-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PUSxPGaXrWBM28LqfQUWngJMFR9MUeOiDHsBB6wHMvauWydG5oQWdYcxwXISZzf6 s31v0J4LrYYim8tYs4ebKw== 0000893220-01-000413.txt : 20010409 0000893220-01-000413.hdr.sgml : 20010409 ACCESSION NUMBER: 0000893220-01-000413 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 26 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOAMERICA INC CENTRAL INDEX KEY: 0001101268 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 223693371 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-29359 FILM NUMBER: 1589838 BUSINESS ADDRESS: STREET 1: C/O GOAMERICA, INC. STREET 2: 401 HACKENSACK AVENUE CITY: HACKENSACK STATE: NJ ZIP: 07601 BUSINESS PHONE: 2019967310 MAIL ADDRESS: STREET 1: C/O GOAMERICA STREET 2: 401 HACKENSACK AVENUE CITY: HACKENSACK STATE: NJ ZIP: 07601 10-K 1 w46736e10-k.txt FORM 10-K FOR GOAMERICA 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- ---------- Commission File Number 0-29359 GOAMERICA, INC. ------------------------------------------------------ (Exact Name of Registrant as Specified in Its Charter) Delaware 22-3693371 ------------------------------- ------------------------------------ (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 433 Hackensack Avenue, Hackensack, New Jersey 07601 --------------------------------------------- ----------------------------------- (Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 996-1717 ----------------------------- Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of Each Exchange on Which Registered ------------------- ----------------------------------------- None ------------------- -----------------------------------------
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value ----------------------------- (Title of Class) ----------------------------- (Title of Class) 2 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: X No: -------- -------- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] State the aggregate market value of the voting common stock held by non-affiliates of the registrant: $95,381,683 at March 23, 2001 based on the last sales price on that date. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of March 23, 2001:
Class Number of Shares ----- ---------------- Common Stock, $0.01 par value 53,216,963
The following documents are incorporated by reference into the Annual Report on Form 10-K: Portions of the registrant's definitive Proxy Statement for its 2001 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report. 3 TABLE OF CONTENTS -----------------
Item Page ---- ---- PART I 1. Business............................................................... 2 2. Properties............................................................. 27 3. Legal Proceedings...................................................... 27 4. Submission of Matters to a Vote of Security Holders.................... 27 PART II 5. Market for our Common Equity, Related Stockholder Matters and Use of Proceeds....................................................... 28 6. Selected Consolidated Financial Data................................... 30 7. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................. 32 7A. Quantitative and Qualitative Disclosures About Market Risk............. 40 8. Financial Statements and Supplementary Data............................ 40 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............................................. 40 PART III 10. Directors and Executive Officers....................................... 41 11. Executive Compensation................................................. 41 12. Security Ownership of Certain Beneficial Owners and Management......... 41 13. Certain Relationships and Related Transactions......................... 41 PART IV 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K....... 42 SIGNATURES..................................................................................... 43 EXHIBIT INDEX.................................................................................. 45 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE.................... F-1
i 4 PART I ITEM 1. BUSINESS. FORWARD-LOOKING STATEMENTS The statements contained in this Annual Report on Form 10-K that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "expects," "may," "will," "should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These forward-looking statements, such as statements regarding anticipated future revenues, capital expenditures, subscriber base, profit margins and other statements regarding matters that are not historical facts, involve predictions with risks and uncertainties. Potential risks and uncertainties that could affect our future operating results include, but are not limited to: (i) our ability to increase and maintain a subscriber base; (ii) uncertainties relating to the future demand for services in the emerging wireless data services market; and (iii) our ability to successfully grow our infrastructure, manage expanded operations, integrate acquired businesses and offer new services. Such risks and others are more fully described in Risk Factors included elsewhere in this Annual Report. Our actual results may differ materially from the results expressed in, or implied by, such forward-looking statements. Each reference herein to "GoAmerica," the "Company" or "We," or any variation thereof, is a reference to GoAmerica, Inc. and its subsidiaries. GENERAL GoAmerica, Inc. is a nationwide wireless Internet services provider. We enable our enterprise and individual subscribers to access wirelessly the Internet, email and corporate intranets through a wide variety of mobile computing and communications devices. Through operation of our Wireless Internet Connectivity Center, we can offer our subscribers comprehensive and flexible mobile data solutions for wireless Internet access. Our turnkey solution provides wireless network services, mobile devices, software and subscriber service and support. Our proprietary Go.Web(TM) technology, which is hosted within our Wireless Internet Connectivity Center, enables our subscribers to access data and the Internet. Enterprise customers utilize Go.Web to wirelessly access mission critical corporate data residing behind firewalls in a secure, wireless environment. This ability empowers mobile workers with the means to access customer relationship management systems, sales/field force automation information time management software and other important corporate systems in real time. Enterprise customers, as well as our mobile professionals can also 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. Additionally, we offer a personal Web page, or "personal portal," www.mygoweb.com, to access their favorite Web sites quickly. We also offer a variety of email solutions which allow 2 5 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 Internet services across a variety of wireless networks and mobile device platforms. To provide our subscribers with nationwide access, we have established strategic relationships with the leading wireless network carriers, such as AT&T Wireless Services, Cingular Interactive, Metricom, Motient and Verizon Wireless. Our subscribers are able to use our wireless Internet services with their choice of a wide variety of leading mobile devices, including Palm operating system-based computing devices, Research In Motion's, or RIM's, interactive devices, laptop computers, Microsoft Windows CE-based computers, Pocket PC-based personal digital assistants and wireless application protocol-enabled, or WAP-enabled, smart phones. We also have engineered our wireless Internet services to operate with new versions of many wireless devices. CORPORATE HISTORY 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. Our principal offices are located at 433 Hackensack Avenue, Hackensack, New Jersey 07601, and our telephone number is (201) 996-1717. GoAmerica, Inc. consummated its initial public offering of its common stock in April 2000. On June 28, 2000, we acquired Wynd Communications Corporation, a California corporation. Wynd is a leading provider of wireless telecommunications services for people who are deaf or hard of hearing, a line of business that we have continued. In the acquisition, the former shareholders of Wynd received an aggregate of 3,964,975 shares of our common stock in exchange for all outstanding shares of Wynd capital stock. Such aggregate amount equaled seven percent (7%) of the total fully-diluted issued and outstanding shares of our common stock on the date of issue. On August 31, 2000, we acquired Hotpaper.com, Inc., a Delaware corporation. Hotpaper provides Web-based document automation software, infrastructure and content. Pursuant to the terms of the acquisition, the former stockholders of Hotpaper received an aggregate of 1,006,111 newly-issued shares of our common stock in exchange for a portion of the outstanding shares of Hotpaper capital stock. In addition, one stockholder of Hotpaper received a cash payment of $750,000 in exchange for a portion of his shares of Hotpaper capital stock. On November 7, 2000, GoAmerica Communications Corp. consummated the acquisition of substantially all the assets of Flash Creative Management, Inc. Flash provides consulting services to business customers in the areas of business improvement, strategy and redesign and in software development and integration, a line of business we have continued. We intend to utilize their expertise to integrate the wireless solutions offered by GoAmerica to its enterprise customers. We acquired substantially all the assets and assumed certain liabilities of Flash. In consideration for the assets purchased, we (i) paid an aggregate purchase price of $6,000,000 3 6 cash ($2,000,000 of which was deferred and is payable within 12 months of the purchase), (ii) issued 466,302 shares of restricted common stock and (iii) assumed certain liabilities of Flash. THE GOAMERICA WIRELESS SOLUTION We provide our subscribers with secure and easy-to-use wireless access to the Internet, email and corporate intranets. Through operation of 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: Extend Enterprise Desktop Functionality to Wireless Devices. We wirelessly extend the power of Web-based desktop applications, email, corporate intranets and the Internet to enterprise mobile workers. Our wireless service and Go.Web technology provide the following enterprise products and services across multiple handheld devices and laptops: - Corporate email and groupware applications - Mobile workforces can view and interact real-time with their email, calendar, public and private folders, address books, memos and tasks. - E-business - Mobile professionals can access and interact virtually real-time with their corporate customer relationship management or sales/field force automation systems in order to shorten sales cycles and identify customer opportunities faster. - Financial services - MobileMarkets(TM) is a wireless financial services product that delivers comprehensive financial information designed for portfolio managers, analysts, equity and research sales professionals, traders and brokers. This product enables instant access to real-time equity and option quotes, market indices, time and sales, customized watch lists, currency tables, news and alerts. - Intranet access and corporate data enablement - We work with enterprise Information Technology personnel to enable mobile employees, secure, wireless access to corporate data bases stored behind firewalls. - Enterprise security - Our solutions incorporate over-the-air security for wireless transport and physical security from our Wireless Internet Connectivity Center to/from the Internet or corporate servers. For corporations requiring a higher degree of security, we can provide a virtual private network that allows for a direct connection behind a firewall. - Professional services - Our professional service capabilities extend to providing support at the enterprise's location and help implement mobile commerce applications. Offer Easy-To-Use Wireless Internet Access, Ecommerce and Email. Through our proprietary 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 page, www.mygoweb.com, where each subscriber can customize their views in order to access their favorite Web sites quickly. In addition, we 4 7 offer a variety of public and corporate email solutions, which allow our subscribers to access their email at their existing Internet and business email accounts. Provide Nationwide Services Across Multiple Wireless Networks. We have established relationships with many of the leading wireless network carriers, including AT&T Wireless Services, Cingular Interactive, Metricom, Motient and Verizon Wireless, 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, Ricochet and Code Division Multiple Access, or CDMA, 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. 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, RIM's interactive devices, laptop computers, Windows CE-based computers, Pocket PC-based personal digital assistants 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 data 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, or wireless markup language, or WML. 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 and redundant, enabling us to move quickly to meet the demands of increased data traffic and expanding wireless network capabilities. We provide enterprise customers with a broad range of secure and reliable wireless solutions through 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 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 5 8 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, 24 hours a day. Existing subscribers can inquire about their accounts or receive technical support through the same toll free service. THE GOAMERICA STRATEGY Our goal is to be the leading provider of nationwide wireless Internet services and mobile data solutions for enterprise and mobile professionals. 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: Enhance and Capitalize on the Go.Web Technology. Our Go.Web technology enables subscribers to access the Internet and company intranets. This technology also brings the same enterprise desktop functionality to the mobile workforce over various devices and through various networks. Go.Web is a scalable and secure technology that can be leveraged across enterprises in numerous vertical industries. Expand Sales Capabilities and Distribution Relationships. We currently sell our services through a variety of channels including enterprise distributors, direct sales representatives, retail relationships and inbound telemarketers. We plan to leverage our enterprise distributors to significantly expand our subscriber base. Such distributors currently include among others Compaq, Dell, RIM and Sony. Each of these distributors has a large enterprise presence and we believe that our agreements with these distributors will allow us to penetrate enterprise customers. Further, we will continue to look for other leading distributors to expand our enterprise sales capabilities. We enhance our distributor relationships with our direct sales representatives who periodically work in conjunction with our enterprise distributors. Additionally, our direct sales representatives focus on small to mid-sized enterprise customers. We will continue to expand our direct sales capabilities to achieve strong subscriber growth. In addition to our enterprise focus, we have established a national retail presence through our relationships with Staples and CompUSA. Our goal in focusing on such channels is to reach the small business user and mobile professional, as well as to generate enterprise sales leads. We supplement these channels with an inbound telemarketing group, as well as sales through our Web site. Leverage Strategic Alliances with Best of Class Partners. We have established strategic alliances with several systems integrators and independent software vendors. These companies, such as Electronic Data Systems and Siebel Systems, have Fortune 1000 enterprise customers for which they provide and/or implement mission critical systems. Many of these enterprises are beginning to focus on wireless initiatives to empower their mobile workforces. We provide the systems integrators and independent software vendors with the wireless know-how and technology to implement such wireless initiatives. We plan to expand and leverage these and other similar relationships to gain access to Fortune 1000 customers and ultimately grow our subscriber base. 6 9 Provide Superior Customer Service and Technical Support. Wireless Internet access is an evolving and growing communications process. Consequently, subscribers may face a number of potential problems. We believe that even sophisticated subscribers periodically have questions or encounter problems as applications adapted to, or 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. Additionally, for our enterprise customers, we offer dedicated technical and customer support representatives. We have expanded our customer service and technical support 24 hours a day, five days a week and ultimately will move to 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. Pursue Strategic Acquisitions. We intend to pursue additional 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 technology 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 Corporate Intranets. Our enterprise 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. Enterprise users can access their corporate databases through Web servers either inside our firewall or within 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. Access to the Internet. Our subscribers efficiently and reliably access virtually all public Web sites from all of 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 customers to pre-determine the choices available to their users. 7 10 Email Services. Our services provide business and individual subscribers access to the wide variety of Internet based and corporate email services. We also provide an email address at goamerica.net for all of our subscribers as a free service. Our business subscribers are also 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 GoAmerica wireless Internet service. Enhanced Mobile Solutions. We continually seek to enhance and expand our service offerings which we believe is a critical element in growing our subscriber base and maintaining customer satisfaction. Specifically, we have a growing suite of applications available to our corporate customers. For example, we acquired Hotpaper, a Web-based infrastructure company dedicated to the automated creation and delivery of business documents, in order to integrate Hotpaper's technology with our Go.Web services to enable mobile professionals to create customized Microsoft Word and Adobe PDF documents from wireless devices and transmit them via fax or email. We have also introduced MobileMarkets, a wireless financial services product that delivers comprehensive financial information designed for portfolio managers, analysts, equity and research sales professionals, traders and brokers. This product enables access to virtually real-time equity and option quotes, market indices, time and sales, customized watch lists, currency tables, news and alerts. Enhanced Consulting Services. Our acquisition of Flash has added professional services to GoAmerica's suite of wireless service offerings for its corporate customers. As part of our engagements with enterprises, we are providing development and consulting services with these acquired resources. Historically, Flash had focused on customized project management, technology development, integration and implementation for Fortune 500 companies. With our wireless expertise and Flash's consulting services strength, we believe we are now better suited to help enterprises analyze, create and implement wireless strategies. CUSTOMERS We sell and market to enterprise and individual customers. Our subscriber base has grown from 1,630 subscribers at December 31, 1998 to 5,859 subscribers at December 31, 1999 to 47,632 subscribers at December 31, 2000. We generally target our enterprise marketing and selling efforts toward decision-makers within businesses with large numbers of mobile professionals. These customers often have a wireless strategy and need assistance with the implementation and maintenance of such a plan. 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, as the wireless data industry gains broader consumer acceptance. 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. 8 11 SALES AND MARKETING Sales We currently sell our services through a variety of channels including enterprise distributors, direct sales representatives, inbound telemarketers, retail relationships and our Web site. As of February 28, 2001, we had 49 employees working in our sales department. Enterprise Distributors. We seek to generate sales and expand our subscriber base by leveraging our relationship with enterprise distributors. Such distributors include, among others, Compaq, Dell, RIM and Sony. The relationships we have with these distributors provide them with value-added services to sell to their customers and provide us with access to their large enterprise customers which in turn expands our subscriber base. Direct Sales Representatives. Our direct sales professionals focus primarily on mid-sized to large corporate customers seeking to establish wireless Internet services for their employees or customers. In certain situations, our sales professionals will work directly with our strategic partners such as System Integrators or Independent Software Vendors to offer an enterprise a complete wireless solution. In addition, our business development personnel and senior executives also spend a considerable amount of their time developing potential customer relationships and selling and promoting our services. 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. Our channel manager professionals supervise 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. We are responsible for billing the reseller. For example, we have a reselling relationship with Motient pursuant to which Motient resells our Go.Web service as a part of Motient'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 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. 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 and bill and support the subscribers provided by our agents. Retail Relationships. We have established a national retail presence with Staples and CompUSA. Our products and services are offered in over 600 stores which cater to the small business and mobile professional. 9 12 Telemarketing. 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. Marketing We market and advertise in order to increase our brand name recognition 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. As of February 28, 2001, we had 29 employees working in our marketing department. We continually seek new ways to reach potential subscribers that are learning about wireless Internet communications. On occasion, we have teamed with certain enterprise distributors and co-marketed our services. Most recently, through our relationship with Sony Electronics, Inc., we have jointly marketed our wireless modems for laptop computers in cable television advertisements primarily geared toward mobile workers. 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 October 2000, we joined the Oracle Wireless Partner Initiative to develop joint marketing programs designed to reach both existing and potential corporate customers. Go.Web Alliance Program. We have entered into 24 strategic relationships with leading wireless ASPs and software developers as part of our newly launched Go.Web Alliance Program. These alliance members, which include 2 Roam, Any Device, Everypath, Giant Bear and SmartServ, have committed to providing efficient, secure and flexible end-to-end wireless solutions to their enterprise customers by utilizing the Go.Web technology. Under these agreements, ASPs and software developers will incorporate our Go.Web functionality into their existing and future applications offerings, adding the ability to deliver content and Web applications to multiple wireless devices over multiple networks. The ASP creates the wireless application, and we enable the delivery to mobile professionals via our Go.Web service. 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. Additionally, we have a strategic alliance with RIM pursuant to which Go.Web is included as a value-added service in various RIM devices sold in North America. 10 13 TECHNOLOGY AND OPERATIONS Service Infrastructure Wireless Internet Connectivity Center. In order to provide our subscribers with the highest availability of services, we recently opened a 4,000 square foot data center facility in New York City. This facility is our primary Wireless Internet Connectivity Center. This state-of-the-art facility was built to provide high performance and reliable and secure wireless access to mission critical data. This Wireless Internet Connectivity Center utilizes the EMC Celerra Enterprise Storage system to provide our services with a dedicated network file server, offering industry-leading scalability, availability and reliability. This Wireless Internet Connectivity Center is connected to multiple 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 data center from 8:00 a.m. to 11:00 p.m. Eastern time on weekdays. 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. Our original data center in Hackensack, New Jersey now functions as a backup facility, providing redundant infrastructure and network connectivity. 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 AT&T Wireless Services, Cingular Interactive, Verizon Wireless, Motient and Metricom. 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. In addition to our direct relationships with various wireless carriers, we also purchase access to wireless networks in the United States and Canada through RIM as part of the RIM Blackberry Wireless Email Solution, a "bundle" of products and services that also includes RIM handheld devices and proprietary software. Under our agreement with RIM, we have agreed to purchase a minimum number of units, each which includes a minimum service commitment. Our agreement with RIM is for three (3) years commencing on May 1, 2001, subject to earlier termination after May 1, 2001 at RIM's convenience on 120 days notice. On expiration of termination of the agreement, we are allowed up to eighteen (18) months to deplete our 11 14 remaining inventory of RIM Blackberry products. There can be no assurance that RIM will not exercise its termination right or agree to renew the agreement upon its expiration. 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 data 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 use Certicom's cryptography within the Go.Web infrastructure. 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. Licensed Software Technology Cingular Interactive. The Cingular Interactive Paging Service, or IPS, is based on server software that we have licensed. We are one of a limited number of companies that have deployed an IPS gateway. This service provides two-way messaging on devices such as the RIM interactive devices. Openwave. Openwave Systems Inc. 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. Oracle. We have licensed and deployed the Oracle IAS platform that allows us to rapidly develop and deploy wireless data solutions for existing databases, intranets and Web sites. We are also a founding member of the Oracle Wireless Alliance program and undertake joint selling and marketing with Oracle. 12 15 Customer Service, Billing and Fulfillment We provide customer service and billing at our customer service center. Our customer service program provides our subscribers with the ability to contact us via a toll free telephone number, the 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 product fulfillment, we maintain a limited inventory of mobile devices and wireless modems at our headquarters which we buy from third-party manufacturers and resellers and use to fill rush orders. The majority of our fulfillment is completed by a third party vendor. We work closely with people on site at the third party vendor to load and configure custom software on mobile devices, activate wireless modems and perform quality assurance checks. Devices are then packed, shipped and tracked until the subscriber receives the product. 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 February 28, 2001, we had 62 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 Monday through Friday, 24 hours a day. We also intend to expand our ecommerce Web site capabilities to include self provisioning, on-line billing, and interactive customer care during 2001. We provide corporate or individual customer billing for all subscription fees, devices and modems, and other fees. COMPETITION The market for our wireless Internet 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. 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. 13 16 INTELLECTUAL PROPERTY RIGHTS We have not yet obtained patents on our technology that would preclude or inhibit competitors from using our technology. We have, however, recently filed a patent application on certain aspects of our Go.Web technology. The application is presently pending in the United States Patent and Trademark Office and has been filed internationally under the Patent Cooperation Treaty and in Argentina, Venezuela, Chile, Taiwan and Thailand. We also acquired two patent applications from Hotpaper relating to document generation over the Internet. The applications are presently pending before the United States Patent and Trademark Office and have been filed internationally under the Patent Cooperation Treaty and in Argentina, Venezuela, Chile, Taiwan and Thailand. We rely on a combination of patent, 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(SM)". 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 is without merit. We intend to defend against such claim vigorously. Such claim has not been pursued by ROTIS 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. We also received in January 2000 an offer from NTP Incorporated to enter into negotiations to obtain a license under one or more of NTP's patent properties relating to wireless email systems. We have reviewed NTP's patents and do not believe that GoAmerica requires a license under those patents. NTP has not pursued its license offer. 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 14 17 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. EMPLOYEES As of February 28, 2001, we had a total of 305 full-time employees. None of our employees is covered by a collective bargaining agreement. We believe that our relations with our employees are good. RISK FACTORS RISKS PARTICULAR TO GOAMERICA WE HAVE HISTORICALLY INCURRED LOSSES AND THESE LOSSES WILL CONTINUE IN THE FORESEEABLE FUTURE. We have never earned a profit. We had net losses of $64.8 million, $11.5 million and $2.6 million for the years ended December 31, 2000, 1999 and 1998, respectively. 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 have acquired, and will continue 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. Further, we have previously experienced negative overall gross margins, which consist of margins on our subscriber revenues, equipment sales and other revenue, and may experience negative overall gross margins again in the future. We have incurred operating losses since our inception and expect to continue 15 18 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 and 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 or increase the costs of services or devices that we purchase from them; 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 and annual basis. 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. 16 19 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. Our churn rates could increase in the future because some of our subscribers have low or no usage rates for our services. 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 have commenced acquisition, development and implementation of automated control systems; however, some of those automated systems are in their initial stages of operation. Therefore, we cannot assure you that we will be able to successfully complete such acquisitions or developments or, if implemented, that our automated control systems will be able to monitor all subscriber usage or improve our gross margins. WE HAVE HISTORICALLY EXPERIENCED AND MAY AGAIN 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 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 have commenced acquisition and development of automated control systems. We may not be able to 17 20 successfully complete the acquisition or development of 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 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. As a result, we have experienced, and expect to continue to experience, negative gross margins on the mobile devices that we resell. WE MAY EXPAND OUR OPERATIONS INTO INTERNATIONAL MARKETS WHICH WILL SUBJECT US TO ADDITIONAL RISKS THAT MAY ADVERSELY AFFECT OUR BUSINESS AND OPERATIONS. We may expand our existing operations and enter international markets, which could demand significant management attention and financial commitment. Our management has limited experience in international operations, and we cannot guarantee that we will successfully implement and expand our international operations, which could have a material adverse effect on our business, financial condition and results of operations. Operating in international markets will subject us to additional risks, including unexpected changes in regulatory requirements, political and economic conditions, taxes, tariffs or other barriers, difficulties in staffing and managing international operations, potential exchange and repatriation controls on foreign earnings, longer sales and payment cycles and difficulty in accounts receivable collection. Such risks may adversely affect our business, financial condition and results of operations. 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 and to 260 on December 31, 2000. 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; - we may not be able to obtain the hardware necessary to expand the subscriber capacity of our systems on a timely basis; 18 21 - 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, such as professional consulting 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, such as professional consulting services; 19 22 - 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, Motient, Verizon Wireless, Cingular Interactive and Metricom 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 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 WHICH COULD RESULT IN VARIABLE AND UNPREDICTABLE REVENUES. 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. In 2000, we have substantially increased and intend to further increase our marketing expenditures as part of our efforts to build the GoAmerica brand in both our current and targeted markets. Our sales and marketing expenses were approximately $35.8 million, $3.3 million and $909,000 for the years ended December 31, 2000, 1999 and 1998, respectively. 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. THE LOSS OF OUR KEY EMPLOYEES COULD ADVERSELY AFFECT OUR BUSINESS. We are particularly dependent on Aaron Dobrinsky, our chairman and chief executive officer, and Joseph Korb, our president, 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 20 23 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 electronic commerce 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 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. 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. 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. 21 24 WE MAY FACE INCREASED COMPETITION WHICH MAY NEGATIVELY IMPACT OUR PRICES FOR OUR SERVICES OR CAUSE US TO LOSE BUSINESS OPPORTUNITIES. 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, Yada Yada, Wireless Knowledge, a joint venture of Microsoft and Qualcomm, Incorporated, Infospace.com and those, such as Aether Systems, Inc., focusing on specific industries; - wireless device manufacturers, such as Palm, Motorola and RIM; - wireless network carriers, such as AT&T Wireless Services, Verizon Wireless, Cingular Interactive, 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. OUR INTELLECTUAL PROPERTY RIGHTS MAY NOT BE ADEQUATELY PROTECTED UNDER THE CURRENT STATE OF THE LAW. Our success substantially depends on our ability to sell services which are dependent on certain intellectual property rights. We currently do not have patents on any of our intellectual property. We have filed for a patent on certain aspects of our Go.Web technology and have also acquire two patent applications from Hotpaper. 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", or certain of our other marks and we may not be able to obtain such registrations. We rely primarily on trade secret laws, patent law, copyright law, trademark law, unfair competition law and confidentiality agreements to protect our intellectual 22 25 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. 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 protection and vigorous enforcement of applicable intellectual property law. 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 CERTAIN 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; 23 26 - 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. 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. 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 INCREASED INTEREST EXPENSES OR ADDITIONAL DILUTION TO OUR STOCKHOLDERS. IF ADDITIONAL FUNDS ARE NEEDED AND ARE NOT AVAILABLE, OUR BUSINESS COULD BE NEGATIVELY IMPACTED. We currently anticipate that our available cash resources will be sufficient to fund our operating needs for at least the next 18 months, including the continued expansion of our sales and marketing program and potential international operations. 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 24 27 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. RISKS PARTICULAR TO OUR INDUSTRY 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. 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. RISKS PARTICULAR TO STOCK PRICE OUR STOCK PRICE, LIKE THAT OF MANY TECHNOLOGY COMPANIES, HAS BEEN AND MAY CONTINUE TO BE VOLATILE. We expect that the market price of our common stock will fluctuate as a result of variations in our quarterly operating results and other factors beyond our control. These fluctuations may be exaggerated if the trading volume of our common stock 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. 25 28 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 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 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. 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. 26 29 ITEM 2. PROPERTIES. FACILITIES We own no real property. Our principal offices are located in Hackensack, New Jersey, and we recently expanded from 401 Hackensack Avenue to 433 Hackensack Avenue. The premises located at 401 Hackensack Avenue consists of approximately 15,917 square feet and the lease expires on May 14, 2007. The newly leased premises at 433 Hackensack Avenue consists of approximately 22,458 square feet and the lease expires on August 31, 2010. We occupy an additional 12,333 square feet of space at 433 Hackensack Avenue as a result of our assumption of Flash's principal office lease. Such lease expires on April 29, 2001. In addition to the network operating facility at our Hackensack office, in December 1999, we entered into a Facilities Maintenance Agreement with Data General, a division of EMC Corporation, pursuant to which we operate a network operating center at their facility in New York City. The initial term of the Facilities Maintenance Agreement shall run until February 29, 2004. The New York facility, located at 55 Broad Street, is our primary network operating center. The New York facility consists of approximately 4,000 square feet. The lease for the New York facility expires on February 29, 2004. The offices of Wynd are located in San Luis Obispo, California and consist of 7,391 square feet. Our lease on the Wynd offices expires on January 31, 2004. The offices of Hotpaper are located in San Francisco, California. The Hotpaper offices consist of 9,203 square feet and the lease expires on December 5, 2002. We believe that our current facilities are adequate to support our existing operations. We also believe that we will be able to obtain suitable additional facilities on commercially reasonable terms on an "as needed" basis. ITEM 3. LEGAL PROCEEDINGS. The Company is not a party to any material legal proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. 27 30 PART II ITEM 5. MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND USE OF PROCEEDS. MARKET FOR OUR COMMON STOCK Prior to April 7, 2000, there was no established market for our common stock. Since April 7, 2000, our common stock has traded on the Nasdaq National Market under the symbol "GOAM." The following table sets forth the high and low sales prices for our common stock from its first day of trading on April 7, 2000 through December 31, 2000 as reported on the Nasdaq National Market.
QUARTER ENDED HIGH LOW - -------------------------------------------------------------------------- June 30, 2000(1).................. $19.31 $5.25 September 30, 2000................ $15.69 $7.06 December 31, 2000................. $12.19 $4.25
- ------------ (1) Represents high and low sales prices for the period from April 7, 2000, when our common stock began trading on the Nasdaq National Market to the end of the second quarter. As of March 23, 2001, the approximate number of holders of record of our common stock was 279 and the approximate number of beneficial holders of our common stock was 17,726. 28 31 RELATED STOCKHOLDER MATTERS We have never declared or paid any cash dividends on our common stock. We intend to retain earnings, if any, to fund future growth and the operation of our business. The following information relates to all securities issued by us during the fourth quarter of 2000 which were not registered under applicable securities laws at the time of grant, issuance and/or sale: 1. Option Grants On October 6, 2000, we granted stock options to various employees pursuant to our 1999 Stock Plan. All of such stock options were granted at an exercise price of $6.69 per share, the then current fair market value of our common stock, with four year vesting. The aggregate number of shares of common stock underlying such stock option grants totaled 326,050. On November 21, 2000, we granted stock options to various employees and directors pursuant to our 1999 Stock Plan. All of such stock options were granted at an exercise price of $7.50 per share, the then current fair market value of our common stock, with four year vesting except for an option to purchase 32,000 shares granted to Brian Bailey at an exercise price of $15.00 per share with three year vesting. The aggregate number of shares of common stock underlying such stock option grants totaled 666,500. 2. Common Stock Issuances Acquisition of Flash On November 7, 2000, we acquired, through GoAmerica Communications Corp., substantially all of the assets and assumed certain liabilities of Flash pursuant to that certain Asset Purchase Agreement by and among GoAmerica, Inc., GoAmerica Communications Corp. and the shareholders of Flash. In partial consideration for the acquisition, we issued 466,302 restricted shares of our common stock to Flash equal in value to $4,000,000 based upon the average closing price of our common stock on the Nasdaq National Market for the ten (10) trading days ending three (3) days prior to the closing of the asset purchase. 3. Warrants On November 14, 2000, we issued warrants to Dell Ventures, L.P. in partial consideration for certain obligations assumed by Dell Products, L.P. by and on behalf of itself, Dell Computer Corporation and its affiliates, or Dell, under the terms of a certain Products Purchase and Distribution Agreement entered into by and between GoAmerica and Dell. All such warrants were granted at an exercise price of $16.00 per share, with a three year exercise period from the date of grant. The aggregate number of shares of common stock underlying such warrant grants totaled 563,864. On January 1, 2001, we granted Sony Electronics, Inc., a Delaware corporation, warrants which were not registered under the Securities Act in partial consideration for certain 29 32 obligations of Sony, under the terms of a certain Services Agreement by and between GoAmerica and Sony. All such warrants were granted at an exercise price of $16.00 per share, with a three year exercise period from the date of grant. The aggregate number of shares of common stock underlying such warrant grants totaled 500,000. We did not employ an underwriter in connection with the issuance of the securities described in this Item 5. We believe that the issuances of the foregoing securities were exempt from registration under either (i) Section 4(2) of the Securities Act as transactions not involving any public offering and such securities having been acquired for investment and not with a view to distribution, or (ii) Rule 701 under the Securities Act as transactions made pursuant to a written compensatory benefit plan or pursuant to a written contract relating to compensation. All recipients had adequate access to information about the Company. USE OF PROCEEDS On April 6, 2000, the Commission declared effective our Registration Statement on Form S-1 (No. 333-94801) as filed with the Commission in connection with our initial public offering of common stock, which was managed by Bear, Stearns & Co., Inc., Chase H&Q, U.S. Bancorp Piper Jaffray, Wit SoundView and DLJdirect, now CSFBdirect. Pursuant to such Registration Statement, on April 12, 2000 we consummated the issuance and sale of an aggregate of 10,000,000 shares of our common stock, for a gross aggregate offering price of $160 million. We incurred underwriting discounts and commissions of approximately $11.2 million. In connection with such offering, we incurred total expenses of approximately $2.6 million. As of December 31, 2000, approximately $114.4 million of the $146.2 million in net proceeds received by us upon consummation of such offering, pending specific application, were invested in short-term, investment-grade, interest-bearing instruments. The remaining $31.8 million of the net proceeds have been specifically applied as follows: (i) $5.0 million for the acquisition of other businesses, (ii) $9.6 million for sales and marketing expenses, (iii) $1.7 million for the purchase of capital assets, and (iv) $15.5 million for working capital needs. ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA. The selected consolidated financial data set forth below with respect to our statement of operations data for the years ended December 31, 1998, 1999 and 2000, and with respect to the consolidated balance sheet data at December 31, 1999 and 2000 are derived from and are qualified by reference to our audited consolidated financial statements and related notes thereto found at "Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K." Our consolidated statement of operations data for the period from August 6, 1996, our date of inception, to December 31, 1996 and for the year ended December 31, 1997 and consolidated balance sheet data as of December 31, 1996, 1997 and 1998 are derived from audited consolidated financial statements not included in this Annual Report on Form 10-K. The selected consolidated financial data set forth below should be read in conjunction with, and is qualified in its entirety by, our audited consolidated financial statements and related notes thereto found at "Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" which are included elsewhere in this Annual Report on Form 10-K. 30 33
YEARS ENDED DECEMBER 31, PERIOD FROM ----------------------------------------- AUGUST 6, (IN THOUSANDS EXCEPT FOR 1996 TO PER SHARE DATA) DECEMBER 31, 2000 1999 1998 1997 1996 -------- -------- -------- -------- ------------ CONSOLIDATED STATEMENT OF OPERATIONS DATA: Revenues: Subscriber ....................... $ 9,006 $ 1,183 $ 360 $ 115 $ -- Equipment ........................ 4,626 1,341 449 33 -- Other ............................ 242 207 18 25 -- -------- -------- -------- -------- -------- Total revenue ...................... 13,874 2,731 827 173 -- ======== ======== ======== ======== ======== Costs and expenses: Cost of subscriber revenue ....... 7,194 4,051 304 88 -- Cost of equipment revenue ........ 6,090 1,648 532 15 -- Sales and marketing .............. 35,807 3,283 909 243 43 General and administrative ....... 28,238 4,810 1,549 841 175 Depreciation and amortization .... 994 275 124 32 3 Amortization of goodwill and other intangibles ................... 7,247 -- -- -- -- Settlement costs ................. -- 297 -- -- -- -------- -------- -------- -------- -------- Total costs and expenses ........... 85,570 14,364 3,418 1,219 221 -------- -------- -------- -------- -------- Loss from operations ............... (71,696) (11,633) (2,591) (1,046) (221) Interest income, net ............... 6,944 165 14 -- -- -------- -------- -------- -------- -------- Net loss ........................... $(64,752) $(11,468) $ (2,577) $ (1,046) $ (221) Beneficial conversion feature and accretion of redemption value of mandatorily redeemable convertible preferred stock .................. (30,547) (10,464) -- -- -- -------- -------- -------- -------- -------- Net loss applicable to common stockholders ..................... $(95,299) $(21,932) $ (2,577) $ (1,046) $ (221) ======== ======== ======== ======== ======== Basic net loss per share applicable to common stockholders ........... $ (2.19) $ (1.02) $ (0.14) $ (0.07) $ (0.02) Diluted net loss per share applicable to common stockholders $ (2.18) $ (1.00) $ (0.14) $ (0.06) $ (0.02) ======== ======== ======== ======== ======== Weighted average shares used in computation of basic net loss per share applicable to common stockholders ..................... 43,426 21,590 18,391 16,083 13,947 Weighted average shares used in computation of diluted net loss per share applicable to common stockholders ..................... 43,678 22,025 18,826 16,518 14,382
31 34
AS OF DECEMBER 31, -------------------------------------------------- (IN THOUSANDS) 2000 1999 1998 1997 1996 -------- -------- -------- -------- -------- BALANCE SHEET DATA: Cash and cash equivalents .......... $114,411 $ 6,344 $ 1,961 $ 20 $ 587 Working capital (deficit) .......... 113,531 2,426 1,476 (143) 700 Total assets ....................... 207,746 9,757 3,010 324 791 Series A redeemable convertible preferred stock ................. -- 20,755 -- -- -- Series B redeemable convertible preferred stock .................... -- -- -- -- -- Total stockholders' equity (deficit) 181,530 (16,659) 2,225 148 779
ITEM 7. 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 consolidated 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. 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. 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 revenue when the services are provided to the subscriber. Subscriber revenue accounted for approximately 64.9%, 43.3% and 43.5% of our total revenue during 2000, 1999 and 1998, 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 currently ranges from $39.95 to $74.95 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 32 35 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. To the extent such fees exceed the related costs, they are deferred and recognized ratably over the life of the related service contracts which is generally six months or twelve months. We offer new subscribers a 14-day trial period during which they can cancel our service without any penalty, although we do not refund the pro-rated fee for that trial period, which we include in our revenue. Subscribers to our plans are subject to six-month, one-year or two-year contracts that provide for early cancellation fees. We also typically sell third-party mobile devices in conjunction with a service agreement to a new subscriber. Equipment revenue accounted for approximately 33.4%, 49.1% and 54.3% of our total revenue during 2000, 1999 and 1998, respectively. We recognize equipment revenue at the time of the shipment of the mobile device to a subscriber. During 2000, approximately 37% 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 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. During 2000, we experienced positive overall gross margins, which consist of margins on our subscriber revenue, equipment revenue and other revenue. We expect to continue to experience positive overall gross margins primarily because of positive gross margins on our subscriber revenue, which were partially offset by negative gross margins on our resale of equipment. We believe that our gross margins on subscriber revenue will improve during 2001. 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 to which we assign our subscribers may not allow us to always cover our subscriber costs. For example, if we assign our Go.Unlimited Plan 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. 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 also have experienced, and expect to continue to experience, negative gross margins on the mobile devices that we resell. 33 36 See "Risk Factors" for a discussion of the risks relating to our historically negative gross margins through the second quarter and our need to improve our systems. We also have experienced, and expect to continue to experience, negative gross margins on the mobile devices that we resell. 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. 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. 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 and the first quarter of 2000, we granted options to certain of our employees at exercise prices below the deemed fair market value per share of our common stock. Such grants resulted in non-cash employee compensation expenses based on 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. During 2000, we incurred an aggregate of $11.3 million in non-cash employee compensation as a result of stock option and warrant grants during 1999 and the first quarter of 2000 which were granted at prices below the deemed fair market value of our common stock. During 2001, we expect to incur an aggregate of $4.2 million in non-cash employee compensation expense as a result of these grants and the remaining balance of deferred compensation will be amortized in future periods. Net interest income consists primarily of interest earned on cash and cash equivalents. During 2000, we acquired Wynd and Hotpaper as well as certain assets and liabilities of Flash for an aggregate purchase price of approximately $65.7 million. The purchase price of these entities included the issuance of an aggregate of 5,437,388 shares of our common stock and cash (net of cash acquired) of approximately $7.7 million, including merger related costs. As a result of these acquisitions, we have recorded intangibles including trade names, developed technology, assembled work force and customer lists aggregating approximately $22.5 million and goodwill of approximately $44.8 million. These intangibles will be amortized over a period of three to five years. 34 37 RESULTS OF OPERATIONS The following table sets forth for the periods indicated certain financial data as a percentage of revenue:
PERCENTAGE OF REVENUE YEARS ENDED DECEMBER 31, 2000 1999 1998 ------ ------ ------ Revenue: Subscriber .................. 64.9% 43.3% 43.5% Equipment ................... 33.4 49.1 54.3 Other ....................... 1.7 7.6 2.2 ------ ------ ------ Total revenue ........... 100.0 100.0 100.0 Costs and expenses: Cost of subscriber revenue .. 51.9 148.4 36.7 Cost of equipment revenue ... 43.9 60.4 64.4 Sales and marketing ......... 258.1 120.2 109.9 General and administrative .. 203.5 176.1 187.4 Depreciation and amortization 7.2 10.0 15.0 Amortization of intangibles.. 52.2 -- -- Settlement costs ............ -- 10.9 -- ------ ------ ------ Total costs and expenses 616.8 526.0 413.4 ------ ------ ------ Loss from operations .... 516.8 426.0 313.4 Interest income .................. 50.1 6.0 1.7 ------ ------ ------ Net loss ................ 466.7% 420.0% 311.7% ====== ====== ======
YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999 Subscriber revenue. Subscriber revenue increased to $9.0 million for the year ended December 31, 2000 from $1.2 million for the year ended December 31, 1999. The increase was primarily due to having a larger average subscriber base in the year ended December 31, 2000 than in the year ended December 31, 1999 as a result of increased sales and marketing efforts and the Company's acquisition of Wynd. Our subscriber base increased to 47,632 subscribers at December 31, 2000 from 5,859 subscribers at December 31, 1999. The increase in subscriber revenue was offset in part by lower average revenue per subscriber resulting primarily from an increase in the number of new subscribers from our Go.Web channel partners. We expect the number of our subscribers to increase as a result of our expanded sales and marketing efforts. Equipment revenue. Equipment revenue increased to $4.6 million for the year ended December 31, 2000 from $1.3 million for the year ended December 31, 1999. This increase was primarily due to an increase in the number of the mobile devices sold during the year ended December 31, 2000 compared to the year ended December 31, 1999. Other revenue. Other revenue increased to $242,000 for the year ended December 31, 2000 from $206,000 for the year ended December 31, 1999. This increase was primarily due to 35 38 the acquisition of Flash. 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 to $7.2 million for the year ended December 31, 2000 from $4.1 million for the year ended December 31, 1999. This increase was primarily due to an increase in our subscriber base and a related increase in airtime usage during the year ended December 31, 2000 compared to the year ended December 31, 1999. Our cost of subscriber revenue consists primarily of wireless airtime costs. We achieved positive gross margin for the year ended December 31, 2000 due to our placement of subscribers in more favorable rate plans. 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 to $6.1 million for the year ended December 31, 2000 from $1.6 million for the year ended December 31, 1999. This increase was primarily due to an increase in the number of mobile devices sold during the year ended December 31, 2000 compared to the year ended December 31, 1999. Sales and marketing. Sales and marketing expenses increased to $35.8 million for the year ended December 31, 2000 from $3.3 million for the year ended December 31, 1999. This increase was primarily due to increased advertising costs paid to third parties of approximately $23.7 million, increased salaries and benefits of approximately $2.2 million for the additional personnel performing sales and marketing activities, non-cash stock-based compensation of approximately $2.1 million and non-cash amortization of approximately $1.1 million related to warrants issued in connection with certain marketing and distribution agreements. 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 to $28.2 million for the year ended December 31, 2000 from $4.8 million for the year ended December 31, 1999. This increase was primarily due to the addition of salaries and benefits of $2.5 million for personnel performing business development and general corporate activities, non-cash stock-based compensation of $8.5 million, as well as incremental costs associated with the operations of Wynd, Hotpaper and Flash, acquired during 2000. 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. Amortization of goodwill and other intangibles. Amortization of goodwill and other intangibles amounted to $7.2 million for the year ended December 31, 2000. This was a result of our acquisitions of Wynd, Hotpaper and Flash. We expect amortization of goodwill and other intangibles to increase as we recognize a full year of amortization in 2001. Settlement costs. Settlement costs for the year ended December 31, 1999 represent the non-cash charge resulting from the settlement of our obligations arising from claims by certain stockholders relating to the sale of equity securities. Such settlement costs represent the fair value of options and warrants issued to such stockholders. No such costs were incurred during 2000. 36 39 Interest income. Interest income increased to $6.9 million for the year ended December 31, 2000 from $165,000 for the year ended December 31, 1999. Such income was primarily due to increased cash balances as a result of our initial public offering and private placement financings completed in 2000. YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998 Subscriber revenue. Subscriber revenue increased to $1.2 million for the year ended December 31, 1999 from $359,000 for the year ended December 31, 1998. The increase primarily was due to having a larger subscriber base in the year ended December 31, 1999 than in the year ended December 31, 1998. Our increase in subscriber revenue was offset in part by lower average revenue per subscriber. Our subscriber base increased to 5,859 subscribers at December 31, 1999 from 1,630 subscribers at December 31, 1998. Equipment revenue. Equipment revenue increased to $1.3 million for the year ended December 31, 1999 from $449,000 for the year ended December 31, 1998. This increase primarily was due to an increase in the number of the mobile devices sold during the year ended December 31, 1999 compared to the year ended December 31, 1998. Other revenue. Other revenue increased to $206,000 for the year ended December 31, 1999 from $18,000 for the year ended December 31, 1998. This increase primarily was due to the performance of a single systems integration consulting project for a third party during the year ended December 31, 1999 compared to the year ended December 31, 1998. Cost of subscriber revenue. Cost of subscriber revenue increased to $4.1 million for the year ended December 31, 1999 from $303,000 for the year ended December 31, 1998. This increase primarily was due to an increase in our subscriber base and a related increase in airtime usage during the year ended December 31, 1999 compared to the year ended December 31, 1998. Our negative gross margin for the year ended December 31, 1999 was a substantial increase over prior periods and was due in part to our placement of subscribers in more expensive carrier plans and to extensive usage by a few subscribers. Cost of equipment revenue. Cost of equipment revenue increased to $1.6 million for the year ended December 31, 1999 from $532,000 for the year ended December 31, 1998. This increase was primarily due to an increase in the number of mobile devices sold during the year ended December 31, 1999 compared to the year ended December 31, 1998. Sales and marketing. Sales and marketing expenses increased to $3.3 million for the year ended December 31, 1999 from $909,000 for the year ended December 31, 1998. This increase was primarily due to increased advertising costs paid to third parties and the salaries and benefits, including stock-based compensation, for the additional personnel performing sales and marketing activities. General and administrative. General and administrative expenses increased to $4.8 million for the year ended December 31, 1999 from $1.5 million for the year ended December 31, 1998. This increase was primarily due to the addition of salaries and benefits, including stock-based compensation, for personnel performing business development and general corporate activities. 37 40 Settlement costs. Settlement costs for the year ended December 31, 1999 represent the non-cash charge resulting from the settlement of our obligations arising from claims by certain stockholders relating to the sale of equity securities. Such settlement costs represent the fair value of options and warrants issued to such stockholders. Interest income. Interest income increased from $14,000 for the year ended December 31, 1998 to $165,000 for the year ended December 31, 1999. Such income was primarily due to increased cash balances as a result of our private placement financings completed in 1999. 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 $18.4 million through December 31, 1999. During 2000, we issued and sold 648,057 shares of Series B Preferred Stock for net proceeds of approximately $24.6 million. We also consummated our initial public offering of 10,000,000 shares of our common stock at a price to the public of $16.00 per share, all of which were issued and sold for net proceeds of $146.2 million. As of December 31, 2000, we had $114.4 million in cash and cash equivalents and $113.5 million of working capital. Net cash used in operating activities was $49.3 million, $6.7 million and $2.2 million for the years ended December 31, 2000, 1999 and 1998, respectively. The principal use of cash in each of these periods was to fund our losses from operations. Net cash used in investing activities was $13.5 million, $643,000 and $498,000 for the years ended December 31, 2000, 1999 and 1998, respectively. For the year ended December 31, 2000, we used cash in investment activities for purchases of $5.5 million of property, equipment and leasehold improvements and $7.7 million for acquisitions, including Hotpaper and Flash. For the years ended December 31, 1999 and 1998, we used cash in investment activities for purchases of property, equipment and leasehold improvements. Net cash provided by financing activities was $170.8 million, $11.8 million and $4.7 million for the years ended December 31, 2000, 1999 and 1998, respectively. Cash provided by financing activities in each of these periods was primarily attributable to proceeds from public and private equity offerings. As of December 31, 2000, our principal commitments consisted of obligations outstanding under operating leases. As of December 31, 2000, future minimum payments for non-cancelable operating leases having terms in excess of one year amounted to $14.3 million, of which $3.0 million is payable in 2001. 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. Additionally, during 2000, we entered into a supply agreement with an equipment manufacturer under which we are obligated to purchase an aggregate of approximately $10 million of wireless devices during 2001. We have entered into employment agreements with certain of our key executives which provide for fixed compensation and bonuses based upon our operating results. Our maximum 38 41 aggregate cash liability under the agreements, if we terminated these employees, is approximately $3,202,000 at December 31, 2000. We have undertaken several operating initiatives that will require significant use of our cash resources. In addition, we are continuing to pursue 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 billing and business process software and systems. We expect that the acquisition and implementation of our automated subscriber usage monitoring systems and new billing and business process software will cost approximately $3.5 million to $5.0 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 expect that our development costs will be approximately $1.0 million to $2.0 million for 2001, which will be funded primarily from our current cash position. We may also use 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. As of December 31, 2000, we had net operating loss carryforwards of approximately $69.4 million for Federal income tax purposes that will expire through 2020. For financial reporting purposes, a valuation allowance has been recognized to offset the deferred tax assets related to these carryforwards. Due to limitations imposed by the Tax Reform Act of 1986, and as a result of a significant change in our ownership in 1999, the utilization of net operating loss carryforwards that arose prior to such ownership change is subject to an annual limitation of $1.4 million. In addition, we acquired additional operating losses through our acquisitions of Wynd and Hotpaper. The Company believes that an ownership change has occurred with respect to these entities. The effect of an ownership change would be the imposition of an annual limitation on the use of net operating loss carryforwards attributable to periods before change. We have not performed a detailed analysis to determine the amount of the potential limitations. We currently anticipate that our available cash resources will be sufficient to fund our operating needs for at least the next 18 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. In the event additional financing is not available, we will be required to significantly reduce our expenses and substantially curtail operations. 39 42 RECENT ACCOUNTING PRONOUNCEMENTS We have adopted the provisions of the Emerging Issues Task Force, or EITF, Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs." This consensus states that all shipping and handling billings to a customer is a sale transaction represent the fees earned for the goods provided and, accordingly, amounts billed related to shipping and handling should be classified as revenue. Prior to January 1, 2000, such costs were insignificant. In May 2000, the EITF reached a consensus on EITF 00-14, "Accounting for Certain Sales Incentives", which provides guidance on accounting for discounts, coupons, rebates and free products, as well as the income statement classification of these discounts, coupons, rebates and free products. EITF 00-14 is effective April 1, 2001, for us. We are currently evaluating the impact of this new guidance. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and Hedging Activities," or 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 any effect on our results of operations, financial position or cash flows upon the adoption of SFAS 133. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We believe that we have limited exposure to financial market risks, including changes in interest rates. At December 31, 2000, all of our available excess funds are cash or cash equivalents. The value of our cash and cash equivalents is not materially affected by changes in interest rates. A hypothetical change in interest rates of 1.0% would result in an annual change in net loss of approximately $1.1 million based on cash and cash equivalent balances at December 31, 2000. We currently hold no derivative instruments and do not earn foreign-source income. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements and the notes thereto which contain supplementary data required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. A list of the financial statements filed herewith is found at "Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K". ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. 40 43 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS. Effective March 28, 2001, Zachary Prensky and Andrew Seybold resigned as Class A members of our Board of Directors for personal reasons. In order to facilitate the even distribution of the number of directors among the three classes of directors, on the same date, Joseph Korb resigned as a Class B member of our Board of Directors. The remaining members of the Board of Directors, acting by unanimous written consent effective March 28, 2001, decreased the size of the entire Board of Directors from nine to seven members and elected Joseph Korb as a Class A director, filling the one remaining vacancy on the Board of Directors. All other information relating to our directors, nominees for election as directors and executive officers may be found under the headings "Election of Directors", "Executive Officers" and "Section 16(a) Beneficial Reporting Compliance" in our definitive proxy statement for the 2001 Annual Meeting of Stockholders and is incorporated herein by reference to such proxy statement. ITEM 11. EXECUTIVE COMPENSATION. The discussion under the heading "Executive Compensation" in our definitive proxy statement for the 2001 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The discussion under the heading "Security Ownership of Certain Beneficial Owners and Management" in our definitive proxy statement for the 2001 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The discussion under the heading "Certain Relationships and Related Transactions" in our definitive proxy statement for the 2001 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement. 41 44 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) (1) Consolidated Financial Statements. Reference is made to the Index to Consolidated Financial Statements and Financial Statement Schedule on Page F-1. (2) Consolidated Financial Statement Schedule. Reference is made to the Index to Consolidated Financial Statements and Financial Statement Schedule on Page F-1. All other schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements or Notes thereto. (3) Exhibits. Reference is made to the Exhibit Index on Page 45. (b) Reports on Form 8-K. We filed a Current Report on Form 8-K, effective November 7, 2000, relating to our acquisition of substantially all the assets of Flash. We were not required to file any financial statements in conjunction with such filing. 42 45 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 30th day of March, 2001. GOAMERICA, INC. By: /s/ Aaron Dobrinsky ------------------------------ Aaron Dobrinsky, Chief Executive Officer 43 46 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - -------------------------------------------------------------------------------------------------------------- /s/ Aaron Dobrinsky Chairman of the Board and Chief March 30, 2001 - -------------------------------------------- Executive Officer (Principal Aaron Dobrinsky Executive Officer) /s/ Francis J. Elenio Chief Financial Officer, Treasurer March 30, 2001 - -------------------------------------------- and Secretary (Principal Financial Francis J. Elenio and Accounting Officer) /s/ Joseph Korb President and Director March 30, 2001 - -------------------------------------------- Joseph Korb /s/ Robi Blumenstein Director March 30, 2001 - -------------------------------------------- Robi Blumenstein /s/ Adam Dell Director March 30, 2001 - -------------------------------------------- Adam Dell /s/ Alan Docter Director March 29, 2001 - -------------------------------------------- Alan Docter /s/ Mark Kristoff Director March 29, 2001 - -------------------------------------------- Mark Kristoff /s/ Brian D. Bailey Director March 30, 2001 - -------------------------------------------- Brian D. Bailey
44 47 EXHIBIT INDEX**
EXHIBIT NO. DESCRIPTION OF EXHIBIT - ----------- ---------------------- 2.1(a) Merger Agreement and Plan of Reorganization, dated as of June 13, 2000, by and among GoAmerica, Inc., GoAmerica Acquisition I Corp., Wynd Communications Corporation and, as to certain sections, the existing shareholders of Wynd Communications Corporation. 2.2(b) Agreement and Plan of Merger, dated as of August 11, 2000, by and among GoAmerica, Inc., GoAmerica Acquisition II Corp. and Hotpaper.com, Inc. 2.3(c) Asset Purchase Agreement, dated as of October 31, 2000, by and among GoAmerica, Inc., GoAmerica Communications Corp., Flash Creative Management, Inc. and the shareholders of Flash Creative Management, Inc. listed on Annex I thereto. 3.1(d) Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on May 8, 2000. 3.2(e) By-laws. 4.1* Warrant to Purchase Common Stock of GoAmerica, Inc. issued to Research In Motion Limited by GoAmerica, Inc. on August 31, 2000. 4.2* Warrant to Purchase Common Stock of GoAmerica, Inc. issued to Dell Ventures, L.P. by GoAmerica, Inc. on November 14, 2000. 4.3* Warrant to Purchase Common Stock of GoAmerica, Inc. issued to Sony Electronics, Inc. by GoAmerica, Inc. on January 1, 2001. 10.1+(e) CDPD Value Added Reseller Agreement by and between GoAmerica and AT&T Wireless Data, Inc., dated May 6, 1997, as amended. 10.2+(e) AirBridge Packet Service Agreement by and between GoAmerica and Bell Atlantic NYNEX Mobile, Inc. (now Verizon Wireless), dated May 13, 1997, as amended. 10.3+(e) Value Added Reseller Agreement by and between GoAmerica and BellSouth Wireless Data L.P. (now Cingular Interactive, L.P.), dated August 31, 1999. 10.4+(e) Reseller Agreement for Messaging Services by and between GoAmerica and ARDIS Company, dated August 25, 1999. 10.5(e) Form of Invention Assignment and Non-Disclosure Agreement by and between GoAmerica and its employees. 10.6(e) Form of Indemnification Agreement by and between GoAmerica and each of its directors and executive officers. 10.7(e) Employment Agreement by and between GoAmerica and Aaron Dobrinsky, dated as of December 31, 1999. 10.8(e) Employment Agreement by and between GoAmerica and Joseph Korb, dated as of December 31, 1999. 10.9(e) Employment Agreement by and between GoAmerica and Francis Elenio, dated as of December 31, 1999.
45 48
EXHIBIT NO. DESCRIPTION OF EXHIBIT - ----------- ---------------------- 10.10(e) Employment Agreement by and between GoAmerica and Jesse Odom, dated as of December 31, 1999. 10.11(e) GoAmerica Communications Corp. 1999 Stock Option Plan. 10.12(e) GoAmerica, Inc. 1999 Stock Plan. 10.13(e) GoAmerica, Inc. Employee Stock Purchase Plan. 10.14(e) Lease Agreement by and between GoAmerica and Continental Investors, L.P., dated August 7, 1996, as amended. 10.15(e) Facilities Maintenance Agreement by and between GoAmerica and Data General, a division of EMC Corporation, dated December 13, 1999. 10.16(e) Registration Rights Agreement, dated October 15, 1996, by and between GoAmerica Communications Corp. and the Investors set forth therein. 10.17(e) Registration Rights Agreement, dated June 25, 1999, by and between GoAmerica Communications Corp. and CIBC WMV Inc. and other investors. 10.18(e) Registration Rights Agreement, dated January 28, 2000, by and between GoAmerica, Inc., Dell USA L.P., Carousel Capital Partners, L.P., Forstmann Little & Co. Equity Partnership-VI, L.P. and Impact Venture Partners, L.P. 10.19(a) Registration Rights Agreement, dated June 28, 2000, by and between GoAmerica, Inc. and the existing shareholders of Wynd Communications Corporation. 10.20(b) Registration Rights Agreement, dated August 31, 2000, by and between GoAmerica, Inc. and the existing stockholders of Hotpaper.com, Inc. 10.21(a) Escrow Agreement, dated as of June 28, 2000, by and among GoAmerica, Inc., the existing shareholders of Wynd Communications Corporation and American Stock Transfer & Trust Company. 10.22(b) Escrow Agreement, dated as of August 31, 2000, by and among GoAmerica, Inc., the existing stockholders of Hotpaper.com, Inc. and American Stock Transfer & Trust Company. 10.23(c) Escrow Agreement, dated as of November 7, 2000, by and among GoAmerica, Inc., Flash Creative Management, Inc., the shareholders of Flash Creative Management, Inc. listed on Schedule A thereto and American Stock Transfer & Trust Company. 10.24*++ Strategic Alliance Marketing Agreement by and between GoAmerica, Inc. and Research in Motion Limited, dated July 1, 2000. 10.25*++ Service Agreement by and between GoAmerica Communications Corp. and Rogers Wireless, Inc., dated July 26, 2000. 10.26*++ Channel Partner Agreement by and between GoAmerica and Metricom, Inc., dated September 1, 2000, 10.27*++ Amendment to the September 1, 2000 Channel Partner Agreement by and between GoAmerica and Metricom, Inc., dated September 1, 2000. 10.28*++ Supply Agreement by and between GoAmerica and Sierra Wireless Data, Inc., dated November 28, 2000.
46 49
EXHIBIT NO. DESCRIPTION OF EXHIBIT - ----------- ---------------------- 10.29*++ Amending Agreement to the November 28, 2000 Supply Agreement by and between GoAmerica and Sierra Wireless Data, Inc., dated December 29, 2000. 10.30*++ Service Agreement by and between GoAmerica and Personal Network Solutions Company, a division of Sony Electronics Inc., dated October 1, 2000. 10.31*++ Letter Amendment to the May 6, 1997 CDPD Value Added Reseller Agreement by and between GoAmerica and AT&T Wireless Data, Inc., dated January 31, 2001. 10.32*++ Amendment No. 1 to the May 13, 1997 Airbridge Packet Service Agreement by and between GoAmerica and Bell Atlantic Mobile (now Verizon Wireless), dated January 7, 2000. 10.33*++ Amendment No. 2 to the May 13, 1997 Airbridge Packet Service Agreement by and between GoAmerica and Bell Atlantic Mobile (now Verizon Wireless), dated March 6, 2000. 10.34*++ Amendment No. 3 to the May 13, 1997 Airbridge Packet Service Agreement by and between GoAmerica and Bell Atlantic Mobile (now Verizon Wireless), dated February 13, 2001. 10.35*++ Amendment No. 1 to the August 31, 1999 Value Added Reseller Agreement by and between GoAmerica and BellSouth Wireless Data L.P. (now Cingular Interactive, L.P.), dated March 9, 2000. 10.36*++ Amendment No. 2 to the August 31, 1999 Value Added Reseller Agreement by and between GoAmerica and BellSouth Wireless Data L.P. (now Cingular Interactive, L.P.), dated March 21, 2000. 10.37* Employment Agreement by and between GoAmerica and David Blumenthal, dated as of November 1, 2000. 10.38* Employment Agreement by and between GoAmerica and Yair Alan Griver, dated as of November 1, 2000. 10.39* Third Amendment to the August 7, 1996 Lease Agreement by and between GoAmerica and Continental Investors, L.P., dated December 1, 1999. 10.40* Fifth Amendment to the August 7, 1996 Lease Agreement by and between GoAmerica and Continental Investors, L.P., dated August 22, 2000, and entered into by and between GoAmerica and Stellar Continental LLC, the successor landlord. 10.41* Amendment to the December 13, 1999 Facilities Maintenance Agreement by and between GoAmerica and Data General, a division of EMC Corporation, dated March 14, 2001. 10.42* Registration Rights Agreement, dated November 14, 2000, by and between GoAmerica, Inc. and Dell Ventures, L.P. 10.43* Registration Rights Agreement, dated January 1, 2001, by and between GoAmerica, Inc. and Sony Electronics Inc. 21.1* List of subsidiaries of the Company. 23.1* Consent of Ernst & Young LLP.
47 50 + Confidential treatment has been requested and granted for a portion of this Exhibit. Confidential materials have been omitted and filed separately with the Securities and Exchange Commission. ++ Confidential treatment has been requested for a portion of this Exhibit and the Company is awaiting a final determination. Confidential materials have been omitted and filed separately with the Securities and Exchange Commission. (a) Incorporated by reference to the Company's Current Report on Form 8-K (File Number 000-29359) filed with the Commission on July 13, 2000. (b) Incorporated by reference to the Company's Current Report on Form 8-K (File Number 000-29359) filed with the Commission on September 15, 2000. (c) Incorporated by reference to the Company's Current Report on Form 8-K (File Number 000-29359) filed with the Commission on November 21, 2000. (d) Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File Number 000-29359) filed with the Commission on August 7, 2000. (e) Incorporated by reference to the Company's Registration Statement on Form S-1 (File Number 333-94801) which became effective on April 6, 2000. * Filed herewith. ** Certain schedules and exhibits to the documents listed in this index are not being filed herewith because we believe that the information contained therein is not material. Upon request therefor, we agree to furnish supplementally a copy of any schedule or exhibit to the Securities and Exchange Commission. 48 51 GOAMERICA, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
PAGE ---- Report of Independent Auditors .......................... F-2 Consolidated Balance Sheets as of December 31, 2000 and 1999 .......................... F-3 Consolidated Statements of Operations for the years ended December 31, 2000, 1999 and 1998 .. F-4 Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2000, 1999 and 1998 .. F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2000,1999 and 1998 .. F-6 Notes to Consolidated Financial Statements .............. F-8 Financial Statement Schedule: Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2000, 1999 and 1998 ....... F-25
All other schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements or Notes thereto. F-1 52 REPORT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders GoAmerica, Inc. We have audited the accompanying consolidated balance sheets of GoAmerica, Inc. as of December 31, 2000 and 1999, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2000. Our audits also included the financial statement schedule as listed in the index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule 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 misstatement. 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 consolidated financial position of GoAmerica, Inc. as of December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. /s/ Ernst & Young LLP MetroPark, New Jersey February 20, 2001 F-2 53 GOAMERICA, INC. CONSOLIDATED BALANCE SHEETS
DECEMBER 31, ------------------------------------ ASSETS 2000 1999 ------------------------------------ Current assets: Cash and cash equivalents..................................... $ 114,410,561 $ 6,343,793 Accounts receivable, less allowance for doubtful accounts of $388,000 in 2000 and $75,000 in 1999, respectively........... 5,016,986 541,865 Merchandise inventories....................................... 14,021,118 589,307 Prepaid expenses and other current assets..................... 5,802,076 471,455 --------------- -------------- Total current assets............................................... 139,250,741 7,946,420 Restricted cash.................................................... 738,270 -- Property, equipment and leasehold improvements, net................ 6,901,793 959,243 Trade names, net of accumulated amortization of $1,101,720 in 2000 9,798,280 -- Other intangible assets, net of accumulated amortization of $1,420,895 in 2000 and $16,667 in 1999, respectively...................... 10,179,105 33,333 Goodwill, net of accumulated amortization of $4,690,841 in 2000.... 40,102,930 -- Deferred costs..................................................... -- 510,748 Other assets....................................................... 774,419 306,940 --------------- -------------- Total assets....................................................... $ 207,745,538 $ 9,756,684 =============== ============== LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable................................................ $ 9,935,473 $ 3,837,715 Accrued expenses................................................ 13,087,594 1,460,936 Deferred revenue................................................ 2,181,966 64,300 Other current liabilities....................................... 514,860 157,854 --------------- -------------- Total current liabilities.......................................... 25,719,893 5,520,805 Other long term liabilities........................................ 495,463 139,274 Commitments and contingencies Series A redeemable preferred stock, $.01 par value; authorized: 10,500; shares issued and outstanding: none in 2000 and 10,500 1999, respectively................................................... -- 20,755,323 Series B redeemable preferred stock, $.01 par value; authorized: 648,057 shares in 2000 and none in 1999; issued and outstanding: none in 2000 and 1999.................................................. -- -- Stockholders' equity (deficit): Preferred stock, $.01 par value; authorized: 4,351,943 in 2000 and 5,000,000 in 1999; issued and outstanding: none in 2000 and 1999, respectively................................................... -- -- Common stock, $.01 par value; authorized: 100,000,000 in 2000 and 45,000,000 shares in 1999; issued and outstanding: 53,128,715 in 2000 and 23,687,184 shares in 1999, respectively............. 531,289 236,872 Additional paid-in capital...................................... 268,848,536 5,483,655 Deferred employee compensation.................................. (7,785,899) (7,067,533) Accumulated deficit............................................. (80,063,744) (15,311,712) --------------- -------------- Total stockholders' equity (deficit)............................... 181,530,182 (16,658,718) --------------- -------------- Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit).................................. $ 207,745,538 $ 9,756,684 =============== ==============
SEE ACCOMPANYING NOTES. F-3 54 GOAMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, ------------------------------------------------ 2000 1999 1998 ------------------------------------------------ REVENUES: Subscriber............................................ $ 9,005,805 $ 1,182,695 $ 359,364 Equipment............................................. 4,626,019 1,341,356 449,027 Other................................................. 241,825 206,496 18,264 -------------- -------------- ------------ 13,873,649 2,730,547 826,655 COSTS AND EXPENSES: Cost of subscriber revenue............................ 7,194,266 4,051,182 303,477 Cost of equipment revenue............................. 6,089,950 1,648,160 532,074 Sales and marketing................................... 35,806,871 3,283,021 908,694 General and administrative............................ 28,237,793 4,809,232 1,549,188 Depreciation and amortization......................... 993,887 275,067 123,616 Amortization of goodwill and other intangibles........ 7,246,789 -- -- Settlement costs...................................... -- 297,310 -- -------------- -------------- ------------ 85,569,556 14,363,972 3,417,049 -------------- -------------- ------------ Loss from operations....................................... (71,695,907) (11,633,425) (2,590,394) Interest income, net.................................. 6,943,875 165,137 13,685 -------------- -------------- ------------ Net loss................................................... $ (64,752,032) $ (11,468,288) $ (2,576,709) Beneficial conversion feature and accretion of redemption value of mandatorily redeemable convertible preferred stock................................................. (30,547,340) (10,463,472) -- -------------- -------------- ------------ Net loss applicable to common stockholders................. $ (95,299,372) $ (21,931,760) $ (2,576,709) ============== ============== ============ Basic net loss per share applicable to common stockholders. $ (2.19) $ (1.02) $ (0.14) Diluted net loss per share applicable to common stockholders $ (2.18) $ (1.00) $ (0.14) ============== ============== ============ Weighted average shares used in computation of basic net loss per share applicable to common stockholders........... 43,426,493 21,590,259 18,391,368 Weighted average shares used in computation of diluted net loss per share applicable to common stockholders...... 43,677,912 22,025,283 18,826,392
SEE ACCOMPANYING NOTES. F-4 55 GOAMERICA, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK ---------------------- NUMBER ADDITIONAL OF SHARES AMOUNT PAID-IN CAPITAL --------- ------ --------------- BALANCE AT JANUARY 1, 1998 .................... 16,409,440 $164,095 $ 1,250,905 Sale of common stock and purchase warrants ..................... 4,918,336 49,183 4,604,527 Net loss .................................. -- -- -- ---------- -------- ------------- BALANCE AT DECEMBER 31, 1998 .................. 21,327,776 213,278 5,855,432 Sale of common stock ...................... 1,875,416 18,754 1,999,322 Issuance of common stock upon exercise of warrants .............................. 483,992 4,840 (4,235) Non-cash capital contribution by principal shareholders in connection with settlement agreements ................. -- -- 148,572 Issuance of warrants to purchase common stock in connection with settlement agreements ............................ -- -- 148,738 Deferred employee compensation ............ -- -- 7,799,298 Amortization of deferred employee compensation .......................... -- -- -- Beneficial conversion feature and accretion of redemption value of redeemable convertible preferred stock -- -- (10,463,472) Net loss .................................. -- -- -- ---------- -------- ------------- BALANCE AT DECEMBER 31, 1999 .................. 23,687,184 236,872 5,483,655 Sale of common stock ...................... 10,000,000 100,000 146,118,741 Issuance of common stock pursuant to: exercise of employee stock options and warrants ............... 318,252 3,183 3,260,754 exercise of warrants ................. 219,865 2,199 2,305 compensation for financing ........... 243,266 2,433 3,646,559 purchase of businesses ............... 5,437,388 54,374 53,280,991 Beneficial conversion feature and accretion of redemption value of redeemable convertible preferred stock -- -- (30,547,340) Issuance of common stock upon conversion of preferred stock .................... 13,222,760 132,228 72,158,545 Conversion of options of acquired businesses ............................ -- -- 4,656,971 Deferred employee compensation ............ -- -- 8,456,680 Amortization of deferred employee compensation .......................... -- -- -- Issuance of warrant in exchange for marketing services .................... -- -- 2,330,675 Net loss .................................. -- -- -- ---------- -------- ------------- BALANCE AT DECEMBER 31, 2000 .................. 53,128,715 $531,289 $ 268,848,536 ========== ======== =============
TOTAL DEFERRED EMPLOYEE ACCUMULATED STOCK-HOLDERS' COMPENSATION DEFICIT EQUITY/ (DEFICIT) ------------- ------- ----------------- BALANCE AT JANUARY 1, 1998 .................... -- $ (1,266,715) $ 148,285 Sale of common stock and purchase warrants ..................... -- 4,653,710 Net loss .................................. -- (2,576,709) (2,576,709) ------------ ------------- ------------- BALANCE AT DECEMBER 31, 1998 .................. -- (3,843,424) 2,225,286 Sale of common stock ...................... -- -- 2,018,076 Issuance of common stock upon exercise of warrants .............................. -- -- 605 Non-cash capital contribution by principal shareholders in connection with settlement agreements ................. -- -- 148,572 Issuance of warrants to purchase common stock in connection with settlement agreements ............................ -- -- 148,738 Deferred employee compensation ............ $ (7,799,298) -- -- Amortization of deferred employee compensation .......................... 731,765 -- 731,765 Beneficial conversion feature and accretion of redemption value of redeemable convertible preferred stock -- -- (10,463,472) Net loss .................................. -- (11,468,288) (11,468,288) ------------ ------------- ------------- BALANCE AT DECEMBER 31, 1999 .................. (7,067,533) (15,311,712) (16,658,718) Sale of common stock ...................... -- -- 146,218,741 Issuance of common stock pursuant to: exercise of employee stock options and warrants ............... (3,087,600) -- 176,337 exercise of warrants ................. -- -- 4,504 compensation for financing ........... -- -- 3,648,992 purchase of businesses ............... -- -- 53,335,365 Beneficial conversion feature and accretion of redemption value of redeemable convertible preferred stock -- -- (30,547,340) Issuance of common stock upon conversion of preferred stock .................... -- -- 72,290,773 Conversion of options of acquired businesses ............................ (519,514) -- 4,137,457 Deferred employee compensation ............ (8,456,680) -- -- Amortization of deferred employee compensation .......................... 11,345,428 -- 11,345,428 Issuance of warrant in exchange for marketing services .................... -- -- 2,330,675 Net loss .................................. -- (64,752,032) (64,752,032) ------------ ------------- ------------- BALANCE AT DECEMBER 31, 2000 .................. $ (7,785,899) $(80,063,744) $ 181,530,182 ============ ============ =============
SEE ACCOMPANYING NOTES. F-5 56 GOAMERICA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, ------------------------------------------------ 2000 1999 1998 ------------------------------------------------- OPERATING ACTIVITIES Net loss................................................... $ (64,752,032) $ (11,468,288) $(2,576,709) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization.......................... 8,240,676 275,067 123,616 Increase in provision for losses on accounts receivable 727,746 215,297 15,000 Non-cash employee compensation......................... 11,345,428 731,765 -- Non-cash settlement costs.............................. -- 297,310 -- Deferred rent.......................................... 101,906 139,274 -- Non-cash marketing expense............................. 1,057,500 -- -- Other non-cash charges................................. 255,700 -- -- Changes in operating assets and liabilities: Increase in accounts receivable..................... (4,702,763) (558,141) (199,651) Increase in inventory............................... (13,345,092) (523,085) (3,202) Increase in prepaid expenses and other assets....... (6,399,903) (432,601) (78,316) Increase (decrease) in accounts payable............. 4,843,996 3,672,332 (20,125) Increase in accrued expenses........................ 11,203,936 856,130 510,303 Increase in deferred income......................... 2,117,666 49,792 14,508 ------------- -------------- ----------- Net cash used in operating activities...................... (49,305,236) (6,745,148) (2,214,576) ============= ============== =========== INVESTING ACTIVITIES Purchase of property, equipment and leasehold improvements. (5,499,482) (387,116) (297,769) Acquisition of businesses, net of cash acquired............ (7,659,017) -- (200,000) Other assets............................................... (300,000) (255,700) -- ------------- -------------- ----------- Net cash used in investing activities...................... (13,458,499) (642,816) (497,769) ============= ============== =========== FINANCING ACTIVITIES Issuance of common stock, net of related expenses.......... 146,399,582 2,018,681 4,653,710 Issuance of preferred stock, net of related expenses....... 24,637,100 10,291,851 -- Deferred financing costs................................... -- (510,748) -- Payments made on capital lease obligations................. (206,179) (28,981) -- ------------- -------------- ----------- Net cash provided by financing activities.................. 170,830,503 11,770,803 4,653,710 ============= ============== =========== Increase in cash and cash equivalents...................... 108,066,768 4,382,839 1,941,365 Cash and cash equivalents at beginning of period........... 6,343,793 1,960,954 19,589 ------------- -------------- ----------- Cash and cash equivalents at end of period................. $114,410,561 $ 6,343,793 $ 1,960,954 ============= ============== =========== Supplemental disclosure of cash flow information: Interest paid......................................... $ 34,198 $ 5,361 -- Non-cash investing and financing activities: Acquisition of equipment through capital leases....... 614,882 186,841 -- Issuance of common stock purchase warrants in exchange for sales and marketing services................... 2,856,815 -- --
F-6 57 GOAMERICA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, ------------------------------------------------ 2000 1999 1998 ------------------------------------------------ Non-cash investing and financing activities (continued): Purchase of businesses, net of cash acquired: Working capital surplus (deficit), net of cash acquired $ (2,886,111) -- -- Property, equipment and leasehold improvements........ 822,073 -- -- Goodwill.............................................. 44,793,770 -- -- Trade names........................................... 10,900,000 -- -- Other intangibles..................................... 11,600,000 -- -- Other assets.......................................... 32,660 -- -- Non-current liabilities............................... (130,553) -- -- Common stock and options issued....................... 57,472,822 -- --
SEE ACCOMPANYING NOTES. F-7 58 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 common and Series A Preferred shares of GoAmerica Communications Corp. for the same number of shares of similar securities of GoAmerica, Inc., and as a result, GoAmerica Communications Corp. became a wholly-owned subsidiary of GoAmerica, Inc. All outstanding options and warrants of GoAmerica Communications Corp. were exchanged into similar securities 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. Basis of Consolidation The consolidated financial statements include the accounts of GoAmerica, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 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 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. F-8 59 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 two to seven years. Expenditures for maintenance and repairs are charged to expense as incurred. Computer Software Developed or Obtained For Internal Use All direct internal and external costs incurred in connection with the application development stage of software for internal use are capitalized. All other costs associated with internal use software are expensed when incurred. Amounts capitalized are included in property, equipment and leasehold improvements and are amortized on a straight-line basis over three years beginning when such assets are placed in service. Intangibles Goodwill, trade names and other intangibles arise from acquisitions. Goodwill is amortized over periods principally ranging from 3 to 4 years, using a straight-line method. Trade names are amortized over 5 years, using a straight-line method. Other intangibles, which include developed technology, assembled work force and customer lists, are amortized over periods principally ranging from 3 to 4 years, using the straight-line method. Intangibles are periodically reviewed to assess recoverability from future operations when events and circumstances indicate that the undiscounted cash flows estimated to be generated by these assets, is less than the carrying amounts of those assets. To the extent carrying values exceed fair values, an impairment loss is recognized in operating results. 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 generally six months or twelve months. Equipment revenue is recognized upon shipment to the end user. Sales into retail channels, where a right of return exits, are deferred and recognized at the time such equipment is sold to the end consumer. Consulting revenue, included in other revenue, is recognized as the related services are provided. F-9 60 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Cost of Revenues Cost of subscriber revenue consists principally of airtime costs charged by carriers. 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 2000, 1999 and 1998, advertising expense was approximately $19,490,000, $1,081,000 and $203,000, respectively. Research and Development Costs Research and development costs are expensed as incurred. During 2000, 1999 and 1998, research and development costs totaled approximately $762,000, $465,000 and $155,000, respectively. 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 required 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 and Emerging Issues Task Force ("EITF") Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods and Services", using a fair value approach. Net Loss Available for Common Stockholders Net loss available for common stockholders represents net loss increased by accretion of the redeemable preferred stock to redemption value and an amount representing beneficial conversion features on preferred stock. Stock Splits On April 15, 1998, the Company's Board of Directors declared a 2000 for 1 stock split. Additionally, on February 23, 2000, the Company's Board of Directors approved an amendment to the Company's certificate of incorporation to increase the number of common shares F-10 61 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS authorized from 45,000,000 to 100,000,000. On that same date, the Company's Board of Directors declared an eight for one stock split to become effective upon the filing of the amendment to the certificate of incorporation. All share and per share data included in the financial statements have been retroactively adjusted to reflect the stock splits, and the amendment to the certificate of incorporation. 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 one financial institution. 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 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 related equipment sales on a single segment basis. Consulting services are not a material component of the Company's business. 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 as of January 1, 1999 had no impact on the Company's results of operations, financial position or cash flows. Reclassifications The Company has reclassified certain prior year information to conform with current year presentation. F-11 62 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Recent Accounting Pronouncements The Company has adopted the provisions of the EITF 00-10, "Accounting for Shipping and Handling Fees and Costs." This consensus states that all shipping and handling billings to a customer in a sale transaction represent the fees earned for the goods provided and, accordingly, amounts billed related to shipping and handling should be classified as revenue. Prior to January 1, 2000, such costs were insignificant. In May 2000, the EITF reached a consensus on EITF 00-14, "Accounting for Certain Sales Incentives," which provides guidance on accounting for discounts, coupons, rebates and free products, as well as the income statement classification of these discounts, coupons, rebates and free products. EITF 00-14 is effective for the Company on April 1, 2001. The Company is currently evaluating the impact of this new guidance. In June 1998, the FASB issued SFAS 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. ACQUISITIONS The Company acquired three companies during 2000. Payment of the aggregate purchase price for these acquisitions of approximately $65.7 million consisted of (i) 5,437,388 shares of the Company's common stock at a weighted-average value of $9.81 per share (based on the average closing prices of the common stock on the date of announcement of each acquisition); (ii) $7.7 million in cash (net of cash acquired of $484,315) including merger related costs and $2 million held in escrow; (iii) the conversion of options to purchase 559,373 shares of common stock the vested portion of which were valued at approximately $4.1 million as of the date of acquisition. These acquisitions were accounted for under the purchase method of accounting, and accordingly, the purchase price has been allocated, on a preliminary basis, to the assets acquired and liabilities assumed based upon estimates of fair market values at the dates of acquisition. The results of operations of the acquired businesses are included in the consolidated results of operations of the Company from their respective dates of acquisition. The excess of the purchase price over the fair value of the acquired net assets aggregating approximately $44.8 million has been recorded as goodwill and is being amortized on a straight-line basis over useful lives ranging from three to four years. The 2000 acquisitions are further described below. On June 28, 2000, the Company acquired Wynd Communications Corporation ("Wynd"), a provider of wireless telecommunications services for the hearing impaired. The total purchase price of approximately $44.0 million included the issuance of 3,964,975 shares of common stock F-12 63 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS valued at $39.5 million ($9.96 per share) and the payment of approximately $469,000 in merger related costs. Under the terms of the merger agreement, 396,498 shares of the common stock issued is being held in escrow for a period of one year from the acquisition date. In addition, outstanding options to acquire Wynd shares were converted into options to purchase, at a weighted average exercise price of $1.61 per share, 477,722 shares of the Company's common stock. Options vested at the date of acquisition with an estimated fair market value of approximately $4.0 million were included in the determination of the total purchase price. Based upon preliminary valuation reports, the Company has recorded identified intangible assets including trade names, developed technology, assembled work force and customer lists aggregating approximately $19.5 million. The cost of the acquisition exceeded the fair value of the acquired net assets by approximately $25.8 million which has been recorded as goodwill and is being amortized on a straight-line basis over 4 years. On August 31, 2000, the Company acquired Hotpaper.com, Inc. ("Hotpaper"), a provider of Web-based document automation software, infrastructure and content. The total purchase price of approximately $10.1 million included the issuance of 1,006,111 shares of common stock, valued at $8.8 million ($8.75 per share), cash consideration of $750,000 and approximately $356,000 in merger related costs. Under the terms of the merger agreement, 100,612 shares of the common stock issued is being held in escrow for a period of one year from the acquisition date. In addition, outstanding options to acquire Hotpaper shares were converted into options to purchase, at a weighted average exercise price of $0.59 per share, 81,651 shares of the Company's common stock. Options vested at the date of acquisition with an estimated fair market value of approximately $147,000 were included in the determination of the total purchase price. Based upon preliminary valuation reports, the Company recorded identified intangible assets including developed technology and assembled work force aggregating approximately $3.0 million. The cost of the acquisition exceeded the fair value of the acquired net assets by approximately $7.9 million which has been recorded as goodwill and is being amortized on a straight-line basis over 3 years. On November 7, 2000, the Company acquired certain assets and assumed certain liabilities of Flash Creative Management, Inc. ("Flash"), a provider of consulting services to business customers in the areas of business improvement, strategy and redesign and in software development and integration. The total purchase price of approximately $11.6 million included the issuance of 466,302 shares of common stock valued at $5.0 million ($10.81 per share), cash consideration of $6.0 million and approximately $568,000 in merger related costs. Under the terms of the purchase agreement, payment of $2.0 million of the cash consideration has been deferred and is included in accrued expenses, and 69,945 shares of the common stock issued are being held in escrow for a period of one year from the acquisition date. The cost of the acquisition exceeded the fair market value of the acquired net assets by approximately $11.1 million which has been recorded as goodwill and is being amortized on a straight-line basis over 3 years. The following unaudited pro forma summary presents the combined results of operations as if the acquisitions described above had occurred as of January 1, 1999, and does not purport to be indicative of the results that would have occurred had the transactions been completed as of that date or of results that may occur in the future. F-13 64 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, -------------------------------------- 2000 1999 -------------------------------------- Net revenues ............................. $ 18,637,112 $ 8,607,363 Net loss applicable to common stockholders (111,462,851) (42,417,051) Net loss per share-basic ................. (2.39) (1.57) Net loss per share-diluted ............... (2.39) (1.54)
In July 1998, the Company acquired certain assets and liabilities of a segment of Data Transmission Services, Inc. ("DTS"), known as ZAP.IT, for approximately $200,000. Had the acquisition of DTS occurred as of January 1, 1998, the unaudited pro forma combined results of operations of the Company during 1998 would have reflected combined revenues of $889,122; net loss of $3,902,552; and net loss per basic and diluted share of $0.21. 4. SUPPLEMENTAL BALANCE SHEET INFORMATION Property, equipment and leasehold improvements consists of the following:
December 31, -------------------------------------- 2000 1999 -------------------------------------- Furniture, fixtures and equipment ............ $ 1,188,278 $ 328,142 Computer equipment and software .............. 6,977,608 1,018,443 Leasehold improvements ....................... 148,638 31,502 ----------- ----------- 8,314,524 1,378,087 Less accumulated depreciation and amortization (1,412,731) (418,844) ----------- ----------- $ 6,901,793 $ 959,243 =========== ===========
At December 31, 2000 and 1999, the Company leased equipment, furniture and fixtures with a cost basis of $986,749 and $186,841, respectively, which is included in property, equipment and leasehold improvements. Accumulated amortization on leased equipment was $89,695 and $1,062 at December 31, 2000 and 1999, respectively. F-14 65 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accrued expenses consisted of the following:
December 31, -------------------------------------- 2000 1999 -------------------------------------- Carrier Services ............................ $ 2,925,133 $ 164,134 Inventory purchases ......................... 2,884,642 85,025 Employee compensation ....................... 2,086,071 213,750 Deferred purchase price - Flash ............. 2,000,000 -- Marketing expenses .......................... 1,844,415 400,000 Professional fees ........................... 839,811 233,007 Equipment and leasehold improvement purchases 100,949 125,000 Accrued legal settlement .................... -- 80,000 Other ....................................... 406,573 160,020 ----------- ---------- $13,087,594 $1,460,936 =========== ==========
5. COMMITMENTS AND CONTINGENCIES The Company leases office facilities under operating leases which expire at various dates through 2010. The Company has the option to renew certain leases for an additional five year period. The Company is obligated under capital leases for computer and office equipment that expire at various dates through December 2005 with interest ranging from 9.85% to 14.9%. Future minimum capital lease payments and future minimum lease payments relating to office space under noncancelable operating leases as of December 31, 2000 are as follows:
CAPITAL OPERATING Year ended December 31, LEASES LEASES ----------- ----------- 2001 .............................................. $ 523,000 $ 3,047,000 2002 .............................................. 275,000 2,563,000 2003 .............................................. 23,000 1,698,000 2004 .............................................. 14,000 1,283,000 2005 .............................................. 2,000 1,273,000 Thereafter ........................................ -- 4,427,000 ----------- ----------- Total minimum lease payments ...................... 837,000 $14,291,000 =========== Less amount representing interest ................. (76,000) ----------- Present value of net minimum capital lease payments .................................. 761,000 Less current portion of capital lease obligations.. (507,000) ----------- Obligations under capital lease, net of current portion ......................................... $ 254,000 ===========
During 2000, 1999 and 1998 total rent expense was approximately $1,992,000, $287,000 and $60,000, respectively. F-15 66 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2000, standby letters of credit totaling approximately $731,000 were outstanding as security deposits on certain facility leases. Such letters of credit expire on various dates through August 2002. As of December 31, 2000, $738,270 of cash held in the Company's bank accounts is restricted to secure these letters of credit. During 2000 and 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 these employees were terminated by the Company, is approximately $3,202,000 at December 31, 2000. During 1999, the Company became a defendant in litigation involving its use of certain computer software. On April 22, 1999, the Company entered into a settlement agreement under which it paid $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 1999. During 2000, the Company entered into a supply agreement with an equipment manufacturer under which it is obligated to purchase an aggregate of approximately $10 million of wireless devices during 2001. 6. 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. 7. 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, the estimated fair value at such date, resulting in net proceeds of approximately $7,335,000. On August 30, 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, the estimated fair value at such date, resulting in net proceeds of approximately $2,457,000. During November 1999, the Company sold an additional 500 shares of Series A Preferred Stock. The purchase price of such shares was $1,000 per share, resulting in net proceeds of $500,000. The Company recorded an adjustment to net loss applicable to common stockholders of approximately $500,000 relating to the beneficial conversion feature inherent in the November 1999 issuance. This amount was determined based upon the excess of the estimated fair value of the Company's common stock into which the Series A Preferred Stock was immediately convertible less the initial conversion price of $1.31 per share and in accordance with EITF No. 98-5, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable F-16 67 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Conversion Ratios" limited to the amount of proceeds received for the 500 shares of Series A Preferred Stock. Each share of Series A Preferred Stock had a liquidation value of $1,000 per share and was convertible into shares of common stock at an initial conversion price of $1.31 per share, subject to adjustments, under certain circumstances. On December 9, 1999, the Company's Board of Directors adopted a resolution which provided for the conversion of the Series A Preferred into common stock upon the consummation of the Company's initial public offering. To the extent not previously converted, upon the five year anniversary of the issuance of the Series A Preferred Stock, a stockholder had the right to 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 paid no dividends; however, such stockholders were 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 voted 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 was 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 had registration rights under an agreement dated June 25, 1999 which provided for the registration of common stock held by such stockholders within the periods specified by such agreements. The holders of the Series A Preferred Stock had anti-dilution rights granted pursuant to an agreement dated August 30, 1999 which allowed such stockholders to purchase additional securities of the Company upon the issuance or sale of certain equity instruments, as defined. In January 2000, the Company sold 648,057 shares of its Series B Redeemable Convertible Preferred Stock ("Series B Preferred Stock") for aggregate net proceeds of approximately $24,637,000. Each share of the Series B Preferred Stock had a liquidation value of $40.12 per share and was convertible at any time at the option of the holder into eight shares of common stock, subject to adjustments, under certain circumstances. The Series B Preferred Stock was subject to automatic conversion upon the completion by the Company of a qualified initial public offering, as defined, of its common stock. To the extent not converted, commencing August 30, 2004 a holder of Series B Preferred Stock had the right to 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 paid no dividends; however, such stockholders were entitled to participate in the event dividends were paid on the Company's common and preferred stock. The Series B Preferred Stock had 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 paid to its financial advisors certain cash consideration and issued approximately 243,266 shares of its common stock. Based on the beneficial conversion terms of the Series B Preferred Stock, assuming an initial public offering price of $15.00 per share the Company F-17 68 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS recorded an adjustment to net loss applicable to common stockholders for approximately $21.0 million at the date of issuance as a beneficial conversion in accordance with EITF 98-5. 8. 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. During 1998, in conjunction with the sale of certain shares of its common stock, the Company issued to the purchasers warrants to purchase an aggregate of 891,792 additional shares of the Company's common stock. Exercise prices under the warrants range from $1.23 per share to $1.93 per share. The warrants were exercisable at the date of issue and expire at various dates through January 2003. As of December 31, 2000, 703,088 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 408,160 currently outstanding shares of the Company's common stock owned by the principal shareholders at an exercise price of $.92 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 113,976 shares of the Company's common stock at a price of $.00125 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, as part of this settlement, two of the Company's principal stockholders issued options to purchase 113,848 currently outstanding shares of the Company's common stock owned by the principal stockholders at an exercise price of $.00125 per share. As a result of these agreements and the related warrant and option issuances by both the Company and the principal stockholders, the Company recorded a non-cash charge of $297,310 during 1999 based on the estimated fair value of the warrants and options on the date of issuance. Such fair value was determined to equal the fair value of the underlying common stock. The options issued by the principal stockholders have been accounted for as a capital contribution. In connection with the issuance of certain shares of its common stock during 1998, the Company agreed to issue additional shares in the event certain subscriber levels were not achieved. To satisfy its obligation, in May 1999, the Company issued warrants to purchase 435,024 shares of its common stock at a price of $.00125 per share. The warrants and options described in the two immediately preceding paragraphs were exercisable at the date of grant and were exercised as of December 31, 2000. F-18 69 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS During the fourth quarter of 1999, the Company sold an additional 1,871,008 shares of its common stock to certain existing common stockholders in connection with the exercise of anti-dilution rights granted to them upon their initial purchase of common stock. The net proceeds to the Company were approximately $1,882,000. On April 12, 2000, the Company consummated an initial public offering of 10,000,000 shares of its common stock at a price to the public of $16.00 per share, all of which shares were issued and sold by the Company. Upon closing of the initial public offering, all issued and outstanding shares of Series A Preferred Stock and Series B Preferred Stock were converted to shares of common stock. On August 31, 2000, the Company granted Research in Motion Limited, a supplier of wireless devices and related software, a warrant to purchase 333,000 shares of the Company's common stock at $16.00 per share as partial consideration for certain obligations pursuant to certain marketing and strategic alliance agreements. The warrant is exercisable one year after the date of grant and expires in three years. As of December 31, 2000, the warrant had an estimated fair market value of approximately $526,000 of which approximately $281,000 was recognized by the Company during 2000 as sales and marketing expense. The Company will recognize the unamortized portion and any change in value over the remaining term of the agreement. All such warrants remain outstanding as of December 31, 2000. On November 14, 2000, the Company granted Dell Ventures, L.P., an affiliate of Dell Products, a warrant to purchase 563,864 shares of the Company's common stock at a price of $16.00 per share as partial consideration for certain obligations pursuant to a product distribution agreement. This warrant was immediately exercisable at the date of grant and expires in three years. As of December 31, 2000, Dell USA, L.P. and its affiliates own in the aggregate approximately 5.9% of the outstanding common stock of the Company. The warrant had an estimated fair market value at the date of grant of approximately $2.3 million of which approximately $777,000 was recognized by the Company during 2000 as sales and marketing expense. The Company will recognize the unamortized portion over the remaining term of the agreement. All such warrants remain outstanding as of December 31, 2000. As of December 31, 2000, the Company had reserved shares of common stock for issuance as follows:
Exercise of common stock options ......... 6,552,723 Exercise of common stock purchase warrants 1,599,952 Employee stock purchase plan ............. 4,000,000
9. STOCK OPTION PLANS AND OTHER STOCK-BASED COMPENSATION On August 3, 1999, the Company adopted the GoAmerica Communications Corp. 1999 Stock Option Plan. This plan provided for the granting of awards to purchase shares of common stock. No further options will be made under the GoAmerica Communications Corp. 1999 Stock Option Plan. F-19 70 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In December 1999, the Company's Board of Directors adopted the GoAmerica, Inc. 1999 Stock Plan (the "Plan") as a successor plan to the GoAmerica Communications Corp. 1999 Stock Option Plan, pursuant to which 4,800,000 additional shares of the Company's common stock have been reserved for issuance to selected employees, non-employee directors and consultants. 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. The Plan provides for award grants in the form of incentive stock options and non-qualified stock options. Options granted under the Plan generally vest annually over 4 years and expire after 10 years. The following table summarizes activity on a combined basis for the plans during 2000 and 1999:
Number of Weighted-Average Options Exercise Price ------------- -------------- Outstanding at January 1, 1999 ......... -- $ -- Granted ................................ 2,440,008 .92 Cancelled .............................. -- -- --------- --------- Outstanding at December 31, 1999 2,440,008 .92 Granted ................................ 3,581,523 8.34 Exercised .............................. (125,277) 1.41 Cancelled .............................. (150,700) 11.81 --------- --------- Outstanding at December 31, 2000 ....... 5,745,554 5.26 ========= ========= Exercisable at December 31, 2000 ....... 1,859,278 1.84 ========= ========= Exercisable at December 31, 1999 ....... 856,000 .95 ========= ========= Available for grant at December 31, 2000 807,169 =========
The following table summarizes information about fixed price stock options outstanding at December 31, 2000:
Outstanding Exercisable ---------------------------------------------------- ------------------------------ Weighted- Average Weighted- Range of Exercise Number Weighted- Average Remaining Number Average Exercise Prices Outstanding Exercise Price Contractual Life Exercisable Price ------ ----------- -------------- ---------------- ----------- ----- $.25 160,000 $.25 8.6 years 53,333 $.25 .45--.56 1,133,699 .55 8.0 years 660,524 .56 1.05--1.31 1,200,062 1.17 8.9 years 562,364 1.13 2.09--2.44 340,891 2.18 9.1 years 183,057 2.20 5.02--7.50 1,808,550 6.19 8.6 years 400,000 5.02 7.97--8.27 172,152 7.97 9.7 years -- -- 15.00--16.00 930,200 15.36 9.2 years -- --
F-20 71 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For certain options granted during 2000 and 1999, the Company has recorded pursuant to APB No. 25 approximately $8,457,000 and $7,799,000, respectively, of deferred compensation expense representing the difference between the exercise price and the market value of the common stock on the date of grant. These amounts are being amortized over the vesting period of each option and amounted to approximately $8,258,000 and $732,000 during the years ended December 31, 2000 and 1999, respectively. During 1996, the Company granted an employee a warrant to purchase up to 320,000 shares of the Company's common stock at $0.44 per share, an amount in excess of the estimated fair value at the date of grant. During 2000, the warrant was exercised on a cashless basis in accordance with the terms of the original agreement resulting in the issuance of 192,975 shares of common stock. As a result, the Company recorded a compensation charge of approximately $4,980,000 representing the difference between the exercise price and the market value of the common stock as of the date of exercise. The following table discloses, for the year ended December 31, 2000 and 1999, the number of options granted and certain weighted-average information:
Year ended December 31, ------------------------------------------------------------------------------- 2000 1999 --------------------------------------- -------------------------------------- Number Fair Exercise Number Fair Exercise of Options Value Price of Options Value Price --------------------------------------- -------------------------------------- Exercise price greater than market price.. 37,000 $ 2.97 $16.00 160,000 $ 0.00 $ 2.24 Exercise price equals market price ....... 2,137,150 7.32 11.08 288,000 0.22 1.31 Exercise price less than market price .... 1,407,373 10.64 3.60 1,992,008 4.04 0.76
Pro forma information regarding net income and earnings per share is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of SFAS 123. The fair value for these options was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions for 2000 and 1999: weighted-average risk-free interest rate of 6.20% and 6.11% respectively; expected volatility of 0.80 and zero; no dividends; and a weighted-average expected life of the options of 4.2 years and 3.0 years, respectively. There were no options granted prior to August 1999. F-21 72 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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:
Year ended December 31, ---------------------------------------- 2000 1999 -------------- --------------- Pro forma net loss applicable to common stockholders .......................... $ (99,279,565) $ (22,044,352) Pro forma loss per share -- basic ..... (2.29) (1.02) Pro forma loss per share -- diluted ... (2.27) (1.00)
The pro forma impact reflected above is not likely to be representative of the effects on reported net loss for future years as options are generally granted each year and vest over several years. In December 1999, the Company's Board of Directors adopted the Employee Stock Purchase Plan effective upon the Company's initial public offering of its common stock which was completed on April 12, 2000. The Company initially reserved 4,000,000 shares of common stock for issuance under the plan. There were no shares sold pursuant to the plan during 2000. 10. INCOME TAXES Significant components of the Company's deferred tax assets and liabilities are as follows:
Year ended December 31, ----------------------------- 2000 1999 ------------ ----------- Deferred tax assets: Net operating loss carryforward ................ $ 27,752,000 $ 6,087,000 Deferred compensation .......................... 5,659,000 Other .......................................... 1,827,000 Less valuation allowance ........................... (27,227,000) (6,071,000) ------------ ----------- Deferred tax assets ................................ 8,011,000 16,000 Deferred tax liabilities: Intangible assets ............................ (8,011,000) -- Property, equipment and leasehold improvements.. -- (16,000) ------------ ----------- Net deferred tax assets ............................ $ -- $ -- ============ ===========
F-22 73 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A reconciliation setting forth the differences between the effective tax rate of the Company and the U.S. statutory rate is as follows:
Year ended December 31, ---------------------------------------------- 2000 1999 1998 ------------ ----------- ----------- Statutory federal income tax (benefit) at 34% ...... $(22,016,000) $(3,855,000) $ (876,000) State income tax (benefit), net of federal benefit.. (3,597,000) (680,000) (155,000) Non-deductible expenses ............................ 1,425,000 -- -- Increase in valuation allowance .................... 24,188,000 4,535,000 1,031,000 ------------ ----------- ----------- Total .............................................. $ -- $ -- $ -- ============ =========== ===========
At December 31, 2000, the Company has a federal and state net operating loss ("NOL") carryforward of approximately $69.4 million. The federal NOL carryforwards expire from 2011 to 2020. 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. In addition, the Company acquired additional operating losses through its acquisitions of Wynd and Hotpaper. The Company believes that an ownership change has occurred with respect to these entities. The effect of an ownership change would be the imposition of an annual limitation on the use of net operating loss carryforwards attributable to periods before the change. The Company has not performed a detailed analysis to determine the amount of the potential limitations. 11. 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 the period. The weighted average number of shares utilized in arriving at basic earnings per share reflect an adjustment for 245,356 common shares for the year ended December 31, 2000, for shares held in escrow as a result of the Wynd, Hotpaper and Flash acquisitions. 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. The weighted average number of shares utilized in arriving at diluted earnings per share presented reflect adjustments for 6,063, 435,024 and 435,024 common F-23 74 GOAMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS shares in each of the years ended December 31, 2000, 1999 and 1998, respectively, issuable pursuant to warrants which were previously issued for nominal consideration. As the Company had a net loss, the impact of the assumed exercise of the stock options, warrants and the assumed preferred stock conversion is anti-dilutive and as such, these amounts (except for warrants as issued for nominal consideration) have been excluded from the calculation of diluted earnings per share. 12. SUBSEQUENT EVENTS During January 2001, the Company entered into a service agreement with Sony Electronics Inc. with an initial term of one year. In conjunction with the agreement, the Company issued a warrant to purchase 500,000 shares of the Company's common stock at a price of $16.00 per share. Such warrants were exercisable at the date of grant and have a three year term. The agreement also requires the Company to provide up to $3.5 million of marketing funds. During 2001, the Company will incur a non-cash sales and marketing charge as a result of the issuance. 13. QUARTERLY FINANCIAL DATA (UNAUDITED) The table below summarizes the Company's unaudited quarterly operating results for years ended December 31, 2000 and 1999.
Quarter Ended March 31 June 30 September 30 December 31 ------------ ------------ ------------ ------------ 2000 Net revenue and other income ................. $ 1,440,667 $ 2,054,830 $ 4,268,014 $ 6,110,138 Cost of revenue .............................. (1,972,697) (2,386,896) (3,811,834) (5,112,789) Operating expenses ........................... (11,506,368) (16,736,124) (17,831,913) (17,970,259) Depreciation and amortization expenses ....... (100,547) (222,265) (3,467,271) (4,450,593) Interest income, net ......................... 188,141 2,322,898 2,425,522 2,007,314 Net (loss) ................................... $(11,950,804) $(14,967,557) $(18,417,482) $(19,416,189) Net (loss) applicable to common stockholders.. $(41,889,313) $(15,576,388) $(18,417,482) $(19,416,189) Net (loss) per common share: - Basic .................................. $ (1.75) $ (0.34) $ (0.36) $ (0.37) - Diluted ................................ $ (1.75) $ (0.34) $ (0.36) $ (0.37) 1999 Net revenue and other income ................. $ 354,778 $ 514,386 $ 611,779 $ 1,249,604 Cost of revenue .............................. (418,951) (900,325) (1,402,131) (2,977,935) Operating expenses ........................... (858,911) (1,531,400) (2,171,826) (3,530,116) Depreciation and amortization expenses ....... (52,843) (42,598) (87,087) (92,539) Settlement costs ............................. -- -- (297,310) -- Interest income, net ......................... 14,647 13,388 52,535 84,567 Net (loss) ................................... $ (961,280) $ (1,946,549) $ (3,294,040) $ (5,266,419) Net (loss) applicable to common stockholders $ (961,280) $ (1,946,549) $ (3,304,207) $(15,719,724) Net (loss) per common share: - Basic .................................. $ (0.05) $ (0.09) $ (0.15) $ (0.68) - Diluted ................................ $ (0.04) $ (0.09) $ (0.15) $ (0.66)
F-24 75 SCHEDULE II GOAMERICA, INC. FINANCIAL STATEMENT SCHEDULE VALUATION AND QUALIFYING ACCOUNTS AND RESERVES YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
BALANCE AT ADDITIONS: BALANCE AT BEGINNING OF CHARGED TO COSTS AND END OF PERIOD EXPENSES DEDUCTIONS PERIOD ------------ --------------------- ---------- ---------- YEAR ENDED DECEMBER 31, 2000 Allowance for doubtful accounts $75,000 $728,000 $415,000(1) $388,000 Inventory Reserve -- 117,000 -- 117,000 Sales allowances, discounts & returns -- 820,000 575,000(2) 245,000 YEAR ENDED DECEMBER 31, 1999 Allowance for doubtful accounts 20,000 215,000 160,000(1) 75,000 YEAR ENDED DECEMBER 31, 1998 Allowance for doubtful accounts 5,000 15,000 -- 20,000
(1) Uncollectible accounts written-off, net of recoveries. (2) Returns and discounts charged to reserve. F-25 EX-4.1 2 w46736ex4-1.txt WARRANT TO PURCHASE FOR MOTION LIMITED 1 Exhibit 4.1 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES STATUTES (TOGETHER WITH THE SECURITIES ACT, THE "SECURITIES LAWS"). THESE SECURITIES, TOGETHER WITH ANY SECURITIES ISSUABLE ON THEIR EXERCISE, ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE RESOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER THE APPLICABLE SECURITIES LAWS OR PURSUANT TO EXEMPTIONS THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS. THESE SECURITIES ARE ALSO SUBJECT TO RESTRICTIONS CONTAINED IN THIS WARRANT TO WHICH REFERENCE SHOULD BE MADE. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF GOAMERICA, INC. GoAmerica, Inc., a corporation organized under the laws of the State of Delaware, U.S.A. (the "Company"), hereby certifies that, for value received, Research In Motion Limited or its registered assigns (the "Holder"), is entitled to subscribe for and purchase up to 333,000 Shares of Common Stock (as adjusted pursuant to Section 4 hereof) (the "Warrant Shares") at a price equal to $16.00 PER SHARE, which is the price per Common Share agreed upon in that certain Preliminary Marketing Agreement in force on May 3, 2000 (the "PMA"), such price to be effective on the date hereof (the "Issue Date") (such price and such other price as results, from time to time, from the adjustments specified in Section 4 hereof is hereinafter referred to as the "Per Share Exercise Price"), subject to the provisions and upon the terms and conditions hereinafter set forth. This Warrant is being issued in connection with that certain Strategic Alliance Agreement, executed on the date hereof, between the Company and the Holder. Terms capitalized herein but not otherwise defined shall have the meaning set forth in Section 9 hereof. All dollar amounts herein are expressed in U.S. dollars. Section 1. Exercise Period. Subject to Section 2 below, the right to purchase the Warrant Shares represented by this Warrant is exercisable on or after May 3, 2001. Section 2. Termination of Warrant. This Warrant will expire and terminate at 4:30 p.m., Toronto time, on the third anniversary of the Issue Date (the "Expiration Date"); provided, however, that if such day is a Saturday, Sunday or Federal holiday, this Warrant will not expire until 4:30 p.m., Toronto time, on the next Business Day. Any portion of this Warrant not exercised before the Expiration Date will become void, and all rights of the Holder hereunder will cease. 1 2 Section 3. Method of Exercise: Payment. The purchase right represented by this Warrant may be exercised in whole or in part by the Holder, at any time, by delivering to the Company, at its principal office, (a) this Warrant, (b) an executed Notice of Exercise in the form attached hereto as Exhibit A, (c) an executed Representations Letter substantially in the form attached hereto as Exhibit B and (d) the payment to the Company of an amount equal to the aggregate exercise price for the Warrant Shares specified in the Notice of Exercise. The Holder or transferee designated in the applicable Notice of Exercise will be deemed to have become the holder of record of such Warrant Shares, for all purposes, as of the close of business on the date on which this Warrant (with the Notice of Exercise and the Representation Letter duly executed) and such payment is received by the Company. Payment shall be made by wire transfer to an account designated by the Company. In the event the Holder exercises this Warrant with respect to fewer than all of the Warrant Shares covered hereby, the Company shall issue to the Holder a new Warrant representing the Warrant Shares remaining unexercised, with such new Warrant having the same terms of this Warrant including, without limitation, the same Expiration Date. Section 4. Adjustment of Per Share Exercise Price and Number of Warrant Shares. The number and kind of Warrant Shares purchasable upon the exercise of this Warrant and the Per Share Exercise Price will be subject to adjustment from time to time upon the occurrence of certain events, as follows: (a) Reorganization, Consolidation, Merger, etc. In case of any capital reclassification or reorganization (other than a reclassification to which Section 4(b) hereof applies) or of any consolidation or merger of the Company with or into any other Person, or any other reorganization (other than a merger or consolidation in which the Company is the continuing, or surviving entity and which does not result in any reclassification or similar change in the Shares of Common Stock) or any sale of all or substantially all of the assets of the Company (any such transaction being hereinafter referred to as a "Reorganization"), then, in each case, the Holder, on exercise hereof at any time after the consummation or effective time of such Reorganization (the "Effective Time"), will receive (regardless of whether or not the Warrant is currently exercisable), in lieu of the Warrant Shares issuable on such exercise prior to the Effective Time, the amount of Shares of Common Stock or other securities and property (including cash) to which such Holder would have been entitled upon the Effective Time if such Holder had exercised this Warrant immediately prior thereto. (b) Split, Subdivision or Combination of Shares of Common Stock. If the Company, at any time or from time to time after the Issue Date, (A) makes a distribution in respect of the Shares of Common Stock in Shares of Common Stock or securities convertible or exchangeable into Shares of Common Stock, (B) subdivides or reclassifies the outstanding Shares of Common Stock into a greater number of Shares of Common Stock, (C) combines or reclassifies the outstanding Shares of Common Stock into a smaller number of Shares of Common Stock, or (D) otherwise issues by reclassification of the Shares of Common Stock any shares or other securities in the Company, then, and in each such case, the Per Share Exercise Price in effect immediately prior to such action will be adjusted by multiplying such Per Share Exercise Price by a fraction, the numerator of which is the number of Shares of Common Stock outstanding immediately prior to such event, and the denominator of which is the number of Shares of Common Stock outstanding immediately after such event. An adjustment made pursuant to this Section 4(b) will become applicable (x) in the case of any such distribution, 2 3 immediately after the close of business on the record date for the determination of holders of Shares of Common Stock entitled to receive such distribution and (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such action becomes effective. Such adjustment will be made successively. Upon each adjustment in the Per Share Exercise Price pursuant to this Section 4(b), the number of Warrant Shares purchasable hereunder will be adjusted, rounded up to the nearest whole share, to the product obtained by multiplying the number of Warrant Shares purchasable immediately prior to such adjustment in the Per Share Exercise Price by a fraction (i) the numerator of which will be the Per Share Exercise Price immediately prior to such adjustment, and (ii) the denominator of which will be the Per Share Exercise Price immediately after such adjustment. (c) Company Owned Shares of Common Stock. For purposes of this Section 4, the number of Shares of Common Stock at any time outstanding will not include any Shares of Common Stock then owned or held by or for the account of the Company. (d) Minimum Adjustment. All calculations of the Per Share Exercise Price pursuant to this Section 4 will be made to the nearest cent. Anything in this Section 4 to the contrary notwithstanding, the Company will not be required to give effect to any adjustment in the Per Share Exercise Price unless and until the net effect of one or more adjustments (each of which will be carried forward), determined as above provided, has resulted in a reduction or increase of the Per Share Exercise Price of at least 1%, and when the cumulative net effect of more than one adjustment so determined is to reduce or increase the Per Share Exercise Price by at least 1%, such reduction or increase in Per Share Exercise Price will thereupon be given effect. (e) Statements of Adjustments. Whenever the Per Share Exercise Price is adjusted as provided in this Section 4, the Company will prepare a statement showing the facts requiring such adjustment and the Per Share Exercise Price that will be in effect after such adjustment. The Company shall cause a copy of such statement to be sent by mail, first class postage prepaid, to the Holder at its address appearing on the Company's records. Where appropriate, such copy may be given in advance and may be included as part of the notice required to be mailed under the provisions of subsection (f) of this Section 4. (f) Notices. In the event the Company proposes to take any action of the types described in subsection (a) or (b) of this Section 4, the Company shall give notice to the Holder, in the manner set forth in subsection (e) of this Section 4, which notice will specify the record date, if any, with respect to any such action and the date on which such action is to take place. Such notice will also set forth such facts with respect thereto as are reasonably necessary to indicate the number of the Shares of Common Stock of the Company or other securities or property which will be deliverable to the Holder upon exercise hereof following the occurrence of such action. In the case of any action which would require the fixing of a record date, such notice will be given at least ten Business Days prior to the date so fixed, and in case of all other action, such notice will be given at least fifteen Business Days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, will not affect the legality or validity of any such action. Section 5. No Rights as a Stockholder. Until this Warrant has been exercised as provided herein and the certificates for Warrant Shares are issued and delivered, the Holder of 3 4 this Warrant will not, by reason of this Warrant, be deemed to be a stockholder of the Company for any purpose, nor will anything contained herein be construed to confer upon the Holder of this Warrant, as such, any of the rights of a stockholder of the Company. Section 6. Transfer; Replacement. Subject to the provisions of this Section 6, this Warrant may be transferred to the Holder's Affiliates, in whole or in part, at any time and from time to time, by delivering to the Company, at its principal office, this Warrant (with an Assignment in the form attached hereto as Exhibit C duly executed). Upon surrender for registration of transfer of this Warrant at such office, the Company shall execute and deliver in the name of the designated transferee or transferees one or more new Warrants representing the right to purchase at the Per Share Exercise Price then in effect a like number of aggregate number of Warrant Shares, with the same terms, and bearing the same legend, as this Warrant. Notwithstanding the foregoing, the Company will not be obligated to register any transfer of this Warrant unless the Holder has provided to the Company evidence reasonably satisfactory to the Company and its counsel (including, without limitation, an opinion of counsel to the Holder) demonstrating that such transfer complies with all applicable federal and state securities laws. In addition to and notwithstanding the foregoing, (i) this Warrant may not be transferred unless such transferee has acknowledged its agreement to be bound hereby; and (ii) no transfer of this Warrant shall be permitted without the prior written consent of the Company, except to a subsidiary of the Holder; provided, however, that such subsidiary must acquire upon such transfer not less than 83,250 of the Warrants to be issued hereunder. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnify it or otherwise as it may in its discretion impose (which may include the posting of a bond and may, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor, and bearing the same legend, as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant will constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant be at any time enforceable by anyone. For the purpose of this Agreement, the term "Holder's Affiliates" shall mean any entity that directly or indirectly controls, is controlled by, or is under common control with the Holder, including, without limitation, the Holder's parent or subsidiaries. Section 7. Warrant Register. The Company shall keep at its principal office a register listing the name and address of the Holder. The Company and any agent of the Company may treat the Person in whose name this Warrant is registered on such register as the owner and holder hereof for all purposes. Section 8. Payment of Taxes and Expenses. The Company will pay all issuance taxes and similar governmental charges that may be imposed on the Company in respect of the issue or delivery thereof. Section 9. Definitions. For purposes of this Warrant, the following definitions apply: "Business Day" means a day other than Saturday, Sunday or a day that is a statutory holiday in the State of New York. 4 5 "Shares of Common Stock" means the Shares of Common Stock of $0.01 US par value in the authorized capital of the Company as constituted as of the date hereof. "Company" means GoAmerica, Inc., a corporation organized under the laws of the State of Delaware. "Effective Time" shall have the meaning, ascribed to such term in Section 4(a) hereof. "Expiration Date" shall have the meaning ascribed to such term in Section 2 hereof. "Holder" shall have the meaning set forth in the first paragraph of this Warrant. "Issue Date" shall have the meaning set forth in the first paragraph of this Warrant. "Per Share Exercise Price" shall have the meaning set forth in the first paragraph of this Warrant. "Reorganization" shall have the meaning ascribed to such term in Section 4(a) hereof. "Warrant Shares" shall have the meaning set forth in the first paragraph of this Warrant. Section 10. Miscellaneous. This Warrant will be governed by and construed in accordance with the internal laws of the State of New York. No amendment or waiver of any provision of this Warrant, nor a consent to any departure by the Company therefrom, will in any event be effective unless the same be in writing and signed by the Company and the Holder, and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given. The captions of this Warrant have been inserted for convenience only and have no substantive effect. Section 11. Securities Laws Matters. The Holder, by its acceptance hereof, acknowledges that neither this Warrant nor the Warrant Shares have been registered for sale under federal or state securities laws and are being offered and sold to the Holder pursuant to one or more exemptions from the registration requirements of such securities laws. The Holder represents that it is acquiring this Warrant and will acquire the Warrant Shares issued upon exercise of this Warrant for its own account for investment and not with a view to, or for sale in connection with, any public distribution thereof in violation of any securities laws. The Holder agrees that neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant will be sold or otherwise transferred unless a registration statement with respect thereto has become effective under the Securities Act; or there is presented to the Company an opinion of counsel selected by the Holder and reasonably satisfactory to the Company that such registration is not 5 6 required. The Holder agrees that the Company or any transfer agent of the Company may be instructed not to transfer any Warrant Shares acquired upon exercise of this Warrant unless it receives reasonably satisfactory evidence of compliance with the foregoing provision, and that there may be endorsed upon any certificate or other instrument representing such Warrant Shares (and any certificates or instruments in substitution therefor) a legend setting forth the foregoing restrictions. The Holder represents to the Company that it is an "Accredited Investor" within the meaning of Rule 501(a) of Regulation D as promulgated by the Securities and Exchange Commission. The Holder hereby acknowledges that the representations and warranties contained in this Section are given with the intention that the Company may rely on them for purposes of claiming an exemption from the registration requirements of applicable securities laws. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Warrant as of this 31st day of August, 2000. GOAMERICA, INC. By: /s/ Francis J. Elenio --------------------------------- Name: Francis J. Elenio Title: CFO, Secretary and Treasurer Attest: ACKNOWLEDGMENT The undersigned hereby acknowledges that the representations and warranties made by it in this Warrant are true, and agrees to be bound by and to observe the agreements set forth herein. HOLDER /s/ James Balsillie ------------------------------ 6 7 EXHIBIT A FORM OF NOTICE OF EXERCISE (To be executed only upon exercise of the attached Warrant) The undersigned registered holder of the attached Warrant irrevocably exercises the within Warrant for and purchases ______ Shares of Common Stock of GOAMERICA, INC. and herewith makes payment therefor in the amount of $______, all at the price and on the terms and conditions specified in the attached Warrant, and requests that a certificate (or _______ certificates in the denominations of _______ Shares of Common Stock) for such Shares of Common Stock hereby purchased be issued in the name of and delivered to the undersigned. In addition to this Notice of Exercise, the undersigned must also provide an executed Representations Letter, substantially in the form attached as Exhibit B to the within Warrant. Dated: , . ---------- ---- [ ] By: --------------------------------- (Signature of Registered Holder) NOTICE: The signature on this Notice of Exercise must correspond with the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever. 8 EXHIBIT B REPRESENTATIONS LETTER (To be executed only upon exercise of the attached Warrant) GoAmerica, Inc. 401 Hackensack Avenue Hackensack, New Jersey 07601 U.S.A. Dear Sirs: We are delivering this letter in connection with the purchase of Shares of Common Stock (the "Shares") of GoAmerica, Inc. (the "Company"), a corporation organized under the laws of the State of Delaware, upon the exercise of warrants of the Company ("Warrants"). We hereby confirm that: (a) we are an "accredited investor" within the meaning of Regulation D under the United States Securities Act of 1933 (the "U.S. Securities Act"); (b) we are purchasing the Shares for our own account; (c) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of purchasing the Shares; (d) we are not acquiring the Shares with a view to distribution thereof or with any present intention of offering or selling any of the Shares in violation of U.S. federal or state securities laws; 9 (e) we understand that the Shares may not be sold or otherwise transferred unless a registration statement with respect to the Shares has become effective under the U.S. Securities Act, or there is presented to the Company an opinion of counsel selected by the undersigned and reasonably satisfactory to the Company that such registration is not required; (f) we acknowledge that we have had access to such financial and other information as we deem necessary in connection with our decision to purchase the Shares; and (g) we acknowledge that we are not purchasing the Shares as a result of any general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising. We understand that the Shares are being offered in a transaction not involving any public offering within the United States within the meaning of U.S. Securities Act and that the Shares have not been and will not be registered under the U.S. Securities Act. We further understand that any Shares acquired by us will be in the form of definitive physical certificates and that such certificates will bear a legend reflecting the substance of paragraph (d) above. We acknowledge that you will rely upon our confirmations, acknowledgements and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate or complete. By: -------------------------------- (Signature of Registered Holder) NOTICE: The signature on this Representations Letter must correspond with the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever. 10 EXHIBIT C FORM OF ASSIGNMENT (To be executed only upon the assignment of the attached Warrant) FOR VALUE RECEIVED, the undersigned registered holder of the attached Warrant hereby sells, assigns and transfer unto______________________, whose address is _____________________, all of the rights of the undersigned under the attached Warrant, with respect to ________ Shares of Common Stock of GOAMERICA, INC. and, if such Shares of Common Stock shall not include all the Warrant Shares issuable as provided in the attached Warrant, that a new Warrant of like tenor for the number of Warrant Shares not being transferred hereunder be issued in the name of and delivered to the undersigned, and does hereby irrevocably constitute and appoint __________ as Attorney to register such transfer on the books of GOAMERICA, INC. maintained for that purpose, with full power of substitution in the premises. Dated: , . ------------ ---- [ ] By: -------------------------------- (Signature of Registered Holder) NOTICE: The signature on this Assignment must correspond with the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever. EX-4.2 3 w46736ex4-2.txt WARRANT TO PURCHASE ISSUED TO DELL VENTURES 1 Exhibit 4.2 THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. NEITHER THIS WARRANT OR SUCH SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS, OR SOME EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR LAWS, OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK OF GOAMERICA, INC. This Warrant is issued to Dell Ventures, L.P., a Texas limited partnership, or its registered assigns ("Holder"), by GoAmerica, Inc., a Delaware corporation (the "Company"), on November 14, 2000 (the "Warrant Issue Date"). 1. Purchase of Shares. Subject to the terms and conditions hereinafter set forth, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company five hundred sixty-three thousand, eight hundred sixty-four (563,864) shares of common stock, par value $0.01 per share, of the Company (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $16.00 per share, and shall be subject to adjustment pursuant to Section 8 hereof (such price, as adjusted from time to time, is herein referred to as the "Exercise Price"). 3. Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term commencing on the Warrant Issue Date and ending at 5:00 p.m., Austin, Texas time, three years after the Warrant Issue Date. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: 2 (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Election attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Net Exercise. In lieu of exercising this Warrant pursuant to Section 4, the Holder may elect to receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) --------- X = A Where: X = The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = The number of Shares in respect of which the net issue election is made; A = The fair market value of one share of the Common Stock at the time the net issue election is made; B = The Exercise Price (as adjusted to the date of the net issuance). For purposes of this Section 5, the fair market value of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty (30) day period ending three (3) days prior to the net exercise election; (ii) if traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors of the Company. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the subscription notice. 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and 2 3 reserved, for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of authorized but unissued Common Stock, or other securities and property, when and as required to provide for the exercise of the rights represented by this Warrant. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon which the Common Stock may be listed. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Distributions of Other Property. In case the Company shall distribute to all holders of its Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) evidences of its indebtedness or assets (excluding cash dividends or distributions payable out of consolidated earnings or earned surplus and dividends or distributions referred to in paragraph (a) above) or rights, options, or warrants, or convertible or exchangeable securities containing the 3 4 right to subscribe for or purchase debt securities, assets, or other securities of the Company (excluding those referred to in paragraph (a) above), then in lieu of an adjustment in the number of shares of Common Stock purchasable upon the exercise of this Warrant, the Holder upon the exercise thereof at any time after such distribution shall be entitled to receive from the Company the stock or other securities to which the Holder would have been entitled if the Holder had exercised the Warrant immediately prior thereto, all subject to further adjustment as provided in this Section 8; provided, however, that no adjustment in respect of cash dividends or interest on such stock or other securities shall be made during the term of this Warrant or upon the exercise of this Warrant. (d) Notice of Certain Events. If, at any time prior to the expiration of this Warrant, (i) the Company shall declare any dividend on the Common Stock payable in cash or shares of Common Stock, Common Stock or capital stock of the Company; or (ii) the Company shall authorize the issuance to all holders of shares of Common Stock of rights, options, or warrants to subscribe for or purchase shares of Common Stock or Common Stock or of any other subscription rights or warrants; or (iii) the Company shall authorize the distribution to all holders of shares of Common Stock evidences of its indebtedness or assets; or (iv) the Board of Directors of the Company shall have approved any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or any sale or lease of all or substantially all of the assets of the Company or any reclassification or change of Common Stock issuable upon exercise of this Warrant (other than a change in par value or as a result of a subdivision or combination), or a tender offer or exchange offer for shares of Common Stock; or (v) the voluntary or involuntary dissolution, liquidation, or winding up of the Company occurs; or (vi) the Company proposes to take any action that would require an adjustment in the number or kind of securities issuable upon exercise of this Warrant pursuant to this Section 8; then the Company shall cause to be given to the Holder, at least twenty calendar days prior to the applicable record date specified, or promptly in the case of events for which there is no record date, a written notice stating (A) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such dividends, rights, options, warrants, or distribution are to be determined, or (B) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock, or (C) the date on which any such consolidation, merger, sale, lease, reclassification, change, dissolution, liquidation, or winding up is expected to become effective or consummated, and the date as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such consolidation, merger, sale, transfer, lease, reclassification, change, dissolution, liquidation, or winding up. (e) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. Registration Rights. The Holder of this Warrant is entitled to all of the rights of a "Holder" under the Registration Rights Agreement attached hereto as Exhibit A (the "New Registration Rights Agreement"). The Company represents and warrants to the Holder that it has, on or prior to the Warrant Issue Date, caused the New Registration Rights Agreement to be delivered to the Holder. The Holder represents and warrants that the Shares are not 4 5 considered "Registrable Securities" under that certain Registration Rights Agreement dated January 28, 2000 between the Company, Dell USA L.P., Carousel Capital Partners, L.P., Forstmann Little & Co. Equity Partnership - VI, L.P. and Impact Venture Partners, L.P. (the "January Registration Rights Agreement"), and that as such, the Holder of this Warrant has no rights as a "Holder" under the January Registration Rights Agreement. 10. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 11. No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such Holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 11 shall limit the right of the Holder to be provided the notices required under this Warrant. 12. Transfers of Warrant and Shares. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the holders one or more appropriate new warrants. A transfer of this Warrant or any Shares held by Dell Ventures, L.P. or any affiliate of Dell Ventures, L.P. may be freely transferred to any other subsidiary or affiliate of Dell Ventures, L.P. or The Dell Foundation without prior consent from the Company, the furnishing of an opinion of counsel to the Company, the filing of a registration statement to effect such transfer or any other certification relating to such subsidiary's or affiliate's status or financial condition. 13. Successors and Assigns. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 14. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 15. Assumption of Warrant. If at any time while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that stockholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of 5 6 the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in Section 8 and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares of the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of Common Stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 16. Notices. All notices required under this Warrant shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile, (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 17. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 18. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 19. Governing Law. This Warrant shall be governed by the laws of the State of Texas as applied to agreements among Delaware residents made and to be performed entirely within the State of Delaware. 6 7 IN WITNESS WHEREOF, GoAmerica, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. GOAMERICA, INC. By: /s/ Francis J. Elenio --------------------------------------- Name: Francis J. Elenio Title: CFO 7 8 NOTICE OF EXERCISE To: [GOAMERICA, INC.] The undersigned hereby elects to [check applicable subsection]: ________ (a) Purchase _________________ shares of Common Stock of GoAmerica, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice; OR ________ (b) Exercise the attached Warrant for [all of the shares] [________ of the shares] [cross out inapplicable phrase] purchasable under the Warrant pursuant to the net exercise provisions of Section 5 of such Warrant. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof. WARRANTHOLDER: Dell Ventures, L.P. By: Dell Gen. P. Corp., its General Partner By: --------------------------------------- Print Name: ------------------------------- Address: ------------------------------------------ ------------------------------------------ Date: ------------------- Name in which shares should be registered: - ------------------------------------------ EX-4.3 4 w46736ex4-3.txt WARRANT TO PURCHASE ISSUED TO SONY ELECTRONICS 1 Exhibit 4.3 THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. NEITHER THIS WARRANT NOR SUCH SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS, OR SOME EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR LAWS, OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK OF GOAMERICA, INC. This Warrant is issued to Sony Electronics Inc., a Delaware corporation, or its registered assigns (the "Holder"), by GoAmerica, Inc., a Delaware corporation (the "Company"), on January 1, 2001 (the "Warrant Issue Date"). 1. Purchase of Shares. Subject to the terms and conditions hereinafter set forth, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company five hundred thousand (500,000) shares of common stock, par value $0.01 per share, of the Company (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $16.00 per share, and shall be subject to adjustment pursuant to Section 8 hereof (such price per share, as adjusted from time to time, is herein referred to as the "Exercise Price"). 3. Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term commencing on the Warrant Issue Date and ending at 5:00 p.m., Eastern time, three (3) years after the Warrant Issue Date. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: 2 (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Net Exercise. Notwithstanding any provisions herein to the contrary, if the Fair Market Value (as defined below) of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company's Common Stock (at the date of such calculation) (the "Fair Market Value") B = Exercise Price (as adjusted to the date of such calculation) For purposes of this Section 5, the fair market value of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty (30) day period ending three (3) days prior to the net exercise election; (ii) if traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors of the Company. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the subscription notice. 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 2 3 The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of authorized but unissued Common Stock, or other securities and property, when and as required to provide for the exercise of the rights represented by this Warrant. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon which the Common Stock may be listed. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Distributions of Other Property. In case the Company shall distribute to all holders of its Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) evidences of its indebtedness or assets (excluding cash dividends or distributions payable out of 3 4 consolidated earnings or earned surplus and dividends or distributions referred to in paragraph (a) above) or rights, options, or warrants, or convertible or exchangeable securities containing the right to subscribe for or purchase debt securities, assets, or other securities of the Company (excluding those referred to in paragraph (a) above), then in lieu of an adjustment in the number of shares of Common Stock purchasable upon the exercise of this Warrant, the Holder upon the exercise thereof at any time after such distribution shall be entitled to receive from the Company the stock or other securities to which the Holder would have been entitled if the Holder had exercised the Warrant immediately prior thereto, all subject to further adjustment as provided in this Section 8; provided, however, that no adjustment in respect of cash dividends or interest on such stock or other securities shall be made during the term of this Warrant or upon the exercise of this Warrant. (d) Notice of Certain Events. If, at any time prior to the expiration of this Warrant, (i) the Company shall declare any dividend on the Common Stock payable in cash or shares of Common Stock, Common Stock or capital stock of the Company; or (ii) the Company shall authorize the issuance to all holders of shares of Common Stock of rights, options, or warrants to subscribe for or purchase shares of Common Stock or Common Stock or of any other subscription rights or warrants; or (iii) the Company shall authorize the distribution to all holders of shares of Common Stock evidences of its indebtedness or assets; or (iv) the Board of Directors of the Company shall have approved any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or any sale or lease of all or substantially all of the assets of the Company or any reclassification or change of Common Stock issuable upon exercise of this Warrant (other than a change in par value or as a result of a subdivision or combination), or a tender offer or exchange offer for shares of Common Stock; or (v) the voluntary or involuntary dissolution, liquidation, or winding up of the Company occurs; or (vi) the Company proposes to take any action that would require an adjustment in the number or kind of securities issuable upon exercise of this Warrant pursuant to this Section 8; then the Company shall cause to be given to the Holder, at least twenty (20) calendar days prior to the applicable record date specified, or promptly in the case of events for which there is no record date, a written notice stating (A) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such dividends, rights, options, warrants, or distribution are to be determined, or (B) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock, or (C) the date on which any such consolidation, merger, sale, lease, reclassification, change, dissolution, liquidation, or winding up is expected to become effective or consummated, and the date as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such consolidation, merger, sale, transfer, lease, reclassification, change, dissolution, liquidation, or winding up. (e) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. Registration Rights. The Holder of this Warrant is entitled to all of the rights of a "Holder" under the Registration Rights Agreement attached hereto as Exhibit A (the "Registration Rights Agreement"). The Company represents and warrants to the Holder that it 4 5 has, on or prior to the Warrant Issue Date, caused the Registration Rights Agreement to be delivered to the Holder. 10. Reservation of Stock, etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise or conversion of the Warrant, all shares of Common Stock from time to time issuable on the exercise or conversion of this Warrant and, upon such issuance, all such shares of Common Stock will be validly issued, fully paid and non-assessable, and free from all taxes, liens and charges with respect to the issuance thereof. 11. No Impairment. Except and to the extent as waived or consented to by the Holder, the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holder against impairment. 12. Register of Warrant. The Company shall maintain, at the principal office of the Company (or such other office as it may designate by notice to the holder hereof), a register in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of such Warrant. The ownership of the Warrant shall be proved by reference to the register and, prior to due presentation for registration of transfer, the Company may treat the person in whose name the Warrant shall be registered as the absolute owner thereof for all purposes. 13. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor; provided, however, if this Warrant of which the original Holder (its nominee, or any of its officers, directors or general partners) is the registered holder is lost, stolen or destroyed, the affidavit of the President, Vice President, Treasurer or any General Partner of such Holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof, and no indemnity bond or other security shall be required as a condition to the execution and delivery by the Company of a new Warrant in replacement of such lost, stolen or destroyed Warrant other than the Holder's written agreement to indemnify the Company. 14. Remedies. The Company stipulates that the remedies at law of the Holder in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise 5 6 except as may be limited by the effect of (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors or (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). 15. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 16. No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such Holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 16 shall limit the right of the Holder to be provided the notices required under this Warrant. No provision of this Warrant, in the absence of affirmative action by the Holder to exercise this Warrant and purchase Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Exercise Price or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 17. Transfers of Warrant and Shares. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the holders one or more appropriate new warrants. A transfer of this Warrant or any Shares held by the Holder or any affiliate of the Holder may be freely transferred to any other subsidiary or affiliate of the Holder without prior consent from the Company, the furnishing of an opinion of counsel to the Company, the filing of a registration statement to effect such transfer or any other certification relating to such subsidiary's or affiliate's status or financial condition. 18. Successors and Assigns. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 19. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 20. Assumption of Warrant. If at any time while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (a) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that 6 7 stockholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (b) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in Section 8 and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares that the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of Common Stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 21. Notices. All notices required under this Warrant shall be deemed to have been given or made for all purposes (a) upon personal delivery, (b) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile, (c) one day after being sent, when sent by professional overnight courier service, or (d) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 22. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 23. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 24. Governing Law. This Warrant shall be governed by the laws of the State of Delaware as applied to agreements among Delaware residents made and to be performed entirely within the State of Delaware. 7 8 IN WITNESS WHEREOF, GoAmerica, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. GOAMERICA, INC. By: /s/ Joseph Korb --------------------------------- Name: Joseph Korb Title: President 8 9 NOTICE OF EXERCISE To: GOAMERICA, INC. The undersigned hereby elects to [check applicable subsection]: ________ (a) Purchase _________________ shares of Common Stock of GoAmerica, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice; OR ________ (b) Exercise the attached Warrant for [all of the shares] [________ of the shares] [cross out inapplicable phrase] purchasable under the Warrant pursuant to the net exercise provisions of Section 5 of such Warrant. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof. WARRANTHOLDER: Sony Electronics Inc. By:[ ] By: --------------------------------------- Print Name: ------------------------------- Address: ------------------------------------------ ------------------------------------------ Date: ------------------- Name in which shares should be registered: - ------------------------------------------ EX-10.24 5 w46736ex10-24.txt STRATEGIC ALLIANCE MARKETING AGREEMENT 1 EXHIBIT 10.24 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. STRATEGIC ALLIANCE AGREEMENT BETWEEN GOAMERICA INC. AND RESEARCH IN MOTION LIMITED THIS STRATEGIC ALLIANCE AGREEMENT (the "Agreement") is entered into as of the 1st day of July, 2000, by and among GOAMERICA INC. ON BEHALF OF ITSELF AND OTHER AFFILIATED CORPORATIONS (hereinafter referred to as "GoAmerica"), a corporation organized under the laws of Delaware, United States of America, with its principal office at 401 Hackensack Avenue, Hackensack, NJ 07601, and RESEARCH IN MOTION LIMITED (hereinafter referred to as "RIM"), a corporation organized under the laws of Ontario, Canada, having principal offices at 295 Phillip Street, Waterloo, Ontario, Canada, N2L 3W8; the above parties are individually and/or collectively referred to herein as the "Party" or "Parties". WITNESSETH: WHEREAS, the Parties have determined that they would benefit from a joint arrangement among their respective organizations to market the RIM BlackBerry Solution and certain RIM Wireless Handheld Devices for Mobitex and Datatac Networks (the "Handheld" or "Handhelds") with GoAmerica's "Go.Web" software application which allows Internet access via wireless handheld devices (the "Application") [the RIM BlackBerry Solution, Handhelds and the Application are individually and/or collectively referred to herein as the "Product" or "Products"]; and WHEREAS, the Parties desire to enter into this Agreement in order to define a business relationship to support and accomplish the above business objective through coordinated marketing arrangements; and WHEREAS, the Parties have entered into a Preliminary Marketing Agreement (the "PMA") dated May 3, 2000 wherein the Parties agreed to enter into a Strategic Alliance Agreement; NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1 RIM ______ GoAmerica _______ 2 1 SCOPE 1.1 During the Term of this Agreement as hereinafter defined, the Parties will work together to offer and market the BlackBerry Solution with the Application to end-user customers buying directly from RIM. 2 TERM 2.1 The term of this Agreement ("Term") shall be for a period of one (1) year from July 31, 2000 (the "Effective Date"). This Agreement shall be automatically renewed for additional one-year periods unless terminated by either Party with thirty (30) days written notice to the other Party prior to the end of the Term or any renewal Term. 3 REPRESENTATIONS AND WARRANTIES 3.1 GoAmerica represents and warrants that it either owns or is authorized to sublicense a software application, "Go.Web" (the "Application"), described in Schedule A attached hereto, which allows Internet access via wireless handheld devices. GoAmerica hereby grants RIM the right to use the Application in conjunction with the Handhelds and the RIM BlackBerry Solution. 3.2 GoAmerica warrants to RIM that the Application hereunder will be free from significant programming errors, will be delivered on media that are free from defects in workmanship and materials, will operate in conformity with the performance capabilities, specifications and functions of such Application, and will conform to the standards generally observed in the industry for similar software applications. GoAmerica shall be solely responsible for providing any and all End-User Warranties relating to the Application. Except as expressly provided in this Agreement, no other warranties, express or implied, are made by GoAmerica. 3.3 GoAmerica warrants that none of: (a) the Application, (b) any upgrades, enhancements or other modifications to the Application developed by or on behalf of GoAmerica and incorporated into the Application or otherwise provided to RIM, or (c) any documentation provided by GoAmerica to RIM along with the Application will infringe or violate, as the case may be, any patents or trademarks registered or enforceable in the United States or Canada, trade names, and copyrights, trade secrets or other intellectual property or proprietary rights. 3.4 GoAmerica warrants that to the best of its knowledge the Application, when integrated with the Handhelds and/or the BlackBerry Solution, will not infringe or violate, as the case may be, any patents or trademarks registered or enforceable in the United States or Canada, trade names, and copyrights, trade secrets or other intellectual property or proprietary rights. 2 RIM ______ GoAmerica _______ 3 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 3.5 GoAmerica warrants that it has included sufficient procedures and check-points in designing and providing software for the Application to RIM to provide against viruses, Trojan horses or other code that manifest contaminating or destructive properties (collectively called the "viruses"). 4 ALLIANCE ACTIVITIES 4.1 During the Term of this Agreement, GoAmerica shall grant to RIM a royalty free, non-exclusive right and license in the Territory to: a) use, execute, copy, distribute by way of sublicense, and maintain the Application in object code form (including, without limitation, all revised or upgraded versions of the Application, if any) for the purpose of including the Application on Handhelds in conjunction with the BlackBerry Wireless Email Solution pursuant to marketing GoAmerica's wireless portal service; and b) make, have made, sell, offer for sale, export from the United States and Canada and import into the United States and Canada (the "Territory") products containing the Application in object code form. 4.2 Without limiting the foregoing, GoAmerica shall grant a, perpetual, royalty free, non-exclusive right and license to the end-users of RIM's Handhelds to use the Application in conjunction with the Handhelds. 4.3 [Note to draft: this issue is dealt with in 4.6 below.] 4.4 GoAmerica shall provide the Application to RIM in a complete and functioning form, acceptable to RIM and on a media acceptable to both Parties. GoAmerica shall also deliver to RIM such documentation as may accompany and/or is related to the Application. In addition, GoAmerica shall provide to RIM, at GoAmerica's expense, all applicable documentation, and all future upgrades, new releases, improvements and enhancements within [**] of such documentation, upgrades, new releases and improvements becoming generally commercially available. GoAmerica agrees to give RIM reasonable notice prior to upgrading the Application, and such notice shall be given no later than notice is given to any other third party. GoAmerica acknowledges that RIM's timely inclusion of upgrades, new releases, improvements and enhancements pertaining to the Application on or with RIM Handhelds is dependent upon GoAmerica's timely provision of such upgrades, new releases, improvements and enhancements to RIM. 3 RIM ______ GoAmerica _______ 4 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 4.5 GoAmerica agrees to test the Application (as reasonably required by RIM) to ensure quality and show proof of such testing to RIM prior to the inclusion of the Application on or with RIM Handhelds. GoAmerica also agrees to maintain support and operations of the Application during the term of this Agreement in a commercially reasonable manner, and shall provide such support and operations in accordance with any maintenance and support agreements or guidelines in effect between the Parties at the time of this Agreement and as may be mutually modified in writing by the Parties from time to time. 4.6 RIM agrees to include the Application and such of the documentation as RIM determines, in its reasonable discretion, is appropriate on or with any Handheld sold by RIM to end-users or distributed by RIM through any of RIM's distribution channels in the Territory for resale in the Territory, for a period of [**] from the Effective Date. At RIM's sole discretion, inclusion of the Application with the Handheld may consist of, but is not limited to, the following: the [**] with the Handheld; the [**] of [**] Handhelds; and [**] through [**] web sites. RIM shall have the right to [**] the Application [**], if such [**] through any of [**] in the [**] in the [**]. Notwithstanding the above, [**] the Application [**] shall be subject to engineering and manufacturing validation of feasibility, and further RIM shall [**] include the Application [**] if (i) [**] device memory availability or other relevant technical considerations, (ii) [**] by any other agreements with [**] customers, including, without limitation, [**] of RIM's offer to include the [**] to be used with the [**], or (iii) a [**] in writing that [**] that will be shipped to such party. 4.7 GoAmerica shall assist RIM with the inclusion of the Application and any upgrades, new releases, improvements and enhancements on RIM Handhelds, including without limitation, training of RIM personnel on the use and maintenance of the Application, in order to successfully complete the integration of the Application with the Handhelds. Training shall take place at RIM's headquarters in Waterloo, Ontario, Canada and shall be without compensation unless the Parties agree otherwise in writing. 4.8 The Application will require RIM's end-users to separately activate the Go.Web Service ("Service") by contacting GoAmerica directly. GoAmerica shall pay to RIM a one-time fee of $[**] US per RIM end-user, for each RIM end-user that uses the Service for a minimum period of [**]. 4.9 GoAmerica shall be responsible for contracting with wireless carriers for airtime and shall compensate the applicable wireless carrier directly for airtime and applicable interconnect charges. RIM shall have no obligation relating to airtime or interconnect charges, and shall not be liable for any damages of any kind arising out of issues relating to airtime, interconnect charges or GoAmerica's relationship with any wireless carriers. Furthermore, GoAmerica agrees to indemnify and hold RIM harmless against any third party claims related to airtime availability provided by GoAmerica or its suppliers. 4 RIM ______ GoAmerica _______ 5 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 4.10 During the Support Term (as hereinafter defined) RIM will provide Level 1 Support for the Application ("Application Level 1 Support"). Application Level 1 Support shall mean direct technical support of the Application, consisting of: (a) a direct response to End-User inquiries concerning the performance of the Application, functionality or operation of the Application; (b) a direct response to reported problems or performance deficiencies with the Application; (c) a diagnosis of problems or performance deficiencies with the Application; and (d) the use of commercially reasonable efforts to resolve problems or performance deficiencies in the Application, to the extent that such resolution is possible over the telephone. Application Level I Support shall be made available by telephone (with call logging and validation) so that End-Users may contact RIM's help desk regarding technical and support questions and other problems regarding use of the Application. RIM shall inform End-Users that if, after using its reasonable commercial efforts, RIM is unable to answer a support question or to correct a reported problem in the Application, the End-User may contact GoAmerica's help desk for second level support. Such arrangement for Application Level 1 Support may be altered by the mutual agreement of the Parties in writing. Application Level 1 Support shall be available during the period of thirty (30) days from September 18, 2000, or such other period of time as mutually agreed upon (the "Support Term"), and during such Support Term, RIM shall provide Application Level 1 Support on a 7 days per week, 24 hours per day basis at the following prices: a) $[**] as a flat fee during each month of the Support Term; and b) $[**] for each call for Application Level I Support. 4.11 GoAmerica agrees that RIM has no responsibility or liability for the billing, invoicing, collection or sales of the Application and related services. 4.12 In consideration of the obligations assumed by RIM, GoAmerica shall: a) have paid to RIM [**] Dollars ($[**]) as of the Effective Date, such sum representing a nonrecurring implementation expense to defray RIM's engineering and marketing costs associated with fulfilling its obligations under the PMA and this SAA, in particular, without limitation, those obligations whereby RIM will be facilitating access to the Go.Web service by its customers in conjunction with RIM's BlackBerry Solution; b) pay RIM the sum of [**] Dollars ($[**]), representing a product placement fee ("PPF") in recognition of the improved positioning of the Go.Web Service in the market place as a result of RIM's undertakings in accordance with this SAA; and 5 RIM ______ GoAmerica _______ 6 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. c) enter into a warrant agreement to be effective at the same time as this SAA whereby RIM shall be granted a warrant to acquire Three Hundred Thirty-Three Thousand shares of the common stock of GoAmerica at a strike price of $16.00 US per share in further consideration of RIM's undertakings pursuant to this SAA. The PPF shall be paid in two equal installments of [**] Dollars ($[**]) the first installment being payable upon the first anniversary of the effective date of the PMA and the second installment being payable upon the second anniversary of the effective date of the PMA. The obligation to make the first and second installment payments shall survive termination or expiration of this SAA. 5 CONFIDENTIALITY AND CONFIDENTIAL INFORMATION 5.1 "Confidential Information" means information belonging to or in the possession or control of a Party which is of a confidential, proprietary or trade secret nature that is finished or disclosed to the other Party under this Agreement: (i) in tangible form and marked or designated in writing in a manner to indicate its confidential, proprietary or trade secret nature, or (ii) in intangible form and concurrently identified as confidential, proprietary or trade secret. Each Party's business plans, strategy, and prospect and/or customer information are hereby designated by each Party as Confidential Information of that Party. 5.2 Confidential, Information shall be deemed to exclude any particular information that (i) is already known to the receiving Party without restrictions at the time of its disclosure by the disclosing Party, as evidenced by the written records of the receiving Party; (ii) after its disclosure by the disclosing Party, is made known to the receiving Party without restrictions by a third Party having the right to do so; (iii) is or becomes publicly known without violation of this Agreement; or (iv) is independently developed by the receiving Party without reference to the disclosing Party's Confidential Information, as evidenced by the written records of the receiving Party. 5.3 Confidential Information will remain the property of the disclosing Party, and the receiving Party will not be deemed by virtue of this Agreement or any access to the disclosing Party's Confidential Information to have acquired any right or interest in or to any such Confidential Information. The receiving Party agrees: (i) to hold the disclosing Party's Confidential Information in strict confidence; (ii) to limit disclosure of the disclosing Party's Confidential Information to personnel having a need to know the information for the purposes of this Agreement; (iii) not to disclose any such Confidential Information to any third party; (iv) to use the disclosing Party's Confidential Information solely and exclusively in accordance with the terms of this Agreement in order to carry out its obligations and exercise its rights under this Agreement; (v) to afford the disclosing Party's Confidential Information at least the same level of protection against unauthorized disclosure or use as the receiving Party normally uses to protect its own information of a similar character, but in no event less than reasonable care; and (vi) to 6 RIM ______ GoAmerica _______ 7 notify the disclosing Party promptly of any unauthorized use or disclosure of the disclosing Party's Confidential Information. Neither this Agreement nor the exchange of Confidential Information hereunder shall be construed as granting any right or license under any copyrights, inventions, or patents now or hereafter owned or controlled by any Party. 5.4 If the receiving Party receives a subpoena or other validly issued administrative or judicial notice requesting the disclosure of the disclosing Party's Confidential Information, or if the receiving Party is otherwise obliged by law to disclose the disclosing Party's Confidential Information, the receiving Party will promptly notify the disclosing Party and, if so requested, will provide reasonable cooperation to the disclosing Party in resisting the disclosure. Subject to its obligations stated in the preceding sentence, the receiving Party will be entitled to comply with any binding subpoena or other process to the extent required by law, but will in doing so make every effort to secure confidential treatment of any materials it is compelled to disclose. 5.5 Within 14 days after the written request of the disclosing Party, the receiving Party, at the disclosing Party's option, will return or destroy, and give written confirmation thereof, all Confidential Information of the disclosing Party that the receiving Party does not possess under a valid license. 5.6 Each Party agrees that if a court of competent jurisdiction determines that the receiving Party has breached, or attempted or threatened to breach, any of its confidentiality obligations to the disclosing Party or the disclosing Party's proprietary rights, the disclosing Party will be entitled to obtain appropriate injunctive relief and other measures restraining further, attempted or threatened breaches of such obligations. 5.7 Except as otherwise explicitly provided herein, nothing herein shall require a Party to disclose any information whatsoever to the other Party, and each Party, in its sole and absolute discretion, may deem any information confidential and decide not to disclose such information to the other Party. 5.8 Notwithstanding any other provision to the contrary herein, either Party may disclose Confidential Information of the other as required by the listing rules of any stock exchange where either parties stocks are listed or quoted. 6 RELATIONSHIP AND CONDUCT OF THE PARTIES 6.1 This Agreement shall not constitute, create, give effect to or otherwise recognize a joint venture, partnership or formal business organization of any kind, and the rights and obligations of the Parties shall be only those expressly set forth herein. No Party shall have authority to bind the other Party except to the extent as expressed herein. The Parties shall be independent entities with each other for all purposes at all times; no Party shall act as agent for or representative of the other Party, and the employees of one Party shall not be deemed to be employees of the other Party. Nothing in this Agreement shall be construed as providing for the sharing of profits or losses arising out of the efforts of 7 RIM ______ GoAmerica _______ 8 any Party, except as such profit or loss sharing may mutually be agreed upon in writing by the Parties. 6.2 In all of its activities under this Agreement, each Party shall act consistently with its status as an independent contractor. When any Party's employees are on the premises of the other Party, the visiting employees shall obey all rules and regulations established by the owner of the premises regarding employee conduct of which the visiting Party is made aware. 6.3 No Party shall, in its performance hereunder, take any action that would be illegal under any applicable rules, regulations and laws. 6.4 Each Party shall furnish to the other Party such cooperation and assistance as may be reasonably required hereunder, 6.5 Each Party represents and warrants that, to the best of its knowledge, it has the legal right to perform all of its obligations under this Agreement. 6.6 In pursuing the joint activities under this Agreement, the Parties agree, as far as practicable, to make a clear distinction between each Party's products in order to avoid any confusion of third parties as to the ownership of, and rights to, the Products. 7 INTELLECTUAL PROPERTY RIGHTS 7.1 RIM grants to GoAmerica a non-exclusive license to use trademarks associated with the RIM BlackBerry Solution and the Handhelds pursuant to this Agreement in a commercially reasonable manner in its marketing efforts related hereto, while adhering to a high standard of excellence in all related packaging, advertising and marketing efforts. GoAmerica will supply RIM with specimens of its use of such trademarks upon request, The use of any trademark in connection herewith creates no further right, title, or interest in or to the trademark and all such use and associated goodwill inure to the benefit of RIM. To the extent deemed otherwise, GoAmerica hereby assigns the same to RIM, when and as they shall arise, for the full term of protection available therefore worldwide. GoAmerica shall not register or attempt to register any trademarks of RIM or its suppliers. GoAmerica shall not remove, alter, deface, or otherwise impair the recognition of any trademark of RIM or RIM's suppliers, including, but not limited to, any marks or brands on any product, software, label, documentation or packaging, or in marketing materials. GoAmerica's only rights with respect to any RIM Software included with the products shall be as provided under the terms of RIM's Software License Agreement. GoAmerica agrees that RIM retains ownership of all right, title and interest in all intellectual property, works of authorship, trade secrets and the like in all aspects of the RIM BlackBerry Solution and the Handhelds as well as in all Products and Software supplied by RIM. GoAmerica and its affiliates and sub-contractors agree not to reverse engineer any aspect of the RIM Software and/or Products supplied under this Agreement and further agree to pay assessed damages should such action take place. 7.2 GoAmerica grants to RIM a non-exclusive license to use trademarks associated with the Application pursuant to this Agreement in a commercially reasonable manner in its 8 RIM ______ GoAmerica _______ 9 marketing efforts related hereto, while adhering to a high standard of excellence in all related packaging, advertising and marketing efforts. RIM will supply GoAmerica with specimens of its use of such trademarks upon request. The use of any trademark in connection herewith creates no further right, title, or interest in or to the trademark and all such use and associated goodwill inure to the benefit of GoAmerica. To the extent deemed otherwise, RIM hereby assigns the same to GoAmerica, when and as they shall arise, for the full term of protection available therefore worldwide. RIM shall not register or attempt to register any trademarks of GoAmerica or its suppliers. RIM shall not remove, alter, deface, or otherwise impair the recognition of any trademark of GoAmerica or GoAmerica's suppliers, including, but not limited to, any marks or brands on any Product, Software, label, documentation or packaging, or in marketing materials. RIM agrees that GoAmerica retains ownership of all right, title and interest in all intellectual property, works of authorship, trade secrets and the like in all aspects of the Application. RIM and its affiliates and sub-contractors agree not to reverse engineer any aspect of the Application supplied under this Agreement and further agree to pay assessed damages should such action take place. Notwithstanding the above, nothing in this Agreement shall prevent RIM from developing technology that would enable RIM's end-users to access the Internet using RIM's, or any other third party's, products, including without limitation, RIM's Handhelds. 7.3 Without limiting the foregoing, GoAmerica agrees that where GoAmerica uses the RIM brand or trademarks to follow the then applicable RIM branding and logo usage guidelines as may be provided by RIM from time to time. RIM agrees that where RIM, uses the GoAmerica brand or trademarks to follow the then applicable GoAmerica branding and logo usage guidelines as may be provided by GoAmerica from time to time. 7.4 Except as set forth in Articles 4.1 and 4.2 and this Article 7, this Agreement does not grant to any Party any rights in, or license to, any present or future Intellectual Property Rights. 8 TERMINATION 8.1 Except for the rights and obligations of the Parties set forth in Articles 3, 4, 5, 7, 10, 11, 16, 17, 23, 24 and 25, and in this Article 8, which shall continue in full force and effect until they have been completely exercised or fulfilled as the case may be, this Agreement shall terminate pursuant to any one of the following events: a) Upon default by a Party which continues unremedied for a period of thirty (30) days after written notice from the aggrieved Party specifying the nature of such breach; b) Upon acquisition of a Party by a competitor (determination of whether or not the acquiring party is a competitor shall be based on reasonable and objective criteria) of the non-acquired Party; c) Upon expiration of the Term of this Agreement where such Term is not renewed; 9 RIM ______ GoAmerica _______ 10 d) Upon a Party's insolvency or initiation of bankruptcy or receivership proceedings by or against a Party or the execution of an assignment for the benefit of creditors; or e) Upon mutual written consent of the Parties; whichever shall first occur. 8.2 Termination of this Agreement shall have the effect of terminating the Parties' obligations to continue any joint marketing or sales activities hereunder, but shall not serve to terminate existing contracts the Parties have entered into pursuant to the terms of this Agreement. Prior to the effective date of termination, the Parties will attempt to negotiate in good faith an orderly transition for any joint marketing or sales activities in progress. Without limiting the foregoing, each Party shall have the right to sell any Handhelds integrated with the Application (the "Integrated Product") after the expiration or termination of this Agreement where such Integrated Products were manufactured prior to such expiration or termination date and in such Party's inventory. 8.3 Upon termination of this Agreement: a) No Party will be liable to the other Party for damages, expenditures, or loss of profits or prospective profits of any kind or nature sustained by, arising out of, or alleged to have arisen out of such termination; b) Each Party shall comply with the provisions of Section 5.5 herein regarding the destruction of and/or return to the other Party of any and all Confidential Information and other items furnished to it by the other Party. 8.4 Any termination of this Agreement for cause shall not affect any right or obligation of a Party which arose prior to such termination. 9 COSTS AND EXPENSES 9.1 Any and all costs and expenses incurred by a Party and arising out of its obligations and efforts under this Agreement shall be borne by that Party. No Party shall charge the other Party for any services provided to the other Party unless specifically agreed to in writing by the Parties. 10 INDEMNIFICATION 10.1 Each Party ("Indemnifying Party") shall indemnify and hold harmless the other Party ("Indemnified Party") from and against any loss, cost, claim, liability, damage and expense (including reasonable attorney's fees) to third parties relating to or arising out of the Indemnifying Party's performance of its obligations in this Agreement, insofar as such claims stem from the Indemnifying Party's gross negligence or willful misconduct which results in death or bodily injury to any person or damage to any real or tangible personal Property. 10.2 The Indemnified Party will notify the Indemnifying Party promptly in writing of any written claims, lawsuits or demands by third parties for which one or more of the 10 RIM ______ GoAmerica _______ 11 Indemnified Party allege that the Indemnifying Party is responsible under this Article 10, and if requested by the Indemnifying Party, will tender the settlement or defense of such claim, lawsuit or demand. The Parties will cooperate in every reasonable manner with the defense or settlement of such claim, lawsuit or demand. The Indemnifying Party will not be liable under this Article 10 for settlements by the Indemnified Party of any claim, lawsuit or demand, unless the Indemnifying Party has approved the settlement in advance or unless the defense of the claim, lawsuit or demand has been tendered to the Indemnifying Party in writing and the Indemnifying Party has failed promptly to undertake the settlement or defense. 10.3 GoAmerica shall defend, indemnify, and hold harmless RIM, RIM's suppliers, successors, affiliates, agents and assigns from any claims, damages, losses, or expenses (including, without limitation, attorney fees and costs) incurred by RIM, RIM's suppliers, successors, affiliates, agents and assigns in connection with all claims, suits, judgments and causes of action for libel, slander, defamation or infringement of copyright or other proprietary right with respect to material transmitted by GoAmerica or GoAmerica's End-User using the Handheld or the Application. No remedy herein conferred upon RIM is intended to be, nor shall it be construed to be, exclusive of any other remedy provided herein or as allowed by law or in equity, but all such remedies shall be cumulative. 10.4 RIM and GoAmerica shall each, as applicable and to the fullest extent permitted by law, indemnify, defend and hold the other harmless, its affiliates, officers, agents and employees from all third party claims, suits or proceedings of any kind for all damages, costs, penalties, fees or expenses (including attorneys' fees) arising out of or related to the following: a) Subject to the limitation of liability set forth in Article 11, RIM will indemnify GoAmerica for any third party claims brought against GoAmerica for infringement of any trademark or patent enforceable in Canada or the United States, copyright or other proprietary right arising out of the Handheld or the Services provided by RIM, where the Handheld has been used in accordance with this Agreement by GoAmerica provided, however, that RIM shall have no indemnification obligation if (i) the Handheld and/or Services are used in combination with any hardware and/or software and/or services not supplied or recommended by RIM or (ii) the Handheld and/or Services are modified without RIM's written consent and the infringement or violation of such proprietary right would not have occurred but for such combination or modification; and further provided that (a) GoAmerica notifies RIM in writing within seven (7) days of the claim; (b) RIM has sole control of the defense and all related settlement negotiations and RIM has, without limitation, the sole, unfettered discretion to compromise and settle such claim; and (c) GoAmerica provides RIM with the assistance, information and authority necessary to perform RIM's obligations under this paragraph. Reasonable out-of-pocket expenses incurred by GoAmerica in providing such assistance will be reimbursed by RIM. 11 RIM ______ GoAmerica _______ 12 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. b) Subject to the limitation of liability set forth in Article 11, GoAmerica will indemnify RIM for claim brought against RIM for infringement of any trademark or patent enforceable in Canada or the United States, copyright or other proprietary right arising out of the Application, where the Application has been used in accordance with this Agreement by RIM provided, however, that GoAmerica shall have no indemnification obligation if (i) the Application is used in combination with any hardware and/or software and/or services not contemplated under this Agreement or (ii) the Application is modified without GoAmerica's written consent and the infringement or violation of such proprietary right would not have occurred but for such combination or modification; and further provided that (a) RIM notifies GoAmerica in writing within seven (7) days of the claim; (b) GoAmerica has sole control of the defense and all related settlement negotiations and GoAmerica has, without limitation, the sole, unfettered discretion to compromise and settle such claim; and (c) RIM provides GoAmerica with the assistance, information and authority necessary to perform GoAmerica's obligations under this paragraph. Reasonable out-of-pocket expenses incurred by RIM in providing such assistance will be reimbursed by GoAmerica. These indemnity obligations will survive the termination of this Agreement. This indemnity will apply even if liability for which the indemnified party is entitled is the result of joint negligence, joint misconduct or joint fault of RIM and GoAmerica, but in such case, liability will be apportioned by the percentage of liability attributable to the negligence, misconduct or fault of the Parties. 11 LIMITATION OF LIABILITY 11.1 Except as set forth in Article 10 herein, or a breach of Article 5 herein, neither Party shall be liable to any other Party for loss, cost claim, injury, liability or expense, including reasonable attorney's fees, relating to or arising out of any ordinary negligent act or omission by a Party. If either Parry should become entitled to claim damages from the other Party (including without limitation, for breach of contract, breach of warranty, gross negligence or other tort claim), the Party against whom damages are sought will be liable only for the amount of the other Party's actual direct damages up to the amount of [**] dollars US ($[**]). NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR LOST REVENUES, LOST PROFITS, OR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT A PARTY HAS BEEN ADVISED BY THE OTHER PARTY OF THE PROBABILITY OF SUCH DAMAGE OR LOSS, WHETHER SUCH DAMAGE OR LOSS ARISES IN CONTRACT, TORT, INCLUDING NEGLIGENCE, STRICT LIABILITY OR OTHERWISE. THE FOREGOING LIMITATION ON RECOVERY SHALL NOT BE CONSTRUED AS PRECLUDING RIM FROM RECOVERING ITS PROFIT IN ANY ACTION FOR PAYMENT UNDER THIS AGREEMENT. 12 RIM ______ GoAmerica _______ 13 11.2 Each Party shall mitigate its damages in a commercially reasonable fashion in the event of the other Party's default under this Agreement. The Parties shall exercise reasonable efforts to cooperate with each other so as to avoid having any internal dispute between or among them affect the Service Provider or disrupt service to the Service Provider. 12 FORCE MAJEURE 12.1 Neither Party shall be liable to the other for any delay or failure to perform, which is due to causes beyond the control of said Party, including but not limited to, force majeure, acts of the public enemy, acts of any governmental authority in its sovereign capacity, fires, floods, hurricanes, earthquakes, epidemics, quarantine restrictions, strikes or other labor disputes and freight embargoes; provided however, that failure to make any payment provided for herein, shall not be excused for any of the foregoing reasons. 13 ASSIGNMENT 13.1 Neither this Agreement nor any of the rights or obligations under this Agreement may be assigned delegated, sublicensed or otherwise transferred by any Party in whole or in part without the prior written consent of the other Party. 14 SUBCONTRACTING 14.1 Upon prior written notice to, and the consent (not to be unreasonably withheld) of, the other Party, either Party may subcontract any of its obligations under this Agreement, but no such subcontract shall relieve the subcontracting Party of primary responsibility for performance of its obligations. 15 NON-EXCLUSIVITY 15.1 Except as otherwise provided herein, this Agreement is non-exclusive. Any Party may enter into similar agreements with third parties; provided, however, that consistent with observing the requirements of Article 5 herein, neither Party shall disclose the terms of any agreement concerning the subject matter of this Agreement to any third party without the prior written consent of the other Parties. 16 AUDIT 16.1 To permit RIM to confirm GoAmerica's compliance with this Agreement and applicable intellectual property laws, GoAmerica shall keep detailed records and provide monthly summary reports to RIM of the numbers of RIM end users activating the Service, such reports to be provided within 15 business days after each month end. To assure such compliance, auditors reasonably acceptable to GoAmerica may inspect such records of GoAmerica from time to time on behalf of RIM, but no more frequently than once per year. Any such audits shall be conducted during regular business hours at the GoAmerica's offices and shall not interfere unreasonably with the GoAmerica's business activities. If an audit reveals that GoAmerica has underpaid fees to RIM, GoAmerica shall be invoiced for such underpaid fees based on the price list in effect at the time the underpaid fees were originally due, plus interest on such underpaid fees at the lesser of 13 RIM ______ GoAmerica _______ 14 eighteen (18%) percent per annum, or the maximum rate allowed under applicable law, calculated from the time the underpaid fees were originally due until the time they are paid, with such payment due immediately upon receipt of invoice. If an audit reveals a 5% or greater non-compliance for any particular quarter by GoAmerica, then GoAmerica shall pay RIM's reasonable costs of conducting the audit. 17 PUBLICITY 17.1 The Parties shall cooperate in jointly drafting and approving press releases announcing their marketing alliance. 17.2 No Party shall use the name of the Other Party in any news release, public announcement, advertisement, sales promotion material or other form of publicity without the prior written consent of the other Party, except that the Parties may mutually agree upon the form of standard press releases or other documentation that each Party will be permitted to use on an ongoing basis without seeking permission from the other Party. No Party shall disclose the existence or the contents of any of the terms and conditions of this Agreement without prior written consent of the other Party. 18 NOTICES 18.1 All notices, including notices of address change, required to be sent hereunder shall be in writing and when sent in writing shall be deemed to have been given when delivered by courier service or mailed by first class mail to the applicable address listed at the beginning of this Agreement. To expedite order processing, either Party may treat documents faxed by the other Party as original documents; nevertheless, either Party may require the other to exchange original signed documents. 18.2 Any notice given pursuant to this Article 18 shall be effective five (5) days after the day it is mailed or upon receipt whichever is earlier. 19 AMENDMENTS AND WAIVERS 19.1 This Agreement may be amended only by written agreement of the Parties. No amendment or waiver of any provisions of this Agreement, and of consent to any default under this Agreement, shall be effective unless the same shall be in writing and signed by a duly authorized representative on behalf of the Party against whom such amendment, waiver or consent is claimed. In addition, no course of dealing or failure of any Party to enforce strictly any term, right, or condition of this Agreement shall be construed as a waiver of such term, right or condition. 20 ORIGINALS 20.1 This Agreement may be executed in multiple counterparts, in which case each such counterpart shall be an original and together each shall constitute one and the same document. 21 SECTION HEADINGS 14 RIM ______ GoAmerica _______ 15 21.1 Section headings are inserted for convenience only and shall not be used in any way to construe the terms of this Agreement. 22 SEVERABILITY 22.1 If any provision hereof is declared or determined to be invalid or unenforceable under applicable law, the remaining provisions hereof shall continue in full force and effect and the Parties shall substitute for the invalid provision a valid provision which most closely approximates the economic effect and intent of the invalid provision. 22.2 The invalidity, in whole or in part, of any section or paragraph of this Agreement shall not affect the validity of the remainder of this Agreement. 23 EXPORT CONTROL 23.1 Both RIM and GoAmerica agree to comply fully with all relevant export laws and regulations of the United States and Canada to assure that neither the Products, nor any direct Product thereof, nor information or technical data provided pursuant to this Agreement, are exported, directly or indirectly, in violation of United States and/or Canadian law. The Parties acknowledge that the Application and certain versions of the BlackBerry Software may operate with a level of data encryption that, as of the Effective Date, may not be exported outside of the United States and Canada without obtaining applicable permits, if at all. Accordingly, without limiting the generality of this Article, the Parties agree that it shall not export, nor encourage or induce any party, customer or potential customer, to export such Products from the Territory. Each Party agrees, at its own expense, to comply with all foreign exchange and other laws and regulations applicable to such Party, and each Party agrees to obtain any licenses or approvals necessary for such Party to perform this Agreement. 24 INFORMAL DISPUTE RESOLUTION 24.1 At the written request of either Party, the Parties will attempt to resolve any dispute arising under or relating to this Agreement through the informal means described in this Article. Each Party will appoint a senior management representative who does not devote substantially all of his or her time to performance under this Agreement (the "Arbitration Representative"). Each Arbitration Representative will furnish to the other all non-privileged information with respect to the dispute that the Parties believe to be appropriate and germane. The Arbitration Representatives will negotiate in an effort to resolve the dispute without the necessity of any formal proceeding. Formal proceedings for the resolution of the dispute may not be commenced until: (i) the designated representatives conclude that resolution through continued negotiation does not appear likely; or (ii) thirty (30) calendar days have passed since the initial request to negotiate the dispute was made; provided, however, that a Party may file earlier to avoid the expiration of any applicable limitations period, to preserve a superior position with respect to other creditors, or to apply for interim or equitable relief. 24.2 Any question or dispute arising out of or relating to this Agreement not resolved pursuant to Article 24.1 will be settled by arbitration administered by the American Arbitration 15 RIM ______ GoAmerica _______ 16 Association ("AAA") in accordance with its Commercial Arbitration Rules and the Supplementary Procedures for Large, Complex Disputes, and judgment on the award may be entered in any court having jurisdiction thereof or over the applicable Party or its assets. There will be three (3) arbitrators; one (1) selected by each Party from a list of qualified arbitrators provided by the AAA and the two so selected will select a third arbitrator. The third arbitrator will meet the qualification criteria to serve as an arbitrator in the Large, Complex Case Dispute Resolution Program and will serve as chairman of the arbitration. The Expedited Procedures will apply. The arbitrators will have no authority to award any damages that are excluded by the terms and conditions of this Agreement. The arbitrators shall issue an opinion in writing setting out the panel's findings of fact and conclusions of law in support of any award, unless the Parties agree otherwise. Either Party will have the right to apply at any time to a judicial authority for appropriate injunctive or other interim or provisional relief, and will not by doing so be deemed to have breached its agreement to arbitrate or to have affected the powers reserved to the arbitrators. 25 LIMITATION OF ACTIONS 25.1 No proceeding, regardless of form, arising out of or related to this Agreement may be brought by either Party more than two (2) years after the accrual of the cause of action, except that (i) proceedings for indemnification or related to violation of a Party's proprietary rights or any duty to protect Confidential Information may be brought at any time within the applicable statute of limitations, and (ii) proceedings for non-payment may be brought up to two (2) years after the date the last payment was due. 26 ENTIRE AGREEMENT; GOVERNING LAW 26.1 This Agreement constitutes the entire understanding and agreement of and among the Parties with respect to the subject matter hereof, and supersedes and merges any prior or contemporaneous representations and agreements, verbal or written. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, U.S.A., except with respect to its conflict of laws rules. IN WITNESS HEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the dates set forth below. RESEARCH IN MOTION LIMITED GOAMERICA INC. By: /s/ Jim Balsillie By: /s/ Joe Korb Name: Jim Balsillie Name: Joe Korb Title: Chairman and Co-CEO Title: President 16 RIM ______ GoAmerica _______ 17 17 RIM_________ GoAmerica__________ EX-10.25 6 w46736ex10-25.txt SERVICE AGREEMENT FOR ROGERS WIRELESS, INC 1 EXHIBIT 10.25 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. SERVICE AGREEMENT This agreement (the "Agreement") dated as of July 26, 2000 describes the terms and conditions pursuant to which GoAmerica Communications Corp., a Delaware corporation having offices at 401 Hackensack Avenue, Hackensack NJ 07601 ("GOAMERICA") authorizes Rogers Wireless Inc. a corporation incorporated under the laws of Canada, having offices at One Mount Pleasant Road, Toronto, Ontario, M4Y 2Y5 ("ROGERS") to purchase and resell specified services (including related software) provided by GoAmerica from time to time and the terms upon which GoAmerica agrees to provide such services (and related software) to Rogers. NOW THEREFORE in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows: 1. DEFINITIONS. In this agreement the following terms will have the meaning set forth below unless the context requires otherwise: "ADDITIONAL CUSTOMIZATIONS" will have the meaning set out in Subsection 9(a); "AFFILIATE" will have the meaning set out in the Canada Business Corporations Act; "BUSINESS DAY" means each day of the week other than Saturday, Sunday and statutory or civic holidays observed in the Province of Ontario; "BROWSER MENU LINK" means a URL hidden behind a combination of text, information and/or content included on a page of a Wireless Browser which, when selected, allows the user to automatically and directly transfer to a specific location on the Internet; "CONFIDENTIAL INFORMATION" of a party means any and all material and information of the party or any of its Affiliates (the "DISCLOSING PARTY") which has or will come into the possession or knowledge of the other party or any of its Affiliates (the "RECIPIENT PARTY") in connection with or as a result of entering into this Agreement including, without limitation, User Information and information concerning the Disclosing Party's past, present and future customers, suppliers, technology and business. Notwithstanding the foregoing, "CONFIDENTIAL INFORMATION" does not include the following information: (i) information which is in the public domain when it is received by or becomes known to the Recipient Party or which subsequently enters the public domain through no fault of the Recipient Party (but only after it enters the public domain); (ii) information which is already known to the Recipient Party at the time of its disclosure to the Recipient Party by the Disclosing Party and is not the subject of an obligation of confidence of any kind; (iii) information which is independently developed by the Recipient Party without any use of or reference to the Confidential Information of the Disclosing Party where such independent development can be established by evidence that would be acceptable to a 2 2 court of competent jurisdiction; and (iv) information which is received by the Recipient Party in good faith without an obligation of confidence of any kind from a third party who the Recipient Party had no reason to believe was not lawfully in possession of such information free of any obligation of confidence of any kind, but only until the Recipient Party subsequently comes to have reason to believe that such information was subject to an obligation of confidence of any kind when originally received; "CUSTOMIZATION ASSESSMENT" will have the meaning set out in Subsection 9(a); "CUSTOMIZATIONS" means a modification, new feature and/or addition to the Wireless Browser made by Go America to create the Customized Browser as further described in Subsection 2(a); "CUSTOMIZED BROWSER" will have the meaning set out in Subsection 2(a); "EFFECTIVE DATE" means July 26, 2000; "ENABLED DEVICE" means a wireless handheld device distributed directly or indirectly by Rogers for use in connection with the Mobitex Network which is branded with the "Blackberry" Mark and which includes a Customized Browser; "END USER DOCUMENTATION" means the end user manuals and other documentation or materials generally made available by GoAmerica to users of the Wireless Browser related to the use, operation, functionality and performance of the Wireless Browser; "ENHANCEMENT" means a change, correction, modification, new feature, new technology and/or other addition and/or improvement, including those resulting in new versions or upgrades; "GOAMERICA INTELLECTUAL PROPERTY" will have the meaning set out in Section 18; "HOME DECK" means the first screen of the user interface for the Customized Browser which appears to a Rogers Customer upon the activation of the Customized Browser by the Rogers Customer; "HOST" or "HOSTING" means to provide and manage servers, facilities, telecommunications, maintenance and operations related to the delivery of Internet based services and content; "INTELLECTUAL PROPERTY RIGHTS" means: (i) any and all proprietary rights provided under: (1) patent law; (2) copyright law; (3) trade-mark law; (4) design patent or industrial design law; (5) semi-conductor chip or mask work law; or (6) any other statutory provision or common law principal applicable to this Agreement including trade secret law, which may provide a right in either ideas, formulae, algorithms, concepts, systems, methods, improvements, inventions or know-how generally, or the expression or use of such ideas, formulae, algorithms, concepts, systems, methods, improvements, inventions or know-how; and (ii) any and all applications, registrations, licences, sub-licences, agreements or any other evidence of a right in any of the foregoing; 3 3 "LOOK AND FEEL" means graphical elements, aesthetic look and feel and other navigation or design features including, without limitation, Marks, Browser Menu Links; meta tags, password set-up and other graphics forming part of the user interface on an Enabled Device; "MARKS" means trade-marks, trade names, design marks, service marks, logos, brand names or other distinguishing features; "MAN" means a Mobitex access number and refers to the unique network address of an Enabled Device pursuant to the Mobitex Protocol; "MOBITEX" means the two way wireless data communications network based upon the Mobitex Data Communications Network based upon the Mobitex Protocol as operated in Canada by Rogers and, where applicable, any other similar network located in the United States or elsewhere that is operated by a third party and that may be accessed by Rogers Customers pursuant to a roaming agreement or otherwise permitted by such third party. "MOBITEX NETWORK" will have the same meaning as "MOBITEX"; "MOBITEX PROTOCOL" means the standard international communications protocol for a two-way wireless data network as promulgated from time to time by the Mobitex Operators Association; "ROGERS CUSTOMER" means a user of an Enabled Device and "ROGERS CUSTOMERS" means all of such users; "ROGERS INTELLECTUAL PROPERTY" will have the meaning set out in Section 16; "ROGERS SERVICE" will have the meaning set out in Section 2; "SERVER SOFTWARE" means GoAmerica's server based software that resides on the Go America facilities and interacts with and supports Enabled Devices. For greater certainty, "SERVER SOFTWARE" includes any and all Enhancements made to such software in accordance with this Agreement; "SERVICE" means the Hosting, operation, support and maintenance at GoAmerica's facilities of the Wireless Browser, equipment and Server Software in order to receive, route, interpret and process queries received from the Wireless Browser and data in response to such queries; "SUPPORT SERVICE LEVELS" will have the meaning set out in Section 10; "SUPPORT SERVICES" will have the meaning set out in Section 10; "SPECIFICATIONS" means the detailed design, functional, technical, branding, user interface, customizations and other specifications for the Rogers Service and the Customized Browser set out in the End User Documentation or attached hereto as Schedule 2; 4 4 "TECHNICAL CONTACT" will have the meaning set out in Section 12; "TERM" will have the meaning set out in Section 29; "TRANSITION COSTS" will have the meaning set out in Subsection 31; "TRANSITION PERIOD" will have the meaning set out in Section 32; "USER INFORMATION" means all data and information pertaining to or identifiable to a Rogers Customer including without limitation: (i) name, address, e-mail address, MAN, IP address, telephone number password, personal financial information, personal preferences, demographic data, marketing data, data about securities transactions, credit data, or any other identification data; (ii) any information that reflects use of or interactions with the Rogers Service, the Server Software and/or the Customized Browser including browsing websites, including but not limited to, information concerning computer search paths, any profiles created or general usage data (other than aggregate statistical information that is not specific to and does not reference Rogers or any of the Rogers Customers); (iii) any data otherwise submitted in the process of registering for the Rogers Service and any data submitted during the course of using the Rogers Service, the Server Software and/or the Customized Browser, including browsing websites; (iv) all information and data relating to the use by a Rogers Customer of the Rogers Service, the Server Software and/or the Customized Browser; and (v) any other information relating to the behaviour of a Rogers Customer collected while such Rogers Customer is using the Rogers Service, the Server Software and/or the Customized Browser; "URL" means universal resource locator, which designates a unique Internet protocol address for locating and accessing an Internet site(s), a page or a location within a page; and "WIRELESS BROWSER" means software, currently commercially known as the Go.Web Browser, which when loaded on a wireless device capable of supporting such software: (i) interprets instructions received by such wireless device from a server; (ii) transmits instructions to a server; (iii) interfaces with such wireless device to perform functions such as write output to a screen and receive input from a key pad; (iv) interfaces with the URL requested by a Rogers Customer, collects data through interaction with the Server Software from sites and/or pages written in HTML, HDML and WML (hypertext markup language, handheld device markup language and wireless markup language, respectively,) and reformats such data in a format which can be displayed on an Enabled Device; and (v) otherwise performs any such other functions necessary to enable the user of such wireless device to access and browse the Internet through interaction with the Server Software. For greater certainty, "WIRELESS BROWSER" includes any and all Enhancements made to the such software in accordance with this Agreement. 2. THE ROGERS SERVICE AND CUSTOMIZED BROWSER (a) Creation and Operation of Rogers Service and the Customized Browser. GoAmerica agrees to develop and deliver to Rogers a customized version of the Wireless Browser (the "CUSTOMIZED BROWSER") and to Host at GoAmerica's 5 5 premises a Rogers branded version of the Service which conforms to and performs in accordance with the Specifications (the "ROGERS SERVICE") and hereby grants to Rogers the right to offer the Rogers Service to Rogers Customers through the Mobitex Network, subject to the terms and conditions set out in this Agreement. For greater certainty, "CUSTOMIZED BROWSER" also includes any and all Enhancements and Additional Customizations made to such software in accordance with this Agreement. (b) Co-operation With Third Parties. GoAmerica acknowledges and agrees that Rogers is currently working with third parties to develop and offer customizations, improvements, enhancements, new features and other functionality to Rogers Customers (including, without limitation, a customized website which will enable Rogers Customers to personalize their Home Deck), and GoAmerica agrees that it will, at its expense, co-operate in good faith with Rogers and with such third parties. Without limiting the generality of the foregoing and subject to Section 4, GoAmerica acknowledges and agrees that Rogers may from time to time work with third parties to develop a wireless portal for use in connection with the Customized Browser. Upon Rogers request, GoAmerica will reasonably cooperate and facilitate a seamless transition of the management and Hosting of the Home Deck to the applicable third party specified by Rogers. (c) Standard Development Kits. GoAmerica will provide to Rogers, on terms and conditions, including price, to be mutually agreed upon by the parties for use by Rogers' content providers , the tools, including without limitation, standard development kits (SDKs), required to make content on the Customized Browser accessible to, and in a format which can be read by, the Rogers Customers as well as all reasonable support in relation to the use by Rogers or its content providers of all such tools. 3. ACTIVATION. GoAmerica will by the end of the next Business Day following receipt from Rogers of each MAN, activate on GoAmerica's servers each Wireless Browser located on the Enabled Device to which such MAN relates. 4. BRANDING. The Rogers Service and the Customized Browser will be branded with the Marks of Rogers and GoAmerica in the manner specified in the Specifications or in such other manner as may be determined by Rogers, in its sole discretion; provided, however, that Rogers may not alter the form or manner in which any GoAmerica Marks are included as part of the Rogers Service in any material respect without the prior consent of GoAmerica, which consent will not be unreasonably withheld or delayed. 5. BROWSER MENU LINKS. Unless otherwise specified by Rogers in writing, GoAmerica will integrate and include as part of the Rogers Service and the Customized Browser all Browser Menu Links provided by Rogers within twenty-four (24) hours following receipt of a request from Rogers. 6 6 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 6. LOOK AND FEEL. Subject to Section 4 Rogers will have sole control over the Look and Feel of the Rogers Service and Customized Browser, including without limitation, the placement, addition and deletion of the Browser Menu Links. 7. ENHANCEMENTS. GoAmerica will notify Rogers in writing [**]prior to making any Enhancement to the Service and/or the Wireless Browser and Rogers will have[**] to notify GoAmerica whether it wishes GoAmerica to incorporate such Enhancement into the Rogers Service and/or the Customized Browser. In the event that: (i) Rogers notifies GoAmerica that it wishes to incorporate an Enhancement into the Rogers Service and/or the Customized Browser; or (ii) Rogers is deemed to have accepted an Enhancement in accordance with the following sentence, GoAmerica will at GoAmerica's expense, incorporate such Enhancement into the Rogers Service and/or Customized Browser concurrently with the date that GoAmerica makes such Enhancement to the Service and/or the Wireless Browser. Should Rogers fail to notify GoAmerica that it rejects any such Enhancement within such [**], Rogers will be deemed to have accepted such Enhancement. 8. RIGHT TO REJECT. Rogers may, at any time within [**] following receipt from GoAmerica of the Rogers Service and/or the Customized Browser or any part thereof, notify GoAmerica in writing whether Rogers accepts or rejects the Rogers Service and/or the Customized Browser or the applicable part thereof. Rogers may reject the Rogers Service and/or the Customized Browser if it does not conform to or perform in accordance with the Specifications in Schedule 2 (or in any separate quote and purchase order). If Rogers does not deliver a notice of acceptance or rejection within such time period, the Rogers Service and/or the Customized Browser will be deemed to have been rejected. If: (i) Rogers delivers to GoAmerica a notice that Rogers rejects the Rogers Service and/or the Customized Browser; or (ii) the Rogers Service and/or the Customized Browser are deemed to have been rejected in accordance with the preceding sentence, provided Rogers has informed GoAmerica in reasonable detail as to the manner in which the Rogers Service and/or the Customized Browser do not conform to or perform in accordance with the Specifications in Schedule 2 (or in any separate purchase order), then GoAmerica will use reasonable commercial efforts to remedy any deficiency as quickly as possible and GoAmerica will redeliver the remedied Rogers Service and/or the Customized Browser to Rogers for its approval, the whole of which will be at GoAmerica's expense. The procedure for acceptance set out in this Section 8 will continue until Rogers has notified GoAmerica in writing that it accepts the Rogers Service and Customized Browser or until Rogers exercises its right to terminate this Agreement in accordance with Subsection 30(b), whichever is earlier. 7 7 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 9. PROCEDURE FOR ADDITIONAL CUSTOMIZATIONS. (a) At any time during the Term, Rogers may request in writing that GoAmerica make additional customizations to the Rogers Service, the Server Software and/or Customized Browser, including without limitation additional Enhancements, which GoAmerica is not otherwise required to make at its expense in accordance with Sections 7 and/or 8 (the "ADDITIONAL CUSTOMIZATIONS"). Within [**]or such longer time requested by GoAmerica and approved by Rogers in writing following receipt by GoAmerica of such written request from Rogers, Go America will, at its expense, provide a written response to Rogers (the "CUSTOMIZATION ASSESSMENT") specifying: (i) the time frame for the development and implementation of the Additional Customizations; (ii) the impact, if any, that the implementation of the Additional Customizations will have on the functionality, usability, performance or other components of the Rogers Service, including the Server Software and the Wireless Browser; (iii) the proposed schedule for the implementation of the Additional Customizations; (iv) the fees and expenses Rogers must pay GoAmerica to develop and implement the Additional Customizations; and (v) any other information reasonably requested by Rogers in order to enable it to assess the impact that the development and implementation of the Additional Customizations will have on the Rogers Service, the Wireless Browser and/or the Server Software. (b) Within [**] of the receipt by Rogers of the Customization Assessment or such longer time requested by Rogers and approved by GoAmerica in writing, Rogers will notify GoAmerica in writing whether it wishes GoAmerica to develop and implement the Additional Customizations in accordance with the Customization Assessment. 8 8 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (c) Rogers will have the right to notify GoAmerica that it rejects a Customization Assessment or that it requires specified clarifications, additions or modifications to such Customization Assessment and GoAmerica will have [**] or such other time as the parties may agree, from the date of receipt of such written notice from Rogers, to deliver to Rogers an amended Customization Assessment and Rogers will have [**] following the receipt of such amended Customization Assessment to notify GoAmerica in writing whether it wishes GoAmerica to develop and implement the Additional Customizations in accordance with the amended Customization Assessment. (d) Upon receipt by GoAmerica of written notice from Rogers indicating that Rogers wishes GoAmerica to develop and implement the Additional Customizations and shall pay GoAmerica the fees and expenses quoted by GoAmerica or otherwise agreed to by the parties in writing, GoAmerica will do so in accordance with the Customization Assessment. If Rogers does not indicate in writing within the required time frame that it wishes GoAmerica to develop and implement the Additional Customizations, GoAmerica will not develop or implement any such Additional Customizations. (e) All Additional Customizations developed and implemented by GoAmerica in accordance with this Section 9 will form part of the Rogers Service, the Server Software and/or the Customized Browser and all approved Customization Assessments will be incorporated into and form part of the Specifications. 10. SUPPORT AND MAINTENANCE. GoAmerica will provide the support services set out in Schedule 4 (the "SUPPORT SERVICES") in accordance with the support service levels set out in Schedule 4 (the "SUPPORT SERVICE LEVELS"). 11. MARKETING. Each party will use reasonable commercial efforts, consistent with good business practises and marketing standards, to advertise, market and promote the Rogers Service and/or the Customized Browser. Without limiting the generality of the foregoing, GoAmerica agrees to pay [**]% of all of the costs incurred by Rogers or any of its Affiliates in relation to the advertising, marketing and promotion of the Rogers Service and/or the Customized Browser where Rogers uses, displays or otherwise refers to the GoAmerica Mark "Go.Web", up to a contribution by GoAmerica of $[**] US. Rogers will be entitled to submit invoices from time to time containing the information concerning the amount spent by or on behalf of Rogers or any of its Affiliates on advertising marketing and/or promotion wherein the Mark "Go.Web" was used, displayed or otherwise referred to and GoAmerica will pay [**]% of such amount within [**] following receipt of the applicable invoice. 12. TECHNICAL CONTACTS. Each party has designated the technical contact (the "TECHNICAL CONTACT") set out in Schedule 1 to act as a liaison for all communications between Rogers and GoAmerica pertaining to this Agreement. Communication between the 9 9 Rogers Technical Contact and the GoAmerica Technical Contact does not replace the obligation to give notices required by this Agreement. 13. TRADEMARK USE. Each party may use the other party's Marks (either alone or in conjunction with such first party's Marks) during the Term in connection with the Rogers Service and/or the Customized Browser and in connection with the marketing, advertising and promotion of the Rogers Service and/or the Customized Browser subject to the other party's prior written consent. Without limiting the generality of the foregoing, neither party will remove, obliterate or modify any of the other party's Marks or notices on the Rogers Service and/or the Customized Browser without such party's consent in writing. 14. LICENSES AND RESTRICTIONS. (a) License Terms. (i) GoAmerica hereby grants to Rogers and its Affiliates a non-exclusive, royalty-free, non-transferable (except as provided in Section 38) license during the Term and, where applicable, the Transition Period, to: (i) install (directly or through a third party) on any number of Enabled Devices; (ii) use; (iii) reproduce; (iv) distribute; (v) store; (vi) grant Rogers Customers the right to download from a Rogers website free of charge; and (vii) sublicense the Wireless Browser in object code format for the purpose of providing Rogers Customers with the Rogers Service and/or the Customized Browser and for no other purpose. (ii) GoAmerica hereby grants to Rogers and its Affiliates a non-exclusive, royalty-free, non-transferable (except as provided in section 38) license during the Term and, where applicable, the Transition Period, to: (i) use; (ii) access; and (iii) permit Rogers Customers to use and access the Server Software for the purpose of providing Rogers Customers with the Rogers Service and/or the Customized Browser and for no other purpose. (iii) GoAmerica hereby grants to Rogers and its Affiliates a non-exclusive, royalty-free, non-transferable (except as provided in Section 38), license during the Term to: (i) use; (ii) reproduce; (iii) distribute; and (iv) sublicense the End User Documentation to the Rogers Customers. (iv) Rogers will not: (i) exceed the licensed use of the Wireless Browser set out in this Agreement; or (ii) translate, decompile or reverse engineer the whole or any part of the Wireless Browser. (b) Source Code Escrow. (i) Immediately following the execution of this Agreement, GoAmerica and Rogers will negotiate in good faith in order to execute the Escrow Agreement (as defined below) no later than two (2) weeks following the Effective Date which will be attached to and form part of this Agreement 10 10 as Schedule 5. Within the time specified below, GoAmerica shall place and shall thereafter maintain, at its expense: (1) an updated copy of the source code for the Customized Browser and the Server Software including Enhancements, if any; and (2) any available commentary, instructions, programmer specifications, notes (technical or otherwise), manuals, tutorial literature, explanations, annotations and other documentation necessary to enable a reasonably skilled programmer to read, understand, operate and maintain the source code for the Customized Browser and the Server Software including Enhancements (collectively, the "Escrow Materials"), in escrow with Data Security International, Inc. ("Escrow Agent") pursuant to the terms of an escrow agreement to be mutually agreed upon by the parties ("Escrow Agreement"). GoAmerica shall deliver the Escrow Materials to the Escrow Agent promptly after execution of the Escrow Agreement by the parties and the Escrow Agent. (ii) Among other terms, the Escrow Agreement will provide for the release of the Escrow Materials to Rogers in the event that (x) GoAmerica is unable to provide Support Services because GoAmerica has become insolvent or unable to pay its debts as they mature in the ordinary course of business; has filed a petition for bankruptcy or has been adjudicated a bankrupt, has made an assignment for the benefit of its creditors or an arrangement for its creditors pursuant to any bankruptcy law; has had proceedings instituted by or against it in bankruptcy or under insolvency laws or for reorganization, receivership or dissolution, or (y) breaches its obligations to provide Support Services as set out in Schedule 4 and fails, after notice in writing by Rogers, to cure such breach within the time provided in this Agreement. (iii) The Escrow Agreement shall also provide, among other mutually agreed terms, that in the event Rogers obtains the Escrow Materials pursuant to the release conditions and procedures set forth in the Escrow Agreement, Rogers shall have the right to use and modify the Escrow Materials solely for the purposes of providing (directly or through third parties) the Support Services that GoAmerica has failed to provide or is unable to provide, for as long such failure or inability continues. At such time as GoAmerica, in good faith, notifies Rogers that it has recovered its ability to provide Support Services, or cured the cause of its breach, Rogers shall promptly return all copies of the Escrow Materials to the Escrow Agent and allow GoAmerica to resume providing Support Services; provided, however that GoAmerica reasonably cooperates and assists Rogers in effecting such transition at GoAmerica's expense. Rogers's rights to use the Escrow Materials shall be limited to the provision of such Support Services. Release of the Escrow Materials shall not be deemed to vest in Rogers any rights to use or modify the Escrow Materials or the Wireless Browser to extend or enhance its functionality or to enable the use of the Wireless Browser in any manner other than as provided in this Agreement. 11 11 15. ASSIGNMENT. GoAmerica hereby assigns to Rogers and its Affiliates all Intellectual Property Rights in and to the Customizations (other than the Intellectual Property Rights forming part of the Wireless Browser prior to the Effective Date) and the Additional Customizations developed and implemented in accordance with Section 9. Except as expressly permitted herein, Go America will not have the right to use, reproduce or otherwise exploit any Intellectual Property Rights in the Customizations and the Additional Customizations without the prior written consent of Rogers. 16. ROGERS INTELLECTUAL PROPERTY. As between the parties, Rogers owns and retains all right, title and interest in and to the following, which will be collectively referred to herein as the "ROGERS INTELLECTUAL PROPERTY": (a) the Customizations and the Additional Customizations; (b) all of the Rogers domain names, Marks and URLs; and (c) all information relating to the Rogers Customers, including without limitation, all information and data about Rogers Customers, including without limitation all User Information. 17. LICENSE OF ROGERS INTELLECTUAL PROPERTY. Subject to Section 43, Rogers grants a non-exclusive, royalty-free, revocable, non-transferable license during the Term to GoAmerica to use the Rogers Intellectual Property, excluding the User Information, subject to the following restrictions: (a) GoAmerica will use the Rogers Intellectual Property, excluding the User Information, in accordance with this Agreement and only for the purpose of fulfilling its obligations hereunder; (b) GoAmerica will not contact, communicate with or distribute information to any Rogers Customer without Rogers' prior written consent; (c) GoAmerica will not disclose, sell, license, rent or otherwise exploit any Rogers Intellectual Property to a third party without the written consent of Rogers; and (d) GoAmerica will use the Rogers Intellectual Property only in accordance with all applicable restrictions imposed by law or regulation. 18. GOAMERICA OWNERSHIP. Subject to Sections 15 and 16, GoAmerica retains all right, title and interest in and to the Service, the Wireless Browser, the Enhancements (other than Enhancements which constitute Additional Customizations), the GoAmerica Marks and all development tools, routines, subroutines, applications, software and other materials that GoAmerica may use in conjunction with providing the Service (collectively, the "GOAMERICA INTELLECTUAL PROPERTY"). 12 12 19. CONFIDENTIALITY. (a) Each party will at all times, both during the Term and thereafter, hold all Confidential Information of the other party in the strictest confidence, and will not use such Confidential Information for any purpose, other than as may be reasonably necessary for the performance of its duties pursuant to this Agreement, without the other party's prior written consent. Without limiting the generality of the foregoing, each party agrees: (i) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement; and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. (b) Notwithstanding the foregoing, each party may disclose Confidential Information: (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law; or (ii) on a "need-to-know" basis under an obligation of confidentiality to its Affiliates and to its and its Affiliates' authorized agents, contractors, legal counsel, accountants, banks and other financing sources and their advisors. (c) The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the other party's written consent. (d) Each party acknowledges that its failure to comply with the provisions of this Section 19 will cause irreparable harm to the other party which cannot be adequately compensated for in damages, and accordingly acknowledges that the other party will be entitled to obtain, in addition to any other remedies available to it, interlocutory and permanent injunctive relief to restrain any anticipated, present or continuing breach of this Section 19. 20. FEES AND REPORTING. (a) Payment of Fees. In consideration for the provision by GoAmerica of the Rogers Service, the Customized Browser and the Server Software in accordance with the terms of this Agreement, including the license to Rogers of the GoAmerica Intellectual Property, Rogers will pay GoAmerica the fees set out in Schedule 3 to this Agreement in accordance with the payment procedure set out therein. Notwithstanding the foregoing, Rogers agrees to pay, in addition to the fees payable under this Agreement, the applicable withholding taxes in relation to such fees; provided, however, that GoAmerica agrees to use reasonable commercial efforts at GoAmerica's expense to reclaim all such amounts paid by Rogers, including the filing of all applicable tax returns, and GoAmerica will promptly pay Rogers all of the amounts reclaimed. 13 13 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (b) Failure to Meet Support Service Levels. If, during any Reporting Period (as defined in Schedule 4) during the Term or any renewal or extension thereto, GoAmerica fails to provide the Support Services in accordance with all applicable Support Service Levels, then, in addition to all other remedies available to Rogers under this Agreement or otherwise at law, Rogers will have no obligation to pay to GoAmerica the "GoAmerica Monthly Access Fee" set out in Section 5 of Schedule 3 relating to such Reporting Period. (c) Reporting Requirements. In addition to GoAmerica's obligations to provide Reports (as defined in Schedule 4 hereof) to Rogers in accordance with Schedule 4, GoAmerica will provide to Rogers, in a form and format mutually agreed upon by the parties, a report in respect of each calendar month during the Term or any renewal or extension thereto which contains statistical information which sets out the frequency of use of the Rogers Service and/or the Customized Browser by each Rogers Customer based on the MAN of each Rogers Customer and any other information reasonably requested by Rogers from time to time, provided that the provision of such information does not violate any Federal Communications Commission or other applicable federal or state regulations. GoAmerica will provide such Reports to Rogers in accordance with GoAmerica's normal billing cycle and each such Report will relate to the period ending on the Business Day on which such Report is delivered. 21. [**] TERMS. GoAmerica represents, warrants and covenants that the terms and conditions set out in this Agreement, including without limitation, the fees payable in relation to the Rogers Service, the Customized Browser and any Additional Customizations,[**] during the Term, [**] by GoAmerica [**] and/or [**] under this Agreement. Without limiting the generality of the foregoing, in the event that GoAmerica [**] and/or [**] under this Agreement, [**] the terms and conditions [**] under this Agreement, [**] to GoAmerica under this Agreement [**] which GoAmerica [**] and the [**] GoAmerica [**] and (ii) thereafter, [**] of the Term. 22. AUDITS. GoAmerica will maintain complete and accurate records containing information in sufficient detail to permit an accurate determination of the fees payable hereunder, and will retain all records and supporting information in accordance with generally accepted accounting principles (GAAP) in a form and format reasonably requested by Rogers. Without limiting the generality of the preceding sentence, GoAmerica will maintain data records relating to all Rogers Customers so that such information is sorted and accessible by Rogers according to the MAN for each Rogers Customer. Such records and supporting information will be made available for inspection on behalf of Rogers by a firm of certified public accountants (or the Canadian equivalent thereof) chosen by Rogers at any time not more than once during any six (6) month period upon ten (10) calendar days prior notice to GoAmerica. Such inspection will take place during Business Day(s) at GoAmerica's offices in Hackensack, New Jersey or at such other 14 14 place as such records may reasonably be regularly stored. In the event that any such audit reveals either: (i) an overpayment by Rogers of greater than or equal to give percent (5%); or (ii) breach by GoAmerica of its representation, warranty and covenant in Section 21, then GoAmerica will forthwith reimburse Rogers an amount equal to the excess payment and the entire cost of the audit (and all related expenses) will be borne by GoAmerica. Rogers will ensure that any person performing such audit on Rogers' behalf signs a non-disclosure agreement with Rogers and any breach by such person of such non-disclosure agreement will constitute breach by Rogers of its confidentiality obligations set out in Section 19 of this Agreement and Rogers will indemnify GoAmerica for the damages related to any such breach. 23. REPRESENTATIONS AND WARRANTIES OF GOAMERICA. GoAmerica represents, warrants and covenants to Rogers as follows and acknowledges that Rogers has relied upon such representations, warranties and covenants: (a) GoAmerica has the corporate power and the capacity to enter into, and to perform its obligations under, this Agreement and has the right to grant to Rogers all rights granted in this Agreement; (b) GoAmerica is the owner or authorized licensor of the Customized Browser, (other than the Customizations and Additional Customizations), and the Server Software and has the right to assign to Rogers all right, title and interest in and to the Customizations and Additional Customizations without violating any third party Intellectual Property Rights; (c) the Customized Browser (including the Customizations and Additional Customizations) will be developed and delivered by qualified GoAmerica personnel in a professional and workmanlike manner in accordance with the highest industry customs and practise; (d) the Rogers Service and the Customized Browser each will conform to and perform in accordance with the Specifications therefor; (e) GoAmerica will perform the Support Services in accordance with the Support Service Levels and in a professional and workmanlike manner in accordance with the highest industry customs and practise; (f) the exercise by Rogers of its rights under this Agreement including without limitation, the provision and distribution of the Rogers Service (including the sublicensing of the Customized Browser and Additional Customizations, if any) to the Rogers Customers will not violate any Intellectual Property Right of any third party and there are no third party claims or allegations that the installation, use, distribution or sublicensing of the Wireless Browser and/or the Customized Browser or the use and other exploitation of the Service or the Rogers Service violates any Intellectual Property Right of a third party; (g) no portion of the Rogers Service, Server Software and/or the Customized Browser will violate any rights of privacy of any third party; 15 15 (h) at the time of delivery to Rogers, the master copy or copies of the Customized Browser and any Additional Customizations will not contain any clock, timer, counter, computer virus, worm, software lock, drop dead device, Trojan-horse routine, trap door, time bomb or any other codes or instructions that directly or indirectly modifies, replicates, distorts, deletes, damages or otherwise disables software, hardware, equipment, files, data or services, or any disabling mechanism or protection feature designed to prevent the use of or access to hardware, equipment, files, data or services; (i) at all times during the Term and any applicable Transition Period, no portion of the Server Software will contain, and GoAmerica will use reasonable commercial efforts to maintain the Server Software in accordance with industry customs and practice in order ensure that no information and/or content accessed through the Server Software will contain, any clock, timer, counter, computer virus, worm, software lock, drop dead device, Trojan-horse routine, trap door, time bomb or any other codes or instructions that directly or indirectly modifies, replicates, distorts, deletes, damages or otherwise disables software, hardware, equipment, files, data or services, or any disabling mechanism or protection features designed to prevent the use of or access to hardware, equipment, files, data or services; (j) GoAmerica's performance of the obligations in this Agreement including the provision and delivery of the Rogers Service and the licensing of the Customized Browser and Server Software will comply with and will neither contravene, breach nor infringe any applicable laws or regulations; and (k) the Rogers Service will be provided by GoAmerica error-free, in an uninterrupted manner. 24. INDEMNIFICATION. (a) GoAmerica will, at its expense, defend, indemnify and hold Rogers and its Affiliates and their respective officers, employees, representatives and agents harmless from and against any claim, suit, action or other proceeding which is based on or arises from a claim that the Rogers Service, the Server Software, Customized Browser and/or Additional Customizations (or the use thereof by a Rogers Customer) infringes the Intellectual Property Rights of a third party (excluding any claims relating to intellectual property including Marks, or text supplied to GoAmerica by Rogers) or any breach by GoAmerica of Section 19. GoAmerica will pay all costs, damages and expenses (including but not limited to reasonable legal fees) in connection with any such claim, suit, action or proceeding; provided, however, that: (i) Rogers notifies GoAmerica in writing within a commercially reasonable time after Rogers becomes aware of a claim; (ii) GoAmerica has sole control of the defence of any such action; and (iii) Rogers reasonably cooperates, in good faith at GoAmerica's expense, in the defence of any such legal action. 16 16 (b) Notwithstanding the foregoing, GoAmerica will have no liability for any claim of infringement based on (i) any modification of the Customized Browser or Rogers Service other than as authorized by GoAmerica where such modification gave rise to the infringement claim; (ii) use (other than use by GoAmerica or its agents) of the Customized Browser or Rogers Service in conjunction with content where use with such content gave rise to the infringement claim; or (iii) use (other than use by GoAmerica or its agents) of the Customized Browser or Rogers Service with software or hardware which is not owned, licensed or authorized by GoAmerica, where use with such other software or hardware gave rise to the infringement claim. 25. CONTINUED USE. Should the Server Software, Customized Browser, (including the Additional Customizations) and/or the Rogers Service become, or in GoAmerica's opinion be likely to become, the subject of a claim of infringement, GoAmerica will, at its option and expense: (i) obtain the right for Rogers to continue using the Server Software, Customized Browser, (including the Additional Customizations) and/or the Rogers Service (ii) modify the Server Software, Customized Browser (including the Additional Customizations) and/or the Rogers Service so it is no longer infringing; provided, however, that any such modification does not impair the ability of the Server Software, Customized Browser (including the Additional Customizations) and/or the Rogers Service or the relevant portion thereof to conform to and perform in accordance with the Specifications therefor or the intended use thereof; or (iii) replace the infringing portion of such GoAmerica Intellectual Property with compatible, equivalent and non-infringing software or technology. If, after reasonable commercial efforts by GoAmerica, GoAmerica is not able to perform any of the foregoing alternatives, then either party will have the right to terminate this Agreement. 26. REPRESENTATIONS AND WARRANTIES OF ROGERS. Rogers represents, warrants and covenants to GoAmerica as follows and acknowledges that GoAmerica has relied upon such representation, warranty and covenant: has the corporate power and the capacity to enter into, and to perform its obligations under, this Agreement and has the right to grant to GoAmerica all rights granted in this Agreement. 27. LIMITATION OF WARRANTY. Except as expressly provided in this Agreement, neither party makes any representations or warranties of any nature whatsoever, either express or implied, with respect to the Rogers Service, the Customized Browser or the Additional Customizations. Except as expressly provided herein, each party hereby disclaims all implied warranties, including without limitation, all warranties of merchantable quality, non-infringement of third party rights and fitness for a particular purpose. 28. LIMITATION OF LIABILITY. Except for GoAmerica's indemnification obligations in Section 24 and Rogers' indemnification obligations under the last sentence of Section 22 which will include, without limitation, special, consequential, indirect, incidental, exemplary and punitive damages and loss of profit, and notwithstanding any other provision in this Agreement, neither party nor their Affiliates or their respective directors, officers, and employees will be liable for any special, consequential, indirect, incidental, exemplary or punitive damages or loss of profit, whether in contract, tort or otherwise resulting from 17 17 any cause of action whatsoever, including negligence, gross negligence, negligent misrepresentation and/or fundamental breach or other theory of law. Except for GoAmerica's indemnification obligations in Section 24 and Rogers' indemnification obligations under the last sentence of Section 22, which will be unlimited as to dollar amount, either party's liability for claims arising from or relating to this Agreement will be limited to the amount paid by Rogers to GoAmerica in relation to this Agreement. The foregoing limitation of liability is an agreed allocation of risk between the parties and the Service Fees agreed to by the parties and set out in Schedule 3 are based upon such allocation. 29. TERM. This Agreement will be effective as the date first written above and will continue for a period expiring one year from the Effective Date (such period and any renewal thereof or extension thereto is herein called the "TERM"), and for the Transition Period where applicable, unless terminated earlier pursuant to Section 30. Rogers may elect to extend this Agreement on the same terms and conditions as those set out herein for not more than twenty-four (24) additional periods of one (1) month by providing written notice of its intention to renew not less than one (1) week prior to the expiration of the initial Term or the then-current monthly extension period. 30. TERMINATION. This Agreement may be terminated: (a) by either party upon a breach or default of any of the terms and conditions of this Agreement by the other party that is not cured within thirty (30) calendar days after receipt by the breaching party of written notice thereof from the non-breaching party; (b) by Rogers forthwith upon written notice, in the event that Rogers rejects the Rogers Service or the Customized Browser pursuant to Section 8 hereof, provided that: (i) GoAmerica has not been able to remedy the failure of the Rogers Service and/or the Customized Browser to conform to or perform in accordance with the Specifications within five (5) Business Days of receipt of the written notice of rejection; and (ii) Rogers and GoAmerica have not been able to reach agreement on a resolution of the issues within five (5) Business Days of the receipt of the written notice of rejection, acting reasonably and in good faith; (c) by either party forthwith upon written notice in the event that the other party: (i) is insolvent or unable to pay its debts as they mature in the ordinary course of business; or (ii) files a petition for bankruptcy or is adjudicated a bankrupt; (iii) makes an assignment for the benefit of its creditors or an arrangement for its creditors pursuant to any bankruptcy law; (iv) has proceedings instituted by or against it in bankruptcy or under insolvency laws or for reorganization, receivership or dissolution; and (d) by either party in accordance with Section 25 upon ten (10) calendar days written notice. 18 18 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 31. EFFECT OF TERMINATION. Upon the termination or expiration of this Agreement (following the Transition Period, where applicable): (a) each party will cease using the other party's Marks; provided, however, that neither party will be required to remove from circulation marketing, promotional or other material already created, or marketing, promotional or other material in respect of which it has placed an order which cannot be cancelled without payment of any fee or penalty; (b) GoAmerica will co-operate with and provide reasonable assistance to Rogers in transferring the Rogers Service and the Customized Browser to a different service provider. Upon Rogers' request, GoAmerica will provide Rogers with reports which contain statistical information which sets out the frequency of use of the Rogers Service, the Server Software and the Customized Browser by each Rogers Customer based on the MAN number of each Rogers Customer, and any other information requested by Rogers from time to time in order to facilitate the transfer of the Rogers Service and the Customized Browser. Rogers agrees to pay for all services rendered and costs, including, without limitation, costs relating to replacing and transferring hardware, software, services, employees, and overhead costs, (the "TRANSITION COSTS") incurred by GoAmerica in assisting in such transfer unless the Agreement is terminated by Rogers pursuant to Subsections 30(a), (b), (c) or (d) in which event GoAmerica will pay the Transition Costs. The Transition Costs will be payable thirty (30) days following receipt by the relevant party of an undisputed invoice, which invoice may be delivered on a monthly basis following the end of each month to which such invoice relates. Termination of this Agreement will not act as a waiver of any prior breach of this Agreement or as a release of either party from any liability for breach of such party's obligations under this Agreement; and (c) On termination of this Agreement, each party will forthwith return all the other party's intellectual property and Confidential Information which is then in its possession or control, and will remove and/or destroy all digital representations thereof in any form from all electronic storage media in its possession or under its control and provide the other party with a certificate signed by one of its officers certifying this has been done. 32. TRANSITION PERIOD. During the period beginning on the first day following the day that this Agreement or any renewal or extension thereto expires or is terminated for any reason whatsoever and continuing for a period of [**] thereafter (the "TRANSITION PERIOD"), this Agreement will remain in effect as to Rogers Customers activated before the end of the Term, and GoAmerica will continue to provide the Rogers Service, the Customized Browser and the Server Software and Rogers will continue to pay for the Rogers Service; provided, however, that Rogers will not have any obligation to pay to GoAmerica the "GoAmerica Monthly Access Fee" set out in Section 5 of Schedule 3 19 19 during the Transition Period. However, Rogers will not have the right to activate any additional Rogers Customers during the Transition Period. 33. DISPUTE RESOLUTION. If any dispute or question (in this Section called a "DISPUTE") arises during the term of this Agreement between the parties concerning the interpretation of this Agreement or any part hereof (other than the interpretation of any of Section 19 or Subsections 23(b), (f) and (g), the parties will in good faith attempt to resolve such Dispute promptly and in an amicable manner under the following informal dispute resolution procedure. If a Dispute arises which is not resolved by the operational personnel involved, GoAmerica's Director of Carrier Relations and Rogers' Director of Product Development or such other senior operations manager of Rogers designated by Rogers from time to time to serve in such capacity (in this Section collectively called the "DISPUTE RESOLUTION COMMITTEE") will be notified. The Dispute Resolution Committee, made up of equal representation, will meet within fifteen (15) calendar days of being notified of a Dispute. If the Dispute Resolution Committee cannot resolve the Dispute within fifteen (15) calendar days after being notified of the Dispute, they will notify GoAmerica's Executive Vice-President and Rogers' Vice-President of New Product Development (in this Section collectively called the "PRESIDENTS"). The Presidents will meet as promptly as possible. If the Presidents cannot resolve the Dispute within fifteen (15) calendar days after being notified of the Dispute, each party may take whatever steps are necessary to protect its interests. However, no Dispute (other than a Dispute concerning the interpretation of any of Section 19 or Subsections 23(b), (f) and (g) will be the subject of litigation or other formal proceeding between the parties before being considered by the Dispute Resolution Committee, the Executive Managers and the Presidents, as set forth in this Section; provided, however, that either party may seek injunctive or equitable relief as otherwise provided for in this Agreement without complying with the above described procedure. 34. SURVIVAL. The provisions of Sections 14, 15, 16, 18, 19, 21, 22, 24, 28, 31, 32, 33, 34, 37, 38 and 43 will survive any termination or expiration of this Agreement. For the purposes of the preceding sentence, this Agreement will be deemed not to have terminated or expired until the last day of the Transition Period, if applicable. 35. FORCE MAJEURE. Neither party is liable for any delay, interruption or failure in the performance of its obligations if caused by acts of God, declared or undeclared war, fire, flood, storm, slide, earthquake, power failure, inability to obtain equipment, supplies or other facilities not caused by a failure to pay, labour disputes, or other similar event beyond the control of the party affected which may prevent or delay such performance ("FORCE MAJEURE"). In the event that a Force Majeure occurs or is likely to occur, the party affected will promptly notify the other, giving particulars of the event. The party so affected will use reasonable efforts to eliminate or remedy the event. 36. CURRENCY. All reference to currency are to currency of Canada, and all payments to be made hereunder will be in Canadian dollars. 37. NOTICES. Any notice required to be given under this Agreement will be duly and properly given if faxed or actually delivered (a) to GoAmerica, Attention: J. Korb, Executive Vice 20 20 President, at its head office address set out below its signature on this Agreement and (b) to Rogers, Attention: Chief Technology Officer, at its address set out below its signature on this Agreement, with a copy to: Rogers Legal Department or at such other address or addresses as the parties from time to time designate by notice in writing to each other. Any given notice given pursuant to this Section will be deemed to be received on the day of faxing or upon actual delivery. 38. OTHER PROVISIONS. This Agreement is governed by the laws of the state of New York and the parties agree to submit any and all disputes to a court of competent jurisdiction in New York. This Agreement contains the whole Agreement between the parties and there are no terms, conditions or collateral agreements expressed, implied, or statutory, other than those expressly set forth in this Agreement. No amendment of this Agreement will be binding unless executed in writing by authorized signing officers of both parties hereto. No waiver of any of the provisions of this Agreement will be deemed to constitute a waiver of any other provision nor will such a waiver constitute a continuing waiver unless otherwise expressly provided in writing executed by the party to be bound. No failure of either party to insist upon strict compliance with any obligation or provision hereunder, and no custom or practice of the parties at variance with the terms hereof, will constitute a waiver of any right to demand exact compliance with the terms of this Agreement. Neither party's delay or omission in exercising any right, power or remedy upon a breach or default by the other party will impair any such right, power or remedy. Neither this Agreement nor any rights under it may be assigned, transferred, shared or delegated by either party without the prior written consent of the other party, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing, Rogers may assign all of its rights and responsibilities under this Agreement to an Affiliate or a party acquiring all or substantially all of its assets whether by purchase, merger, acquisition or any other means without consent. This Agreement may be signed in counterparts including counterparts by fax. If any provision of this Agreement is found to be invalid, illegal or unenforceable by a court of competent jurisdiction, then such provision will be deemed to be severed from this Agreement and the remainder of this Agreement will not be affected and will remain in full force to the extent permitted by law. In the event that any portion of this Agreement will have been so determined to be or become invalid, illegal or unenforceable (the "OFFENDING PORTION"), the parties will negotiate in good faith such changes to this Agreement as will best preserve for the parties the benefits and obligations of such Offending Portion. All headings and captions contained in this Agreement are for convenience only and do not constitute a part of this Agreement. Whenever required, the singular will be deemed to include the plural and vice versa. Whenever required, the masculine gender will include the feminine, and vice versa. This Agreement is binding upon the successors to and permitted assigns of each party. 39. PUBLICITY. All public notices to third parties and all other publicity concerning this Agreement will be jointly planned and co-ordinated by GoAmerica and Rogers and no party will act unilaterally in this regard without first submitting such publicity to the other party for review for a period equal to no less than two (2) Business Days and receiving the prior approval of the other party except where required to do so by applicable law or by the applicable regulations or policies of any governmental authority or any stock 21 21 exchange in circumstances where prior consultation with the other party is not practicable. Without limiting the generality of the foregoing, it is understood and agreed that GoAmerica and Rogers will each be entitled to issue a press release or public statement concerning the entering into of this Agreement, such press release or public statement to be approved by the other, such approval not to be unreasonably withheld or delayed. 40. RELATIONSHIP OF THE PARTIES. Nothing contained in this Agreement will be construed as creating any agency, partnership or other form of joint enterprise between the parties. The relationship between the parties will at all times be that of independent contractors. Neither party will have the authority to contract for or bind the other in any manner whatsoever. 41. NEGOTIATION OF TERMS RELATING TO RESALE OF THE SERVICE. GoAmerica acknowledges that Rogers distributes wireless services through resellers and that Rogers may, in its discretion, elect to offer its resellers the opportunity to distribute a version of the Service (including, without limitation, a customized version of the Service) to the reseller's customers. GoAmerica agrees that, at Rogers's request, GoAmerica will negotiate in good faith the terms and conditions pursuant to which Rogers and GoAmerica will develop, operate and distribute such versions of the Service to Rogers's resellers for distribution by such resellers to their respective customers, which terms and conditions will be at least as favourable as the terms and conditions made available by GoAmerica to any third party for the same or substantially similar commercial arrangements as those entered into between Rogers and GoAmerica in accordance with this Section 41. 42. SECURITY AUDITS. GoAmerica acknowledges and agrees that certain persons with whom Rogers is in discussions and/or negotiations or with whom Rogers has entered into an agreement in relation to the Rogers Service and/or the Customized Browser may require that certain security standards be met by GoAmerica in the provision of the Rogers Service and license of the Customized Browser and the Server Software ("ROGERS SERVICE PROVIDERS"). GoAmerica and Rogers agree to negotiate in good faith a procedure for security audits by Rogers Suppliers and to execute a corresponding mutually agreed upon amendment to this Agreement by no later than twenty-one (21) calendar days following the Effective Date. Such amendment will include, without limitation, the parameters surrounding the Rogers Service Providers' right to inspect the environment, facilities and security procedures surrounding the servers and equipment on which the Server Software is installed or which are used in the transmission or receipt of information through the Server Software and to perform tests in order to identify potential security risks. Such amendment will also include a mutually agreed upon level of security which GoAmerica will maintain during the Term as well as a procedure for increasing such security level and for determining the corresponding fees payable by Rogers, if applicable. 22 22 43. USER INFORMATION. GoAmerica may receive or use User Information for the purposes contemplated by this Agreement, and if GoAmerica learns or obtains any User Information, such User Information will constitute Confidential Information and will be subject to Section 19 of this Agreement. GOAMERICA COMMUNICATIONS CORP. By: /s/ Joseph A. Korb ------------------------------------ (authorized signatory) Joseph A. Korb ------------------------------------ (print name) Company Information: GoAmerica Communications Corp. 401 Hackensack Ave Hackensack NJ 07601 Phone: (201) 996-1717 Fax: (201) 996-1772 ROGERS WIRELESS INC. By: /s/ David Neale ------------------------------------ (authorized signatory) David Neale ------------------------------------ (print name) By: /s/ J.M. Smith (authorized signatory) J.M. Smith ------------------------------------ (print name) Rogers Information: 1 Mt. Pleasant Rd. Toronto, ON M4Y 2Y5 Phone: (416) 935-7349 Fax: (416) 935-7672 23 23 SCHEDULES TO SERVICE AGREEMENT 1) Technical Contacts 2) Specifications for Rogers Service 3) Service Fees 4) Support and Support Levels 5) Escrow Agreement 24 24 SCHEDULE 1 TECHNICAL CONTACTS Pursuant to Section 12 of the Agreement, each party designates the following persons as the Technical Contacts to act as a liaison for all communications between Rogers and GoAmerica pertaining to this Agreement. Rogers Technical Contact: GoAmerica Technical Contact: Ron Field Debbie Kerr Director of Network Operations GoAmerica Communications Corp. 401 Hackensack Avenue Hackensack NJ 07601 Phone: (201) 996-1717 Fax: (201) 996-1772 Email: dkerr@goamerica.net Date of Designation Date of Designation /s/ David Neale /s/ Joseph Korb Authorized Signatory Authorized Signatory Each party may replace its Technical Contact at any time by notifying the other party in writing. 25 25 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. SCHEDULE 2 SPECIFICATIONS FOR ROGERS SERVICE AND THE CUSTOMIZED BROWSER The Rogers Service and Customized Browser are provided to Rogers Customers through Enabled Devices on which the Wireless Browser has been installed (such as the RIM 950 or RIM 957). The Wireless Browser will interface with the standard GoAmerica server, commonly known as "GoAmerica's "Go.Web" Services Gateway", including the Server Software. To effect a connection between Rogers' network and GoAmerica's server, GoAmerica will procure from a carrier of its choice an X.25 leased data line between its premises and GoAmerica's point of interconnection in Hackensack, NJ. GoAmerica will determine the capacity required based upon traffic usage, in its reasonable judgment. Rogers will reimburse GoAmerica for [**] per cent ([**]%) of the actual charges (including [**]) payable by GoAmerica to procure and maintain such leased line connection.] Customizations The following customizations will be developed and implemented by GoAmerica as part of the Rogers Service and/or the Customized Browser: - - The "GoAmerica" icon [**]; - - The text under the [**]"; - - The pull down menu [**]; - - The Home Deck page header [**]; - - The Rogers Service will be [**]; - - The default error page will be bilingual such that the messages "URL down" and "not able to access" will be in both French and English (wording to be provided by Rogers); - - The default setting for [**] and/or [**] rather than [**]; - - The default setting on the [**]; - - the "splash" page which [**] from time to time; and - - Rogers will provide GoAmerica with information [**] and GoAmerica will provide [**] in writing. - - The Customized Browser will [**]. - - The Customized Browser will [**]. - - [**], will be part of the [**]. 26 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. SCHEDULE 3 SERVICE FEES PURSUANT TO SECTION 20, THE ROGERS WILL PAY THE FEES SET OUT BELOW ON THE TERMS AND CONDITIONS CONTAINED IN THIS SCHEDULE 3. TERMS AND CONDITIONS OF PAYMENT 1. The fees specified below are net of applicable taxes, which will be added to amounts payable by Rogers. 2. Within [**] days of the end of each calendar month, GoAmerica will submit to Rogers, a hard copy invoice for the fees payable under Sections 5 and 6 of this Schedule 3 for the Rogers Service and Customized Browser during the previous calendar month (the "BILLING PERIOD"). 3. Rogers will pay each monthly invoice submitted by GoAmerica in accordance with Section 2 of this Schedule 3 within [**] of receipt by Rogers thereof unless Rogers disputes the amount set out in the invoice in accordance with Section 4 of this Schedule 3. In the event that Rogers disputes all or any part of an amount invoiced by GoAmerica: Rogers will pay all undisputed amounts on such disputed invoice in accordance with Section 3 of this Schedule 3; and Rogers will submit the dispute relating to the disputed amounts to dispute resolution in accordance with the provisions of Section 33 of this Agreement hereof; and Rogers will have no obligation to pay such disputed amount until such dispute is resolved or otherwise determined in accordance with Section 33 of this Agreement. 27 2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 5. GOAMERICA MONTHLY ACCESS FEE Subject to Subsection 20(b) and Section 32 of this Agreement, in consideration of the pre-provisioning by GoAmerica of Rogers Customers on the GoAmerica gateway and the maintenance by GoAmerica of the GoAmerica gateway, Rogers will pay to GoAmerica $[**](CDN) payable in arrears on a monthly basis [**] and/or [**]during the month [**] 6. GOAMERICA MONTHLY SERVICE FEES (PER ROGERS CUSTOMER) (CANADIAN DOLLARS)
[**]KB [**]KB - [**]KB [**]KB TO [**]KB TO MORE THAN [**] KB [**]KB [**]KB [**] $[**] $[**] $[**] $[**]
The Monthly Service Fee will be determined for each Rogers Customer based upon the amount of that Rogers Customer's data usage (in kilobytes) during the relevant Billing Period. GoAmerica will submit detailed reports with sufficient information to confirm amounts owed for each month. 7. AIR TIME CHARGES As between GoAmerica and Rogers, Rogers will be responsible for, and will pay directly to the appropriate carrier, any carrier charges incurred by Rogers Customers for wireless or landline network usage to access the Rogers Service and/or Customized Browser, including all wireless carrier charges for usage while roaming in the United States; provided, however, that Rogers will not be responsible for, and will have no obligation to pay any carrier, for any carrier charges incurred by Rogers Customers for wireless or landline network usage to access the Rogers Service and/or Customized Browser unless such Rogers Customers have a MAN number which is within the range in respect of which Rogers has entered into a roaming agreement with the applicable carrier. 28 SCHEDULE 4 1.1 INTRODUCTION 1.1.1 OBJECTIVES This Schedule 4: (a) defines the Support Services which will be provided by GoAmerica for the Rogers Service, the Customized Browser and the Server Software; (b) establishes the Service Levels with which GoAmerica shall comply in providing Support Services to Rogers as required pursuant to Section 10 of the Agreement; (c) describes the respective roles and responsibilities of Rogers and GoAmerica for Maintenance Services; and (d) describes the process by which the parties will report to the other with respect to the matters described in this Schedule 4 and review the performance of GoAmerica under this Schedule 4. 1.1.2 DEFINITIONS All capitalized terms not defined in this Schedule 4 shall have the meaning ascribed thereto in Section 1 of the main terms and conditions of the Agreement. For the purposes of this Schedule 4, the following terms will have the following meanings: (a) "ACTION" means the specific tasks to be performed and/or results which must be achieved by the applicable party in response to a Situation or for performing Maintenance Services, as set out in Tables 1.3.3 and 1.4.4, respectively. (b) "AVAILABILITY" means (Total Available Minutes - Total Customer Outage Minutes)/ Total Available Minutes x 100%). (c) "CUSTOMER OUTAGE MINUTES" means, for each occurrence of a Failure or a Degradation in connection with the Rogers Service, the Customized Browser and/or the Server Software (the total number of minutes, rounded to the nearest minute, in such Failure or Degradation) x (the number of Rogers Customers affected by such Failure or Degradation). 29 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (d) "CRITICAL FAULT" means any Failure in the operation of any Non-Redundant Component which affects [**] or more Rogers Customers within [**] of one Business Day. (e) "DEGRADATION" means any problem which does not constitute a Failure. (f) "DEMARCATION POINT" means the smart jack connection between the GoAmerica Facilities and communication lines connecting the Mobitex Network to the GoAmerica Facilities. (g) "ERROR" means any verifiable and reproducible failure of the Rogers Service, the Customized Browser or the Server Software to conform to or perform in accordance with the Specifications in a material respect. The term "ERROR" shall not include any failure of the Rogers Service to conform to or perform with accordance with the Specifications in a material respect that results from: (ii) Rogers misuse or improper use of the Customized Browser; (iii) the unauthorized modification by Rogers of the Customized Browser; (iii) the failure or malfunction of any equipment, software or service not provided or operated by GoAmerica, including but not limited to the Enabled Device, the Mobitex Network or communications lines or services connecting the Mobitex Network to the Demarcation Point. (h) "ERROR CORRECTION" means a permanent modification of, addition to or deletion from the Customized Browser, the Server Software or the Rogers Service that causes the Rogers Service, the Customized Browser and/or the Server Software to conform to and perform in accordance with the Specifications in all material respects. (i) "ESCALATION" means the level or levels of management to which a Situation or Maintenance Services, as applicable, shall be escalated in the event that GoAmerica has missed either a Response Time or a Time to Cure deadline by the length of time indicated in the Escalation column for such escalation level. Either party may request Escalation to the next level at any time via verbal request to the indicated Escalation contact. (j) "ESCALATION LEVEL 1" OR "OE1" means, for each of Rogers and GoAmerica, the person identified in Appendix A to Schedule 4 as the person to whom matters identified in this Schedule 4 to be reported to "ESCALATION LEVEL 1" or "OE1" shall be reported. - 4 - 30 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (k) "ESCALATION LEVEL 2" OR "OE2" means, for each of Rogers and GoAmerica, the person identified in Appendix A to Schedule 4 as the person to whom matters identified in this Schedule 4 to be reported to "ESCALATION LEVEL 2" or "OE2" shall be reported. (l) "ESCALATION LEVEL 3" OR "OE3" means, for each of Rogers and GoAmerica, the person identified in Appendix A to Schedule 4 as the person to whom matters identified in this Schedule 4 to be reported to "ESCALATION LEVEL 3" or "OE3" shall be reported. (m) "FAILURE" means any Error that renders Rogers unable to provide all or any part of the Rogers Service, the Customized Browser and/or Server Software to the Rogers Customers (including, without limitation, provisioning, billing, and all other components of the Rogers Service, Customized Browser and/or Server Software). (n) "GOAMERICA FACILITIES" means equipment, software and communication facilities that are on GoAmerica's side of the Demarcation Point operated by GoAmerica. (o) "IDENTIFICATION" means the party responsible for identifying the Situation or initiate the Maintenance Services, as applicable, and notifying the person identified in the Notification column of the applicable Table. (p) "MAINTENANCE SERVICES" shall have the meaning ascribed thereto in Section 1.4.4 of this Schedule 4. (q) "MAINTENANCE WINDOW" shall have the meaning ascribed thereto in Section 1.4.1 of this Schedule 4. (r) "MAJOR FAULT" means: (i) any Failure of a component of the GoAmerica Facilities for which there is a back-up component which can be used to continue operation of such component functionality in an uninterrupted and non-degraded manner; or (ii) any Degradation of a Non-Redundant Component, that affects [**]or more Rogers Customers within [**] of 1 Business Day. (s) "MEAN TIME TO CURE PERCENTAGE" means (the total number of times during a Reporting Period in which GoAmerica completed an Action on or prior to the Time to Cure requirement specified for such Action) / (the total number of times during such Reporting Period in which GoAmerica was required to complete an Action) x 100%. - 5 - 31 (t) "MINOR FAULT" means any Error or other service problem which is not a Critical Fault or a Major Fault. (u) "NON-REDUNDANT COMPONENTS" include any component of the GoAmerica Facilities for which there is no back-up component which can be used to continue operation of such component functionality in an uninterrupted and non-degraded manner. (v) "NOTIFICATION" means the designated contact point for receiving notice from the person identified in the Identification column, and the person responsible for reporting and acting to correct the Situation or perform the Maintenance Services, as applicable, in accordance with this Schedule 4; (w) "PERMITTED SCHEDULED MAINTENANCE" means maintenance provided during a Maintenance Window and in accordance with the requirements of Section 1.4 of this Schedule 4. (x) "REPORT" shall have the meaning ascribed thereto in Section 1.5.1 of this Schedule 4. (y) "REPORTING PERIOD" means a calendar month. (z) "RESPONSE TIME" means the time period within which the party who receives notice, as identified in the Notification column, must deliver a response to the party identified in the Identification column confirming receipt of such notice and that it will complete the required Actions. (aa) "SERVICE LEVEL" means (the total time, measured to the nearest minute, during each Reporting Period during which GoAmerica has provided Support Services in accordance with the all of the requirements of this Schedule 4) / (the total number of minutes in such Reporting Period) x 100%. (bb) "SITUATION" means either a Critical Fault, Major Fault or a Minor Fault. The classification of a Situation will be the one as defined in section 1.1.2 of Schedule 4 of this agreement. (cc) "SUBMISSION ACKNOWLEDGMENT TIME AVERAGE" means (the sum of the amount of time elapsed between the time that Rogers notifies GoAmerica of a problem which requires Support Services and the time that GoAmerica acknowledges receipt of such problem, for all such problems relating to Support Services sent to GoAmerica during a Reporting Period) / (the total number of requests for Support Services sent to GoAmerica during such Reporting Period). - 6 - 32 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (dd) "TIER I CUSTOMER SUPPORT" means first level customer service to Rogers Customers, including installation, field service, sales, billing, general information, browser configuration, basic troubleshooting and all other customer calls. Tier I Customer Support includes all customer contact via telephone and electronic mail for all issues. (ee) "TIER II TECHNICAL SUPPORT" means second level technical support to the Rogers Customers, including advanced troubleshooting and support of Wireless Browser. Tier II Technical Support includes problems that cannot be resolved immediately on the telephone. Tier II Technical Support is performed through the tools and procedures developed by GoAmerica. (ff) "TIER III GOAMERICA NETWORK SUPPORT" means the third level support to the respective Tier II Technical Support staff to be provided by GoAmerica in accordance with the provisions of this Schedule 4. (gg) "TIME TO CURE" means the amount of time following the date and time on which the party identified in the Notification column of Table 1.3.3 is notified of a problem within which such party is required to complete the Action. (hh) "TOTAL AVAILABLE MINUTES" means ((the total number of minutes, rounded to the nearest minute, in a Reporting Period) (the number of Rogers Customers on the last day of such Reporting Period)) (ii) "TOTAL CUSTOMER OUTAGE MINUTES" means the sum of all Customer Outage Minutes in a Reporting Period. 1.2 PROVISION OF SUPPORT SERVICES Rogers and GoAmerica hereby agree that: (a) Rogers shall be solely responsible for providing Tier I Customer Support and Tier II Technical Support; (b) GoAmerica shall provide to Rogers Tier III GoAmerica Network Support. Tier III Network Support shall include, without limitation, the following obligations: (i) GoAmerica shall provide support in respect of any service problems relating to the following components of the Rogers Service, the Customized Browser and/or the Server Software which affect [**]or more Rogers Customers within [**] of 1 Business Day: 1. connectivity to the Internet via major interconnects; and 2. the GoAmerica Facilities; - 7 - 33 (ii) GoAmerica shall provide Rogers with the most current version of the Wireless Browser as soon as such version is made available to any of GoAmerica's customers or to any third party for distribution. GoAmerica shall provide to Rogers all reasonable support and maintenance required to operate the Wireless Browser. During any time when Rogers is unable to use or operate the Wireless Browser, GoAmerica shall provide any services reasonably required by Rogers to enable Rogers to verify the correct configuration of the Rogers Service, the Customized Browser and/or the Server Software. (i) GoAmerica shall provide the Support Services to Rogers primarily via telephone and email. All communication between Rogers and GoAmerica, will reference trouble ticket numbers from Rogers' trouble ticketing system. (ii) GoAmerica shall provide the Support Services via both remote and on-site staff or authorized agents, working at the location of the GoAmerica Facilities or accessing it remotely at the sole expense of GoAmerica. (iii) the Support Services shall be delivered by qualified GoAmerica personnel in a professional manner. If Rogers determines that GoAmerica has not performed the Support Services in accordance with the requirements set out in this Schedule 4, then, in addition to all other remedies available to Rogers, GoAmerica shall, at its expense, immediately implement corrective action to remedy such failure to perform. - 8 - 34 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.3 TIER III GOAMERICA NETWORK SUPPORT SERVICE LEVEL REQUIREMENTS 1.3.1 HOURS OF THE TIER III GOAMERICA NETWORK SUPPORT SERVICES GoAmerica shall provide the Support Services in accordance with the terms of this Schedule 4 seven (7) days a week, twenty-four (24) hour a day, fifty-two (52) weeks a year, inclusive of all federal, state, provincial, municipal and other statutory holidays observed in either Canada or the United States. 1.3.2 SERVICE LEVELS GoAmerica shall be required to meet the Service Level measurements for the Rogers Service, the Customized Browser and the Server Software set out in the table immediately below during each and every Reporting Period. The failure of GoAmerica to meet any one of the Service Level requirements set out below during any single Reporting Period shall constitute a material breach of a material term of this Agreement Notwithstanding the foregoing, GoAmerica shall not be liable for a failure to meet the Service Level requirements set out below to the extent that any such failure is directly and solely attributable to a failure within the Rogers Facilities.
Availability ------------ Rogers Service [**]
TABLE 1.3.2 1.3.3 SITUATION REPORTING AND ESCALATION PROCESS AND RESPONSE AND REPAIR REQUIREMENTS For each category of Situation set out in the table below for which the Support Services are required, Rogers and GoAmerica agree to the following Identification, Notification and Escalation procedures, the following Response Times, Escalation times Time to Cure times and Mean Time to Cure Percentage requirements and the following Actions. The failure of GoAmerica during any three (3) consecutive Reporting Periods to meet the Mean Time to Cure percentages as any set out below shall constitute a material breach of a material term of this Agreement. - 9 - 35 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
MEAN TIME RESPONSE TIME TO CURE SITUATION IDENTIFICATION NOTIFICATION TIME ESCALATION ACTION TO CURE PERCENTAGE --------- -------------- ------------ ---- ---------- ------ ------- ---------- Critical Fault Rogers OE1 GoAmerica OE1 [**] OE2 after Restoration [**] [**] % [**]OE3 after of service in [**]OE4 after accordance [**] with all Specifications Major Fault Rogers OE1 GoAmerica OE1 [**] OE2 after Restoration [**] [**] % [**]OE3 after of service in [**]OE4 after accordance [**] with all Specifications Minor Fault Rogers OE1 GoAmerica OE1 [**] OE2 after Restoration [**] [**] % [**]OE3 after of service in [**]OE4 after accordance [**] with all Specifications
TABLE 1.3.3 1.4 MAINTENANCE ROLES AND RESPONSIBILITIES 1.4.1 MAINTENANCE WINDOW DEFINITION GoAmerica agrees that it shall perform any Maintenance Services which may have an impact on the Rogers Service or on Rogers's business operations only during the hours of 12:00 Midnight to 4:00 A.M. Eastern Time (the "MAINTENANCE WINDOW") and only in accordance with the process set out in this Section 1.4. 1.4.2 GOAMERICA MAINTENANCE REQUEST If GoAmerica wishes to perform Maintenance Services which may have an impact on the Rogers Service, the Customized Browser, the Server Software or on Rogers's business operations during any Maintenance Window, GoAmerica shall provide Rogers with a minimum of [**] prior written notice of its intention to perform such Maintenance Services. Such notice shall include a callback telephone number, a start time and estimated time for work completion for all such Maintenance Services. Rogers reserves the right, in its sole discretion, to request alternate work plans consistent with its obligations to provide satisfactory Rogers Service to the Rogers Customers. - 10 - 36 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.4.3 EQUIPMENT SPARES RESPONSIBILITIES GoAmerica and Rogers agree that they will each be responsible for the maintenance and deployment of the following equipment spares: (a) GoAmerica shall have sole responsibility for the maintenance and deployment of equipment spares for the GoAmerica Facilities. (b) Rogers shall have sole responsibility for the maintenance and deployment of equipment spares for the Enabled Devices, the Mobitex Network, the Communications lines connecting the Mobitex Network to the Demarcation Point. 1.4.4. MAINTENANCE SERVICES REPORTING AND ESCALATION PROCESS AND RESPONSE AND REPAIR REQUIREMENTS For each category of maintenance services set out in the table below (the "MAINTENANCE SERVICES"), Rogers and GoAmerica agree to the following Identification, Notification and Escalation procedures, the following Response Times and Escalation times, and the following ACTIONS. The failure of GoAmerica to meet any one of the requirements set out below shall constitute a material breach of a material term of this Agreement.
RESPONSE MAINTENANCE SERVICES IDENTIFICATION NOTIFICATION TIME ESCALATION ACTION - -------------------- -------------- ------------ ---- ---------- ------ GoAmerica GoAmerica OE1 Rogers OE1 [**] OE2 @ [**]OE3 @ [**] Approval of GoAmerica Maintenance Request OE4 @ [**] Maintenance Request. Rogers Maintenance Rogers OE1 GoAmerica OE1 [**] OE2 after[**] Approval of Rogers Request OE3 after [**] Maintenance Request. OE4 after [**] Client Software GoAmerica OE1 Rogers OE1 [**] OE3 after [**] Approval of release date. Release Request Implementation GoAmerica OE1 Rogers OE1 [**] OE2 after [**]OE3 Approval of technical Resource Request (Eng.) after [**]OE4 after resources for any [**] assistance of any facilities changes.
TABLE 1.4.4 - 11 - 37 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.5 REPORTING AND REVIEW 1.5.1 SERVICE LEVEL REPORTING GoAmerica will provide written reports to Rogers specifying the actual achieved results in respect of each performance requirement set out in Sections 1.3.2, 1.3.4 and 1.4.4 of this Schedule 4 during each Reporting Period (each, a "Report"). All performance requirements will be summarized on the basis of each Reporting Period. Each Report will be delivered by the [**] following the Reporting Period to which the Report relates. The form and format of the Report shall be mutually agreed to by the parties. 1.5.2 QUALITY IMPROVEMENT REVIEW PROCESS GoAmerica and Rogers will jointly review the performance of GoAmerica and the Rogers Service, the Customized Browser and the Server Software against the performance requirements set out in this Schedule 4 (including, without limitation, all Critical Faults, Major Faults, Degradation and new Reports) on a regular basis with the objective of identifying root causes and recommending changes to correct: - - all changes in reported performance levels; - - all incidences of Critical Faults and Major Faults. Rogers will set the agenda for all such meetings, which will be scheduled as follows:
Frequency of Reviews Weekly -------------------- ------ Participants As agreed by the parties Method of Communicating Conference call or on site meeting as agreed by the parties Time As mutually agreed Length 2 hours
- 12 - 38 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. APPENDIX I TO SCHEDULE 4 Escalation Levels and Contacts ESCALATION LEVEL 1 (OE1)
GOAMERICA ROGERS Organization Name Network Operations Rogers Network Operations ----------------- ------------------ ------------------------- Team Name Network Operations CTAC Primary Contact [**] [**] Hours of Operation Normal 9-5 P.M. E 830-1700 EST, (Mon.-Fri.) Emergency On-Call Schedule On-Call Schedule Method of Escalation Normal Email [EMAIL MIGRATING TO REMEDY] Emergency Pager [PAGER] Phone (Voice Mailbox) [**] [**] Email [**] [**] Email to Pager [**] [**] Pager [**] Fax [**] Emergency Phone [**] [**] Mailing Address 55 Broad St. 1 Mount Pleasant Road Lower Level 10th Floor New York, NY 1004 Toronto, Ontario Canada M4Y 2Y5 Manager's Name [**] [**]Manager Network Support Group/CTAC
- 13 - 39 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. ESCALATION LEVEL 2 (OE2)
GOAMERICA ROGERS Organization Name Network Operations Rogers Network Operations ----------------- ------------------ ------------------------- Team Name Primary Contact [**] [**] Hours of Operation Normal M-F, 1000-1800 EST M-F, 0900-1700 EST Emergency Pager Pager Method of Escalation Normal Telephone Telephone Emergency [24 HOUR BEEPER COVERAGE] Pager Phone (Voice Mailbox) [**] [**] Email [**] [**] Email to Pager [**] [**] Pager [**] [**] Fax Emergency Phone [**] Mailing Address 1 Mount Pleasant Road 10th Floor Toronto, Ontario Canada M4Y 2Y5 Manager's Name [**]
- 14 - 40 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. ESCALATION LEVEL 3 (OE3)
GOAMERICA Organization Name Network Operations [ROGERS NETWORK OPERATIONS] ----------------- ------------------ --------------------------- Team Name Primary Contact [**] [**] Hours of Operation Normal 1000-1800 EST [M-F, 0830-1700 EST] Emergency Pager [PAGER] Method of Escalation Normal Telephone [TELEPHONE] Emergency 24 Hour beeper coverage [PAGER] Phone (Voice Mailbox) [**] [**] Email [**] [**] Email to Pager [**] Pager [**] [**] Fax [**] Emergency Phone Mailing Address 1 Mount Pleasant Road 3rd Floor Toronto, Ontario Canada M4Y 2Y5 Manager's Name
- 15 - 41 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. ESCALATION LEVEL 4 (OE4)
GOAMERICA Organization Name Network Operations ----------------- ------------------ -------------------- Team Name Primary Contact [**] Hours of Operation Normal 1000-1800 EST [M-F, 0900-1800 EST] Emergency [PAGER] [PAGER] Method of Escalation Normal [TELEPHONE] [TELEPHONE] Emergency 24 Hour beeper coverage [PAGER] Phone (Voice Mailbox) [**] Email [**] Email to Pager [**] Pager [**] [**] Fax [**] Emergency Phone Mailing Address Manager's Name
- 16 - 42 SCHEDULE 5 ESCROW AGREEMENT [TO BE NEGOTIATED AND ATTACHED IN ACCORDANCE WITH SUBSECTION 14(b)] EX-10.26 7 w46736ex10-26.txt CHANNEL PARTNER AGREEMENT 1 EXHIBIT 10.26 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. Ricochet RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS THIS RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS (THE "AGREEMENT") is made as of the 1ST DAY OF SEPTEMBER, 2000 (the "Effective Date") by and between METRICOM, INC., a Delaware corporation ("METRICOM"), and GOAMERICA COMMUNICATIONS CORPORATION, a Delaware corporation ("AUTHORIZED SERVICE PROVIDER" or "ASP") with its principal offices at 401 Hackensack Avenue, Hackensack, New Jersey 07601 (together, the "Parties"). RECITALS WHEREAS, Metricom has developed a proprietary wireless, mobile Internet access service that Metricom intends to market under the name Ricochet(TM) (the "SERVICE") as more fully defined and attached as EXHIBIT A hereto; and WHEREAS, Metricom desires to appoint ASP as a non-exclusive reseller of the Service in the Territory (as hereinafter defined), and ASP wishes to accept such appointment, all pursuant to the terms and conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants, promises, representations and warranties set forth herein, the parties hereby agree as follows: AGREEMENT 1. DEFINITIONS. Unless the context clearly requires otherwise, each of the following terms, when used herein with initial capitals, shall have the meaning set forth for such term below: 1.1 "AFFILIATE" means, when used with respect to one of the Parties hereto, any legal entity or entities controlling, controlled by, or under common control with a party to this Agreement. The term "control" as used in the immediately preceding sentence means the right to the exercise, directly or indirectly, of more than fifty percent (50%) of the voting rights attributable to the shares, partnership interests, membership shares, or other similar evidences of ownership of such controlled party. 1.2 "ASP SUBSCRIBER" means a Subscriber who has been registered for the Service by the ASP or by any ASP Reseller in accordance with this Agreement. 1.3 "GSA" means a Geographical Service Area defined as a city, together with nearby communities that have a high degree of economic and social integration with that city, including suburban areas generally considered part of the same metropolitan area. The population covered within each GSA will be at least as large as set forth on EXHIBIT B. 1.4 "MARKET LAUNCH SCHEDULE" means the schedule according to which Metricom intends to deploy the network through which Metricom will provide the Service.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 1 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.5 "MARKS" means trademarks, service marks, logos, and trade names, whether or not registered. 1.6 "NETWORK COVERED AREA" means that portion of the GSA to be covered by the network (including the square miles set forth in the Market Launch Schedule). 1.7 "NON-COMPETE CUSTOMERS" means [**]., or their respective affiliates. 1.8 "PROMOTIONAL MATERIALS" means promotional publications, documents, software, equipment or other marketing collateral prepared or disseminated by Metricom in connection with its efforts to promote the Service to Subscribers. 1.9 "RESELLER" means any third party to whom ASP has granted the right to resell the Service to end users pursuant to SECTION 3.2. 1.10 "SERVICE YEAR" means a twelve-month period commencing upon the date that the Service is first ready for commercial operation in Phase I GSAs as determined by Metricom and communicated in writing to ASP and each anniversary thereof. 1.11 "SUBSCRIBER" means a single, individual end user of the Service. 1.12 "SUBSCRIBER DOCUMENTATION" means documentation prepared and disseminated by Metricom (in hard copy, electronic and/or online form) for use by Subscribers and ASP's sales and support organizations regarding the proper installation, set-up, troubleshooting and operation of the Service. 1.13 "TERRITORY" means the fifty (50) states of the United States of America and Canada. 1.14 "TOTAL NET CUMULATIVE SUBSCRIBERS (TNCS)" means the total number of ASP Subscribers registered in accordance with this Agreement as of any given date, less the number of ASP Subscribers that have canceled their subscriptions to the Service prior to such date. 1.15 "UNRESTRICTED ACCESS" means the ability to access and use the Service anywhere in the Territory where the Service is then-currently available. 2. RESALE OF THE SERVICE. 2.1 APPOINTMENT. Metricom hereby appoints ASP, and ASP hereby accepts appointment, as Metricom's non-exclusive reseller of the Service in the Territory. In connection therewith, ASP will identify, register, and provide sales support and customer support to ASP Subscribers in accordance with this Agreement.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 2 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
3 2.2 NATURE OF APPOINTMENT. ASP understands that, subject to SECTION 2.3, this appointment is non-exclusive and that Metricom will establish other means of distribution, appoint other distributors and resellers, and/or use its own direct sales personnel to identify, register and support Subscribers and to promote the Service. Similarly, Metricom understands that ASP may market, sell and distribute services similar or identical to the Service, whether provided directly by ASP or a third party. 2.3 LIMITED NON-COMPETE. Notwithstanding the non-exclusive nature of this Agreement, ASP is expressly prohibited from directly or indirectly selling the Service to Non-Compete Customers unless ASP receives written authorization from Metricom expressly granting permission to do so. 2.4 METRICOM RIGHTS. Nothing in this Agreement will be construed in any way to limit Metricom's right to do either or both of the following at any time in Metricom's sole discretion: (i) reject or terminate the subscription of any ASP Subscriber that is in violation of the applicable terms of service and/or (ii) subject to SECTION 2.2, enter into arrangements of any kind whatsoever with other parties regarding the marketing and distribution of the Service. 2.5 ASP RIGHTS. Nothing in this Agreement will be construed in any way to limit ASP's right to enter into similar or dissimilar contracts with third parties regarding similar services. 2.6 ADDITIONAL SERVICES. Metricom may develop and offer at its sole discretion for resale by ASP, other services that enhance or complement the Service. ASP will have the option, but not the obligation, to buy any additional services from Metricom at prices and terms to be negotiated in good faith by the Parties. 3. DUTIES OF ASP. ASP will have the following duties during the term of this Agreement: 3.1 PROMOTION AND SALES. ASP will use commercially reasonable efforts to actively endorse, promote and sell the Service (including subscription renewals) in the Territory and will devote personnel and resources to effectively promote the Service as contemplated herein. ASP will identify and register ASP Subscribers in accordance with this Agreement. ASP will not specifically direct promotional activities at existing Subscribers of Metricom or another authorized service provider of Metricom so as to encourage them to discontinue their then-current subscriptions and become ASP Subscribers. ASP will perform its duties hereunder in a diligent and businesslike manner and will refrain from any activity or action that would reasonably be expected to damage the reputation of Metricom or the Service. 3.2 ASP RESELLERS. ASP may grant to third parties the right to resell the Service ("RESELLER") to end users only, provided that (i) ASP will retain the same obligations with regard to ASP Subscribers registered by Resellers that ASP has with respect to ASP Subscribers registered by ASP under this Agreement and (ii) ASP shall remain fully liable and accountable for any and all acts or omissions of any such Resellers and of persons either directly or indirectly employed by Reseller. 3.3 TERMS OF USE. ASP shall, and shall cause its Resellers to, enter into a written agreement with each of their respective Subscribers which is applicable to each ASP Subscriber's use of the Service, which includes terms substantially similar to and at least as restrictive as those set forth on EXHIBIT D, subject to changes mutually agreed to in writing by ASP and Metricom, and provides at least as much protection of Metricom's proprietary rights (including Metricom's intellectual property rights) as this Agreement. At Metricom's request, ASP agrees that it shall immediately terminate the subscription of any ASP Subscriber who has breached its subscriber agreement with ASP.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 3 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
4 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 3.4 MATERIALS FOR SUBSCRIBERS. (A) PROMOTIONAL MATERIALS. To support ASP's sales efforts, Metricom shall prepare and disseminate printed or electronic copies of the Promotional Materials. Metricom reserves the right to limit the volume of material available without charge. Metricom grants the non-exclusive rights to reproduce, distribute and display any materials provided by Metricom in electronic format provided that ASP will cause all copies of the Promotional Material to contain the same and all copyright or proprietary legends contained in the original Promotional Material. ASP will have the option to distribute to prospective Subscribers any Promotional Materials provided by Metricom to ASP. All Promotional Materials prepared by Metricom will be consistent with industry standards. Metricom requires that ASP and ASP's Resellers discontinue reproduction, distribution and display of any Promotional Materials upon written notice from Metricom of any change rendering the Promotional Materials obsolete. Metricom will use its reasonable efforts to provide ASP [**] written notice of such change and shall reimburse ASP for the cost of any Promotional Materials purchased by ASP from Metricom within [**] prior to the date of such notice. (B) SUBSCRIBER DOCUMENTATION. Metricom will prepare and deliver to ASP the Subscriber Documentation. ASP will make available the then-current version of the Subscriber Documentation (as identified by Metricom) to all ASP Subscribers. Metricom hereby grants ASP a nonexclusive, nontransferable, license without right of sublicense in the Territory, to (i) reproduce, distribute and display the Subscriber Documentation in connection with its obligations under this Agreement and (ii) modify the Subscriber Documentation solely as necessary to incorporate the Subscriber Documentation into documentation prepared by ASP for ASP Subscribers ("ASP SUBSCRIBER Documentation"), provided that ASP does not alter or modify any substantive provision of the Subscriber Documentation without the prior written consent of Metricom. Notwithstanding the foregoing, ASP may sublicense to ASP's Resellers a nonexclusive, nontransferable, license in the Territory to reproduce, distribute and display the Subscriber Documentation and ASP Subscriber Documentation to ASP Subscribers. ASP shall cause all copies of the Subscriber Documentation or modified version thereof pursuant to this SECTION 3.3(b), to contain the same and all copyright or proprietary legends contained in the original Subscriber Documentation. (C) OWNERSHIP AND INTELLECTUAL PROPERTY. ASP and ASP Resellers acknowledge and agree that Metricom is and shall remain the sole owner of the Promotional Material, Subscriber Documentation and all Marks contained in such materials except to the extent that ASP Subscriber Documentation contains any ASP or ASP Reseller Marks, which shall remain the exclusive property of ASP or ASP Reseller, respectively. Nothing herein will be construed as granting to ASP or any Reseller any proprietary rights (including any intellectual property rights) to any Promotional Materials, Subscriber Documentation or any Marks therein. 3.5 BILLING; CUSTOMER BILLING INFORMATION. ASP shall provide customer billing and collection services for ASP Subscribers. (A) ASP shall provide to Metricom, on a monthly basis, the billing address, including Subscriber name and nine-digit zip code, for each ASP Subscriber and any Subscriber billing address changes. Billing address changes, along with the previous address, shall be clearly identified as such. Where a Reseller represents the ASP, the ASP will set up a reasonable procedure to capture and transmit billing information and billing address changes on a monthly basis. 3.6 NO OTHER WARRANTIES. ASP is not entitled to any representations, warranties or guarantees concerning the Service other than the warranties provided by Metricom to ASP under this Agreement.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 4 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
5 ASP will not, without Metricom's prior express written consent, make any representations, warranties or guarantees concerning the Service other than the warranties provided by Metricom to ASP hereunder. 3.7 CUSTOMER SUPPORT. ASP or the applicable Reseller is responsible for all interaction with its prospects and Subscribers which shall include, but not be limited to, the following: (A) SALES SUPPORT. ASP or the applicable Reseller will provide sales support to ASP Subscribers in a diligent manner consistent with industry standards, which will include the following: (i) responding to questions from ASP Subscribers about the features and prices of the Service; (ii) introducing ASP Subscribers to new features of the Service and new services as such become available; (iii) producing and processing all ASP Subscriber and prospective Subscriber orders; (iv) customer billing issues; (v) account setup and maintenance; and (vi) providing such other sales support as Metricom may, from time to time, reasonably request. (B) SERVICE SUPPORT. ASP or the applicable Reseller will, in a diligent manner consistent with industry standards, provide Level I Service Support, as defined in EXHIBIT C attached hereto, to ASP Subscribers. If ASP or the applicable Reseller is not able to sufficiently address an ASP Subscriber's support request because of its technical nature, ASP may request assistance from the Metricom service support department as provided in EXHIBIT C. (I) ASP shall be responsible for providing Level II and Level III Service Support to its Resellers. 3.8 TRAINING. (A) SALES SUPPORT. Metricom will provide to ASP's qualified sales trainers and sales managers initial sales training for the Service as set forth in SECTION 4.3. Thereafter, ASP will be responsible for providing ongoing and additional training of all ASP sales personnel subject to reasonable requirements established by Metricom. Metricom may from time to time, at its sole discretion, verify compliance with such requirements through routine testing and other forms of verification. Failure to remove untrained or improperly trained personnel from selling the Service until ASP has trained them to Metricom's requirements will be considered a material breach of ASP's obligations under this Agreement, subject to termination as set forth in SECTION 7. (B) SERVICE SUPPORT. Metricom will provide initial service support training as set forth in SECTION 4.5 to ASP qualified customer support trainers and customer support managers. Thereafter, ASP will be responsible for training its customer support personnel working with the Service and modem hardware ("CUSTOMER SUPPORT"). ASP shall cause its Customer Support to attend a certified training program, as designed by Metricom, and pass reasonable certification requirements established by Metricom. ASP shall use only a certified customer support trainer, as determined by Metricom, to conduct its training sessions. Metricom may from time to time, at its sole discretion, verify compliance with such requirements through routine testing and other forms of verification. Failure to remove untrained, or improperly trained personnel from supporting the Service until ASP has trained them to Metricom's requirements will be considered a material breach of ASP's obligations under this Agreement subject to termination as set forth in SECTION 7. (C) In the event of any significant change in the Service after the initial sales support and service support training, Metricom agrees to provide training (which may be conducted remotely or consist of "train the trainer" sessions) for such change at no additional charge to ASP.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 5 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
6 3.9 COMPLIANCE WITH LAWS. In performing its duties under this Agreement, ASP will at all times comply with all applicable federal, state, and local laws and will not engage in any illegal or unethical practices. 3.10 BRANDING. The Service shall be branded and marketed by Metricom and shall be co-branded by ASP (or its Resellers). ASP and all of its Resellers will display the Ricochet(TM) brand, in a manner visible to their respective Subscribers, on the modem connection window, in documentation distributed to any ASP Subscribers and on any sales support documents prepared by ASP or any Reseller, provided that ASP's (or the applicable ASP Reseller's) brand may be the primary brand visible to ASP Subscribers. Metricom will work with ASP and each Reseller in good faith to ensure that ASP's or the applicable Resellers' brand has prominence in any and all materials made available to ASP Subscribers. ASP is also expected to use the co-branded mark in Promotional Materials for prospects including advertising and direct marketing. As partial consideration for this obligation of ASP and its Resellers, Metricom agrees that it shall impose co-branding obligations on any other resellers of the Service substantially similar to those imposed on ASP and its Resellers herein. 3.11 INTERNET AND LAN ACCESS. ASP agrees to provide a competitively priced and featured Internet access service and/or LAN access services to Subscribers. ASP agrees to promote the Service as a means of connecting to or through its Internet and LAN access services. 3.12 NETWORK INTERCONNECT. ASP, at its sole expense, shall provide the connection to the Ricochet(TM) network in accordance with Metricom's specifications. Metricom will, at ASP's expense, provide operations and engineering teams, to assist in the network interconnect design and installation which would enable ASP to connect Subscribers to the Service. The cost and details of the network interconnect will be established under a separate agreement between the Parties. 3.13 STANDARD SERVICE LEVEL AGREEMENT. ASP shall minimum performance commitments for the network connection and customer service levels and response times as set forth in EXHIBIT H attached hereto. 3.14 FLAT RATE PRICING. ASP agrees to sell the Service to end users and to require its Resellers to sell the Service to end users at a flat rate, non-metered price. 3.15 MODEM PURCHASE AGREEMENT COMMITMENT. ASP agrees to enter in to at least one (1) separate agreement with a Metricom authorized modem manufacturer for the purpose of purchasing, selling, distributing and supporting modems for connection to the Service to Resellers and Subscribers. To the extent reasonably requested by Metricom, ASP will provide projected sales and corresponding modem requirements for ASP and Reseller Subscribers to Metricom and/or its existing or potential equipment and services vendors. 3.16 BUSINESS MANAGEMENT SYSTEM INTERFACE. ASP will develop, at its expense, an internal system which shall interface with Metricom's Business Management System, as described in Exhibit F attached hereto, for the purpose of managing ASP Subscriber accounts. ASP will be responsible for (i) any necessary modifications or enhancements to such internal systems to interface with Metricom's information systems; (ii) internal training on use of the system; and (iii) account management of the system. Upon request by ASP and provided ASP is using Metricom's standard system, Metricom will assist ASP with its internal training.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 6 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
7 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 4. DUTIES OF METRICOM. 4.1 SERVICE TO SUBSCRIBERS. Metricom will provide the Service to the ASP in accordance with the service performance standards set forth in EXHIBIT E (the "QUALITY OF SERVICE"). To the extent that Metricom does not maintain the Performance Quality of Service for [**] percent ([**]%) or greater of the ASP Subscribers or the Network Uptime Quality of Service [**] percent ([**]%) of the time over the course of a calendar month for a specific GSA, ASP's payment obligations under SECTION 6.1 for the affected GSA shall be reduced pro rata for the amount of time and the number of ASP Subscribers within the affected GSA that the Quality of Service commitment is not met during the relevant month. Metricom shall have [**] following written notice from ASP to bring the Service for the affected GSA back into conformance with EXHIBIT E. If, following such [**] period, the Affected Percentage (as defined below) is less than [**] percent ([**]%) of the covered population in the affected GSA, ASP's payment obligations under SECTION 6.1 for the affected GSA shall be reduced by a percentage equal to [**] during the period in which the Service for the affected GSA is not in conformance with EXHIBIT E. If, following such thirty day period, the Affected Percentage is [**] percent ([**]%) or greater of the covered population in the affected GSA, ASP shall have no payment obligations under SECTION 6.1 for the affected GSA during the period in which the Service for the affected GSA is not in conformance with EXHIBIT E. If, following such [**] period, the Affected Percentage is greater than [**] percent ([**]%) of the covered population in the affected GSA for any period of [**] or for any period of [**] during any Service Year, ASP shall have the option, which expires after [**] days from the date that such period ends, of terminating this Agreement pursuant to SECTION 8.3. For the purposes of this SECTION 4.1, the "AFFECTED PERCENTAGE" means the total population in the affected GSA covered by the Service for which Metricom has not satisfied its Quality of Service obligations under this SECTION 4.1, divided by the total covered population of the affected GSA in which the Service is offered. 4.2 SALES SUPPORT. Metricom will supply co-branded advertising and promotion in order to support ASP's sales effort. 4.3 SALES SUPPORT TRAINING. Metricom will supply sales training to qualified ASP Sales Trainers and Sales Managers. Such sales training shall include (i) a general overview of Metricom, the ASP program, the industry and marketplace, the modem, and the Service; and (ii) information on how to competitively position the Service, target desired end users by understanding their needs and how the Service fills that need. 4.4 SERVICE SUPPORT FOR THE SERVICE. If ASP or the applicable Reseller is not able to adequately resolve a technical support request regarding the Service, ASP may request assistance from Metricom, which assistance will be provided directly to ASP but not directly to any Reseller or ASP Subscriber. ASP or the applicable Reseller may only refer an ASP Subscriber directly to the Metricom technical service department with Metricom's prior approval. Metricom will, in a diligent manner consistent with industry standards, supply Level II and Level III Service Support to ASP as set forth on EXHIBIT C.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 7 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
8 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 4.5 SERVICE SUPPORT TRAINING. Metricom will supply (i) initial technical support training to qualified ASP customer support trainers and customer support managers; (ii) training materials to be utilized in training additional ASP customer support employees; and (iii) updated product information and support materials. Metricom may provide additional training upon request by ASP at a mutually agreed upon price. Initial technical support training shall include (i) a general overview of Metricom, the ASP program, the industry and marketplace, the modem and the Service; and (ii) a technically oriented program encompassing the Ricochet network, the modem, accessories and troubleshooting from a support technician's point of view. Such program assumes a background and understanding of the Internet and networking in general by the trainees. 4.6 NETWORK DEPLOYMENT. (A) Metricom will deploy the network infrastructure necessary to provide the Service substantially in accordance with its Market Launch Schedule. (B) If the Market Launch Schedule is delayed or Metricom's actual deployment of the network infrastructure necessary to provide the Service occurs more slowly than called for by the Market Launch Schedule and if such delay exceeds [**], the ASP shall have the option to terminate this Agreement under SECTION 8. 4.7 COMPLIANCE WITH LAWS. In performing its duties under this Agreement, Metricom will at all times comply with all applicable federal, state, and local laws and will not engage in any illegal or unethical practices. 4.8 BUSINESS MANAGEMENT SYSTEM. Metricom will provide a set of applications ("BUSINESS MANAGEMENT SYSTEM"), as described in EXHIBIT F attached hereto, to ASP for the purpose of managing ASP Subscriber accounts. 4.9 MODEM TECHNOLOGY LICENSING COMMITMENT. Metricom has licensed the Ricochet(TM) compatible modem technology to one or more manufacturers for the purpose of producing a supply of Service compatible modems. 5. RATES; VOLUME; DISCOUNT 5.1 RATES (A) Prior to such time that Metricom, as determined solely by Metricom, has deployed the network to the extent that coverage is provided to a total of [**] million ([**]) potential end users ("Commitment Date"), ASP shall be invoiced for the ASP Subscribers activated prior to the Commitment Date ("Pre-Commitment Date Subscribers") at the Discount Rate set forth in Exhibit G, Table B, irrespective of the actual number of Pre-Commitment Date Subscribers. The rates for Pre-Commitment Date Subscribers will not increase for the term of the Agreement, except as set forth herein. ASP shall be invoiced for Pre-Commitment Date Subscribers in accordance with SECTION 6.1. (B) The rates and pricing rules set forth in SECTION 5.2 will apply the first day of the quarter following the Commitment Date. 5.2 VOLUME; DISCOUNT
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 8 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
9 (A) Subscriber Rate discount ("Discount Rate") provided to ASP is based upon the assumption that ASP's Total Net Cumulative Subscribers ("TNCS") at the end of each year period will meet or exceed the ASP Subscriber Objectives set forth in Table A ("Yearly Subscriber Objective"). Pre-Commitment Date Subscribers will not be included in the TNCS calculations for purposes of 5.2. (B) The parties have agreed upon the fixed schedule set forth in Exhibit G, Table C, setting forth ASP's Subscriber Objective by quarter for each year period ("Quarterly Subscriber Objective"). The sum of ASP's Quarterly Subscriber Objectives for any given year period shall meet or exceed ASP's Yearly Subscriber Objective for that year period as set forth in Exhibit G, Table A. Such schedule may be changed only upon express mutual agreement. (C) Except for Pre-Commitment Date Subscribers, Commencing the first day of the quarter following the Commitment Date, ASP will be will be invoiced in accordance with SECTION 6.1 at the Discount Rate set forth in Exhibit G, Table B. On the last day of each quarter ASP's TNCS for the quarter will be compared with ASP's Quarterly Subscriber Objective ("Quarterly Reconciliation"). If ASP's TNCS for the quarter meets or exceeds ASP's Quarterly Subscriber Objective the Discount Rate will apply. If ASP's TNCS for the quarter is less than ASP's Quarterly Subscriber Objective: (i) ASP will be invoiced an amount equal to the difference of the Normal Rate and Discount Rate multiplied by the TNCS as of the last day of the previous quarter minus the TNCS as of the last day of the current quarter ("Quarterly Adjustment"); and (ii) the Normal Rate will continue to apply to the ASP Subscribers activated in such quarter, until such time that ASP's TNCS in the aggregate meets the Quarterly Subscriber Objective. Quarterly Adjustments will be due net thirty days from invoice. (D) In the event that its Market Launch Schedule is delayed or Metricom's actual deployment of the network infrastructure necessary to provide the Service occurs more slowly than called for by the Market Launch Schedule, Metricom and ASP shall work together in good faith to adjust ASP's Yearly Subscriber Objective by a percentage equivalent to the percentage of the Market Launch Schedule which was delayed, starting with Year 3, and proceeding to Year 2, if necessary. (E) The parties have established the Yearly Subscriber Objectives and Quarterly Subscriber Objectives as a non-binding forecast for pricing purposes only. This SECTION 5.2 shall not be construed to obligate ASP to purchase any specific volume of service from Metricom. ASP's failure to meet any Quarterly Subscriber Objective or Yearly Subscriber Objective shall not constitute a breach of this agreement, and ASP shall have no liability for such failure other than payment of the Quarterly Adjustments and Normal Rate as provided in SECTION 5.2(c). 6. PRICING AND PAYMENTS. 6.1 INVOICING, PRICING, AND PAYMENT. Metricom will invoice ASP monthly in arrears. Bill will be based on the number ASP Subscribers for the number of days ASP Subscriber was active within ASP's billing cycle. For the purposes of this SECTION 6.1, the term "ACTIVE" means that the ASP Subscriber's modem has been assigned to an ASP gateway and is capable of talking through the Service. The monthly fees for ASP Subscribers are set forth in the table attached hereto as EXHIBIT G and includes ROW Fees. ASP will make each monthly payment to Metricom not later than thirty (30) days of the invoice date. 6.2 REPORTS. Each Metricom invoice will be accompanied by a report prepared by Metricom stating (i) the number of new ASP Subscribers registered through ASP's billing date, and (ii) the number of ASP Subscribers whose subscriptions terminated on or before the ASP's billing date.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 9 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
10 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 6.3 LICENSES, EXPENSES, AND TAXES. Metricom will obtain and maintain, at its own expense, right of way and similar licenses, registrations, permits, and approvals needed for it to deploy its network. ASP (or the applicable Reseller) will obtain and maintain, at its own expense, any additional licenses, registrations, permits, and approvals related to the use of the Service by any ASP Subscriber that Metricom cannot obtain because it is not the contracting party with the Subscriber. Except as otherwise set forth herein, both Parties will pay all of its own marketing and advertising costs and all expenses of its office, employees, and other activities under this Agreement. ASP will be solely responsible for payment of any and all federal, state and local taxes arising from or imposed on the payments made by ASP Subscribers to ASP under this Agreement. 6.4 ACCESS. The pricing set forth in EXHIBIT G is applicable to each ASP Subscriber's use of the Service within the Territory. ASP will have no rights to restrict the territory in which the ASP Subscribers may use the Service. 6.5 RIGHT OF WAY (ROW) FEES. ASP acknowledges that Metricom, as a function of its right-of-way agreements with certain municipalities, may owe various municipalities fees ("ROW FEES") in connection with the use of the Service by ASP Subscribers. ASP agrees not to disclose the existence or amount of such fees to ASP Subscribers. Metricom shall be solely liable for all matters related to any ROW Fees including payment to the appropriate municipalities, provided, however, that: (A) ASP will transmit the Subscriber name and billing address information at the time of account set up via the information system as described in EXHIBIT F. Metricom will use the Subscriber billing information for administration and payment of ROW Fees, and municipal and marketing audit purposes only. (B) In addition, with the permission of the ASP, Metricom may solicit subscribers' help in lobbying for new or renewal municipal right-of-way agreements. (C) Metricom has the right to increase the monthly fees set forth in EXHIBIT G, or impose additional rates and charges to the extent of any increases in ROW Fees or additional rates and charges Metricom is required to pay local jurisdictions or municipalities effective on January 1st of each calendar year, provided Metricom has notified ASP on or before the preceding December 1st of such increase. Such increases may be made not more than once each year and no annual increase shall exceed [**]percent ([**]%) of the monthly fee in effect at the time of the increase. In the event that an increase in ROW Fees to other authorized service providers in any given year is greater than [**] percent ([**]%), Metricom has the right to increase the ROW Fees to ASP in the following year(s), subject to the [**] percent ([**]%) cap set forth herein, provided that in no event shall ASP be charged monthly fees higher than any other authorized service providers with the same level of volume and/or revenue commitments to Metricom. Each increase shall apply equally to all ASP Subscribers and no increase shall be apportioned geographically based upon a Subscriber's location. At any time, Metricom has the right to decrease the monthly fees set forth in EXHIBIT G, or reduce any rates and charges payable by ASP hereunder to the extend of any decreases in ROW Fees Metricom is required to pay local jurisdictions or municipalities. It shall be the policy of Metricom to manage ROW Fees to balance and not to use ROW Fees as a source of revenue. Metricom and the ASP will agree and promote the belief that the Service and the ROW Fees benefit and add value to the covered communities. (D) Metricom shall indemnify and hold harmless ASP and its Resellers from any third-party claims based on Metricom's failure to remit such ROW Fees to the appropriate municipality.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 10 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
11 6.6 ANNUAL PRICE REVIEW. The Parties will conduct annual meetings during the term of this Agreement during which they will discuss whether the parties should amend the pricing or other terms and conditions set forth in this Agreement. Except as provided in SECTION 6.5(c), Metricom shall not increase any prices payable by ASP under this Agreement unless such increase has been mutually agreed upon in writing by the parties. 7. CONFIDENTIALITY. 7.1 For the purposes of this Agreement, "CONFIDENTIAL INFORMATION" means information about the disclosing party's business or activities that is proprietary and confidential, which includes all business, financial, technical, non-technical and other information of a party marked or designated by such party as "confidential" or "proprietary"; or information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. Confidential Information also includes proprietary or confidential information of any third party that may disclose such information to either party in the course of such party's business. 7.2 Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation (iii) is approved for release by written authorization of the disclosing party (iv) the receiving party knew prior to receiving such information from the disclosing party or develops independently without reference to the disclosing party's Confidential Information as shown by the receiving party's files and records immediately prior to the time of disclosure or (v) is independently developed by the receiving party without reference to Confidential Information. 7.3 By virtue of this Agreement, each party hereto may disclose to the other any information that is Confidential Information. Such Confidential Information will be governed by the terms of this SECTION 7. Each party agrees to use the Confidential Information of the other party solely to the extent necessary to fulfill its obligations or exercise its rights hereunder, and not for any other purpose. 7.4 Each party agrees (i) that it will disclose such Confidential Information only to its employees, agents, and contractors (including ASP's Resellers) with a need to know such Confidential Information and who have obligations of confidentiality not to use such Confidential Information for any purpose except as expressly permitted hereunder, (ii) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement, and (iii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. 7.5 Notwithstanding the foregoing, each party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that the receiving party uses reasonable efforts to provide the disclosing party with prior notice of such obligation to disclose and reasonably assists in seeking a protective order thereof or (ii) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. 7.6 Within fifteen (15) days of receipt of a written request for the return of Confidential Information, all disclosing party's Confidential Information and all copies thereof in receiving party's possession or control will be returned to disclosing party or destroyed by receiving party at disclosing party's instruction. Receiving party will then certify the same in writing and that no copies have been retained by receiving party, its employees, agents or contractors.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 11 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
12 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 7.7 Each party acknowledges that unauthorized disclosure or use of the Confidential Information may cause irreparable harm to the other party for which recovery of money damages would be inadequate, and the other party may therefore be entitled to seek timely injunctive relief to protect its rights under this Agreement, in addition to any and all remedies available at law. 7.8 The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party. 7.9 Any ASP Subscriber information including, but not limited to, names, addresses, ZIP codes, marketing plans, and competitive information, provided by ASP and its Resellers, to Metricom for the purpose of compliance with local, state or federal law or for any other purpose, shall be considered Confidential Information and proprietary to ASP. Metricom will not use such ASP Subscriber information in any manner that is not expressly permitted under this Agreement without the express written permission of an authorized ASP employee or in violation of applicable law or regulation. Notwithstanding the foregoing, Metricom may use ASP Subscriber information in aggregate form for internal business purposes provided that Metricom does not use any identifying personal information. Nothing in this Agreement shall be construed to override or supersede requirements promulgated pursuant to the Telecommunications Act of 1996 (the "ACT") and lawfully in effect, with respect to the treatment of Customer Proprietary Network Information (as defined in the Act). 8. TERM AND TERMINATION. 8.1 INITIAL TERM AND RENEWAL. The term of the Agreement will commence on the Effective Date and will continue in full force until the expiration of the third (3rd) Service Year ("INITIAL TERM") unless earlier terminated in accordance with SECTION 8.2 or 8.3. The Agreement shall be considered extended on an annual basis for an additional Service Year, unless either party exercises it's rights of termination per SECTIONS 8.2, 8.3 or 9. 8.2 TERMINATION FOR CAUSE BY METRICOM. Metricom will have the right to terminate this Agreement upon written notice to ASP if ASP breaches any of its material duties or obligations under provisions of this Agreement and has not cured such breach within [**] after receipt of written notice thereof. 8.3 TERMINATION FOR CAUSE BY ASP. ASP will have the right to terminate this Agreement upon written notice to Metricom if Metricom breaches any of its material duties or obligations under provisions of this Agreement, and has not cured such breach within [**] after receipt of written notice thereof. 8.4 TERMINATION BY MUTUAL AGREEMENT. The Agreement may be terminated without cause by written consent of both of the parties to the agreement.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 12 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
13 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 9. EFFECT OF EXPIRATION OR TERMINATION. 9.1 END OF AUTHORITY; RETURN OF PROPERTY. Except as expressly provided herein, upon expiration or termination of this Agreement for any reason, ASP's and its Resellers' authority to act as a reseller on behalf of Metricom, to register Subscribers and to use the Marks described in SECTION 10 will immediately cease. ASP and its Resellers will promptly return to Metricom all tangible copies of Promotional Materials and Subscriber Documentation in ASP's or its Resellers' possession or control and delete or erase any electronic copies, and certify in writing to Metricom that it has fully complied with these requirements; provided, that ASP or its Reseller as the case may be, may retain one copy thereof for archival purposes. 9.2 ASP SUBSCRIBERS. In the event that the term of an ASP Subscriber agreement with ASP or a Reseller extends beyond the expiration or termination of this Agreement, this Agreement shall continue in effect to the extent required to provide Service to such ASP Subscriber(s) for a period of not more than [**] following the expiration or termination of this Agreement or the expiration of the last ASP Subscriber agreement, whichever occurs first. 9.3 SURVIVAL. Notwithstanding anything to the contrary in this Agreement, SECTIONS 1, 6.1, 6.3, 6.4, 6.5, 7, 8, 9, 10 (except for the trademark license granted therein), 11, 12, 13, 14 and 15 will survive expiration or earlier termination of this Agreement. 10. TRADEMARKS. During the term of this Agreement, ASP will have a non-transferable, non-exclusive right to use the Marks of Metricom, provided that such use is solely in order to fulfill ASP's obligations under this Agreement. Except for the limited right to use Metricom's Marks as set forth in this SECTION 10, nothing in this Agreement will be construed to grant ASP any right, title or interest in and to Metricom's Marks. ASP acknowledges Metricom's exclusive ownership of Metricom's Marks and agrees not to take any action inconsistent with such ownership. ASP will not adopt, use or attempt to register any trademarks, service marks or trade names that are confusingly similar to the Metricom Marks. ASP will comply with any written trademark policies or guidelines concerning use of Metricom's Marks that Metricom furnishes to ASP from time to time. ASP will provide to Metricom, at no cost to Metricom and prior to any use, examples of ASP's use of Metricom's Marks and will obtain Metricom's written approval prior to such use, which approval shall not be unreasonably withheld, conditioned or delayed. Metricom shall not use ASP's Marks for any reason without the express written approval of ASP. 11. INDEPENDENT CONTRACTORS. ASP and Metricom are independent contractors. Except in connection with the acquisition of Subscribers by ASP according to the terms of this Agreement, neither party will have or represent that it has the right, power or authority to bind, contract or commit the other party or to create any obligation on behalf of the other party. This Agreement will not be deemed to create any agency, partnership, or joint venture between the parties. 12. INDEMNITY. 12.1 INDEMNIFICATION BY ASP. ASP will defend, indemnify and hold harmless Metricom, its affiliates, and their respective officers, directors, employees and agents from and against all claims,
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 13 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
14 liabilities and expenses asserted by third parties (including reasonable attorneys fees) to the extent arising out of (i) any breach by ASP of any warranty made by ASP under this Agreement; (ii) any statement, representation or warranty made by ASP relating to the Service that (a) was not approved in advance and in writing by Metricom or (b) differs from the representations and warranties made by Metricom in the then-current version of the Subscriber Documentation; or (iii) the negligence or intentional misconduct of ASP or any of its employees, agents or representatives. THIS SECTION CONSTITUTES METRICOM'S SOLE AND EXCLUSIVE REMEDY, AND ASP'S SOLE OBLIGATION AND LIABILITY IN THE EVENT OF ANY THIRD PARTY CLAIM AGAINST METRICOM OF THE TYPE LISTED IN THIS SECTION. 12.2 INDEMNIFICATION BY METRICOM. Metricom will defend, indemnify and hold harmless ASP, its affiliates and their respective officers, directors, employees and agents from and against all claims, liabilities and expenses asserted by third parties (including reasonable attorneys' fees) to the extent arising out of: (A) the negligence or intentional misconduct of Metricom or any of its employees, agents or representatives; or (B) claims that the Service as delivered by Metricom infringes a patent, copyright, trade secret or any other intellectual property right of any third party provided however that Metricom shall have no liability to ASP or any third party if any alleged infringement or claim of infringement is based upon (i) any modification of the Service other than by Metricom; (ii) use of the Service in connection or in combination with equipment, devices, software or other services not provided by Metricom (if such infringement or claim of infringement would not have occurred otherwise); or (iii) the use of the Service other than as permitted under this Agreement or under EXHIBIT D or in a manner for which it was not intended. THIS SECTION CONSTITUTES ASP'S SOLE AND EXCLUSIVE REMEDY, AND METRICOM'S SOLE OBLIGATION AND LIABILITY IN THE EVENT OF ANY THIRD PARTY CLAIM AGAINST ASP OF THE TYPE LISTED IN THIS SECTION. 12.3 The foregoing indemnities are conditioned on the indemnified party (i) promptly notifying the indemnifying party in writing of such action or claim, (ii) giving the indemnifying party sole control of the defense thereof and any related settlement negotiations, provided however, that any such settlement which imposes injunctive or other equitable relief binding upon the indemnified party will require the indemnified party's prior written consent (which consent may be granted or withheld in the sole discretion of the indemnified party), and (iii) cooperating and, at indemnifying party's reasonable request and expense, assisting in such defense. 12.4 Notwithstanding any other provision of this Agreement and except for Metricom's obligations of indemnification under SECTION 12.2(b), the indemnifying party's obligations under this Section will not extend to any third party claims for consequential, indirect, exemplary, special or incidental damages. 13. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY LOST PROFITS, LOSS OF DATA, OR OTHER CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES ARISING FROM OR RELATING TO THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE SERVICE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NEITHER PARTY WILL BE LIABLE TO
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 14 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
15 THE OTHER PARTY FOR DAMAGES SUCH AS COMPENSATION OR DAMAGES FOR LOSS OF PRESENT OR PROSPECTIVE PROFITS OR REVENUES, LOSS OF ACTUAL OR ANTICIPATED COMMISSIONS, OR EXPENDITURES OR COMMITMENTS MADE IN CONNECTION WITH THE PERFORMANCE OF OBLIGATIONS UNDER THIS AGREEMENT. EXCEPT IN CONNECTION WITH THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 12 AND ASP'S PAYMENT OBLIGATIONS UNDER SECTION 6, EACH PARTY'S TOTAL CUMULATIVE LIABILITY ARISING FROM OR RELATING TO THIS AGREEMENT, WHETHER IN CONTRACT, IN TORT, UNDER A THEORY OF STRICT LIABILITY OR OTHERWISE, WILL BE LIMITED TO THE AGGREGATE AMOUNT PAID TO METRICOM BY ASP UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE DATE THE CLAIM AROSE. METRICOM'S SUPPLIERS WILL HAVE NO LIABILITY OF ANY NATURE TO ASP UNDER THIS AGREEMENT. EACH PARTY UNDERSTANDS AND AGREES THAT THE LIMITATIONS OF LIABILITY IN THIS AGREEMENT ARE REASONABLE AND A FUNDAMENTAL PART OF THIS AGREEMENT AND THAT NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT WITHOUT SUCH LIMITATIONS. 14. WARRANTY; DISCLAIMER OF WARRANTIES. 14.1 The parties warrant and represent that the Services will be provided in accordance with applicable federal, state and local laws, regulations, orders and ordinances. 14.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, METRICOM DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SERVICE, INCLUDING ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE SERVICE WILL OPERATE ERROR-FREE OR WITHOUT INTERRUPTION.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 15 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
16 15. GENERAL. 15.1 NOTICES. All notices and consents required or permitted under this Agreement must be in writing; must be personally delivered or sent by registered or certified mail (postage prepaid), by private courier, or by facsimile (receipt confirmed and with a copy sent by registered or certified mail), in each case to the appropriate party at the address set forth below; and will be effective upon receipt. Each party may change its address and/or addressee for receipt of notices by giving notice of the new address and/or addressee to the other party. IF TO METRICOM, TO: IF TO ASP, TO: Metricom, Inc. GoAmerica Communications Corporation 333 West Julian Street 401 Hackensack Avenue San Jose, CA 95110 Hackensack, New Jersey 07601 Facsimile: (408) 282-3076 Facsimile: 201/996-1772 Attention: Business Licensing Attention: Marty May 15.2 SEVERABILITY. If any provision of this Agreement is held by a court of law to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement will not be affected or impaired thereby and the illegal, invalid, or unenforceable provision will be deemed modified such that it is legal, valid, and enforceable and accomplishes the intention of the parties to the fullest extent possible. 15.3 WAIVERS. The failure of either party to enforce any provision of this Agreement, unless waived in writing by such party, will not constitute a waiver of that party's right to enforce that provision or any other provision of this Agreement. 15.4 ASSIGNMENTS. Neither party may assign or transfer any of its rights under this Agreement to any third party, by operation of law or otherwise, without the prior written consent of the other party, which shall not be unreasonably withheld. Notwithstanding the above, either party may assign this Agreement upon notice to, but without consent of the other party, to an affiliate or successor-in-interest in the event of a merger, transfer, consolidation or sale of substantially all of the assigning party's business, assets or capital stock provided, however, that the assignee shall expressly assume the assigning party's obligations hereunder, and shall be subject to all of the terms and conditions of this Agreement. Any attempted assignment or transfer in violation of the foregoing will be void. This Agreement will be binding upon, and inure to the benefit of, the successors and permitted assigns of the parties. 15.5 CONSTRUCTION. There are no intended third party beneficiaries of this Agreement. The headings of Sections and subsections of this Agreement are for convenience and will not be construed to alter the meaning of any provision of this Agreement. Unless otherwise expressly stated, the word "including" when used in this Agreement means "including but not limited to." 15.6 ENTIRE AGREEMENT AND AMENDMENTS. This Agreement constitutes the entire agreement between the parties and supersedes all previous written or oral communications or understandings between them relating to the subject matter of this Agreement. This Agreement may be amended only in writing signed by both parties. 15.7 COUNTERPARTS. This Agreement may be executed in identical counterparts, each of which will be an original and which together will constitute the same instrument.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 16 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
17 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
METRICOM, INC. ASP: GOAMERICA COMMUNICATIONS CORPORATION By: /s/ John Wernke By: /s/ Francis J. Elenio -------------------------------- -------------------------------- John Wernke Name: Francis J. Elenio Sr. Vice President, Marketing and ------------------------------ Sales Title: CFO -----------------------------
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 17 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
18 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT A: SERVICES OFFERING TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS PURPOSE: This document describes the Ricochet services which Metricom, Inc. will be offering to ASP. INTRODUCTION: Ricochet is a nationwide mobile data service offering the fastest wireless data connections to mobile professionals in small, medium and large corporations and vertical markets. This service, and its various components, will be offered to a variety of telecommunications and data services providers. The following are the elements of the Ricochet Services Offering: 1. Ricochet Network Interconnection 2. Ricochet Service Accounts 1. RICOCHET(TM) NETWORK INTERCONNECTION The first item needed when equipping an ASP to sell Ricochet(TM) Services is a Ricochet Network Interconnection. This is the "plumbing" and business agreement that allows an ASP to front-end their services with Ricochet(TM) Service. Once established, end-customers can access the ASPs' information and data services using the Ricochet(TM) network. Ricochet(TM) is a very unique connection method the ASP can offer to provide mobile access to their services. KEY FEATURES Full Benefits Of Ricochet -- The Ricochet(TM) Network Interconnection provides an ASP with a new mobile connection method specifically designed for high-performance mobile access. Nationwide Ricochet(TM) Access -- With the Network Interconnection, a ASP's end-customers can access the ASP's services from anywhere in the fifty United States (USA) where Ricochet(TM) service is available. High-Speed Connectivity -- All circuits associated with the Network Interconnection are appropriately sized to ensure an end-customer experience of 128Kbps/64Kbps. Capacity -- The Network Interconnection is scalable and will grow as the number of subscribers grows. Reliability -- All Network Interconnection installations are designed for [**]% availability. Secure -- All Network Interconnection installations will meet standard security specifications.
Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 18 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
19 Professional Implementation Team -- Network Interconnection installations will be designed, configured and installed by a dedicated Metricom team. 2. RICOCHET(TM) INDIVIDUAL ACCOUNT (SUBSCRIPTION) Once a Ricochet(TM) Network Interconnection is installed and operational, an ASP can begin to purchase and sell individual accounts ("SUBSCRIPTIONS"). The Ricochet(TM) Individual Accounts can be sold in combination with a Ricochet(TM) compatible modem. Each end-customer must have a valid Subscription and modem in order to use the Ricochet(TM) network. KEY FEATURES Mobility -- A Ricochet(TM) Subscription allows the end-customer to move throughout the coverage territory and establish a connection to the information resources and additional services provided by the ASP. Nationwide Account -- Unlimited Ricochet(TM) access to anywhere coverage is available within the USA. Motion -- A Ricochet(TM) Subscription enables an end-customer to establish and maintain a connection to the ASP's services while in motion (e.g. car, train or bus). Average data rates may decrease to 28.8kbps/14.4kbps at speeds of 70mph. High Performance -- Each Ricochet(TM) Subscription connection will have an average data rate of 128kbps/64kbps over the Ricochet(TM) network. Coverage -- Each Ricochet(TM) Subscription will have coverage in the top 40 metropolitan areas, airports, convention centers and hotels across the U.S. Security -- All Ricochet(TM) Subscriptions have secure data transport within the Ricochet(TM) network and up to the Ricochet(TM) Network Interconnection. This allows ASPs to offer secure end-to-end solutions such as VPNs. Ease Of Use -- Ricochet(TM) Subscriptions enable high performance mobile connections to an ASP's services. This is accomplished using a Ricochet(TM) compatible modem that connects with standard ports on most computing devices. It operates the same as a standard phone modem and functions with most software and operating systems. Flat-Rate Billing -- Each Ricochet(TM) Subscription has a fixed monthly fee for unlimited use of the Ricochet(TM) network. Metricom will make no provision for tracing or billing ASPs for metered services. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 19 of 41 Metricom Initials: GoAmerica Initials: ------------ Confidential & Proprietary ------------ Not for use or disclosure outside of Metricom or Contractor except under written permission
20 EXHIBIT C: SUPPORT LEVEL DEFINITIONS TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS I. DEFINITIONS LEVEL I SERVICE SUPPORT: ASP or the applicable Reseller will, in a diligent manner consistent with industry standards, supply all Level I Service Support, which shall be defined as all interactions with ASP Subscribers associated with the Service and Ricochet(TM) related services. This will include, but is not limited to, all customer billing issues, account setup and maintenance issues, pre-sales inquiries, and technical support requests. Upon exhausting all resources and escalation paths within ASP's support organization, designated ASP representatives may contact Metricom technical support for those items specified in the Technical Support definition below. Acceptable escalations to Metricom will consist of inoperability or non-standard operation of the Ricochet(TM) service. LEVEL II SERVICE SUPPORT: Level II Service Support, provided by Metricom directly to designated ASP support personnel only, consists of providing assistance in resolving those outstanding Level I Service Support issues related to the inoperability of the Ricochet(TM) network, associated software, and Metricom supplied services. LEVEL III SERVICE SUPPORT: Level III Service Support shall be provided by Metricom to designated ASP support personnel only and includes, but is not limited to, resolution of any issues that cannot or have not been satisfactorily resolved by Level II Service Support personnel. Only Metricom Level II Service Support personnel may escalate unresolved issues to Level III personnel. All Level III Service Support interaction with the ASP will be conducted by Metricom Level II personnel only. SCOPE OF TECHNICAL SUPPORT: Technical Support for Ricochet(TM) is defined as support for: - Ricochet(TM) Modems and Accessories (Only those manufactured/provided by Metricom to ASP) - Modem Hardware - Modem Firmware - Modem Accessories (Cabling, Batteries, Power Adapter, Antenna) - Ricochet(TM) Installation Software, when provided by Metricom - Services provided by Metricom - Ricochet(TM) Network: - Network Access Rights (Add/Delete/Modify services) - Network Coverage Inquiries - Network Performance Issues Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 20 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 21 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. II. ESCALATION PROCESS Metricom will only accept calls from designated ASP contacts, which shall number as follows: - Up to [**] customers (arrow) [**] designated contacts - Each additional [**] customers (arrow) [**] additional designee added - Designated contacts should represent the highest level of escalation within ASP Technical Support group. Interaction of Metricom Technical Support and ASP: - - ASP Subscribers may not contact Metricom directly for Ricochet(TM) support. - - ASP designated contacts who have determined Level II support by Metricom Technical Support is necessary and appropriate will contact Metricom Technical Support by phone or other means to consult, during which time the ASP Subscriber may not be a part of the consultation. - - Metricom reserves the right to change the method of interaction between ASP and Metricom Technical Support, which may include requests for support to be executed via a method specified by Metricom. These methods may include, but are not limited to, the following: telephone, e-mail, facsimile, and Web-based communications. - - When further research is required to provide resolution, ASP agrees to conduct all follow-up calls to ASP Subscribers. Metricom reserves the right to communicate possible resolutions to ASP via phone conversation, voicemail message, facsimile, e-mail and Web-based communications. III. COMPLIANCE - - Metricom reserves the right to levy a service charge, to ASP, billed at $[**] for each call to Metricom by an ASP subscriber who reaches Metricom after being transferred or referred by ASP without following the procedures outlined in the preceding paragraph. - - Metricom reserves the right to levy a service charge, to ASP, billed at $[**] for each call to Metricom by ASP for assistance to resolve a Level I Service Support issue beyond a call allowance of [**] such calls per [**] ASP Subscribers per month. - - Metricom reserves the right to levy a service charge, to ASP, billed at $[**] for each call to Metricom by an unauthorized agent, which is not one of the designated contacts that have been provided to Metricom by ASP. - - Metricom reserves the right to levy a charge of $[**] for each call from ASP support personnel supporting the Ricochet(TM) service and hardware, but have not undergone training by a Ricochet(TM) certified Trainer. A certified Ricochet(TM) trainer is one that has been authorized by the Metricom training staff to perform training for the Ricochet(TM) service, technology, and hardware. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 21 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 22 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. IV. RICOCHET(TM) SERVICE COVERAGE FOR ASP TECHNICAL SUPPORT PERSONNEL In the event that the ASP's Technical Support Personnel are located in an area where Service coverage is not available, ASP may elect to obtain Service coverage for their facilities at a reasonable cost to ASP. If Metricom Level II and Level III Service Support personnel are required to respond to issues that the ASP's Level I Service Support personnel could not resolve due to a lack of Service coverage at their facility, then the ASP will be billed at the rate of $[**] per minute to resolve the issue. V. RICOCHET(TM) COMPATIBLE MODEM TECHNICAL SUPPORT All Ricochet(TM) compatible modem technical support issues shall be addressed by separate agreement between the ASP and a Metricom authorized modem manufacturer. Except in the event where Metricom is the manufacturer, Metricom shall have no responsibility for any level of Ricochet(TM) compatible modem technical support. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 22 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 23 EXHIBIT D: TERMS OF USE TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS The following sets forth the terms and conditions applicable to your use of the Ricochet(R) Wireless Communications Service ("Ricochet") provided to you by Metricom, Inc. (R) ("Metricom"). By agreeing to use Ricochet or upon commencing use of Ricochet, you agree to use Ricochet in accordance with the terms and conditions of this Agreement and with any and all applicable laws and regulations. ANY USER WHO DOES NOT AGREE TO BE BOUND BY THESE TERMS SHOULD IMMEDIATELY STOP USE OF THE SERVICES AND NOTIFY METRICOM SO THAT THE USER'S ACCOUNT MAY BE CLOSED. 1. LICENSE TO USE RICOCHET. Subject to the terms and conditions of this Agreement, you will have a nonexclusive, nontransferable, non-assignable personal license to use Ricochet. The use of Ricochet or documentation related thereto is licensed, not sold, to you for your use only under the terms of the license contained herein. For purpose hereof, "use" means to access Ricochet. 2. FEES. All fees incurred by you under this Agreement, together with applicable sales, use or similar taxes, will be payable by credit card or by other means acceptable to Metricom. If you request any change to your level of service, you agree to pay any additional fees, if applicable, related thereto. 3. EQUIPMENT AND SOFTWARE. You shall use your own equipment to access Ricochet. You are responsible for all charges for your use of any third party services via Ricochet, including any long distance telephone transmission and any information or service provider charges incurred by you during your use of Ricochet that are not part of the Ricochet service you have selected. METRICOM SPECIFICALLY DISCLAIMS ANY RESPONSIBILITY FOR DETERMINING COMPATIBILITY BETWEEN RICOCHET AND ANY EQUIPMENT OR SOFTWARE PROVIDED BY YOU AND EACH IN NO WAY WARRANTS THE CAPABILITIES OF ANY SUCH EQUIPMENT OR SOFTWARE IN THE USE OF RICOCHET. METRICOM MAKES NO FURTHER REPRESENTATIONS OR WARRANTIES THAT RICOCHET, TOGETHER WITH YOUR EQUIPMENT, WILL ACHIEVE THE MAXIMUM NETWORK ACCESS SPEED SET FORTH IN ANY METRICOM DOCUMENTATION. 4. PROPRIETARY RIGHTS OF METRICOM. All right, title and interest in Ricochet and the materials included therewith belong to Metricom, except to the extent that third parties whose materials are made available via Ricochet possess copyright or other proprietary interests in such materials. You will not, by virtue of this Agreement, acquire any proprietary interest in Ricochet or of any materials included therewith or accessed thereby. 5. TERRITORIAL LIMITATIONS. Ricochet may only be used in the United States, Canada and Puerto Rico. Use outside of this territory is prohibited and may violate the export control laws of the United States. You agree not to decompile, reverse engineer or disassemble any Ricochet software. You agree not to modify, adapt, translate, incorporate into other works, rent, lease, loan, resell for profit, distribute, network or create derivative works based upon Ricochet, any Ricochet software or any part thereof or any manuals or documentation related to Ricochet. 6. LIMITATIONS ON USE. You are solely responsible for the information or other material you distribute or voluntarily receive while using Ricochet ("Your Materials"). You agree that Your Materials Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 23 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 24 and your use of Ricochet, as applicable, (a) shall not infringe on any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity (and, accordingly, you shall not upload, post or transmit, in any way, information, software or other material obtained through Ricochet which is protected by copyright or other proprietary right, without obtaining permission of the owner); (b) shall not violate any applicable law, statute, ordinance or regulation (including without limitation the laws and regulations governing export control and laws regarding or false advertising); (c) shall not be defamatory, trade libelous, unlawfully threatening or unlawfully harassing; (d) shall not be obscene or contain child pornography and shall not be distributed to anyone who is not legally permitted to receive such materials; and (e) shall not contain any viruses, Trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information. You shall not (i) distribute or allow anyone else to distribute unsolicited commercial e-mail through your Ricochet account; (ii) engage in "Ponzi" or pyramid schemes; (iii) attempt to gain access to any other person's computer, software, or data of any other person, without the knowledge and consent of such person or to circumvent the user authentication or security of any host, network, or account (including without limitation, by accessing data not intended for you, logging into a server or account you are not expressly authorized to access, or probing the security of other networks or otherwise using tools designed for compromising security, such as password guessing programs, cracking tools, packet sniffers or network probing tools); (iii) impersonate another person with fraudulent or malicious intent; (iv) restrict, inhibit or otherwise interfere with the ability of any other person to use or enjoy Ricochet, including, without limitation, generating levels of traffic sufficient to impede others' ability to send or retrieve information, denial of service attacks, flooding of a network, overloading a service, improper seizing and abuse of operator privileges and attempts to "crash" a host; (v) knowingly disrupt Ricochet or take any other action that imposes an unreasonable or disproportionately large load or burden on Metricom's infrastructure and network or otherwise improperly disrupt or impede Metricom's ability to deliver Ricochet and monitor the Ricochet network; or (vi) resell Ricochet or otherwise charge others to use Ricochet. You are responsible for any misuse of Ricochet that you have contracted for, even if the inappropriate activity was committed by a friend, family member, guest, employee or customer with access to your account. It is your responsibility to take steps to ensure that others do not gain unauthorized access to Ricochet through your account. Metricom, through Ricochet, acts as a passive conduit for your online distribution and publication of your information and has no obligation to monitor Ricochet and/or the content available through use of Ricochet. Metricom reserves the right to monitor bandwidth, usage, and content from time to time to identify violations of this Policy; and/or to protect the network and Ricochet users. Metricom may take any responsive actions it deems appropriate. Such actions include, but are not limited to, temporary or permanent removal of content, cancellation of newsgroup posts, filtering of Internet transmissions, temporary reduction of a user's network speed to a level designed to ensure that sufficient bandwidth is generally available to Ricochet users, and the immediate suspension or termination of all or any portion of the Ricochet service ordered by a user. Metricom will have no liability for any such responsive actions, and any such actions are not Metricom's exclusive remedies and Metricom may take any other legal or technical action it deems appropriate. Metricom reserves the right to investigate suspected violations of this Section 6, including the gathering of information from the user or users involved and the complaining party, if any, and examination of material on Metricom's servers and network. During an investigation, Metricom may suspend the account or accounts involved and/or remove material which potentially violates this Policy. You hereby authorize Metricom to cooperate with (i) law enforcement authorities in the investigation of suspected criminal violations, and (ii) system administrators at other Internet service providers or other network or computing facilities in order to enforce the provisions hereof. Such cooperation may include providing your username, IP address, or other identifying information. Upon termination of an account, Metricom is authorized to delete any files, programs, data Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 24 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 25 and email messages associated with such account. The failure of Metricom to enforce this Section 6, for whatever reason, shall not be construed as a waiver of any right to do so at any time. 7. LIMITATIONS ON NUMBER OF USERS AND ACCOUNT USAGE. You may not transfer or share your Ricochet service accounts with anyone. You may not disclose your password to any third parties. 8. PRIVACY. Metricom will not sell, rent, or furnish your name or specific information regarding you to any third party, except as required by law. Metricom may provide advertisers or others with aggregate information about our subscribers and business. No assurance can be given that e-mail will remain private. 9. SERVICE, REMEDY, AND LIMITATION ON REMEDY. In the event that Ricochet service is interrupted or you experience some other difficulty with your service attributable to Ricochet, you may call the phone number printed in the applicable documentation provided by Metricom. Metricom shall endeavor to correct problems attributable to Ricochet as soon as reasonably practicable. The foregoing sets forth your sole and exclusive remedy with respect to such problems. 10. LIMITED WARRANTY AND DISCLAIMER OF WARRANTY. Metricom offers no warranties, express or implied, regarding the accuracy, sufficiency or suitability of Ricochet, its software or other Ricochet materials provided to you. You have the sole responsibility for inspecting and testing all services to your satisfaction before using them with important data. Metricom makes no warranties or representations whatsoever regarding any goods or services provided by any third parties pursuant to your use of Ricochet and Metricom shall not be liable for any costs or damages arising out of, either directly or indirectly, the actions or inactions of such third parties. RICOCHET IS DISTRIBUTED ON AN "AS IS" BASIS WITHOUT WARRANTIES OF ANY KIND, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. METRICOM DOES NOT WARRANT THAT ANY DATA OR FILES SENT BY OR TO A USER WILL BE TRANSMITTED IN UNCORRUPTED FORM OR WITHIN A REASONABLE PERIOD OF TIME. SOME STATES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS AND YOU MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE. 11. LIMITATION OF LIABILITY. (a) Without limiting the generality of the foregoing Sections 9 and 10, Metricom shall not be liable for any loss, injury, claim, liability or damage of any kind resulting in any way from (i) your use of Ricochet, (ii) your use of any equipment in connection with Ricochet, or (iii) the content or materials included with or accessed via use of Ricochet. (b) IN NO EVENT SHALL METRICOM BE LIABLE TO YOU OR ANY THIRD PARTY FOR ANY CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES, INCLUDING BUT NOT LIMITED TO ANY LOST PROFITS, DATA, SAVINGS OR REVENUES, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER UNDER TORT, CONTRACT OR OTHER THEORIES OF RECOVERY, EVEN IF METRICOM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. BECAUSE SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU. (c) In no event shall Metricom be liable to you or any third party for any amount in excess of the subscription price actually paid by you for the most recent year of service, whether under tort, contract, or other theories of recovery. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 25 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 26 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 12. INDEMNITY. You shall indemnify Metricom against liability as well as against claims or demands, or damages, or costs or expenses (including but not limited to reasonable attorneys' fees) arising out of or in connection with your breach of any limitation set forth in Sections 5 or 6 of this Agreement, or breach of any other provision of this Agreement, or your violation of any duty imposed by law, or any such breach or violation by any person to whom you have given your password or authorized or permitted to use your Ricochet account in any way. 13. TERM. This Agreement shall be effective as of the date on which Metricom receives this signed Agreement or when you commence using Ricochet. This Agreement shall remain effective until terminated pursuant to Section 15. 14. AUTOMATIC RENEWAL. As a service to its subscribers, Metricom will automatically renew your Ricochet subscription service effective at the end of each subscription period. If you do not wish automatic renewal, please notify us by delivery of email or other written notice. If your service has been automatically renewed and you wish to terminate it, you may do so at any time without cause as provided in Section 15. 15. TERMINATION. Metricom reserves the right, at its sole discretion, immediately, without notice, and with or without cause to suspend or terminate your access to and use of Ricochet, to delete all information related to your Ricochet account, upon any breach of the terms and conditions hereof by you. Either you or Metricom may terminate this Agreement at any time without cause by sending notice to the other party. 16. EFFECT OF TERMINATION. (a) If you cancel service at any time, you will be obligated to pay all fees at the nondiscounted rate up through the end of the month. If you prepaid, Metricom will return the amounts you prepaid for the months thereafter excluding any prepayment discount and also excluding shipping and handling costs. If you cancel service after [**], you will also be obligated for the activation fee. (b) Sections 3, 4, 5, 6, 7, 10, 11, 15, 16, 18, 20, 21, 22, and 34 shall survive termination or expiration of this Agreement. 17. U.S. GOVERNMENT END USERS. Ricochet is a "commercial item," as that term is defined at 48 C.F.R. 2.101, consisting of "commercial computer software" and "commercial computer software documentation," as such terms are used in 48 C.F.R. 12.212 and is provided to the U.S. Government only as a commercial end item. Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4, all U.S. Government end users acquire Ricochet with only those rights set forth herein. 18. CHOICE OF LAW AND FORUM. This Agreement shall be deemed to have been entered into and shall be interpreted and governed in all respects by the laws of the State of California. Any action under or relating to or in connection with this Agreement may be brought in a court of competent jurisdiction, federal or state, in the State of California and in no other jurisdiction. You hereby consent to such jurisdiction in California and to service of process issued by such court. 19. MODIFICATION BY METRICOM. Upon delivery of e-mail or other written notice, Metricom may modify this Agreement, its operating rules, and any specific prices that became a subject of this Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 26 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 27 Agreement. Without prior notice, Metricom, in its sole discretion, may discontinue or revise any or all other prices and any or all other aspects of Ricochet. 20. NOTICES. Except as set forth in Section 19, any notice, demand, request or consent required or permitted hereunder shall be in writing and shall be given by certified mail, return receipt requested, or via express courier, to your last known address. 22. SEVERABILITY. Should any provision of this Agreement be held by a court of law to be illegal, invalid or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby. 23. NONWAIVER. The failure of any party to enforce any of the terms or conditions of this Agreement, unless waived in writing, shall not constitute a waiver of that party's right to enforce each and every term and condition of this Agreement. 24. ENTIRE AGREEMENT. These Terms and Conditions and any Ricochet order form you have submitted to Metricom shall collectively constitute the entire agreement between Metricom and you with respect to the subject matter hereof. This Agreement supersedes all prior discussions, negotiations, or representations by the parties. MCOM Terms of Use Rev. 022900 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 27 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 28 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT E: QUALITY OF SERVICE TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS 1. PERFORMANCE ("PERFORMANCE QUALITY OF SERVICE") Peak Network Load Hour is defined as the hour of each day (the 24-hour period commencing each 12:01 a.m. and ending each 12:00 a.m.) during which the most bytes are sent through each GSA network. Fixed Point Performance: During the Peak Network Load Hour, Subscribers will get a minimum of [**] throughput downstream and [**] throughput upstream from the subscriber device to the gateway at the NIF, for at least [**]% of the data transfers during the Peak Network Load Hour. The network shall provide such performance to [**]% of devices inside homes, offices and hotels within the GSA that are above ground and within line of sight and [**] feet of an exterior window in a building. Mobile Performance: During the Peak Network Load Hour, a mobile Subscriber moving at [**] MPH will get a minimum of [**] throughput downstream and [**] throughput upstream from the subscriber device to the gateway at the NIF, for at least [**]% of the data transfers during the Peak Network Load Hour. The network shall provide such performance to at least [**]% of moving trains and automobiles within the GSA that are above ground. Fixed Point Performance and Mobile Performance shall be no worse than the above figures outside of the Peak Network Load Hour. If performance, reasonably tested, would be within these parameters but for factors outside of Metricom's control, including without limitation backbone latency and server speed, but not including radio interference, Metricom will be deemed to be in compliance with this Section 1 of Schedule 4.1. 2. NETWORK UPTIME ("NETWORK UPTIME QUALITY OF SERVICE") Network availability will be measured between any subscriber and the NIF. Metricom shall provide availability at least [**]% of the time. 3. NETWORK COVERAGE The network will provide indoor (within line of sight and [**] feet from an exterior window in a building), above ground coverage to at least the square mileage in each GSA set forth on Schedule 1.3, which shall cover [**]% of the total population within the GSA. The Metricom network will provide indoor (within line of sight and [**] feet from an exterior window in a building), above ground coverage of [**]% of important business traveler locations within the GSA, defined as airports, convention centers and high concentrations of business hotels. Metricom will consider the network in a GSA ready for commercial operation when the network provides indoor (within line of sight and [**] feet from an exterior window in a building), above ground coverage to [**]% of the population within the Network Covered Area of the GSA. During the planning phase (prior to any deployment) of a GSA system to be built, Metricom shall describe its planned coverage areas to ASP. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 28 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 29 After deployment and prior to commencement of service, Metricom shall perform measurements to confirm that the planned coverage area is likely to be achieved in a loaded system. After commencement of service, Metricom shall conduct on-going measurements and performance monitoring in order to verify the coverage area of the system during periods of maximum load. If shortfalls in the planned coverage area (indoor and outdoor) are found in the operational fully loaded system, Metricom shall make modifications to expand the operational coverage area so that it conforms to the planned coverage area. Such work should be carried out on a commercially reasonable schedule, which Metricom shall supply to ASP. 4. PERFORMANCE MEASUREMENT Metricom agrees to work with ASP to measure performance (and report quarterly on availability, and throughput rates) between the NIF and the Subscriber modems. 5. EASE OF USE On an ongoing basis, Metricom will provide installation wizards or other tools to facilitate installation and configuration of the Service and Ricochet modems such that Ricochet modems will be at least as easy to install as comparable wire line modems. Normal user installations shall take less than five minutes. Metricom will agree to support at least the latest three versions of Microsoft Windows Operating System, two versions of Mac OS and all other Operating Systems used as the primary operating system on more than 10% of Laptop Computers in the United States. The hardware and software will be compatible with all major Laptop computers manufactured by DELL, IBM, Compaq, Toshiba, Gateway or any other manufacturer with 10% or more of United States market share of Laptop computers. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 29 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 30 EXHIBIT F: BUSINESS MANAGEMENT SYSTEM TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS This document defines the Business Management System and its requirements. Metricom will provide ASP with services and support mechanisms for managing ASP Subscriber accounts as follows: 1) SUBSCRIBER MANAGEMENT SYSTEMS Metricom provides the following systems and capabilities to the ASP: 1. SUBSCRIBER ACTIVATION AND MANAGEMENT SYSTEM (SMS): In order to activate subscribers for service, they must be enrolled in the Metricom SMS. This allows our network to authorize and authenticate subscribers onto the network via the Ricochet modem. The interface to the SMS can be one of three ways: 1. Online: via a browser (IE or Netscape 4.0 or higher) interface connected to the internet 2. Batch: via a file transfer mechanism 3. API: via a direct call interface to the SMS ASPs may choose to interact with Metricom using any or all of the above interfaces. For the online mode, ASPs will require training in the use of the browser-based interface. Metricom will work with the ASP's Support Contact to develop a training program for your account reps. The SMS application allows the Service Provide to control who is allowed to make inquiries, updates, and generate reports from the application. Setup and maintenance of this data is accomplished through the ASP's systems administrator. 2. TECHNICAL SUPPORT SYSTEMS: Metricom provides systems that will allow the ASP's technical support staff to interact with Metricom. These systems are provided via a browser interface over the Internet. There are two components: 1. Trouble Ticketing Action Response: Metricom has deployed Remedy's AR systems as the primary interface for escalating issues to Metricom's internal technical support group. 2. Diagnostic Tools: these tools will allow the ASP to query subscriber modem status to determine modem functionality and help determine customer problems. 2) BILLING SYSTEMS Per the Agreement and payment schedule outlined in the Agreement, Metricom will bill the ASP for their active subscribers on the chosen day of the month. The billing reports will contain a summarization of the charges for each of the subscribers. Metricom will invoice the ASP monthly. Monthly fees are based upon Total Net Cumulative Subscribers (TNCS). Each month, Metricom will provide the ASP reports containing: i) Number of new subscribers for the month ii) Terminations during the month iii) TNCS as defined above iv) Billing occurs when a modem is registered v) Billing reports will indicate which business unit is to be charged. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 30 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 31 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. ASPs may request from Metricom detailed billing report information. This information will list each of the subscribers that are been have activated, their status, service levels, and monthly charge less adjustments. 3) RIGHT OF WAY FEES As stated in the Agreement, Metricom will remit to the appropriate municipalities the fees owed based upon the location of the Subscriber. In order to accomplish this, ASP must provide to Metricom accurate name and address information. This information is confidential. 4) SECURITY Neither party shall disclose any information other than on a "need to know" basis. Metricom will not use any subscriber information not authorized by the ASP. Any disclosure will require prior written consent. 5) IMPLEMENTATION TEAM AND SCHEDULE a) Metricom and the ASP will appoint the personnel necessary to effectively implement the Business Management System. i) Team shall be appointed within [**] of the execution of a signed agreement. (1) Each party shall appoint a Team Leader and communicate the identity of that leader to the other party (2) The Team Leaders of each party shall be responsible for managing the planning and implementation schedule of the Business Management System. b) Metricom and the ASP shall complete the implementation of the Business Management System within [**] of the commencement of the "Agreement Year" as defined in Paragraph 1.2 of the signed agreement. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 31 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 32 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT G: PRICING TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS Subscriber Rate discount ("Discount Rate") provided to ASP is based upon the assumption that ASP's Total Net Cumulative Subscribers ("TNCS") at the end of each year will meet or exceed the ASP Subscriber Objectives set forth in Table A ("Yearly Subscriber Objectives"). Table A Yearly Subscriber Objective* Year 1 [**] Year 2 [**] Year 3 [**] Total TCNS [**] *TCNS per year Table B ASP Subscriber Rates** Normal Rate $[**]/month Discount Rate $[**]month **Rates based per ASP Subscriber per month Table C Quarterly Subscriber Objectives YEAR 1 TCNS Quarter 1 [**] Quarter 2 [**] Quarter 3 [**] Quarter 4 [**] YEAR 2 Quarter 1 [**] Quarter 2 [**] Quarter 3 [**] Quarter 4 [**] YEAR 3 Quarter 1 [**] Quarter 2 [**] Quarter 3 [**] Quarter 4 [**] Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 32 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 33 REMAINDER OF PAGE LEFT INTENTIONALLY BLANK Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 33 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 34 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT H: ASP STANDARD SERVICE LEVEL REQUIREMENTS TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS PART I. NETWORK CONNECTION STANDARD SERVICE LEVEL REQUIREMENTS In order to guarantee [**] of performance to Subscribers, the ASP's circuits shall meet the standard service level requirements set forth herein for latency, bandwidth utilization and packet loss (collectively, "NETWORK SSLR") for the applicable type of connect, commencing upon the first day of the second month after the successful end-to-end testing of the Service. Metricom's network operations center (the "NOC") will collect network performance statistics while monitoring the ASP's network connections at each Metricom network interconnection facility ("NIF") in a GSA to ensure that the ASP is meeting the Network SSLR. In no case will PING tests performed by Subscribers be recognized by Metricom as a valid, measurable test of ASP's compliance with its Network SSLR. 1. NETWORK DELAY 1.1 Measurement Testing Mericom will perform network delay measurement testing between the Metricom service provider gateway and an interface node on the ASP's network. The network delay will be measured by determining roundtrip network latency in accordance with the following measurements: a) Software and hardware components capable of measuring traffic and responses shall be placed at each NIF to measure network delay using the statistics from ICMP PING packets. b) The roundtrip network latency measurements shall be taken at [**] minute intervals. These measurements shall be averaged on an hourly basis to determine the average network delay sample for that hour ("AVERAGE NETWORK DELAY SAMPLE") for that NIF. 1.1.1 Included Components All components of the ASP's network which includes the service provider gateway and the Cisco 7206 router terminating the ASP's circuit shall be included in the determination of the network delay. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 34 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 35 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.1.2 Excluded Components The equipment located beyond the termination of the ASP's circuit on its network shall be excluded in the determination of the network delay. 1.2 Standard Service Level Requirements ("NETWORK DELAY SSLR") In any given month, no more than [**] percent ([**]%) of the Average Network Delay Samples for a NIF shall exceed the applicable Maximum Allowable Network Delay between the NIF and the ASP's point of presence ("POP") for the specific type of connection as set forth below: a) Direct connections to Metricom's POP ("DIRECT CONNECTIONS") shall maintain a network delay between the NIF and the ASP POP equal to or less than [**] ("MAXIMUM ALLOWABLE NETWORK DELAY"). b) Connections utilizing the Internet ("VIRTUAL CONNECTIONS") shall maintain a network delay between a NIF and the applicable ASP POP equal to or less than [**] ("MAXIMUM ALLOWABLE NETWORK DELAY"). 1.3 Non-Compliant Connections In the event more than [**] percent ([**]%) of the Average Network Delay Samples for a NIF exceed the applicable Maximum Allowable Network Delay for the specific type of connection for [**] months, the ASP shall: a) Non-compliant Direct Connections circuits shall be upgraded to a circuit with a higher speed. b) Non-compliant Virtual Connections shall be replaced with a Direct Connection to the NIF where the applicable Maximum Allowable Network Delay is not being met. 2. BANDWIDTH UTILIZATION 2.1 Measurement Testing Metricom will perform measurement testing on the ASP's circuits terminated at the NIF to determine bandwidth utilization in accordance with the following criteria: a) Software and hardware components capable of measuring traffic and responses shall be placed at each NIF to measure bandwidth utilization. b) The bandwidth utilization measurements shall be taken at [**] minute intervals on the ports used for the ASP's circuits. These measurements shall be averaged on an hourly basis to determine the average network capacity sample for that hour ("AVERAGE BANDWIDTH UTILIZATION SAMPLE"). Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 35 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 36 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 2.1.1 Components Included All components of the ASP's network which include the Cisco 7206 router terminating the ASP's circuit shall be included in the determination of the bandwidth utilization. 2.1.2 Components Excluded The equipment located beyond the termination of the ASP's circuit on their Subscriber Management System shall be excluded in the determination of bandwidth utilization. 2.2 Standard Service Level Requirements ("BANDWIDTH SSLR") In any given month, no more than [**] percent ([**]%) of the Average Bandwidth Utilization Samples for a NIF shall exceed the applicable Maximum Allowable Bandwidth Capacity between a NIF and the ASP's POP for the specific type of connection as set forth below: a) Direct Connections shall maintain an average NIF-to-NIF bandwidth utilization equal to or less than [**] percent ([**]%) of the ASP's circuit capacity ("MAXIMUM ALLOWABLE BANDWIDTH CAPACITY"). b) Virtual Connections shall maintain bandwidth utilization equal to or less than [**] percent ([**]%) of the subscribed capacity for that NIF ("MAXIMUM ALLOWABLE BANDWIDTH CAPACITY"). 2.3 Non-Compliant Connections In the event more than [**] percent ([**]%) of the Average Bandwidth Utilization Samples for a NIF exceed the applicable Maximum Allowable Bandwidth Utilization for the specific type of connection for [**] months, the ASP shall: a) Order an additional circuit to support Subscribers for the non-compliant Direct Connect. The additional circuit shall equal or exceed the existing circuit capacity. b) Increase capacity for the non-compliant Virtual Connection or upgrade it to a Direct Connection to the NIF. 3. PACKET LOSS 3.1 Measurement Testing Mericom will perform packet loss measurement testing on the ASP's circuits terminated at the NIF in accordance with the following measurements: a) Software and hardware components capable of measuring packet loss shall be placed at each Metricom NIF to measure the number of packets lost. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 36 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 37 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. b) The packet loss measurements shall be taken at [**] minute intervals on the ports used for the ASP's circuits. These measurements shall be averaged on an hourly basis to determine the average network capacity sample for that hour ("AVERAGE PACKET LOSS SAMPLE"). c) The packet loss measurement is based on measuring the number of packets lost while sending sixty four (64) byte ICMP PING packets to the ASP's LT2P network server. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 37 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 38 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 3.1.1 Included Components All components of the ASP's network which includes the service provider gateway and the Cisco 7206 router terminating the ASP's circuit shall be included in the determination of the packet loss. 3.1.2 Excluded Components The equipment located beyond the termination of the ASP's circuit on its network shall be excluded in the determination of the packet loss. 3.2 Standard Service Level Requirements ("PACKET LOSS SSLR") In any given month, no more than [**] percent ([**]%) of the Average Packet Loss Samples for a NIF shall exceed the applicable Maximum Allowable Packet Loss between that NIF and the ASP's POP for the specific type of NIF connection as set forth below: a) Direct Connections shall maintain a packet loss rate between the NIF and the applicable ASP POP equal to or less than [**] percent ([**]%) [**] ("MAXIMUM ALLOWABLE PACKET LOSS"). b) Virtual Connections via the Internet shall maintain a network delay between a NIF and the applicable ASP POP equal to or less than [**] percent ([**]%) [**] ("MAXIMUM ALLOWABLE PACKET LOSS"). 3.3 Corrective Action for Non-Compliance In the event more than [**] percent ([**]%) of the Average Packet Loss Samples for a NIF exceed the applicable Maximum Allowable Packet Loss for the specific type of NIF connection for more than [**] months, the ASP shall take the following corrective action: a) An ASP with a Direct Connection shall work with the NOC to resolve the problem. b) An ASP with a Virtual Connection shall increase its capacity at that NIF or replace the connection with a Direct Connection to the NIF where the applicable Maximum Allowable Packet Loss is not being met. 4. NETWORK SSLR MANAGEMENT 4.1 Reports Metricom will provide network delay, bandwidth utilization and packet loss reports (collectively, the "REPORTS"), at no extra charge, for ASP review. The ASP shall obtain the Reports from Metricom's website via username and password. Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 38 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 39 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. The reporting tool queries the ASP's interface at a set time interval depending on line speed and the connection type. For example, T1 lines are queried about every [**] minutes. Therefore, a sampling of data represents [**] minutes of traffic. Reports are based on a 24-hour period, from 00:00 CST to 23:59 CST. The following information can be viewed on the report: - Date - [**] - The i[**] service. - [**] - The [**] the customer. - [**] - The [**] the customer. - [**]- The [**] speed. - [**] - The [**] period. - [**] - The [**] period. - [**] - The [**] speed. - [**] - The [**] the customer. - [**] - The [**]the customer. - [**] - The [**] the customer. - [**] - The a[**] the customer. - [**] - The [**] the customer. - [**] - The [**] the customer. 4.2 Report Review and Verification The ASP will assign a prime contact that will meet with the Metricom Channel Manager on the last business day of every month. The Reports shall be reviewed and compliance with this EXHIBIT H shall be verified by both parties. If a root cause analysis ("RCA") of the non-compliance is reasonably required by either party, the requiring party shall notify the non-requiring party. The non-requiring party shall produce a RCA report by the next monthly meeting. 5. NON-COMPLIANCE 5.1 Cause of Non-Compliance In the event of non-conformance at a NIF as set forth in Part 1 of this EXHIBIT H, the NOC will perform a series of diagnostic tests to ensure that any non-compliance was not a result of any Metricom initiated changes at the NIF where the ASP's Network SSLR is not met. If the non-compliance is due to such change or installation by Metricom, the NOC will take full Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 39 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission 40 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. responsibility in resolving the problem according to the guidelines of this EXHIBIT H. Any necessary follow up is the joint responsibility of Metricom and the Metricom account sales team. 5.2 Notification Process At such time as Metricom has determined that the ASP has not met its Network SSLR, the NOC will create a trouble ticket and notify the ASP in writing, and Metricom's Technical Support Group of ASP's failure to comply with its Network SSLR. 5.3 Cure Period The ASP shall have [**] from such notification to bring the network connection performance back into compliance with the Network SSLR as set forth herein. 5.2 Penalties If ASP fails to take corrective action as set forth herein, Metricom shall charge the ASP a fee equal to [**] percent ([**]%) of of the wholesale subscription for all of the Ricochet Subcribers affected in that GSA for each day that the ASP is non-compliant with the Network SSLR set forth herein. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK Rev. 083000 GoAmerica Authorized Service Provider Agreement Page 40 of 41 Metricom Initials: ___ Confidential & Proprietary GoAmerica Initials: ______ Not for use or disclosure outside of Metricom or Contractor except under written permission EX-10.27 8 w46736ex10-27.txt AMENDMENT TO 10-1-2000 TO CHANNEL PARTNER AGREEMEN 1 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT 10.27 AMENDMENT ONE TO RICOCHET(TM) CHANNEL PARTNER AGREEMENT FOR AUTHORIZED SERVICE PROVIDERS BY AND BETWEEN METRICOM, INC. AND GOAMERICA COMMUNICATIONS CORPORATION DATED SEPTEMBER 1, 2000 Reference is made to that certain Ricochet(TM) Channel Partner Agreement for Authorized Service Providers effective September 1, 2000 (the "Agreement") between METRICOM, INC. ("Metricom"), a Delaware corporation, with it principal offices at 333 West Julian Street, San Jose, CA 95110, and GOAMERICA COMMUNICATIONS CORPORATION ("ASP") located at 401 Hackensack Avenue, New Jersey, 07601. 1. The Agreement is amended by adding the following as a new Section: ASP CO-OPERATIVE MARKETING FUNDING PROGRAM. Metricom will establish a program (the "Co-op Program") under which Metricom will make funds available to ASP, and which ASP shall earn under the requirements established in this Section ("Co-Op Funds"), to assist ASP in its efforts to effectively endorse, promote and sell the Service as contemplated in this Agreement for the year 2000. The Co-op Program is limited to the acquisition of new Ricochet(TM) subscribers (excludes existing subscribers of the [**] Ricochet(TM) service) and does not apply to any customer loyalty, retention or other programs directed at existing Subscribers. To be eligible under the Co-op Program, all programs require Metricom's written approval prior to the release of any such program. 1. PROGRAM DESCRIPTION. The Co-op Program is comprised of three categories: (A) CO-OPERATIVE ADVERTISING/DIRECT MAIL. This category covers lead generation, advertising, media placement and non-installed-base direct mail programs. Metricom will make available, to ASP, a mix of broadcast (television and radio), print and online in each GSA at a discount of [**] percent ([**]%) off of the production cost. The discounted rate, as reflected in Table 1.A, will be deducted directly from ASP's earned Ad Funds, subject to the limitations set forth in Paragraph 2(b) of this Section. TABLE 1.A CREATIVE RATES
PRODUCTION MEDIA VALUE COST ASP RATE ----- ----- ---------- -------- TV* - (:30 spot) :20 second Ricochet with :10 partner taggable (partner can choose among 4 spots) $[**] $[**] $[**] Radio - (:30 spot) :20 second Ricochet with :10 partner taggable $[**] $[**] $[**] Newspaper, Black and White (4x10, Jr. page, full page) $[**]K $[**] $[**] Magazine/Trade Publication $[**] $[**] $[**] Online $[**] $[**]K $[**] Direct Mail (four color post card) $[**] $[**]K $[**]
Rev. 082100eap Amendment One to Ricochet(TM)Channel Partner Agreement Page 1 of 4 for Authorized Service Providers Metricom Confidential and Proprietary Not for Use or Disclosure Outside of Metricom Initials: Metricom or ASP Except Upon Written Approval GoAmerica Initials: -------------- ------------
2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. In the event ASP elects to develop its own campaign, using Metricom's co-branded mark, Metricom shall have the right to review and approve, in writing, such campaign prior to production. ASP agrees not to launch any campaign earlier than [**] from Metricom's Ricochet(TM) brand campaign launch as determined by Metricom and communicated in writing to ASP by an authorized representative of Metricom. (I) DIRECT MAIL. ASP has the option to use Metricom provided Creative or develop its own creative. In either event, Metricom shall have the right to review and approve, in writing, all creative prior to production. (B) MARKET DEVELOPMENT. This category is designed to offset the costs of special programs and non-traditional advertising, subject to prior written approval by Metricom. Such programs include, but are not limited to: Ricochet Demo Program Event sponsorships (ASP sales force kick-off or jointly sponsored industry events) Joint PR Efforts Video News Releases/Promotional Videos Collateral Development Referral Programs In-box or other special promotions Coffee Sleeves/Bar Coasters Web Marketing Sales Force Incentives (trips, bonuses, etc.) (C) JUMP-START. This category allows ASP to use Incentive Funds for installed-based marketing programs ("Jump Starts") during the initial [**] offering the Service in any GSA. Upon written approval by Metricom of ASP's program, Metricom will credit ASP's Marketing Account with the Incentive Funds. Jump Starts can include, but are not limited to, email, direct mail, web-based, refer a friend and modem rebate programs. 2. FUNDS. Metricom will make available fifty dollars ($[**]) for advertising and direct mail programs ("Ad Funds") plus [**] dollars ($[**]) for market development programs ("MD Funds") for a total one-time amount of [**] dollars ($[**]) per new subscriber (excludes existing subscribers of the [**]Ricochet(TM) service) that ASP registers, with additional incentives available up to a maximum of [**] dollars ($[**]) ("Incentive Funds") for the year 2000. Ad Funds, MD Funds and Incentive Funds shall be referred to collectively as Co-op Funds. Co-op Funds are available exclusively to the ASP, however, ASP may elect to share its Co-op Funds with its Reseller(s) provided requests for reimbursement and the disbursement of such is handled by ASP. (A) MARKETING ACCOUNT. Upon execution of this Amendment One, Metricom will pre-build ASP's co-operative marketing account ("Marketing Account") based on ASP's Guaranteed ASP subscribers for the first [**]. Metricom will reconcile the difference between the actual number of ASP Subscribers and the Guaranteed ASP Subscribers at the start of the [**] and make any adjustments necessary. The account will be calculated on a [**] basis, using the information contained in the reports described in Section 5.2 of the Agreement. The account details will be provided to ASP on a monthly basis. (B) REIMBURSEMENT. Reimbursement will be at [**] percent of ([**]%) of pre-approved programs limited to the applicable earned Co-op Funds available in ASP's Marketing Account as of the date of the invoice submitted for reimbursement. All requests for reimbursement ("Claim") must be received by Metricom within [**] days after the ending run date of the program or [**], whichever occurs first. Rev. 082100eap Amendment One to Ricochet(TM)Channel Partner Agreement Page 2 of 4 for Authorized Service Providers Metricom Confidential and Proprietary Not for Use or Disclosure Outside of Metricom Initials: Metricom or ASP Except Upon Written Approval GoAmerica Initials: -------------- ------------
3 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (C) INSUFFICIENT FUNDS. In the event ASP does not have sufficient funds in the applicable fund category to cover the Claim, ASP may determine how much, if any, of the available funds should be applied toward the Claim. ASP shall indicate such rate on the applicable claim form. (D) CAP ON FUNDS. ASP's year 2000 Co-op Funds are capped at [**] dollars ($[**]). In the event ASP reaches this cap early in the Co-op Program and has demonstrated successful programs, the parties agree to negotiate a new cap on good faith. (E) EXPIRATION OF FUNDS. Co-op Funds accrued in the year 2000, must be designated for a program by [**]. Such programs must be completed and funds claimed by [**]. Complete proof of performance documents must be submitted by [**]. ASP'S Marketing Account will be debited any unsubstantiated amounts. Any unused funds shall be forfeit. 3. REQUIREMENTS OF ELIGIBILITY/LOSS OF ELIGIBILITY. (A) ELIGIBILITY. In order to be eligible for Co-op Funds, ASP must meet the following requirements: (I) Adherence to the requirements set forth in this Amendment One; (II) Compliance with Metricom corporate graphics standards on logo usage, advertising guidelines and creative guidelines; (III) Written pre-authorization from Metricom Corporate Marketing for all campaigns and/or programs related to the Service; (IV) Submission of appropriate forms along with supporting documents as set forth in the Pre-Approval Process below; (V) Submission of appropriate proof of performance (creative, tear sheets, scripts, media schedule, etc.) and copies of invoices; and (VI) A Marketing account in good standing. (B) LOSS OF ELIGIBILITY. (I) Metricom reserves the right to re-evaluate ASP's participation in the Co-op Program if ASP experiences an unusually high churn rate ([**] percent ([**]%) or higher). Such re-evaluation may result in freezing ASP's Market Account or termination of ASP's participation in the Co-op Program. (II) In the event of termination of the Agreement or this Amendment for any reason, including without limitation, failure to renew, ASP misrepresentation of Metricom or abuse of the Co-op Program, ASP's participation in the Co-op Program shall be terminated immediately and ASP shall have [**] thereafter in which to submit all claims for reimbursements which were submitted and approved for reimbursement prior to termination of the Agreement or this Amendment One. Any unused Co-op Funds will be forfeit. 4. PROGRAM PRE-APPROVAL PROCESS. ASP may commence submitting pre-approval forms, samples of which are attached hereto as exhibits, once ASP has accumulated sufficient Co-op Funds to cover the program for which ASP is requesting reimbursement. 1. Fill out the appropriate pre-approval form (i.e., Co-op Advertising/Direct Mail, Marketing Development, or Jump-Start). 2. Submit the completed pre-approval form to the address set forth in Paragraph 6. 3. If approved, Metricom will return the reimbursement request form signed by an authorized representative of Metricom within [**] working days from receipt of request by Metricom. If the request is not approved, Metricom will return the form with recommended changes. ASP may resubmit the form after the recommended changes have been made. Rev. 082100eap Amendment One to Ricochet(TM)Channel Partner Agreement Page 3 of 4 for Authorized Service Providers Metricom Confidential and Proprietary Not for Use or Disclosure Outside of Metricom Initials: Metricom or ASP Except Upon Written Approval GoAmerica Initials: -------------- ------------
4 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 5. CLAIM PROCEDURE. Metricom will process Claims as expeditiously as possible. If the Claim is approved, ASP's Marketing Accounting will be debited and a check for expenditures other than those purchased from Metricom, will be mailed to ASP within four weeks after approval. Please allow three (3) weeks for processing. A sample of the claim is attached hereto as an exhibit. 1. Submit a completed claim form with the applicable proof of performance (creative, tear sheet, scripts, media schedule, photographs, etc.), a program/campaign evaluation report and the applicable invoices to the address identified in Paragraph 6. 2. Reimbursement requests must be received by Metricom Corporate Department within [**] after the ending run date of a program or [**] whichever comes first. 6. FORM SUBMITTAL. Please submit completed Pre-Approval Forms and Claim Forms, along with required attachments to: Corporate Marketing Attn: Luz A. Berg Metricom, Inc. 333 West Julian Street San Jose, CA 95110 Phone: 408-282-4189 Fax: 408-282-3028 Email: iberg@metricom.com 7. ADDITIONAL TERMS. (A) The Co-op Program will be reviewed annually. (B) Metricom reserves the right to modify or terminate the Co-op Program at any time. (C) All material shall comply with all federal, state and local laws. Metricom disclaims all liability or responsibility for an advertising or promotion by ASP. To the extent that this Amendment is inconsistent with the Agreement, this Amendment shall govern and shall be deemed to amend and supersede the Agreement as of the date hereof. All terms used herein and not otherwise defined shall have the same meanings ascribed to them in the Agreement. Except as expressly set forth herein, the Agreement remains in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this amendment to be executed by their duly authorized representatives effective on the 1st day of September, 2000.
METRICOM, INC. GOAMERICA COMMUNICATIONS CORPORATION: By: /s/ John G. Wernke By: /s/ Francis J. Elenio Name: John G. Wernke Name: Francis J. Elenio Title: Sr. V.P. Marketing and Sales Title: CFO Date: 8/31/00 Date: 8/31/00
Rev. 082100eap Amendment One to Ricochet(TM)Channel Partner Agreement Page 4 of 4 for Authorized Service Providers Metricom Confidential and Proprietary Not for Use or Disclosure Outside of Metricom Initials: Metricom or ASP Except Upon Written Approval GoAmerica Initials: -------------- ------------
EX-10.28 9 w46736ex10-28.txt SUPPLY AGREEMENT FOR SIERRA WIRELESS DATA 1 EXHIBIT 10.28 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. SUPPLY AGREEMENT This Supply Agreement (the "AGREEMENT") is made as of November 28, 2000, by and between Sierra Wireless Data, Inc. ("SWD"), a Delaware corporation, having an office at Park 80, Plaza West, Suite 200, Saddle Brook, New Jersey, U.S.A., 07663, and GoAmerica Inc., a Delaware corporation having an office at 401 Hackensack Ave., Hackensack, NJ 07601 ("GOA"). WHEREAS the parties desire to enter into a commercial arrangement under which SWD will design, develop, manufacture and sell to GOA an agreed-upon number of data subscriber devices for the Network, as set out in this Agreement. NOW THEREFORE, in consideration of the mutual promises set forth herein and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged) the parties hereby agree as follows: 1. INTERPRETATION 1.1 DEFINITIONS. Whenever used in this Agreement, the following words and terms shall have the respective meanings ascribed to them: (a) "BUSINESS DAY" means any day other than Saturday, Sunday or any statutory holiday in the United States; (b) "CONFIDENTIAL INFORMATION" means all Information disclosed, to a receiving party by a disclosing party, in writing or by way of any other media and marked as proprietary and/or confidential or that by the nature of the circumstances surrounding the disclosure or receipt ought to be treated as proprietary and confidential, except any portion thereof that a receiving party can demonstrate by written records prepared and maintained in the ordinary course of its business or other reasonably sufficient evidence: (a) was known to the receiving party before receipt thereof under this Agreement; (b) is disclosed to the receiving party by a third party who has a right to make such disclosure without any obligation of confidentiality to the other party; (c) is or becomes generally known in the trade without violation of either this Agreement by the receiving party or any confidentiality obligation owed to the disclosing party by any third party; (d) is furnished by the disclosing party to a third party without restriction on subsequent disclosure; or (e) is independently developed by the receiving party or its employees or contractors without reference to the disclosing party's information; provided, that only the particular Information that is specifically excluded, as set 2 forth above, shall be excluded from treatment as Confidential Information hereunder, and not any other Information that happens to appear in proximity to such excluded portion. (For example, a portion of a document may be excluded without affecting the confidential nature of those portions that do not themselves qualify for exclusion). Confidential Information shall also include all notes, copies, summaries and derivative materials, in any media. Confidential Information shall also include, without limitation, any and all information of third parties that is disclosed or obtained pursuant to this Agreement and that would otherwise qualify as Confidential Information as defined herein if disclosed by GOA or SWD. Confidential Information shall also include the specific terms and conditions of this Agreement, but shall not include the general nature of this Agreement; (c) "DELIVERY SCHEDULE" means the schedule for delivery by SWD to GOA of the Springboard Products, a copy of which is attached hereto as Schedule 1; (d) "EFFECTIVE DATE" means the date of execution of this Agreement; (e) "FORCE MAJEURE" has the meaning set out in section 15.1; (f) "INFORMATION" means all forms and types of financial, business, marketing, operations, scientific, technical, economic and engineering information, whether tangible or intangible, including without limitation, patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, codes, know-how, computer software, databases, product names or marks, marketing materials or programs, specifications, shop-practices, customer lists, supplier lists, engineering and manufacturing information, price lists, costing information, employee and consulting relationship information, accounting and financial data, profit margin, marketing and sales data, strategic plans, information concerning new products, trade secrets and all other proprietary information of a disclosing party (including all originals, copies, digests and summaries, in any form, and whether prepared by the disclosing party or a third party); (g) "INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in section 12.1; (h) "NETWORK" means the AT&T and Verizon Wireless CDPD communications network on which the P1-CDPD Module will operate and all other networks on which the P2-CDMA Ix Module will operate, as advised to SWD by GOA in accordance with section 2.2 hereof, (i) "P1-CDPD MODULE(s)" means the SWD/GOA co-branded Phase One CDPD Springboard module, based on current SWD (or its affiliates) CDPD technology, supporting Network functionality and built to the P1-CDPD Module Specifications and includes, without limitation, all Software and documentation related thereto, all Upgrades that are available during the currency of this -2- 3 Agreement and the version of GOA's web software provided to SWD prior to manufacture of the module(s); (j) "P2-CDMA 1X MODULE(s)" means the SWD/GOA co-branded CDMA 1xRTT Springboard module, supporting voice and data, supporting Network functionality and built to the P2-CDMA Ix Module Specifications and includes, without limitation, all Software and documentation related thereto, all Upgrades that are available during the currency of this Agreement and the version of GOA's web software provided to SWD prior to manufacture of the module(s); (k) "P1-CDPD MODULE SPECIFICATIONS" means the design and performance requirements for the P1-CDPD Module, a copy of which shall be given to GOA by SWD once finalized; (l) "P2-CDMA IX MODULE SPECIFICATIONS" means the design and performance requirements for the P2-CDMA Ix Module, a copy of which shall be given to GOA by SWD once finalized; (m) "PC CARD(s)" means any SWD branded Type H PCMCIA modem card, or co-branded under prior agreement, which is commercially available at the time GOA places a-Purchase Order under section 3.5 and includes, without limitation, all Software and documentation related thereto and any and all Upgrades that are available during the currency of this Agreement; (n) "PRODUCTS" means the Springboard Products and the PC Cards; (o) "PURCHASE ORDERS" means purchase orders issued, from time to time, by GOA to SWD pursuant to which GOA shall purchase Products in accordance with the terms of this Agreement, as such purchase orders may be modified in accordance with the terms of this Agreement; (p) "REJECTION" means GOA's written notification to SWD that any Product: (i) has not complied with, or performed in accordance with, its Specifications; and/or (ii) has not complied with its part number or revision as set out in the applicable Purchase Order; (q) "SHIPPING POINT" means the designated depot in the continental US selected by SWD) as its shipping point for Products; (r) "SOFTWARE" has the meaning set out in section 13.2; (s) "SPECIFICATIONS" means the design and performance requirements for each Product, as such may be amended from time to time in accordance with this Agreement; (t) "SPRINGBOARD PRODUCTS" means, collectively, the P1-CDPD Module and the P2-CDMA 1x Module; and -3- 4 (u) "UPGRADES" shall mean any and all improvements, corrections, modifications, alterations, revisions, extensions and/or enhancements to a Product, which do not change in any significant way the form, fit and functionality defined in the applicable Product Specifications, made or acquired by SWD during the currency of this Agreement. 1.2 HEADINGS. The section and paragraph headings contained herein are included solely for convenience, are not intended to be full or accurate descriptions of the context hereof, and shall not be considered part of this Agreement. 1.3 EXTENDED MEANINGS. Words importing the singular include the plural and vice versa and words importing gender include all genders, unless the context otherwise requires. 1.4 CURRENCY. Unless otherwise indicated, all dollar amounts contained in this Agreement are stated and shall be paid in lawful currency of the United States of America. 1.5 AMENDMENTS. This Agreement may not be amended or modified in any respect except by written instrument signed by duly authorized officers of SWD and GOA. 1.6 WAIVER. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provisions (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 1.7 SEVERABILITY. In the event that any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and such invalid or unenforceable provision shall be construed so as to best accomplish the objectives of such provision within the limits of applicable law. 1.8 SCHEDULES. The following are the schedules attached to this Agreement, each of which forms an integral part of this Agreement:
Schedule No. Scheduled Information ------------ --------------------- 1 Delivery Schedules
1.9 METRICOM PURCHASE AGREEMENT. If GOA is approved by Metricom, Inc. as a "designee" under the Purchase Agreement (the "Metricom Agreement") dated November 9, 1999 between SWD and Metricom., Inc., then to the extent that there is any conflict or inconsistency between the terms and provisions of this Agreement and the terms and provisions of the Metricom Agreement, the terms and provisions of this Agreement will prevail and govern. 2. DEVELOPMENT 2.1 DEVELOPMENT OF THE SPRINGBOARD PRODUCTS. Upon reasonable request of GOA, during the development of the Springboard Products, SWD shall advise GOA of the status of development and the status of Network and carrier, to the extent applicable, acceptance testing of the Springboard Products. -4- 5 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 2.2 NOTIFICATION BY GOA OF CARRIER. In order to enable SWD to arrange for acceptance testing of the P2-CDMA 1x Module, GOA shall advise SWD in writing, not less than 180 days prior to the first shipping month for P2-CDMA Ix Modules as described in Schedule 1, of the name of the carrier(s) on whose Network it will sell P2-CDMA Ix Modules and such other details as SWD may require in connection therewith. 2.3 CO-BRANDING. The Springboard Products provided under this Agreement (other than those described in section 3.5) shall carry the GoAmerica trademarked name and may carry such other GOA logo as is expressly agreed to by SWD, in its sole discretion. Such use of the GoAmerica trademark is hereby authorized by GOA and GOA agrees to indemnify and hold SWD harmless for any losses, damages or other liabilities resulting from the use of the GoAmerica trademark. All use will inure to the benefit of GOA and will not vest in SWD any rights in or to such trademark. 2.4 MONTHLY MEETING. In order to best coordinate the sales of the Products, the parties have designated certain product managers to act as liaison between the parties. The designated product managers shall hold meetings, on a monthly basis, by teleconference call or at a mutually agreed location, to review the progress being made in the sales of the Products. 3. PURCHASES 3.1 SCOPE OF AGREEMENT. The terms and conditions set forth in this Agreement shall govern the supply by SWD of Products to GOA during the currency of this Agreement. All Products shall conform to and be in compliance with the requirements of this Agreement. 3.2 PI-CDIPD MODULE PURCHASES. GOA hereby agrees to purchase and has issued to SWD, and SWD has accepted, a Purchase Order for [**] P1-CDPD Modules at a per unit price of US$[**], on a firm and non-cancelable basis. The [**] PI-CDPD Modules will be delivered to GOA in accordance with Schedule 1, subject only to rescheduling as described in Schedule 1. 3.3 P2-CDMA 1X MODULE PURCHASES. GOA hereby agrees to purchase, and will issue a Purchase Order for [**] P2-CDMA Ix Modules at a per unit price of US$[**], on a firm and non-cancelable basis. The [**] P2-CDMA Ix Modules will be delivered to GOA in accordance with Schedule 1, subject only to rescheduling as described in Schedule I and such other reasonable delay as may be advised by SWD due to unexpected delay of the network certification of the P2-CDMA Ix Module resulting from delayed network deployment by a network carrier designated under section 2.2. -5- 6 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 3.4 ADDITIONAL PURCHASES. GOA hereby agrees to purchase, and will issue Purchase Orders for [**] Springboard Modules and/or PC Cards, on a firm and non-cancelable basis; provided however that GOA shall not purchase (nor submit a Purchase Order for) more than [**] PC Cards which are intended for use on the Ricochet network. The [**] Springboard Modules and/or PC Cards will be delivered to GOA in accordance with the ordering and forecasting provisions of Article 6 hereto. The price for the Springboard Modules shall be as described in sections 3.2 and 3.3, depending on the particular module ordered. The price for the PC Cards shall be as advised by SWD at * the time of order. GOA shall order all such [**] units in accordance with the provisions of Article 6, in such a manner so that SWD is able to deliver to GOA all [**] units by no later than June 30, 2002. SWD confirms that it received from GOA (and accepted) on September 22, 2000, Purchase Order No. 200526 for [**] AirCard [**] PC Cards, which quantity of PC Cards reduces GOA's commitment to purchase [**] Springboard Modules and/or PC Cards to [**] Springboard Modules and/or PC Cards. 3.5 SUCCESSOR PRODUCT PURCHASES. In addition to the purchases of the Springboard Modules and PC Cards, GOA may from time to time (but is not obligated to): a. during the first 12 months following the Effective Date, issue Purchase Orders for other Springboard data modules which SWD is, as of the date of the Purchase Order, commercially shipping, under substantially the same terms and conditions described in this Agreement other than price which shall be as advised by SWD at the time of order; b. issue Purchase Orders for additional Products; in accordance with the ordering and forecasting provisions of Article 6 hereof. None of the purchases under this section will reduce GOA's obligations under sections 3.2 and 3.3, inclusive. 3.6 PURCHASE ORDER TERMS NOT TO APPLY. All Purchase Orders shall comply with the terms of this Agreement. In the event of any inconsistency or conflict between any pre-printed terms on a Purchase Order, order confirmation, invoice or any other commercial forms used by the parties relating to the Products, the terms of this Agreement shall govern. 4. PRICING AND PAYMENT 4.1 TERMS OF PAYMENT. All prices for Springboard Modules and PC Cards shall be FOB Shipping Point. SWD will invoice GOA for Products purchased upon delivery of such Products to GOA at the Shipping Point and GOA will pay all such invoices within [**] after the invoice date. If deliveries of Product are made in installments, each installment shall be separately invoiced and payment due and payable therefor shall be made accordingly. Prices are exclusive of all federal, provincial, state, municipal or other government, excise, use, sales, occupational or like taxes, tariffs, duties, surcharges, now in force or enacted in the future. Any taxes related to this Agreement shall be paid by GOA, except in those circumstances where SWD is required by law to collect such taxes, and excluding taxes based upon SWD's net income and excluding all import and export duties to the Shipping Point. If, during the first [**] after GOA's receipt of Product, all or a portion of such Product is Rejected, SWD will issue credit for such Product and will re-invoice GOA for such rejected Product once it is repaired or replaced. -6- 7 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 4.2 [**]GOA. With respect to all Springboard Products purchased by GOA under the terms of this Agreement, [**]in North America (excluding Affiliates of SWD) and: (a) will [**] in terms of [**] in North America (excluding Affiliates of SWD) [**] in the [**] of the [**] on the [**]; and (b) will [**] (as determined at the date of the applicable [**] to any [**]in North America (excluding Affiliates of SWD) [**], in the aggregate, the same or lesser quantity of the [**] on the [**] 4.3 INTEREST. SWD shall be entitled to charge GOA, and GOA shall pay to SWD, interest at the rate of 1.5% per month on all amounts not paid within [**] after date of invoice. 5. DELIVERY 5.1 SHIPPING POINT. All deliveries of Product will be made to the Shipping Point at SWD's sole cost and expense. Title to the Product and entire risk of loss and damage shall pass to GOA upon its receipt of Products at the Shipping Point. 5.2 ACCEPTANCE OR REJECTION OF PRODUCTS. GOA will inspect and either accept or Reject Products within [**] following its receipt at the Shipping Point. All Products which are not Rejected within such [**] period shall be deemed accepted by GOA. In the case of any Rejection, GOA shall advise SWD with specificity the reasons for such Rejection and any Rejected Products shall be returned promptly to SWD's facilities at SWD's expense. Such Rejected Products shall be replaced by SWD within [**] of receipt by SWD of such Rejected Projects. GOA's right to inspect and test Products shall not relieve SWD from its testing inspection, warranty and quality control obligations. 5.3 DELIVERY CHANGE REQUEST. Changes to Product delivery dates which are not contemplated in section 6.4 may only be made by GOA's authorized purchasing representatives and must be agreed to by SWD. If accepted, written confirmation of such changes will be sent by SWD to GOA within [**] of receiving a change request. 5.4 LATE DELIVERY. Subject to section 6.4, SWD shall deliver the quantity of Product identified in each Purchase Order by the delivery date specified in the Purchase Order, or as agreed by the parties. SWD shall use all reasonable commercial efforts to provide GOA at least [**] notice if any delivery will not arrive by the specified delivery date. Whether or not GOA has been notified of SWD's inability to meet a specified delivery date, should SWD fail to deliver Products within [**] of the specified delivery date, including any rescheduled date accepted by GOA as provided above, except to the extent such failure is due to GOA's breach of this Agreement or a Force Majeure event, GOA may, in addition to any other remedies available to it under this Agreement or by law, rescind the portion of the Purchase Order relating to such delayed Products, upon written notice to SWD. -7- 8 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 5.5 SHIPPING INSTRUCTIONS. SWD shall properly pack the Products for protection against damage or deterioration that may occur during normal and proper shipment, handling or storage. In the event that GOA specifies that SWD use a method of shipping other than its regular method, SWD will comply with the request and GOA will reimburse SWD for any costs incurred above the costs for the normal method of shipping, 6. FORECASTS AND ORDERING 6.1 ROLLING FORECASTS. Except to the extent provided in Schedule 1, GOA shall provide to SWD, on a monthly basis, a rolling, good-faith, [**] written sales forecast of expected purchases of all types of Products, in order to assist SWD in production planning. Each forecast shall be updated and delivered to SWD, in writing, on the first day of each month (a "Forecast Date"). In the event GOA fails to furnish a forecast within[**] after any Forecast Date, the then current forecast shall apply until changed at a subsequent Forecast Date. The first [**] of each forecast shall be binding on GOA, subject only to permitted rescheduling of delivery dates and/or increases or decreases in scheduled order quantity under section 6.4, and GOA shall submit (and failing which it shall be deemed to have submitted) a Purchase Order for all Products covered by such [**] period. 6.2 ORDERING. SWD shall confirm receipt of each Purchase Order in writing within [**]of receipt thereof. Such confirmation shall not be deemed acceptance of the Purchase Order (acceptance is governed by section 6.3 hereof). Each Purchase Order shall reference this Agreement and state the part number, Product description, quantity of Products ordered, GOA's desired delivery date, method of shipment, unit price for each Product ordered and total purchase price for the Purchase Order. 6.3 ACCEPTANCE OF PURCHASE ORDER. When a Purchase Order issued by GOA is in accordance with this Agreement placed at the appropriate lead time of [**] and for a quantity of Products ordered for delivery during that [**] period which is the same as the number of units of Products forecasted for that [**] period, SWD shall be obligated to accept (and shall be deemed to have accepted) each such Purchase Order. For Purchase Orders placed at a lead time of between [**] and for a quantity of Products ordered for delivery: (i) during such [**] period which is plus or minus [**]% of the number of units forecasted for delivery during that period; and (ii) during the first [**] thereof which is the same as the number of units of Products forecasted for delivery during that period, SWD shall be obligated to accept (and shall be deemed to have accepted) each such Purchase Order. For Purchase Orders placed at a time other than as previously described and/or for quantities of Products which are outside the previously described forecasted quantities, SWD may either accept or reject such Purchase Orders within five Business Days following receipt of such a Purchase Order. If, within five Business Days after SWD fails to respond to a such a Purchase Order and GOA notifies SWD of such failure, SWD shall be deemed to have accepted the Purchase Order and shall deliver Products in the time and to the extent that would have been required had SWD responded to this Purchase Order in a timely fashion. A Purchase Order may not vary the terms of this Agreement unless an authorized officer of SWD expressly consents in writing. -8- 9 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 6.4 CHANGES ORDERS AND RESCHEDULING. In the event GOA intends to increase or decrease the quantity of Products scheduled for delivery and/or reschedule delivery dates therefore under any Purchase Order, GOA shall deliver a written change order to SWD identifying the type and quantity of Products to be increased or decreased and/or the rescheduled delivery date. GOA shall be entitled to increase or decrease the quantity of Products scheduled for delivery and/or reschedule delivery dates based upon the number of days advance notice given by GOA to SWD as indicated in Schedule I with respect to the Purchase Orders placed under sections 3.2, 3.3 and 3.4 and otherwise as follows:
UNITS SCHEDULED FOR DELIVERY WITHIN CHANGE ALLOWED* [**] days [**] [**] days [**]% [**] days [**]% *excludes rescheduled delivery quantities
7. CHANGES TO PRODUCT 7.1 SUBSTITUTIONS. SWD may, from time to time and without notice to GOA, make substitutions and modifications to the Products, provided such substitutions and modifications will not materially affect the form, fit, functions, features or performance of the Products. 7.2 UPGRADES TO PRODUCT. To the extent practicable, SWD will notify GOA in advance of any Upgrades. SWD will provide to GOA, at no charge, all Upgrades as soon as they become available. GOA may require SWD to provide Upgrades to any of its existing inventory at GOA's expense. Notwithstanding the foregoing, if SWD adds new features, characteristics or functions to the Product which are not Upgrades, SWD shall offer the changes to GOA on such terms as the parties may agree. 7.3 GOA INITIATED NEW FEATURES. If GOA determines that a new feature or modification to a Product would be desirable, SVID will use reasonable commercial efforts to incorporate the change. If SWD indicates that it may incorporate the change, SWD and GOA will negotiate in good faith to determine the pricing adjustment and completion and delivery schedule relating to the new feature and modification. SVM will incorporate any changes agreed upon between SWD and GOA as soon as is reasonably practicable. 7.4 CHANGES TO PRODUCT. SWD will notify GOA of any modifications or additions it intends to make to the Products that will materially affect the form, functions, features or performance of the Products, not less then [**] in advance of such implementation. If GOA accepts such changes then it shall, after the implementation by SWD of such changes, purchase Products so revised. If GOA declines to accept such changes, SWD shall, to the extent reasonably commercially practicable, provide GOA with a last chance buy of the old Product. -9- 10 8. CONFIDENTIAL INFORMATION 8.1 PERMITTED USE. Confidential Information of each party will be used by the other party solely for the purposes permitted by this Agreement. All Confidential Information will be received and held in confidence by the receiving party, subject to the provisions of this Agreement. Each party acknowledges that it will not obtain any rights of any sort in or to the Confidential Information of the other party as a result of such disclosure and that any such rights must be the subject of separate written agreement(s). Either party may disclose the general nature, but not the specified financial terms, of this Agreement only with the prior written consent of the other party. 8.2 NON-DISCLOSURE. Each party shall use efforts fully commensurate with those employed by the party for the protection of its own Confidential Information of a similar nature, but in any event no less than a reasonable degree of care, to protect the Confidential Information of the other party. The parties will not disclose Confidential Information to anyone except employees and those agents, professional advisors, contractors and Affiliates with a need to know in connection with the purposes under section 8.1 and who are under confidentiality obligations with respect to such Confidential Information. 8.3 REQUIRED DISCLOSURE. Nothing herein shall prevent a receiving party from disclosing all or part of the Confidential Information as necessary pursuant to the lawful requirement of a governmental agency or when disclosure is required by operation of law; provided that prior to any such disclosure, the receiving party shall use reasonable efforts to: (a) promptly notify the disclosing party in writing of such requirement to disclose; and (b) cooperate fully with the disclosing party in protecting against any such disclosure or obtaining a protective order. 9. OTHER PROVISIONS 9.1 APPOINTMENT AS RESELLER. SWD hereby appoints GOA as a non-exclusive reseller of the Springboard Products for the purpose of resale to the general public in the United States. The aforementioned territory may be expanded upon mutual agreement of the parties. 9.2 NON-EXCLUSIVE ARRANGEMENT. Neither party shall be precluded from discussing, negotiating and/or entering into arrangements with third parties regarding developing, manufacturing and/or selling products which are similar to or competitive with the Products provided under this Agreement. 9.3 SCOPE AND LIMITATION OF AUTHORITY. Each party shall act solely as an independent organization and shall have no power or authority to act for, bind, or commit the other party. 9.4 QUALITY ASSURANCE. During the currency of this Agreement, at any time upon reasonable notice and during normal business hours, SWD agrees to permit GOA to review and examine any of SWD's design, development and production processes relating to the Products provided under this Agreement. -10- 11 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 9.5 [**] PRODUCTS. The parties to this Agreement wish to record their intention to work together and cooperate in good faith [**] with the GOA product line. 9.6 TECHNICAL SUPPORT. Technical Support for the Products purchased by GOA under this Agreement will be managed via a three-tier Technical Support infrastructure and process as follows: LEVEL I TECHNICAL SUPPORT GOA will provide Level I Technical Support to their direct and indirect customers for all operating systems and environments supported by SWD's products. Level I Support is defined as calls* originating from GOA's customers, resellers or distributors regarding the Products, GOA Service, Wireless Service Providers, and GOA Products including, but not limited to, pre and post-sale inquiries concerning the basic operation of the hardware and software, functionality, interoperability and capabilities of those products and services. For calls regarding the Products, GOA will make every attempt to answer customer questions and resolve issues using available tools, documentation, test equipment and other materials used to support the Products. If the customer question I issue regarding the products cannot be resolved by GOA Level I support personnel to the customers' satisfaction, the issue will be forwarded to GOA Level II Technical Support for further investigation and resolution. *Calls include phone calls, e-mail, web-based inquiries, faxes and letters. LEVEL II TECHNICAL SUPPORT Level II Technical Support will be provided by GOA support staff directly to GOA Level I Support personnel to assist in the resolution of open customer issues that have not been resolved to the satisfaction of GOA customers during a Level I Support call. GOA Level II issues that are unresolved may be escalated to SWD Technical Support through designated GOA Level II support personnel. SWD will be available to handle GOA escalation requests during normal hours of operation (Weekdays 6:00 AM to 5.00 PM PST). SWD Technical Support will work directly with GOA Level II support staff to resolve issues and answer questions; this may require GOA support staff to gather additional information and provide system information or test results back to SWD support staff to aid in the definition and resolution of the problem. It will be GOA support staff's responsibility to communicate directly with the end-user customer. LEVEL III TECHNICAL SUPPORT (ESCALATION) Level III Technical Support will be provided by SWD support and system engineering staff to resolve issues that cannot be satisfactorily resolved by Level I and Level II Support personnel. -11- 12 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. TECHNICAL SUPPORT TRAINING Technical Support training and documentation for the Products will be initially provided to GOA Level I and Level II Support staff by SWD. GOA support staff will receive training on the general use, functionality, operation and compatibility of the Products. It will be the duty of the GOA to provide Level I staff with ongoing training. SWD will provide ongoing Level II training. In addition, all support related documentation, training materials, notes, FAQ`s, and web based support materials will be made available to GOA for their use in supporting these Products. The GOA will join TSANET to assist in resolving multivendor issues. 9.7 FREEDOM OF ACTION. This Agreement shall not be construed to prohibit or restrict either party from, without breach of the party's obligations hereunder, developing, making, having made, using, leasing, licensing, buying, selling or otherwise disposing of or dealing with any products or services whatsoever, now or in the future. 10. PRODUCT WARRANTY 10.1 WARRANTY. For a period of one year from the date of delivery of Products by GOA to an end user customer, but in any event for no longer than [**] from the date of delivery of Products to GOA, SWD warrants that: (a) title to all Product shall be free and clear of all liens, encumbrances, security interests or other claims; (b) each Product shall be of good quality and be free from defects in materials, workmanship and manufacture under normal use and service; (c) all materials, parts, components and other items incorporated in each Product will be new; and (d) each Product shall be compliant with, and perform in accordance with, its Specifications. All Products sold to GOA under this Agreement shall be FCC certified as described in each Product's Specifications. 10.2 WARRANTY RETURNS. GOA shall return defective Product, transportation charges prepaid by GOA, to SWD at its designated depot in the continental United States with SWD's Return Material Authorization Number (RMA) and completed problem sheet. SWD will, at its option, repair, replace or otherwise correct any defective Product at SWD's sole expense, provided however, that in no event shall SWD take longer than [**] from its receipt of such defective Product to perform such repair or replacement. SWD will pay all shipping and other costs incidental to the return of repaired or replacement Product to GOA or GOA's customer. To the extent SWD determines the Product is not defective, GOA or GOA's customer will pay to return -12- 13 the Product to GOA or GOA's customer as applicable. Any Product which is replaced or repaired by SWD shall be warranted as provided in section 10.1 for the remainder of the original warranty period. 10.3 NO WARRANTY. SWD's express warranty shall not apply to any Product damaged as a result of any accident, negligence, use in any application for which the Product is not designed or intended under the terms of this Agreement, modifications after the fact including combination with products not specifically authorized by SWD, or by any other causes unrelated to defective workmanship, materials or manufacture. 10.4 OUT OF WARRANTY REPAIRS. SWD agrees to make available to GOA out of warranty repairs in accordance with its programs in effect at the time of purchase of Products. Such services for non-warranty repairs will be provided at SWD's then current time and materials rates and fees. 11. DISCLAIMER OF WARRANTY; LIMITATION 11.1 DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH IN SECTION 10.1, NEITHER SWD NOR ANY OF ITS AFFILIATES MAKES ANY OTHER WARRANTIES, WHETHER EXPRESSED OR IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY PRODUCT. 11.2 LIMITATION OF LIABILITY. EXCEPT FOR CLAIMS RELATING TO SECTION 13.2, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL (INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND BUSINESS INTERRUPTION), INCIDENTAL, INDIRECT, SPECIAL, ECONOMIC, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, WHETHER FOR BREACH OR REPUDIATION OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE OR OTHERWISE, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR AN INTELLECTUAL PROPERTY INDEMNITY OBLIGATION WHICH IS COVERED BY SECTION 12.1, OR A BREACH OF WARRANTY CLAIM WHICH IS COVERED BY SECTION 10.1, THE LIABILITY OF SWD AND ITS AFFILIATES UNDER OR FOR BREACH OF THIS AGREEMENT AND/OR THE SALE OF PRODUCT IS LIMITED TO THE PURCHASE PRICE OF SUCH PRODUCT. 12. INTELLECTUAL PROPERTY INDEMNITY 12.1 INDEMNITY. Except as specifically provided in section 12.2 below, SWD shall, at all times during the currency of this Agreement and thereafter, defend, indemnify and hold harmless GOA, its shareholders, officers, employees, agents, affiliates and customers, from and against any damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of any claim, suit or proceeding brought by a third party asserting that the Products, or any part thereof, infringes or misappropriates any third party US patent, trade secret, copyright, trademark or other proprietary right (collectively, "Intellectual Property Rights"). In the event that such a claim is made, or in SWD's opinion is likely to be made, or the use of the Products is enjoined or, -13- 14 in SWD's opinion is likely to become the subject of an injunction preventing its re-sale or use as contemplated herein, SWD will, at SWD's expense and sole election either: (a) procure for GOA and its customers the right to use such Products; (b) modify such Product so that it becomes non-infringing while giving equivalent functionality and performance such that its use is not enjoined; or (c) if neither of the foregoing options is reasonably available, refund to GOA all amounts paid for the infringing Products, depreciated on a straight-line basis over a three (3) year period. THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY OF SWD AND ITS AFFILIATES FOR INFRINGEMENT AND IS IN LIEU OF ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED OR STATUTORY, IN REGARD THERETO. 12.2 EXCLUSIONS. SWD shall have no liability or obligation to GOA or its customers with respect to any patent, trade secret, copyright, trademark or other proprietary right infringement claim to the extent based upon: (a) use of the Products in an application or environment or on a platform or with devices for which the Product was not designed or contemplated to the extent that such use caused the infringement; (b) modifications, alterations, combinations or enhancements of the Product not created by SWD or with SWD's consent, solely to the extent that such modification, alteration, combination or enhancement caused the infringement; (c) any patent, copyright or trade secret which GOA or any of its Affiliates owns or has elusive interest; (d) any GOA defined feature that SWD incorporates into a Product at GOA's request or (e) failure of GOA or its customer to install any corrections or enhancements made available by SWD at no charge that maintain equivalent or better functionality and performance, solely to the extent that such correction or enhancement would have avoided the infringement claim, SWD's obligations hereunder do not apply to any alleged infringement occurring after GOA has received written notice of such alleged infringement. 13. LICENSE GRANT 13.1 LICENSE GRANT. (a) The Products and their software and related documentation may bear certain tradenames, trademarks, trade devices, logos, codes or other symbols of SWD (the "INDICIA"). GOA will be allowed to use, and is encouraged to use, the Indicia in GOA's publicity related to the Products, provided that: (i) all uses of Indicia by GOA shall be subject to pro-publication or pre-use review and approval by SWD, and (ii) if, in SWD's judgment and prior to any use thereof by GOA, any use of Indicia by GOA is deemed detrimental to the Indicia or SWD's reputation, or is deemed otherwise undesirable, SWD may withdraw such permission without liability as a result thereof. Such use will inure to the benefit of SWD and will not vest in GOA any rights in or to the Indicia. (b) GOA will not conduct business under any of the Indicia or derivatives or variations thereof, and GOA will not directly or indirectly hold itself out as having any relations to SWD or its Affiliates other than as set forth herein. Indicia may be used by GOA only to advertise and promote the Products themselves, and may not be used to identify GOA. Indicia will not be used in GOA's advertising, promotion, or catalogues in a manner that implies SWD's endorsement of products, software (including related documentation), or services -14- 15 not purchased from SWD. GOA will not remove or alter any Indicia applied to the Products or software (including related documentation) without the prior written approval of SWD. 13.2 SOFTWARE LICENSE. Certain items of Products sold to GOA hereunder may contain or be accompanied by Software in executable code form (the "Software") and, except as otherwise expressly provided herein, all references to "Products" in this Agreement shall be deemed to include the accompanying Software, provided that nothing herein shall be construed as the sale of any Software to GOA. Pursuant to a separate license agreement provided by SWD to GOA and attached as an Appendix hereto, SWD will grant to GOA a non-exclusive license to use, in object form only, and sublicense to its end-user customers, the Software solely in the Products for the duration of the useful life of such Products and subject to the terms and conditions of this Agreement. GOA shall not, without the prior written consent of SWD: (a) alter, modify, translate or adapt any Software or create any derivative works based thereon; (b) copy any Software; (c) assign, sublicense or otherwise transfer the Software in whole or in pan, except as permitted herein; (d) use the Software except as specifically contemplated in this Agreement; or (e) disclose the Software to any third party. The entire right, title and interest in the Software shall remain with SWD and GOA shall remove any copyright notices or other legends from the Software or any accompanying documentation. 14. OWNERSHIP OF INTELLECTUAL PROPERTY 14.1 OWNERSHIP BY SWD. Except for licenses otherwise expressly granted under this Agreement, the sale of Products hereunder does not convey to GOA any Intellectual Property Rights in the Products and GOA acknowledges SWD's exclusive rights thereto. Neither the sale of Products or any provision of this Agreement will be construed to grant to GOA, either expressly, by implication or by way of estoppel, any license under any other Intellectual Property Rights of SVM covering or relating to any other product or invention of SWD, or any combination of the Product with any other product of SWD. 15. FORCE MAJEURE 15.1 FORCE MAJEURE. Neither party shall be liable in any respect for its failure to perform any of its obligations hereunder (other than failure to make any payments when due hereunder and other than failure to perform all obligations under Article 2 hereof) during any period in which performance is prevented, interrupted or delayed by fire, flood, war, embargo, riot or the intervention of any government authority, strikes, walkouts or other labor disturbances, an industry-wide lack of components or materials or a shortage or lack of components or materials from a single source supplier to SWD that has claimed an event of force majeure, or delay in transportation beyond the reasonable control of the party experiencing same (each a "Force Majeure"), except that lack of funds or credit shall not constitute a Force Majeure. The party so affected shall, upon giving prompt written notice to the other party of the delay and the cause- therefor, be excused from performance to the extent of the Force Majeure; provided however, that the party so affected shall use reasonable efforts to avoid or remove such causes of non-performance and shall continue performance hereunder with the utmost dispatch whenever such causes are removed. -15- 16 16. TERMINATION 16.1 TERMINATION. Either party may terminate this Agreement and/or any order issued hereunder at any time by providing written notice to the other party in the event that the other party: (a) fails to comply in any substantial way with any material provision of this Agreement or any order issued hereunder and in the case of a breach of which is capable of remedy, fails to remedy same within thirty (30) days of notification of said breach, or (b) becomes insolvent or makes an assignment for the benefit of creditors, or a receiver or similar officer is appointed to take charge of all or a part of a party's assets or institutes any proceedings for liquidation or the winding up of its business, and such condition is not cured within thirty (30) days. There shall be no termination for cause because of a Force Majeure. Termination under this section 16 shall not limit a non-breaching party's additional rights and remedies available to it at law or equity 17. GENERAL 17.1 NOTICES. Any notice given under this Agreement must be in writing and will be effective when delivered personally or deposited in the mail, postage prepaid and addressed to the parties at their respective addresses set forth below, or at any new address subsequently designated in writing by either party to the other and will be deemed received on the third business day after mailing: -16- 17 If to Sierra Wireless Data, Inc. With a copy to: Park 80, Plaza West Sierra Wireless, Inc. Suite 200 13575 Commerce Parkway, Suite 150 Saddle Brook, NJ 07663 USA Richmond, BC, Canada V6V 2LI Attention: President Attention: President If to GOA 401 Hackensack Ave. Hackensack, NJ 07601 Attention: Management, Procurement Department 17.2 PUBLICITY. (a) Upon the later of (i) the execution of this Agreement; or (ii) the receipt by SWD of the Purchase Order for P1-CDPD Modules, the parties will jointly announce their arrangements under this Agreement. (b) Neither party shall originate any publicity, news release or other public announcement relating to this Agreement, its terms or the existence of an arrangement between the parties without the prior written approval of the other party, except as otherwise required by law or as permitted pursuant to this Agreement 17.3 ORGANIZATION, AUTHORIZATION, ETC. Each of SWD and GOA represents and warrants to the other that: (a) it is a corporation duly organized, validly existing and in good standing under the laws of its incorporating jurisdiction and has all requisite corporate power and authority to enter into this Agreement; (b) it is duly authorized by all requisite action to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby, and that the same do not and will not conflict or cause a default with respect to such party's obligations under any other agreement; (c) it has duly executed and delivered this Agreement; and (d) (i) it is authorized to disclose any and all Confidential Information made available by it to the other party pursuant to this Agreement; and (ii) it shall not disclose to the other party any Information that is confidential or proprietary to itself or to a third party unless such information is identified as Confidential Information. 17.4 RELATIONSHIP OF THE PARTIES. Neither party is, and nothing herein or performed hereunder shall be represented or construed as constituting either party as, an agent or representative of the other. Neither party has authority to make any representation, guarantee, warranty commitment or agreement on behalf of the other, to incur any liability or indebtedness on behalf of the other or otherwise to bind the other. -17- 18 17.5 ASSIGNMENT. Neither this Agreement nor any rights or obligations hereunder shall be assigned by SWD or GOA without the prior written consent of the other party hereto, except that either party may assign this Agreement in whole or in part to a successor company in the event of a reorganization or acquisition of all or substantially all of the assets or shares of the party. 17.6 ENUREMENT. This Agreement shall enure to the benefit of and be binding upon each of SWD and GOA and their respective successors (including any successor by reason of amalgamation, merger or other corporate reorganization of either party) and permitted assigns. 17.7 EXPORT. Both parties agree to comply with all export laws and restrictions and regulations of Canada and the United States Department of Commerce or other sovereign agency or authority, and not to export, or allow the export or re-export of any technical data or any direct product thereof in violation of any such restrictions, laws or regulations, or unless and until all required licenses and authorizations are obtained. During the currency of this Agreement, each party agrees to reasonably cooperate with the other party and to otherwise provide reasonable assistance to the other party in exporting the Products as may be requested by the other party from time to time. 17.8 COMPLIANCE WITH LAWS. Each party shall comply with all laws, legislation, rules, regulations, and governmental requirements with respect to the Products, and the performance by the party of its obligations hereunder, of any and all applicable jurisdictions, including without limitation obtaining and maintaining any and all consents, licenses, approvals, registrations, certifications and authorizations required for the installation and use of the Products hereunder and necessary for the performance under this Agreement in such jurisdictions. In the event that this Agreement is required to be registered with any governmental authority, the parties shall mutually cooperate to cause such registration to be made and shall share any expense or tax payable in respect thereof. 17.9 INFORMAL DISPUTE RESOLUTION. Prior to the initiation of litigation, the parties shall first attempt to resolve their dispute on an informal basis in accordance with this section. The party believing itself aggrieved (the "Invoking Party") shall call for management involvement in the dispute negotiation by written notice to the other party. The parties shall use their best efforts to arrange personal meetings and/or telephone conferences as needed between the negotiators for the parties, who shall be senior management executives for each party. If a resolution is not achieved within ninety (90) days, then either party shall have the right to commence litigation proceedings in a trial to the court. Each party agrees to continue performing its obligations under this Agreement while any dispute is being resolved unless and until such obligations are terminated by the termination or expiration of this Agreement. -18- 19 17.10 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without regard for any choice or conflict of laws rule or provision that would result in the application of the substantive law of any other jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. SIERRA WIRELESS DATA, INC. GOAMERICA INC. /s/ Jason Cohenour /s/ Joseph Korb - ----------------------------------- ------------------------------------ Signature Signature Jason Cohenour Joseph Korb - ----------------------------------- ------------------------------------ Name: Name: President - ----------------------------------- ------------------------------------ Title: Title: -19- 20 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. SCHEDULE 1 DELIVERY SCHEDULES P1-CDPD MODULE PURCHASES
- -------------------------------------------------------------------------------- Shipping Month Number of PC Cards - -------------------------------------------------------------------------------- 1 [**] - -------------------------------------------------------------------------------- 2 [**] - -------------------------------------------------------------------------------- 3 [**] - -------------------------------------------------------------------------------- 4 [**] - -------------------------------------------------------------------------------- 5 [**] - -------------------------------------------------------------------------------- 6 [**] - -------------------------------------------------------------------------------- Total: [**] - --------------------------------------------------------------------------------
* Month 1 is [**]. The particular delivery date within each month shall be as advised by SWD to GOA. Rescheduling - with reference to section 6.4, units scheduled for delivery in months 1, 2 and 3 may not be rescheduled. Units scheduled for delivery in months 4, 5 and 6 may be rescheduled plus or minus [**]% of the original amount (i.e. excludes any deferred amount) by a maximum of [**] from its originally scheduled date, on at least [**]prior notice. P2-CDMA 1X MODULE PURCHASES
- -------------------------------------------------------------------------------- Shipping Month Number of PC Cards - -------------------------------------------------------------------------------- 1* [**] - -------------------------------------------------------------------------------- 2 [**] - -------------------------------------------------------------------------------- 3 [**] - -------------------------------------------------------------------------------- 4 [**] - -------------------------------------------------------------------------------- 5 [**] - -------------------------------------------------------------------------------- 6 [**] - -------------------------------------------------------------------------------- 7 [**] - -------------------------------------------------------------------------------- Total: [**] - --------------------------------------------------------------------------------
* Month 1 is [**]. If GOA notifies SWD under section 2.2 with a shorter lead time than that contemplated therein, this delivery schedule shall delay, day-for-day. The particular delivery date within each such month shall be as advised by SWD to GOA. Rescheduling - same as above for PI-CDPD Module, with month 7 being treated the same as months 4, 5 and 6 therein. EX-10.29 10 w46736ex10-29.txt AMENDING AGREEMENT TO SIERRA SUPPLY AGREEMENT 1 EXHIBIT 10.29 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AMENDING AGREEMENT NO. 1 TO THE SUPPLY AGREEMENT DATED AS OF NOVEMBER 28, 2000 BETWEEN SIERRA WIRELESS DATA, INC. AND GOAMERICA, INC. This Amending Agreement is made as of December 29, 2000, by and between Sierra Wireless Data, Inc. ("SWD"), a Delaware Corporation and GoAmerica, Inc. ("GOA"), a Delaware Corporation. WHEREAS, SWD and GOA entered into a Supply Agreement dated as of November 28, 2000 and it has been determined that it is in the best interests of the parties to such agreement to amend the same in accordance with the terms and conditions herein. NOW THEREFORE, in consideration of the mutual promises set forth herein and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged) the parties hereby agree as follows: 1. Confirmation of Supply Agreement. Other than as expressly amended by the terms of this Amending Agreement, the Supply Agreement is hereby confirmed and remains in full force and effect in accordance of its terms. 2. Interpretation/General. The interpretation provisions set out in sections 1.1 to 1.7 inclusive of the supply Agreement and the general provisions set out in sections 17.1 to 17.10 inclusive of the Supply Agreement shall be incorporated by reference into this Amending Agreement. 3. Amendments. The Supply Agreement is amended as follows (with all section references being to sections in the Supply Agreement): (a) The definition of Products in section 1.1(n) is deleted and replaced with the following: "(n) "Products" means the Springboard Products, the PC Cards and the Sierra Sled for Sony Clie (the first release of Boa) described in Section 3.7;" 4. Additions. The following provisions are added to the Supply Agreement: 2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (a) "3.7. PURCHASES OF SIERRA SLED FOR SONY CLIE. In addition to the GOA commitments described in sections 3.2 to 3.4 inclusive, GOA hereby agrees to purchase and will issue a purchase order for, and SWD agrees to sell to GOA, [**] units of the Sierra Sled for Sony Clie (the first release of Boa operable on the CDPD or Ricochet networks, at a per unit price of US$[**] FOB Shipping Point, on a firm and non-cancelable basis. Such units shall be co-branded, and shall carry the GOA trademark name and may carry such other GOA logo as is expressly agreed to by SWD, in its sole discretion, with the exception that the SWD PC Card Products in the Sierra Sled for Sony Clie will be SWD branded only. The GOA indemnity set out in section 2.3 shall apply, mutatis mutandis, to the use of such trademarks as described in this section. The CD provided with the AirCard [**] of the CDPD version will contain drivers for the notebook version of the AirCard [**]. The [**] units will be delivered to GOA (subject only to such rescheduling as may be permitted by SWD) as follows: o [**] CDPD pre-production units by [**]. o [**] CDPD production units during [**]. o [**] CDPD production units during [**]. o [**] production units during each month beginning [**] and ending [**]. o [**] production units during [**]. GOA acknowledges and agrees that for the aforementioned [**] unit commitment, a minimum of [**] units will be purchased for intended use on CDPD networks with the balance of the unit commitment being purchased for intended use on either CDPD or Ricochet Networks. If GOA desires to purchase the Ricochet version of the Product, the provisions of section 6 of the Supply Agreement shall be amended to require at least [**] lead time prior to the initial delivery to GOA of such Products. Notwithstanding the foregoing, in no event shall the Ricochet version of the Product be available for delivery prior to [**] following the commercial availability of the CDPD version of the Product. Notwithstanding section 4.1, SWD agrees that GOA may make payment of the per unit purchase price of US$[**], in installments, as follows: $[**] together with all other invoiced amounts arising in connection with the sale of the unit within [**] of the date of invoice; $[**] within [**] of the date of invoice; $[**] within [**] of the date of invoice; and $[**] within [**]of the date of invoice." 2 3 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. (b) "3.9 MARKET DEVELOPMENT FUNDS. SWD shall reimburse GOA for up to US$[**] of market development expenses incurred by GOA in connection with product promotion and the commercial branch of the Sierra Sled for Sony Clie, in such manner as shall be agreed to by the parties. For all such expenses for which GOA intends to seek reimbursement, GOA must obtain the written approval of SWD, prior to GOA incurring the market development expenses and GOA agrees to feature prominently the name "Sierra Wireless" and the Sierra Wireless logo in its television, print and radio advertising campaigns, where practicable, and mutually agreed upon." (c) "3.16 EXCLUSIVITY. For the period of [**] following the initial commercial shipment of the Sierra Sled for Sony Clie, described in Section 3.7, to GOA (the "Exclusivity Period"), GOA agrees that SWD will be the exclusive supplier to GOA of CDPD and Ricochet sled products for all versions of the Sony Clie that operate with the first release of Boa. During the Exclusivity Period, SWD agrees that the version of the Sierra Sled for Sony Clie, described in Section 3.7, shipped to GOA, will be made available exclusively to GOA and to no other customer for use in the United States (other than affiliates of SWD who are not competitors of GOA), provided that GOA is the exclusive supplier to Sony, and its designated distributors and resellers, of CDPD and Ricochet Sled products and/or airtime services for all versions of Sony Clie. The aforementioned exclusivity provisions will be extended from [**], provided GOA has accepted delivery of at least [**] of such units prior to [**], and has placed firm, non-cancelable purchase orders, within the standard lead times, for delivery of [**] of such units in each month during such [**] period. 5. COUNTERPARTS. This Amending Agreement may be signed in any number of counterparts and each of such counterparts shall constitute an original document and all such counterparts, taken together, shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Amending Agreement as of the date year first above written. SIERRA WIRELESS DATA, INC. GOAMERICA, INC. Per: /s/ Jason Cohenour Per: /s/ Joseph Korb ---------------------------------- -------------------------------- Authorized Signatory Authorized Signatory 3 EX-10.30 11 w46736ex10-30.txt SERVICE AGREEMENT FOR NETWORK SOLUTIONS COMPANY 1 EXHIBIT 10.30 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. SERVICE AGREEMENT This agreement (the "Agreement") is made as of October 1, 2000 ("Effective Date"), by and between GOAMERICA COMMUNICATIONS CORPORATION, a Delaware corporation ("GoAmerica"), and the Personal Network Solutions Company division of SONY ELECTRONICS INC., a Delaware corporation ("Sony"). RECITALS WHEREAS, Sony and GoAmerica desire to enter, into business relationship in which GoAmerica will support the creation, marketing and operation of a Sony-branded wireless service for use with handheld and notebook computer mobile devices in the United States, as well as provisioning and distribution of related wireless modem hardware; NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and obligations hereinafter set forth, the parties hereto agree as follows: 1. DEFINITIONS In addition to the terms defined in the introductory paragraphs and elsewhere in this Agreement, as used herein, the following terms (and their respective plurals) shall have the meanings given to them: 1.1 "Affiliate" when used in reference to any person or entity, shall mean any person or entity that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the entity in question. For purposes of this definition, "control" (including with correlative meaning, the terms "controlled by" and "under common control with"), as used with respect to an entity, means the possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, such power to be evidenced by either ownership of the majority of the outstanding securities (on a fully-diluted basis) of the entity in question or possession of a majority of the voting rights with respect to the outstanding securities of such entity. 1.2 "Application Programming Interface" or "API" means a programming interface containing the ability to access and utilize specific API enabled functions of a given software program. 1 2 1.3 "Beta Launch Date" means the date prior to the Launch Date on which elements of the Sony Service sufficient for Sony to practically test all material functionality of the Sony Service will be first available for Sony access and testing. 1.4 "Client Device" means the combination of a Wireless Modem and the personal computer, digital camera or other device to which it may be connected or of which it is a part (including any Handheld as defined in Section 1.14 below, or any Sony Notebook as defined in Section 1.19), which combination may be used for authorized access to the Sony Service. 1.5 "Connectivity Service" means those wireless network services listed in Exhibit A (as updated from time to time by mutual agreement of the parties) that are provided by GoAmerica as part of the Sony Service, including any land line usage incidental thereto that is provided by GoAmerica at no separate charge as a part of such wireless network services. 1.6 "Content" means any work of authorship within the scope of Section 102 of the United States Copyright Act (or similar successor provision) in a digital format that can be accessed, used by or provided to a User through use of the Sony Service. 1.7 "Feature" means a particular service or application provided by a GoAmerica Provider or a Sony Provider that may be accessed or used through the Sony Service, such as a stock trading or wireless banking application. 1.8 "Function" means an operation or capability of the Sony Service defined in software which resides on Client Devices or the GoAmerica Facilities. 1.9 "GoAmerica Content" means Content or Features supplied by GoAmerica that Users may receive, access or use as part of the Sony Service. 1.10 "GoAmerica Provider" means a third-party publisher, distributor or application service provider who has entered into a written agreement with GoAmerica that authorizes GoAmerica to enable such third party's Content or Features to be accessed or used by Users through the Sony Service. 1.11 "GoAmerica Facilities" means the servers operated by or for GoAmerica to provide the Sony Service. 1.12 "GoAmerica Service" means GoAmerica's own basic branded wireless and internet access, personalization and portal service, excluding services or features for which there is a separate additional charge to end users. The current base feature set of the GoAmerica Service is set forth on Exhibit D attached hereto. 2 3 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.13 "GoAmerica Technology" means technology used or provided by GoAmerica to support the Sony Service, including all software tools, hardware designs, algorithms, software (in source and object forms), architecture, and documentation (both printed and electronic), network designs, know-how, trade secrets and any related Intellectual Property Rights throughout the world (whether owned by GoAmerica or licensed to GoAmerica from a third party) and also including any derivatives, inventions, improvements, discoveries, enhancements or extensions of GoAmerica Technology made, conceived, reduced to practice, or developed during the term of this Agreement by GoAmerica. 1.14 "Handheld" means handheld personal digital assistant products marketed by Sony in the Territory during the Term. 1.15 "Integration Technologies" means the GoAmerica integration technologies provided by GoAmerica for Sony and Sony Group entities to link and integrate Sony and Sony Group hardware and online properties to the Sony Service including all API technologies and smart agent technologies, as further described in Exhibit B attached hereto. 1.16 "Intellectual Property" or "IP" means any patents, patent rights, trademarks, service marks, registered designs, applications for any of the foregoing, copyright, know-how, trade secrets, unregistered design rights, confidential information, moral rights and any other similar protected rights in any country and "Intellectual Property Right" has a corresponding meaning. 1.17 "Jointly Developed Technology" means any technology that (i) is developed jointly by both parties during the Term; and (ii) is based on or derived from the collaboration that occurs in furtherance of this Agreement; provided, however, that such Jointly Developed Technology remains subject to the rights of either party and any third party in any underlying Intellectual Property. 1.18 "Launch Date" means the date on which the Sony Service is publicly announced and first becomes fully operational for public use and a minimum of 100 Wireless Modems are available for end-user distribution, presently anticipated to be [**]. 1.19 "Sony Notebook" means any model of Sony branded laptop computers which Sony, after reasonable technical investigation with the cooperation and support of GoAmerica, advises GoAmerica in writing are compatible with the Wireless Modems and the Sony Service. 1.20 "Portal Service" means the server-based content and functionality portal operated by GoAmerica to perform certain addressing, switching and routing functions of the Sony Service, including personalization features. 1.21 "Sony Content" means Content or Features supplied by Sony that may be accessed or used as part of the Sony Service. 3 4 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.22 "Sony Provider" means a member of the Sony Group or third-party application service provider or publisher or distributor of Content contracted by Sony who has authorized GoAmerica or Sony to enable such third party's Content or Features to be accessed, used by or provided to Users through the Sony Service. 1.23 "Sony Functionality" means wireless Internet service Features or Functions licensed to or developed by or for the Sony Group and provided to GoAmerica solely for GoAmerica implementation or integration with the GoAmerica Technology to constitute the Sony Service. 1.24 "Sony Group" means Sony Electronics Inc. and all of its Affiliates world-wide. 1.25 "Sony Home Deck" means the first screen of the Sony User Interface that appears to a User on a Client Device upon connection to the Sony Service. 1.26 "Sony Service" means the wireless internet access, personalization page and content portal service provided by GoAmerica to Users as an integrated service offering on behalf of Sony as provided in the Service Description (defined in Section 2.1 below) which incorporates the Sony Functionality and Sony Content and the GoAmerica Technology and GoAmerica Content, Connectivity Service (as defined in Section 1.5) and Portal Service (as defined in Section 1.20). 1.27 "Sony Service Website" means one or more sites on the World Wide Web identified by the Universal Resource Locator ("URL") as Sony may from time to time determine) that are hosted and operated by GoAmerica as part of the Sony Service to provide a site through which Users may activate or personalize service, order Wireless Modems, make service inquiries and perform similar tasks. 1.28 "Sony User Interface" shall have the meaning stated in Section 2.6. 1.29 "Subscription" means the activation on the GoAmerica Facilities, pursuant to a service agreement between GoAmerica and a User, of an individual Client Device to enable use of the Sony Service, provided that (i) such Client Device remains activated for three (3) consecutive months after initial activation ("Start Up Period") and (ii) that GoAmerica is not making such activation to enable use of the Sony Service [**]. If a Client Device is activated as a replacement for a previously activated Client Device, then the initial activation and the replacement shall be counted as a single Subscription and the duration of each activation shall be added together to determine when the Start Up Period has been met. 1.30 "Term" shall have the meaning stated in Section 12.1. 1.31 "Territory" means the United States and all territories and possessions, and any additional countries or geographic areas that the parties may from time to time agree in writing to include in such defined term. 4 5 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1.32 "User Content" means all Content provided to the Sony Service by Users, or used or accessed by Users through the Sony Service, other than Sony Content and GoAmerica Content. 1.33 "User Data" means the compilation of data collected by the parties from Users or prospective Users of the Sony Service. Such data may include, without limitation, the names, addresses, telephone and fax numbers, e-mail addresses and credit information and impression/use/commerce data related to the extent related to specific a User or prospective User. "User Data" does not include general statistical information collected by either party concerning the use of the Sony Service, provided such general statistical information cannot be searched or analyzed to identify particular information concerning a specific User or prospective User. 1.34 "User" means a person or entity who uses the Sony Service. 1.35 "Wireless Modem" means the wireless modems to be developed, provisioned, distributed and supported by GoAmerica pursuant to this Agreement. 2. DEVELOPMENT/OPERATION OF THE SONY SERVICE 2.1 Service Description. GoAmerica and Sony shall cooperate to develop, market and provide the Sony Service in the Territory. Exhibit C attached hereto ("Service Description") describes the Features, Content and Functions that will initially be included in the Sony Service. Sony, at any time in its sole discretion, may propose modifications to the Sony Service to add, delete or modify Features, Functions, Content and supported products. Sony shall propose such modifications by providing GoAmerica a revised Service Description. Subject to GoAmerica's obligations under Section 2.10 below, GoAmerica may reject such proposed revision in whole or in part by giving Sony written notice within [**] days, provided that GoAmerica may not reject Sony proposed deletions unless Sony has earlier contractually agreed to support the Feature, Function or Content proposed by Sony to be deleted. GoAmerica shall provide the Sony Service with the same degree of quality and care and to the same performance levels as GoAmerica provides the GoAmerica Service generally to GoAmerica's own users. GoAmerica's implementation of modifications to the Sony Service shall have the same priority as GoAmerica modification of the GoAmerica Service, provided that for quality assurance and technical implementation staging reasons GoAmerica may delay Sony implementation for up to [**] days on a nondiscriminatory basis, so long as there is no competitive impact to the Sony Service. Sony shall not be required to implement or approve any modifications to the Sony Service proposed by GoAmerica. While the Sony Service is initially intended to be marketed to users of Handhelds and Sony Notebooks, if Sony elects to expand the scope of the Sony Service to target users of other Sony and third-party equipment, then Sony and GoAmerica shall mutually agree in writing upon any technical implementation and support issues that either party, in its reasonable judgment, determines must be considered and resolved in order for the Sony Services to accommodate such expansion of the target market. 5 6 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 2.2 Management Team. The parties shall establish a team (the "Management Team") comprised of one (1) individual from each of Sony and GoAmerica. The members of the Management Team will serve as the parties' principal point of contact for matters relating to the performance of this Agreement. All of the members of the Management Team shall participate at least once each month (once each week prior to the Launch Date) in a telephone conference to review the development, implementation and ongoing performance of the Sony Service. 2.3 Pricing. The Sony Service shall be made available for offer by GoAmerica at a price no higher than $[**] for unlimited wireless data access using CDPD Connectivity Services in connection with a Handheld, $[**] using CDPD Connectivity Services in connection with a Sony Notebook, $[**] using CDPD Connectivity Services in connection with a Handheld/Sony Notebook combination, $[**] using Ricochet Connectivity Services in connection with a Handheld or Sony Notebook and $[**] using Ricochet Connectivity Services in connection with a Handheld/Sony Notebook combination in those GoAmerica CDPD and Ricochet coverage areas as detailed on the general GoAmerica web-site. 2.4 Provisioning, Fulfillment and Support. GoAmerica will be responsible for providing Connectivity Services on the networks listed in the Service Description, implementing, hosting, operating and maintaining the Portal Service, providing fulfillment services for Wireless Modems, provisioning of new Users to the Sony Service, and providing customer support. Specific program details are set forth in Exhibit C attached hereto (the "Service Description"). Revisions and updates to the Program Description shall be made in writing as mutually agreed by the parties. 2.5 Manuals and Documentation. At its expense, GoAmerica will develop, author, and maintain user manuals and documentation for the Sony Service including guides, wizards, online and offline documentation and related support scripting (collectively, "Documentation"). The Documentation shall be comparable in scope and content to the user manuals and documentation GoAmerica provides to users of the GoAmerica Service. Each party shall have the right of approval of the Documentation. Sony shall have the right to determine and/or approve the graphic design thereof, including branding and the use of Sony trademarks, as provided in Section 3 of this Agreement. 2.6 Content Development, Sourcing and Integration. Sony will develop and specify to GoAmerica a technically practicable Sony "look and feel" for the Sony Service, including content GUI, menu hierarchy, fonts and logos ("Sony User Interface"). [**], GoAmerica will incorporate the Sony User Interface into the Sony Service. Sony shall have the right, without obligation, to provide its own Features, Functions and Content and to develop content arrangements with Sony Providers, either for access to content, placement agreements, use of logos, advertising agreements and other arrangements which GoAmerica will, [**] incorporate into the Sony Service. Unless otherwise agreed, Sony Content, the Sony User Interface and any Features or Function provided by Sony shall be used exclusively for the Sony Service. The appropriate Sony Group member retains all rights to such features and may at its option elect to allow GoAmerica to offer it throughout GoAmerica's network. 6 7 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 2.7 Connectivity Service. Unless otherwise agreed by Sony in circumstances where Sony procures Connectivity Service directly from wireless carriers, GoAmerica shall be responsible for procuring Connectivity Services from the appropriate wireless carriers in order to provide the Sony Service in those areas of the Territory where such carriers provide coverage. Except with respect to Connectivity Services that Sony procures directly from wireless carriers, GoAmerica shall be solely responsible for all payments to such carriers for access time or other carrier products or services included within the Sony Service. Sony shall cooperate with GoAmerica to ensure that the Sony Service meets any technical requirements or usage policies of such carriers. To the extent its carriers enable GoAmerica to do so, GoAmerica shall manage Connectivity Service provisioning so that GoAmerica will be the only interface to and from a customer and a customer will not need to interact directly with GoAmerica's wireless carriers to provision service; provided, however, that even in instances where interaction with GoAmerica's wireless carriers to provision service is necessary, GoAmerica shall facilitate coordination with such carriers and assist customers in any issues with such carriers. 2.8 Launch Schedule. The Beta Launch Date is scheduled for [**] and the Launch Date (including supply of at least [**] devices) for [**]. Changes to such schedule shall be made only with Sony's written approval. 2.9 Customer, Sales and Technical Support. Upon the Launch Date, GoAmerica shall provide customer, sales and technical support ("Support Service") for the Sony Service twenty-four (24) hours daily and seven (7) days per week. Support Service shall be accessible to Users via toll-free telephone, and all incoming support requests shall generally be received by a live operator and not by an automated answering service. In order to remain consistent with the terms of Section 3.1 regarding branding of the Sony Service, Support Service operators shall identify the Support Service to all callers as determined by Sony, using support service scripts similar to those used by Sony itself or otherwise approved by Sony. In addition, all written or electronic communications with Users concerning the Support Service shall be branded or identified as determined by Sony pursuant to Section 3.1. Sony will provide to GoAmerica information required for GoAmerica to effect the "soft hand-off" to Sony, Sony Affiliates or third parties designated by Sony of inquiries made to the Support Service that relate to issues other than the Sony Service and the Wireless Modems, including but not limited to hardware and software issues concerning Sony products such as Handhelds or Sony Notebooks and third-party software not supplied by GoAmerica. GoAmerica will provide to Sony information required for Sony, Sony Affiliates or third-party suppliers to Sony to effect the "soft hand-off"of inquiries received that relate to the Sony Service or the Wireless Modems. Sony shall have the right to approve all GoAmerica call scripts and establish reasonable minimum standards for GoAmerica's representative training. GoAmerica shall provide a special toll-free number for Sony's immediate around the clock access to GoAmerica technical support for use in escalation situations and other situations requiring immediate GoAmerica support of Sony. Minimum guidelines for service 7 8 Confidential Materials omitted and field separately with the Securities and Exchange Commission. Asterisks denote omissions. metrics are set forth on Exhibit E attached hereto. GoAmerica shall provide reporting to Sony of service metrics in the form provided in Exhibit E attached hereto on a monthly basis. GoAmerica shall provide training to Sony customer service and sales/marketing personnel at GoAmerica's cost, including required travel to Sony facilities in the Continental United States, sufficient for such personnel to properly represent the Sony Service to Sony's reasonable satisfaction. 2.10 Service Enhancements. GoAmerica shall use commercially reasonable efforts to maintain and enhance the Features, Functions, Content quality, and value of the Sony Service to compete effectively with other similar commercially available wireless services targeted to handheld and notebook category devices. GoAmerica and Sony shall meet regularly to review GoAmerica's product and service development plans and schedules. GoAmerica shall give all commercially reasonable consideration to including GoAmerica's plans for product and service development as a high priority in all enhancements that Sony proposes that would benefit both parties and merit such priority. At Sony's option, subject to the terms, conditions, license restrictions or limitations of any applicable agreements GoAmerica may have with any third party, all of which shall be nondiscriminatory as to Sony, GoAmerica shall include in the Sony Service any additional features and functions of the GoAmerica Service that GoAmerica makes available to users of the GoAmerica Service during the Term. Notwithstanding the above, at Sony's option,[**], GoAmerica shall include in the Sony Service any additional features and functions of the GoAmerica Service marketed by GoAmerica as part of its "basic" or "standard" service. 2.11 Territory. The Sony Service shall be made available only in the Territory, provided, however, that Sony may (i) from time to time conduct demonstrations of the Sony Service outside the Territory at trade shows or other similar events, (ii) make incidental distribution of materials promoting the Sony Service, so long as Sony clearly indicates that the Sony Service is not available outside the Territory. Sony acknowledges that Connectivity Services provided by GoAmerica as part of the Sony Service may not be available for any demonstration Sony desires to conduct outside the Territory and that GoAmerica shall have no obligation to provide or procure Connectivity Services outside the Territory for any purpose. 3. BRANDING AND TRADEMARKS 3.1 Sony Branding. Sony shall determine, in its sole discretion, the Sony Service's branding, logo, trademark and domain name address. 3.2 GoAmerica and Other Branding. GoAmerica's brand, trademark or logo will be presented on the Sony Service as "Towered by GoAmerica" below the fold. Branding on collateral marketing and advertising will be consistent with such presentation. Branding of other third-party technology, content or connectivity providers shall be exclusively controlled by Sony. 8 9 3.3 Control of Branding. All uses of trademarks, logos or other branding on the Sony Service is subject to the direction and control of the Sony Design Center and Sony's Trademark & Brand Identity Committee. 3.4 Sony Trademarks. Sony shall have and retain sole ownership of any and all Sony trademarks, trade names, logos, and service marks used in connection with the Sony Service including the goodwill pertaining thereto. Use by GoAmerica of any Sony trademarks or service marks must specifically be approved by Sony in writing prior to use by GoAmerica. GoAmerica shall not use any trademark or trade name of Sony or any word, symbol or design confusingly similar thereto, as part of its corporate name, or as part of the name of any product of GoAmerica. GoAmerica shall not remove or alter any of the Sony trademarks or service marks, including proprietary or copyright notices, on the Sony GUI, the Sony Services, or related materials without Sony's prior written consent. To protect and preserve the goodwill and image of Sony, GoAmerica shall (1) conduct business in a manner that reflects favorably at all times on the products, services, and reputation of Sony; (2) avoid deceptive, misleading, or unethical practices that are or might be detrimental to Sony or the products for the public, including any disparagement of Sony or the Sony Services; (3) make no false or misleading representations with regard to Sony; (4) refrain from publishing or employing any misleading or deceptive advertising materials; and (5) refrain, unless permitted by Sony, from making any representations, warranties or guarantees to third parties or to the trade with respect to the specifications, features or capabilities of the Sony Services. 3.5 GoAmerica Trademarks. GoAmerica shall have and retain sole ownership of any and all GoAmerica trademarks, trade names, logos, and service marks used in connection with the Sony Service including the goodwill pertaining thereto. Use by Sony of any GoAmerica trademarks or service marks must be specifically approved by GoAmerica in writing prior to use by Sony provided that any use example once approved may be deemed approval for similar uses until such approval is withdrawn. Sony and its Affiliates shall not use any trademark or trade name of GoAmerica or any word, symbol or design confusingly similar thereto, as part of the corporate name of any member of the Sony Group, or as part of the name of any product of Sony. Sony shall not remove or alter any trademark or service marks of GoAmerica, including proprietary or copyright notices, on products or services provided by GoAmerica without GoAmerica's prior written consent, except to the extent that this Agreement provides that such GoAmerica product or service shall be branded by Sony. To protect and preserve the goodwill and image of GoAmerica, Sony shall (1) conduct business in a manner that reflects favorably at all times on the products, services, and reputation of GoAmerica; (2) avoid deceptive, misleading, or unethical practices that are or might be detrimental to GoAmerica, the GoAmerica Services or products, including any disparagement of GoAmerica or the GoAmerica Services; (3) make no false or misleading representations with regard to GoAmerica; and (4) refrain from publishing or employing any misleading or deceptive advertising materials. 9 10 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 4. EXCLUSIVITY; TERRITORIAL EXPANSION 4.1 Exclusivity. During the Term, Sony will not co-brand, co-market or otherwise actively promote any other third party CDPD or Ricochet wireless service intended for primary use with the Handheld other than through engineering support, such as provisioning of electrical or mechanical specifications or verification of compatibility. The parties agree to discuss other network technologies and may choose to expand or amend the Agreement in writing to include such technologies. While this Agreement is in effect, the Sony Service shall be GoAmerica's only service offering targeted to the Handheld, provided that GoAmerica may market the GoAmerica Service to Handheld customers in vertical market segments not served by Sony and in circumstances where GoAmerica has significant inventories only useable with Handhelds after Sony has provided its standard end of life notification to its dealers for Handhelds requiring custom modem/sled designs. 4.2 Territorial Expansion. During the Term, if a Sony Affiliate elects to offer a service similar to the Sony Service in another geographic area outside the United States in which GoAmerica provides a service similar to the GoAmerica Service, then, subject to any terms, conditions, or covenants in any agreement predating the Effective Date GoAmerica may have with a third party that restrict, limit or otherwise affect GoAmerica's right to do so, GoAmerica [**] in such area [**] the terms and conditions of an agreement to provide services similar to the services GoAmerica is providing under this Agreement. In conducting such negotiations, the parties, or their Affiliates, shall, to the extent reasonably possible, make a good faith effort to agree upon terms [**], taking into account all local factors reasonably relevant to such negotiations, including differences in the cost or availability of goods, services and labor and the rules, regulations and laws (including but not limited to telecommunications regulations) in effect in such geographic area that may affect the terms on which such service can be offered. 5. WIRELESS MODEMS 5.1 Development. GoAmerica will manage the development of Wireless Modems for all Handhelds and Sony Notebooks by contracting with third parties for the design and manufacture of Wireless Modems, on such terms and conditions with such third parties as GoAmerica determines in its sole discretion are appropriate for such purpose, provided such terms are consistent with the terms of this Agreement. Sony shall have the right to approve or reject GoAmerica's choice of Wireless Modem manufacturer. Sony shall have the final right, prior to initial production, to approve the technical specifications for each model of Wireless Modem. Sony shall also have the right, prior to initial production, to approve any retail packaging for each model of Wireless Modem. In exercising such rights of approval, Sony shall abide by the reasonable scheduling requirements of GoAmerica and the Wireless Modem manufacturer in order to avoid delay in the procurement of components or production of Wireless Modems. GoAmerica shall be responsible that the manufacturer comply with all applicable laws, rules and regulations 10 11 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. concerning the safety of such devices and the licensing, testing, or type acceptance thereof, including all related record keeping and reporting obligations, and shall fully indemnify Sony with respect to such compliance and claims related thereto. GoAmerica shall provide Sony with all documentation and records reasonably related to such compliance and reporting, if reasonably requested by Sony. The industrial design of Wireless Modems shall be exclusive to Sony if such design is based upon drawings and specifications provided by Sony. Notwithstanding the above, Sony shall [**] with or [**] support the Sony Service, in which case GoAmerica shall [**] by Sony, subject to Sony's [**] arrangements. 5.2 Sale. GoAmerica will sell such Wireless Modems under the GoAmerica brand bundled with the Sony Service through GoAmerica's direct sales channels, such as its website and toll-free telephone number. GoAmerica shall also use commercially reasonable efforts to distribute and sell Wireless Modems through GoAmerica's indirect sales channels, subject to the terms, conditions and limitations of any applicable agreements with third parties. Upon Sony's request, Sony may sell the Wireless Modems directly via Sony websites or other Sony distribution channels, in which case GoAmerica shall provide the Sony reseller on a non-discriminatory basis any incentives provided to other similar distribution channels, appropriately taking into account any subsidies/payments GoAmerica is already paying Sony so as to allow Sony to offer a competitive end user value taking into consideration prevailing industry margins. 5.3 Costs and Subsidy. Sony agrees to consult and cooperate with GoAmerica at Sony's. own expense in the integration of the Wireless Modems with the Handhelds and Sony Notebooks by providing relevant and reasonably necessary and/or useful technical information including but not limited to mechanical CAD reference resources, i/o interface descriptions and direction regarding product cosmetic appearance and physical fit with the Handheld and the Sony Notebooks. GoAmerica will bear all costs associated with the design, development, production and sale (other than Sony's costs for such consultation and cooperation and Sony's costs for sales by Sony) of the Wireless Modems. GoAmerica shall offer prospective users a rebate against the retail price of each Wireless Modem to reduce the retail cost of each CDPD Wireless Modem to not more than $[**] and each Ricochet Wireless Modem to not more than $[**] with a twelve (12) month service contract; provided that the total end user cost for each Wireless Modem shall be [**] marketed [**] by GoAmerica in connection with the GoAmerica Service, taking into account any subsidies/payments GoAmerica is already paying Sony so as to allow Sony to offer a competitive end user value taking into consideration prevailing industry margins. 5.4 Warranty and Service of Modems. As between the parties, GoAmerica shall be responsible for the warranty and service of the Wireless Modems. Each Wireless Modem shall be offered for sale with a limited warranty on commercially reasonable terms valid for not less than one (1) year from the date of purchase ("Limited Warranty"). The 11 12 specific terms of the Limited Warranty shall be generally consistent with prevailing practice for similar products in the wireless data services industry, but in no event less favorable to the purchaser than the limited warranty terms GoAmerica offers its own subscribers for similar products. GoAmerica shall itself or through third parties that it has made arrangements with provide all in warranty and out of warranty repair/replace service for the Wireless Modems at a standard of performance at least equal to GoAmerica's own arrangements for wireless modems provided in conjunction with the GoAmerica Service. GoAmerica shall indemnify Sony against any and all claims arising from the failure to provide a Limited Warranty as required by this Section 5.4, and for all claims for the breach thereof. 12 13 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 6. MARKETING OF SERVICE 6.1 General. The parties agree to cooperate in the marketing of the Sony Service. Without limiting the generality of the forgoing, (a) Sony agrees to advertise sales promotions relating to the Sony Service to Sony VAI0 customers via email consistent with general Sony email policies, (b) Sony may, subject to production schedules, place marketing literature designed and produced by GoAmerica and approved by Sony in Handheld boxes and (c) Sony agrees to place advertising banners designed by GoAmerica and approved by Sony on a special Sony "microsite" promoting the Sony Service and directing customers to a GoAmerica operated website where the Sony Service may be ordered. After consulting in good faith with GoAmerica, Sony shall approve and control all marketing communications including billing communications. 6.2 GoAmerica Provision of Marketing Funds. GoAmerica shall provide up to [**] dollars ($[**]) of cooperative marketing funds during the Term towards the marketing of the Handheld with the Sony Service. Sony must expend [**] dollars ($[**]) on advertising or support of dealer advertising mentioning the Sony Service to accrue [**] dollar ($[**]) of funds from GoAmerica, subject to the [**] dollar ($[**]) GoAmerica cap. GoAmerica shall pay Sony within [**] days of Sony's submission of evidence of advertising spend. Sony shall follow written guidelines set forth in Exhibit G attached hereto in such GoAmerica funded advertisements and obtain GoAmerica's specific written approval, which shall not be unreasonably withheld. Failure by GoAmerica to disapprove an advertisement within [**] business days of its written receipt shall be deemed approval. 6.3 Marketing Compliance/End User Terms. GoAmerica shall be responsible for all legally required consumer disclosure compliance regarding Sony Service functionality, business terms, limitations of coverage and features. Unless otherwise agreed in writing by GoAmerica, the Sony Service shall be offered, sold and provided to Users subject to GoAmerica's then current standard terms and conditions of service ("User Agreement"). GoAmerica shall have no obligation to provision the Sony Service for any prospective User who has not accepted such terms and conditions by written or electronic signature or such other form of agreement as GoAmerica in its sole discretion may deem appropriate. Not less than [**]) days before making any material revisions to the User Agreement applicable to the Sony Service, GoAmerica shall notify Sony of its intention to do so and the date such revisions will be adopted ("Adoption Date") and shall provide Sony with a copy of the proposed revisions. If Sony determines that the proposed revisions are substantially inconsistent with the terms and conditions on which other similar wireless data services are offered, and that the adoption of the proposed revisions would have a material adverse affect on the marketability of the Sony Service, then Sony shall notify GoAmerica in writing of such determination prior to the Adoption Date. Upon receipt of such notification, (i) representatives of Sony and GoAmerica, together with legal counsel for each party, shall promptly confer to discuss whether the proposed revisions or mutual alternative revisions, should be adopted, and (ii) GoAmerica shall not adopt the proposed revisions. Sony shall have no right to object to any proposed revisions to the User 13 14 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. Agreement for any reason other than as stated above or unless GoAmerica's legal counsel confirms in writing to Sony that the proposed revisions are required to comply with regulatory or carrier requirements or the unambiguous terms of any agreement with a GoAmerica Provider. Sony's obligation to such proposed revisions shall not affect GoAmerica's right to adopt such proposed revisions for terms and conditions of the GoAmerica Service or any other GoAmerica co-branded service. 6.4 Demonstration Accounts. GoAmerica shall provide to Sony [**] service accounts to be used in the marketing and promotion of the Sony Service as Sony sees fit. Sony is responsible for purchasing the Wireless Modems for these service accounts. Additionally, GoAmerica will provide "demonstration accounts" for authorized Sony retailers of the Handheld [**] to Sony and at GoAmerica's cost to the retailer. Such accounts shall not be deemed "Subscriptions" for purposes of either Sections 7 or 8. 6.5 Letter Agreement Promotion. The parties agree to carry out the promotion that was begun pursuant to the letter agreement between the parties dated December 11, 2000, a copy of which is annexed hereto as Exhibit J (the "Letter Ageement"). Paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 14 of the Letter Agreement are hereby incorporated into and made a part of this Agreement. 7. COMPENSATION AND REVENUE SHARING 7.1 GoAmerica to Retain Revenues. GoAmerica shall have the right to receive and retain all Sony Service revenues from the base Sony Service as described in Exhibit C attached hereto. The parties specifically agree that there is no guarantee that Sony Service revenues will exceed GoAmerica's cost in performing its obligations, or that Sony will continue marketing any particular hardware product mix or any particular quantity of hardware products. Sony shall provide GoAmerica with non-binding forecast numbers as they relate to the said product mix. If Sony knows it will be canceling or changing the Handhelds so as to be incompatible with the Sony Service, it shall inform GoAmerica in writing within [**] days. At a minimum, Sony must offer for sale at least [**]particular model of Handheld that is physically compatible with the Wireless Modems during the Initial Term (as defined in Section 12.1) of the contract. 7.2 One Time Payments to Sony. GoAmerica will pay Sony a one-time sales commission payment ("Activation Fee") for each new Subscription to the Sony Service in the amount provided in Exhibit F attached hereto. 14 15 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 7.3 Ongoing Payments to Sony. GoAmerica will pay Sony a percentage (the "Residual Rate") of the Base Recurring Revenue (as defined immediately below) each month for each Subscription ("Residual Fee"), for as long as that Subscription remains activated on the Sony Service. "Base Recurring Revenue" shall mean all recurring monthly fees actually paid to GoAmerica for use of the Sony Service as described in the Service Description (Exhibit C) and shall not include Additional Revenues as defined in Section 7.4 below. GoAmerica shall only incur the Residual Fee payment obligation after the first [**] of service (the "Start Up Period"), but such payment obligation shall include the [**] retroactive Base Recurring Revenue for such Start Up Period once the Start Up Period requirement has been satisfied. 7.4 Additional Revenues. The parties shall share, on terms set forth in this Section, additional gross revenues received by either party for any changes to the Sony Service made beyond the base service set forth in the Service Description (Exhibit C) , as such Service Description is amended from time to time, including improvements, additional Content, content partners, content revenue sharing arrangements, content placement revenue, banner advertising or other additional services, but excluding GoAmerica non-network professional services revenues from services targeted to business users that are approved by Sony ("Additional Revenue"). GoAmerica shall retain [**] percent ([**]%) of all Additional Revenues derived by GoAmerica from a GoAmerica Provider (other than a GoAmerica Provider whose Content or Features were included in the Sony Service as initially provided on the Effective Date), and shall pay the remaining [**] percent ([**]%) to Sony. Sony shall retain [**] percent ([**]%) of all Additional Revenues derived by Sony from a Sony Provider (other than a Sony Provider whose Content or Features were included in the Sony Service as initially provided on the Effective Date), and shall pay the remaining [**] percent ([**]%) to GoAmerica. Notwithstanding the above, Sony shall retain any revenues obtained from Sony Affiliates. 7.5 Timing of Payments; Report of Payment Calculation. Payments shall be made monthly no later than [**] from the end of each calendar month. For each month, GoAmerica shall pay Sony (i) Residual Fees with respect to all Base Recurring Revenues actually paid to GoAmerica during such month for Subscriptions whose Start Up Period has expired and any Residual Fees retroactively due for Subscriptions whose Start Up Period expired during such month and (ii) Activation Fees with respect to all new Subscriptions whose Start Up Period expires during such month. Additionally, each party shall pay the other any Additional Revenues due, owing and payable. Each party shall provide the other, together with each payment, a report in sufficient detail for the receiving party to confirm satisfaction of payment requirements. 15 16 8. WARRANTS 8.1 In further consideration of Sony's undertakings pursuant to this Agreement, GoAmerica and Sony shall enter into a warrant agreement to be effective January 1 2001, whereby GoAmerica shall grant Sony a warrant to acquire Five Hundred Thousand (500,000) shares of the common stock of GoAmerica at an exercise price of $16.00 per share. Such warrant agreement shall be in the form annexed hereto as Exhibit G. 8.2 In the event Sony elects to exercise its right pursuant to Section 12.1 of this Agreement to extend this Agreement for the First Renewal Term, then promptly after Sony gives notice of such election, in consideration of such election GoAmerica and Sony shall enter into a second warrant agreement to be effective on the first anniversary of the Launch Date whereby GoAmerica shall grant Sony a warrant to acquire Two Hundred Fifty Thousand (250,000) shares of the common stock of GoAmerica at an exercise price equal to the average closing price of such shares for the ten (10) trading day period ending three (3) trading days prior to the date such second warrant agreement becomes effective. In the event that, as of the date such second warrant agreement becomes effective, the total number of Subscriptions is equal to or greater than thirty thousand (30,000), then the number of shares that Sony will have the right to purchase pursuant to such second warrant agreement shall be increased by two hundred fifty thousand (250,000), to a total of five hundred thousand shares (500,000). The second warrant agreement shall be in substantially the same form as Exhibit G attached hereto except for the number of shares that Sony shall have the right to acquire, and the price per share. 8.3 In the event Sony elects to exercise its right pursuant to Section 12.1 of this Agreement to extend this Agreement for the Second Renewal Term, then promptly after Sony gives notice of such election, in consideration of such election GoAmerica and Sony shall enter into a third warrant agreement to be effective on the second anniversary of the Launch Date whereby GoAmerica shall grant Sony a warrant to acquire Two Hundred Fifty Thousand (250,000) shares of the common stock of GoAmerica at an exercise price equal to the average closing price of such shares for the ten (10) trading day period ending three (3) trading days prior to the date such third warrant agreement becomes effective. In the event that, as of the date such third warrant agreement becomes effective, the total number Subscriptions is equal to or greater than one hundred thousand (100,000), then the number of shares that Sony will have the right to purchase pursuant to such third warrant agreement shall be increased by two hundred fifty thousand (250,000), to a total of five hundred thousand shares (500,000). The third warrant agreement shall be in substantially the same form as Exhibit I attached hereto except for the number of shares that Sony shall have the right to acquire, and the price per share. 8.4 Sony shall have standard piggyback registration rights with respect to all shares of common stock of GoAmerica issued upon the exercise of any warrants that are granted pursuant to this Section 8 pursuant to a registration rights agreement in the form of Exhibit J attached hereto. 8.5 For purposes of Sections 8.2 and 8.3 above, the term "Subscription" includes all subscriptions to the GoAmerica Service for which a bounty is or was payable to Sony 16 17 pursuant to the terms of the Letter Agreement between the parties dated December 11, 2000, a copy of which is annexed hereto as Exhibit J. 9. INTELLECTUAL PROPERTY 9.1 License to Sony by GoAmerica. GoAmerica hereby grants to Sony, with a right to sublicense to any and all members of the Sony Group, for use in connection with Sony/Sony Group websites, devices and online services targeted to the Territory, a worldwide non-exclusive, royalty-free license during the Term, and as reasonably needed for customer support thereafter, to the Integration Technologies. 9.2 License to GoAmerica by Sony. Sony hereby grants GoAmerica a worldwide, non-exclusive, royalty-free license during the Term to use, perform, display and copy the Sony Technology, including the Sony User Interface, as reasonably necessary or useful to perform GoAmerica's obligations under this Agreement. Sony hereby grants GoAmerica the worldwide, non-exclusive right and license during the Term to use and copy User Data (1) as reasonably necessary or useful for the purpose of performing GoAmerica's obligations under this Agreement and (2) as GoAmerica deems useful for the purpose of promoting and marketing to Users of the Sony Service other GoAmerica products and services that Sony has specifically approved in writing for GoAmerica's promotion and marketing activities. GoAmerica's use of User Data shall be subject to Sony's privacy policies in effect from time to time and applicable law. 9.3 Ownership of Intellectual Property. All Jointly Developed Technology shall be owned jointly by GoAmerica and Sony with full mutual joint and several rights of exploitation with no duty to account one to the other. Each party will continue to exclusively own any IP owned by such party and incorporated into the Sony Service. 9.4 User Data. As between the parties Sony shall own all rights to User Data, subject to the license rights granted above. Sony shall have access to the User Data in standard electronic format through quarterly electronic media transmittals from GoAmerica as well as up to three additional times a quarter upon request. 9.5 Protection of Jointly Developed Technology. Sony and GoAmerica agree to take action necessary to protect Intellectual Property Rights in any Jointly Developed Technology ("Jointly Owned IP"), including but not limited to deciding who should write and file patent applications and cooperating as necessary in filing appropriate applications. In general, the parties anticipate that if the Jointly Developed Technology primarily relates to Sony technology, Sony will file and that if the Jointly Developed Technology relates to GoAmerica technology, GoAmerica will file. Each party will cooperate in good faith to achieve the purpose of this Section. The parties agree to use their best efforts to determine the countries in which to file, prosecute and maintain Jointly Owned IP rights, giving highest priority to the United States, Europe and Japan. If a party does not want to pay for or participate in the filing, prosecution or maintenance of any such patent for Jointly Owned IP right in any country it will have the right to notify the other party to that effect, whereupon the notifying's party's obligation to pay for or participate in the filing, prosecution or maintenance of any such patent will cease and the other party shall 17 18 have the right to procure such patent right at its own cost and shall own such patent in such country. 10. RESPONSIBILITY FOR CONTENT AND ACTIVITY FACILITATION 10.1 Illegal Content/Activity. Each party shall be responsible for preventing when practical and otherwise minimizing illegal content of any kind, or facilitation of illegal activity, from that portion of the Sony Service provided by that party and will be responsible to remove same or prevent further access to such content or facilitation once aware of its presence. 10.2 Access to Adult Content. Access security designed to limit access to persons 18 years of age or older who request access after disclosure of the adult nature of content shall be required for any adult-oriented content provided by a party. 10.3 Cooperation with Law Enforcement. Each party shall, to the extent permitted by law, coordinate with the other so as fully cooperate with law enforcement authorities in the Territory, provided that nothing in this Section shall be deemed to restrict a party from requiring a subpoena or judicial writ before making information available, or from withholding information from the other party if directed to do so by law enforcement authorities or judicial order. 10.4 Removal of Content and Disablement of Features. Each party shall remove any Content or disable any Features or Functions that a court of competent jurisdiction has ordered removed or disabled on the basis of copyright or other infringement or violation of rights of publicity/privacy or that the other party reasonably requests to have removed or disabled. 10.5 Joint Defense and Claim Resolution. In the event either party is made party to a claim regarding User Content or a User's illegal use of the Sony Service, the parties shall jointly defend such claim, pursue any remedies reasonably available against such User and shall share equally in the cost of such defense, pursuit of such remedies and any judicial awards or settlements (both positive and negative), provided that to the extent any claim results from the breach of a duty by one party to the other pursuant to this Agreement, the breaching party shall bear all defense and claim resolution obligations. 11. CONFIDENTIALITY 11.1 Each party possesses certain valuable confidential and/or proprietary information (the "Confidential Information"), including documents and materials, whether printed or in machine-readable form or otherwise, which they will disclose to the other for purposes of implementation of this Agreement. 11.2 Each party agrees to safeguard and hold in confidence and to neither directly nor indirectly disclose nor use same, other than for purpose for which such disclosure is being made, any of the Confidential Information: (i) disclosed by the disclosing party, its agents or employees hereunder; or, (ii) obtained from the disclosing party as a result of the activities contemplated by this Agreement; provided, however, that Sony may 18 19 disclose the Confidential Information to Sony Group members with a need to know hereunder, as long as they agree to be bound by this Agreement to the same extent as Sony is bound. The parties' obligations under this Section 11.2 shall continue while this Agreement is in effect and for three (3) years thereafter; provided, however, that with respect to software provided by either party to the other, the receiving party's obligation shall continue until such time, if ever, as one of the conditions set forth in Section 11.6 below applies. 11.3 The parties represent and warrant to each other that the disclosure of their respective Confidential Information under this Agreement or the disclosure of any other information in connection therewith will not violate any proprietary rights of third parties, including, without limitation, confidential relationships, patent and copyrights, or trade secrets, and that such disclosures will not violate any contractual obligations that Sony or GoAmerica may have to any third party. 11.4 GoAmerica acknowledges that the Sony Group does not need or desire to receive either: (1) U.S government classified information; or (2) any otherwise restricted information, the receipt, disclosure, use or retention of which causes a violation under any provision of the United States Code or any other trade secret laws within the Territory. GoAmerica accordingly agrees that such information will not be provided, either orally or in writing, to Sony. 11.5 Sony acknowledges that the GoAmerica does not need or desire to receive either: (1) U.S. government classified information; or (2) any otherwise restricted information, the receipt, disclosure, use or retention of which causes a violation under any provision of the United States Code or any other trade secret laws within the Territory. Sony accordingly agrees that such information will not be provided, either orally or in writing, to GoAmerica. 11.6 The parties understand that their obligations of non-disclosure and non-use under this Agreement shall not apply to any portion of a disclosing party's Confidential Information that a receiving party can demonstrate falls within any of the following categories: 11.6.1 That, as of the Effective Date, was already known by the receiving party or its Affiliates without obligation of confidentiality, as demonstrated by appropriate evidence antedating the relationship between Sony and GoAmerica; or, 11.6.2 That, after the Effective Date, is obtained by the receiving party or its Affiliates from a third party which is lawfully in possession thereof and is not in violation of any contractual or legal obligation to the disclosing party with respect thereto; or, 11.6.3 That, as of the Effective Date, is, or after the Effective Date, becomes part of the public domain through no fault of the receiving party or any of its Affiliates; or, 11.6.4 That, after the Effective Date, is independently ascertained by the receiving party or its Affiliates or is developed for the receiving party or for its Affiliates by their employees or any third party, any of which have not had access either directly or indirectly to the Confidential Information; or, 19 20 11.6.5 That, after the Effective Date, is required to be disclosed by any administrative or judicial action, provided, however, that the receiving party attempts to maintain the confidentiality of the Confidential Information by asserting in such action any applicable privileges and, immediately after receiving notice of such action, notifies the disclosing party of such action to give the disclosing party the opportunity to seek legal remedies to maintain the confidentiality of same; or, 11.6.6 That must be disclosed under the rules and regulations of the Securities and Exchange Commission or similar foreign securities regulators. 11.7 Each receiving party agrees to restrict access to all of the Confidential Information of the disclosing party to only such of their employees and contractors who: (i) require the Confidential Information for the purpose for which such disclosure is being made under this Agreement; and, (ii) have agreed in writing with the receiving party to maintain the confidential nature of all information (including that of third parties) disclosed to or received by them in the course of their employment or retention. 11.8 Each receiving party agrees to use the same degree of care and scrutiny to avoid disclosure, publication or dissemination of the Confidential Information of the disclosing party as they would use with respect to their own Confidential Information, but the use of such efforts shall not constitute a defense in the event that the Confidential Information of the disclosing party is not kept confidential in accordance with the provisions of this Agreement. Each receiving party, at its own expense, shall take all reasonable measures including, but not limited to, court proceedings to restrain their employees and contractors or former employees and contractors from unauthorized disclosure or use of the Confidential Information of the disclosing party. 11.9 Each party agrees to return all Confidential Information of the other so disclosed and any copies of same upon the termination of this Agreement or at such other time as the other may request, provided, however, that the receiving party may retain one copy thereof in the confidential, restricted access files of its legal department/legal counsel for use only in the event a dispute arises between the parties hereunder and only in connection with that dispute and sufficient copies to permit such party to fulfill its obligations to third parties. 11.10 Confidential Information to which the parties' obligations of non-disclosure and non-use under this Agreement extend, shall be limited to that which is disclosed to the receiving party in writing and marked "Confidential" by the disclosing party or which is disclosed orally but identified by the disclosing party at that time as being Confidential and, within thirty (30) days thereafter, is reduced to writing and marked "Confidential" by the disclosing party and re-disclosed to the receiving party. This Agreement and its exhibits shall be deemed Confidential Information. 11.11 Either party's disclosure of the Confidential Information or other information to the other under this Agreement shall not constitute an option, grant or license to the receiving party under any patent or other rights now or hereinafter held by the disclosing party. 20 21 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 12. TERM, TERMINATION & TRANSITION PROCESS 12.1 Term. The term of this Agreement shall be one year from the Launch Date. ("Initial Term") Sony, at its sole option may elect to renew this Agreement after the Initial Term as follows: (a) for one (1) year beginning on the first anniversary of the Launch Date ("First Renewal Term"), by giving written notice of such election to GoAmerica not less then sixty (60) days prior to such anniversary; and thereafter (b) for an additional one (1) year period beginning on the second anniversary of the Launch Date ("Second Renewal Term"), by giving written notice of such election to GoAmerica not less than sixty (60) days prior to such second anniversary. As used in this Agreement, "Term" means the Initial Term and, if applicable, the First Renewal Term, the Second Renewal Term and the Transition Process (as defined below). 12.2 Transition Process. If the Initial Term or First Renewal Term is not extended or this Agreement reaches the end of the three (3) year maximum, the following procedure shall occur during up to the first four (4) months after the end of the Initial Term or Second Renewal Term, as applicable: at Sony's election, GoAmerica shall continue to operate the Sony Service on its servers and through its contracted carriers for a maximum of [**] months during which time the Sony Service shall be transitioned by GoAmerica to Sony's designated carriers and servers (the "Transition Process"); provided, however, that if the Initial Term or First Renewal Term is not extended or this Agreement reaches the end of the three (3) year maximum, Sony shall amortize actual GoAmerica wireless modem costs paid to third-party suppliers for recently acquired Users by compensating GoAmerica in an amount equal to [**] percent ([**]%) of the actual incremental GoAmerica Wireless Modem subscriber hardware cost of individual Users transitioned to a replacement Sony Service for each month less than [**] months such transitioned individual User had been a Sony Service subscriber at the time of such transition; provided, however, that Sony shall only compensate GoAmerica for subscribers successfully transitioned to the replacement service for a period of [**] months. An example of such calculation is provided in Exhibit K attached hereto. 12.3 Compensation and Revenue Sharing During Transition Process. All compensation and revenue sharing between the parties shall continue through the Transition Process until the Sony Service is transferred from GoAmerica as provided herein. 12.4 Sony Right of Termination on GoAmerica Breach. Sony may at its election terminate this Agreement in the event that GoAmerica materially breaches this Agreement and fails to cure said breach within thirty (30) days of written notice from Sony. In the event of such termination: 12.4.1 Upon Sony's request, GoAmerica shall immediately deliver copies of User Data to Sony's control except such User Data as Sony requests GoAmerica temporarily retain for transitional purposes; 21 22 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 12.4.2 Sony may transition the Sony Service to a third-party service provider or providers, in which case GoAmerica shall facilitate such transition at GoAmerica's expense, including the cost of developing and distributing software updates to enable Wireless Modems already in use to communicate via such third-party service provider, but excluding the cost of providing equipment to replace such Wireless Modems. GoAmerica's software development and distribution obligation shall only extend to like wireless networks (for example, transition from CDPD to CDPD, but not transition from CDPD to another format such as Ricochet or GPRS). 12.4.3 Sony may require, at its sole option, GoAmerica to continue to operate the Sony Service for the lesser of [**] or the time remaining until the end of the Transition Process that would have occurred under Section 12.2 had said breach not occurred; and 12.4.4 All Activation Fees and revenue sharing shall continue until the end of the above applicable periods, plus any direct damages suffered by Sony. 12.4.5 GoAmerica shall not solicit transitioned Users either directly or in connection with GoAmerica's service partners for a period of one (1) year from the end of the Transition Process. 12.5 GoAmerica Right of Termination on Sony Breach. GoAmerica may terminate this Agreement in the event Sony materially breaches this Agreement and fails to cure said breach within [**] days of written notice from GoAmerica. In the event of such termination: 12.5.1 Unless Sony elects not to continue the Sony Service, all User Data will be immediately delivered to Sony except such User Data as Sony requests GoAmerica temporarily retain for transitional purposes; 12.5.2 If Sony elects not to continue the Sony Service then GoAmerica shall migrate Users to the GoAmerica Service for the remainder of any legal commitment to such customers and service such customers; and 12.5.3 GoAmerica shall have no obligation to pay Activation Fees, Residual Fees or other compensation to Sony as of the date of termination. 13. INDEMNIFICATION/INSURANCE 13.1 Indemnification by GoAmerica. Subject to the limitations set forth below, GoAmerica, at its own expense, shall: 13.1.1 defend, or at its option settle, and pay any final judgment entered or settlement made in any claim, suit or proceeding against Sony or any of its Affiliates or such 22 23 entities' officers, directors, employees and/or consultants (each such entity or individual a "Sony Indemnified Party") by a third party on the basis and to the extent that (i) any Wireless Modem, GoAmerica Technology, GoAmerica Content, Connectivity Services provided by GoAmerica, or Features or Functions provided by GoAmerica or a GoAmerica Provider (collectively, "GoAmerica Deliverables") is alleged to infringe any U.S. Intellectual Property Right, (ii) any GoAmerica Deliverable is alleged to have caused death personal injury or damage to property (other than data or other intangibles) due to the negligence or intentional misconduct of GoAmerica (iii) any GoAmerica Content or any Feature or Function provided by GoAmerica or a GoAmerica Provider is alleged to violate rights of privacy or publicity, or to be libelous, defamatory, or otherwise tortious or illegal. 13.1.2 Notwithstanding the foregoing, GoAmerica shall have no obligation to a Sony Indemnified Party pursuant to this Section 13.1.2 unless: (i) Sony gives GoAmerica prompt written notice of the claim, suit or proceeding; (ii) GoAmerica is given the right to control and direct the investigation, preparation, defense and settlement of the claim, suit or proceeding; and (iii) Sony provides GoAmerica with reasonable assistance in the defense or settlement thereof at GoAmerica's expense. In connection with the defense of any such claim, suit or proceeding, Sony may have its own counsel in attendance at all public interactions and substantive negotiations at Sony's own cost and expense and GoAmerica shall provide Sony with reasonable advance notice of all such interactions and/or negotiations. 13.1.3 If the claim, suit or proceeding against a Sony Indemnified Party involves alleged infringement of any third-party IP rights, GoAmerica, at its option and expense, shall use all reasonable efforts to: (i) obtain a license at no cost to Sony permitting continued use of the rights in contention; (ii) modify the applicable GoAmerica Technology, Connectivity Services and/or Wireless Modem so that it can perform its intended function without infringing; (iii) modify the applicable GoAmerica Content without infringing any third-party IP rights; or (iv) substitute technology or content, as the case may be, of comparable functionality and performance/scope, that does not infringe third-party IP rights. In the event of any third-party claim of infringement, upon written notification and request from GoAmerica, Sony shall cease using the intellectual property in dispute pursuant to a commercially reasonable schedule. 13.1.4 In the event GoAmerica does not use reasonable efforts as required in Section 13.1.3, Sony may, after written notice to GoAmerica, itself take such steps and be fully indemnified therefore by GoAmerica. 13.2 Indemnification by Sony. 13.2.1 Subject to the limitations set forth below, Sony, at its own expense, shall defend, or at its option settle, and pay any final judgment entered or settlement made, in any claim, suit or proceeding against GoAmerica or any of its Affiliates and such 23 24 entities' officers, directors, employees and consultants (each such entity or individual a "GoAmerica Indemnified Party") by a third party on the basis and to the extent that (i) any Sony Content, the Sony User Interface, any Sony Functionality provided by Sony or any other Sony deliverable (together "Sony Deliverables") hereunder is alleged to infringe any U.S. Intellectual Property Right or (ii) any Sony Deliverable, Handheld or Sony Notebook is alleged to have caused death, personal injury or damage to property (other than data or other intangibles) due to the negligence or intentional misconduct of Sony (iii) any Sony Content or any Feature or Function provided by Sony or a Sony Provider is alleged to violate rights of privacy or publicity, or to be libelous, defamatory, or otherwise tortious or illegal. 13.2.2 Notwithstanding the foregoing, Sony shall have no obligation to a GoAmerica Indemnified Party pursuant to this Section 13.2.2 unless: (i) GoAmerica gives Sony prompt written notice of the claim, suit or proceeding; (ii) Sony is given the right to control and direct the investigation, preparation, defense and settlement of the claim, suit or proceeding; and (iii) GoAmerica provides Sony with reasonable assistance in the defense or settlement thereof at Sony's expense. In connection with the defense of any such claim, suit or proceeding, GoAmerica may have its own counsel in attendance at all public interactions in substantive negotiations at its own cost and expense and Sony shall provide GoAmerica with reasonable advance notice of all such interactions and/or negotiations. 13.2.3 If the claim, suit or proceeding against a GoAmerica Indemnified Party involves alleged infringement of any third-party IP rights, Sony, at its option and expense, shall use all reasonable efforts to: (i) obtain a license at no cost to GoAmerica permitting continued use of the rights in contention; (ii) modify the applicable Sony Deliverables so that it can perform its intended function without infringing; (iii) modify the applicable Sony Content without infringing any third-party IP rights; or (iv) substitute technology or content, as the case may be, of comparable functionality and performance/scope, that does not infringe third-party IP rights. In the event of any third-party claim of infringement, upon written notification and request from Sony, GoAmerica shall curtail using the IP in dispute pursuant to a commercially reasonable schedule. 13.2.4 In the event Sony does not take any of the foregoing required remedial steps, GoAmerica may itself take such steps and be fully indemnified therefore by Sony. 13.3 Insurance. Promptly after the execution of this Agreement, GoAmerica shall furnish to Sony a copy of an insurance certificate evidencing the effectiveness of a general and comprehensive business insurance policy which GoAmerica maintains, with an insurance company with a Best's rating of B+ or above, containing at least the following coverages: (i) Worker's Compensation and Employer's Liability, minimum statutory limits; (ii) General Liability, with minimum limits of $1,000,000.00 per occurrence for bodily injury death, or property damage; and (iii) Automobile Liability, with minimum limits of $1,000,000.00 per each occurrence of bodily injury, death or property damage. 24 25 13.4 Cooperation. Each party will provide reasonable cooperation to the other in the event of any claim or litigation brought by any third party against the other party or both parties in respect of any aspect of the Sony Service. 14. GENERAL AND MISCELLANEOUS 14.1 Survival. Upon termination or expiration of this Agreement for any reason, the following provisions shall survive and remain effective: 3.4, 3.5, 7.3,7.4, 8.4, 9.3, 9.4, 9.5, 10.3, 10.5, 11.1 TO 11.11, 12.2, 12.3, 12.5, 13.1 TO 13.4, 14.1 TO 14.20, 15.1 TO 15.3, 16 AND 17. 14.2 Notices. Unless otherwise provided in this Agreement, all notices required under this Agreement shall be in writing and shall be effective for all purposes upon receipt when addressed as follows: If to GoAmerica: GoAmerica Communications Corporation 401 Hackensack Avenue Hackensack, New Jersey 07601 Attn: Chief Financial Officer With a copy to: Hale and Dorr LLP 650 College Road East Princeton, New Jersey 08540 Attn: David J. Sorin, Esq. If to Sony: Personal Network Solutions Company Sony Electronics Inc. 16765 W. Bernardo Dr. San Diego, California 92127 Attn: President With a copy to: Sony Electronics Inc. 1 Sony Drive Park Ridge, New Jersey 07656 Attention: General Counsel Either party may change its address by written notice to the other party in the manner set forth above. Receipt of communications by United States first class certified or registered mail will be sufficiently evidenced by return receipt, and receipt of communications transmitted by telecopier or facsimile, shall be deemed to have been received upon transmission, provided that such notice is also sent by overnight express courier for delivery on the following day. To the extent feasible, in the case of illegible or otherwise unreadable facsimile transmissions, the receiving party shall promptly notify 25 26 the transmitting party of any transmission problem and the transmitting party shall promptly resend any affected pages. 14.3 Force Majeure. A party will not be deemed to have materially breached this Agreement to the extent that performance of its obligations or attempts to cure any breach are delayed or prevented by reason of any act of God, fire, natural disaster, accident, act of government, strike, labor dispute or Internet backbone outage, provided that the party whose performance is delayed or prevented promptly notifies the other party of the nature and duration of such event and uses commercially reasonable efforts to circumvent such event of force majeure. Notwithstanding anything herein to the contrary, in the event that a force majeure event lasts longer than ten (10) days, the party ready to perform can terminate this Agreement. If the event of force majeure lasts greater than ten (10) days and, as a result, GoAmerica is not able to host the Sony Service during the Term, Sony shall have an interim right and license to host or have hosted and operate or have operated the Sony Service to the extent necessary to keep the Sony Service running during the Term but only for so long as the event of force majeure continues. 14.4 Independent Contractors. In the course of performing under this Agreement, each of the parties will operate as, and have the status of, an independent contractor and will not act as or be an agent, partner, co-venturer, employee or fiduciary of the other party. Neither party will have the right or authority to assume or create any obligations or to make any representations or warranties on behalf of any other party, whether express or implied, or to bind the other party in any respect whatsoever. 14.5 Assignment. Neither party shall be entitled to assign all or any portion of its rights or delegate its obligations under this Agreement without the prior written consent of the other party, provided that for purposes of this Agreement any transfer of rights or responsibilities by either party to any Affiliate of such party shall not be deemed an Assignment, provided that the assignment shall be subject to a writing in which the Affiliate agrees to the terms and conditions of this Agreement and provided the assignor remains hereunder for (i) any breaches or failures of the assignor prior to such assignment, (ii) any failure of such assignee to fulfill its obligations and indemnifications hereunder, and (iii) for any liability arising from or damages from breaches caused by such assignee. Any attempted or purported assignment or delegation without such required consent will be void and deemed a material breach of this Agreement. 14.6 Severability. If any provision of this Agreement or portion thereof is determined by a court of competent jurisdiction to be invalid, illegal or otherwise unenforceable, then such provision will, to the extent permitted by the court not be voided but will instead be construed to give effect to its intent to the maximum extent permissible under applicable law and the remainder of this Agreement will remain in full force and effect according to its terms. 14.7 GoAmerica Bankruptcy. GoAmerica acknowledges that all rights and licenses to any GoAmerica owned or sublicensed intellectual property granted under or pursuant to this Agreement are, and shall be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the "Bankruptcy Code"), licenses of rights to "intellectual 26 27 property" as defined under Section 101 (56) of the Bankruptcy Code. The parties agree that Sony, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under Bankruptcy Code for the period licensed hereunder. GoAmerica acknowledges that if GoAmerica, as debtor in possession or a trustee-in-bankruptcy (collectively, "Trustee") in a case under the Bankruptcy Code, rejects this Agreement, Sony may elect to retain its licensed rights under this Agreement as provided in Section 365(n) of the Bankruptcy Code. After the commencement of a case under the Bankruptcy Code by or against GoAmerica and unless and until this Agreement is rejected, upon written request of Sony to the Trustee, the Trustee shall, unless GoAmerica agrees to perform its obligations hereunder, (a) provide Sony with then current copies of any intellectual property licensed hereunder and (b) not interfere with the rights of Sony under this Agreement, including Sony's right to use and obtain such copies of such intellectual property. If the Trustee rejects this Agreement and Sony elects to retain its rights under such agreements to the extent permitted by law, then upon Sony's written request to the Trustee, the Trustee shall provide copies of any intellectual property to Sony as required by law, subject to the parties' mutual obligations under this Agreement (including revenue sharing obligations). 14.8 Export Control Matters. Each party shall be responsible for insuring that it complies with all laws and regulations of the United States government relating to the export from the United States of technical information or technical data or products or services using technical information or technical data or products received from the other party under this Agreement. 14.9 Choice of Law/Jurisdiction and Venue. This Agreement shall be governed by and construed under, and the legal relations between the parties hereto shall be determined in accordance with, the laws of the State of New Jersey, without giving effect to such state's conflict of law principles. The United Nations Convention on the International Sale of Goods shall not be applicable to this Agreement. The parties hereby submit to the personal jurisdiction of, and agree that, subject to Section 14.16 (Equitable Relief) and Section 14.11 (Dispute Resolution), any legal proceeding with respect to or arising under this Agreement shall be brought in any United States District Court in New Jersey or the state courts of the State of New Jersey. 14.10 Generally Accepted Accounting Principles and Rights of Audit. Except as otherwise provided in this Agreement, financial calculations required by this Agreement shall be done in accordance with generally accepted accounting principles. Each party shall have the right for representatives of a firm of independent "Big Six" certified public accountants to which the other party shall not unreasonably object ("Auditors") to make an examination and audit, by prior appointment during normal business hours, not more frequently than once annually, of all records and accounts as may contain information bearing upon either party's financial, performance or milestone obligations hereunder to the other. Each party shall be supplied a copy of such auditor's preliminary report, which shall not be final until the Auditors have taken account of any representations reasonably made by either party within fourteen (14) days of receipt of the report by both parties. In the absence or dismissal of any representations from either party, the Auditors report shall be (in the absence of clerical or manifest error, or issues of contractual 27 28 interpretation, or issues of fact as to completion of required conduct by a party as a condition precedent to obligations) final and binding on the parties. Such audit shall be at the expense of the requesting party, unless it reveals an underpayment of five percent (50%) or more, in which case the underpaying party shall reimburse the requesting party for the reasonable costs of such audit in addition to any underpaid amount due. 14.11 Dispute Resolution. The parties shall attempt in good faith to resolve any controversy or claim arising out of or relating to this Agreement promptly by negotiations between senior executives of the parties who have authority to settle the controversy. The disputing party will give the other party written notice of the dispute and its desire to initiate the process provided for in this Section. Within twenty (20) days after receipt of such notice, the receiving party shall submit to the other a written response. Such disputing party notice and receiving party response will include (i) a statement of position and arguments supporting such position, and (ii) the name and title of the executive who will represent it in the negotiations. Such executives will meet at a mutually acceptable time and place within thirty (30) days of the date of the disputing party's notice and thereafter as soon as they reasonably deem necessary to exchange information and to attempt to resolve the dispute. If the dispute has not been resolved within sixty (60) days of the disputing party's notice, or if either party will not meet within thirty (30) days, either party may initiate mediation of the dispute under the mediation rules of the Center for Public Resources in Santa Clara County, California. If the dispute is not resolved pursuant to such mediation procedure within sixty (60) days of the initiation thereof, or if either party will not participate in such mediation, then either party may initiate litigation by giving thirty (30) days prior notice to the other party. 14.12 Limitation of Rights. The use of any these procedures or any other alternative dispute resolution procedures will not be construed under the doctrine of laches, waiver or estoppel to affect adversely the rights of either party. Nothing will prevent either party from resorting to the judicial proceedings mentioned in Section 14.9 if (a) good faith efforts to attempt resolution of the dispute under these procedures have been unsuccessful or (b) interim relief " Section 14.16 is necessary to prevent serious and irreparable injury to one of the parties or to others. 14.13 Entire Agreement; Modification; Waiver. This Agreement (together with all Exhibits attached hereto) constitutes the entire agreement of the parties concerning its subject matter and supersedes any and all prior or contemporaneous, written or oral negotiations, correspondence, understandings and agreements between the parties respecting the subject matter of this Agreement, including but not limited to any letters of intent between the parties. No agreement by a party to delete or substitute proposed terms or provisions (including all Exhibits attached hereto) during the negotiation of this Agreement shall in any way be used or held against that party. No supplement, modification or amendment to this Agreement shall be binding unless evidenced by a writing signed by the party against whom it is sought to be enforced. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. In the event of a conflict between the main body of this Agreement and any 28 29 exhibit hereto the main body of this Agreement shall prevail to the extent of such conflict. 14.14 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. 14.15 Authority, Corporate Action and No Breach. Each party to this Agreement represents and warrants to, and agrees with the other, that it has the right, power and authority to enter into, and perform all its obligations under, and has taken all the requisite corporate action to approve the execution, delivery and performance of this Agreement and that the execution, delivery and performance of this Agreement shall not result in the breach or non-performance of any agreements it has with third parties. 14.16 Equitable Relief. Each party agrees that the other party shall be entitled to equitable relief, including such injunction or injunctions as may be required to prevent any breach of this Agreement or the infringement or further infringement of any Intellectual Property Right by the other, and may specifically enforce such provisions or protect such rights by an action instituted in any court having jurisdiction. Each party acknowledges that damages may be an inadequate remedy for such a breach or infringement. Each party covenants and agrees not to contest the availability to the other party of such injunctive relief on any grounds to prevent such a breach or infringement, provided however that nothing herein shall prevent or prohibit the impugned party from disputing the occurrence of such a breach or infringement, including the occurrence of the default giving rise to the application for such injunctive relief, or from making submissions with respect to the amount and type of security to be posted by a party in connection with the grant of such injunctive relief. This Section 14.16 shall survive the termination or expiration of this Agreement. 14.17 Supplemental Escrow Agreement. Unless GoAmerica provides Sony the software tools described in Exhibit B within the time provided in Exhibit B, the parties shall enter into an Escrow Agreement with DSI Technology Escrow Services, Inc. ("DSI") to provide for escrow deposit with respect to such software tools. Such Escrow Agreement shall be in substantially the form attached as Exhibit L and shall be mutually agreed within the time provided in Exhibit B. 14.18 Expenses. Each party shall bear its own costs and expenses in connection with the performance of its obligations under this Agreement. 14.19 Interpretation. In this Agreement (i) all capitalized derivative forms of defined terms and phrases have meanings that correspond to the defined terms and phrases, (ii) the words "include", "includes" or "including" mean "include without limitation", "includes without limitation"; and "including without limitation" respectively, (iii) the division of this Agreement into separate sections, subsections and schedules, the Agreement's title and the insertion of headings is for convenience of reference only and shall not affect the construction or interpretation of this Agreement, (iv) words or abbreviations which have well known or trade meanings are used herein in accordance with their recognized 29 30 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. meanings, and (y) references to currency herein are references to United States dollars unless otherwise explicitly stated. 14.20 Publicity. Neither party shall issue a press release or other publicity mentioning the other without the prior written approval of the other. 15. DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITY 15.1 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES MAKE NO WARRANTIES, WHETHER EXPRESS OR IMPLIED WITH RESPECT TO ANY PRODUCT, SERVICE, DELIVERABLE OR THING TO BE PROVIDED HEREUNDER BY A PARTY, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS. 15.2 Limitation of Liability. EXCEPT (I) FOR LIABILITIES ARISING UNDER SECTION 13.1 AND 13.2, AND (II) FOR BREACH OF CONFIDENTIALITY OBLIGATIONS ARISING UNDER SECTION 11, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE, INCLUDING WITHOUT LIMITATION, LOST REVENUES OR PROFITS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT (INCLUDING, WITHOUT LIMITATION, THE BREACH OF THIS AGREEMENT OR ANY TERMINATION OF THIS AGREEMENT), TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE OTHER PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE IN ADVANCE. EXCEPT FOR (I) LIABILITIES OF GOAMERICA ARISING UNDER SECTION 13.1, BREACH BY GOAMERICA OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 11, AND USE BY GOAMERICA OF USER DATA OTHER THAN AS AUTHORIZED IN THIS AGREEMENT OR OTHERWISE APPROVED BY SONY AND (II) LIABILITIES OF SONY ARISING UNDER SECTION 13.2 AND BREACH BY SONY OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 11 EACH PARTY'S COLLECTIVE DIRECT DAMAGES SHALL BE LIMITED TO $[**] ("Initial Limitation"). 15.3 Renegotiation of Limitation of Liability. In the event Sony elects to renew this Agreement for the First Renewal Term as provided in Section 12.1, then, upon receipt by GoAmerica of Sony's written notice of such election, the parties shall negotiate in good faith to increase the limitation of liability from the amount of the Initial Limitation to such greater amount as the parties may mutually agree. The Initial Limitation shall remain in effect until the parties agree in writing to such greater amount. 16. NO THIRD-PARTY BENEFICIARIES 30 31 The parties specifically disavow any desire or intention to create a "third party" beneficiary contract, and specifically declare that no person, except for the parties and their permitted assigns, shall have any rights hereunder nor any right of enforcement hereof. 17. COUNTERPARTS This Agreement and any amendment, supplement, restatement or termination of any provision hereof, may be executed and delivered in counterparts by facsimile, each of which so executed and delivered counterpart is an original, and such counterparts, together, shall constitute but one and the same instrument. [SIGNATURE PAGE FOLLOWS - REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 31 32 IN WITNESS WHEREOF, the parties have signed and delivered this Agreement as of the date first above written. GoAmerica Communications Corp. By: /s/ Joseph Korb -------------------------------- Name: Joseph Korb ------------------------------ Title: President ----------------------------- Personal Network Solutions Company, A division of Sony Electronics Inc. By: /s/ Mark T. Viken -------------------------------- Name: Mark T. Viken ------------------------------ Title: Sr. GM/President ----------------------------- 32 33 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT A Connectivity Services The Sony Service shall include the following Connectivity Services to be provided by GoAmerica, pursuant to GoAmerica's agreements with the appropriate carriers: CDPD - Nationwide coverage to the extent of available combined carrier coverage (at least equal to [**] as of the Effective Date). [**] - Coverage dependant upon [**] rollout schedule and implementation 33 34 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT B Transition Assistance At Sony's request, GoAmerica shall provide Sony with the following [**] in standard computer format to migrate Users and the Sony Service to a new provider: ALL CUSTOMER CONTENT/USER INFORMATION INCLUDING: o Email addresses o Name, Device, Service Agreement, Address, etc. o Sony Provisioned IP Addresses o Device ID's of Sony Customers (JP Address, ESN) o Carrier network(s) customer's service is provisioned on SONY PROVISIONED IP ADDRESSES o Oracle Database (Database to be sent in both of the following outputs) o Hardcopy o Binary output DEVICE ID'S FOR THE USERS o Oracle Database (Database to be sent in both of the following outputs) o Hardcopy o Binary output SONY SERVICE o All files and images in appropriate format related to the Sony Service in order for Sony to recreate the Handheld Deck, Notebook Deck and associated Sony Service web site pages. File types may include but are not limited to HTML, XML and WML formats. Additionally, [**], GoAmerica shall provide to Sony a software tool that will remotely or through user-implemented CD-ROM disable any modem locks or other software, firmware or hardware impediment to transition of customers from the GoAmerica service to a competitive service of the same class (e.g., CDPD to CDPD, but not CDPD to Ricochet). This tool shall be 34 35 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. made available to Sony or escrowed by GoAmerica for Sony pursuant to the terms of the Escrow Agreement set forth on Exhibit L within [**] of the first customer ship of Wireless Modems. 35 36 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT C Service Description GoAmerica shall implement the Sony Service in a modular manner so that the Sony Service is comprised of several components, which shall include, but may not be limited to: A. Network Operations Center: [**]Service Platform: See Exhibit D B. Enabling Technologies: [**] as required. C. Personalization Engine: Personalization [**] personalization [**]. D. Content: [**]User Data: Information [**] and other information. E. Provisioning Systems: Provisioning of [**] and any other provisioning necessary. F. Billing Systems: Billing system capable of [**] billing. G. Customer Support Systems: Customer service systems capable of supporting[**] of customer service [**]. H. Hosting Services: Hosting of [**] service [**]. I. Other Systems/Platforms required for service offering. 36 37 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT D Base Service 1. [**]. 2. [**]). Access up to [**] 3. The GoAmerica [**]The GoAmerica [**] [**] Features as described in 1.7 and Exhibit C Functions as described under 1.8 and Exhibit C Content as described under 1.6 and Exhibit C 4. Base Content: GoAmerica Content Providers
- ---------------------------------------------------------------------------------------------------------------------- CONTENT PROVIDER DEAL STATUS EXPIRATION - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Business & Finance - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 08/09/01 - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 09/05/01 - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 02/01/01 - ---------------------------------------------------------------------------------------------------------------------- Living - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Deal - ---------------------------------------------------------------------------------------------------------------------- Shopping - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 08/12/01 - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 09/17/01 - ---------------------------------------------------------------------------------------------------------------------- [**] Deal - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 05/10/01 - ----------------------------------------------------------------------------------------------------------------------
37 38 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
- ---------------------------------------------------------------------------------------------------------------------- [**] Deal 09/01/01 - ---------------------------------------------------------------------------------------------------------------------- News - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 08/08/01 - ---------------------------------------------------- --------------------------------- ------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Deal - ---------------------------------------------------------------------------------------------------------------------- [**] Deal - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 10/23/01 - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- Search - ---------------------------------------------------------------------------------------------------------------------- [**] Deal - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 09/02/01 - ---------------------------------------------------------------------------------------------------------------------- Sports - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- Travel - ---------------------------------------------------------------------------------------------------------------------- [**] - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 12/26/00 - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Pending - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Link - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 07/10/01 - ---------------------------------------------------------------------------------------------------------------------- Weather - ---------------------------------------------------------------------------------------------------------------------- [**] pending - ---------------------------------------------------------------------------------------------------------------------- Reference and General Content - ---------------------------------------------------------------------------------------------------------------------- [**] - ---------------------------------------------------------------------------------------------------------------------- [**] - ---------------------------------------------------------------------------------------------------------------------- [**] no $ 08/22/01 - ---------------------------------------------------------------------------------------------------------------------- [**] ? N/A - ---------------------------------------------------------------------------------------------------------------------- [**] Deal N/A - ---------------------------------------------------------------------------------------------------------------------- [**] no $ - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 07/18/01 - ---------------------------------------------------------------------------------------------------------------------- [**] Deal 05/18/01 - ---------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------
38 39 5. Connectivity service as described under 2.7 and Exhibit A 6. Customer Support, Sales and Technical Support as described under 2.9 39 40 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT E Service Level Support Level Service Requirements: Hours of Support: GoAmerica will provide the seven (7) days a week, twenty-four (24) hours a day, fifty-two (52) weeks a year, inclusive of all federal holidays observed in the United States. Service Levels: GoAmerica will be required to meet the following Service Level measurements for the Hosting service.
- ------------------------------------------------------------------------------- AVAILABILITY - ------------------------------------------------------------------------------- Hosting Services [**]% - -------------------------------------------------------------------------------
Back up: GoAmerica provides [**], and [**]Redundancy: GoAmerica redundancy procedures vary within network. Servers, network equipment and storage systems have their individual redundancy. Environmental systems are fully redundant (e.g., A/C, power). Hot Swappable: Hot Swappable depends on the particular system. Most GoAmerica systems do have hot swappable components. Disaster Recovery Process: to be provided by GoAmerica within [**] of the Effective Date. 40 41 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. SONY Service Level: GoAmerica shall use commercially reasonable efforts to ensure that the Service is stable, reliable and dependable. GoAmerica agrees that it shall use commercially reasonable efforts to: 1. Manage all of the GoAmerica network infrastructure and related maintenance such that existing Sony Service Users have Sony Service availability [**]% of the time with a maximum of [**] hour maintenance sessions per month. GoAmerica shall take reasonable steps to schedule maintenance sessions in off-peak hours so as to minimum network infrastructure and related negative impacts to users. 2. Establish a plan for disaster recovery such that resumption of Service can be restored within [**]. 3. Continue establishing coverage so the Service is available to [**]%+ of the US population using a local access number that does not incur a toll charge. Corrective Action Plan: In the event that Sony Service falls below the above Service Levels, the parties shall meet to review the performance of the Sony Service. If the Sony Service is found to be performing below the Service Levels, GoAmerica shall provide a Corrective Action Plan (CAP) to Sony within [**] business days of a written finding. The CAP shall outline step's to bring the Sony Service performance back with the Service Levels and will be mutually agreed to by both Parties. GoAmerica shall then have [**] days to bring the Sony Service within Service Levels. DESCRIPTION & SPECIFICATIONS OF CUSTOMER SUPPORT CUSTOMER AND TECHNICAL SUPPORT: Under the terms of this Agreement, GoAmerica (or its designated third-party provider) shall provide customer and technical support to Users. Sony and GoAmerica will together determine the way metrics are calculated. GoAmerica shall use commercially reasonable efforts to provide customer support that conforms to the following requirements: 1. Email and toll-free telephone support; 2. Availability: 24 hours a day, 7 days per week; 3. Service Level: [**]% of the calls shall be answered within [**] minutes; 41 42 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 4. Call Resolution: [**]% of calls resolved [**] and [**]% of calls resolved within [**]; 5. All non-information request e-mails shall be responded to within [**] of their receipt. 6. Average Time to Answer: [**] minutes GoAmerica shall provide: 1. Notification and timely updates of significant network outages and service problems on a proactive basis to Sony's designated customer support organization. 2. Proactive updates of any client software issues and make available the updated client software solution [**]it makes available [**]. 3. A toll-free access number to allow Sony's designated customer support organization to hot transfer calls regarding the GoAmerica Service. General Support: GoAmerica shall provide support for their GoAmerica Service in a timely and knowledgeable fashion. Such support shall include, but not be limited to: 1. Providing a knowledgeable contact for technical support, in addition to GoAmerica's Account Manager, and maintaining an e-mail address or phone number for Sony to contact during GoAmerica's normal business hours (Monday through Friday, 8:00am to 5:00pm PST), to report problems and receive assistance. 2. Providing prompt communication and assistance. If either Sony or Go America finds a qualified defect due to the other party's ("Responsible Party") product, they will route it to the Responsible Party's technical contact with the following details a) Defect ID f) Software and hardware used in testing b) Defect state g) Failure symptom vs expected result c) Defect severity h) Steps required to reproduce defect d) Frequency of occurrence i) Defect root cause and resolution e) Functional area j) Version fixed
Both parties will log and track all defects until they are resolved and closed; Cost of defect resolution will be borne by the Responsible Party. 42 43 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. Defect Severity Definition: Both parties will use the following criteria to classify defects:
- --------------------------------------------------------------------------------------------------------------------- SEVERITY DEFINITION - --------------------------------------------------------------------------------------------------------------------- Critical Feature did not work and there was no workaround. System crashed or hung. Data corrupted or lost. - --------------------------------------------------------------------------------------------------------------------- Serious Incorrect output functionally or logically. Did not meet Software Specifications. - --------------------------------------------------------------------------------------------------------------------- Moderate Cosmetic flaw. Usability (Aesthetic, Consistency, Syntactic, Misleading). Annoying behavior. - --------------------------------------------------------------------------------------------------------------------- Enhancement Request for a design enhancement. - --------------------------------------------------------------------------------------------------------------------- Unclear Specification Software specifications not clearly defined. - ---------------------------------------------------------------------------------------------------------------------
Management Of Defects: All defects found in Sony Service will be tracked until they are closed. Unless deferred defects will be handled according to the following timelines: 1. All Critical and Serious defects must be fixed within [**] working days; 2. All moderate defects must be fixed within [**] weeks unless they meet deferment criteria set out below; 3. All unclear specifications must be clarified and specifications updated at the next opportunity; and 4. Deferred defects will be addressed at the next opportunity. For this purpose, "deferred defects" criteria shall mean that such defects do not result in loss or corruption or data, have low probability of occurring, are risky to fix', have no impact on usage of the software or are irreproducible. Management of Fixes: Either party shall notify the other party of the resolution of each defect, and shall provide a fix in an acceptable format, depending on the method selected for distribution of the fix to its customers. For example, if the fix is distributed off a web site, the Responsible Party shall provide an installation wizard or cab file which enables the fix to be easily installed on the Sony Product. 43 44 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT F Activation Fees and Residual Rates
- ---------------------------------------------------------------------------------------------------------------------- CONNECTIVITY SERVICE USED ACTIVATION FEE RESIDUAL RATE - ---------------------------------------------------------------------------------------------------------------------- CDPD - ---------------------------------------------------------------------------------------------------------------------- All Client Devices and all Service $ [**] [**]% Rates - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Ricochet: - ---------------------------------------------------------------------------------------------------------------------- If Service Rate for a Subscription is: - ---------------------------------------------------------------------------------------------------------------------- $[**] or more $ [**] [**]% - ---------------------------------------------------------------------------------------------------------------------- $[**] $ [**] [**]% - ---------------------------------------------------------------------------------------------------------------------- $[**] or less $ [**] [**]% - ----------------------------------------------------------------------------------------------------------------------
44 45 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT G GoAmerica Marketing Guidelines I. GoAmerica marketing funds are designed to generate demand for the Sony Service. These funds will be made available for demand generating advertising based on the following guidelines: Guidelines: The Sony Service must be one of the prominent focuses of the advertisement. The advertisement may include one or more of the following products: 1) Sony products 2) Service and Service content 3) Wireless Modem 4) Place of purchase for Service/Modem which could include Web-Site, 1-800#, Retail Dealer or other place where purchase could occur. Sony (inclusive of service and any featured content from service), GoAmerica logos, and point of purchase logos shall be the only prominently placed logos unless otherwise specifically approved by GoAmerica, unless otherwise provided for in Sony arrangements with platform, technology, content or service licensors such as Intel, Palm or Microsoft. Approvals: Sony must give GoAmerica [**] business days for approval. Qualifying approved ads must be approved in writing. Ad with GoAmerica signature shall serve as documentation for eligibility in this marketing funds program. Payment will be remitted upon receipt of invoices and accompanying audited numbers for said advertisement. Payment/Disbursement of Funds: All payments/disbursements made only to Sony PNSC. II. Retail dealer funds: An amount up to $[**] of the marketing funds can be used for retail dealer end-user demand advertising and promotions. These funds will be used for retail dealer promotions and or advertising. With regards to promotions other than advertising, Sony and GoAmerica will jointly approve the use of these funds on an individual retail dealer basis. With regards to print advertising, the guidelines are: 45 46 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 1. The Sony Service must be one of the prominent focuses of the advertisement. 2. The advertisement will include the following products elements: a. Sony products b. Service and Service content c. Wireless Modem Sony (inclusive of service and any featured content from service), GoAmerica logos shall be the only prominently placed logos in the retail dealer's ad space dedicated to the Sony/Go America modem product/service unless otherwise specifically approved by GoAmerica, unless otherwise provided for in Sony arrangements with platform, technology, content or service licensors [**]Eligible funding amount will be determined based on the total amount of space in the retail dealer's ad dedicated to the Sony/GoAmerica wireless modem products/services. For example, if 25% of the available advertising space in a retail dealers ad is dedicated to the Sony/GoAmerica wireless modem products/services then the 25% of the total ad placement cost will be eligible for reimbursement under Retail Dealer Funds. Approvals: GoAmerica will pay for printed advertising submitted by Sony which meet the above guidelines. Sony and GoAmerica will develop a submission process for this. For approved promotions other than printed advertising, GoAmerica signature shall serve as documentation for eligibility in this marketing funds program. Payment will be remitted upon receipt of invoices and accompanying audited numbers for said promotion. Payment/Disbursement of Funds: All payments/disbursements made only to Sony PNSC. 46 47 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT J Letter Agreement dated December 11, 2000 [GOAMERICA LETTERHEAD] December 11, 2000 Mr. Mark Hanson Vice President, Personal Network Solutions Company Sony Electronics Inc. 16765 West Bernardo Road San Diego, CA 92127 Re: GoAmerica and Sony's VaioWireless Modem Promotion Dear Mr. Hanson: GoAmerica Communications Corporation ("GoAmerica") and the Personal Network Solutions Company division of Sony Electronics Inc. ("Sony") are currently engaged in negotiations of a business relationship as provided in a letter of intent previously signed by the parties dated [INSERT DATE OF SONY GOAMERICA LOI]. The parties expect to enter into an agreement before December 31, 2000 setting forth the definitive terms and conditions governing such relationship (the "Definitive Agreement"). Pending the execution of the Definitive Agreement, Sony and GoAmerica desire to begin certain efforts to cooperate in a marketing program as further described in this letter (the "Program"). The Program is intended to promote the sale of wireless services currently offered by GoAmerica and wireless services to be offered as a co-branded Sony/GoAmerica service (collectively referred to as "GoAmerica Service") and Sony VAIO notebook computers in the United States. This letter is intended to serve as an interim agreement between the parties concerning the terms of the Program. Pending the execution of the Definitive Agreement, Sony and GoAmerica agree as follows: 1. Program Period. The Program will begin on December 11, 2000 and continue until August 31, 2001 (the "Program Period"). 2. Promotion Offer. At its expense, GoAmerica will provide each Eligible Customer a GoAmerica Wireless Modem on the following terms: 47 48 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. a. [**] Eligible Customers who sign a Qualified Agreement for [**] Month Plan. b. At a price of $[**] for Eligible Customers who sign a Qualified Agreement for a [**] Month Plan. GoAmerica shall be responsible for fulfillment, activation of service, and customer support in accordance with its usual policies and practices 3. Qualified Agreement. A "Qualified Agreement" means an agreement, on GoAmerica's standard terms and conditions of service, which obligates the customer to purchase the GoAmerica Services for a minimum term of either twelve (12) months ("12 Month Plan") or twenty-four (24) months ("24 Month Plan") at a price of $[**]("Monthly Service Fee") or more for unlimited use of the GoAmerica Services. 4. Eligible Customers. An Eligible Customer means a person who purchases a Compatible Sony Notebook at retail, on-line via Sony's website at www.sony.com/goamerica, directly through Sony or from a Sony reseller prior to or during the Program Period and who provides GoAmerica with proof of purchase reasonably acceptable to GoAmerica. 5. Compatible Sony Notebooks. A "Compatible Sony Notebook" means models of Sony branded laptop computers which Sony, after reasonable technical investigation, advises GoAmerica in writing are compatible with the GoAmerica Wireless Modems. 6. GoAmerica Wireless Modems. The "GoAmerica Wireless Modems" means wireless modem devices that enable a Compatible Sony Notebook to send and receive data via the GoAmerica Services. GoAmerica will have the right to choose, subject to Sony's approval, which shall not be unreasonably withheld, the particular manufacturers and models of wireless modems to make available through the Program, provided the models chosen have a manufacturer's suggested retail price of not less than $[**] and not more than $[**]. The following models are deemed approved by Sony: Sierra Wireless AirCard 300 or Novatel Wireless Merlin, Nextcell Spider II. GoAmerica shall be responsible for first tier customer support and satisfaction of warranty repair and service obligations related to the GoAmerica Wireless Modems. 48 49 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 7. Advertising and Promotion. At its expense, Sony will promote and market the Program online, in advertising, at retail and through other sales and marketing avenues. Sony will determine the specific scope and extent of such marketing and promotion in its reasonable discretion, but will consult regularly with GoAmerica to obtain GoAmerica's recommendations and advice and to inform GoAmerica regarding the promotion and marketing efforts undertaken. The value of Sony's marketing and promotional efforts incorporating the Program as an element will be not less than $[**] million. All advertising and promotional literature concerning the Program (whether in tangible or electronic form) must be approved in writing by GoAmerica before publication, provided that materials and guidelines once approved shall be deemed approval of substantially similar materials and guidelines. 8. Trademarks. Trademark usage must conform to the policies and practices of the trademark owner. Neither party will make use of the other's trademarks, service marks, trade names or logos without the prior written approval of the other party. 9. One-time Payments to Sony. GoAmerica will pay Sony a one-time commission of [**] dollars ($[**]) ("Bounty") for each subscription to the GoAmerica Services activated through the Program by a Qualified Customer. GoAmerica will remit each Bounty payment [**] days after activation and receipt of initial payment by the Subscriber. 10. On-going Payments to Sony. GoAmerica will pay Sony [**]% of the Monthly Service Fees paid by Qualified Customers for subscriptions to the GoAmerica Services activated through the Program, for as long as that subscription remains activated on the GoAmerica Services. 11. Exclusivity. During the Program Period, GoAmerica will [**] to third party consumer retailers. During the Program Period, Sony will [**]. 12. Disclaimer of Warranty. NEITHER PARTY MAKES ANY WARRANTY OR REPRESENTATION TO THE OTHER CONCERNING THE PROGRAM, THE COMPATIBLE SONY NOTEBOOKS, THE WIRELESS SERVICES OR THE GOAMERICA SERVICES. EACH PARTY ACKNOWLEDGES THAT IT IS UNDERTAKING ITS PARTICIPATION IN THE PROGRAM AT ITS OWN RISK AND NOT IN RELIANCE UPON ANY PROMISE OR REPRESENTATION OF ANY KIND BY THE OTHER CONCERNING THE LIKELY SUCCESS OR FAILURE OF THE PROGRAM. THE GOAMERICA SERVICES AND THE WIRELESS MODEMS ARE PROVIDED TO USERS SUBJECT TO GOAMERICA'S STANDARD TERMS AND CONDITIONS OF SERVICE AND GOAMERICA'S LIABILITY TO ANY USER OF THE GOAMERICA SERVICES, SHALL BE DELETED AS PROVIDED THEREIN 49 50 13. Confidentiality. Confidential Information provided by either party to the other in connection with the Program shall be subject to the Confidentiality Agreement between the parties dated [insert date]. 14. Expenses. Except as stated in this letter, each party agrees to bear its own costs and expenses in connection with its performance of Program. 15. Governing Law. New Jersey Law with shall govern this Letter of Intent and the Definitive Agreement without reference to its conflicts of law principles. 16. Indemnification. GoAmerica shall defend and indemnify Sony with respect to third party claim and suits relating to the GoAmerica Service and the GoAmerica Wireless Modems. Sony shall defend and indemnify GoAmerica with respect to third party claims and suits relating to Sony notebook computers. A party's indemnification obligation hereunder shall be subject to prompt notice, tender of defense and cooperation of such party by the party seeking indemnification. 17. Legal Effect. This letter shall constitute a legal and binding agreement. Upon execution, the Definitive Agreement shall supersede this Letter of Intent. Please acknowledge your acceptance of the foregoing by signing in the space provided below and returning a signed copy to us. Very truly yours, GoAmerica Communications Corp By: /s/ Joseph Korb - -------------------------------- Signature Joseph Korb - -------------------------------- Name President - -------------------------------- Title Accepted and agreed SONY ELECTRONICS, INC. By: /s/ Mark T. Viken - --------------------------------- Signature Mark T. Viken - --------------------------------- Name 50 51 - --------------------------------- Title - --------------------------------- Date 51 52 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT K Modem Payment Subsidy Schedule Example Example actual Wireless Modem cost to GoAmerica net of all supplier subsidies and rebates $[**] Example Wireless Modem provided to Customer = $[**]Example Wireless Modem subsidy = $200 Modem subsidized over [**] month period = [**]th of modem cost subsidized each month. Customer transitioned to new Sony Service after [**] months = [**] months remaining to subsidize modem. Sony shall pay GoAmerica $100 ($[**]) in order to transition customer. 52 53 EXHIBIT L FORM OF ESCROW AGREEMENT ACCOUNT NUMBER ----------------------- This Agreement is effective , 20 among DS1 Technology ------------------ ---- Escrow Services, Inc. ("DSI"), -------------------------------------- ("Depositor") and ("Preferred ------------------------------------ Beneficiary"), who collectively may be referred to in this Agreement as "the parties." A. Depositor and Preferred Beneficiary have entered or will enter into a license agreement, development agreement, and/or other agreement regarding certain proprietary technology of Depositor (referred to in this Agreement as "the License Agreement"). B. Depositor desires to avoid disclosure of its proprietary technology except under certain limited circumstances. C. The availability of the proprietary technology of Depositor is critical to Preferred Beneficiary in the conduct of its business and, therefore, Preferred Beneficiary needs access to the proprietary technology under certain limited circumstances. D. Depositor and Preferred Beneficiary desire to establish an escrow with DSI to provide for the retention, administration and controlled access of the proprietary technology materials of Depositor. E. The parties desire this Agreement to be supplementary to the License Agreement pursuant to 11 United States [Bankruptcy] Code, Section 365(n). ARTICLE 1 -- DEPOSITS 1.1 Obligation to Make Deposit. Upon the signing of this Agreement by the parties, Depositor shall deliver to DSI the proprietary technology and other materials ("Deposit Materials") required to be deposited by the License Agreement or, if the License Agreement does not identify the materials to be deposited with DSI, then such materials will be identified on an Exhibit A. If Exhibit A is applicable, it is to be prepared and signed by Depositor and Preferred Beneficiary. DSI shall have no obligation with respect to the preparation, signing or delivery of Exhibit A. 1.2 Identification of Tangible Media. Prior to the delivery of the Deposit Materials to DSI Depositor shall conspicuously label for identification each document, magnetic tape, disk, or other tangible media upon which the Deposit Materials are written or stored. Additionally, Depositor shall complete Exhibit B to this Agreement by listing each such tangible media by the item label description, the type of media and the quantity. The Exhibit B must be signed by Depositor and delivered to DSI with the Deposit Materials. Unless and until Depositor makes the initial deposit with DSI, DSI shall have no obligation with respect to this Agreement, except the obligation to notify the parties regarding the status of the deposit account as required in Section 2.2 below. 53 54 1.3 Deposit Inspection. When DSI receives the Deposit Materials and the Exhibit B, DSI will conduct a deposit inspection by visually matching the labeling of the tangible media containing the Deposit Materials to the item descriptions and quantity listed on the Exhibit B. In addition to the deposit inspection, Preferred Beneficiary may elect to cause a verification of the Deposit Materials in accordance with Section 1.6 below. 1.4 Acceptance of Deposit. At completion of the deposit inspection, if DSI determines that the labeling of the tangible media matches the item descriptions and quantity on Exhibit B, DSI will date and sign the Exhibit B and mail a copy thereof to Depositor and Preferred Beneficiary. If DSI determines that the labeling does not match the item descriptions or quantity on the Exhibit B, DSI will (a) note the discrepancies in writing on the Exhibit B; (b) date and sign the Exhibit B with the exceptions noted; and (c) mail a copy of the Exhibit B to Depositor and Preferred Beneficiary. DSI's acceptance of the deposit occurs upon the signing of the Exhibit B by DSI. Delivery of the signed Exhibit B to Preferred Beneficiary is Preferred Beneficiary's notice that the Deposit Materials have been received and accepted by DSI. 1.5 Depositor's Representations. Depositor represents as follows: a. Depositor lawfully possesses all of the Deposit Materials deposited with DSI; b. With respect to all of the Deposit Materials, Depositor has the right and authority to grant to DSI and Preferred Beneficiary the rights as provided in this Agreement; c. The Deposit Materials are not subject to any lien or other encumbrance; d. The Deposit Materials consist of the proprietary technology and other materials identified either in the License Agreement or Exhibit A, as the case may be; and e. The Deposit Materials are readable and useable in their current form or, if any portion of the Deposit Materials are encrypted, the decryption tools and decryption keys have also been deposited. 1.6 Verification. Preferred Beneficiary shall have the right, at Preferred Beneficiary's expense, to cause a verification of any Deposit Materials. Preferred Beneficiary shall notify Depositor and DSI of Preferred Beneficiary's request for verification. Depositor shall have the right to be present at the verification. A verification determines, in different levels of detail, the accuracy, completeness, sufficiency and quality of the Deposit Materials. If a verification is elected after the Deposit Materials have been delivered to DSI, then only DSI, or at DSI's election an independent person or company selected and supervised by DSI, may perform the verification. 1.7 Deposit Updates. Unless otherwise provided by the License Agreement, Depositor shall update the Deposit Materials within 60 days of each release of a new version of the product which is subject to the License Agreement. Such updates will be added to the existing deposit. All deposit updates shall be listed on a new Exhibit B and the new Exhibit B shall be signed by Depositor. Each Exhibit B will be held and maintained separately within the escrow account. An independent record will be created which will document the activity for each Exhibit B. The 54 55 processing of all deposit updates shall be in accordance with Sections 1.2 through 1.6 above. All references in this Agreement to the Deposit Materials shall include the initial Deposit Materials and any updates. 1.8 Removal of Deposit Materials. The Deposit Materials may be removed and/or exchanged only on written instructions signed by Depositor and Preferred Beneficiary, or as otherwise provided in this Agreement. ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING 2.1 Confidentiality. DSI shall maintain the Deposit Materials in a secure, environmentally safe, locked facility which is accessible only to authorized representatives of DSI. DSI shall have the obligation to reasonably protect the confidentiality of the Deposit Materials. Except as provided in this Agreement, DSI shall not disclose, transfer, make available, or use the Deposit Materials. DSI shall not disclose the content of this Agreement to any third party. If DSI receives a subpoena or other order of a court or other judicial tribunal pertaining to the disclosure or release of the Deposit Materials, DSI will immediately notify the parties to this Agreement unless prohibited by law. It shall be the responsibility of Depositor and/or Preferred Beneficiary to challenge any such order; provided, however, that DSI does not waive its rights to present its position with respect to any such order. DSI will not be required to disobey any court or other judicial tribunal order. (See Section 7.5 below for notices of requested orders.) 2.2 Status Reports. DSI will issue to Depositor and Preferred Beneficiary a report profiling the account history at least semi-annually. DSI may provide copies of the account history pertaining to this Agreement upon the request of any party to this Agreement. 2.3 Audit Rights. During the term of this Agreement, Depositor and Preferred Beneficiary shall each have the right to inspect the written records of DSI pertaining to this Agreement. Any inspection shall be held during normal business hours and following reasonable prior notice. ARTICLE 3 -- GRANT OF RIGHTS TO DSI 3.1 Title to Media. Depositor hereby transfers to DSI the title to the media upon which the proprietary technology and materials are written or stored. However, this transfer does not include the ownership of the proprietary technology and materials contained on the media such as any copyright, trade secret, patent or other intellectual property rights. 3.2 Right to Make Copies. DSI shall have the right to make copies of the Deposit Materials as reasonably necessary to perform this Agreement. DSI shall copy all copyright, nondisclosure, and other proprietary notices and titles contained on the Deposit Materials onto any copies made by DSI. With all Deposit Materials submitted to DSI, Depositor shall provide any and all instructions as may be necessary to duplicate the Deposit Materials including but not limited to the hardware and/or software needed. 3.3 Right to Transfer Upon Release. Depositor hereby grants to DSI the right to transfer the Deposit Materials to Preferred Beneficiary upon any release of the Deposit Materials for use by Preferred Beneficiary in accordance with Section 4.5. Except upon such a release or as otherwise provided in this Agreement, DSI shall not transfer the Deposit Materials. 55 56 ARTICLE 4 -- RELEASE OF DEPOSIT 4.1 Release Conditions. As used in this Agreement, "Release Condition" shall mean the following: a. Preferred Beneficiary elects not to renew the License Agreement at the expiration of the Initial Term or First Renewal Term as provided in Section 12.1 the License Agreement, and Depositor becomes obligated to transition the Sony Service (as defined in the License Agreement) to Preferred Beneficiary's designated carriers and servers as provided in Section 12.2 thereof; b. The Term of the License Agreement reaches the end of the three (3) year maximum as provided in Section 12.1 of the License Agreement, and Depositor becomes obligated to transition the Sony Service to Preferred Beneficiary's designated carriers and servers as provided in Section 12.2 thereof; provided however, that this condition (b) shall not apply in the event the parties have agreed in writing to extend the License Agreement beyond the three (3) year maximum as provided in Section 12.1 thereof or have executed a written agreement that otherwise provides for Depositor to continue to provide the Sony Service. c. Preferred Beneficiary terminates the License Agreement pursuant to Section 12.4 thereof due to Depositors material breach, and elects pursuant to Section 12.4.2 to transition the Sony Service to a third-party service provider or providers. 4.2 Filing For Release. If Preferred Beneficiary believes in good faith that a Release Condition has occurred, Preferred Beneficiary may provide to DSI written notice of the occurrence of the Release Condition and a request for the release of the Deposit Materials. Upon receipt of such notice, DSI shall provide a copy of the notice to Depositor by commercial express mail. 4.3 Contrary Instructions. From the date DSI mails the notice requesting release of the Deposit Materials, Depositor shall have ten business days to deliver to DSI contrary instructions. "Contrary Instructions" shall mean the written representation by Depositor that a Release Condition has not occurred or has been cured. Upon receipt of Contrary Instructions, DSI shall send a copy to Preferred Beneficiary by commercial express mail. Additionally, DSI shall notify both Depositor and Preferred Beneficiary that there is a dispute to be resolved pursuant to the Dispute Resolution section (Section 7.3) of this Agreement. Subject to Section 5.2, DSI will continue to store the Deposit Materials without release pending (a) joint instructions from Depositor and Preferred Beneficiary; (b) resolution pursuant to the Dispute Resolution provisions; or (c) order of a court. 4.4 Release of Deposit. If DSI does not receive Contrary Instructions from the Depositor, DSI is authorized to release the Deposit Materials to the Preferred Beneficiary or, if more than one beneficiary is registered to the deposit, to release a copy of the Deposit Materials to the Preferred Beneficiary. However, DSI is entitled to receive any fees due DSI before making the release. Any copying expense in excess of $300 will be chargeable to Preferred Beneficiary. This Agreement will terminate upon the release of the Deposit Materials held by DSI. 56 57 4.5 Right to Use Following Release. Unless otherwise provided in the License Agreement, upon release of the Deposit Materials in accordance with this Article 4, Preferred Beneficiary shall have the right to use the Deposit Materials for the sole purpose of continuing the benefits afforded to Preferred Beneficiary by the License Agreement. Preferred Beneficiary shall be obligated to maintain the confidentiality of the released Deposit Materials. ARTICLE 5 -- TERM AND TERMINATION 5.1 Term of Agreement. The initial term of this Agreement is for a period of one year. Thereafter, this Agreement shall automatically renew from year-to-year unless (a) Depositor and Preferred Beneficiary jointly instruct DSI in writing that the Agreement is terminated; or (b) the Agreement is terminated by DSI for nonpayment in accordance with Section 5.2. If the Deposit Materials are subject to another escrow agreement with DSI, DSI reserves the right, after the initial one year term, to adjust the anniversary date of this Agreement to match the then prevailing anniversary date of such other escrow arrangements. 5.2 Termination for Nonpayment. In the event of the nonpayment of fees owed to DSI, DSI shall provide written notice of delinquency to all parties to this Agreement. Any party to this Agreement shall have the right to make the payment to DSI to cure the default. If the past due payment is not received in full by DSI within one month of the date of such notice, then DSI shall have the right to terminate this Agreement at any time thereafter by sending written notice of termination to all parties. DSI shall have no obligation to take any action under this Agreement so long as any payment due to DSI remains unpaid. 5.3 Disposition of Deposit Materials Upon Termination. Upon termination of this Agreement, DSI shall destroy, return, or otherwise deliver the Deposit Materials in accordance with Depositor's instructions. If there are no instructions, DSI may, at its sole discretion, destroy the Deposit Materials or return them to Depositor. DSI shall have no obligation to return or destroy the Deposit Materials if the Deposit Materials are subject to another escrow agreement with DSI 5.4 Survival of Terms Following Termination. Upon termination of this Agreement, the following provisions of this Agreement shall survive: a. Depositor's Representations (Section 1.5); b. The obligations of confidentiality with respect to the Deposit Materials; c. The rights granted in the sections entitled Right to Transfer Upon Release (Section 3.3) and Right to Use Following Release (Section 4.5), if a release of the Deposit Materials has occurred prior to termination; d. The obligation to pay DSI any fees and expenses due; e. The provisions of Article 7; and f. Any provisions in this Agreement which specifically state they survive the termination or expiration of this Agreement. 57 58 ARTICLE 6 -- DSI'S FEES 6.1 Fee Schedule. DSI is entitled to be paid its standard fees and expenses applicable to the services provided. DSI shall notify the party responsible for payment of DSI's fees at least 60 days prior to any increase in fees. For any service not listed on DSI's standard fee schedule, DSI will provide a quote prior to rendering the service, if requested. 6.2 Payment Terms. DSI shall not be required to perform any service unless the payment for such service and any outstanding balances owed to DSI are paid in full. Fees are due upon receipt of a signed contract or receipt of the Deposit Materials whichever is earliest. If invoiced fees are not paid, DSI may terminate this Agreement in accordance with Section 5.2. Late fees on past due amounts shall accrue interest at the rate of one and one-half percent per month (18% per annum) from the date of the invoice. ARTICLE 7 -- LIABILITY AND DISPUTES 7.1 Right to Rely on Instructions. DSI may act in reliance upon any instruction, instrument, or signature reasonably believed by DSI to be genuine. DSI may assume that any employee of a party to this Agreement who gives any written notice, request, or instruction has the authority to do so. DSI will not be required to inquire into the truth or evaluate the merit of any statement or representation contained in any notice or document. DSI shall not be responsible for failure to act as a result of causes beyond the reasonable control of DSI. 7.2 Indemnification. Depositor and Preferred Beneficiary each agree to indemnify, defend and hold harmless DSI from any and all claims, actions, damages, arbitration fees and expenses, costs, attorneys' fees and other liabilities ("Liabilities") incurred by DSI relating in any way to this escrow arrangement unless such Liabilities were caused solely by the negligence or willful misconduct of DSI. 7.3 Dispute Resolution. Any dispute relating to or arising from this Agreement shall be resolved by arbitration under the Commercial Rules of the American Arbitration Association. Three arbitrators shall be selected. The Depositor and Preferred Beneficiary shall each select one arbitrator and the two chosen arbitrators shall select the third arbitrator, or failing agreement on the selection of the third arbitrator, the American Arbitration Association shall select the third arbitrator. However, if DSI is a party to the arbitration, DSI shall select the third arbitrator. Unless otherwise agreed by Depositor and Preferred Beneficiary, arbitration will take place in San Diego, California, U.S.A. Any court having jurisdiction over the matter may enter judgment on the award of the arbitrator(s). Service of a petition to confirm the arbitration award may be made by First Class mail or by commercial express mail, to the attorney for the party or, if unrepresented, to the party at the last known business address. [THE PARTIES WILL DISCUSS TERMS FOR EXPEDITED DISPUTE RESOLUTION] 7.4 Controlling Law. This Agreement is to be governed and construed in accordance with the laws of the State of California, without regard to its conflict of law provisions. 7.5 Notice of Requested Order. If any party intends to obtain an order from the arbitrator or any court of competent jurisdiction which may direct DSI to take, or refrain from taking any action, that party shall: 58 59 a. Give DSI at least two business days' prior notice of the hearing; b. Include in any such order that, as a precondition to DSI's obligation, DSI be paid in full for any past due fees and be paid for the reasonable value of the services to be rendered pursuant to such order; and c. Ensure that DSI not be required to deliver the original (as opposed to a copy) of the Deposit Materials if DSI may need to retain the original in its possession to fulfill any of its other duties. ARTICLE 8 -- GENERAL PROVISIONS 8.1 Entire Agreement. This Agreement, which includes the Exhibits described herein, embodies the entire understanding among the parties with respect to its subject matter and supersedes all previous communications, representations or understandings, either oral or written. DSI is not a party to the License Agreement between Depositor and Preferred Beneficiary and has no knowledge of any of the terms or provisions of any such License Agreement. DSI's only obligations to Depositor or Preferred Beneficiary are as set forth in this Agreement. No amendment or modification of this Agreement shall be valid or binding unless signed by all the parties hereto, except that Exhibit A need not be signed by DSI, Exhibit B need not be signed by Preferred Beneficiary and Exhibit C need not be signed. 8.2 Notices. All notices, invoices, payments, deposits and other documents and communications shall be given to the parties at the addresses specified in the attached Exhibit C. It shall be the responsibility of the parties to notify each other as provided in this Section in the event of a change of address. The parties shall have the right to rely on the last known address of the other parties. Unless otherwise provided in this Agreement, all documents and communications may be delivered by First Class mail. 8.3 Severability. In the event any provision of this Agreement is found to be invalid, voidable or unenforceable, the parties agree that unless it materially affects the entire intent and purpose of this Agreement, such invalidity, voidability or unenforceability shall affect neither the validity of this Agreement nor the remaining provisions herein, and the provision in question shall be deemed to be replaced with a valid and enforceable provision most closely reflecting the intent and purpose of the original provision. 8.4 Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties. However, DSI shall have no obligation in performing this Agreement to recognize any successor or assign of Depositor or Preferred Beneficiary unless DSI receives clear, authoritative and conclusive written evidence of the change of parties. 8.5 Regulations. Depositor and Preferred Beneficiary are responsible for and warrant compliance with all applicable laws, rules and regulations, including but not limited to customs laws, import, export, and re-export laws and government regulations of any country from or to which the Deposit Materials may be delivered in accordance with the provisions of this Agreement. 59 60 - --------------------------------------- ------------------------------------ Depositor Preferred Beneficiary By: By: ------------------------------------ --------------------------------- Name: Name: ---------------------------------- ------------------------------- Title: Title: --------------------------------- ------------------------------ Date: Date: ---------------------------------- ------------------------------- DSI Technology Escrow Services, Inc. By: ---------------------------------------- Name: -------------------------------------- Title: ------------------------------------- Date: -------------------------------------- 60 61 EXHIBIT A MATERIAL TO BE DEPOSITED Account Number ------------------------- Depositor represents to Preferred Beneficiary that Deposit Materials delivered to DSI shall consist of the following: - --------------------------------------- ------------------------------------ Depositor Preferred Beneficiary By: By: ------------------------------------ --------------------------------- Name: Name: ---------------------------------- ------------------------------- Title: Title: --------------------------------- ------------------------------ Date: Date: ---------------------------------- ------------------------------- 61 62 EXHIBIT B DESCRIPTION OF DEPOSIT MATERIALS Depositor Company Name ---------------------------------------------------------- Account Number ------------------------------------------------------------------ Product Name Version ------------------------------------------ ----------------- (Product Name will appear as the Exhibit B Name on Account History report) DEPOSIT MATERIAL DESCRIPTION: Quantity Media Type & Size Label Description of Each Separate Item Disk 3.5" or - ------ --- DAT tape mm - ------ -- CD-ROM - ------ Data cartridge tape - ------ --- TK 70 or tape - ------ --- Magnetic tape - ------ --- Documentation - ------ Other - ------ -------------------------- PRODUCT DESCRIPTION: Environment ---------------------------------------------------------------- DEPOSIT MATERIAL INFORMATION: Is the media encrypted? Yes/No If yes, please include any passwords and the decryption tools. Encryption tool name Version -------------------------------------- --------------- Hardware required --------------------------------------------------------------- Software required --------------------------------------------------------------- Other required information ------------------------------------------------------ I certify for DEPOSITOR that the above DSI has inspected and accepted the described Deposit Materials have been above materials (any exceptions are transmitted to DSI: noted above): Signature Signature ---------------------------- --------------------------- Print Name Print Name ---------------------------- -------------------------- Date Dated Accepted ---------------------------------- ---------------------- Exhibit B # ------------------------- Send materials to: DSI, 9265 Sky Park Ct., Suite 202, San Diego, CA 92123 (858) 499-1600 62 63 EXHIBIT C DESIGNATED CONTACT Account Number ----------------------- Notices, deposit material returns and Invoices to Depositor should be communications to Depositor should be addressed to: addressed to: Company Name: ------------------------ ------------------------------------- Address: ----------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- Designated Contact: Contact: ------------------ ----------------------------- Telephone: --------------------------- ------------------------------------- Facsimile: P.O.#, IF REQUIRED: --------------------------- ------------------ Notices and communications to Invoices to Preferred Beneficiary Preferred Beneficiary should be should be addressed to: addressed to: Company Name: ------------------------ ------------------------------------- Address: ----------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- Designated Contact: Contact: ------------------ ----------------------------- Telephone: --------------------------- ------------------------------------- Facsimile: P.O.#, IF REQUIRED: --------------------------- ------------------ Requests from Depositor or Preferred Beneficiary to change the designated contact should be given in writing by the designated contact or an authorized employee of Depositor or Preferred Beneficiary. Contracts, Deposit Materials and Invoice inquiries and fee remittances notices to DSI should be addressed to: to DSI should be addressed to: DSI Technology Escrow Services, Inc. DSI Technology Escrow Services, Inc. Contract Administration Accounts Receivable 9265 Sky Park Court, Suite 202 P.O. Box 45156 San Diego, CA 92123 San Francisco, CA 94145-0156 Telephone: (858) 499-1600 (858) 499-1636 Facsimile: (858) 694-1919 (858) 499-1637 Date: -------------------------------- 63 EX-10.31 12 w46736ex10-31.txt LETTER AMENDMENT TO CDPD VALUE ADDED RESELLER AGRE 1 EXHIBIT 10.31 - -------------------------------------------------------------------------------- GoAmerica, Inc. has requested that the marked portions of this document be granted confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 - -------------------------------------------------------------------------------- GoAmerica, Inc. 433 Hackensack Avennue Hackensack, NJ 07601 GoAmerica, Inc. (888) 462-4600 Toll Free Wireless Internet Services (201) 996-1717 (201) 996-1772 (Fax) www.goamerica.net January 31, 2001 John Russell Director, Data Strategy and Development AT&T Wireless Services, Inc. P.O. Box 97061 Redmond, WA 98073-9761 Dear John: The purpose of this letter is to amend the May 6, 1997 CDPD Value Added Reseller Agreement (the "Agreement") between GoAmerica, Inc. ("GoAmerica") and AT&T Wireless Services, Inc. ("AT&T"), as follows: Section 6.3 of the Agreement is amended to provide that the period within which GoAmerica may dispute an invoice is reduced from [**] days after receipt of such invoice to [**] days after receipt of such invoice. Furthermore, with respect to all invoices delivered by AT&T and received by GoAmerica to date and all charges incurred by GoAmerica through the date of the last invoice received by GoAmerica to date, neither party shall dispute such amounts due or payable. GoAmerica agrees that it will commit that any future disputes over invoice amounts will not be the result of a GoAmerica employee placing an End User in an incorrect or inappropriate pricing plan. Upon execution of this letter by AT&T, AT&T shall issue a credit in the amount of $[**] to GoAmerica for the dispute settlement with respect to May and June 2000 invoices. Except as amended by the terms of this letter, all other terms and conditions of the Agreement shall remain unchanged. 2 Please have an authorized officer of AT&T sign a copy of this letter in the space provided below and return a copy to the attention of Ellen Flora to indicate your agreement to the terms and conditions set forth above. Sincerely, GOAMERICA, INC. By: /s/ Joseph Korb -------------------------------- Joseph Korb President ACKNOWLEDGED AND AGREED: AT&T Wireless Services, Inc. By: /s/ Christopher Hall ------------------------------- Name: Christopher Hall Title: National Segment Manager EX-10.32 13 w46736ex10-32.txt AMEND. NO 1 TO AIRBRIDGE PACKET SERVICE AGREE 1 EXHIBIT 10.32 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. 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"). 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. The term of the Agreement is hereby extended for three (3) years, from the date this Amendment is executed, and shall automatically renew for additional one (1) year terms, unless Customer notifies BAM in writing at least sixty (60) day prior to the expiration of the then current term, that it does not wish to renew the Agreement.' Exhibit B, Price Schedule is hereby deleted in its entirety and replaced with a new Exhibit B and B1, as attached hereto. 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. Section 4, of the Agreement, "Installation", is hereby deleted in its entirety. Section 2, of the Agreement, "Provision of Service", second sentence, the term "exclusively", is hereby deleted and replaced with the term "preferred". 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. 2 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 Exhibit A, is hereby deleted in its entirety and replaced with a new Exhibit A, in the form attached hereto. Exhibit C, "Airbridgea 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. This Amendment shall be effective when executed by both parties. 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 GOAMERICA BY BELL ATLANTIC MOBILE, INC. COMMUNICATIONS CORPORATION ITS MANAGING GENERAL PARTNER: By: /s/Robert J. Hirsh By: /s/ Francis J.Elenio ---------------------------------- ------------------------ Name: Robert J. Hirsh Name: Francis J.Elenio -------------------------------- ---------------------- Title: Exec. Dir. Data Sales & Mrtg. Title: CFO ------------------------------- --------------------- Date: 1/7/00 Date: 12/28/99 ------------------------------- ----------------------
3 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. 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 R1, 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. COUNTIES OF THE RSA(s) IN WHICH BAM IS LICENSED: 4 NORTHEAST REGION: Windham in CT 2-WINDHAM; Newport in 111-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 (131); 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, Cameron, and Elk in PA 2 MCKEAN; Butler, Clarion, Lawrence and Armstrong in PA 6 LAWRENCE 1132); Indiana, Jefferson and Clearfield in PA 7 JEFFERSON; Greene and Fayette in PA 9 GREENE; Huntingdon, Juniata and Mifflin in PA 11 HUNTINGDON (132). NORTHERN NEW JERSEY/NY METRO REGION: Hunterdon in NJ I-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 (131); Madison, Culpeper, Orange, Fredericksburg City, Spotsylvania, Louisa and Stafford VA 11 -MADISON (133); Caroline, King George, King William, King & Queen, Essex, Richmond, Westmoreland, Northumberland. Lancaster, Mathews, Northampton, Accomack, and Middlesex in VA 12-CAROLINE (132). 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. 5 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT B AirBridge@) Internet Access Monthly Access fee: [**] per month 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): Ail www browser software J clients, or Citrix All e-mail servers and systems AOL, Prodigy, CompuServe client software Lotus Domino and Microsoft Exchange systems PalmPilot compatible browsers (HandWeb, etc.) These rate plans are not to be used for other applications such as telemetry or customized third party software packages. 6 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT B1 AirBridge@) Internet Access Silver Price Plan
Access Fee $[**] Usage in BAM Markets [**]* Usage Outside BAM Markets $[**] NEI Unit Commitment [**] Activation fee $[**] Contract Term in Years 3
Commitment Schedule: NEIs in Service - -------------------------------- --------------- Month 1 [**] Month 2 [**] Month 3 [**] Month 4 [**] Month 5 [**] Month 6 [**] Month 7 [**] Month 8 [**] Month 9 [**] Month 10 [**] Month 11 [**] Month 12 to 36 [**] $[**] Traveler Option Available
Pricing does not include electronic billing information Use limited to the following applications All web browser software AOL, Prodigy, Compuserve All customer E-mail servers LOTUS DOMINO, MICROSOFT EXCHANGE 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 NELS CORRESPONDING TO THE COMMITMENT SCHEDULE SHOWN ABOVE, CUSTOMER SHALL BE CHARGED AS IF THOSE NEW WERE IN SERVICE. 7 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 DAM 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 NEls 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 100. These NEIs will be reserved by BAM geographic region (i.e. 100 NEI's out of NY Metro, 100 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 DAM COOS department (Please see Exhibit C, page 3). This form will be filled out by an authorized VAC representative and will list the NEls from the reserved block to be activated. The DAM 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.
8 EXHIBIT C Page 2 CUSTOMER: GO AMERICA CUSTOMER #: 758 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 ID CONTRACT LENGTH NEI - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - --------------------------------------------------------------------------------------------- HQ VAC - ---------------------------------------------------------------------------------------------
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 9 EXHIBIT C Page 3 CUSTOMER: GO AMERICA CUSTOMER #: 758 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 100):
- ------------------------------------------------------------------------------------------ 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. EX-10.33 14 w46736ex10-33.txt AMEND. NO 2 TO AIRBRIDGE PACKET SERVICE AGREEMENT 1 EXHIBIT 10.33 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AMENDMENT NO. 2 This AMENDMENT No. 2 (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. Exhibit A, is hereby deleted in its entirety and replaced with a new Exhibit A, in the form attached hereto. 3. A new Exhibit B-2, "Pioneer Price Schedule" is hereby added in its entirety as attached hereto. 4. A new paragraph is hereby added to Section 3, "Pricing" as follows: "In order to qualify for and receive the rates as shown in this (Amendment), Exhibit B1, "Pioneer Price Schedule," Customer shall provide a pre-payment of $[**], to BAM for charges associated with Customer Contract ###-##-#### to be deposited in an account associated with this Contract Number prior to BAM activating any NEIs on this plan. As NEIs are activated and charges are incurred on this plan, BAM may draw down these funds for any and all charges or fees incurred by Customer. If at anytime the BAM account associated with this Contract Number is less than $[**], Customer shall, within [**] of written notification from BAM, remit payment to achieve a minimum amount of $[**] in the account. Upon non-payment of any sum due BAM, or upon a violation by Customer of any of the provisions of this Agreement, BAM may immediately upon written notice deny any further NEI activations from Customer without incurring any liability. In the event that after [**], Customer fails to make minimum payments required to achieve $[**] in the account associated with this Contract Number BAM may immediately upon written notice temporarily discontinue or interrupt the furnishing of the Service to the Customer. Any failure to achieve the $[**] minimum threshold on a timely basis shall be considered a breach and BAM may pursue any and all of its rights including termination of service and termination of the Agreement." 2 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. If at the conclusion of the extended term of this Agreement, Customer wishes for this Agreement to automatically renew for an additional one year term as specified in Section 15, Term of Agreement, and continue to take advantage of the rates shown in Exhibit B1, it shall be required to maintain a minimum of [**] active NEIs per month. If such minimum is not maintained, Customer shall be charged the difference between [**] and the actual number of active NEIs, on the following month's invoice. NEIs active on rate plans other than the plan shown on Exhibit B1, shall not be included for the purpose of determining whether Customer has met its monthly minimum." 5. This Amendment shall be effective when executed by both parties. 6. 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. GOAMERICA Its managing general partner: COMMUNICATIONS CORPORATION By : /s/ James Surnight By : /s/ Joseph Korb -------------------------------- ------------------------------- Name: James Surnight Name: Joseph Korb ------------------------------- ------------------------------- Title: VP Data & Internet Services Title: President ------------------------------ ------------------------------- Date: 2/13/01 Date: 2/9/01 ------------------------------- ------------------------------- 3 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 MSA4 Albany NY, Montgomery NY, Rensselaer NY, Saratoga NY, Schenectady NY of the Albany MSA. PITTSBURG 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 MSA7, 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. 4 (b) COUNTIES OF THE RSA(s) IN WHICH BAM IS LICENSED: Northeast Region: Windham in CT 2-WINDHAM; Newport in RI-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 I-FRANKLIN; Addison, Rutland, Windsor, Bennigton and Windham in VT 2-ADDISON (131); Ostego, Delaware, Schoharie, Sullivan and Ulster in NY 5-OSTEGO. PITTSBURGH REGION: Mason, Jackson, Roane, and Calhoun in WV I 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 (132). 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, Talbor, Caroline, Dorcl-ester, 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 (BI); 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, Matthews, Northampton, Accomack, and Middlesex in VA 12-CAROLINE (132). 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 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. 5 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT B1 PIONEER PRICE SCHEDULE Monthly Charge per NEI $[**] Kilobyte Allowance per NEI [**] KB Allowance is aggregated monthly across all NEIs on this rate plan. Kilobyte Rate over Allowance $[**]/KB Visiting Rate per Kilobyte $[**]/KB Activation Charge per NEI $[**]
"In order to qualify for and receive the rates as shown, Customer shall provide a pre-payment of $[**], to be deposited in account associated with the customer contract prior to BAM activating any NEIs on this plan. As NEIs are activated and charges incurred on this plan, BAM may draw down these funds for any and all charges or fees incurred by GoAmerica. If at anytime the BAM account is less than $[**], Customer shall, within [**] of written notification from BAM, remit payment to achieve a minimum amount of $[**] in the account. Upon non-payment of any sum due BAM, or upon a violation by Customer of any of the provisions of this Agreement, BAM may immediately upon written notice deny any further NEI activations from Customer without incurring any liability. In the event that after [**], Customer fails to make minimum payments required to achieve $[**] in the account BAM may immediately upon written notice temporarily discontinue or interrupt the furnishing of the Service to the Customer. Any failure to achieve the $[**] minimum threshold on a timely basis shall be considered a breach and BAM may pursue any and all of it's rights including termination of service and termination of the Agreement." If at the conclusion of the extended term of this Agreement, Customer wishes for this Agreement to automatically renew for an additional one year term as specified in Section 15, Term of Agreement, and continue to take advantage of the rates shown in Exhibit B1, it shall be required to maintain a minimum of [**] active NEIs per month. If such minimum is not maintained, Customer shall be charged the difference between [**] and the actual number of active NEIs, on the following month's invoice. NEIs active on rate plans other than the plan shown on Exhibit 131, shall not be included for the purpose of determining whether Customer has met its monthly minimum." 6 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT B-2 PIONEER PRICE SCHEDULE Monthly Charge per NEI S[**] Kilobyte Allowance per NEI [**]KB Allowance is aggregated monthly across all NEIs on this rate plan. Kilobyte Rate over Allowance $[**]/KB Visiting Rate per Kilobyte $[**]/KB Activation Charge per NEI $[**]
Note: Participation in this rate plan is subject to the requirements set forth in Section 4 of this Amendment to Contract ###-##-#### between BAM and Go America Communications Corporation. EX-10.34 15 w46736ex10-34.txt AMEND. NO 3 TO AIRBRIDGE PACKET SERVICE AGREEMENT 1 EXHIBIT 10.34 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AMENDMENT NO. 3 This AMENDMENT No. 3 (the "Amendment") is made and entered into by and between GoAmerica Communications Corporation ("Customer") and Cellco Partnership, doing business as Verizon Wireless ("Verizon Wireless") for attachment to Contract ####-##-####, dated May 13, 1997 (the "Agreement") and as amended on January 7, 2000 and March 6, 2000. 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. BAM's name is hereby changed to Verizon Wireless. 3. The term "AirBridge Packet Service" is hereby changed to "Mobile IP Services." 4. The term of this Agreement (the "Extended Term") is extended for four (4) years from the effective date of this Amendment. 5. Exhibit A, is hereby deleted in its entirety and the definition of "Area", in Section 1 of the Agreement, is also deleted and replaced as follows: "The markets within which Verizon Wireless either is licensed or 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 Verizon Wireless currently or may provide Mobile IP Services." 2 A new Exhibit B-3, "AIA Platinum and Palm Platinum Pricing" is hereby added in its entirely as attached hereto. Customer hereby acknowledges that it may take up to thirty (30) days from the execution of this Amendment for the rates shown in Exhibit B-3 to be implemented. This Amendment shall be effective when executed by both parties. 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 Verizon Wireless, GOAMERICA Its managing general partner: COMMUNICATIONS CORPORATION By: /s/ James Surnight By: /s/ Joseph Korb -------------------------------- -------------------------- Name: James Surnight Name: Joseph Korb ------------------------------ ------------------------ Title: VP Data & Internet Services Title: President ----------------------------- ----------------------- Date: 2/13/01 Date: 2/9/01 ------------------------------ ------------------------
3 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. EXHIBIT B-3 Mobile IP Internet Access Pricing Platinum and Palm Platinum Pricing Verizon Wireless' Commitment Plans require a minimum number of units in service on the network during specific times. Please see the commitment schedules below for the associated commitment time frames. Verizon Wireless' Mobile IP Platinum Commitment plan has a minimum number of units commitment of [**] and its Mobile IP Palm Platinum Plan has a minimum number of units commitment of [**]. However, for the purposes of this Amendment, Customer must maintain a minimum number of [**] NEIs across the rate plans shown in this Exhibit B-3. In the event that Customer does not activate or falls below the minimum number of units, Customer will be invoiced as if the total number of units associated with their Commitment Plan were active. Verizon Wireless will invoice Customer the difference between the units in service and the commitment level for that month, multiplied by the monthly access fee of $[**]. At the end of the first year of the Extended Term of this Agreement, Customer must maintain [**] units in service during a given month. If such minimum is not maintained, Customer will be charged $[**] monthly access fee for those units that represent the shortfall. The volume commitments shown below are in addition to existing commitments contained in Contract ####-##-####, dated May 13,1997 and its subsequent Amendments 1 and 2. NEIs active on the $[**] price plan contained in Contract # ###-##-#### and its subsequent Amendments 1 and 2, may convert to the $[**] rate plan shown in this Exhibit B-3, but shall not count towards Customer's [**] NEI minimum commitment. All price plans are only available for Customer for the provision to its Authorized Users as part of the mobile data communications system which offers bundled Customer content through standard browser-based Internet applications only, intended for use with Palm OS handhelds, Microsoft Pocket PC based handhelds, and Microsoft Windows based notepads and laptops. No telemetry, AVL, or public safety applications will be available on these plans. Pursuant to the terms of this Agreement, Verizon Wireless reserves the right to investigate the usage of any NEI and reserves the right to suspend NEIs that are being used fraudulently. (insert) Each new IP activated is for a one year contract. If the individual IP is not in service for twelve months, an early termination fee of $[**]per will be applied. 4 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
- -------------------------------------------------------------------------------- Mobile IP Internet Access Pricing Platinum and Palm Platinum Pricing Commitment Schedule - -------------------------------------------------------------------------------- Month NEIs in Service - -------------------------------------------------------------------------------- Month 1 [**] - -------------------------------------------------------------------------------- Month 2 [**] - -------------------------------------------------------------------------------- Month 3 [**] - -------------------------------------------------------------------------------- Month 4 [**] - -------------------------------------------------------------------------------- Month 5 [**] - -------------------------------------------------------------------------------- Month 6 [**] - -------------------------------------------------------------------------------- Month 7 [**] - -------------------------------------------------------------------------------- Month 8 [**] - -------------------------------------------------------------------------------- Month 9 [**] - -------------------------------------------------------------------------------- Month 10 [**] - -------------------------------------------------------------------------------- Month 11 [**] - -------------------------------------------------------------------------------- Month 12 [**] - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- Monthly Access Fee $[**] - -------------------------------------------------------------------------------- Non Verizon Wireless Visiting Rate $[**] - -------------------------------------------------------------------------------- Unit Commitment [**] - -------------------------------------------------------------------------------- Activation Fee $[**] - -------------------------------------------------------------------------------- Early Termination Fee $[**] - -------------------------------------------------------------------------------- Contract Term and CSA Term in Years 4 Years - --------------------------------------------------------------------------------
Note: Use limited to the following applications: All web browser software, AOL, Prodigy, CompuServe, All customer E-mail servers, Lotus Domino, Microsoft Exchange 5 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
- -------------------------------------------------------------------------------- Mobile IP Palm Platinum Plan - -------------------------------------------------------------------------------- Monthly Access Fee [**] - -------------------------------------------------------------------------------- Non-Verizon Wireless Visiting Rate $[**] - -------------------------------------------------------------------------------- Unit Commitment [**] - -------------------------------------------------------------------------------- Activation Fee $[**] - -------------------------------------------------------------------------------- Early Termination Fee $[**] - -------------------------------------------------------------------------------- Contract Terms in Years 4 Years - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- Palm Platinum Plan Terms and Conditions: This service may be used only with Palm OS Personal Digital Assistants and Novatel Wireless and Sierra Minstrel CDPD modems for the Palm III and V, and Handspring Visor only. This service may be used only with mobile clients for Internet/Intranet access and Internet e-mail via an HTML browser or proprietary client software for Public Online Service Providers (e.g., GoAmerica browser and pop3 email account, AOL(R), CompuServe(R), ProdigyInternet(TM)), and related mail clients. It may also be used with software for proxy applications (e.g., Citrix(R)) and for dispatch applications. This service cannot be used by a server device or with a host computer application. Examples of restricted uses for this service include, but are not limited to, web camera posts or broadcasts, capture and transmission of jpeg files, automatic data feeds, telemetry applications, automated functions, or machine-to machine applications. This service may not be substituted for a private line or frame relay connection. A POP3 electronic mailbox @airbridge.net is included. Five megabytes of mail storage are provided. Within the disk space limitation, we will keep unread e-mail for a minimum of 30 days. Users are permitted a maximum of 2,500 e-mail log-on attempts per month. Access to Verizon Wireless Mobile Web Microbrowser Gateway Information services is Included for users of capable devices. The term of this contract is four (4) years. An Early Termination Fee of $[**] per IP address applies. Taxes where applicable are not Included. Verizon Wireless, without notice retains the right to deny service to any of GoAmerica's end user customers whose usage adversely impacts our network or service levels. This Rate Plan Is subject to the terms and conditions of the Value Added Contract (VAC) which Is Incorporated herein by reference, including dispute resolution by Independent arbitration Instead of jury trials. - -------------------------------------------------------------------------------- 6 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. Mobile IP Internet Access Commitment Plan Terms and Conditions: This service may only be used for the following applications: - -------------------------------------------------------------------------------- 1. Internet/intranet access and Intranet e-mail via a standard HTML browser (e.g., Netscape Navigator or Communicator, Microsoft Internet Explorer, GoAmerica browser and pop3 email account etc.) 2. Proprietary client software for Public Online Service Providers (e.g., AOL, CompuServe, Prodigy) and mail client. 3. PalmPilot or Windows CE compatible browers (e.g., HandWeb, ProxiWeb, Pocket Explorer, etc.) and e-mail (e.g., HandStamp, Outlook Express, etc.) 4. Citrix (an alternative browsing technology) 5. Dispatch (where a human being at a terminal is sending information to one or more mobile users' machine) This service cannot be used by a server device or with a host computer application. Examples of restricted uses for this service include, but are not limited to, web camera posts or broadcasts, capture and transmission for jpeg files, automatic data feeds, telemetry applications, automated functions, or machine-to-machine applications. This service may not be substituted for a private line or frame relay connection. A POP3 electronic mailbox @airbridge.net is included. Five megabytes of mail storage are provided. Within the disk space limitation, we will keep unread e-mail for a minimum of 30 days. Users are permitted a maximum of [**] e-mail log-on attempts per month. Access to Verizon Wireless Mobile Web Microbrowser Gateway information services Is Included for users of capable devices. The term of this contract is four (4) years. An Early Termination Fee of $[**] per IP address applies. Taxes where applicable are not included. Verizon Wireless retains the right to deny service, without notice, to any customer whose usage adversely impacts our network or service levels. This Rate Plan is subject to the terms and conditions of the Value Added Contract (VAC) which is incorporated herein by reference, including dispute resolution by independent arbitration instead of jury trials. Pricing does not include electronic billing information. - -------------------------------------------------------------------------------- EX-10.35 16 w46736ex10-35.txt AMEND. NO 1 TO VALUE ADDED RESELLER AGREEMENT 1 EXHIBIT 10.35 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AMENDMENT NUMBER ONE TO VALUE ADDED RESELLER AGREEMENT THIS AMENDMENT NUMBER ONE TO VALUE ADDED RESELLER AGREEMENT (the "Amendment"), is made and entered into on the date authorized signatures of both parties are affixed hereto, by and between BellSouth Wireless Data, L.P., with an address at 10 Woodbridge Center Drive, Woodbridge, New Jersey . 07095 ("BellSouth"), and GoAmerica Communications Corporation, with an address at 401 Hackensack Avenue, Hackensack, New Jersey 07601 ("GoAmerica"). WHEREAS, BellSouth and GoAmerica have entered into a 'Value Added Reseller Agreement dated August 31, 1999 (the "Agreement"); and WHEREAS, BellSouth and GoAmerica desire to amend the Agreement as set forth below. NOW,THERE FORE, in consideration of the mutual covenants hereinafter set forth and other good and valuable consideration, BellSouth and GoAmerica hereby agree to amend the Agreement follows: 1. The subparagraph of Section III of Schedule 2.2 entitled "Regular Price Plan" and the rates forth therein (the "Original Rates") are hereby amended to provide that all services provided to "New Subscriber Units" shall be charged as set forth in subparagraphs "a" through "d" below. For purposes of this Amendment, "New Subscriber Units" shall mean GoAmerica customer Subscriber Units activated under this Amendment and for the first time on the BellSouth Facilities, but including Subscriber Units activated under the Special Price Plans provided for in Section III or to which BellSouth provides BellSouth Interactive Paging Service. a) Each New Subscriber Unit billable under this Agreement shall be billed each month at following rates (the "New Rates") i) $[**]for the first [**] Kilobytes or part thereof, plus ii) $[**] for each Kilobyte or part thereof in excess of the [**] Kilobyte per month limit until charge of $[**] is reached which shall entitle the New Subscriber to continue to use Kilobytes up to a maximum of [**] Kilobytes during that month, plus iii) $[**] for each Kilobyte or part thereof in excess of the [**] Kilobyte per month limit. b) It is provided however, that in no event shall the monthly fees chargeable to and payable GoAmerica under Subparagraph III of Schedule 2.2 (the "Recurring Charges") be less than $[**] per month. 2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. c) The New Rates shall: (i) be subject to review as follows: At any time between the 120th and 150th day following signing of this Amendment BellSouth and GoAmerica may review the number of Subscriber Units activated and revenue generated by GoAmerica and send written notice to the other party requesting a re-negotiation of the applicable rates. In such event the parties shall negotiate in good faith and try to reach agreement on the rates which should apply to GoAmerica. If the parties do not reach agreement by the 30th day after the receipt of the written notice, then either party may terminate the New Rates by written notice to the other. (ii) automatically terminate unless GoAmerica has generated, and continued to maintain monthly Recurring Charges of $[**] (the "[**]K Threshold") by June 30, 2000 and $[**] (the "[**]K Threshold") by September 30, 2000, (iii) apply to all GoAmerica Subscriber Units if GoAmerica reaches the [**]K Threshold, and (iv) shall terminate if the Recurring Charges fall below the [**]K Threshold for any month aft June 30, 2000, or if the Recurring Charges fall below the [**]K Threshold for any month after September 30, 2000., d) In the event the New Rates shall terminate as provided in Subparagraph 1c of the Amendment, then thereafter until the end of the Term of the Agreement: i) all New Subscriber Units shall be activated at the Original Rates; ii) all New Subscriber Units activated prior to the termination and any GoAmerica Subscriber Units existing prior to the Amendment which were being charged at the New Rates pursuant to subparagraph 1ciii (if any), shall continue to be charged at the New Rates until the end of the Initial Term and thereafter shall be charged at the Original Rates for any Renewal Term and iii) the minimum monthly fees provided for in Subparagraph 1(b) of this Amendment shall terminate. 2. Except as modified and/or amended herein, all of the definitions, terms, covenants and conditions contained in the Agreement shall remain in full force and effect and shall be applicable to this Amendment. -2- 3 IN WITNESS WHEREOF, GoAmerica and BellSouth have caused this Amendment to be duly executed by their respective duly authorized representatives as of the day and year first above written. This Amendment will not be fully executed and binding on the parties unless and until authorized signatures of both parties are affixed hereto. GoAmerica Communications Corp. BellSouth Wireless Data, L.P. By: Joseph Korb By: Thomas Langan ----------------------------------- --------------------------------- Title: Executive Vice President Title: Vice President -------------------------------- ------------------------------ Date: March 8, 2000 Date: 3/9/00 --------------------------------- ------------------------------- -3- EX-10.36 17 w46736ex10-36.txt AMENDMENT NO. 2 TO VALUE ADDED SELLER AGREEMENT 1 EXHIBIT 10.36 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AMENDMENT NUMBER TWO TO VALUE ADDED RESELLER AGREEMENT THIS AMENDMENT NUMBER TWO TO VALUE ADDED RESELLER AGREEMENT (the "Amendment"), is made and entered into on the date authorized signatures of both parties are affixed hereto, by and between BellSouth Wireless Data, L.P., with an address at 10 Woodbridge Center Drive, Woodbridge, New Jersey 07095 ("BellSouth"), and GoAmerica Communications Corporation, with an address at 401 Hackensack Avenue, Hackensack, New Jersey , 07601 ("GoAmerica"). WHEREAS. BellSouth and GoAmerica have entered into a "Value Added Reseller Agreement", dated August 31, 1999 which agreement was amended by the parties by Amendment Number Two to Value Added Reseller Agreement signed by GoAmerica on March 10, 2000 and by BellSouth on March 10, 2000 (collectively the "Agreement"); and WHEREAS, BellSouth and GoAmerica desire to further amend the Agreement to permit GoAmerica to provide for certain Supplemental Services as defined and set forth below. NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and other good and valuable consideration. BellSouth and GoAmerica hereby agree to further amend the Agreement as follows: 1. A) GoAmerica shall have the right to provide GoAmerica Service to subscribers for use in connection with Subscriber Units activated on the BellSouth Facilities by BellSouth, or by third party resellers (the "Supplemental Services") only under the following conditions: a) GoAmerica shall provide Supplemental Services only In connection with GoAmerica's GoWeb service (the "Supplemental GoWeb Service") and not in connection with any other GoAmerica Service, b) it shall be GoAmerica's obligation to obtain any consent which may be required by the third party reseller, if any, which has registered the unit an the BellSouth Facilities, b) GoAmerica shall not provide Supplemental GoWeb Services to a Subscriber Unit without prior written notice to BellSouth Informing BellSouth of the MAN number of each radio modem to which GoAmerica Intends to provide Supplemental GoWeb Service, c) GoAmerica shall Identify a unique Fixed Terminal Subscription which shall permit BellSouth to Isolate and bill the Supplemental GoWeb Service as stand alone GoWeb traffic and d) GoAmerica shall pay for the use of the BellSouth Facilities, in connection With the provision of Supplemental GoWeb Services, as provided In Section 2 of this Amendment, 2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. A) Except as provided in Section 1A above with respect to Supplemental GoWeb Service, GoAmerica shall not provide Supplemental Services without the written consent of BellSouth. As a condition of BellSouth's consent, BellSouth shall have the right to charge such additional fees and impose such additional terms and conditions, as BellSouth in its sole discretion shall deem appropriate. 2. Section III of Schedule 2.2 is amended to add the following additional Price Plan: "Supplemental GoWeb Services Price Plan Any Subscriber unit billable under this Price Plan shall be billed each month at the rate of i) $[**] for the first [**] Kilobytes or part thereof, plus ii) $[**] for each Kilobyte or part thereof in excess of the [**] Kilobyte per month limit." 3. Except as modified and/or amended herein, all of the definitions, terms, covenants and conditions contained in the Agreement shall remain in full force and effect and shall be applicable to this Amendment. IN WITNESS WHEREOF, GoAmerica and BellSouth have caused this Amendment to be duly executed by their respective duly authorized representatives as of the day and year first above written. This Amendment will not be fully executed and binding on the parties unless and until authorized signatures of both parties are affixed hereto. GoAmerica Communications Corp. BellSouth Wireless Data, L.P. By: Joseph Korb By: Thomas Langan ----------------------------- --------------------------- Title: Executive Vice President Title: Vice President -------------------------- ------------------------ Date: March 21, 2000 Date: 3/10/00 --------------------------- ------------------------
-2- EX-10.37 18 w46736ex10-37.txt EMPLOYMENT AGREEMENT FOR DAVID BLUMENTHAL 1 Exhibit 10.37 EMPLOYMENT AGREEMENT THIS AGREEMENT made effective as of the 1st day of November 2000 (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 David Blumenthal (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 Operating 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"). 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 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 Operating Officer of a company comparable to the Company. The Employee will hold, in addition to the office of Chief Operating 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 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- 3 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. The Employee shall be paid an initial base salary at the rate of $175,000 per year. Effective January 1, 2001, the initial base salary shall be subject to an increase at the standard rate of any increases for similarly situated executive employees. Thereafter, 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") annually during the term hereof. The Employee's base salary shall be payable in equal installments in accordance with the Company's general salary payment policies but no less frequently than monthly. (b) Bonuses. The Employee shall be eligible for and may receive bonuses. The amount of such 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. Any such awards shall be made on a basis commensurate with other similarly situated executive employees. (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 similarly -3- 4 situated executive level 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 as are made available to other similarly situated executive level employees. (e) Expenses. Subject to and in accordance with reasonable policies and procedures maintained by the Company from time to time concerning documentation of expenses, the Employee hereby is authorized to incur, and, 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 per year. In addition, the Employee shall be entitled to 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. -4- 5 (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 be 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 (other than the transaction contemplated by the Asset Purchase Agreement dated as of the 31st day of October 2000, by and among the Company, GoAmerica Communications Corp., Flash Creative Management, Inc., and the shareholders of Flash Creative Management, Inc. listed on Annex I to the Asset Purchase Agreement); 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 unreasonable 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. -5- 6 (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 be 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; (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; and (iv) The requirement that the Employee to be based at a location outside of a fifty (50) mile radius from Hackensack, New Jersey, except for required travel on the Company's business to an extent substantially consistent with the Employee's business obligations. (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 -6- 7 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: (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 twelve (12) months from the date of such termination. 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- 8 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- 9 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) 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) In consideration for the Company entering into the Asset Purchase Agreement dated as of the 31st day of October 2000, by and among the Company, GoAmerica Communications Corp., Flash Creative Management, Inc., and the shareholders of Flash Creative Management, Inc. listed on Annex I to the Asset Purchase Agreement, in consideration for the value and good will being acquired pursuant thereto, and because the Employee acknowledges and agrees that he has access to secret and confidential information of the Company and its subsidiaries, the following restrictive covenant is necessary -9- 10 to protect the interests and continued success of the Company. Except as otherwise expressly consented to in writing by the Company, during the time period (the "Restricted Period") that begins on the Effective Date and ends on the latter of the date that is i) three years from the date of the consummation of the Asset Purchase Agreement or ii) twelve (12) months from the date of termination of Employee's employment hereunder, except as otherwise expressly consented to in writing by the Company, 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 ( hereafter a "Competitive Business") or activities of which the Employee is aware the Company plans to conduct within one (1) year of termination; (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; -10- 11 (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 Restricted Period, and with respect to any company which may be deemed directly or indirectly to be a Competitive Business or a business 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 the Company's Employee-At-Will, Invention Assignment, Confidentiality and Non-Solicitation Agreement attached hereto as Exhibit A (the "ICN Agreement"), which is incorporated herein by reference and made a part hereof as though fully set forth herein. To the extent that the terms of -11- 12 this Agreement are inconsistent with the terms of the ICN Agreement, the terms of this Agreement shall govern. Employee acknowledges and understands that Section 8 hereof and the ICN Agreement will survive the termination of his employment with the Company. (f) Employee acknowledges and agrees that in the event of a breach or threatened breach of the provisions of this Section 8 and/or the ICN Agreement 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 and/or the ICN Agreement. 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. (g) A Competitive Business shall be determined as of the date the Employee's employment with the Company terminates. As of the Effective Date a Competitive Business is the provision of wireless services, i.e., those provided by a wireless network service provider such as ATT Wireless Services, Verizon Wireless, OmniSky, Aether, Motient, and Metricom or those provided by product companies such as Research in Motion, Sierra Wireless and Novatel. 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 -12- 13 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 and the ICN Agreement--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 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. -13- 14 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 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. -14- 15 (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 the ICN Agreement attached as 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- 16 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/ Aaron Dobrinsky - ------------------------------------ -------------------------------- Francis J. Elenio, Secretary Aaron Dobrinsky, President Address: --------------------------- --------------------------- --------------------------- WITNESS: EMPLOYEE /s/ Lior Hod /s/ David Blumenthal - ------------------------------------ ----------------------------------- David Blumenthal Address: 452 Churchill Road -------------------------- Teaneck, NJ 07666 -------------------------- -------------------------- -16- 17 EXHIBIT A -A1- EX-10.38 19 w46736ex10-38.txt EMPLOYMENT AGREEMENT FOR YAIR ALAN GRIVER 1 Exhibit 10.38 EMPLOYMENT AGREEMENT THIS AGREEMENT made effective as of the 1st day of November 2000 (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 Alan Griver (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 Information 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"). 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 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 Information Officer of a company comparable to the Company. The Employee will hold, in addition to the office of Chief Information 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 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- 3 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. The Employee shall be paid an initial base salary at the rate of $175,000 per year. Effective January 1, 2001, the initial base salary shall be subject to an increase at the standard rate of any increases for similarly situated executive employees. Thereafter, 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") annually during the term hereof. The Employee's base salary shall be payable in equal installments in accordance with the Company's general salary payment policies but no less frequently than monthly. (b) Bonuses. The Employee shall be eligible for and may receive bonuses. The amount of such 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. Any such awards shall be made on a basis commensurate with other similarly situated executive employees. (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 similarly -3- 4 situated executive level 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 as are made available to other similarly situated executive level employees. (e) Expenses. Subject to and in accordance with reasonable policies and procedures maintained by the Company from time to time concerning documentation of expenses, the Employee hereby is authorized to incur, and, 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 per year. In addition, the Employee shall be entitled to 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. -4- 5 (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 be 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 (other than the transaction contemplated by the Asset Purchase Agreement dated as of the 31st day of October 2000, by and among the Company, GoAmerica Communications Corp., Flash Creative Management, Inc., and the shareholders of Flash Creative Management, Inc. listed on Annex I to the Asset Purchase Agreement); 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 unreasonable 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. -5- 6 (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 be 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; (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; and (iv) The requirement that the Employee to be based at a location outside of a fifty (50) mile radius from Hackensack, New Jersey, except for required travel on the Company's business to an extent substantially consistent with the Employee's business obligations. (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 -6- 7 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: (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 twelve (12) months from the date of such termination. 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- 8 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- 9 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) 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) In consideration for the Company entering into the Asset Purchase Agreement dated as of the 31st day of October 2000, by and among the Company, GoAmerica Communications Corp., Flash Creative Management, Inc., and the shareholders of Flash Creative Management, Inc. listed on Annex I to the Asset Purchase Agreement, in consideration for the value and good will being acquired pursuant thereto, and because the Employee acknowledges and agrees that he has access to secret and confidential information of the Company and its subsidiaries, the following restrictive covenant is necessary -9- 10 to protect the interests and continued success of the Company. Except as otherwise expressly consented to in writing by the Company, during the time period (the "Restricted Period") that begins on the Effective Date and ends on the latter of the date that is i) three years from the date of the consummation of the Asset Purchase Agreement or ii) twelve (12) months from the date of termination of Employee's employment hereunder, except as otherwise expressly consented to in writing by the Company, 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 ( hereafter a "Competitive Business") or activities of which the Employee is aware the Company plans to conduct within one (1) year of termination; (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; -10- 11 (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 Restricted Period, and with respect to any company which may be deemed directly or indirectly to be a Competitive Business or a business 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 the Company's Employee-At-Will, Invention Assignment, Confidentiality and Non-Solicitation Agreement attached hereto as Exhibit A (the "ICN Agreement"), which is incorporated herein by reference and made a part hereof as though fully set forth herein. To the extent that the terms of -11- 12 this Agreement are inconsistent with the terms of the ICN Agreement, the terms of this Agreement shall govern. Employee acknowledges and understands that Section 8 hereof and the ICN Agreement will survive the termination of his employment with the Company. (f) Employee acknowledges and agrees that in the event of a breach or threatened breach of the provisions of this Section 8 and/or the ICN Agreement 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 and/or the ICN Agreement. 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. (g) A Competitive Business shall be determined as of the date the Employee's employment with the Company terminates. As of the Effective Date a Competitive Business is the provision of wireless services, i.e., those provided by a wireless network service provider such as ATT Wireless Services, Verizon Wireless, OmniSky, Aether, Motient, and Metricom or those provided by product companies such as Research in Motion, Sierra Wireless and Novatel. 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 -12- 13 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 and the ICN Agreement--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 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. -13- 14 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 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. -14- 15 (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 the ICN Agreement attached as 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- 16 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/ Aaron Dobrinsky - ---------------------------------- -------------------------------- Francis J. Elenio, Secretary Aaron Dobrinsky, President Address: -------------------------- -------------------------- -------------------------- WITNESS: EMPLOYEE /s/ Lior Hod /s/ Y. Alan Griver - ---------------------------------- ----------------------------------- Alan Griver Address:439 Maple Hill Dr. ----------------------- Hackensack, NJ 07601 ----------------------- ----------------------- -16- 17 EXHIBIT A -A1- EX-10.39 20 w46736ex10-39.txt THIRD AMENDMENT TO LEASE AGREEMENT 1 EXHIBIT 10.39 THIRD AMENDMENT TO LEASE THIS AGREEMENT (hereinafter referred to as the "Amendment") made as of the 1st day of December 1999, between CONTINENTAL INVESTORS, L.P., A New Jersey Limited Partnership, whose address is 1500 Market Street, 3000 Centre Square West, Philadelphia, Pennsylvania 19102 (hereinafter referred to as "Lessor"); and GO AMERICA COMMUNICATIONS CORP., a New Jersey corporation, with offices at 401 Hackensack Avenue, Hackensack, New Jersey 07601 (hereinafter referred to as "Lessee"). WITNESSETH: WHEREAS, Lessor's predecessor-in-interest (RREEF USA Fund-I) and Lessee's predecessor-in-interest (Go America Inc.) entered into a lease dated August 7, 1996, as modified by First Amendment to Lease dated August 24, 1998 and Second Amendment to Lease dated June 24, 1999 (hereinafter, collectively, referred to as the "Lease"), whereby Lessee is presently in possession of premises containing approximately 15,917 gross rentable square feet comprising the entire fourth (4th) floor (hereinafter, collectively, referred to as the "Premises") in the building located at 401 Hackensack Avenue, Hackensack, New Jersey (hereinafter referred to as 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 of land designated as Lot 5.A Block 512.A, Lot 1 Block 514 on the current tax map of the City of Hackensack and Lot 3 Block 98 on the current tax map of the Borough of River Edge (hereinafter collectively referred to as the "Parcel"); and WHEREAS, Lessee desires to lease additional space on the third (3rd) floor of the Building, and Lessor is willing to lease such additional space to Lessee on the terms and provisions set forth in the Lease, except to the extent provided for herein; and WHEREAS, the parties hereto desire to amend the Lease only in the respects and on the conditions hereinafter stated. NOW, THEREFORE, Lessor and Lessee agree as follows: 1. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Lease unless otherwise defined herein. 2. Lessor and Lessee hereby confirm that the Commencement Date of the Term of the Lease was August 14, 1996 and that the Termination Date is May 14, 2007. 3. From and after December 1, 1999 through December 31, 2000 (hereinafter referred to as the "Additional Space Term"), 1 2 Lessee hereby leases from Lessor additional space consisting of approximately 4,356 gross rentable square feet on the third (3rd) floor of the Building (hereinafter referred to as the "Additional Space"), which Additional Space is as shown on Exhibit A attached hereto and made a part hereof. The Additional Space is being leased in its "AS IS" condition, and Reference Page Paragraph (7) of the Lease shall be amended to reflect that during the Additional Space Term, the Premises shall include the Premises as they existed prior to this Amendment and the Additional Space for a total square footage of 20,273 gross rentable square feet. From and after January 1, 2001 through the Termination Date of the Lease, as the same may be extended or renewed, Reference Page Paragraph (7) of the Lease shall be amended to reflect that the Premises consists of approximately 15,917 gross rentable square feet. 4. Lessee shall pay to Lessor during the Additional Space Term, in addition to the Fixed Basic Rent due and owing for the Premises as they existed prior to this Amendment, Fixed Basic Rent for the Additional Space only in the amount of One Hundred Thirty-three Thousand Three Hundred Eleven and 75/100 ($133,311.75) Dollars, which shall accrue at an Annual Fixed Basic Rent of One Hundred Twenty-three Thousand Fifty-seven and 00/100 ($123,057.00) Dollars, payable in advance on the first day of each calendar month in Monthly Fixed Basic Rent installments of Ten Thousand Two Hundred Fifty-four and 75/100 ($10,254.75) Dollars each, and Reference Page Paragraph (9) of the Lease shall be deemed modified accordingly. Lessor acknowledges receipt from Lessee of the sum of Ten Thousand Two Hundred Fifty-four and 75/100 ($10,254.75) Dollars, by check, subject to collection, which shall be applied by Lessor to Fixed Basic Rent for the Additional Space for the month of December 1999. 5. With respect to calculating Operating Cost Escalation for the Additional Space only, Reference Page Paragraph (2)(A) of the Lease ("Base Operating Costs") shall be amended to reflect that the Base Operating Costs shall be those costs incurred for the Building, Complex and Parcel during Calendar Year 2000. 6. With respect to calculating Tax Escalation for the Additional Space only, Reference Page Paragraph (2)(B) of the Lease ("Base Real Estate Taxes") shall be amended to reflect that the Base Real Estate Taxes shall be those Real Estate Taxes incurred for the Building, Complex and Parcel during Calendar Year 2000. 7. With respect to calculating Fuel, Utilities and Electric Cost Escalation for the Additional Space only, Reference Page Paragraph (2)(C) of the Lease ("Base Utility and Energy Costs") shall be amended to reflect that the Base Utility and Energy Costs shall be 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 2000. 2 3 8. With respect to the Additional Space only, Reference Page Paragraph (3) of the Lease ("Base Utility Rate") shall be amended to reflect that the Base Utility Rate shall be the average rate in effect (including surcharges and/or adjustments) from December 1, 1998 through November 30, 1999. 9. Notwithstanding anything contained herein to the contrary, calculations of Operating Cost Escalation, Tax Escalation, and Fuel, Utilities and Electric Cost Escalation for the Premises as they existed prior to the Additional Space Term shall remain as provided by the Lease prior to this Amendment. 10. During the Additional Space Term, Reference Page Paragraph (8) of the Lease shall be amended to reflect that Lessee's Electric Rent Inclusion Factor shall be Twenty-one Thousand Three Hundred Sixty-two and 04/100 ($21,362.04) Dollars per annum. From and after January 1, 2001 through the Termination Date of the Lease, as the same may be extended or renewed, Reference Page Paragraph (8) of the Lease shall be amended to reflect that Lessee's Electric Rent Inclusion Factor shall be Fifteen Thousand Nine Hundred Seventeen and 04/100 ($15,917.04) Dollars per annum. 11. During the Additional Space Term, Reference Page Paragraph (10) of the Lease shall be amended to reflect that Lessee's Percentage shall be 3.44 (%) percent. From and after January 1, 2001 through the Termination Date of the Lease, as the same may be extended or renewed, Reference Page Paragraph (10) of the Lease shall be amended to reflect that Lessee's Percentage shall be 2.70 (%) percent. 12. During the Additional Space Term, Reference Page Paragraph (12) of the Lease shall be amended to reflect that the total number of Lessee's parking spaces shall be eighty-one (81), of which thirty (30) shall be covered and fifty-one (51) shall be uncovered. From and after January 1, 2001 through the Termination Date of the Lease, as the same may be extended or renewed, Reference Page Paragraph (12) of the Lease shall be amended to reflect that the total number of Lessee's parking spaces shall be sixty-four (64), of which twenty-five (25) shall be covered and thirty-nine (39) shall be uncovered. 13. Section 56 of the Lease ("Limitation of Lessor's Liability") is hereby renumbered to be Section 57 and the following Section is hereby added to the Lease: "56. YEAR 2000 COMPLIANCE. The Lessor and Lessee acknowledge the existence of what is commonly referred to as the Year 2000 problem. Lessor shall endeavor to ensure that all Computer Controlled Facility Components are Year 2000 Compliant by, among other things, seeking written confirmation from the component and/or systems manufacturer and taking such other measures to prevent 3 4 and/or mitigate any Year 2000 problems, all as part of the Operating Costs for the Building, Complex and Parcel and chargeable as such as Additional Rent as provided for in this Lease. (A) Computer Controlled Facility Components refers to software driven technology and embedded microchip technology. This includes, but is not limited to, programmable thermostats, HVAC controllers, elevator controllers, utility monitoring and control systems, fire detection and suppression systems, alarms, security systems and any other Building control systems utilizing microcomputer, minicomputer, or programmable logic controllers. (B) Year 2000 Compliant means Computer Controlled Facility Components that accurately process date/time data (including, but not limited to, calculating, comparing and sequencing) from, into, and between the twentieth and twenty-first centuries and the years 1999 and 2000 and leap year calculations. (C) Lessee acknowledges that Lessor relies upon the manufacturer of said Computer Controlled Facility Components and/or systems to ensure that they are Year 2000 Compliant and that Lessor cannot and does not warrant or represent that said components and/or systems will in fact be Year 2000 Compliant. Lessee hereby waives any claim against Lessor, to include but not be limited to, any business interruption claim, property damage claim or constructive eviction claim resulting from any failure of said Computer Controlled Facility Components and/or systems to be Year 2000 Compliant. 14. Lessee represents and warrants to the Lessor that Cushman & Wakefield of New Jersey, Inc. is the sole broker with whom Lessee has negotiated in bringing about this Amendment. Lessee agrees to indemnify and hold Lessor harmless from any and all claims of other brokers claiming to have dealt with Lessee and expenses in connection therewith arising out of or in connection with the negotiation of or the entering into this Amendment by Lessor and Lessee. Lessor shall pay Cushman & Wakefield of New Jersey, Inc. any fees or commissions due as a result of this transaction pursuant to the terms of a separate agreement. 15. Lessee represents, warrants and covenants that Lessor is not in default under any of its obligations under the Lease and that, to the best of Lessee's knowledge, Lessee is not in default of any of its obligations under the Lease, and no event has occurred which, with the passage of time or the giving of 4 5 notice, or both, would constitute a default by either Lessor or Lessee thereunder. 16. Except as modified by this Amendment, the Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. The covenants, agreements, terms, provisions and conditions contained in this Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. In the event of any conflict between the terms contained in this Amendment and the Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties. 17. The submission of this Amendment for examination does not constitute a reservation of, or option for, the Additional Space, and this Amendment becomes effective only upon execution and delivery thereof by Lessor and Lessee. IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and seals as of the date and year first above written, and acknowledge the one to the other that they possess the requisite authority to enter into this transaction and to sign this Amendment. GO AMERICA COMMUNICATIONS CORP., Lessee CONTINENTAL INVESTORS, L.P., Lessor BY: BERGEN OF HACKENSACK, INC., General Partner By: /s/ Francis J. Elenio By: /s/ David K. Barart ------------------------------------ ------------------------------------ Name: Francis J. Elenio Name: David K. Barart ---------------------------------- ------------------------------------ Title: CFO Title: V.P. --------------------------------- ------------------------------------ Dated: 12/17/99 Dated: 12/21/99 --------------------------------- ------------------------------------
5 6 Exhibit A to Lease Amendment Dated 12/1/99 between Continental Investors, L.P. (Landlord) and Go America, (Tenant). This plan is intended to only show the general layout of the property or a part thereof. Landlord reserves the right to alter, vary, add or omit in whole or in part any structures and or improvements and or common areas and or land area shown on this plan. All measurement and distances are approximate. This plan is not to be scaled. [FLOOR PLAN] EX-10.40 21 w46736ex10-40.txt FIFTH AMENDMENT TO LEASE AGREEMENT 1 Exhibit 10.40 FIFTH AMENDMENT TO LEASE THIS AMENDMENT (hereinafter referred to as "this Amendment"), made as of the 22nd day of August, 2000, between STELLAR CONTINENTAL LLC, a Delaware limited liability company with an address at 156 William Street, New York, NY 10038 (hereinafter referred to as "Lessor"), and GO AMERICA COMMUNICATIONS CORP., a New Jersey corporation with offices at 401 Hackensack Avenue, Hackensack, New Jersey 07601 (hereinafter referred to as "Lessee"); WITNESSETH: WHEREAS, Lessor's predecessor-in-interest (RREEF USA Fund-I) and Lessee's predecessor-in-interest (Go America Inc.) entered into a Lease dated August 7, 1996, as amended by a First Amendment to Lease dated August 24, 1998, a Second Amendment to Lease dated June 24, 1999 and a Third Amendment to Lease dated made as of December 1, 1999 and Lessor and Lessee entered into a Fourth Amendment to Lease dated February , 2000 (herein collectively referred to as the "Lease"), whereby Lessee is presently in possession of premises containing approximately 23,173 gross rentable square feet of space (hereinafter collectively referred to as the "Premises") in the building located at 401 Hackensack Avenue, Hackensack, New Jersey (herein referred to as the "Building") comprising the entire fourth (4th) floor of the Building (the "4th Floor Premises") together with approximately 4,356 gross rentable square feet of space on the third (3rd) floor of the Building (herein referred to as the "3rd Floor Additional Space") and 2,900 gross rentable square feet on the sixth (6th) floor (the "6th Floor Premises") which is situated as part of the complex of buildings known at Continental Plaza at 401, 407, 411 and 433 Hackensack Avenue, Hackensack, New Jersey (herein called the "Complex"), all located on that certain parcel of land designated at Lot 5.A in Block 512.A and Lot 1 in Block 514 on the current tax map of the City of Hackensack and Lot 3 Block 98 on the current tax map of the Borough of River Edge (herein collectively referred to as the "Parcel"); and WHEREAS, Lessee desires to surrender and vacate the 3rd Floor Additional Space and 6th Floor Additional Space (but not the 4th Floor Premises) and lease approximately 22,458 gross rentable square feet of space on the third (3rd) floor (the "New 3rd Floor Premises") and 4,652 gross rentable square feet on the second (2nd) floor (the "New 2nd Floor Premises") in the building known as 433 Hackensack Avenue, Hackensack, New Jersey and Lessor is willing to accept such surrenders and lease such New 3rd Floor Premises and New 2nd Floor Premises to Lessee on the terms and provisions set forth in the Lease as amended as provided in this Amendment; and WHEREIN, the parties hereto desire to amend the Lease in the respects and to the extent hereinafter stated. NOW, THEREFORE, Lessor and Lessee hereby agree as follows: 1. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Lease unless otherwise defined herein. 2 2. Lessor and Lessee hereby confirm that the Commencement Date of the Term of the Lease was August 14, 1996 and that the Termination Date is May 14, 2007. 3. From and after September 1, 2000 through August 31, 2010 (hereinafter referred to as the "New Premises Term"), Lessee hereby leases from Lessor the New 3rd Floor Premises and the New 2nd Floor Premises and, as of September 1, 2000, hereby surrenders to Lessor and agrees to vacate on or before such date, in accordance with the terms of the Lease, the 3rd Floor Additional Space and the 6th Floor Additional Space, but shall retain the 4th Floor Premises such that, notwithstanding any provision(s) of this Amendment, the provisions of the Lease solely with respect to the 4th Floor Premises as they exist without regard to this Amendment shall apply to the 4th Floor Premises but not to the 3rd Floor Additional Space or to the 6th Floor Additional Space. 4. From and after the commencement date of the New Premises Term, Lessee shall pay to Lessor Fixed Basic Rent for the New 2nd Floor Premises and New 3rd Floor Premises (in the aggregate) in accordance with the following schedule (of which $40,665 per annum shall consist of ERIF for the New 3rd Floor Premises and New 2nd Floor Premises combined):
Annual Fixed Monthly Fixed Period Basic Rent Basic Rent ------ ------------ ------------- 9/1/00 - 8/31/01 $ 853,965 $ 71,163.75 9/1/01 - 8/31/02 867,520 72,293.34 9/1/02 - 8/31/03 881,075 73,422.92 9/1/03 - 8/31/04 894,630 74,552.50 9/1/04 - 8/31/05 908,185 75,683.09 9/1/05 - 8/31/06 921,740 76,811.67 9/1/06 - 8/31/07 935,295 77,941.25 9/1/07 - 8/31/08 948,850 79,070.84 9/1/08 - 8/31/09 962,405 80,200.42 9/1/09 - 8/31/10 975,960 81,330.00
Notwithstanding the foregoing Fixed Basic Rent schedule, for the period commencing September 1, 2000 and terminating November 30, 2000 and the period commencing September 1, 2001 and terminating November 30, 2001, Lessee only shall pay the ERIF in the sum of $3,388.75 per month with respect to the New 2nd Floor Premises and New 3rd Floor Premises and, with respect to December, 2000, Lessee only shall pay ERIF in the sum of $581.50 for the New 2nd Floor Premises plus $61,759.50 (inclusive of ERIF) for the New Third Floor Premises. 2 3 5. During the New Premises Term, the Base Year for Operating Costs, Base Utility and Energy Costs and the Real Estate Taxes shall be calendar year 2000, and Base Utility Rate shall be the average rate in effect during calendar year 2000. 6. The Security Deposit under the Lease for the New 2nd Floor Premises and New 3rd Floor Premises during the New Premises Term shall be $555,755 in the form of a letter of credit ("L/C") being delivered to Lessor upon the execution and delivery of this Amendment together with payment of the minimum annual fixed rent for the fourth month of the New Premises Term (i.e., $71,163.75). If, on any September 1 commencing on September 1, 2003, Lessee shall show a net profit from operations after taxes for the immediately preceding twelve (12) calendar months (a "Trigger Event"), then the security deposit shall be reduced by $69,469 as of that September 1, until such time as there shall be $279,818 as a security deposit. If, after any reduction(s) in security deposit as aforesaid, there shall not occur a Trigger Event on any September 1, then Lessee shall deliver to Lessor on each such September 1 an amended L/C increased by $69,496 but in no event in excess of $555,755. The L/C shall be a clean, irrevocable and unconditional letter of credit issued by and drawn upon any commercial bank chartered by the State of New York, the State of New Jersey or the United States Government (the "Issuing Bank") with offices for banking purposes in the State of New Jersey of State of New York, and having a net worth of not less than $500 million, which L/C shall have a term of not less than one year, be in form and content satisfactory in all respects to Lessor, be for the account of Lessor and be in the amount of the Security Deposit. The L/C shall provide that: (i) The Issuing Bank shall pay to Lessor, or its duly authorized representative, from time to time an amount sufficient to cure the default of Lessee without acceleration up to the face amount of the L/C upon presentation of only the L/C and a sight draft in the amount to be drawn; (ii) The L/C shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the Term of this Lease, unless the Issuing Bank sends written notice (the "Non-Renewal Notice") to Lessor by certified or registered mail, return receipt requested, not less than thirty (30) days next preceding the then expiration date of the L/C, that it elects not to have such L/C renewed; (iii) Lessor, within twenty (20) days of its receipt of the Non-Renewal Notice, shall have the right, exercisable by a sight draft, to receive the monies represented by the L/C (which moneys shall be held by Lessor as a cash deposit pursuant to the terms of the Lease as amended by this Amendment pending the replacement of such L/C or Lessee's default under the Lease as amended by this Amendment); and 3 4 (iv) Upon Lessor's sale or net lease of Lessor's interest in the Building, the L/C shall be transferable by Lessor as provided for herein. In the event of a sale or net lease of Lessor's interest in the Building, Landlord shall have the right to transfer the cash security or L/C, as the case may be, deposited hereunder to the vendee, lessee or transferee, without cost to Lessor, and, upon transfer of the L/C or cash security (as the case may be) to the vendee, lessee or transferee, Lessor shall thereupon be released from all liability for the return of such cash security or L/C. In such event, Lessee agrees to look solely to the new landlord for the return of said cash security or L/C. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or L/C. In the event that at any time during the New Premises Term (a) the net worth of the Issuing Bank shall be less than the minimum amount specified above or (b) circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing L/C (hereinafter referred to as the "Existing L/C") in accordance with the terms thereof, then, upon the happening of either of the foregoing, Lessor may send written notice to Lessee (hereinafter referred to as the "Replacement Notice") requiring Lessee within thirty (30) days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the "Replacement L/C") from an Issuing Bank meeting the qualifications described in this Paragraph 6. Upon receipt of the Replacement L/C meeting the qualifications of this Paragraph 6, Lessor shall forthwith return the Existing L/C to Lessee. In the event that a Replacement L/C meeting the qualifications of this Paragraph 6 is not received by Lessor within the time specified then the Existing L/C may be presented for payment by Lessor and the proceeds thereof shall be held by Lessor in accordance with this Paragraph 6 subject, however, to Lessee's right, at any time thereafter prior to a Lessee's default hereunder, to replace such cash security with a replacement L/C meeting the qualifications of this Paragraph 6. The provisions of Article 17 of the Lease shall be applicable hereto. 7. Lessee's Percentage at paragraph 10 or the Reference Page of the Lease shall be amended to 4.603%. 8. Lessee's total parking spaces for the New 2nd Floor Premises and New 3rd Floor Premises shall be 108, of which 76 shall be gate-accessed covered and 32 shall be uncovered. 9. Lessee shall have the right, at Lessee's sole cost and expense, to erect a sign in accordance with Exhibit 1 annexed hereto and made a part hereof (specifying appearance, size and location), the cost and expense of which shall be debited against the allowance described in paragraph 10, below. 4 5 10. (a) With respect to Lessee's leasehold improvements at the New 2nd Floor Premises and New 3rd Floor Premises, Lessee shall receive an allowance of $325,320 (inclusive of Lessor's profit) to be used not later than August 31, 2005 provided, at the time that Lessee requests reimbursement from Lessor, Lessee shall not be in default under the Lease or this Amendment beyond any applicable notice and grace periods. Within such allowance for leasehold improvements (all of which shall be performed by or at the direction of Lessor using contractors satisfactory to Lessor in Lessor's sole discretion), there shall be debited the cost and expense of constructing the appropriate cable conduit within the Complex so as to link communications among the 4th Floor Premises, the New 2nd Floor Premises and the New 3rd Floor Premises. (b) Not later than August 4, 2000, time being of the essence, Lessee shall submit to Lessor plans and specifications for leasehold improvements to be performed by Lessor at the New 2nd Floor Premises and New 3rd Floor Premises to prepare same for Lessee's occupancy ("Lessor's Work"). For each day beyond August 4, 2000 that such plans and specifications are not delivered to Lessor, the "Outside Date" for Lessor's Work to be completed shall be extended by one (1) day. The Outside Date for the New 3rd Floor Premises is December 1, 2000 and for the New 2nd Floor Premises is January 1, 2001. For each two (2) days that Lessor's Work is not substantially completed (other than punchlist items), Lessee shall receive one (1) day of free Monthly Fixed Basic Rent (except that Lessee shall pay ERIF for each such day), but in no event shall the New Premises Term be extended nor shall Lessee have the right to termination or damages by reason of such delay. The taking of possession of Lessee shall be conclusive in determining that Lessor's Work (other than punchlist items) has been substantially completed. 11. (a) In the event that during the New Premises Term any space shall become available that is contiguous to either or both of the New 2nd Floor Premises (but not first floor, i.e., lobby space) and New 3rd Floor Premises, or if the space in the basement and lower lobby (currently occupied by ABC) shall become available, Lessee shall be given the first offer to accept or reject such space within ten (10) days after Lessor shall notify Lessee in writing that such space is available (and disclosing in such notice the salient terms pursuant to which Lessor intends to offer such space for lease to others), time being of the essence; silence by Lessee within such ten (10) days shall be deemed rejection of Lessor's offer of such space. If Lessee rejects or is deemed to have rejected such space, Lessor shall be free to enter into any lease or occupancy agreement with any third party during the next succeeding 120 days, but only upon substantially the same salient terms and at Fixed Basic Rent of at least ninety (90%) percent of that offered to Lessee. 5 6 (b) The relocation provisions of the Lease shall not apply during the New Premises Term or during any renewal provided for in this Amendment. The transactions contemplated by this Amendment do not constitute a relocation. 12. (a) Provided Lessee is not in default under the Lease and this Amendment (and as then amended to date) beyond any applicable notice and grace period, Lessee shall have two (2) consecutive options to renew the Lease as amended hereby with respect to not less than all of the Demised Premises (defined below) for a renewal term of five (5) years each (each being an "Option Term") under all of the same terms and conditions of the Lease and this Amendment (as they may subsequently have been amended at the time in question) except: (x) as to Fixed Basic Rent and (y) there shall be no further renewal options. In order to exercise either such renewal option, Lessee must send written notice ("Lessee's Option Notice") to Lessor not earlier than thirteen (13) months nor later than nine (9) months prior to the expiration of the New Term or the first renewal term, as the case may be, irrevocably stating that Lessee elects to renew for such five (5) year period. Unless the Lease (as then amended to date) is in full force and effect and Lessee is not in default thereunder beyond any applicable notice and grace periods on (x) the date of Lessee's Option Notice and (y) the first day of the respective Option Term, Lessee's Option Notice shall be deemed a nullity, ab initio. (b) the Fixed Basic Rent during the first Option Term shall be at 95% of Fair Market Rental Value and at 100% of Fair Market Rental Value during the second Option Term, but in no event shall the Fixed Basic Rent during the first or second renewal term be less than that payable by Lessee during the immediately preceding twelve (12) months. (c) (i) The "Fair Market Rental Value" of the "Demised Premises" (meaning, for the purposes of this Article 12, only, the New 2nd Floor Premises and New 3rd Floor Premises) means the rental rate a landlord under no compulsion to lease the Demised Premises and a Lessee under no compulsion to lease the Demised Premises would agree upon as the rent for the first year of the Option Term, taking into consideration brokerage commissions, landlord work, rental abatements, the uses permitted under this Lease, the quality, size, design and location of the Building and the Demised Premises, and the rent for comparable buildings and complexes located in the vicinity of the Hackensack, New Jersey prime office rental area. For the purpose of establishing the Fair Market Rental Value adjustment, within sixty (60) days following receipt of Lessee's Option Notice, Lessor shall notify Lessee of the opinion of Lessor as to the Fair Market Rental Value for the Demised Premises, which shall be the Fixed Basic Rent applicable to the 6 7 Option Term. Lessee shall have thirty (30) days following receipt of such written notice within which to notify Lessor if Lessee disputes such Fair Market Rental Value, and upon failure of Lessee to so notify Lessor, and setting forth with reasonable detail the reasons why Lessee disputes such Fair Market Rental Value specified by Lessor, the Fair Market Rental Value specified by Lessor shall be deemed accepted by Lessee as the Fixed Basic Rent for the Option Term. If Lessee notifies Lessor within such thirty (30) day period that Lessee does not agree with the Fair Market Rental Value of the Demised Premises specified by Lessor (setting forth in reasonable detail the reasons therefor) and if Lessor and Lessee are unable to agree upon such Fair Market Rental Value within the next ensuing thirty (30) days, then such Fair Market Rental Value shall be determined by appraisal as described below. (ii) Within seven (7) days after the expiration of the last thirty (30) day period set forth in the last sentence of (c)(i) above, Lessor and Lessee shall each appoint a real estate appraiser with at least five (5) years' full-time commercial appraisal experience in the area in which the Demised Premises are located, to appraise the then Fair Market Rental Value of the Demised Premises. If either the Lessor or the Lessee does not appoint an appraiser within ten (10) days after the other has given notice of the name of its appraiser, the single appraiser appointed will be the sole appraiser and will set the then Fair Market Rental Value of the Demised Premises. If two (2) appraisers are appointed pursuant to this section, they will meet promptly and attempt to set the then Fair Market Rental Value of the Demised Premises. If they are unable to agree within thirty (30) days after the second appraiser has been appointed, they will attempt to select a third appraiser meeting the qualifications stated in this section within ten (10) days. If they are unable to agree on the third appraiser, then either the Lessor or the Lessee, by giving ten (10) days prior notice to the other, can apply to a then presiding judge of the New Jersey Superior Court in Bergen County for the selection of a third appraiser who meets the qualifications stated in this section. Lessor and Lessee each shall bear one-half (1/2) of the cost of appointing the third appraiser and of paying the third appraiser's fee (and shall each bear the cost of their own appraisers). Within thirty (30) days after the selection of the third appraiser, a majority of the appraisers who agree will set the then Fair Market Rental Value of the Demised Premises. If a majority of the appraisers are unable to set the then Fair Market Rental Value of the Demised Premises within thirty (30) days after selection of the third appraiser, then the two (2) closest appraisals 7 8 shall be averaged and this average shall establish the then Fair Market Rental Value of the Demised Premises. In the event such Fair Market Rental Value determination shall not have been completed prior to the commencement of the Option Term, Lessee shall pay as Fixed Basic Rent effective as of and subsequent to the commencement of the Option Term, the Fair Market Rental Value first communicated by Lessor to Lessee (but not less than the Fixed Basic Rent being paid by Lessee immediately prior to the commencement of the Option Term), and if such Fixed Basic Rent is thereafter fixed or readjusted to a different amount, such new Fixed Basic Rent shall take effect retroactively back to the first day of the Option Term, and Lessee or Lessor, as the case may be, shall immediately pay to the other the sum which is accrued and underpaid or overpaid as a result of such retroactive application. 13. For the purposes of the Lease as amended by this Amendment, although a reorganization, merger or consolidation of Lessee (each, an "event") shall be deemed an assignment of the Lease as amended by this Amendment (and as may be subsequently amended), Lessor's recapture rights under the Lease shall not apply and no consent of Lessor is required provided that after such event the net worth of the surviving entity and the surviving entity's cash on hand shall be at least equal to that of Lessee immediately prior to the event; however, in order for such assignment to be effective (if at all), Lessee shall have delivered to Lessor a duplicate original of the documentation effectuating such assignment along with audited financial statements of the surviving entity confirming the net worth requirements of this Paragraph 13 not later than three (3) days after the event. All of the other provisions of the Lease (as amended to the date of the event) shall be applicable to any such assignment. 14. Lessor and Lessee each warrants and represents to the other that Cushman & Wakefield of New Jersey, Inc. was the sole broker that brought about this Amendment and Lessor shall pay said broker pursuant to separate written agreement. 15. With the exception of the provisions of Paragraphs 11(b), 13 and 16 and this Paragraph 15, this Amendment shall have no effect as to modifying the Lease with respect to the 4th Floor Premises. 16. The rights and obligations of Lessor and Lessee under this Amendment shall be subject to receipt of the consent of Lessor's mortgagee and to the mortgagee agreeing to enter into a Subordination, Attornment and Non-Disturbance Agreement ("SANDA") with Lessee on mortgagee's standard form. If either such consent or such SANDA is not received within ten (10) business days after this Amendment is received, then Lessor (only with respect to consent) and Lessee each shall have the right, exercisable only within the next five (5) business days (time being of the essence) thereafter, to terminate this Amendment by written notice to the other. If such termination notice shall be sent, then this Amendment shall be void ab initio and neither party shall have any further rights or obligations 8 9 to the other by reason thereof. Silence within such five (5) business days shall be deemed conclusive waiver of any such cancellation right. 17. Except as specifically provided in this Amendment, the Lease remains in full force and effect, unchanged and unmodified, and shall apply in all respects to the New 2nd Floor Premises and New 3rd Floor Premises as well as to the 4th Floor Premises. IN WITNESS WHEREOF, Lessor and Lessee have entered into this Amendment as of the day and year first written above, and acknowledge one to the other that they possess the requisite authority to enter into this transaction and to sign this Amendment. *GO AMERICA COMMUNICATIONS CORP. STELLAR CONTINENTAL LLC, BY: STELLAR CAPITAL MANAGEMENT LLC, ITS MANAGER By: /s/ Aaron Dobrinsky By: /s/ Moshe Azizni ----------------------------------- ----------------------------------- Name: Aaron Dobrinsky Name: Moshe Azizni Title: President & CEO Title: Manager
* In the event of any dispute or discrepancy between this document and the lease agreement signed on August 4, 2000 by Frank Elenio, then the August 4, 2000 Fifth amendment to lease shall govern. 9 10 EXHIBIT A Exhibit "___" to Lease Agreement dated _______________________ between Stellar Capital Management ("Lessor") and Go America Inc. ("Lessee"). This plan is intended to only show the general layout of the property or a part thereof. Landlord reserves the right to alter, vary, add omit in whole or in part any structures and or improvement and or common areas and or land area shown on the plan. All measurement and distances are approximate. This plan is not to be scaled. [FLOOR PLAN FOLLOWS] EX-10.41 22 w46736ex10-41.txt AMENDMENT TO FACILITIES MAINTENANCE AGREEMENT 1 Exhibit 10.41 AMENDMENT DATED MARCH 14, 2001 ("AMENDMENT") TO FACILITIES MAINTENANCE AGREEMENT DATED DECEMBER 17, [SIC], 1999 (THE "AGREEMENT") BETWEEN DATA GENERAL, A DIVISION OF EMC CORPORATION ("DG") AND GOAMERICA COMMUNICATIONS CORPORATION ("GOAMERICA") Capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement. The parties, DG and GoAmerica, hereby amend the Agreement as follows: 1. Section 11.1 of the Agreement is deleted in its entirety, and the following substituted therefor: The term of the Agreement (the "Initial Term") shall hereafter, for all purposes of the Agreement, be coterminous with the "Demised Term" as defined in the Data Center Lease, which is currently scheduled to expire on February 29, 2004. Provided that there shall then exist no default of GoAmerica under the Agreement, DG agrees to cooperate with GoAmerica in order to obtain, prior to April 30, 2003, the written consent of DG's landlord under the Data Center Lease ("Owner") to the assignment by DG to GoAmerica of all of DG's rights and obligations under the Data Center Lease as of February 29, 2004 (the "Assignment"). The Assignment shall (a) provide for the complete release of DG and EMC from any and all liabilities or obligations under the Data Center Lease accruing after February 29, 2004, (b) shall be completely executed in form and substance reasonably acceptable to DG prior to February 28, 2003, and (c) shall not become effective unless Owner shall have consented to and approved the Assignment in writing prior to April 30, 2003. If all of the foregoing terms have been satisfied and all conditions to the effectiveness of the Assignment have been met prior to April 30, 2003, DG agrees to exercise the extension option contained in the Data Center Lease for an additional two (2) years beyond February 29, 2004 (the "Extension Term"), it being understood between the parties that upon the exercise of such extension GoAmerica shall assume and become solely responsible and liable for all performance obligations of the tenant under the Data Center Lease accruing after February 29, 2004. DG makes no representation or warranty as to the effective rent or other applicable terms of the Data Center Lease during the Extension Term, it being understood that negotiation of all such terms shall be the sole responsibility of GoAmerica. 2. Pursuant to and subject to the terms of an amendment to the Data Center Lease executed on or about the date hereof between DG and Owner (the "Lease Amendment"), a copy of which has been reviewed and approved by GoAmerica, the Data Center shall be expanded to include the "Additional Space" described in the Lease Amendment upon delivery thereof to DG by Owner and completion of the buildout of such Additional Space by DG. 3. From and after the date hereof, the pricing of Services shall be as set forth in Exhibit C attached hereto, and such Exhibit shall amend and replace Exhibit C to the original Agreement. Furthermore, it is understood and agreed by the parties that Services shall be provided by DG on a completely net basis, and that in the event of any unforeseen increases in utilities or other costs incurred by DG in providing the Services, Exhibit C may be amended in order to allow DG to pass on such increased costs to GoAmerica. 4. The parties agree to amend certain other provisions of the Agreement as follows: a. The first WHEREAS clause on the first page of the Agreement is deleted, and the following inserted therein: "GoAmerica agrees to license from DG the Data Center, as more particularly described herein, subject to and upon all of the terms and conditions hereinafter set forth." b. Section 2.1 is amended by deleting the term "best efforts" and replacing such term with "commercially reasonable efforts". 2 c. Section 2.4 is amended by inserting the words "zoning or building department" before the word "consents". d. Section 7.2 is amended and restated in its entirety as follows: "GoAmerica's aggregate liability for any claims arising from this Agreement shall not exceed two (2) times the accrued amounts owed by GoAmerica to DG for Services during the immediately preceding twelve (12) month period prior to the claim that gave rise to the damages. The foregoing limitation shall not apply to any liabilities of GoAmerica to DG for damages resulting from GoAmerica's failure to vacate the Data Center upon the expiration or earlier termination of the term of this Agreement." e. Section 9 is amended by changing the definition of "Data Center Lease" to include the Data Center Lease, "as amended by the Lease Amendment." Furthermore, insert "Subject to the Data Center Lease" at the beginning of the last sentence of Section 9. f. Section 11.3 is amended by inserting the following at the end of clause (i): ", provided that DG may terminate this Agreement at any time following (A) failure of GoAmerica to cure a default of any payment obligation under this Agreement within thirty (30) days after written notice to GoAmerica of such default, or (B) failure of GoAmerica to immediately cure any default of its obligations under Section 9 which results in any action on the part of Owner to declare a default under the Data Center Lease." g. Section 11.4 is amended by adding the following sentence at the end thereof: "None of the foregoing shall be construed to permit GoAmerica, under any circumstances, to occupy any part of the Data Center following expiration or earlier termination of the term of the Data Center Lease." h. Section 14.5 is amended by changing the reference to "Section 10" to instead refer to "Section 9". i. Section 14.6 is amended by requiring that any notice given to DG also be sent simultaneously and in the same manner to: EMC Corporation 35 Parkwood Drive Hopkinton, MA 01748 Attention: General Counsel And to: EMC Corporation 228 South Street Hopkinton, MA 01748 Attention: Director, Global Real Estate IN WITNESS WHEREOF, this Amendment has been executed by the duly authorized representatives of the parties as of this Amendment date first written down. Data General, A Division of EMC GoAmerica Communications Corporation Corporation By /s/ Angelo Perri By /s/ Joseph Korb ----------------------------- ---------------------------------- Name Angelo Perri Name Joseph Korb ----------------------------- ---------------------------------- Title Director Title President ----------------------------- ---------------------------------- 3 EXHIBIT C RECURRING MONTHLY OPERATIONAL EXPENSES - MARCH 1, 2001 TO JUNE 30, 2003 STAFFING Operations Manager (240 days per year) Subtotal - Staffing UTILITIES (Includes Facilities Usage charge, Electric, Janitorial, Water, phone system, diesel generator fee, insurance) MAINTENANCE AND REPAIRS (Includes Fire Suppression, UPS, A/C, A/C water charge, generator, Fire dept. permits, security) TOTAL MONTHLY RECURRING COST FROM MARCH 1, 2001 TO JUNE 30, 2003: AMOUNT FINANCED: TOTAL MONTHLY RECURRING INCREMENTAL COST TO BE INVOICED SEPARATELY: RECURRING MONTHLY OPERATIONAL EXPENSES - JULY 1, 2003 TO FEBRUARY 29, 2004 STAFFING Operations Manager (240 days per year) Subtotal - Staffing UTILITIES (Includes Facilities Usage charge, Electric, Janitorial, Water, phone system, diesel generator fee, insurance) MAINTENANCE AND REPAIRS (Includes Fire Suppression, UPS, A/C, A/C water charge, generator, Fire dept. permits, security) TOTAL MONTHLY RECURRING COST FROM JULY 1, 2003 TO FEBRUARY 29, 2004: 4 Exhibit C RECURRING MONTHLY OPERATIONAL EXPENSES - MARCH 1, 2001 TO JUNE 30, 2002 STAFFING Operations Manager (240 days per year) $15,000 Subtotal - Staffing $15,000 Utilities (includes Facilities Usage charge, Electric, Janitorial, Water, phone system, diesel generator fee, insurance) $25,340 MAINTENANCE AND REPAIRS (includes Fire Suppression, UPS, A/C water charge, generator, Fire dept. permits, security) $789 TOTAL MONTHLY RECURRING COST FROM MARCH 1, 2001 TO JUNE 30, 2003: $41,137 AMOUNT FINANCED: $31,895 TOTAL MONTHLY RECURRING INCREMENTAL COST TO BE INVOICED SEPARATELY: $9,142 RECURRING MONTHLY OPERATIONAL EXPENSES - JULY 1, 2003 TO FEBRUARY 23, 2004 Staffing Operations Manager (240 days per year) $20,000 Subtotal - Staffing $20,000 Utilities (includes Facilities Usage charge, Electric, Janitorial, Water, phone system, diesel generator fee, insurance) $26,876 MAINTENANCE AND REPAIRS (includes Fire Suppression, UPS, A/C, A/C water charge, generator, Fire dept. permits, security) $1,730 TOTAL MONTHLY RECURRING COST FROM JULY 1, 2003 TO FEBRUARY 23, 2004: $48,606
EX-10.42 23 w46736ex10-42.txt REGISTRATION RIGHTS AGREEMENT 1 Exhibit 10.42 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of the 14th day of November, 2000, by and among GoAmerica, Inc., a Delaware corporation (the "Company"), and Dell Ventures, L.P. ("Dell"). RECITALS WHEREAS, this Agreement is made pursuant to the Warrant to Purchase Common Stock of GoAmerica, Inc. (the "Warrant") dated as of November 14, 2000 by and among the Company and Dell. Capitalized terms used herein shall have the respective meanings ascribed to them in the Warrant, unless the context requires otherwise; and WHEREAS, in connection with the issuance of the Warrant, the parties desire to enter into this Agreement in order to grant certain registration rights to Dell as set forth below with respect to the number of shares of Common Stock of the Company issuable pursuant to the Warrant (the "Shares"). NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. GENERAL. 1.1 DEFINITIONS. As used in this Agreement the following terms shall have the following respective meanings: "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Holder" means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.7 hereof. "Initial Offering" means the Company's first firm commitment underwritten public offering of its Common Stock registered under the Securities Act as declared effective by the Commission on April 6, 2000. "Prior Registration Rights Agreements" means (a) that certain Registration Rights Agreement, dated October 15, 1996, by and among the Company and the investors party thereto; (b) that certain Registration Rights Agreement, dated June 25, 1999, by and among the Company and the investors party thereto; (c) that certain Registration Rights Agreement dated January 28, 2000, by and among the Company and the investors party thereto; (d) that certain Registration Rights Agreement dated June 28, 2000, by and among the Company and the investors party thereto and (e) that certain Registration Rights Agreement dated August 31, 2000, by and among the Company and the investors party thereto. 2 "Register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document. "Registrable Securities" means (a) the Shares; and (b) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares. "Registrable Securities then outstanding" shall be the number of shares determined by calculating the total number of shares of the Company's Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then exercisable or convertible securities. "Registration Expenses" shall mean all expenses incurred by the Company in complying with Section 2.1 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements of a single special counsel for the Holders selected by a majority of Holders participating in a particular registration, blue sky fees and expenses (but excluding (a) the compensation of regular employees of the Company which shall be paid in any event by the Company and (b) Selling Expenses). "SEC" or "Commission" means the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended. "Selling Expenses" shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities by a Holder. "Special Registration Statement" shall mean a registration statement relating to any employee benefit plan or with respect to any corporate reorganization or other transaction under Rule 145 of the Securities Act. SECTION 2. REGISTRATION. 2.1 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of Registrable Securities in writing at least fifteen (15) days prior to the filing of any registration statement under the Securities Act 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, but excluding Special Registration Statements) and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder as set forth herein. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by such Holder shall, within fifteen (15) days after the above-described notice from the Company, so notify the Company in writing. Such notice shall state the intended method of disposition of the Registrable Securities by such Holder as set forth herein. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any 2 3 subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. (a) UNDERWRITING. If the registration statement under which the Company gives notice under this Section 2.1 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder to be included in a registration pursuant to this Section 2.1 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated first, to the Company; second to all stockholders who are entitled to participate and who have elected to participate in the offering pursuant to the terms of the Prior Registration Rights Agreements on a pro rata basis based upon the total number of shares held by each such participating stockholder that are subject to piggyback registration rights pursuant thereto; third, to all stockholders who are entitled to participate and who have elected to participate in the offering pursuant to the terms of this Agreement, on a pro rata basis based upon the total number of shares held by each such participating stockholder that are subject to piggyback registration rights pursuant hereto; and fourth, to any other stockholder of the Company on a pro rata basis. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For any Holder which is a partnership or corporation, the partners, stockholders, subsidiaries, parents and affiliates of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single "Holder", and any pro rata reduction with respect to such "Holder" shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such "Holder", as defined in this sentence. (b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.1 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.2 hereof. 2.2 EXPENSES OF REGISTRATION. All Registration Expenses incurred in connection with any registration, qualification or compliance hereunder shall be borne by the Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the Holders of the securities so registered pro rata on the basis of the number of shares so registered. 2.3 OBLIGATIONS OF THE COMPANY. Subject to Section 2.1(b), whenever the Company elects to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: 3 4 (a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to ninety (90) days or, if earlier, until the Holder or Holders have completed the distribution related thereto. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in paragraph (a) above. (c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. (f) Notify each Holder 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 of 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 a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. The Company will use reasonable efforts to amend or supplement such prospectus in order to cause such prospectus not to include any 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 light of the circumstances then existing. (g) Use its commercially reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated as of such date, from the independent certified public accountants of the Company, in 4 5 form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters. 2.4 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted under this Section 2 shall terminate and be of no further force and effect seven (7) years after the date of the Company's Initial Offering. In addition, a Holder's registration rights shall expire if (a) collectively, the Holders hold less than 1% of the Company's outstanding Common Stock and (b) all Registrable Securities held by such Holder (and its affiliates, partners, members and former members) may be sold under Rule 144 during any ninety (90) day period. 2.5 DELAY OF REGISTRATION; FURNISHING INFORMATION. (a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. (b) It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.1 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities. 2.6 INDEMNIFICATION. In the event any Registrable Securities are included in a registration statement under Section 2.1: (a) The Company will indemnify and hold harmless each Holder, the partners, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation") by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any Violation or alleged Violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement (provided, however, that the Company will not be required to indemnify any of the foregoing persons on account of any losses, claims, damages or liabilities arising from a Violation if and to the extent that such Violation was made in a preliminary prospectus and was corrected in a subsequent prospectus that was required by law to be delivered to the person making the claim with respect to which indemnification is sought hereunder, and such subsequent prospectus was made available by the Company to permit delivery of such prospectus in a timely manner, and such subsequent prospectus was so delivered to the Holder making the claim for indemnification); and 5 6 the Company will pay as incurred to each such Holder, partner, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, underwriter or controlling person of such Holder. (b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder's partners, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will pay as incurred any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Violation; provided, however, that the indemnity agreement contained in this Section 2.6(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall any indemnity under this Section 2.6 exceed the net proceeds from the offering received by such Holder. (c) Promptly after receipt by an indemnified party under this Section 2.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain one counsel of their own, with the reasonable fees and expenses of such counsel to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party 6 7 would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.6, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.6. (d) If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder. (e) The obligations of the Company and Holders under this Section 2.6 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. 2.7 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned by a Holder to a transferee or assignee of Registrable Securities to which (a) there is transferred to such transferee no less than twenty thousand (20,000) shares of Registrable Securities, appropriately adjusted to reflect any stock splits, stock dividends, subdivisions, reverse splits and similar events, (b) there is transferred to such transferee at least ten percent (10%) of the shares of Registrable Securities held by the Holder, (c) such transferee is an affiliate, subsidiary or parent company, family member or family trust for the benefit of a party hereto or (d) such transferee or transferees are partners of a Holder, who agree to act through a single representative; provided, however, (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement. 7 8 2.8 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2 may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of a majority of the Registrable Securities then outstanding. Any amendment or waiver effected in accordance with this Section 2.8 shall be binding upon each Holder and the Company. By acceptance of any benefits under this Section 2, Holders of Registrable Securities hereby agree to be bound by the provisions hereunder. 2.9 RULE 144 REPORTING. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC 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 SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the Initial Offering; (b) File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and (c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of 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 as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration. SECTION 3. MISCELLANEOUS. 3.1 GOVERNING LAW. This Agreement shall be construed under Delaware General Corporation Law as to matters of corporate law and, as to all other matters of law, shall be governed and construed under the laws of the State of Delaware as such laws are applied to agreements between Delaware residents entered into and performed entirely in the State of Delaware. 3.2 SURVIVAL. The representations, warranties, covenants, and agreements made herein shall survive any investigation made by any Holder and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the 8 9 Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price. 3.4 ENTIRE AGREEMENT. This Agreement, the Warrant and the other documents delivered pursuant thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 3.5 SEVERABILITY. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 3.6 AMENDMENT AND WAIVER. (a) Except as otherwise expressly provided, this Agreement may be amended or modified only upon the written consent of the Company and the holders of at least a majority of the Registrable Securities. (b) Except as otherwise expressly provided, the obligations of the Company and the rights of the Holders under this Agreement may be waived only with the written consent of the holders of at least a majority of the Registrable Securities. (c) For the purposes of determining the number of Holder or stockholders entitled to vote or exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record holders of its stock as maintained by or on behalf of the Company. 3.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any Holder, upon any breach, default or noncompliance of the Company under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on any Holder's part of any breach, default or noncompliance under the Agreement or any waiver on such Holder's part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not alternative. 3.8 NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the party to be notified at the address as set forth on 9 10 the signature pages hereof or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto. 3.9 PRIORITY OF REGISTRATION RIGHTS. Notwithstanding anything herein to the contrary, in the event of any conflict between the provisions of this Agreement and the provisions of any of the Prior Registration Rights Agreements, the provisions of the Prior Registration Rights Agreements shall govern. 3.10 ATTORNEYS' FEES. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals. 3.11 TITLES AND SUBTITLES. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 3.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 3.13 MUTUAL DRAFTING. This Agreement is the result of the joint efforts of the Company and each of the Holders and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and there shall be no construction against any party based on any presumption of the party's involvement in the drafting thereof. [SIGNATURE PAGE FOLLOWS] 10 11 IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof. GOAMERICA, INC. By: /s/ Francis J. Elenio --------------------------------------- Print Name: Francis J. Elenio ------------------------------- Title: CFO ------------------------------------ Address: 401 Hackensack Avenue Hackensack, NJ 07601 Attn: Aaron Dobrinsky, President DELL VENTURES, L.P. By: /s/ Paul Legris --------------------------------------- Print Name: Paul Legris ------------------------------- Title: Portfolio Manager ------------------------------------ Address: Las Comas, Mailstop 9002 One Dell Way Round Rock, TX 78682 EX-10.43 24 w46736ex10-43.txt REGISTRATION RIGHTS AGREEMENT 1 Exhibit 10.43 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of the 1 day of January, 2001, by and among GoAmerica, Inc., a Delaware corporation (the "Company"), and Sony Electronics Inc. ("Sony"). RECITALS WHEREAS, this Agreement is made pursuant to the Warrants to Purchase Common Stock of GoAmerica, Inc. by and among the Company and Sony (the "Warrants") that are granted and issued pursuant to Section 11 of the Sony/GoAmerica Service Agreement (the "Service Agreement"). Capitalized terms used herein shall have the respective meanings ascribed to them in the Warrants, unless the context requires otherwise; and WHEREAS, in connection with the issuance of the Warrants, the parties desire to enter into this Agreement in order to grant certain registration rights to Sony as set forth below with respect to the number of shares of Common Stock of the Company issuable pursuant to the Warrants (the "Shares"). NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. GENERAL. DEFINITIONS. As used in this Agreement the following terms shall have the following respective meanings: "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Holder" means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.7 hereof. "Initial Offering" means the Company's first firm commitment underwritten public offering of its Common Stock registered under the Securities Act as declared effective by the Commission on April 6, 2000. "Prior Registration Rights Agreements" means (a) that certain Registration Rights Agreement, dated October 15, 1996, by and among the Company and the investors party thereto; (b) that certain Registration Rights Agreement, dated June 25, 1999, by and among the Company and the investors party thereto; (c) that certain Registration Rights Agreement dated January 28, 2000, by and among the Company and the investors party thereto; (d) that certain Registration Rights Agreement dated June 28, 2000, by and among the Company and the investors party thereto; (e) that certain Registration Rights Agreement dated August 31, 2000, by and among the Company and the investors party 2 thereto; and (f) that certain Registration Rights Agreement dated November 14, 2000, by and among the Company and Dell Ventures, L.P. "Register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document. "Registrable Securities" means (a) the Shares; and (b) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares. "Registrable Securities then outstanding" shall be the number of shares determined by calculating the total number of shares of the Company's Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then exercisable or convertible securities. "Registration Expenses" shall mean all expenses incurred by the Company in complying with Section 2.1 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements of a single special counsel for the Holders selected by a majority of Holders participating in a particular registration, blue sky fees and expenses (but excluding (a) the compensation of regular employees of the Company which shall be paid in any event by the Company and (b) Selling Expenses). "SEC" or "Commission" means the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended. "Selling Expenses" shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities by a Holder. "Special Registration Statement" shall mean a registration statement relating to any employee benefit plan or with respect to any corporate reorganization or other transaction under Rule 145 of the Securities Act. SECTION 2. REGISTRATION. 2.1 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of Registrable Securities in writing at least fifteen (15) days prior to the filing of any registration statement under the Securities Act 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, but excluding Special Registration Statements) and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder as set forth herein. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by such Holder shall, within fifteen (15) days after the above-described notice from the Company, so notify the Company in writing. Such 2 3 notice shall state the intended method of disposition of the Registrable Securities by such Holder as set forth herein. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. (a) UNDERWRITING. If the registration statement under which the Company gives notice under this Section 2.1 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder to be included in a registration pursuant to this Section 2.1 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated first, to the Company; second to all stockholders who are entitled to participate and who have elected to participate in the offering pursuant to the terms of the Prior Registration Rights Agreements on a pro rata basis based upon the total number of shares held by each such participating stockholder that are subject to piggyback registration rights pursuant thereto; third, to all stockholders who are entitled to participate and who have elected to participate in the offering pursuant to the terms of this Agreement, on a pro rata basis based upon the total number of shares held by each such participating stockholder that are subject to piggyback registration rights pursuant hereto; and fourth, to any other stockholder of the Company on a pro rata basis. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For any Holder which is a partnership or corporation, the partners, stockholders, subsidiaries, parents and affiliates of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single "Holder", and any pro rata reduction with respect to such "Holder" shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such "Holder", as defined in this sentence. (b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.1 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.2 hereof. 3 4 2.2 EXPENSES OF REGISTRATION. All Registration Expenses incurred in connection with any registration, qualification or compliance hereunder shall be borne by the Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the Holders of the securities so registered pro rata on the basis of the number of shares so registered. 2.3 OBLIGATIONS OF THE COMPANY. Subject to Section 2.1(b), whenever the Company elects to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to ninety (90) days or, if earlier, until the Holder or Holders have completed the distribution related thereto. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in paragraph (a) above. (c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. (f) Notify each Holder 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 of 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 a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. The Company will use reasonable efforts to amend or supplement such 4 5 prospectus in order to cause such prospectus not to include any 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 light of the circumstances then existing. (g) Use its commercially reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters. 2.4 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted under this Section 2 shall terminate and be of no further force and effect seven (7) years after the date of the Company's Initial Offering. In addition, a Holder's registration rights shall expire if (a) collectively, the Holders hold less than 1% of the Company's outstanding Common Stock and (b) all Registrable Securities held by such Holder (and its affiliates, partners, members and former members) may be sold under Rule 144 during any ninety (90) day period. 2.5 DELAY OF REGISTRATION; FURNISHING INFORMATION. (a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. (b) It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.1 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities. 2.6 INDEMNIFICATION. In the event any Registrable Securities are included in a registration statement under Section 2.1: (a) The Company will indemnify and hold harmless each Holder, the partners, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation") by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary 5 6 prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any Violation or alleged Violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement (provided, however, that the Company will not be required to indemnify any of the foregoing persons on account of any losses, claims, damages or liabilities arising from a Violation if and to the extent that such Violation was made in a preliminary prospectus and was corrected in a subsequent prospectus that was required by law to be delivered to the person making the claim with respect to which indemnification is sought hereunder, and such subsequent prospectus was made available by the Company to permit delivery of such prospectus in a timely manner, and such subsequent prospectus was so delivered to the Holder making the claim for indemnification); and the Company will pay as incurred to each such Holder, partner, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, underwriter or controlling person of such Holder. (b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder's partners, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will pay as incurred any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Violation; provided, however, that the indemnity agreement contained in this Section 2.6(b) shall not apply to amounts 6 7 paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall any indemnity under this Section 2.6 exceed the net proceeds from the offering received by such Holder. (c) Promptly after receipt by an indemnified party under this Section 2.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain one counsel of their own, with the reasonable fees and expenses of such counsel to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.6, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.6. (d) If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder. (e) The obligations of the Company and Holders under this Section 2.6 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as 7 8 an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. 2.7 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned by a Holder to a transferee or assignee of Registrable Securities to which (a) there is transferred to such transferee no less than twenty thousand (20,000) shares of Registrable Securities, appropriately adjusted to reflect any stock splits, stock dividends, subdivisions, reverse splits and similar events, (b) there is transferred to such transferee at least ten percent (10%) of the shares of Registrable Securities held by the Holder, (c) such transferee is an affiliate, subsidiary or parent company, family member or family trust for the benefit of a party hereto or (d) such transferee or transferees are partners of a Holder, who agree to act through a single representative; provided, however, (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement. 2.8 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2 may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of a majority of the Registrable Securities then outstanding. Any amendment or waiver effected in accordance with this Section 2.8 shall be binding upon each Holder and the Company. By acceptance of any benefits under this Section 2, Holders of Registrable Securities hereby agree to be bound by the provisions hereunder. 2.9 RULE 144 REPORTING. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC 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 SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the Initial Offering; (b) File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and (c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of 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 as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration. 8 9 SECTION 3. MISCELLANEOUS. 3.1 GOVERNING LAW. This Agreement shall be construed under Delaware General Corporation Law as to matters of corporate law and, as to all other matters of law, shall be governed and construed under the laws of the State of Delaware as such laws are applied to agreements between Delaware residents entered into and performed entirely in the State of Delaware. 3.2 SURVIVAL. The representations, warranties, covenants, and agreements made herein shall survive any investigation made by any Holder and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price. 3.4 ENTIRE AGREEMENT. This Agreement, the Warrants, the Service Agreement and the other documents delivered pursuant thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 3.5 SEVERABILITY. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 3.6 AMENDMENT AND WAIVER. (a) Except as otherwise expressly provided, this Agreement may be amended or modified only upon the written consent of the Company and the holders of at least a majority of the Registrable Securities. (b) Except as otherwise expressly provided, the obligations of the Company and the rights of the Holders under this Agreement may be waived only with the written consent of the holders of at least a majority of the Registrable Securities. 9 10 (c) For the purposes of determining the number of Holder or stockholders entitled to vote or exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record holders of its stock as maintained by or on behalf of the Company. 3.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any Holder, upon any breach, default or noncompliance of the Company under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on any Holder's part of any breach, default or noncompliance under the Agreement or any waiver on such Holder's part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not alternative. 3.8 NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the party to be notified at the address as set forth on the signature pages hereof or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto. 3.9 PRIORITY OF REGISTRATION RIGHTS. Notwithstanding anything herein to the contrary, in the event of any conflict between the provisions of this Agreement and the provisions of any of the Prior Registration Rights Agreements, the provisions of the Prior Registration Rights Agreements shall govern. 3.10 ATTORNEYS' FEES. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals. 3.11 TITLES AND SUBTITLES. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 10 11 3.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 3.13 MUTUAL DRAFTING. This Agreement is the result of the joint efforts of the Company and each of the Holders and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and there shall be no construction against any party based on any presumption of the party's involvement in the drafting thereof. [SIGNATURE PAGE FOLLOWS] 11 12 IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof. GOAMERICA, INC. By: /s/ Joseph Korb --------------------------------------- Print Name: Joseph Korb ------------------------------- Title: President ------------------------------------ Address: 433 Hackensack Avenue Hackensack, NJ 07601 Attn: Aaron Dobrinsky, President SONY ELECTRONICS INC. By: /s/ Mark T. Viken --------------------------------------- Print Name: Mark T. Viken ------------------------------- Title: Sr. GM/President ------------------------------------ Address: 16765 W. Bernardo Dr. -------------------------------- San Diego, CA 92127 - ------------------------------------------ - ------------------------------------------ 12 EX-21.1 25 w46736ex21-1.txt LIST OF SUBSIDIARIES OF THE COMPANY 1 Exhibit 21.1 GoAmerica, Inc. Subsidiaries ---------------------------- 1. GoAmerica Communications Corp. (Delaware corporation) 433 Hackensack Avenue Hackensack, New Jersey 07601 2. GoAmerica Marketing, Inc. (Delaware corporation) 433 Hackensack Avenue Hackensack, New Jersey 07601 3. Wynd Communications Corporation (California corporation) 75 Higuera Street, Suite 240 San Luis Obispo, California 93401 4. Hotpaper.com, Inc. (Delaware corporation) 33 New Montgomery Street, Suite 1040 San Francisco, California 94105 EX-23.1 26 w46736ex23-1.txt CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.1 CONSENT OF ERNST & YOUNG LLP 2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-47736) pertaining to the GoAmerica Communications Corp. 1999 Stock Option Plan, the GoAmerica, Inc. 1999 Stock Plan and the GoAmerica, Inc. Employee Stock Purchase Plan of our report dated February 20, 2001, with respect to the financial statements and schedule of GoAmerica, Inc. included in the Annual Report (Form 10-K) for the year ended December 31, 2000. /s/ Ernst & Young LLP MetroPark, New Jersey March 30, 2001 -----END PRIVACY-ENHANCED MESSAGE-----