EXHIBIT 10.17
Execution Copy
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of the 25th
day of June, 1999, is made between GoAmerica Communications Corp., a Delaware
corporation (the "Company"), and CIBC WMV INC., a Delaware corporation ("CIBC").
WITNESSETH:
WHEREAS, the Company and CIBC are parties to the Convertible Preferred
Stock Purchase Agreement dated as of the date hereof (as may be amended,
supplemented or modified from time to time, the "Purchase Agreement");
WHEREAS, as a condition to closing under the Purchase Agreement and as an
inducement to CIBC to consummate the transactions contemplated by the Purchase
Agreement, the Company and CIBC desire to execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties to
this Agreement agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Affiliate" means, with respect to any specified Person, (1) any other
Person who, directly or indirectly through one or more intermediaries, owns or
controls, is under common ownership or control with, or is owned or controlled
by, such specified Person, (2) any other Person who is a director, officer or
partner or is, directly or indirectly, the beneficial owner of 10% or more of
any class of equity securities, of the specified Person or a Person described in
clause (1) above, (3) any other Person of whom the specified Person is a
director, officer or partner or is, directly or indirectly, the beneficial owner
of 10% or more of any class of equity securities, (4) any other Person in whom
the specified Person has a substantial beneficial interest or as to whom the
specified Person serves as trustee or in a similar capacity, or (5) any relative
or spouse (including any partner with whom such Person resides on a permanent
basis) of the specified Person or any of the foregoing Persons described in
clause (1), (2), (3) or (4) above, any relative of such spouse, any spouse of
any such relative or any other Person who, directly or indirectly, is under
common ownership or control with, or is owned or controlled by such spouse or
relative. As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person, whether through the
ownership of voting securities, by contract or otherwise. As used in this
definition, the term "relative" means any former spouse, parent, grandparent,
great-grandparent, child, grandchild, great-grandchild, sibling, first uncle,
first aunt or first cousin (in each case, whether natural or adoptive).
"Business Day" means a day, other than a Saturday or Sunday, on which the
principal commercial banks located in New York are open for business during
normal banking hours.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Conversion Shares" means shares of Common Stock of the Company issued upon
conversion or exchange of the Eligible Shares.
"Eligible Shares" means shares of Convertible Preferred Stock of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Holder" means any holder of Eligible Shares or Conversion Shares who has
executed a joinder agreement and become a party hereto.
"Initial Public Offering" means the initial offering to the public of the
Company's securities pursuant to a firm commitment underwriting pursuant to the
Securities Act.
"Person" means any natural person, legal or personal representative,
partnership, company, corporation, incorporated syndicate, unincorporated or
incorporated association, trust or Governmental Body, howsoever designated or
constituted and whether acting in an individual, fiduciary or other capacity.
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" means the Conversion Shares, excluding Conversion
Shares which have been registered under the Securities Act pursuant to an
effective registration statement filed thereunder and disposed of in accordance
with the registration statement covering them.
"Registration Expenses" means all expenses relating to a registration for
which the Company is responsible hereunder, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the
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Company, blue sky fees and expenses, fees of any exchange or market on which the
Company's Common Stock is to be listed or quoted, transfer taxes, fees of
transfer agents and registrars, reasonable fees and disbursements of one legal
counsel for all the selling Holders and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at this time.
"Selling Expenses" means all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities.
Section 1.2 Certain Rules of Interpretation. In this Agreement:
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(a) time is of the essence in the performance of the parties'
respective obligations;
(b) unless otherwise specified, all references to monetary amounts are
to United States dollars; and
(c) the use of words in the singular or plural, or with a particular
gender, shall not limit the scope or exclude the application of any provision of
this Agreement to such Person or Persons or circumstances as the context
otherwise permits.
(d) the words "include", "includes" and "including" are deemed to be
followed by the phrase "without limitation";
(e) the phrases "ordinary course of business" and "ordinary course of
business consistent with past practice" refer to the business and practices of
GoAmerica, consistent with historical practices conducted by GoAmerica during
the past 12 months; and
(f) any representation or warranty contained herein as to the
enforceability of a Contract shall be subject to the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).
2. Requested Registration.
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(a) Request for Registration. If the Company receives from
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Holders of at least 67% of the Eligible Shares at any time after 180 days
following the effective date of the
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Company's Initial Public Offering, a written request that the Company
effect any registration with respect to all or a part of the Registrable
Securities, the Company will:
(i) within 20 days of such written request give written notice
of the proposed registration to all other Holders, if any; and
(ii) as soon as practicable, use all reasonable efforts to
effect such registration (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with applicable regulations under the
Securities Act) as may be so requested and would permit or facilitate
the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such
portion of the Registrable Securities of any Holder or Holders joining
in such request as are specified in written request given within 30
days after receipt of such written notice from the Company; provided,
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that the Company shall not be obligated to effect, or take any action
to effect, any such registration pursuant to this Section 2:
(A) in any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable
rules or regulations thereunder; or
(B) after the Company has effected one such registration
pursuant to this Section 2(a) and such registration has been
declared or ordered effective and the sales of such Registrable
Securities shall have closed.
Subject to the foregoing clauses (A) and (B), the Company shall file a
registration statement covering the Registrable Securities so requested to
be registered as soon as practicable after receipt of the request of
Holders of 51% of the Eligible Shares. Each Holder will have the right to
participate ratably with the others.
The registration statement filed pursuant to the request of CIBC may,
subject to the provisions of Section 2(b) below, include other securities
of the Company including securities of the Company which are held by
persons who are entitled to include their securities in any such
registration; provided, however, that, in any underwritten public offering
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contemplated by Sections 2, 3 and 5, the Holders of Eligible Shares shall
be entitled to sell such Eligible Shares to the underwriters for conversion
and sale of the shares of Common Stock issued upon conversion thereof,
subject to agreement of the underwriters.
The Company shall be entitled to postpone for a reasonable period of
time not to exceed six months the filing of a registration statement
otherwise required to be filed by it
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pursuant to this Section 2(a) if the Company determines, in its reasonable
judgment, that such registration would materially interfere with any
financing, acquisition, corporate reorganization or other material
transaction involving the Company and the Company promptly gives written
notice to the Holders who have initiated or elected to participate in such
registration including an explanation thereof. The Company shall not
exercise its right to defer a registration more than once in any 12-month
period or in any event if the effect would be to permit a registration of
securities (other than a registration that was pending at the time of the
initial demand or a registration on Form X-0, Xxxx X-0 or any successor or
similar form) to the exclusion of such number of Registrable Securities as
would otherwise have been included in the registration statement the filing
of which was deferred.
Holders requesting registration shall be entitled to withdraw any
registration request made pursuant to this Section 2(a), provided, that
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such registration request shall nevertheless be counted toward the number
of registrations the Company is required to file pursuant to this Section
2(a) unless the Holders reimburse the Company for all reasonable out-of-
pocket costs incurred by the Company prior to such withdrawal.
For purposes of provisions of Sections 2(a) and 5, registrations
relative to which less than 50% of the offered securities are in fact sold
shall not be included.
(b) Underwriting.
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(i) If Holders requesting registration intend to distribute
the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their
request made pursuant to this Section 2 and the Company shall include
such information in the written notice referred to in Section 2(a)
above. The right of any Holder to registration pursuant to Section
2(a) shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting. A Holder may elect to include in such
underwriting all or a part of the Registrable Securities he holds.
(ii) The Company (together with all Holders proposing to
distribute their securities through such underwriting) shall enter
into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such
underwriting by CIBC from the list of underwriters set forth on the
attached Schedule I. If any Holder of Registrable Securities who has
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requested inclusion in such registration as provided above disapproves
of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the underwriter and CIBC.
The securities so withdrawn shall also be withdrawn from registration.
If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, the Company may
include its securities for its own account in such registration if
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the underwriter so agrees and if the number of Registrable Securities
and other securities which would otherwise have been included in such
registration and underwriting will not thereby be limited or adversely
affected.
(iii) Notwithstanding the provisions of this Section 2(b), if
the underwriter determines that marketing factors require a limitation
of the total number of shares of Common Stock to be underwritten or a
limitation of the total number of shares of Common Stock to be sold by
the Company, then, subject to the provisions of Section 6 herein, the
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number of shares to be included in the registration and the
underwriting shall be allocated among all shareholders of the Company
who are participating in such registration, on a pro rata basis based
on the number of Registrable Securities or other shares of Common
Stock of the Company held by all such Holders and being included in
such registration; provided, that the number of shares of Registrable
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Securities to be included in such underwriting and registration shall
not be reduced unless all other securities included in such
registration by the Company are first entirely excluded from the
underwriting and registration. No stock excluded from the
underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. If the Company determines not to
participate in any such underwriting, it may elect to withdraw
therefrom by written notice to the holders of Registrable Securities
and the underwriter. The securities so withdrawn from such
underwriting shall also be withdrawn from such registration.
3. Company Registration.
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(a) If the Company elects to register any of its securities for
purposes of a public offering of securities of the Company (including, but
not limited to, registration statements relating to secondary offerings of
securities of the Company), other than a registration relating solely to
employee benefit plans, a registration relating solely to a Commission Rule
145 transaction, or a registration on any registration form which does not
permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof (which
shall include a list of the jurisdictions in which the Company intends
to attempt to qualify such securities under the applicable blue sky or
other state securities laws) at least 30 days prior to the filing of
any registration statement; and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a
written request or requests, made by any Holder within 30 days after
receipt of the written notice from the Company described in clause (i)
above, except as set forth in Section 3(b) below. Such
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written request may specify all or a part of a Holder's Registrable
Securities. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by it
shall, within 30 days after the above-described notice from the
Company, so notify the Company in writing.
(b) Underwriting. If the registration of which the Company gives
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notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3(a)(i). In such event the right of any Holder to
registration pursuant to Section 3(a) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of the
Registrable Securities such Holder elects to register in such underwriting
to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company)
enter into an underwriting agreement in customary form with the underwriter
or underwriters selected by the Company from the list attached as Schedule
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I hereto. Notwithstanding the provisions of Section 3, if the underwriter
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determines that marketing factors require a limitation of the total number
of shares to be underwritten or a limitation of the total number of shares
of Registrable Securities to be underwritten, the number of shares that may
be included in the underwriting shall be allocated, first, to the Company;
second, to the shareholders of the Company participating in the
underwriting, on a pro rata basis subject to the provisions of Section 6
herein. No stock excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
If any Holder of Registrable Securities determines not to participate in
any such underwriting, such person may elect to withdraw therefrom by
written notice to the Company and the underwriter. The securities so
withdrawn from such underwriting shall also be withdrawn from such
registration. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 3 without
thereby incurring any liability to the holders of Registrable Securities.
4. Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of their shares so registered. The reasonable fees of counsel retained
by any selling Holders shall be borne by the Company.
5. Registration Procedures. In the case of each registration effected by
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the Company pursuant to the provisions of this Agreement, the Company will keep
each Holder advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:
(a) prepare and file with the Commission a registration
statement (which, in the case of an underwritten public offering pursuant
to Section 2, shall be on Form S-1 or other form of general applicability
satisfactory to the managing underwriter selected as therein provided) with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for a period
commencing on the
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effective date of such registration statement and ending on the earlier of
the 90th day thereafter and the date on which all of such Registrable
Securities have been disposed of;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and
comply with the provisions of the Securities Act with respect to the
disposition of such Registrable Securities covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller of Registrable Securities and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or
other disposition of the Registrable Securities covered by such
registration statement;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as the sellers of Registrable
Securities or, in the case of an underwritten public offering, the managing
underwriter reasonably shall request; provided, however, that the Company
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shall not for any such purpose under this clause (d) be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in
any such jurisdiction;
(e) use its best efforts to list the Registrable Securities covered
by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
(f) immediately notify each seller of Registrable Securities and each
underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Company has
knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing and the Company will prepare a
supplement or amendment to such prospectus in order that such prospectus
will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(g) if the offering is underwritten and at the request of any seller
of Registrable Securities, use its best efforts to furnish in the date that
Registrable Securities are delivered to the underwriters for sale pursuant
to such registration: (i) an opinion dated
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such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such seller, stating
that such registration statement has become effective under the Securities
Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus and
each amendment or supplement thereof comply as to form in all material
respects with the requirements of the Securities Act (except that such
counsel need not express any opinion as to financial statements contained
therein) and (C) to such other effects as reasonably may be requested by
counsel for the underwriters or by such seller or its counsel and (ii) a
letter dated such date from the independent public accountants retained by
the Company, addressed to the underwriters and to such seller, stating that
they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the financial
statements of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereof, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other
financial matters (including information as to the period ending no more
than five Business Days prior to the date of such letter) with respect to
such registration as such underwriters reasonably may request;
(h) make available for inspection by each seller of Registrable
Securities, any underwriter participating in any distribution pursuant to
such registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant
or agent in connection with such registration statement;
(i) cause all Registrable Securities covered by the registration
statement to be listed on each securities exchange on which the Company's
Common Stock is then listed, and unless the same already exists, provide a
transfer agent, registrar and CUSIP number for all such Registrable
Securities not later than the effective date of the registration statement;
and
(j) otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(f), such Holder will,
as soon as is practical, discontinue disposition of its Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus covering such Registrable Securities.
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In connection with each registration hereunder, the sellers of Registrable
Securities will furnish to the Company in writing such information with respect
to themselves and the proposed distribution by them as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Sections 2, 3 or 5
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
6. Secondary Offering Priority. Up to fifty percent (50%) of the number
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of shares available to be sold in any secondary offering of the Company's Common
Stock permitted to be included by the Company's underwriters in conjunction with
an Initial Public Offering and up to fifty percent (50%) of the number of shares
available to be sold in each subsequent offering of the Company's common stock
permitted to be included therein by the Company's underwriters shall be reserved
for Holders under Section 2 until such time as Holders, as a group, have been
afforded the opportunity to include fifty percent (50%) of their Conversion
Shares through such offerings or any other registered underwritten offering
available to such Holders; provided, however, that the number of Registrable
Securities to which the foregoing priority is afforded shall not be greater than
the difference between fifty percent (50%) of the Conversion Shares and the
number of Conversion Shares as to which the opportunity to sell in any such
offerings had been made available.
7. Indemnification.
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(a) The Company will indemnify each Holder, each of its
officers, directors, shareholders, employees, agents and partners, and each
other person controlling such Holder, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement,
and each underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or action in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification
or compliance, or based on any omission (or alleged omission) to state
thereto a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of
the Securities Act, the Exchange Act, any rule or regulation thereunder, or
any other federal or state securities laws applicable to the Company and
relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and will reimburse each
such Holder, each of its officers, directors, shareholders, employees,
agents and partners, and each other person controlling such Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses
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reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, including any of the foregoing
incurred in settlement of any litigation commenced or threatened; provided,
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however, that the Company will not be liable in any such case to the extent
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that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein; and provided further, however, that the
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indemnity agreement contained in this Section 7(a) will not apply to
amounts paid in settlement if such settlement is effected without the
consent of the Company (which consent will not be unreasonably withheld).
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Holder or any such director,
officer, partner, agent, Affiliate, shareholders, underwriters, employees
or control persons and shall survive the transfer of such securities by the
Company.
(b) Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualifications or
compliance is being effected, severally and not jointly, indemnify the
Company, each of its directors, shareholders, employees, agents and
officers and each underwriter, if any, of the Company's securities covered
by such a registration statement, each other person who controls the
Company or such underwriter within the meaning of the Securities Act, the
Exchange Act, any rule or regulation thereunder, or any other federal or
state securities laws and the rules and regulations thereunder, each such
other Holder and each of their officers, directors, shareholders,
employees, agents and partners, and each other person controlling such
Holder, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or
any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading or any violation by such Holder of the Securities Act, the
Exchange Act, any rule or regulation thereunder, or any other federal or
state securities laws applicable to such Holder and relating to action or
in action required of such Holder in connection with any such registration,
qualification or compliance, and will reimburse the Company and any other
Holder, and each of their directors, officers, partners, underwriters,
shareholders, employees, agents or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, including any
of the foregoing incurred in settlement of any litigation commenced or
threatened, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein; provided, however, that the obligations of
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such Holders hereunder shall be limited to an amount equal to the net
proceeds to each such Holder of securities sold as contemplated herein; and
provided further, however, that the indemnity agreement contained in this
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Section 7(b) will not
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apply to amounts paid in settlement if such settlement is effected without
the consent of the majority of the Holders (which consent will not be
unreasonably withheld). Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company
or any such director, officer, partner, agent, or Affiliate, shareholders,
underwriters, employees or control persons and shall survive the transfer
of such securities by such Holder.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than under this
Section 7 and shall only relieve it from any liability which it may have to
such indemnified party under this Section 7 if and to the extent the
indemnifying part is prejudiced by such omission. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 7 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected
as incurred; provided, however, that, if the defendants in any such action
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include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional
to those available to the indemnifying party or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party shall have the right to
select a separate counsel and to assume such legal defenses and otherwise
to participate in the defense of such action, with the expenses and fees of
such separate counsel and other expenses related to such participation to
be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any
Holder exercising rights under this Agreement, or any controlling person of
any such Holder, makes a claim for indemnification pursuant to this Section
7 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that this Section
7 provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any such selling Holder or
any such controlling person in circumstances for which indemnification is
provided under this Section 7; then, and in each such case, the Company and
such Holder will contribute to the aggregate losses, claims, damages or
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liabilities to which they may be subject (after contribution from others)
in such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of its
Registrable Securities offered by the registration statement bears to the
public offering price of all securities offered by such registration
statement, and the Company is responsible for the remaining portion;
provided, however, that, in any such case, (A) no such Holder will be
-------- -------
required to contribute any amount in excess of the price to the
underwriters of all such Registrable Securities offered by it pursuant to
such registration statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
8. Changes in Eligible Shares. If, and as often as, there is any change
--------------------------
in the Eligible Shares by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Eligible Shares as so changed.
9. Information by Holder. Each Holder of Registrable Securities shall
---------------------
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company (or any underwriter) may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this
Agreement.
10. Limitations on Registration of Issues of Securities. From and after
---------------------------------------------------
the date of this Agreement, the Company shall not, without the prior written
consent of Holders of two-thirds of the Registrable Securities then outstanding
held by Holders who are signatories to this Agreement, enter into any agreement
with any holder or prospective holder of any securities of the Company giving
such holder or prospective holder equity registration rights which are superior
to, or which in any manner limit, the rights of the Holder's hereunder.
11. Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its best efforts to:
(a) Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
from and after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to
the general public;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act at any time after it has become subject to such reporting requirements;
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(c) So long as a purchaser of Eligible Shares owns any Eligible
Shares or Registrable Securities, furnish to the purchaser of Eligible
Shares forthwith upon request a written statement by the Company as to its
compliance with reporting requirements of Rule 144 (at any time from and
after 90 days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the
general public), and of the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed as a purchaser of Eligible Shares may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a purchaser of Eligible Shares to sell any such
securities without registration.
12. Representation and Warranties of the Company. The Company represents
--------------------------------------------
and warrants to the undersigned holders of Eligible Shares as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other
agency of government, the Charter or Bylaws of the Company or any provision
of any indenture, agreement or other instrument to which it or any of its
properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Company (other than Permitted Liens
as defined in the Purchase Agreement).
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms (subject to equitable
principles and to applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting the enforceability of
creditors' rights generally and to applicable laws affecting the
enforceability of indemnification and contribution).
13. Transfer or Assignment of Registration Rights. The rights to cause
---------------------------------------------
the Company to register a Holder's securities granted to each Holder by the
Company under Sections 2, 3, and 5 may be transferred or assigned by a Holder to
a transferee or assignee of any of such Holder's Registrable Securities if (i)
there is transferred to such transferee at least 20% of the total shares of
Registrable Securities originally issued to the direct or indirect transferor of
such transferee (as adjusted for stock splits and combinations), (ii) such
transferee is an Affiliate, subsidiary, parent, general partner, limited
partner, retired partner, member or retired member of a party hereto, (iii) such
transferee is a trust for the benefit of an individual Holder or (iv) in the
case of CIBC, such transferee is not a competitor of the Company; provided, that
--------
the Company is given written notice by such Holder at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
--------
further,
-------
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that the transferee or assignee of such rights assumes the obligations of such
Holder under this Agreement by executing a Joinder Agreement satisfactory to the
Company, whereby such person becomes a party to this Agreement; and provided yet
-------- ---
further, that no transfer of the rights hereunder will be valid (and will be
-------
void ab initio) if any such attempted transfer is to a Person that engages,
-- ------
directly or indirectly, in a business or intends to engage in a business that
competes with the Company.
14. "Market Stand-off" Agreement. Each Holder agrees, if requested by the
---------------------------
Company and an underwriter of Common Stock (or other securities) of the Company,
not to directly or indirectly sell, offer to sell, contract to sell (including
without limitation, short sell), grant any option to purchase or otherwise
transfer or dispose of any Common Stock (or other securities) of the Company
held by such Holder during the seven days prior to, and the 180 day period
beginning on, the effective date of a registration statement of the Company
filed under the Securities Act (except as part of such registration):
(a) such agreement only applies to the first such registration
statement of the Company including securities to be sold on its behalf to
the public in an underwritten offering; and
(b) all officers and directors of the Company enter into similar
agreements.
Such agreement shall be in writing in a form satisfactory to the Company
and such underwriter. The Holders hereby agree that the Company may impose
stop-transfer instructions with respect to the shares (or securities) subject to
the foregoing restriction until the end of said 180 day period.
15. Miscellaneous.
-------------
(a) Successors and Assigns. All covenants and agreements contained
----------------------
in this Agreement by or on behalf of any of the parties hereto shall bind
and inure to the benefit of their respective heirs, executors,
administrators, successors and assigns of the Company and each of the
Holders (including without limitation transferees of any Eligible Shares or
Restricted Stock), whether so expressed or not.
(b) Notices. Any notice or other writing required or permitted to be
-------
given under this Agreement or for the purposes of this Agreement (referred
to in this Section and throughout this Agreement as a "notice") to any
party shall be sufficiently given if delivered personally, or if sent by
prepaid registered mail or if transmitted by fax to such party:
(i) in the case of a notice to CIBC at:
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
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Attention: Xxxx Xxxxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxxxxx, Esq.
Fax: (000) 000-0000
(ii) in the case of a notice to the Company at:
GoAmerica Communications Corp.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
or at such other address as the party to whom such writing is to be given
shall have last notified to the party giving the same in the manner
provided in this Section. Any notice personally delivered to the party to
whom it is addressed as provided in this Section shall be deemed to have
been given and received on the day it is so delivered at such address,
provided, that if such day is not a Business Day then the notice shall be
--------
deemed to have been given and received on the Business Day next following
such day. Any notice mailed to the address and in the manner provided for
in this Section shall be deemed to have been given and received on the
fifth Business Day next following the date of its mailing. Any notice
transmitted by fax shall be deemed given and received on the first Business
Day after its transmission.
(c) Governing Law. This Agreement shall be governed and construed in
-------------
accordance with the internal laws of the State of New York.
(d) Amendment. This Agreement may be amended, supplemented or
---------
modified only by a written instrument duly executed by or on behalf of each
party hereto.
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(e) Severability. If any provision of this Agreement shall be held to
------------
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if
any such illegal, invalid or unenforceable provision where not contained
herein.
(f) Entire Agreement. This Agreement, as restated herein, and the
----------------
other instruments referred to herein contain the entire agreement among the
parties with respect to the registration rights of holders of Eligible
Shares and supersede all prior and contemporaneous arrangements or
understandings with respect thereto. Each Holder who is not a signatory to
this Agreement shall be deemed to be an intended third party beneficiary
hereof and shall be entitled to enforce all rights, preferences and
privileges afforded to such Holders hereunder.
(g) Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Facsimile counterpart signatures
to this Agreement shall be acceptable and binding.
(h) Waiver. Any term or condition of this Agreement may be waived at
------
any time by any party hereto that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument
duly executed by or on behalf of the party waiving such term or condition
(and no such waiver shall in any event be binding on any other party hereto
that is entitled to the benefits of such term or provision). No waiver by
any party hereto of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same
or any other term or condition of this Agreement on any future occasion.
All remedies, either under this Agreement or by law or otherwise afforded,
will be cumulative and not alternative.
(i) Third Party Beneficiaries. The terms and provisions of this
-------------------------
Agreement are intended solely for the benefit of each party hereto (and any
additional Holders who execute a Joinder Agreement) and their respective
successors and permitted transferees, and it is not the intention of the
parties to confer third-party beneficiary rights, and this Agreement does
not confer any such rights, upon any other Person other than any Person
entitled to indemnity under Section 7.
(j) Public Notices. All public notices to third parties and all other
--------------
publicity concerning the transactions contemplated by this Agreement shall
be jointly planned and coordinated by the parties hereto and no party shall
act unilaterally in this regard without the prior approval of the other
party, such approval not to be unreasonably withheld, except:
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(i) in the case of the Company for communications made in
confidence to the Company's employees affected by such transactions;
or
(ii) where required to do so by law or by the applicable
regulations or policies of any United States or other regulatory
agency of competent jurisdiction or any stock exchange in
circumstances where prior consultation with the other parties is not
practicable.
(k) Further Assurances. Each of the parties covenants and agrees to
------------------
take all such action and to execute all such documents as may be necessary
or advisable to implement the provisions of this Agreement fully and
effectively and to make them binding on the parties hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
COMPANY GOAMERICA COMMUNICATIONS CORP.
By: /s/ Xxxxx Xxxxxxxxx
_____________________________
Name: Xxxxx Xxxxxxxxx
Title: President
HOLDER
CIBC WMV INC.
By: /s/ Xxxx Xxxxxxxxxxx
_____________________________
Name: Xxxx Xxxxxxxxxxx
Title: Managing Director
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SCHEDULE I
Eligible Underwriters
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