-----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, AEuvU5uAQF7k7TdABTiWa+S7iQ/z9gNZX6Uy+C+o0H0iRmFiO5S8z5mE/GLkHIdX IehWHgClrqysfeyIxVFMdQ== 0001144204-05-034997.txt : 20051114 0001144204-05-034997.hdr.sgml : 20051111 20051114071139 ACCESSION NUMBER: 0001144204-05-034997 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051114 DATE AS OF CHANGE: 20051114 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-29359 FILM NUMBER: 051196161 BUSINESS ADDRESS: STREET 1: C/O GOAMERICA, INC. STREET 2: 433 HACKENSACK AVENUE CITY: HACKENSACK STATE: NJ ZIP: 07601 BUSINESS PHONE: 2019961717 MAIL ADDRESS: STREET 1: C/O GOAMERICA STREET 2: 401 HACKENSACK AVENUE CITY: HACKENSACK STATE: NJ ZIP: 07601 10-Q 1 v028787_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

Commission File No. 0-29359

GoAmerica, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

22-3693371

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer Identification No.)

433 Hackensack Avenue, Hackensack, New Jersey

07601

(Address of Principal Executive Offices)

(Zip Code)

(201) 996-1717

(Registrant's Telephone Number,

Including Area Code)

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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act):

Yes: __

No: X

Indicate by check mark whether the registrant is a shell company (as described in Rule 12b-2 of the Exchange Act):

Yes: __

No: X

Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of October 31, 2005:

Class

Number of Shares

Common Stock, $.01 par value

2,093,451

GOAMERICA, INC.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION	1
Item 1. Financial Statements (September 30, 2005 and 2004 are unaudited)	1
Condensed Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004	2
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2005 and 2004	3
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2005 and 2004	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
General	10
Critical Accounting Policies and Estimates	10
Results of Operations	11
Liquidity and Capital Resources	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	20
Item 4. Controls and Procedures	20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	21
Item 6. Exhibits	21
SIGNATURES	22

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

-1-

GOAMERICA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30, 2005			December 31, 2004
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,937		$	7,098
Accounts receivable, net		1,560			1,530
Other receivables		—			732
Merchandise inventories, net		334			123
Prepaid expenses and other current assets		356			219
Total current assets		7,187			9,702

Restricted cash		300			604
Property, equipment and leasehold improvements, net		755			940
Goodwill, net		6,000			6,000
Trade names and other intangible assets, net		75			639
Other assets		591			101
	$	14,908		$	17,986

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	670		$	348
Accrued expenses		336			538
Deferred revenue		86			285
Other current liabilities		37			1
Total current liabilities		1,129			1,172

Commitments and contingencies

Stockholders' equity:
Common stock, $.01 par value, authorized: 200,000,000 shares in 2005 and 2004; issued: 2,117,514 in 2005 and 2,117,339 in 2004		21			21
Additional paid-in capital		285,856			285,854
Accumulated deficit		(271,912	)		(268,875	)
Treasury stock, at cost, 24,063 shares in 2005 and 2004		(186	)		(186	)
Total stockholders' equity		13,779			16,814
	$	14,908		$	17,986

The accompanying notes are an integral part of these financial statements.

-2-

GOAMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Revenues:
Subscriber	$	548		$	1,207		$	1,967		$	4,596
Prepaid services		1,027			—			2,452			—
Relay services		329			—			774			—
Equipment		120			50			361			156
Other		270			113			676			163
		2,294			1,370			6,230			4,915
Costs and expenses:
Cost of subscriber airtime		208			510			727			2,117
Cost of network operations		78			132			243			580
Cost of equipment revenue		138			35			436			149
Cost of prepaid services		1,252			—			2,663			—
Cost of other revenue		—			56			—			56
Sales and marketing		320			165			773			543
General and administrative		984			1,220			3,336			4,050
Research and development		96			126			255			434
Depreciation and amortization		119			168			375			664
Amortization of other intangibles		122			99			564			534
		3,317			2,511			9,372			9,127
Loss from operations		(1,023	)		(1,141	)		(3,142	)		(4,212	)

Other income (expense):
Settlement gains (losses), net		—			(140	)		—			1,481
Interest income (expense), net		29			38			105			(991	)

Total other income (expense), net		29			(102	)		105			490

Net loss	$	(994	)	$	(1,243	)	$	(3,037	)	$	(3,722	)

Basic net loss per share	$	(0.48	)	$	(0.61	)	$	(1.45	)	$	(2.19	)
Diluted net loss per share	$	(0.48	)	$	(0.61	)	$	(1.45	)	$	(2.19	)

Weighted average shares used in computation of basic net loss per share		2,093,451			2,040,603			2,093,445			1,695,766
Weighted average shares used in computation of diluted net loss per share		2,093,451			2,040,603			2,093,445			1,695,766

The accompanying notes are an integral part of these financial statements.

-3-

GOAMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2005			2004

Operating activities
Net loss	$	(3,037	)	$	(3,722	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of fixed assets		375			664
Amortization of other intangible assets		564			534
Amortization of deferred financing costs		—			624
Amortization of discount on bridge note payable		—			390
Provision for losses on accounts receivable		36			51
Common stock issued for interest expense		—			19
Settlement gains, net		—			(1,481	)
Changes in operating assets and liabilities:
Increase in accounts receivable		(66	)		(60	)
Decrease in other receivables		732			534
Increase in merchandise inventories		(211	)		(2	)
Increase in prepaid expenses and other current assets		(137	)		(362	)
Increase (decrease) in accounts payable		322			(1,066	)
Increase (decrease) in accrued expenses		(202	)		(483	)
Decrease in deferred revenue		(199	)		(322	)
Net cash used in operating activities		(1,823	)		(4,682	)

Investing activities
Change in other assets and restricted cash		(186	)		(307	)
Purchase of property, equipment and leasehold improvements		(116	)		(63	)
Acquisition of intangible assets		—			(75	)
Net cash used in investing activities		(302	)		(445	)

Financing activities
Issuance of common stock, net of related expenses		—			12,770
Issuance of common stock for exercise of stock options and warrants		2			211
Purchase of treasury stock		—			(186	)
Increase in deferred financing costs		—			(139	)
Payments made on capital lease obligations		(38	)		(5	)
Net cash (used in) provided by financing activities		(36	)		12,651

Net increase (decrease) in cash and cash equivalents		(2,161	)		7,524
Cash and cash equivalents at beginning of period		7,098			568
Cash and cash equivalents at end of period	$	4,937		$	8,092

Supplemental Disclosure of Non-Cash Investing Activities:
Common stock issued in connection with conversion of bridge note	$	—		$	1,015
Common stock issued in connection with vendor settlements	$	—		$	451
Application of deferred financing costs against proceeds from the sale of stock	$	—		$	(606	)
Acquisition of equipment through capital leases	$	74		$	—

The accompanying notes are an integral part of these financial statements.

-4-

GOAMERICA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share and per share data)

Note 1 - Basis of Presentation:

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and include the results of GoAmerica, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Accordingly, certain information and footnote disclosures required in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring adjustments except as otherwise disclosed herein) which the Company considers necessary for the fair presentation of its financial position as of September 30, 2005, the results of its operations for the three and nine month periods ended September 30, 2005 and 2004 and its cash flows for the nine month periods ended September 30, 2005 and 2004. These financial statements should be read in conjunction with the Company's audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K (as amended) for the year ended December 31, 2004.

The Company is dependent on EarthLink, Inc. (“Earthlink”) for billing and collections, customer support and technical support for certain of the Company’s subscribers. Additionally, the Company is dependent on EarthLink and other third parties for wireless communication devices and wireless network connectivity. 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. In addition, the majority of the Company’s other revenue is earned through commissions derived from a master dealer agreement with T-Mobile.

During the fourth quarter of 2004, the Company commenced selling prepaid calling card services. The Company sells prepaid calling cards via two methods: 1) as a distributor in which the Company has no future obligation to provide the usage embedded in the card, and 2) as a Company branded card in which the Company is obligated to provide usage service utilizing its own infrastructure until the obligation to provide the service is either completed or the card expires.

Prepaid airtime sold to customers is recorded as deferred revenue prior to the commencement of services and revenue is recognized when airtime is utilized or the card expires. Revenue from calling cards sold to customers in which the Company has no obligation to provide airtime service is recorded at the time of the delivery of the cards to the customer, provided that collection is deemed probable.

Commencing in the later part of March 2005, the Company began deriving relay service revenues from a wireless Internet Relay service marketed in conjunction with Sprint Corporation and our i711.com’ branded Internet service. Revenue from relay services is recognized as the service is provided. Additionally, the Company records other revenues from commissions received through the acquisition of subscribers on behalf of various network providers with which the Company does not have reseller agreements. These commissions are recognized as revenue in the period earned.

The Company has incurred significant operating losses since its inception and, as of September 30, 2005, has an accumulated deficit of $271,912. During the nine months ended September 30, 2005, the Company incurred a net loss of $3,037 and used $1,823 of cash to fund operating activities. As of September 30, 2005, the Company had $5,237 in cash and cash equivalents (inclusive of restricted cash).

Results for the interim period are not necessarily indicative of results that may be expected for the entire year or for any other interim period.

-5-

Note 2 - Significant Accounting Policies:

Recent Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board ("FASB") issued SFAS 151, "Inventory Costs - An Amendment of ARB No. 43, Chapter 4" ("SFAS 151"). SFAS 151 amends the guidance in ARB No. 43, Chapter 4 to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). The provisions of SFAS 151 are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS 151 is not expected to have a material effect on the Company's financial condition or results of operations.

In December 2004, the FASB issued SFAS 153, "Exchanges of Nonmonetary Assets - an amendment of APB Opinion No. 29" ("SFAS 153"). SFAS 153 amends APB Opinion 29 to eliminate the similar productive asset exception and establishes that exchanges of productive assets should be accounted for at fair value, rather than at carryover basis unless (1) neither the asset received nor the asset surrendered has a fair value that is determinable within reasonable limits, (2) the transaction is an exchange transaction to facilitate sales to customers, or (3) the transaction lacks commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS 153 are effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of SFAS 153 is not expected to have a material effect on the Company's financial condition or results of operations.

In December 2004, the FASB issued SFAS 123R, "Share-Based Payment". SFAS 123R establishes that employee services received in exchange for share-based payment result in a cost that should be recognized in the income statement as an expense when the services are consumed by the enterprise. It further establishes that those expenses be measured at fair value determined as of the grant date. The provisions of SFAS 123R become effective with respect to the Company beginning January 1, 2006. The Company is currently evaluating the effect the adoption of SFAS 123R will have on the Company's financial condition and results of operations.

Note 3 - Earnings 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 loss per share is computed by dividing the Company’s net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share excludes potential common shares if the effect is anti-dilutive. Diluted loss per share is determined in the same manner as basic loss per share except that the number of shares is increased assuming exercise of dilutive stock options and warrants using the treasury stock method. As the Company had a net loss, the impact of the assumed exercise of the stock options and warrants is anti-dilutive and as such, these amounts have been excluded from the calculation of diluted loss per share. For the nine months ended September 30, 2005 and 2004, 290,605 and 290,780 of common stock equivalent shares, respectively, were excluded from the computation of diluted net loss per share, respectively.

-6-

Note 4 - Goodwill and Other Intangible Assets:

The Company follows SFAS No. 142, "Goodwill and Other Intangible Assets". Under SFAS No. 142, goodwill and other intangible assets with indefinite lives are no longer amortized but are reviewed for impairment annually, or more frequently if impairment indicators arise. The Company believes there are no such impairment indicators at September 30, 2005.

The following table summarizes other intangibles subject to amortization at the dates indicated:

	September 30, 2005							December 31, 2004
	Gross							Gross
	Carrying		Accumulated					Carrying		Accumulated
	Amount		Amortization			Net		Amount		Amortization			Net

Trade Names	$	4,572	$	(4,572	)	$	—	$	4,572	$	(4,388	)	$	184
Technology		3,017		(3,017	)		—		3,017		(3,017	)		—
Customer Lists		2,258		(2,258	)		—		2,258		(2,258	)		—
Other		935		(860	)		75		935		(480	)		455
	$	10,782	$	(10,707	)	$	75	$	10,782	$	(10,143	)	$	639

Amortization expense for other intangibles totaled $564 and $534 for the nine months ended September 30, 2005 and 2004, respectively. Future aggregate amortization expense for intangible assets is estimated to be:

Three Months Ending December 31, 2005 $ 75

Note 5 - Stock-based 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. Under this method, compensation expense is recorded on the date of the grant only if the current market price of the underlying stock exceeds the exercise price. Options issued to non-employees are accounted for in accordance with SFAS 123, "Accounting for Stock-Based Compensation", 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.

SFAS No. 123 established accounting and disclosure requirements using a fair value-basis method of accounting for stock-based employee compensation plans. As presently allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic value-based method of accounting described above, and has adopted the disclosure requirements of SFAS No. 123. Had the Company elected to recognize compensation cost based on the fair value of the stock options at the date of grant under SFAS 123, such costs would have been recognized ratably over the vesting period of the underlying instruments and the Company's net loss and net loss per common share would have increased to the pro forma amounts indicated in the table below.

	Three months ended September 30,						Nine months ended September 30,
	2005			2004			2005			2004
Net loss, as reported	$	(994	)	$	(1,243	)	$	(3,037	)	$	(3,722	)
Deduct: Stock-based employee compensation expense included in reported net loss		—			—			—			—

Add: Total stock-based employee compensation expense determined under fair value based method for all awards		(413	)		(992	)		(1,239	)		(2,976	)
Pro forma net loss	$	(1,407	)	$	(2,235	)	$	(4,276	)	$	(6,698	)
Loss per share - basic, as reported	$	(0.48	)	$	(0.61	)	$	(1.45	)	$	(2.19	)
Loss per share - diluted, as reported	$	(0.48	)	$	(0.61	)	$	(1.45	)	$	(2.19	)
Pro forma loss per share - basic	$	(0.68	)	$	(1.10	)	$	(2.05	)	$	(3.95	)
Pro forma loss per share - diluted	$	(0.68	)	$	(1.10	)	$	(2.05	)	$	(3.95	)

-7-

The pro forma results above are not intended to be indicative of or a projection of future results.

Note 6 - Contingencies:

On September 22, 2004, Boundless Depot, LLC ("Boundless Depot") and Scott Johnson, one of two Boundless Depot shareholders, sued GoAmerica and Wynd Communications in the Superior Court of the State of California for the County of Los Angeles, claiming damages of one million dollars for GoAmerica's refusal to pay Boundless Depot unattained contingent consideration, comprising cash and/or GoAmerica Common Stock, with respect to the Asset Purchase Agreement dated as of February 8, 2003 (the "Deafwireless Agreement"), pursuant to which GoAmerica and Wynd Communications acquired certain Deafwireless assets. The total value of such contingent consideration, if all contingencies had been fully met and amounts paid immediately thereupon, would not have exceeded $211; however, the Company does not believe any of the contingent consideration is owed to Boundless Depot or either of its shareholders since conditions of the Deafwireless Agreement were not met and the Company incurred costs for which it is entitled to receive reimbursement from Boundless Depot or offset against any amounts that may become payable to Boundless Depot. Upon petition by GoAmerica and Wynd Communications, the Court has ordered this matter into arbitration, which process is now pending. The Company intends to defend this action vigorously and may elect to pursue counterclaims.

In the first quarter of 2005, the Company reclassified $300 of restricted cash to operating cash to reflect an informal arrangement between the Company and one of its carrier providers which allowed for a reduction in the amount of the required letter of credit and related supporting cash account. The Company expects to finalize this arrangement including a new letter of credit in the fourth quarter.

Note 7 - Business Segment Information:

The Company has two reportable business segments: Wireless Data Solutions and Prepaid Services. The operating results of these business segments are distinguishable and regularly reviewed by the Company’s executive officers. The Company evaluates the performance of its business segments based primarily on operating income (loss). All overhead is allocated to the business segments, except for certain specific corporate costs, such as corporate management compensation, corporate legal, accounting and governance costs and certain insurance and facilities costs. Operating results presented for the business segments of the Company are as follows (in thousands):

	Wireless Data Solutions			Prepaid Services			Corporate			Total
Three Months Ended September 30, 2005:

Revenue	$	1,267		$	1,027		$	—		$	2,294
Operating loss	$	(364	)	$	(346	)	$	(313	)	$	(1,023	)

Three Months Ended September 30, 2004:

Revenue	$	1,370		$	—		$	—		$	1,370
Operating loss	$	(560	)	$	—		$	(581	)	$	(1,141	)

Nine Months Ended September 30, 2005:

Revenue	$	3,714		$	2,516		$	—		$	6,230
Operating loss	$	(1,369	)	$	(655	)	$	(1,118	)	$	(3,142	)

Nine Months Ended September 30, 2004:

Revenue	$	4,915		$	—		$	—		$	4,915
Operating loss	$	(2,592	)	$	—		$	(1,620	)	$	(4,212	)

-8-

Note 8 - Short Term Loan Agreement:

On May 2, 2005, the Company entered into a short term loan agreement with Hands On Video Relay Services, Inc., a Delaware corporation, and Hands On Sign Language Services, Inc., a California corporation (collectively, "Hands On”). The Company may be required to loan Hands On an aggregate of $1,000 under the loan agreement under certain circumstances. All amounts that the Company advances to Hands On pursuant to this agreement will be secured, initially, by the assets acquired with such funds and will bear interest at a defined prime rate. If Hands On breaches any material provision of any definitive agreement, the balance of principal and accrued interest will become immediately due and payable and Hands On will grant the Company a broader security interest in substantially all of its assets until amounts due under the loan agreement are paid. As of September 30, 2005, the Company had advanced $350 to Hands On under the loan agreement. This amount is included in other assets as of September 30, 2005.

Note 9 - Merger Agreement:

On July 6, 2005, the Company entered into an Agreement and Plan of Reorganization with Hands On. Under the agreement, the two Hands On entities will merge with two newly formed acquisition subsidiaries of the Company, and the shareholders of Hands On will receive a number of shares of the Company's common stock approximately equal to the number of shares of the Company's common stock outstanding immediately prior to the closing. Completion of the merger is subject to shareholder approval by the shareholders of the Company and Hands On, and other customary closing conditions. Pursuant to the agreement, the principal shareholders of Hands On have agreed to vote their shares in favor of the merger. The Company has recorded approximately $200 of deferred acquisition costs as of September 30, 2005, which is included in other assets.

On October 28, 2005, the Company executed a Waiver and Supplemental Agreement with Hands On, modifying the Agreement and Plan of Reorganization, dated as of July 6, 2005, between the Company and Hands On. Such modifications permit Hands On to raise up to $2,000 through the issuance of new Hands On securities or the sale of Hands On securities currently held by certain shareholders, through December 31, 2005 (the amount may be increased beyond $2,000 and such date may be extended under certain circumstances). Any Hands On securities so issued must convert automatically into common stock of Hands On, and then GoAmerica, upon the closing of the merger. Additionally, the purchasers of any Hands On securities will be required to agree to vote in favor of the merger and to waive any appraisal rights that such purchasers may have. Any funds raised by Hands On through the sale of Hands On securities prior to the merger will be used to pay transaction expenses incurred in connection with the merger and/or to pay other liabilities of Hands On.

-9-

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

General

GoAmerica(R) is a communications service provider, offering wireless data solutions primarily for consumers who are deaf, hard of hearing and/or speech-impaired and telecommunication services in the form of prepaid calling cards. We currently develop, market and support most wireless data solutions through Wynd Communications Corporation, a wholly owned subsidiary of GoAmerica. Wynd Communications offers enhanced services known as WyndTell(R) and WyndPower(TM), which assist our deaf or hard of hearing customers in communicating from most major metropolitan areas in the continental United States and parts of Canada. WyndTell and WyndPower allow customers to send and receive email messages to and from any email service, provide for delivery and acknowledgements of sent messages that are read, send and receive TTY/TDD (text telephone or teletypewriter) messages, faxes, and text-to-speech messages, and access the Internet using such wireless computing devices as Research in Motion, or RIM, wireless handheld devices, certain Motorola paging devices and the T-Mobile Sidekick, Fido hiptop, and SunCom hiptop devices running on Danger Inc.'s hiptop platform. In addition to Wyndtell, we began offering “Sprint Relay Wireless, Powered By GoAmerica" as a standard feature across all of the WyndTell service offerings that operate on certain RIM handheld devices and the T-Mobile Sidekick. Additionally, GoAmerica continues to support customers who use our proprietary software technology called Go.Web(TM). By utilizing Go.Web, businesses can improve the productivity of employees by enabling secure wireless access to corporate data on many wireless computing devices and over many wireless data networks. Our Go.Web technology can be hosted and supported in a secure network operations center maintained by GoAmerica or its third party outsourcing provider or installed behind an enterprise’s network security system, commonly know as the firewall. Customers who opt to install the software do so by purchasing our proprietary Go.Web Enterprise Server, formally known as Go.Web OnPrem™, technology. The Wynd Communications and Go.Web services transmit over most major wireless data networks in North America. During the fourth quarter of 2004, we commenced selling prepaid calling card services. We sell prepaid calling cards in two methods: 1) as a distributor in which we have no future obligation to provide the usage embedded in the card and 2) as a Company branded card in which we are obligated to provide usage service utilizing our own infrastructure until the obligation to provide the service is either completed or the card expires. Commencing in the later part of March 2005, the Company began offering our i711.com™ branded Internet service, which uses Nordia, Inc.’s technology platform and relay operators (also referred to as Communication Assistants or “CA’s”) to facilitate calls.

Our wireless data solutions revenues are derived principally from subscription to our value-added wireless data services, for which customers typically pay monthly recurring fees. We derive additional wireless data solutions revenue from the sale of wireless communications devices. Additionally, the Company derives other revenues from commissions received through the acquisition of subscribers on behalf of various network providers with which we do not have reseller agreements. We continue to engineer our technology to operate with new versions of wireless devices as they emerge.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, allowance for doubtful accounts, inventory valuation and recoverability of our intangible assets. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. Historically, we have derived our revenue primarily from the sale of basic and value-added wireless data services and the sale of related mobile devices. Subscriber revenue consists primarily of monthly charges for access and usage and is recognized as the services are provided. Equipment revenue is recognized upon shipment to the end user. Prepaid airtime sold to customers is recorded as deferred revenue prior to the commencement of services and revenue is recognized when airtime is utilized or the card expires. Revenue from calling cards sold to customers in which the Company has no obligation to provide airtime service is recorded at the time of the delivery of the cards to the customer, provided that collection is deemed probable. Revenue from relay services is recognized as the service is provided. Commissions received through the acquisition of subscribers on behalf of various network providers with which we do not have reseller agreements are recognized as revenue in the period earned. We estimate the collectibility of our trade receivables. A considerable amount of judgment is required in assessing the ultimate realization of these receivables, including analysis of historical collection rates and the current credit-worthiness of significant customers. Significant changes in required reserves have been recorded in recent periods and may occur in the future due to the current market conditions. We write down inventory for estimated excess or obsolete inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. In assessing the recoverability of our goodwill, other intangibles and other long-lived assets, we must make assumptions regarding estimated future cash flows. If such assumptions change in the future, we may be required to record impairment charges for these assets not previously recorded.

Results of Operations

The following table sets forth, for the three and nine months ended September 30, 2005 and 2004, the percentage relationship to net revenues of certain items included in the Company’s unaudited consolidated statements of operations.

	Three Months Ended September 30,												Nine Months Ended September 30,
(In thousands)	2005						2004						2005						2004
	$			%			$			%			$			%			$			%
Revenues:
Subscriber	$	548			23.9		$	1,207			88.2		$	1,967			31.6		$	4,596			93.5
Prepaid services		1,027			44.8			—			—			2,452			39.4			—			—
Relay services		329			14.3			—			—			774			12.4			—			—
Equipment		120			5.2			50			3.6			361			5.8			156			3.2
Other		270			11.8			113			8.2			676			10.8			163			3.3
		2,294			100.0			1,370			100.0			6,230			100.0			4,915			100.0
Costs and expenses:
Cost of subscriber airtime		208			9.1			510			37.2			727			11.7			2,117			43.1
Cost of network operations		78			3.4			132			9.6			243			3.9			580			11.8
Cost of equipment revenue		138			6.0			35			2.6			436			7.0			149			3.0
Cost of prepaid services		1,252			54.6			—			—			2,663			42.7			—			—
Cost of other		—			—			56			4.1			—			—			56			1.1
Sales and marketing		320			13.9			165			12.0			773			12.4			543			11.0
General and administrative		984			42.9			1,220			89.1			3,336			53.5			4,050			82.4
Research and development		96			4.2			126			9.2			255			4.1			434			8.8
Depreciation and amortization		119			5.2			168			12.3			375			6.0			664			13.5
Amortization of other intangibles		122			5.3			99			7.2			564			9.1			534			10.9
		3,317			144.6			2,511			183.3			9,372			150.4			9,127			185.6
Loss from operations		(1,023	)		(44.6	)		(1,141	)		(83.3	)		(3,142	)		(50.4	)		(4,212	)		(85.6	)

Other income (expense):
Settlement gains, net		—			—			(140	)		(10.2	)		—			—			1,481			30.1
Interest income (expense), net		29			1.3			38			2.8			105			1.7			(991	)		(20.1	)

Total other income		29			1.3			(102	)		(7.4	)		105			1.7			490			10.0

Net loss	$	(994	)		(43.3	)	$	(1,243	)		(90.7	)	$	(3,037	)		(48.7	)	$	(3,722	)		(75.6	)

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The following table sets forth the period over period percentage increases or decreases of certain items included in the Company's unaudited consolidated statements of operations.

	Three Months Ended September 30,												Nine Months Ended September 30,
(In thousands)							Change												Change
	2005			2004			$			%			2005			2004			$			%
Revenues:
Subscriber	$	548		$	1,207		$	(659	)		(54.6	)	$	1,967		$	4,596		$	(2,629	)		(57.2	)
Prepaid services		1,027			—			1,027			—			2,452			—			2,452			—
Relay services		329			—			329			—			774			—			774			—
Equipment		120			50			70			140.0			361			156			205			131.4
Other		270			113			157			138.9			676			163			513			314.7
		2,294			1,370			924			67.4			6,230			4,915			1,315			26.8
Costs and expenses:
Cost of subscriber airtime		208			510			(302	)		(59.2	)		727			2,117			(1,390	)		(65.7	)
Cost of network operations		78			132			(54	)		(40.9	)		243			580			(337	)		(58.1	)
Cost of equipment revenue		138			35			103			294.3			436			149			287			192.6
Cost of prepaid services		1,252			—			1,252			100.0			2,663			—			2,663			100.0
Cost of other		—			56			(56	)		(100.0	)		—			56			(56	)		(100.0	)
Sales and marketing, net		320			165			155			93.9			773			543			230			42.4
General and administrative		984			1,220			(236	)		(19.3	)		3,336			4,050			(714	)		(17.6	)
Research and development		96			126			(30	)		(23.8	)		255			434			(179	)		(41.2	)
Depreciation and amortization		119			168			(49	)		(29.2	)		375			664			(289	)		(43.5	)
Amortization of other intangibles		122			99			23			23.2			564			534			30			5.6
		3,317			2,511			806			32.1			9,372			9,127			245			2.7
Loss from operations		(1,023	)		(1,141	)		118			(10.3	)		(3,142	)		(4,212	)		1,070			(25.4	)

Other income (expense):
Settlement gains, net		—			(140	)		140			(100.0	)		—			1,481			(1,481	)		(100.0	)
Interest income (expense), net		29			38			(9	)		(23.7	)		105			(991	)		1,096			110.6

Total other income		29			(102	)		131			(128.4	)		105			490			(385	)		(78.6	)

Net loss	$	(994	)	$	(1,243	)	$	249			(20.0	)	$	(3,037	)	$	(3,722	)	$	685			(18.4	)

In the following descriptions of our results of operations, we provide information about our expectations for the future. Such expectations do not reflect the pending Hands On merger, which is not expected to be consummated until the first quarter of 2006.

Three months ended September 30, 2005 Compared to Three months ended September 30, 2004

Consolidated

Subscriber revenue. Subscriber revenue decreased 55%, to $548,000 for the three months ended September 30, 2005 from $1.2 million for the three months ended September 30, 2004. This decrease was primarily due to declines in our full service offering subscriber base and was partially offset by increased subscribers to our value added WyndPower service. Our subscriber base decreased to 45,021 subscribers at September 30, 2005 from 61,171 subscribers at September 30, 2004. Our average revenue per user, ARPU, decreased to $3.79 for the three months ended September 30, 2005 from $6.41 for the three months ended September 30, 2004. We expect subscriber revenue to decline slightly as subscribers to our higher ARPU full-service offerings continue to decline and are replaced with subscribers to our lower ARPU value added services.

Prepaid services revenue. We began marketing prepaid calling cards in late 2004 and recognized $1.0 million of prepaid service revenue for the three months ended September 30, 2005. We did not market prepaid calling cards for the corresponding prior period.

Relay services revenue. We began providing relay services in late March 2005 and recognized $329,000 of relay service revenue for the three months ended September 30, 2005. We did not provide relay services for the corresponding prior period.

Equipment revenue. Equipment revenue increased to $120,000 for the three months ended September 30, 2005 from $50,000 for the three months ended September 30, 2004. This increase was primarily due to higher sales of mobile devices as a result of our Global Interactive product line. We expect equipment revenue to increase as we continue to provide devices to new subscribers of our Wynd services and from our sales of equipment to subscribers on behalf of various wireless network providers.

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Other revenue. Other revenue increased to $270,000 for the three months ended September 30, 2005 from $113,000 for the three months ended September 30, 2004. This increase primarily reflects commissions from the acquisition of subscribers on behalf of various wireless network providers, principally T-Mobile. We expect other revenue to increase as commissions earned from various wireless network providers increase.

Cost of subscriber airtime. Cost of subscriber airtime decreased 59%, to $208,000 for the three months ended September 30, 2005 from $510,000 for the three months ended September 30, 2004. This decrease was primarily due to the decrease in our subscriber base described above. We expect cost of subscriber airtime to decline slightly as subscribers to our higher ARPU full-service offerings continue to decline and are replaced with subscribers to our lower ARPU value added services.

Cost of prepaid services revenue. We began marketing prepaid calling cards in late 2004 and incurred $1.3 million of costs related to prepaid service revenue for the three months ended September 30, 2005. We did not market prepaid calling cards for the corresponding prior period. We expect cost of prepaid service revenue to approximate revenue for the reasonably foreseeable future.

Cost of network operations. Cost of network operations decreased to $78,000 for the three months ended September 30, 2005 from $132,000 for the three months ended September 30, 2004 as a result of the consolidation of our GoWeb and WyndTell production systems into a single data center operated by a third party provider. We expect our cost of network operations to decline as a percentage of revenue during 2005.

Cost of equipment revenue. Cost of equipment revenue increased 294%, to $138,000 for the three months ended September 30, 2005 from $35,000 for the three months ended September 30, 2004. This increase was primarily due to higher sales of mobile devices as a result of our Global Interactive product line. We expect cost of equipment revenue to increase as we continue to provide devices to new subscribers of our Wynd services and from the cost of equipment provided to subscribers on behalf of various wireless network providers.

Sales and marketing. Sales and marketing expenses increased to $320,000 for the three months ended September 30, 2005 from $165,000 for the three months ended September 30, 2004. This increase primarily was due to our introduction of new products and services to the consumer marketplace as well as increased payments to third parties as compensation for marketing these products. We expect sales and marketing expenses to increase as demand for these new products and services increases.

General and administrative. General and administrative expenses decreased 19%, to $984,000 for the three months ended September 30, 2005 from $1.2 million for the three months ended September 30, 2004. This decrease was primarily due to decreased salaries and benefits for personnel performing general corporate activities and decreased facility costs. We expect general and administrative expenses to decline as a percentage of revenue during 2005.

Research and development. Research and development expense decreased to $96,000 for the three months ended September 30, 2005 from $126,000 for the three months ended September 30, 2004.

Amortization of other intangibles. Amortization of other intangibles increased to $122,000 for the three months ended September 30, 2005 from $99,000 for the three months ended September 30, 2004.

Settlement losses. Settlement losses in the amount of $140,000 were recorded for the three months ended September 30, 2004 as a result of recording a settlement loss reserve for pending litigation.

Interest income (expense), net. Interest income decreased to $29,000 for the three months ended September 30, 2005 from $38,000 for the three months ended September 30, 2004.

Wireless Data Solutions Segment

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Cost of network operations. Cost of network operations decreased to $31,000 for the three months ended September 30, 2005 from $132,000 for the three months ended September 30, 2004 as a result of the consolidation of our GoWeb and WyndTell production systems into a single data center operated by a third party provider. We expect our cost of network operations to decline as a percentage of revenue during 2005.

General and administrative. General and administrative expenses decreased 7%, to $597,000 for the three months ended September 30, 2005 from $639,000 for the three months ended September 30, 2004. This decrease was primarily due to decreased salaries and benefits for personnel performing general corporate activities and decreased facility costs We expect general and administrative expenses to decline as a percentage of revenue during 2005.

Research and development. Research and development expense decreased to $96,000 for the three months ended September 30, 2005 from $126,000 for the three months ended September 30, 2004.

Amortization of other intangibles. Amortization of other intangibles increased to $122,000 for the three months ended September 30, 2005 from $99,000 for the three months ended September 30, 2004.

Settlement losses. Settlement losses in the amount of $140,000 were recorded for the three months ended September 30, 2004 as a result of recording a settlement loss reserve for pending litigation.

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Prepaid Services Segment

We have provided certain information regarding results for the quarter ended September 30, 2005. We did not market prepaid calling cards for the corresponding prior period.

Cost of network operations. Cost of network operations related to our prepaid calling cards was $47,000 for the three months ended September 30, 2005.

General and administrative. General and administrative expenses were $74,000 for the three months ended September 30, 2005.

Corporate Segment

General and administrative. General and administrative expenses decreased to $313,000 for the three months ended September 30, 2005 from $581,000 for the three months ended September 30, 2004. This decrease was primarily due to decreased salaries and benefits for personnel performing general corporate activities and decreased facility costs. We expect general and administrative expenses to decline as a percentage of revenue during 2005.

Interest income (expense), net. Interest income decreased to $29,000 for the three months ended September 30, 2005 from $38,000 for the three months ended September 30, 2004.

Nine months ended September 30, 2005 Compared to Nine months ended September 30, 2004

Consolidated

Subscriber revenue. Subscriber revenue decreased 57%, to $2.0 million for the nine months ended September 30, 2005 from $4.6 million for the nine months ended September 30, 2004. This decrease was primarily due to declines in our full service offering subscriber base and was partially offset by increased subscribers to our value added WyndPower service. Our subscriber base decreased to 45,021 subscribers at September 30, 2005 from 61,171 subscribers at September 30, 2004. Our ARPU decreased to $4.33 for the nine months ended September 30, 2005 from $7.49 for the nine months ended September 30, 2004.

Prepaid services revenue. We began marketing prepaid calling cards in late 2004 and recognized $2.5 million of prepaid service revenue for the nine months ended September 30, 2005. We did not market prepaid calling cards for the corresponding prior period.

Relay services revenue. We began providing relay services in late March 2005 and recognized $774,000 of relay service revenue for the nine months ended September 30, 2005. We did not provide relay services for the corresponding prior period.

Equipment revenue. Equipment revenue increased to $361,000 for the nine months ended September 30, 2005 from $156,000 for the nine months ended September 30, 2004. This increase was primarily due to higher sales of mobile devices as a result of our Global Interactive product line.

Other revenue. Other revenue increased to $676,000 for the nine months ended September 30, 2005 from $163,000 for the nine months ended September 30, 2004. This increase primarily reflects commissions from the acquisition of subscribers on behalf of various wireless network providers.

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Cost of subscriber airtime. Cost of subscriber airtime decreased 66%, to $727,000 for the nine months ended September 30, 2005 from $2.1 million for the nine months ended September 30, 2004. This decrease was primarily due to the decrease in our subscriber base described above.

Cost of prepaid services revenue. We began marketing prepaid calling cards in late 2004 and incurred $2.7 million of costs related to prepaid service revenue for the nine months ended September 30, 2005. We did not market prepaid calling cards for the corresponding prior period.

Cost of network operations. Cost of network operations decreased to $243,000 for the nine months ended September 30, 2005 from $580,000 for the nine months ended September 30, 2004 as a result of the consolidation of our GoWeb and WyndTell production systems into a single data center operated by a third party provider.

Cost of equipment revenue. Cost of equipment revenue increased 192%, to $436,000 for the nine months ended September 30, 2005 from $149,000 for the nine months ended September 30, 2004. This increase was primarily due to higher sales of mobile devices as a result of our Global Interactive product line.

Sales and marketing. Sales and marketing expenses increased to $773,000 for the nine months ended September 30, 2005 from $543,000 for the nine months ended September 30, 2004. This increase primarily was due to our introduction of new products and services to the consumer marketplace as well as increased payments to third parties as compensation for marketing these products.

General and administrative. General and administrative expenses decreased 18%, to $3.3 million for the nine months ended September 30, 2005 from $4.1 million for the nine months ended September 30, 2004. This decrease was primarily due to decreased salaries and benefits for personnel performing general corporate activities and decreased facility costs due to our consolidation of operations completed during April of 2004.

Research and development. Research and development expense decreased to $255,000 for the nine months ended September 30, 2005 from $434,000 for the nine months ended September 30, 2004.

Amortization of other intangibles. Amortization of other intangibles increased to $564,000 for the nine months ended September 30, 2005 from $534,000 for the nine months ended September 30, 2004.

Settlement gains, net. The Company entered into agreements with certain of its creditors to relieve the Company of certain debts. As a result, the Company recorded settlement gains totaling $1.5 million in 2004.

Interest income (expense), net. Interest income increased to $105,000 for the nine months ended September 30, 2005 from interest expense of $1.0 million for the nine months ended September 30, 2004. This change was primarily due to the amortization of deferred debt expense and discount recorded on bridge notes payable during the three months ended March 31, 2004.

Wireless Data Solutions Segment

Equipment revenue. Equipment revenue increased to $297,000 for the nine months ended September 30, 2005 from $156,000 for the nine months ended September 30, 2004. This increase was primarily due to higher sales of mobile devices as a result of our Global Interactive product line.

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Cost of network operations. Cost of network operations decreased to $152,000 for the nine months ended September 30, 2005 from $580,000 for the nine months ended September 30, 2004 as a result of the consolidation of our GoWeb and WyndTell production systems into a single data center operated by a third party provider.

Cost of equipment revenue. Cost of equipment revenue increased 156%, to $382,000 for the nine months ended September 30, 2005 from $149,000 for the nine months ended September 30, 2004. This increase was primarily due to higher sales of mobile devices as a result of our Global Interactive product line.

General and administrative. General and administrative expenses decreased 24%, to $1,855,000 for the nine months ended September 30, 2005 from $2,430,000 for the nine months ended September 30, 2004. This decrease was primarily due to decreased salaries and benefits for personnel performing general corporate activities and decreased facility costs due to our consolidation of operations completed during April of 2004.

Research and development. Research and development expense decreased to $255,000 for the nine months ended September 30, 2005 from $434,000 for the nine months ended September 30, 2004.

Amortization of other intangibles. Amortization of other intangibles increased to $564,000 for the nine months ended September 30, 2005 from $534,000 for the nine months ended September 30, 2004.

Settlement gains, net. The Company entered into agreements with certain of its creditors to relieve the Company of certain debts. As a result, the Company has recorded settlement gains totaling $1.5 million in 2004.

Prepaid Services Segment

We have provided certain information regarding results for the nine months ended September 30, 2005. We did not market prepaid calling cards for the corresponding prior period.

Prepaid services revenue. We began marketing prepaid calling cards in late 2004 and recognized $2.5 million of prepaid service revenue for the nine months ended September 30, 2005.

Equipment revenue. We recognized $64,000 of equipment revenue from ClearMobile, our prepaid phone product line for the nine months ended September 30, 2005.

Cost of network operations. Cost of network operations related to our prepaid calling cards was $91,000 for the nine months ended September 30, 2005.

Cost of equipment revenue. Cost of equipment revenue was $54,000 for the nine months ended September 30, 2005.

General and administrative. General and administrative expenses were $363,000 for the nine months ended September 30, 2005.

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Corporate Segment

General and administrative. General and administrative expenses decreased to $1.1 million for the nine months ended September 30, 2005 from $1.6 million for the nine months ended September 30, 2004. This decrease was primarily due to decreased salaries and benefits for personnel performing general corporate activities.

Liquidity and Capital Resources

Since our inception, we financed our operations through a public offering and private placements of our equity securities. We have incurred significant operating losses since our inception and as of September 30, 2005 have an accumulated deficit of $271.9 million. During the nine months ended September 30, 2005, we incurred a net loss of $3.0 million, used $1.8 million of cash to fund operating activities and overall experienced a decline of $2.2 million in our cash and cash equivalents. We currently anticipate that our available cash resources will be sufficient to fund our operating needs for at least the next 12 months. 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.

Net cash used in operating activities amounted to $1.8 million for the nine months ended September 30, 2005 principally reflecting our net loss and an increase in our merchandise inventories and prepaid expenses which was more than offset by a reduction in other receivables.

We used $302,000 in cash from investing activities during the nine months ended September 30, 2005, which primarily resulted from merger related costs, purchases of equipment and capitalized costs associated with the development of our i711.com branded Internet service. This was partially offset by a reduction in cash required to support a letter of credit.

Net cash used in financing activities was $36,000 for the nine months ended September 30, 2005, which resulted from payments made on capital lease obligations. This was partially offset by the issuance of stock from exercise of certain warrants.

As of September 30, 2005, our principal commitments consisted of obligations outstanding under operating leases. As of September 30, 2005, future minimum payments for non-cancelable operating leases having terms in excess of one year amounted to $499,000, of which approximately $287,000 is payable in the next twelve months.

The following table summarizes GoAmerica’s contractual obligations at September 30, 2005, and the effect such obligations are expected to have on its liquidity and cash flow in future periods.

September 30, (In thousands)	Total		Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
Contractual Obligations:
Capital Lease Obligations	$	37	$	37	$	—	$	—	$	—
Operating Lease Obligation		499		287		212		—		—
Total Contractual Cash Obligation	$	536	$	324	$	212	$	—	$	—

Other Commercial Commitments:
Standby Letter of Credit	$	300	$	300	$	—	$	—	$	—
Total Commercial Commitments	$	300	$	300	$	—	$	—	$	—

-18-

On May 2, 2005, the Company entered into a short term loan agreement with Hands On Video Relay Services, Inc., a Delaware corporation, and Hands On Sign Language Services, Inc., a California corporation (collectively, "Hands On”). We may be required to loan Hands On up to an aggregate of $1,000,000 under the loan agreement under certain circumstances. Pursuant to that agreement, all amounts that the Company advances to Hands On will be secured, initially, by the assets acquired with such funds and will bear interest at a defined prime rate. If Hands On breaches any material provision of any definitive agreement, the balance of principal and accrued interest will become immediately due and payable and Hands On will grant the Company a broader security interest in substantially all of Hands On's assets until amounts due under the loan agreement are paid. As of September 30, 2005, the Company had advanced $350,000 to Hands On under the loan agreement.

Forward Looking Statements

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended). Such forward-looking statements may be identified by the use of forward-looking terminology such as "may", "will", "expect", "estimate", "anticipate", "continue", or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve risks and uncertainties, including, but not limited to: (i) our limited operating history; (ii) our ability to successfully manage our relationship with EarthLink; (iii) our dependence on EarthLink to provide billing, customer and technical support to certain of our subscribers; (iv) our ability to respond to the rapid technological change of the wireless data industry and offer new services; (v) our dependence on wireless carrier networks; (vi) our ability to respond to increased competition in the wireless data industry; (vii) our ability to integrate acquired businesses and technologies, including Hands On (if the mergers are completed); (viii) our ability to generate revenue growth; (ix) our ability to increase or maintain gross margins, profitability, liquidity and capital resources; (x) difficulties inherent in predicting the outcome of regulatory processes; (xi) our limited experience in offering prepaid calling cards: and (xii) difficulty in predicting the consequences of our entering into a merger agreement with Hands On. Many of such risks and others are more fully described in the Risk Factors set forth in Exhibit 99.1 to our Annual Report on Form 10-K for the year ended December 31, 2004. Our actual results could differ materially from the results expressed in, or implied by, such forward-looking statements.

Recent Accounting Pronouncements

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In December 2004, the FASB issued SFAS 123R, "Share-Based Payment". SFAS 123R establishes that employee services received in exchange for share-based payment result in a cost that should be recognized in the income statement as an expense when the services are consumed by the enterprise. It further establishes that those expenses be measured at fair value determined as of the grant date. The provisions of SFAS 123R become effective with respect to the Company on January 1, 2006. The Company is currently evaluating the effect the adoption of SFAS 123R will have on our financial condition and results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We believe that we have limited exposure to financial market risks, including changes in interest rates. At September 30, 2005, 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 our net loss of approximately $53,000 based on cash and cash equivalent balances at September 30, 2005. We currently hold no derivative instruments and do not earn foreign-source income.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures.

As of the end of the Company's most recently completed fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) covered by this report, the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

Changes in internal controls.

There have been no changes in the Company's internal controls over financial reporting that occurred during the Company's last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

On September 22, 2004, Boundless Depot, LLC ("Boundless Depot") and Scott Johnson, one of two Boundless Depot shareholders, sued GoAmerica and Wynd Communications in the Superior Court of the State of California for the County of Los Angeles, claiming damages of one million dollars for GoAmerica's refusal to pay Boundless Depot unattained contingent consideration, comprising cash and/or GoAmerica Common Stock, with respect to the Asset Purchase Agreement dated as of February 8, 2003 (the "Deafwireless Agreement"), pursuant to which GoAmerica and Wynd Communications acquired certain Deafwireless assets. The total value of such contingent consideration, if all contingencies had been fully met and amounts paid immediately thereupon, would not have exceeded $211,000; however, the Company does not believe any of the contingent consideration is owed to Boundless Depot or either of its shareholders since conditions of the Deafwireless Agreement were not met and the Company incurred costs for which it is entitled to receive reimbursement from Boundless Depot or offset against any amounts that may become payable to Boundless Depot. Upon petition by GoAmerica and Wynd Communications, the Court has ordered this matter into arbitration, which process is now pending. The Company intends to defend this action vigorously and may elect to pursue counterclaims.

Item 6. Exhibits.

2.1	Waiver and Supplemental Agreement, dated as of October 28, 2005, among Hands On Video Relay Services, Inc., Hands On Sign Language Services, Inc., Denise and Ronald Obray, and GoAmerica, Inc.

3.1	Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on August 18, 2005.

10.1	Amended and Restated Employment Agreement by and between GoAmerica and Daniel R. Luis, dated as of November 8, 2005.
10.2	Amended and Restated Employment Agreement by and between GoAmerica and Donald G. Barnhart, dated as of November 8, 2005.

10.3	Amended and Restated Employment Agreement by and between GoAmerica and Jesse Odom, dated as of November 8, 2005.

10.4	Employment Agreement by and between GoAmerica and Wayne D. Smith, dated as of November 8, 2005.

31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements 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.


	GOAMERICA, INC

DATE: November 11, 2005	By:	/s/ Daniel R. Luis
		Daniel R. Luis Chief Executive Officer (Principal Executive Officer)



DATE: November 11, 2005	By:	/s/ Donald G. Barnhart
		Donald G. Barnhart Chief Financial Officer (Principal Financial and Accounting Officer)

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Exhibit Index

Exhibit No.	Description of Document

2.1	Waiver and Supplemental Agreement, dated as of October 28, 2005, among Hands On Video Relay Services, Inc., Hands On Sign Language Services, Inc., Denise and Ronald Obray, and GoAmerica, Inc.

3.1	Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on August 18, 2005.

10.1	Amended and Restated Employment Agreement by and between GoAmerica and Daniel R. Luis, dated as of November 8, 2005.

10.2	Amended and Restated Employment Agreement by and between GoAmerica and Donald G. Barnhart, dated as of November 8, 2005.

10.3	Amended and Restated Employment Agreement by and between GoAmerica and Jesse Odom, dated as of November 8, 2005.

10.4	Employment Agreement by and between GoAmerica and Wayne D. Smith, dated as of November 8, 2005.

31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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EX-2.1 2 v028787_ex2-1.htm

Exhibit 2.1

WAIVER AND SUPPLEMENTAL AGREEMENT

This Waiver and Supplemental Agreement is made as of October 28, 2005, among Hands On Video Relay Services, Inc., Hands On Sign Language Services, Inc. (collectively “Hands On”), Denise and Ronald Obray (collectively, the “Obrays”) and GoAmerica, Inc. (“GoAmerica).

The parties hereto agree as follows:

1.0 Background. The parties entered into an Agreement and Plan of Reorganization, dated as of July 6, 2005 (the “Merger Agreement”). All capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Merger Agreement. Hands On has requested a waiver from GoAmerica from certain provisions of the Merger Agreement to allow Hands On to raise a limited amount of capital from third-party sources through the issuance of new securities or the sale of securities currently held by the Obrays (collectively, “Securities Transactions”).

Both GoAmerica and Hands On are prohibited under Section 5.2 of the Merger Agreement from:

·	taking any action to solicit, initiate, encourage or support any inquiries that could lead to business deals with third parties, including mergers, asset sales, sales of capital stock or similar transactions; or

·	engaging in any discussions or negotiations or providing any information to any party regarding any these types of transactions.

Section 5.1 of the Merger Agreement provides that neither party may issue any securities without the prior consent of the other party. Finally, Section 5.3 of the Merger Agreement provides that the Obrays will not transfer or sell any of their interests in Hands On.

GoAmerica is willing to grant Hands On and the Obrays a waiver from these provisions of the Merger Agreement on the terms described below and Hands and the Obrays are willing to grant GoAmerica a limited waiver from Section 5.2 on the terms described below.

2.0 Terms of Waiver.

2.1 GoAmerica agrees that Hands On and the Obrays shall be permitted to raise up to $2.0 million (or, if GoAmerica consents, more than $2.0 million) through Securities Transactions during the period from the date this Waiver and Supplemental Agreement is signed through December 31, 2005, provided that if Hands On and the Obrays have a bona fide proposal for a Securities Transaction by December 31, 2005, the parties will agree to a reasonable extension of this date (consistent with Merger closing by the Closing Date) to consummate such Securities Transaction.

2.2 The Securities Transactions will be subject to the following conditions:

·	Only common stock, or securities that convert into common stock of Hands On, and then GoAmerica, automatically upon closing of the Merger with GoAmerica, will be sold. No debt or other obligations resulting from the sale of these securities will be outstanding following closing of the Merger.

Purchasers of these securities will be required as a condition to any sale to agree to vote in favor of the Merger with GoAmerica and to waive any appraisal rights which they may have so that the Obrays and the Purchasers will, in the aggregate, at all times hold sufficient shares of Hands On to ensure that the Merger will be approved by Hands On shareholders.

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2.3 The funds raised by the Securities Transactions will be used by Hands On and the Obrays to pay transactions expenses incurred by Hands On and the Obrays in connection with the Merger Agreement and the Merger and to pay other liabilities of Hands On, provided that as long as all outstanding transaction expenses and past due liabilities of Hands On have been paid, Hands On shall continue to have the right to make distributions to Target Shareholders if the provisions of Section 5.1(b) of the Merger Agreement have been met. The parties acknowledge that Section 6.15 of the Merger Agreement provides that “whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense.” To effectuate this provision, to the extent that any transaction expenses of Hands On and the Obrays remain outstanding as of the Effective Time of the Merger, by operation of law, GoAmerica shall assume such transaction expenses on the Closing Date, and the number of GoAmerica shares to be issued in the Merger will be reduced by a number of shares equal to (i) the product of multiplying the amount of such transaction expenses so assumed by GoAmerica times 2.0, divided by (ii) the Average Closing Price.

2.4 The Targets’ Working Capital Deficit described in the Merger Agreement shall be calculated as of the Closing Date (rather than as of June 30, 2005). Accordingly, all references in the Merger Agreement to the Targets' Working Capital Deficit as of the date of the Merger Agreement shall be construed to mean the Targets Working Capital Deficit as of the Closing Date, and the following terms in the Merger Agreement are hereby revised to read as follows:

“Targets’ Working Capital Deficit Shares” shall mean the number of shares of Acquirer Common Stock equal to (i) the amount of Targets’ Working Capital Deficit as of the Closing Date (determined in accordance with the provisions contained herein), divided by (ii) the Average Closing Price.

“Targets’ Working Capital Deficit” shall mean the amount by which the Targets’ Total Current Liabilities exceed the Targets’ Total Currents Assets as of the Closing Date.

“Targets’ Total Current Assets” shall mean all of the Targets’ current assets as determined according to generally accepted accounting principles consistent with Targets’ past accounting practices, but excluding the note receivable from the Shareholders’ Agent and any prepaid legal expenses incurred by Targets in connection with the Merger, as set forth on the Closing Date Balance Sheet.

“Targets’ Total Current Liabilities” shall mean all of the Targets’ current liabilities as determined according to generally accepted accounting principles consistent with Targets’ past accounting practices, but excluding obligations under the VRS Notes and obligations under that certain Short Term Loan Agreement previously entered into by the Targets and Acquirer, as set forth on the Closing Date Balance Sheet.

In addition, a Closing Date Balance Sheet of the Targets shall be prepared by Targets no later than 20 business days after the Closing Date, following the procedures (including, without limitation, the review procedure) described in Section 2.6(b) of the Merger Agreement with respect to the June 30 Balance Sheet. Since the exact amount of GoAmerica shares to be issued in the Merger cannot be calculated until the parties agree to the Closing Date Balance Sheet of the Targets, a new Section 10.11 is hereby added to the Merger Agreement to read as follows:

“10.11 Issuance of Acquirer Common Stock. Notwithstanding any other provision contained in this Agreement, twenty five (25%) of the shares of Acquirer Common Stock to be issued to Ron and Denise Obray in the Merger shall be delivered into escrow (the "Working Capital Deficit Escrow Shares") and shall not be released until the Closing Date Balance Sheet and, accordingly, the Targets’ Working Capital Deficit Shares, have been agreed to by the parties or otherwise determined in accordance with Section 2.6 (b) of the Merger Agreement.” Pending such determination, Ron and Denise Obray shall enjoy all rights and benefits of ownership of the Working Capital Deficit Escrow Shares, including, without limitation, all voting rights.

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2.5 All other provisions in the Merger Agreement, including, without limitation, the adjustment for the VRS Note Considerations Shares, shall remain unchanged and in full force and effect.

2.6 GoAmerica and its representatives shall be permitted to contact, negotiate with and provide information to (subject to a confidentiality agreement), the third parties previously identified by GoAmerica to Hands On who have contacted GoAmerica since July 6, 2005 for the purpose of exploring possible business arrangements, provided that GoAmerica will apprise and involve in good faith Ronald Obray. Hands On and its representatives shall be permitted to contact, negotiate with and provide information to (subject to a confidentiality agreement), third parties (other than those referred to in the immediately preceding sentence) solely in connection with raising funds pursuant to Securities Transactions in accordance with the terms of this Waiver and Supplemental Agreement. Hands On will keep GoAmerica apprised of these discussions and all material terms.

3.0 Capital Expenditures. GoAmerica will continue loaning funds to Hands On (up to an additional $650,000) solely for capital expenditures on the terms set forth in the Short Term Loan Agreement previously entered into by the parties provided that upon execution of this Waiver and Supplemental Agreement, (a) GoAmerica shall issue approximately $100,000 in payments to various Hands On creditors or vendors specified by Hands On on or about the date of execution of this Waiver and Supplemental Agreement, and (b) any future capital expenditure for which Hands On seeks funds under the Short Term Loan Agreement is discussed with GoAmerica in advance of making any commitment, and GoAmerica agrees that the proposed capital expenditure is consistent with the Business Plan being developed jointly by GoAmerica and Hands On, which agreement shall not be unreasonably withheld. GoAmerica reserves the right to pay the vendors directly for these capital expenditures.

4.0 GoAmerica and Hands On Financial Information. GoAmerica agrees to provide Hands On, and Hands On agrees to provide GoAmerica with the following information promptly after such information becomes available:

·	the consolidated financial statements of the other party as of and for the nine months ended September 30, 2005;

·	to the extent available, a P&L breakdown for the various business units of each party;

·	minutes of all board meetings, and all board resolutions or written consents, which have not been provided to the other party; and

·	a copy of any agreement either party has with AOL regarding such party’s new IM service, which has not been provided to the other party.

Notwithstanding the foregoing, nothing herein shall limit or alter the parties' rights and obligationspursuant to Section 6.5 of the Merger Agreement.

5.0 Closing of the Merger. The parties agree to use their best efforts to close the Merger as soon as possible (and in any event prior to January 31, 2006). Hands On and the Obrays agree that upon satisfaction of the conditions precedent to the Merger described in the Merger Agreement, they will consummate the Merger regardless of whether or not their fundraising efforts permitted by this Waiver and Supplement have been successful.

6.0 Governing Law. This Waiver and Supplemental Agreement shall be governed by and construed in accordance with the internal laws of Delaware.

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IN WITNESS WHEREOF the parties have signed this Waiver and Supplemental Agreement as of the date first above written.


	HANDS ON VIDEO RELAY SERVICES, INC.

	By:	/s/ Ronald Obray

	HANDS ON SIGN LANGUAGE SERVICES, INC.

	By:	/s/ Ronald Obray


		/s/ Ronald Obray
		Ronald Obray



		/s/ Denise Obray
		Denise Obray

	GOAMERICA, INC.

	By:	/s/ Daniel R. Luis
		Daniel R. Luis
		Chief Executive Officer

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EX-3.1 3 v028787_ex3-1.htm

Exhibit 3.1

RESTATED CERTIFICATE OF INCORPORATION

GOAMERICA, INC.

GoAmerica, Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter referred to as the "Corporation"), hereby certifies as follows:

1. The name of the corporation is GoAmerica, Inc. The Corporation's original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on December 1, 1999.

2. This Restated Certificate of Incorporation (the "Restated Certificate of Incorporation") was duly adopted in accordance with the provisions of Section 245 of the Delaware General Corporation Law. This Restated Certificate of Incorporation restates and integrates, and does not further amend, the provisions of the Corporation's Certificate of Incorporation as heretofore amended or supplemented, and there is no discrepancy between the provisions of the Corporation’s Certificate of Incorporation as heretofore amended or supplemented and the provisions of this Restated Certificate of Incorporation.

ARTICLES

FIRST: The name of the Corporation is GoAmerica, Inc.

SECOND: The Corporation's registered office in the State of Delaware is located at Corporation Service Corporation, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. The name of its registered agent at such address is Corporation Service Corporation.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH: (a) The total number of shares of capital stock which the Corporation shall have the authority to issue is 204,351,943 shares, consisting of: (i) two hundred million (200,000,000) shares of Common Stock, par value $0.01 per share (the "Common Stock"); and (ii) four million three hundred fifty one thousand nine hundred forty three (4,351,943) shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock").

(b) The authorized but undesignated Preferred Stock may be issued from time to time in one or more series. The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of subsection (a) above, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualification, limitations or restrictions thereof.

The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(i)

The number of shares constituting that series and the distinctive designation of that series;

(ii)

The dividend rate on the shares of that series, whether dividends shall be cumulative, and if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

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(iii)

Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;

(iv)

Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine;

(v)

Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(vi)

The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and

(vii)

Any other relative rights, preferences and limitations of that series.

FIFTH: Directors elected by the holders of voting stock shall, in accordance with the Corporation's By-laws, be classified in respect to the time for which they shall severally serve on the Board of Directors by dividing them into three staggered classes which shall be as nearly equal in number as possible. Each member of each class shall serve for three-year terms. At each annual meeting of the stockholders, the stockholders shall elect Directors of the class which term then expires, to serve until the third succeeding annual meeting. Except as otherwise provided in this Restated Certificate of Incorporation, each Director shall serve for the term for which elected and until his or her successor shall be duly elected and shall qualify.

SIXTH: The Corporation is to have perpetual existence.

SEVENTH: The following provisions are included for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its Board of Directors and stockholders:

(i) The Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation, subject to any limitation thereof contained in the Bylaws. The stockholders also shall have the power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Restated Certificate of Incorporation, the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws of the Corporation.

(ii) Stockholders of the Corporation may not take any action by written consent in lieu of a meeting.

(iii) Special meetings of stockholders may be called at any time only by the President, the Chairman of the Board of Directors of the Corporation (if any) or a majority of the Board of Directors of the Corporation. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes set forth in the notice of such special meeting.

(iv) The Board of Directors of the Corporation, when evaluating any offer of another party (a) to make a tender or exchange offer for any equity security of the Corporation or (b) to effect a business combination, shall, in connection with the exercise of its judgment in determining what is in the best interests of the Corporation as a whole, be authorized to give due consideration to any such factors as the Board of Directors of the Corporation determines to be relevant, including, without limitation:

(1)

the interests of the Corporation's stockholders, including the possibility that these interests might be best served by the continued independence of the Corporation;

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(2)

whether the proposed transaction might violate federal or state laws;

(3)

not only the consideration being offered in the proposed transaction, in relation to the then current market price for the outstanding capital stock of the Corporation, but also to the market price for the capital stock of the Corporation over a period of years, the estimated price that might be achieved in a negotiated sale of the Corporation as a whole or in part or through orderly liquidation, the premiums over market price for the securities of other corporations in similar transactions, current political, economic and other factors bearing on securities prices and the Corporation's financial condition and future prospects; and

(4)

the social, legal and economic effects upon employees, suppliers, customers, creditors and others having similar relationships with the Corporation, upon the communities in which the Corporation conducts its business and upon the economy of the state, region and nation.

In connection with any such evaluation, the Board of Directors of the Corporation is authorized to conduct such investigations and engage in such legal proceedings as the Board of Directors of the Corporation may determine.

(v)

in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Restated Certificate of Incorporation, the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend any provision of Articles SEVENTH or EIGHTH of this Restated Certificate of Incorporation.

EIGHTH: A director of the Corporation shall not be personally liable either to the Corporation or to any stockholder for monetary damages for breach of fiduciary duty as a director, except (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, or (ii) for acts or omissions which are not in good faith or which involve intentional misconduct or knowing violation of the law, or (iii) for any matter in respect of which such director shall be liable under Section 174 of Title 8 of the General Corporation Law of the State of Delaware or any amendment thereto or successor provision thereto, or (iv) for any transaction from which the director shall have derived an improper personal benefit. Neither amendment nor repeal of this paragraph nor the adoption of any provision of the Restated Certificate of Incorporation inconsistent with this paragraph shall eliminate or reduce the effect of this paragraph in respect of any matter occurring, or any cause of action, suit or claim that, but for this paragraph of this Article, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

NINTH: Election of directors need not be by written ballot.

IN WITNESS WHEREOF, the undersigned, being the Executive Vice President, General Counsel and Secretary of the Corporation, does hereby execute this Restated Certificate of Incorporation this 17th day of August, 2005.




	By:	/s/ Wayne D. Smith
		Wayne D. Smith
		Executive Vice President, General Counsel and Secretary

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EX-10.1 4 v028787_ex10-1.htm Unassociated Document

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as amended and restated, this “Agreement”), made as of the 8th day of November, 2005 (the “Effective Date”), by and between GoAmerica, Inc., a Delaware corporation (the “Company”), and Daniel R. Luis (the “Employee”).

RECITALS

WHEREAS, the Company desires to secure the continued employment of the Employee in accordance with the provisions of this Agreement;

WHEREAS, the Employee desires and is willing to accept continued employment with the Company in accordance herewith; and

WHEREAS, the Company and the Employee desire to amend and restate the Employee’s Employment Agreement, dated as of May 2, 2002, as amended as of March 10, 2004, hereby.

AGREEMENT

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 continue to employ the Employee and the Employee hereby agrees to continue to serve the Company, pursuant to the terms and conditions of this Agreement as of the Effective Date, in the position of Chief Executive Officer of the Company (or, subject to the Employee’s consent, which shall not be unreasonably withheld, in such alternate position of equal or greater responsibility as the Company shall determine in its reasonable discretion in an area of the Employee’s primary competency). The initial term of this Agreement shall commence on the Effective Date and shall expire on the two year 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 (each a “Renewal Term”), unless sooner terminated or amended as provided herein 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 ninety (90) days prior to such expiration date or anniversary, as the case may be.

2. Positions and Duties. The Employee’s duties hereunder shall be those which shall be prescribed from time to time by the Board of Directors of the Company in accordance with the bylaws of the Company and which customarily accompany the title of Chief Executive Officer of a company of similar size and purpose. The employee will also hold such other executive offices in the Company and its subsidiaries to which he may be elected, appointed or assigned by the Board of Directors. 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 of the Company or participating in non-business organizations so long as such memberships or activities do not interfere with the performance of the Employee’s duties hereunder.

3. Compensation. During the term of this Agreement, the Employee shall receive, for all services rendered to the Company hereunder, the following (hereinafter referred to as “Compensation”):

(a) Base Salary. For the term hereof, the Employee shall be paid an annual base salary equal to $200,000; provided, however, that the Employee’s annual base salary shall be increased to $225,000 as of the end of the Company’s first fiscal quarter after the Effective Date for which the Company reports (or would have been able to report but for extraordinary charges that are not expected to recur) EBIDTA profitability as determined by the Company’s independent auditors. The Employee’s annual base salary shall be payable in equal installments in accordance with the Company's general salary payment policies but no less frequently than monthly. Such base salary shall be reviewed no less than annually and any increases in the amount thereof shall be determined by the Board of Directors of the Company or a compensation committee formed by the Board of Directors (the “Compensation Committee”) of the Company no later than at and as of each May 2nd during the term hereof. Such base salary may be decreased only if done in conjunction with similar pro rata decreases in base salary for other executives within the Company.

(b) Bonuses. For the fiscal year ending December 31, 2006 and each fiscal year thereafter, the Employee shall be eligible to receive an annual bonus according to a mutually agreed upon bonus plan to be established by Board of Directors of the Company or the Compensation Committee thereof. Nothing herein shall be construed as a guarantee of any such bonus.

(c) Incentive Compensation. The Employee shall be eligible for awards from the Company’s incentive compensation plans, including without limitation any stock award plans applicable to high level executive officers of the Company or to key employees of the Company or its subsidiaries, in the discretion of the Company’s Board of Directors or the Compensation Committee thereof, provided, however, that terms and conditions of such incentive compensation plans, including without limitation, the number of shares, vesting schedules and exercise prices, shall be no less favorable than the terms and conditions provided to the President of the Company’s accessible communications businesses or the equivalent thereof.

In addition to the general incentive compensation contemplated in the immediately preceding paragraph, the Company is granting to the Employee, as of the Effective Date, eighty thousand (80,000) shares of the Company’s common stock, which shall vest in one third (1/3) increments on each of the first, second and third year anniversaries of the Effective Date, unless otherwise provided in this Agreement.

(d) Benefits. The Employee and his “dependents,” as that term may be defined under the applicable benefit plan(s) of the Company, shall be included, to the extent eligible thereunder, in any and all plans, programs and policies which provide benefits for employees and their dependents. Such plans, programs and policies may include health care insurance, long-term disability plans, life insurance, supplemental disability insurance, supplemental life insurance, holidays and other similar or comparable benefits made available to the Company’s employees.

(e) Expense Allowances. Subject to and in accordance with the Company’s policies and procedures and in accordance with the Company’s payroll practices but no less frequently than monthly, the Company shall provide to the Employee (i) a maximum discretionary expense allowance of up to nine thousand dollars ($9,000.00) per Company fiscal year (pro-rated for any partial period) to be used by Employee for his own automobile lease or similar finance payments, insurance, club and organization dues or memberships, travel upgrades, technology devices, and similar executive perquisites and related taxes during the term of this Agreement, and, in addition to the foregoing, (ii) reimbursement for all reasonable and necessary business-related expenses incurred by the Employee on behalf of the Company or any of its subsidiaries, including directly related tolls, gasoline and parking, upon presentation of itemized accounts. The Employee shall not, directly or indirectly, bind or make the Company a party to, or execute in the name of any Company entity or under the appearance of corporate or agency authority, any agreement or similar arrangement or understanding, express or implied, relating to payments to third parties of any of the amounts contemplated in or relating to clause (i) of the immediately foregoing sentence without the prior express written approval of the Company’s Board of Directors or the Compensation Committee thereof.

4. Absences. The Employee shall be entitled to vacations of no less than four (4) weeks per calendar year, 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 the 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 of the Company, and upon no less than ninety (90) days prior written notice to the Employee. The Employee may terminate employment hereunder without cause upon no less than ninety (90) days prior written notice to the Company.

(b) For Cause, by the Company. The Company may terminate the Employee’s employment hereunder for cause immediately and with prompt notice to the Employee, which cause shall be determined in good faith solely by the Board of Directors of the Company. “Cause” for termination shall include, but is not limited to, the following conduct of the Employee:

(i) Material breach of any provision of this Agreement by the Employee, which breach shall not have been cured by the Employee within sixty (60) days of receipt of written notice of said breach (or such shorter period within which to cure as is reasonable under the circumstances if the Company reasonably expects irreparable injury from a delay of sixty (60) days), including reasonable detail of the breach and the conduct required to cure, unless the nature of the breach is such that it cannot reasonably be expected to be cured within such time;

(ii) Gross misconduct as an employee of the Company, including but not limited to: misappropriating any funds or property of the Company; attempting to willfully obtain any personal profit from any transaction in which the Employee has an interest which is adverse to the interests of the Company; or any other act or omission which substantially impairs the Company's ability to conduct its ordinary business in its usual manner;

(iii) Continuing unreasonable neglect or refusal to perform the duties assigned to the Employee under or pursuant to this Agreement;

(iv) Conviction of a felony (including pleading guilty or no contest to a felony or lesser charge which results from plea bargaining); or

(v) Any other act or omission which subjects the Company or any of its subsidiaries to substantial public disrespect, scandal or ridicule.

(c) For Good Reason by Employee. The Employee may terminate employment hereunder for Good Reason by written notice to the Company no more than thirty (30) days after the occurrence of the event constituting Good Reason. Such notice shall state an effective date no earlier than thirty (30) days after the date notice is given to the Company, and the Company shall have ten (10) business days from its receipt of such notice within which to cure and, in the event of such cure, Employee’s notice in such case shall be of no further force or effect. “Good reason” for termination by the Employee shall arise from the following conduct of the Company or events without the Employee’s consent (other than in connection with or subsequent to the termination or suspension of Employee’s employment or duties for Cause or in connection with the Employee’s Disability and excluding any isolated action not taken in bad faith and which is promptly remedied by the Company after receipt of notice thereof from the Employee):

(i) Material breach of any provision of this Agreement by the Company, which breach shall not have been cured by the Company within ten (10) business days of receipt of written notice of said breach;

(ii) Failure to use commercially reasonable efforts to obtain nomination and election of the Employee as a director of the Company (unless the Employee voluntarily resigns, chooses not to stand for reelection or is removed for cause) or to maintain the Employee in a position commensurate with that referred to in Section 1 of this Agreement, the assignment to the Employee of any duties inconsistent therewith or the Employee’s experience or abilities or the withdrawal of a material portion of the Employee’s duties (other than in connection with the disposition or termination of any Company business which does not constitute a “Change of Control” hereunder), or a change in the Employee’s reporting relationship such that the Employee does not report directly to the Board of Directors;

(iii) A requirement that the Employee must, or in order to perform effectively the Employee should reasonably expect to, perform his duties hereunder at a location outside of a 25 mile radius from Hackensack, New Jersey other than (A) business travel consistent with that required of employees with similar positions at other companies similar in size and stage of development to the Company, and (B) activities required in connection with the sale or merger of the Company, provided that such activities are not required for more than three consecutive months; or

(iv) Upon a “Change of Control”, which shall mean the first to occur of any of the following:

(aa) any “person” (as defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), excluding for this purpose, (i) the Company or any subsidiary of the Company, or (ii) any employee benefit plan of the Company or any subsidiary of the Company, or any person or entity organized, appointed or established by the Company for or pursuant to the terms of any plan which acquires beneficial ownership of voting securities of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the Company representing more than 30% of the combined voting power of the Company’s then outstanding securities; provided, however, that no Change of Control will be deemed to have occurred as a result of a change in ownership percentage resulting solely from an acquisition of securities by the Company, the grant or exercise of any stock option, stock award, stock purchase right or similar equity incentive, or the continued beneficial ownership by any party of voting securities of the Company which such party beneficially owned as of the date hereof; or

(bb) persons, who, as of the Effective Date constitute the Board (the “Incumbent Directors”) cease for any reason, including without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority thereof, provided that any person becoming a director of the Company subsequent to the Effective Date shall be considered an Incumbent Director if such person’s election or nomination for election was approved by a vote of at least 50% of the Incumbent Directors; but provided further, that any such person whose initial assumption of office is in connection with an actual or threatened election contest relating to the members of the Board or other actual or threatened solicitation of proxies or consents by or on behalf of a “person” (as defined in Section 13(d) and 14(d) of the Exchange Act) other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation, shall not be considered an Incumbent Director; or

(cc) consummation of a reorganization, merger or consolidation or sale or other disposition of at least 80% of the assets (other than cash and cash equivalents) of the Company (a “Business Combination”), in each case, unless, following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of outstanding voting securities of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the company resulting from such Business Combination (including, without limitation, a company which, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the outstanding voting securities of the Company; or

(dd) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding anything in the foregoing, the definition of “Change of Control” as used in this Section 5(c)(iv) shall not be deemed to include the transactions contemplated by the Agreement and Plan of Merger, dated July 6, 2005, between the Company and two of its subsidiaries, on the one hand, and Hands On Video Relay Services, Inc., Hands On Sign Language Services, Inc., Ronald E. Obray and Denise E. Obray, on the other hand.

(d) Death. The period of active employment of the Employee hereunder shall terminate automatically in the event of his death.

(e) Disability. In the event that the Employee shall be unable to perform duties hereunder for a period of one hundred eighty (180) consecutive calendar days or one hundred eighty (180) work days within any 360 consecutive calendar days, by reason of disability as a result of illness, accident or other physical or mental incapacity or disability, the Company may, in its discretion, by giving written notice to the Employee, terminate the Employee's employment hereunder as long as the Employee is still disabled on the effective date of such termination.

(f) Mutual Agreement. This Agreement may be terminated at any time by mutual agreement of the Employee and the Company.

6. Compensation in the Event of Termination. In the event that the Employee’s employment pursuant to this Agreement terminates or is not renewed by the Company, the Company shall pay the Employee compensation as set forth below:

(a) By Employee for Good Reason; Termination by Company Without Cause; Non-Renewal. Except as expressly noted otherwise, in the event this Agreement is terminated by the Employee for Good Reason pursuant to Section 5(c) hereof; by the Company without Cause pursuant to Section 5(a) hereof; or if the Company elects not renew this Agreement, 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 (except those benefits which the Company may not properly provide, pursuant to any applicable Company benefit plan, policy or law) in the same manner as before termination, for a period of one year (except in the event of non-renewal, in which case the period shall be six months, the “Severance Period”). The Company’s obligation to make payments to the Employee during the Severance Period shall not be offset by any income the Employee receives from sources other than the Company for work activity conducted by the Employee during the Severance Period. To the extent the Employee receives any medical or health benefits pursuant to this section, such benefits shall be provided as a reimbursement (or direct payment at the sole election of the Company) to the Employee of payments made pursuant to an election to continue benefits under COBRA.

(ii) Notwithstanding the terms of any stock award agreement to which the Employee is a party to the contrary, (A) in the event of termination by the Employee for Good Reason or by the Company without cause only, all stock options, restricted stock and similar awards grants issued to the Employee shall immediately vest in the Employee, and (B) the Employee may exercise any or all vested options at any time within one (1) year of the Employee’s termination date;

(iii) the payments, rights and entitlements described in Section 6(a)(i) and 6(a)(ii) hereof, if any, shall only be made if the Employee shall first have executed and delivered to the Company a valid general release of claims with respect to his employment and the termination of such employment, in a form reasonably acceptable to the Company.

(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) in the event of a termination pursuant to Section 5(e) hereof, if eligible, the Employee shall be entitled to benefits under any long-term disability plan of the Company covering the Employee then in effect;

(ii) To the extent the Employee has not received or does not receive disability or death benefits pursuant to any Company-paid benefit or similar plan of the Company covering the Employee then in effect pursuant to the Employee Retirement Income Security Act of 1974, as amended, the Company shall continue to pay the base salary payable hereunder at the then current rate for one (1) year following such death or such termination, to the Employee or his personal representative, as applicable; and

(iii) all other compensation and benefits provided for in Section 3, other than any amounts due pursuant to Subsection 3(d) 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.

7. Effect of Termination. In the event of expiration or early termination of this Agreement as provided herein, neither the Company nor the Employee shall have any remaining duties or obligations hereunder except that:

(a) The Company shall:

(i) Pay the Employee's accrued salary and any other accrued benefits under Section 3 hereof;

(ii) Reimburse the Employee for expenses already incurred in accordance with Section 3(e) hereof;

(iii) To the extent required by law, pay or otherwise provide for any benefits, payments or continuation or conversion rights in accordance with the provisions of any benefit plan of which the Employee or any of his dependents is or was a participant; and

(iv) Pay the Employee or his beneficiaries any compensation due pursuant to Section 6 hereof; and

(b) The Employee shall remain bound by the terms of Section 8 hereof and Exhibit A attached hereto.

8. Restrictive Covenant.

(a) The Employee acknowledges and agrees that he has access to secret and confidential information of the Company and its subsidiaries and that the following restrictive covenant is necessary to protect the interests and continued success of the Company. Except as otherwise expressly consented to in writing by the Company, until the termination of the Employee’s employment (for any reason and whether such employment was under this Agreement or otherwise) and for a period of one (1) year thereafter (the “Restricted Period”), provided Employee receives the compensation specified in Section 6(a), if applicable, 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, engage, in any state or territory of the United States of America or other country where the Company is actively doing business, in direct or indirect competition with the business conducted by the Company or activities in which the Company plans to conduct business.

(b) Nothing in this Section 8, whether express or implied, shall prevent the Employee from being a holder of securities of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934, as amended, or any privately held company; provided, however, that during the term of this agreement, and with respect to any company which may be deemed to directly or indirectly compete with the business conducted by the Company or with the activities which the Company plans to conduct, the Employee holds of record and beneficially less than one percent (1%) of the votes eligible to be cast generally by holders of securities of such company for the election of directors.

(c) The Employee, as a condition of his continued employment, acknowledges and agrees that he has reviewed and signed and will continue to be bound by all of the provisions set forth in Exhibit A attached hereto, which is incorporated herein by reference and made a part hereof as though fully set forth herein, during the term of this Agreement, and any time hereafter.

(d) The Employee acknowledges and agrees that in the event of a breach or threatened breach of the provisions of this Section 8 or Exhibit A by Employee the Company may suffer irreparable harm and therefore, the Company shall be entitled, to the extent permissible by law, immediately to cease to pay or provide the Employee any compensation being, or to be, paid or provided to him pursuant to Sections 3 or 6 of this Agreement, and also to obtain immediate injunctive relief restraining the Employee from conduct in breach or threatened breach of the covenants contained in this Section 8. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of damages from the Employee.

9. 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 ten million dollars ($10,000,000).

10. 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 that 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.

11. 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.

12. 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 and shall have the right to assign its rights to enforce the provisions of Section 8 and Exhibit A to any successor. 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.

13. 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 Chief Executive Officer and Chairman of the Board of Directors of the Company or to such other person or at such other address with respect to each party as such party shall notify the other in writing.

14. Construction of Agreement.

(a) Governing Law. This Agreement shall be governed by and its provisions construed and enforced in accordance with the internal laws of the State of New Jersey without reference to its principles regarding conflicts of law.

(b) Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(c) Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience of reference only and shall not constitute a part of this Agreement.

15. Entire Agreement. This Agreement and Exhibit A hereto contains the entire agreement of the parties concerning the Employee’s employment and all promises, representations, understandings, arrangements and prior agreements on such subject, including but not limited to, the Employment Agreement, 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.

* * * * *

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.

	By:
		Aaron Dobrinsky
		Chairman

WITNESS:		EMPLOYEE


		Daniel R. Luis

		Address:

EXHIBIT A

GoAmerica, Inc.

EMPLOYEE’S INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT

In consideration of my employment or continued employment by GoAmerica, Inc., a Delaware corporation or any subsidiary or parent corporation thereof (the “Company”), I hereby represent and agree as follows:

1. I understand that the Company is engaged in the business of providing communications services to the deaf and hard of hearing markets and related services and that I may have access to or acquire information with respect to Confidential Information (as defined below), including processes and methods, development tools, scientific, technical and/or business innovations.

2. Disclosure of Innovations. I agree to disclose in writing to the Company all inventions, improvements and other innovations of any kind that I may make, conceive, develop or reduce to practice, alone or jointly with others, during the term of my employment with the Company, whether or not they are related to my work for the Company and whether or not they are eligible for patent, copyright, trademark, trade secret or other legal protection (“Innovations”). Examples of Innovations shall include, but are not limited to, discoveries, research, inventions, formulas, techniques, processes, tools, know-how, marketing plans, new product plans, production processes, advertising, packaging and marketing techniques and improvements to computer hardware or software.

3. Assignment of Ownership of Innovations. I agree that all Innovations will be the sole and exclusive property of the Company and I hereby assign all of my rights, title or interest in the Innovations and in all related patents, copyrights, trademarks, trade secrets, rights of priority and other proprietary rights to the Company. At the Company's request and expense, during and after the period of my employment with the Company, I will assist and cooperate with the Company in all respects and will execute documents, and, subject to my reasonable availability, give testimony and take further acts requested by the Company to obtain, maintain, perfect and enforce for the Company patent, copyright, trademark, trade secret and other legal protection for the Innovations. I hereby appoint the President and Chief Executive Officer of the Company as my attorney-in-fact to execute documents on my behalf for this purpose.

4. Protection of Confidential Information of the Company. I understand that my work as an employee of the Company creates a relationship of trust and confidence between myself and the Company. During and after the period of my employment with the Company, I will not use or disclose or allow anyone else to use or disclose any “Confidential Information” (as defined below) relating to the Company, its products, suppliers or customers except as may be necessary in the performance of my work for the Company or as may be authorized in advance by appropriate officers of the Company. “Confidential Information” shall include innovations, methodologies, processes, tools, business strategies, financial information, forecasts, personnel information, customer lists, trade secrets and any other non-public technical or business information, whether in writing or given to me orally, which I know or have reason to know the Company would like to treat as confidential for any purpose, such as maintaining a competitive advantage or avoiding undesirable publicity. I will keep Confidential Information secret and will not allow any unauthorized use of the same, whether or not any document containing it is marked as confidential. These restrictions, however, will not apply to Confidential Information that has become known to the public generally through no fault or breach of mine or that the Company regularly gives to third parties without restriction on use or disclosure. Upon termination of my work with the Company, I will promptly deliver to the Company all documents and materials of any nature pertaining to my work with the Company and I will not take with me any documents or materials or copies thereof containing any Confidential Information.

5. Other Agreements. I represent that my performance of all the terms of this Agreement and my duties as an employee of the Company will not breach any invention assignment agreement, confidential information agreement, non-competition agreement or other agreement with any former employer or other party. I represent that I have not and will not bring with me to the Company or use in the performance of my duties for the Company any documents or materials of a former employer that are not generally available to the public.

6. Disclosure of this Agreement. I hereby authorize the Company to notify others, including but not limited to customers of the Company and any of my future employers, of the terms of this Agreement and my responsibilities hereunder.

7. Injunctive Relief. I understand that in the event of a breach or threatened breach of this Agreement by me the Company may suffer irreparable harm and monetary damages alone would not adequately compensate the Company. The Company will therefore be entitled to injunctive relief to enforce this Agreement.

8. Enforcement and Severability. I acknowledge that each of the provisions in this Agreement are separate and independent covenants. I agree that if any court shall determine that any provision of this Agreement is unenforceable with respect to its term or scope such provision shall nonetheless be enforceable by any such court upon such modified term or scope as may be determined by such court to be reasonable and enforceable. The remainder of this Agreement shall not be affected by the unenforceability or court ordered modification of a specific provision.

9. Governing Law. I agree that this Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey.

10. Superseding Agreement. I understand and agree that this Agreement, as Exhibit A to my Employment Agreement with the Company, contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all previous agreements and understandings between the parties with respect to its subject matter.

11. Acknowledgments. I acknowledge that I have read this agreement, was given the opportunity to ask questions and sufficient time to consult an attorney and I have either consulted an attorney or affirmatively decided not to consult an attorney. I understand that this agreement is a part of and does not alter the terms of my Employment Agreement with the Company. I also understand that my obligations under this Agreement survive the termination of my employment with the Company.

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M_P`%_H_0_0^GL26\DAQR_>*>&/9__]+LNO8>2_+]:NMSJRT`N&NOT58P_JY0 M*P6M,`?]^7S@DL0?UQ_I EX-10.2 6 v028787_ex10-2.htm Unassociated Document

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

RECITALS

WHEREAS, the Company desires to secure the continued employment of the Employee in accordance with the provisions of this Agreement;

WHEREAS, the Employee desires and is willing to accept continued employment with the Company in accordance herewith; and

WHEREAS, the Company and the Employee desire to amend and restate the Employee’s Employment Agreement, dated as of March 10, 2004, hereby.

AGREEMENT

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 continue to employ the Employee and the Employee hereby agrees to continue to serve the Company, pursuant to the terms and conditions of this Agreement as of the Effective Date, in the position of Chief Financial Officer of the Company (or, subject to the Employee’s consent, which shall not be unreasonably withheld, in such alternate position of equal or greater responsibility as the Company shall determine in its reasonable discretion in an area of the Employee’s primary competency). The initial term of this Agreement shall commence on the Effective Date and shall expire on the two year 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 (each a “Renewal Term”), unless sooner terminated or amended as provided herein 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 ninety (90) days prior to such expiration date or anniversary, as the case may be.

2. Positions and Duties. The Employee’s duties hereunder shall be those which shall be prescribed from time to time by the Chief Executive Officer or the Audit Committee of the Board of Directors of the Company in accordance with the bylaws of the Company and which customarily accompany the title of Chief Financial Officer of a company of similar size and purpose. The employee will also hold such other executive offices in the Company and its subsidiaries to which he may be elected, appointed or assigned by the Chief Executive Officer or the Board of Directors. 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 of the Company or participating in non-business organizations so long as such memberships or activities do not interfere with the performance of the Employee’s duties hereunder.

3. Compensation. During the term of this Agreement, the Employee shall receive, for all services rendered to the Company hereunder, the following (hereinafter referred to as “Compensation”):

(a) Base Salary. For the term hereof, the Employee shall be paid an annual base salary equal to $165,000; provided, however, that the Employee’s annual base salary shall be increased to $190,000 as of the end of the Company’s first fiscal quarter after the Effective Date for which the Company reports (or would have been able to report but for extraordinary charges that are not expected to recur) EBIDTA profitability as determined by the Company’s independent auditors. The Employee’s annual base salary shall be payable in equal installments in accordance with the Company's general salary payment policies but no less frequently than monthly. Such base salary shall be reviewed no less than annually and any increases in the amount thereof shall be determined by the Board of Directors of the Company or a compensation committee formed by the Board of Directors (the “Compensation Committee”) of the Company no later than at and as of each March 10^th during the term hereof. Such base salary may be decreased only if done in conjunction with similar pro rata decreases in base salary for other executives within the Company.

In addition to the general incentive compensation contemplated in the immediately preceding paragraph, the Company is granting to the Employee, as of the Effective Date, fifty five thousand (55,000) shares of the Company’s common stock, which shall vest in one third (1/3) increments on each of the first, second and third year anniversaries of the Effective Date, unless otherwise provided in this Agreement.

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:

(iii) Continuing unreasonable neglect or refusal to perform the duties assigned to the Employee under or pursuant to this Agreement;

(iv) Conviction of a felony (including pleading guilty or no contest to a felony or lesser charge which results from plea bargaining); or

(v) Any other act or omission which subjects the Company or any of its subsidiaries to substantial public disrespect, scandal or ridicule.

(i) Material breach of any provision of this Agreement by the Company, which breach shall not have been cured by the Company within ten (10) business 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 1 of this Agreement, the assignment to the Employee of any duties inconsistent therewith or the Employee’s experience or abilities or the withdrawal of a material portion of the Employee’s duties (other than in connection with the disposition or termination of any Company business which does not constitute a “Change of Control” hereunder), or a change in the Employee’s reporting relationship such that the Employee does not report directly to the Chief Executive Officer or the Audit Committee of the Board of Directors;

(iv) Upon a “Change of Control”, which shall mean the first to occur of any of the following:

(dd) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

(d) Death. The period of active employment of the Employee hereunder shall terminate automatically in the event of his death.

(f) Mutual Agreement. This Agreement may be terminated at any time by mutual agreement of the Employee and the Company.

(a) By Employee for Good Reason; Termination by Company Without Cause; Non-Renewal. Except as expressly noted otherwise, in the event this Agreement 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; or if the Company elects not renew this Agreement, then:

(ii) Notwithstanding the terms of any stock award agreement to which the Employee is a party to the contrary, (A) in the event of termination by the Employee for Good Reason only, all stock options, restricted stock and similar awards grants issued to the Employee shall immediately vest in the Employee, and (B) the Employee may exercise any or all such options at any time within one (1) year of the Employee’s termination date;

(iii) all other compensation and benefits provided for in Section 3, other than any amounts due pursuant to Subsection 3(d) of this Agreement shall cease upon such termination.

(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;

(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.

9. 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.

14. Construction of Agreement.

(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.

* * * * *

ATTEST:		GoAmerica, Inc.

	By:
		Daniel R. Luis
		Chief Executive Officer

WITNESS:		EMPLOYEE


		Donald G. Barnhart

		Address:

EXHIBIT A

GoAmerica, Inc.

EMPLOYEE’S INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT

9. Governing Law. I agree that this Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey.

EX-10.3 7 v028787_ex10-3.htm Unassociated Document

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

RECITALS

WHEREAS, the Company desires to secure the continued employment of the Employee in accordance with the provisions of this Agreement;

WHEREAS, the Employee desires and is willing to accept continued employment with the Company in accordance herewith; and

WHEREAS, the Company and the Employee desire to amend and restate the Employee’s Employment Agreement, dated as of May 6, 2002, hereby.

AGREEMENT

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 continue to employ the Employee and the Employee hereby agrees to continue to serve the Company, pursuant to the terms and conditions of this Agreement as of the Effective Date, in the position of Chief Technology Officer of the Company (or, subject to the Employee’s consent, which shall not be unreasonably withheld, in such alternate position of equal or greater responsibility as the Company shall determine in its reasonable discretion in an area of the Employee’s primary competency). The initial term of this Agreement shall commence on the Effective Date and shall expire on the two year 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 (each a “Renewal Term”), unless sooner terminated or amended as provided herein 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 ninety (90) days prior to such expiration date or anniversary, as the case may be.

2. Positions and Duties. The Employee’s duties hereunder shall be those which shall be prescribed from time to time by the Chief Executive Officer of the Company in accordance with the bylaws of the Company and which customarily accompany the title of Chief Technology Officer of a company of similar size and purpose. The employee will also hold such other executive offices in the Company and its subsidiaries to which he may be elected, appointed or assigned by the Chief Executive Officer or the Board of Directors. 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 of the Company or participating in non-business organizations so long as such memberships or activities do not interfere with the performance of the Employee’s duties hereunder.

3. Compensation. During the term of this Agreement, the Employee shall receive, for all services rendered to the Company hereunder, the following (hereinafter referred to as “Compensation”):

(a) Base Salary. For the term hereof, the Employee shall be paid an annual base salary equal to $165,000; provided, however, that the Employee’s annual base salary shall be increased to $185,000 as of the end of the Company’s first fiscal quarter after the Effective Date for which the Company reports (or would have been able to report but for extraordinary charges that are not expected to recur) EBIDTA profitability as determined by the Company’s independent auditors. The Employee’s annual base salary shall be payable in equal installments in accordance with the Company's general salary payment policies but no less frequently than monthly. Such base salary shall be reviewed no less than annually and any increases in the amount thereof shall be determined by the Board of Directors of the Company or a compensation committee formed by the Board of Directors (the “Compensation Committee”) of the Company no later than at and as of each May 6th during the term hereof. Such base salary may be decreased only if done in conjunction with similar pro rata decreases in base salary for other executives within the Company.