EXHIBIT 10.1
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") dated as of August 31, 2000 is by
and among GoAmerica, Inc. ("GOAM"), the stockholders of Hotpaper.com, Inc. as
listed on Schedule A hereto (the "Stockholders") and American Stock Transfer &
Trust Company, as escrow agent (the "Escrow Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, this Agreement is made pursuant to the Agreement and Plan of
Merger (the "Merger Agreement") dated as of August 11, 2000 by and among GOAM,
GoAmerica Acquisition II Corp. ("Sub") and Hotpaper.com, Inc. ("Hotpaper").
Capitalized terms used herein shall have the respective meanings ascribed to
them in the Merger Agreement, unless the context requires otherwise.
WHEREAS, pursuant to the Merger Agreement, (a) Sub will be merged with and
into Hotpaper, (b) GOAM is issuing shares of GOAM Common Stock to the
Stockholders, in conversion of and exchange for the shares of capital stock of
Hotpaper (on an as converted to common stock basis) then held by the
Stockholders, and (c) the Stockholders have agreed, by acceptance of their
respective portions of the Merger Shares pursuant to the Merger Agreement, to
indemnify the GOAM Indemnitees for Indemnifiable Losses.
WHEREAS, Section 2.3 of the Merger Agreement provides that one or more
certificates representing an aggregate of ten percent (10%) of the Merger Shares
issuable to the Stockholders plus ten percent (10%) of that number of shares
that would have been issued to Kevin Warnock had he received shares of GOAM
Common Stock in lieu of the Cash Payment (the "Escrow Shares"), which Escrow
Shares are to be deducted pro rata from the Merger Shares allocable to each
Stockholder (except that the portion of the Escrow Shares which represents ten
percent (10%) of the shares that would have been issued to Kevin Warnock shall
be deducted solely from the actual Merger Shares issued to Warnock), shall be
issued and delivered to the Escrow Agent and shall be placed in an escrow
account (the "Escrow Account") pursuant to this Agreement to settle claims for
Indemnifiable Losses that may arise pursuant to the Merger Agreement.
WHEREAS, the parties desire to establish the terms and conditions pursuant
to which the Escrow Shares will be deposited and held in, and delivered from,
the Escrow Account.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein and in
the Merger Agreement, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. APPOINTMENT OF ESCROW AGENT.
GOAM and the Stockholders hereby appoint and designate American Stock
Transfer & Trust Company as the Escrow Agent for the purposes herein set forth
and American Stock Transfer & Trust Company hereby accepts such appointment, all
on the terms and subject to the conditions of this Agreement.
2. ACKNOWLEDGMENT OF RECEIPT OF THE MERGER AGREEMENT.
The Escrow Agent hereby acknowledges receipt of a copy of the Merger
Agreement, but, except for reference thereto for definitions incorporated by
reference herein and as provided in Section 5 hereof, the Escrow Agent is not
charged with any duties or responsibilities with respect to the Merger
Agreement.
3. ESCROW SHARES.
3.1. GOAM hereby agrees to provide to the Escrow Agent, within three (3)
business days after the date hereof, one or more stock certificates representing
the number of Escrow Shares, to be held in escrow by the Escrow Agent. Each
stock certificate so deposited on behalf of the Stockholders shall be issued in
the name of the Escrow Agent, as escrow agent for GOAM and the Stockholders. The
Escrow Agent acknowledges and agrees, as transfer agent and registrar for GOAM,
to use its best efforts to process such certificates on behalf of GOAM within
the foregoing timeframe. The Escrow Shares, as such term is used herein, shall
include the initial Escrow Shares deposited by GOAM and the "Additional Escrow
Account" as that term is defined in Section 3.2.
3.2. Any and all dividends payable in securities or other distributions of
any kind made in respect to the Escrow Shares, except cash dividends which shall
be paid directly to each respective Stockholder (the "Additional Escrow
Account"), shall be held in escrow pursuant to this Agreement; provided,
however, that the Stockholders shall have the voting rights with respect to the
Escrow Shares so long as such Escrow Shares are held in escrow. GOAM shall take
any and all reasonable and necessary steps to allow the exercise of such voting
rights. While the Escrow Shares remain subject to this Agreement, the
Stockholders shall retain and shall be able to exercise all other incidents of
ownership of the Escrow Shares that are not inconsistent with the terms and
conditions hereof.
3.3. The Stockholders shall be responsible for any tax liability and tax
reporting obligations attributable to (a) the placement of the Escrow Shares in
the Escrow Account and (b) the payment of any dividends, to the extent paid, or
other amounts payable to the Stockholders with respect to the Escrow Shares and
shall provide the Escrow Agent with executed and completed Internal Revenue
Service Forms W-9.
3.4. Except as contemplated hereunder, no Escrow Shares or any beneficial
interest therein may be pledged, hypothecated, or permitted to suffer any lien
or encumbrance by the Stockholders or Hotpaper, including by operation of law,
or be taken
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or reached by any legal or equitable process in satisfaction of any debt or
other liability of any Stockholder or Hotpaper, prior to the date the Escrow
Agent is required to deliver the Escrow Shares to the Stockholders in accordance
with the terms of this Agreement.
4. INDEMNIFICATION LIABILITY OF STOCKHOLDERS.
The Stockholders' obligations regarding liability for indemnification to
the GOAM Indemnitees shall be governed by the Merger Agreement. The terms,
conditions, covenants and provisions regarding the indemnification obligations
of the Stockholders set forth in the Merger Agreement are hereby incorporated in
full by reference herein.
5. DISTRIBUTION EVENTS.
5.1. At any time or times prior to the first anniversary of the date
hereof, GOAM may make claims against the Escrow Shares for amounts due for
indemnification under the Merger Agreement. If, after final determination of
liability on a claim in accordance with the procedures set forth in Section 6.2
of the Merger Agreement, any of the GOAM Indemnitees shall have any claim of
indemnification for Indemnifiable Losses pursuant to the Merger Agreement, GOAM
shall promptly (a) give formal written notice thereof to the Stockholder
Representative and the Escrow Agent, which notice shall include the aggregate
dollar amount of the Indemnifiable Losses and a brief description of the facts
upon which the claim is based, and (b) provide the Escrow Agent and the
Stockholder Representative with a calculation pursuant to Section 5.3 hereof.
Subject to the following provisions of this Section 5, the Escrow Agent shall,
not less than fifteen (15) business days but within twenty (20) business days
following delivery of such notice, deliver to GOAM in accordance with Section
5.3 hereof the number of Escrow Shares having an aggregate cash value (as
determined in accordance with Section 5.3 hereof) equal to the amount of such
Indemnifiable Losses. To the extent that the value of the Escrow Shares so
determined represented by stock certificates so delivered exceeds the cash value
of the Indemnifiable Losses, GOAM shall promptly deliver to the Escrow Agent
stock certificates for the balance of the Escrow Shares, which shall be held
pursuant to this Agreement.
5.2. If the Stockholder Representative shall, in good faith, notify the
Escrow Agent in writing of any objections or disputes with respect to a claim
for indemnification within fifteen (15) business days following delivery of
notice of a claim for indemnity pursuant to Section 5.1 hereof, then the Escrow
Agent shall instead set aside such Escrow Shares (the "Set Aside Amount") until
(a) the Stockholder Representative and GOAM have agreed upon the rights of GOAM,
any of the GOAM Indemnitees seeking indemnification and the Stockholders with
respect thereto and have notified the Escrow Agent of such an agreement in
writing signed by GOAM and the Stockholder Representative, (b) such rights are
finally determined pursuant to Section 14.6 of this Agreement or (c) the
Termination Date. Any uncontested portion of a claim will be resolved as set
forth in Section 5.1 above. The Escrow Agent may rely on any arbitration ruling
in accordance with Section 14.6 hereof or on the final order or other final
determination of any such court. If any such arbitrator or
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court shall determine that any or all of the Escrow Shares are to be delivered
to GOAM, the Escrow Agent shall, within fifteen (15) days following receipt of a
copy of such final determination, deliver to GOAM the number of Escrow Shares
having a cash value equal (determined as provided in Section 5.3) to the sum of
the amount of the claim for Indemnifiable Losses as to which the arbitrator or
the court has finally determined that any of the GOAM Indemnitees is entitled to
indemnity under the Merger Agreement. All other expenses of such litigation or
arbitration, including reasonable attorney's fees, will be paid by the losing
party and the court or the arbitrator will be authorized to make such
determination.
5.3. For purposes of establishing the number of Escrow Shares to be
delivered to GOAM or set aside in respect of any Set Aside Amount pursuant to
this Section 5, the cash value of each share of GOAM Common Stock shall be equal
to the average closing prices per share of GOAM's Common Stock as reported on
the Nasdaq National Market (or such other exchange or quotation system upon
which GOAM is then traded) during the ten (10) trading days ending three (3)
days prior to the date of the Closing Date.
6. TERMINATION.
This Agreement shall terminate thirteen (13) months from the Closing Date
or, if at such time a contested claim remains unresolved, at such time as such
contested claim has been resolved, unless sooner terminated by the parties (the
"Termination Date"). Notwithstanding anything in this Agreement to the contrary,
GOAM shall assert all claims under this Escrow Agreement within the twelve (12)
month period commencing on the Closing Date. On the Termination Date or as soon
thereafter as is practicable, the Escrow Agent shall distribute to the
Stockholders an aggregate amount equal to the Escrow Shares less the sum of any
amount previously paid to GOAM from the Escrow Account as indemnification
pursuant to the Merger Agreement. The Escrow Shares shall be distributed to the
Stockholders in the same proportion that the balance of the Merger Shares not
deposited in the Escrow Account is distributed to the Stockholders in the Merger
Agreement, such proportions are set forth next to each Stockholder's name on
Schedule A hereto.
7. FEES AND EXPENSES OF ESCROW AGENT.
7.1. For services rendered, the Escrow Agent shall receive a fee of
$2,500 per annum. The fees of the Escrow Agent shall be borne by GOAM.
7.2. The Escrow Agent shall also be entitled to reimbursement from GOAM
for all reasonable out-of-pocket expenses paid or incurred by it in the
administration of its duties hereunder, including, but not limited to,
reasonable attorneys' or agents' fees and disbursements and all reasonable taxes
or other governmental charges. It is anticipated that such disbursement shall
not exceed $500 barring any unforeseen circumstances. If for any reason the
deposit of the Escrow Shares is not received by the Escrow Agent as contemplated
in Section 3.1 hereof, GOAM shall reimburse the Escrow Agent for all expenses,
including
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reasonable counsel fees and disbursements, paid or incurred by it in making
preparations for providing the services contemplated hereby.
8. PROTECTION OF ESCROW AGENT.
8.1. The Escrow Agent shall have no duties or responsibilities other than
those expressly set forth herein. The Escrow Agent shall have no duty to enforce
any obligation of any person to make any payment or delivery, or to direct or
cause any payment or delivery to be made, or to enforce any obligation of any
person to perform any other act. The Escrow Agent shall be under no liability to
the other parties hereto or to anyone else by reason of any failure on the part
of any party hereto or any maker, guarantor, endorser or other signatory of any
document or any other person to perform such person's obligations under any such
document. Except for amendments to this Agreement referred to below, and except
for instructions given to the Escrow Agent by GOAM and the Stockholders relating
to the Escrow Account under this Agreement, the Escrow Agent shall not be
obligated to recognize any agreement between any and all of the persons referred
to herein, notwithstanding that references thereto may be made herein and
whether or not it has knowledge thereof.
8.2. The Escrow Agent shall not be liable to GOAM or the Stockholders or
to anyone else for any action taken or omitted by it, or any action suffered by
it to be taken or omitted, in good faith and in the exercise of its own best
judgment and shall be liable only in case of its own bad faith or willful
misconduct or gross negligence or intentional failure to comply with its
obligations under this Agreement. The Escrow Agent may rely conclusively and
shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Escrow Agent),
statement, instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as to
the truth and acceptability of any information therein contained), which is
believed by the Escrow Agent to be genuine and to be signed or presented by the
proper person or persons. The Escrow Agent shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this Agreement
or any of the terms thereof, unless evidenced by a writing delivered to the
Escrow Agent signed by the proper party or parties and, if the duties or rights
of the Escrow Agent are affected, unless it shall give its prior written consent
thereto.
8.3. The Escrow Agent shall not be responsible for the sufficiency or
accuracy of the form of, or the execution, validity, value or genuineness of,
any document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein; nor shall the Escrow Agent be responsible or liable to
the other parties hereto or to anyone else in any respect on account of the
identity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any document or property or this Agreement. The
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent pursuant to
the provisions hereof.
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8.4 The Escrow Agent shall have the right to assume in the absence of
written notice to the contrary from the proper person or persons that a fact or
an event by reason of which an action would or might be taken by the Escrow
Agent does not exist or has not occurred, without incurring liability to the
other parties hereto or to anyone else for any action taken or omitted, or any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own best judgment, in reliance upon such assumption.
9. CONTROVERSIES.
If any controversy arises among the parties to this Agreement, or with any
other party, concerning the subject matter of this Agreement, or its terms or
conditions, the Escrow Agent will not be required to determine the controversy
or to take any action regarding it. The Escrow Agent may hold the Escrow Shares
and all documents and funds, and may wait for settlement of any such controversy
by final appropriate arbitration or legal proceedings or other means, as the
Escrow Agent may require in its discretion, notwithstanding any other provision
of this Agreement. In such event, the Escrow Agent will not be liable for
interest or damages. Furthermore, the Escrow Agent may at its option file an
action of interpleader in a court of competent jurisdiction requiring the
parties to answer and litigate their claims and rights among themselves. The
Escrow Agent is authorized to deposit with the clerk of the court all documents
and funds held in the Escrow Account, except all costs, expenses, charges and
reasonable attorney fees incurred by the Escrow Agent due to the interpleader
action, GOAM agrees to pay and promptly deposit with the clerk of the court.
Upon initiating such action, the Escrow Agent shall be fully released and
discharged of and from any obligations and liability imposed by the terms of
this Agreement. The release from liability shall survive the termination of this
Agreement.
10. RESIGNATION OR REMOVAL OF ESCROW AGENT.
The Escrow Agent may resign at any time upon giving at least thirty (30)
days' written notice to GOAM and the Stockholder Representative, and may be
removed by the mutual agreement of GOAM and the Stockholder Representative and
the Escrow Agent shall turn over the Escrow Account to the duly appointed
successor escrow agent (less any amount due and owning under Section 7 hereof);
provided, however, that any such resignation or removal shall not become
effective until the appointment of a successor escrow agent which shall be
accomplished as follows. GOAM and the Stockholder Representative shall use their
reasonable best efforts to agree on a successor escrow agent within thirty (30)
days after receiving such notice of resignation from the Escrow Agent. If GOAM
and the Stockholder Representative fail to agree on a successor escrow agent
within such time, the parties shall promptly request a court of competent
jurisdiction to appoint such an agent. If a successor escrow agent is not
appointed within thirty (30) days of the parties request to the court, the
Escrow Agent may deposit the Escrow Account with such court pending appointment.
The successor escrow agent shall execute and deliver to the Escrow Agent an
instrument accepting such appointment and it shall, without further acts, be
vested with all the estates, properties, rights, powers and duties of the
predecessor escrow agent as if originally named
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as the escrow agent. Then, the Escrow Agent shall be discharged from any further
duties and liability under this Agreement accruing after the date the
appointment of such successor escrow agent is accepted by the parties (or made
by a court of competent jurisdiction, as applicable) and becomes effective, and
such discharge of liability will survive the termination of this Agreement.
11. INDEMNIFICATION OF ESCROW AGENT.
11.1. GOAM shall reimburse, indemnify and hold harmless the Escrow Agent,
its employees and agents (referred to in this Section 11 collectively and
individually as the "Escrow Agent"), from and against any and all any and all
expenses, including reasonable counsel fees and disbursements, or loss suffered
by the Escrow Agent in connection with any action, suit or other proceeding
involving any claim, or in connection with any claim or demand, which in any
way, directly or indirectly, arises out of or relates to this Agreement, the
services of the Escrow Agent hereunder, the monies or other property held by it
hereunder. The Escrow Agent shall have a lien for the amount of any such
expenses or loss on the monies and other property held by it hereunder and shall
be entitled to reimburse itself from such monies or property for the amount of
any such expense or loss. Promptly after the receipt by the Escrow Agent or
notice of any demand or claim or the commencement of any action, suit or
proceeding, the Escrow Agent shall, if a claim in respect thereof is to be made
against GOAM, notify GOAM thereof in writing, but the failure by the Escrow
Agent to give such notice shall not relieve GOAM from any liability which they
may have to the Escrow Agent hereunder. Notwithstanding any obligation to make
payments and deliveries hereunder, the Escrow Agent may retain and hold for such
time as it deems necessary such amount of monies or property as it shall, from
time to time, in its sole discretion, deem sufficient to indemnify itself for
any such loss or expense and for any amounts due it under Section 7.
11.2. For purposes of this Section 11, the term "expense or loss" shall
include all amounts paid or payable to satisfy any claim, demand or liability,
or in settlement of any claim, demand, action, suit or proceeding settled with
the express written consent of the Escrow Agent, and all costs and expenses,
including, but not limited to, reasonable counsel fees and disbursements, paid
or incurred in investigating or defending against any such claim, demand,
action, suit or proceeding.
11.3. GOAM and the Stockholders may participate at their own expense in
the defense of any claim or action that may be asserted against the Escrow
Agent, and if GOAM or the Stockholders so elects, either may assume the defense
of such claim or action; provided, however, that if there exists a conflict of
interest that would make it inappropriate for the same counsel to represent both
GOAM or the Stockholders, as the case may be, and the Escrow Agent, retention of
separate counsel by the Escrow Agent shall be reimbursable as hereinabove
provided; and provided, further, that GOAM shall not settle or compromise any
such claim or action without the consent of the Stockholders, which consent
shall not be unreasonably withheld, and the Stockholders shall not settle or
compromise any such
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claim or action without the consent of GOAM, which consent shall not be
unreasonably withheld. The parties will notify the Escrow Agent in writing of
their intention to participate or assume the defense of any claim. The right of
the Escrow Agent to indemnification hereunder shall survive its resignation or
removal as Escrow Agent and shall survive the termination of this Agreement by
lapse of time or otherwise.
12. AUTHORITY OF GOAM.
GOAM shall be entitled to assert claims for indemnity on behalf of any of
the GOAM Indemnitees, and all of the GOAM Indemnitees shall be bound by GOAM's
actions and decisions hereunder.
13. AUTHORITY OF STOCKHOLDER REPRESENTATIVE.
The Stockholder Representative represents and warrants to GOAM and the
Escrow Agent that the Stockholders, by virtue of the Stockholders' acceptance of
the Merger Shares, have consented to: (a) be bound by the terms of this Escrow
Agreement; (b) be a party hereto with the same force and effect as if they were
signatories hereto, including without limitation, the appointment of the
Stockholder Representative as their representative for purposes of this Escrow
Agreement and as attorney-in-fact and agent for and on behalf of each such
Stockholder; and (c) the taking by the Stockholder Representative of any and all
actions and the making of any decisions required or permitted to be taken or
made by the Stockholder Representative under this Escrow Agreement and the
Merger Agreement.
14. MISCELLANEOUS.
14.1. Amendments and Waivers. This Agreement, or any provision of this
Agreement, may be amended or waived from time to time only upon the mutual
written agreement of GOAM, the Stockholders (by and through the Stockholder
Representative) and the Escrow Agent. No delay or omission by any party to
exercise any right or power hereunder shall impair such right or power or be
construed to be a waiver thereof. A waiver by any of the parties hereto of any
of the covenants to be performed by the other or any breach thereof shall not be
construed to be a waiver of any subsequent breach or of any other covenant
contained in this Agreement.
14.2. Notices. Notices and other communications by a party under this
Agreement shall be in writing and hand-delivered, deposited with an overnight
carrier for next- or second-day delivery, sent by certified mail or transmitted
by facsimile (with receipt confirmed), addressed to the parties as follows (or
to such other addresses as any party may designate from time to time in
writing):
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(a) if to GOAM or Sub, to:
GoAmerica, Inc.
401 Hackensack Avenue
Hackensack, New Jersey 07601
Attention: Mr. Aaron Dobrinsky
with copies to:
Buchanan Ingersoll Professional Corporation
650 College Road East
Princeton, New Jersey 08540
Attention: David J. Sorin, Esq.
(b) if to the Stockholders, to:
Kevin Warnock, Stockholder Representative
c/o Hotpaper.com, Inc.
33 New Montgomery Street, 10th Floor
San Francisco, California 94105
with copies to:
Cooley Godward LLP
5 Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306
Attention: Eric Jensen, Esq.
(c) if to the Escrow Agent, to:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Mr. Herbert Lemmer
and shall be deemed given when received.
14.3. Successors; Third Parties; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. This Agreement is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder, except as
otherwise expressly provided herein.
14.4. Entire Agreement. This Agreement, the Merger Agreement (and any
agreements referenced therein) constitute the entire agreement among GOAM, the
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Stockholders and the Escrow Agent with respect to the subject matter hereof, and
supersedes any and all prior agreements, understandings, promises or
representations made by such Persons concerning the subject matter of this
Agreement.
14.5. Applicable Law. The validity, performance and construction of this
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
14.6. Consent to Jurisdiction; Arbitration.
(a) Each of the parties hereby consents and agrees to submit himself or
itself to the non-exclusive jurisdiction of the State of New York and of the
United States of America located in the State of New York, county of New York.
(b) The parties acknowledge and agree that GOAM would be materially
prejudiced by the failure of the parties to resolve any objections or disputes
as contemplated by Section 5.2 and Article 6 hereof. The parties therefore agree
to resolve any such disputes or objections in accordance with the arbitration
provisions set forth below and to take any and all actions necessary to resolve
such disputes or objections as expeditiously as possible and in any event prior
to the Termination Date. Notwithstanding anything to the contrary contained in
this Agreement, any dispute, controversy or claim arising out of or relating to
this Agreement, or the provisions of the Merger Agreement related hereto, or the
breach, termination or validity thereof ("Dispute") shall be finally settled by
arbitration, to be held in New York, New York in accordance with the CPR
Institute For Dispute Resolution ("CPR") Non-Administered Arbitration Rules then
in effect ("Rules"), except as modified herein. Within five (5) days after
receipt by a party of a notice of dispute, GOAM, on the one hand and the
Stockholder Representative, on the other, shall each appoint one arbitrator; the
two arbitrators so appointed shall select the third arbitrator who shall be a
disinterested person of recognized competence in the matter at issue who shall
act as the presiding arbitrator for the dispute in question. If either party
fails to name an initial arbitrator, or if appointed arbitrators have failed to
appoint the third arbitrator as provided in the Rules, then CPR shall appoint
that arbitrator within five (5) days of the request of either GOAM or the
Stockholder Representative. Consistent with the expedited nature of arbitration,
the number of depositions, if any, conducted by each of claimant(s),
collectively, and by respondent(s), collectively, pursuant to Rule 11 of the
Rules shall be limited to three (3) and any discovery permitted by the tribunal
shall be completed within ten (10) days of the date of the appointment of the
third arbitrator. Any award rendered in such arbitration shall be final and
binding upon the parties, and judgment may be entered thereon in any court of
competent jurisdiction. Upon the rendering of any such award on or prior to the
Termination Date, the Escrow Agent shall release the appropriate portion of the
Escrow Account in accordance with Article 6 hereof. The parties agree to submit
to the non-exclusive jurisdiction of the courts of the State of New York and of
the United States of America located in the State of New York, county of New
York, for any action to enforce any award hereunder. The demand for arbitrations
shall be delivered in accordance with Section 14.2. The fees of the
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arbitrators shall be shared equally by the parties. This agreement to arbitrate,
and the final ruling or decision of the arbitrators, shall be binding on the
parties and specifically enforceable.
14.7. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
14.8. Captions; Construction. Titles or captions of Sections contained in
this Agreement are inserted only as a matter of convenience and for reference,
and in no way define, limit, extend or describe the scope of this Agreement or
the intent of any provision of this Agreement. The words "herein" and "hereof"
and other words of similar import refer to this Agreement as a whole and not to
any particular part of this Agreement. The word "including" as used herein shall
not be construed so as to exclude any other thing not referred to or described.
All references herein to Sections shall be deemed references to sections of this
Agreement, except as otherwise provided.
14.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
14.10. Binding Effect. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their respective successors,
assigns, heirs and legal representatives. Except as otherwise set forth herein,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
14.11. Further Assurances. From time to time on and after the date hereof,
GOAM and the Stockholders shall deliver or cause to be delivered to the Escrow
Agent such further documents and instruments and shall do and cause to be done
such further acts as the Escrow Agent shall reasonably request (it being
understood that the Escrow Agent shall have no obligation to make any such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.
[Signature page follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of and on the
date first above written.
GOAMERICA, INC.
By: /s/ Francis J. Elenio
------------------------------------
Name: Francis J. Elenio
Title: Chief Financial Officer, Secretary and
Treasurer
THE STOCKHOLDERS
By: /s/ Kevin Warnock
------------------------------------
Name: Kevin Warnock
Title: Stockholder Representative
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Escrow Agent
By: /s/ Herbert J. Lemmer
------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
SCHEDULE A
SCHEDULE OF STOCKHOLDERS
Number of
Percentage of Shares to be
Total Escrow Deposited in
Name Shares Escrow
---- ------ ------
Kevin L. Warnock 18.9233% 19,039
David Henderson 8.4203% 8,472
Andrew Warnock 1.1227% 1,130
Nokia Ventures, L.P. 58.8607% 59,221
Osprey Ventures, L.P. 2.0236% 2,036
Osprey Ventures Q, L.P. 3.4288% 3,449
Osprey Ventures Affiliates Fund, L.P. 0.1686% 170
Angel Investors, L.P. 1.2422% 1,250
Angel(Q) Investors, L.P. 1.0062% 1,012
Stephen J. Martin 2.2484% 2,262
GC&H Ventures, L.P. 0.7869% 792
Robert C. Hill 0.3373% 339
Thomas Figlio 0.0020% 2
Michael Foster 0.0241% 24
Mary Ann O'Brien 1.4050% 1,414
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of the 31st day of August, 2000, by and among GoAmerica, Inc., a Delaware
corporation (the "Company"), and the stockholders of Hotpaper.com, Inc. listed
on the signature page hereof (referred to collectively herein as the
"Stockholders" and each individually as a "Stockholder").
Recitals
WHEREAS, this Agreement is made pursuant to the Agreement and Plan of
Merger (the "Merger Agreement") dated as of August 11, 2000 by and among the
Company, GoAmerica Acquisition II Corp. ("Sub") and Hotpaper.com, Inc.
("Hotpaper"). Capitalized terms used herein shall have the respective meanings
ascribed to them in the Merger Agreement, unless the context requires otherwise.
WHEREAS, pursuant to the Merger Agreement, (a) Sub will be merged with and
into Hotpaper (the "Merger"), and (b) the Company is issuing shares of Common
Stock of the Company to the Stockholders, in conversion of and exchange for the
outstanding shares of capital stock of Hotpaper (on an as converted to common
stock basis) then held by the Stockholders; and
Whereas, in connection with the consummation of the Merger, the parties
desire to enter into this Agreement in order to grant certain registration
rights to the Stockholders as set forth below.
Now, Therefore, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. GENERAL.
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1.1 DEFINITIONS. As used in this Agreement the following terms shall have
the following respective meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means any person owning of record Registrable Securities
that have not been sold to the public or any assignee of record of such
Registrable Securities in accordance with Section 2.7 hereof.
"Initial Offering" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act as declared effective by the Commission on April 6, 2000.
"Prior Registration Rights Agreements" means (a) that certain
Registration Rights Agreement, dated October 15, 1996, by and among the Company
and the investors party thereto; (b) that certain Registration Rights Agreement,
dated June 25, 1999, by and among the Company
and the investors party thereto; (c) that certain Registration Rights Agreement
dated January 28, 2000, by and among the Company and the investors party
thereto; and (d) that certain Registration Rights Agreement dated June 28, 2000,
by and among the Company and the investors party thereto.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means (a) the Merger Shares; and (b) any
Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
the Merger Shares.
"Registrable Securities then outstanding" shall be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Section 2.1 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of a single special
counsel for the Holders selected by a majority of Holders participating in a
particular registration, blue sky fees and expenses (but excluding (a) the
compensation of regular employees of the Company which shall be paid in any
event by the Company and (b) Selling Expenses).
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities by a Holder.
"Special Registration Statement" shall mean a registration statement
relating to any employee benefit plan or with respect to any corporate
reorganization or other transaction under Rule 145 of the Securities Act.
SECTION 2. REGISTRATION.
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2.1 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least fifteen (15) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding Special Registration Statements) and will afford each
such Holder an opportunity to include in such registration statement all or part
of such Registrable Securities held by such Holder as set forth herein. Each
Holder desiring to include in any such registration statement all or any part of
the Registrable Securities held by such Holder shall,
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within fifteen (15) days after the above-described notice from the Company, so
notify the Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by such Holder as set forth herein. If
a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(a) Underwriting. If the registration statement under which the
Company gives notice under this Section 2.1 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 2.1 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this Agreement, if the underwriter determines in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated first, to the Company; second to all stockholders who are
entitled to participate and who have elected to participate in the offering
pursuant to the terms of the Prior Registration Rights Agreements on a pro rata
basis based upon the total number of shares held by each such participating
stockholder that are subject to piggyback registration rights pursuant thereto;
third, to all stockholders who are entitled to participate and who have elected
to participate in the offering pursuant to the terms of this Agreement, on a pro
rata basis based upon the total number of shares held by each such participating
stockholder that are subject to piggyback registration rights pursuant hereto;
and fourth, to any other stockholder of the Company on a pro rata basis. If any
Holder disapproves of the terms of any such underwriting, such Holder may elect
to withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration. For any
Holder which is a partnership or corporation, the partners, stockholders,
subsidiaries, parents and affiliates of such Holder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "Holder", and any
pro rata reduction with respect to such "Holder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "Holder", as defined in this sentence.
(b) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.1 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.2 hereof.
2.2 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be
borne by the Company. All
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Selling Expenses incurred in connection with any registrations hereunder, shall
be borne by the Holders of the securities so registered pro rata on the basis of
the number of shares so registered.
2.3 OBLIGATIONS OF THE COMPANY. Subject to Section 2.1(b), whenever the
Company elects to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all commercially reasonable
efforts to cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to ninety (90)
days or, if earlier, until the Holder or Holders have completed the distribution
related thereto.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement for the period set forth in paragraph (a) above.
(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its commercially reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
The Company will use reasonable efforts to amend or supplement such prospectus
in order to cause such prospectus not to include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing.
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(g) Use its commercially reasonable efforts to furnish, on the date
that such Registrable Securities are delivered to the underwriters for sale, if
such securities are being sold through underwriters, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and (ii)
a letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.
2.4 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect seven
(7) years after the date of the Company's Initial Offering. In addition, a
Holder's registration rights shall expire if (a) collectively, the Holders hold
less than 1% of the Company's outstanding Common Stock and (b) all Registrable
Securities held by such Holder (and its affiliates, partners, members and former
members) may be sold under Rule 144 during any ninety (90) day period.
2.5 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.1 that the selling Holders
shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
2.6 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Section 2.1:
(a) The Company will indemnify and hold harmless each Holder, the
partners, officers and directors of each Holder, any underwriter (as defined in
the Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any Violation or alleged
Violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement (provided, however, that the Company will
not be required to indemnify any of the foregoing persons on
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account of any losses, claims, damages or liabilities arising from a Violation
if and to the extent that such Violation was made in a preliminary prospectus
and was corrected in a subsequent prospectus that was required by law to be
delivered to the person making the claim with respect to which indemnification
is sought hereunder, and such subsequent prospectus was made available by the
Company to permit delivery of such prospectus in a timely manner, and such
subsequent prospectus was so delivered to the Holder making the claim for
indemnification); and the Company will pay as incurred to each such Holder,
partner, officer, director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 2.6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration qualifications or
compliance is being effected, indemnify and hold harmless the Company, each of
its directors, its officers and each person, if any, who controls the Company
within the meaning of the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such other
Holder's partners, directors or officers or any person who controls such Holder,
against any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officer, controlling person, underwriter or
other such Holder, or partner, director, officer or controlling person of such
other Holder may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder under an instrument duly executed by such Holder and
stated to be specifically for use in connection with such registration; and each
such Holder will pay as incurred any legal or other expenses reasonably incurred
by the Company or any such director, officer, controlling person, underwriter or
other Holder, or partner, officer, director or controlling person of such other
Holder in connection with investigating or defending any such loss, claim,
damage, liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
Section 2.6(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 2.6
exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.6, deliver to
the indemnifying party a written notice of the commencement
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thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain one counsel of their own, with the
reasonable fees and expenses of such counsel to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if materially prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 2.6, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.6.
(d) If the indemnification provided for in this Section 2.6 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.
(e) The obligations of the Company and Holders under this Section
2.6 shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this Agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
2.7 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned by a
Holder to a transferee or assignee of Registrable Securities to which (a) there
is transferred to such transferee no less than twenty thousand (20,000) shares
of Registrable Securities, appropriately adjusted to reflect any stock splits,
stock dividends, subdivisions, reverse splits and similar events, (b) there is
transferred to such transferee at least ten percent (10%) of the shares of
Registrable Securities held by the Holder, (c) such transferee is an affiliate,
subsidiary or parent company, family member or family trust for the benefit of a
party hereto or (d) such transferee or transferees are partners of a Holder, who
agree to act through a single representative; provided, however, (i) the
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transferor shall, within ten (10) days after such transfer, furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (ii) such transferee shall agree to be subject to all restrictions
set forth in this Agreement.
2.8 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2 may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 2.8 shall be binding upon each Holder and the Company. By
acceptance of any benefits under this Section 2, Holders of Registrable
Securities hereby agree to be bound by the provisions hereunder.
2.9 "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH INFORMATION. Each
Holder hereby agrees that such Holder shall not sell, transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale, any Common Stock
(or other securities) of the Company held by such Holder (other than those
included in the registration) for a period specified by the representative of
the underwriters of Common Stock (or other securities) of the Company not to
exceed one hundred eighty (180) days following the Closing Date.
Each Holder agrees to execute and deliver such other agreements as may be
reasonably requested by the Company or the underwriter which are consistent with
the foregoing or which are necessary to give further effect thereto. In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, each Holder shall provide,
within ten (10) days of such request, such information as may be required by the
Company or such representative in connection with the completion of any public
offering of the Company's securities pursuant to a registration statement filed
under the Securities Act. The obligations described in this Section 2.9 shall
not apply to a registration relating solely to employee benefit plans on Form
S-1 or Form S-8 or similar forms that may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction on Form S-4 or
similar forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period. Each Holder agrees that any transferee of any
shares of Registrable Securities shall be bound by this Section 2.9.
2.10 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the Initial Offering;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
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(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
2.11 TITLE TO STOCK. Each Stockholder hereby represents that he is the
beneficial owner of the outstanding shares of capital stock of Hotpaper issued
in his respective name and that, except as otherwise disclosed on the Hotpaper
Disclosure Schedule, all such shares are free and clear of any mortgages,
pledges, security interests, liens, claims, charges, equities, conditional sales
contracts, restrictions, reservations, options, first refusal rights or other
encumbrances of any nature whatsoever.
SECTION 3. MISCELLANEOUS.
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3.1 GOVERNING LAW. This Agreement shall be construed under Delaware
General Corporation Law as to matters of corporate law and, as to all other
matters of law, shall be governed and construed under the laws of the State of
Delaware as such laws are applied to agreements between Delaware residents
entered into and performed entirely in the State of Delaware.
3.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of Registrable Securities from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.
3.4 ENTIRE AGREEMENT. This Agreement, the Merger Agreement and the other
documents delivered pursuant thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.
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3.5 SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
3.6 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of at least a majority of the Registrable Securities.
(b) Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of at least a majority of the
Registrable Securities.
(c) For the purposes of determining the number of Holder or
Stockholders entitled to vote or exercise any rights hereunder, the Company
shall be entitled to rely solely on the list of record holders of its stock as
maintained by or on behalf of the Company.
3.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
3.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed electronic mail or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the party to be notified at the address as set forth on the signature
pages hereof or at such other address as such party may designate by ten (10)
days advance written notice to the other parties hereto.
3.9 PRIORITY OF REGISTRATION RIGHTS. Notwithstanding anything herein to
the contrary, in the event of any conflict between the provisions of this
Agreement and the provisions of any of the Prior Registration Rights Agreements,
the provisions of the Prior Registration Rights Agreements shall govern.
3.10 ATTORNEYS' FEES. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from
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the losing party all fees, costs and expenses of enforcing any right of such
prevailing party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of
appeals.
3.11 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
3.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
3.13 MUTUAL DRAFTING. This Agreement is the result of the joint efforts of
the Company and each of the Stockholders and each provision hereof has been
subject to the mutual consultation, negotiation and agreement of the parties and
there shall be no construction against any party based on any presumption of the
party's involvement in the drafting thereof.
[SIGNATURE PAGE FOLLOWS]
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In Witness Whereof, the parties hereto have executed this Registration
Rights Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
GOAMERICA, Inc.
By: /s/ Francis J. Elenio
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Print Name: Francis J. Elenio
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Title: Chief Financial Officer, Secretary
and Treasurer
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Address: 401 Hackensack Avenue
Hackensack, NJ 07601
Attn: Aaron Dobrinsky, President
STOCKHOLDERS:
/s/ Kevin L. Warnock /s/ David Henderson
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Name: Kevin L. Warnock Name: David Henderson
Address: Address:
Nokia Ventures, L.P.
/s/ Andrew C. Warnock By: /s/ W. Peter Buhl
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Name: Andrew C. Warnock Name: W. Peter Buhl
Address: Address:
Osprey Ventures, L.P. Angel Investors, L.P. and
Angel (Q) Investors, L.P.
By: /s/ David M. Stasmy By: /s/ Bob Bozeman,
--------------------------- Angel Management, L.L.C.
Name: David M. Stasmy, as ----------------------------
Managing Member of Osprey Name:
Management, L.L.C. Address:
Address:
Osprey Ventures Q, L.P. Osprey Ventures Affiliates Fund, L.P.
By: /s/ David M. Stasmy By: /s/ David M. Stasmy
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Name: David M. Stasmy, as Name: David M. Stasmy, as
Managing Member of Osprey Managing Member of Osprey
Management, L.L.C. Management, L.L.C.
Address: Address:
GC&H Investments
/s/ Stephen J. Martin By: /s/ Kenneth L. Guernsey
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Name: Stephen J. Martin Name: Kenneth L. Guernsey,
Address: Executive Partner
Address:
/s/ Robert C. Hill /s/ Thomas Figlio
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Name: Robert C. Hill Name: Thomas Figlio
Address: Address:
/s/ Michael Foster /s/ Mary Ann O'Brien
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Name: Michael Foster Name: Mary Ann O'Brien
Address: Address: