Exhibit 10.5
EXCHANGE AGREEMENT
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This EXCHANGE AGREEMENT ("Agreement") is entered into as of August 29,
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2001, by and between VOXWARE, INC., a Delaware corporation (the "Company"),
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with principal executive office located at 000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 0,
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000, and Castle Creek Technology Partners, LLC, a
Delaware limited liability company (the "Purchaser") with principal offices
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located at 000 X. Xxxxxxx Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000.
RECITALS
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A. The Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 3(a)(9) of the Securities Act of 1933, as amended (the "Securities
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Act").
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B. The Purchaser and the Company desire that the Purchaser exchange all
outstanding shares of the Company's Series A Convertible Preferred Stock, par
value $0.001 per share (the "Series A Stock") held by the Purchaser as of the
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Effective Time (as defined below) for an equal number of shares of the
Company's Series B Convertible Preferred Stock, par value $0.001 per share (the
"Series B Stock"), the terms of which are set forth in a Certificate of
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Designations, Preferences and Rights (the "Series B Designation") filed with the
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Secretary of State of the State of Delaware in the form attached hereto as
Exhibit "A ".
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C. Contemporaneously with the effective time of the Exchange (the
"Effective Time"), certain terms of the Securities Purchase Agreement between
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the parties hereto dated as of April 19, 2001 (the "April 2001 Securities
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Purchase Agreement") as specified below shall be amended and, contemporaneously
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with the execution of this Agreement; (i) certain terms of the Registration
Rights Agreement between the parties hereto dated as of April 19, 2001 (the
"Registration Rights Agreement") as specified below shall be amended; (ii) an
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amended and restated warrant in the form attached hereto as Exhibit "B" (the
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"New Warrant") shall be issued to the Purchaser and the warrant to purchase
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2,142,000 shares of Common Stock (as defined below) issued pursuant to the
April 2001 Securities Purchase Agreement (the "April 2001 Warrant") shall be
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cancelled; and (iii) the warrant issued to the Purchaser on August 15, 2000 (the
"August 2000 Warrant") shall be amended as provided below.
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D. The Company is contemporaneously with the execution of this Agreement
issuing a warrant to purchase 708,656 shares of Common Stock (the "Remedy
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Warrant" and, collectively with the New Warrant, the "Warrants") pursuant to
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Section 2.3 of the Registration Rights Agreement in the form attached hereto as
Exhibit "C".
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NOW, THEREFORE, in consideration of their respective promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Purchaser hereby agree as
follows:
ARTICLE I
EXCHANGE AND ISSUANCE OF SECURITIES
1.1. Exchange. Effective at the Effective Time without the requirement of
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any further action by any party all shares of Series A Stock held by Purchaser
shall be deemed cancelled and an equal number of shares of Series B Stock shall
be deemed issued. The Purchaser shall promptly after the Effective Time
surrender all certificates for shares of Series A Stock to the Company and the
Company no later than two Business Days after receipt of such certificates shall
issue as of the date on which the Effective Time occurs certificates for an
equal number of shares of Series B Stock.
1.2. Effective Time. The Effective Time shall be the time at which the New
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Registration Statement (as defined in Section 4.2 below) is declared effective
by the United States Securities and Exchange Commission (the "SEC").
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1.3. Warrant Exchange. Contemporaneously with the execution of this
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Agreement, the New Warrant is being issued to the Purchaser and the Purchaser is
surrendering the April 2001 Warrant to the Company for cancellation.
1.4. Remedy Warrant. Contemporaneously with the execution of this
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Agreement, the Remedy Warrant is being issued to the Purchaser.
ARTICLE II
PURCHASERS' REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Company as follows:
2.1. Purchase for Own Account. The Purchaser is acquiring the shares of
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Series B Stock, the Warrants and the shares of the Company's common stock, par
value $0.001 per share (the "Common Stock") issued upon conversion of or as
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dividends upon the Series B Stock (the "Conversion Shares") and upon exercise of
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the Warrants (the "Exercise Shares" and collectively with the Series B Stock,
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the Warrants, and the Conversion Shares, the "Securities") for its own account
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and not with a view toward, or in connection with, the public distribution
thereof, and will not resell the Securities except pursuant to sales that are
exempt from the registration requirements of the Securities Act and/or sales
that are registered under the Securities Act. The Purchaser further represents
that it does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to any third party with
respect to any of the Securities. The Purchaser understands that it must bear
the economic risk of this investment indefinitely, unless any disposition of the
Securities is registered pursuant to the Securities Act and any applicable state
securities laws or an
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exemption from such registration is available, and that the Company has no
present intention of disposing of any such Securities other than as contemplated
by the Registration Rights Agreement. By making the representations in this
Section 2.1, the Purchaser does not agree to hold any Securities for any minimum
or other specific term and reserves the right to dispose of any or all of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from registration under the Securities Act and other
applicable state securities laws.
2.2. Transfer or Resale. The Purchaser understands that (i) except as
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provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless subsequently registered thereunder or an
exemption from such registration is available (which exemption the Company
expressly agrees may be established as contemplated in clauses (b) and (c) of
Section 5.1 hereof or as otherwise may be permissible under the Securities Act);
(ii) any sale of such Securities made in reliance on Rule 144 under the
Securities Act (or a successor rule) ("Rule 144") may be made only in accordance
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with the terms of said Rule and further, if said Rule is not applicable, any
resale of such Securities without registration under the Securities Act may
require compliance with some other exemption under the Securities Act or the
rules and regulations of the SEC thereunder; and (iii) neither the Company nor
any other person is under any obligation to register such Securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder (in each case, other than pursuant to
this Agreement or the Registration Rights Agreement).
2.3. Legends. The Purchaser understands that, subject to Article V hereof,
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the certificates for the Series B Stock and the Warrants and, until such time as
the Conversion Shares and Exercise Shares have been registered under the
Securities Act as contemplated by the Registration Rights Agreement or
otherwise, may be sold by the Purchaser pursuant to Rule 144 or otherwise
without registration, the certificates for the Conversion Shares and Exercise
Shares will bear a restrictive legend (the "Legend") in the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
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Except for the Legend in accordance with this Section 2.3 and Section 5.1
hereof, the Securities shall bear no other legend.
2.4. Authorization; Enforcement. This Agreement has been duly and validly
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authorized, executed and delivered on behalf of the Purchaser and to a valid and
binding agreement of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as enforcement thereof may be limited by (i)
laws of general application relating to bankruptcy, insolvency moratorium,
reorganization or other similar laws, both state and federal, affecting the
enforcement of creditors' rights in general, and (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that:
3.1. Organization and Qualification; Series B Designation. The Company
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and each of its subsidiaries is a corporation duly organized, validity existing
and in good standing under the laws of the jurisdiction in which it is
incorporated, and has the requisite corporate power and authority to own its
properties and to carry on its business as now being conducted. The Series B
Designation in the form of Exhibit A hereto has been duly filed with the
Secretary of State. The Company and each of its subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction where the failure to so qualify would have a Material Adverse
Effect.
For the purpose of this agreement "Material Adverse Effect" means any
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material adverse effect on (a) the business, operations, properties, financial
condition or operating results of the Company and its subsidiaries, taken as a
whole on a consolidated basis or (b) the ability of the Company to perform its
obligations under this Agreement, the New Warrant and the Registration Rights
Agreement (collectively, the "Investment Agreements").
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3.2. Authorization; Enforcement. (a) The Company has the requisite
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corporate power and authority to (i) enter into, and perform its obligations
under the Investment Agreements, (ii) issue and perform its obligations with
respect to the Series B Stock and Warrants in accordance with the terms hereof
and thereof, and (iii) issue the Conversion Shares and Exercise Shares, in
accordance with the terms and conditions of the Series B Stock and Warrants,
respectively; (b) the execution, delivery and performance of this Agreement and
the consummation by the Company of the transactions contemplated hereby
(including without limitation the issuance of the Series B Stock and Warrants,
the reservation for issuance and issuance of the number of the Conversion
Shares and Exercise Shares initially issuable pursuant to the conversion of the
Series B Stock and the exercise of the Warrants, respectively) have been duly
authorized by all necessary corporate action and no further consent or
authorization of the Company, its board of directors or stockholders or any
other person, body or agency is required with respect to any of the transactions
contemplated hereby or thereby (other than actions of the SEC and
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the Company's Board of Directors in connection with the registration of the
Conversion Shares and Exercise Shares in accordance with the Registration Rights
Agreement); (c) this Agreement has been duly executed and delivered by the
Company; and (d) this Agreement constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by (i) laws of general
application relating to bankruptcy, insolvency moratorium, reorganization or
other similar laws, both state and federal, affecting the enforcement of
creditors= rights in general, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
3.3. Issuance of Shares, etc. The Series B Stock, the Warrants, the
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Conversion Shares and Exercise Shares have been duly authorized and when issued
and delivered in accordance with the terms hereof (and, as to the Conversion
Shares and Exercise Shares, in accordance with the terms of the Series B Stock
and the Warrants, respectively) will be validly issued, fully paid and non-
assessable, free from all taxes, liens, claims and encumbrances and are not and
will not be subject to preemptive rights or other similar rights and will not
trigger any anti-dilution or similar provisions in any securities of the Company
or any other agreements to which the Company is party which rights or provisions
have not been waived. No events have occurred prior to the date hereof which
trigger anti-dilution adjustments with respect to the Series A Stock, except as
reflected in the April 2001 Securities Purchase Agreement.
3.4. No Conflicts. The execution, delivery and performance of each of this
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Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby (including the issuance of the Series B Stock and the
Warrants and the reservation for issuance of the Conversion Shares and the
Exercise Shares) do not and will not (a) result in a violation of the
Certificate of Incorporation or By-laws of the Company or any of its
subsidiaries, (b) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party (except for such conflicts, defaults, terminations,
amendments, accelerations, and cancellations as would not, individually or in
the aggregate, have a Material Adverse Effect), or (c) assuming the accuracy of
the Purchaser's representations and warranties set forth in Article II hereof,
result in a violation of any law, rule, regulation, order, judgment or decree
(including, without limitation, U.S. federal and state securities laws and
regulations) applicable to the Company or any of its subsidiaries, or by which
any property or asset of the Company or any of its subsidiaries, is bound or
affected. The Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self-regulatory agency or entity or authority in
order for it to execute, deliver or perform any of its obligations under this
Agreement or to perform its obligations in accordance with the terms hereof.
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3.5. Acknowledgment Regarding Purchaser=s Acquisition of the Securities.
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The Company acknowledges and agrees that the Purchaser is acting independently
and is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement or the transactions
contemplated hereby, that this Agreement and the transactions contemplated
hereby, and the relationship between the Purchaser and the Company is "arms-
length", and that any statement made by the Purchaser, or any of its
representatives or agents, in connection with this Agreement or the transactions
contemplated hereby, other than the representations and warranties of the
Purchaser contained herein, is not advice or a recommendation, is merely
incidental to the Purchaser's acquisition of the Securities and has not been
relied upon in any way by the Company, its officers, directors or other
representatives. The Company further represents to the Purchaser that the
Company's decision to enter into this Agreement and the transactions
contemplated hereby has been based solely on an independent evaluation by the
Company and its representatives.
3.6. No Brokers. The Company has taken no action which would give rise to
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any claim by any person for brokerage commissions, finder's fees or similar
payments by the Purchaser relating to this Agreement or the transactions
contemplated hereby.
3.7. Acknowledgment of Dilution. The potential number of Conversion Shares
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and Exercise Shares issuable to the Purchaser may increase substantially in
certain circumstances, including the circumstance wherein the trading price of
the Common Stock declines. The Company's executive officers and directors have
studied and fully understand the terms of this Agreement and the transactions
contemplated hereby and the nature of the securities being sold hereunder and
recognize that they have a potential dilative effect. The board of directors of
the Company has concluded in its good faith business judgment that the issuance
of the Securities as contemplated hereby is in the best interests of the
Company. The Company acknowledges that its obligation to issue the Conversion
Shares and Exercise Shares in accordance with the terms of the Series B
Designation and the Warrants, respectively, is binding upon it and enforceable
regardless of the dilution that such issuance may have on the ownership
interests of other stockholders.
ARTICLE IV
AMENDMENTS TO SECURITIES PURCHASE
AGREEMENT AND REGISTRATION RIGHTS AGREEMENT, ETC
4.1. Amendment to April 2001 Securities Purchase Agreement. The April 2001
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Securities Purchase Agreement shall be amended effective as of the Effective
Time without the requirement of any further action by any party to delete
subsections (c) and (d) of Section 4.15 thereof and to change the references to
Series A Preferred Stock in Sections 4.7(d) and 4.15 thereof to Series B Stock.
4.2. Amendment to Registration Rights Agreement. The Registration Rights
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Agreement is hereby amended effective as of the date of this Agreement to
require that: (a) the Company shall file as soon as practicable but in any event
on or prior to
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August 30, 2001 (which date shall be a "Filing Deadline" as that term is used in
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the Registration Rights Agreement) a Registration Statement on Form S-2 (the
"New Registration Statement") covering the resale of 6,807,653 shares of Common
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Stock (subject to reduction on a one-for-one basis for any shares of Common
Stock issuable pursuant to conversions of Series A Stock after the date hereof
and prior to the Effective Time) and (b) the Company shall file as soon as
practical after each issuance of an Additional Share Warrant pursuant to
subsection (a) or (b) of Section 4.15 of the April 2001 Securities Purchase
Agreement, but in any event by 20 days after such issuance (which date shall
be a Filing Deadline) a Registration Statement on Form S-3 (if that Form is
then available; if not, on Form S-2) covering the resale of the number of
shares initially issuable upon exercise of the applicable Additional Share
Warrant (an "Additional Registration Statement"). The New Registration
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Statement and each Additional Registration Statement shall be declared
effective by the ninetieth (90th) day following filing (which date shall be a
"Registration Deadline"). The Company shall be obligated to comply with its
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obligations under the Registration Rights Agreement, as amended hereby, with
respect to the New Registration Statement and each Additional Registration
Statement, including without limitation its obligation to make payments in the
event of a Registration Failure or a Registration Suspension and to file an
amendment or new Registration Statement in accordance with the provisions of
Section 3.2 of the Registration Rights Agreement if the number of shares
registered is insufficient as a result of subsequent anti-dilution adjustments.
4.3 Amendment to August 2000 Warrant. The August 2000 Warrant is hereby
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amended effective as of this date of this Agreement to delete Section 4(d)
thereof in its entirety.
4.4. Report on Form 8-K. The Company agrees to file a Current Report on
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Form 8-K disclosing this Agreement and the transactions contemplated hereby with
the SEC within two (2) business days following the date hereof. Such Form 8-K
shall contain as exhibits this Agreement and the Series B Designation.
4.5. Restriction on Other Registrations. During the period beginning on the
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date hereof and ending at the Effective Time, the Company shall not permit any
registration statement filed by it or entities that it controls to be declared
effective by the SEC.
4.6 Inclusion for Quotation. The Conversion Shares and Exercise Shares
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shall be included for quotation or listed on each principal market on which the
Common Stock is now traded or is traded in the future.
4.7 Limitation on Conversions. Purchaser agrees to limit conversions of
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Series B Stock so that the aggregate number of shares of Common Stock issued
upon such conversions does not exceed 3,456,997 (subject to reduction on a
one-for-one basis for any shares of Common Stock issuable pursuant to
conversions of Series A Stock after the date hereof and prior to the Effective
Time).
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ARTICLE I
LEGEND REMOVAL, TRANSFER, AND CERTAIN SALES
5.1. Removal of Legend. The Legend shall be removed and the Company shall
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issue a certificate without any legend to the holder of any Security upon which
such Legend is stamped, and a certificate for a Security shall be originally
issued without the Legend if (a) the sale of such Security is registered under
the Securities Act, (b) such holder provides the Company with an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions to the effect that a public sale or transfer of such
Security may be made without registration under the Securities Act or (c) such
Security can be sold pursuant to Rule 144. The Purchaser agrees to sell all
Securities, including those represented by a certificate(s) from which the
Legend has been removed, or which were originally issued without the Legend,
pursuant to an effective registration statement and to deliver a prospectus in
connection with such sale or in compliance with an exemption from the
registration requirements of the Securities Act. In the event the Legend is
removed from any Security or any Security is issued without the Legend and
thereafter the effectiveness of a registration statement covering the resale of
such Security is suspended or a supplement or amendment thereto is required by
applicable securities laws, then upon reasonable advance notice to each
Purchaser holding such Security, the Company may require that the Legend be
placed on any such Security that cannot then be sold pursuant to an effective
registration statement or Rule 144 or with respect to which the opinion referred
to in clause (b) next above has not been rendered, which Legend shall be removed
when such Security may be sold pursuant to an effective registration statement
or Rule 144 or such holder provides the opinion with respect thereto described
in clause (b) next above.
5.2. Transfer Agent Instructions. The Company shall instruct its transfer
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agent to issue certificates, registered in the name of the Purchaser or its
nominee, for the Conversion Shares and Exercise Shares in accordance with the
terms of the Series B Stock and New Warrant, as applicable. Such certificates
shall bear a legend only in the form of the Legend and only to the extent
permitted by Section 5.1 above. The Company warrants that no instruction other
than such instructions referred to in this Article V, and no stop transfer
instructions other than stop transfer instructions to give effect to Section 2.2
hereof in the case of the Conversion Shares prior to registration under the
Securities Act, will be given by the Company to its transfer agent and, subject
to applicable law, the Securities shall otherwise be freely transferable on the
books and records of the Company. Nothing in this Section shall affect in any
way the Purchaser=s obligations and agreement set forth in Section 5.1 hereof to
resell the Securities pursuant to an effective registration statement and to
deliver a prospectus in connection with such sale or in compliance with an
exemption from the registration requirements of applicable securities laws.
Without limiting any other rights of the Purchaser or obligations of the
Company, if (i) the Purchaser provides the Company with an opinion of counsel,
to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from registration or (ii) the Purchaser
transfers Securities pursuant to Rule 144, the Company shall permit the
transfer, and, in the case of Conversion Shares
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promptly instruct its transfer agent to issue one or more certificates in such
name and in such denomination as specified by the Purchaser in order to effect
such a transfer or sale.
(b) Purchaser shall exercise its right to convert the Series B Stock
by faxing an executed and completed Form of Notice of Conversion to the Company,
and delivering within two (2) business days thereafter, the original Notice of
Conversion (and the related share certificate) to the Company by hand delivery
or by express courier, duly endorsed. Each date on which a completed Notice of
Conversion to Purchase is faxed in accordance with the provisions of the Series
B Stock shall be deemed an "Conversion Date." The Company will transmit the
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certificates representing the Common Stock issuable upon conversion of any
Series B Stock (together with a certificate evidencing shares not converted) to
the Purchaser via express courier as soon as practicable, but no later than
three (3) business days after the Conversion Date (each such delivery date, is
referred to herein as a "Delivery Date"). For purposes of this Agreement,
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conversion of Series B Stock shall be deemed to have been made immediately prior
to the close of business on the Conversion Date. The Purchaser shall exercise
the New Warrant in accordance with the terms of the New Warrant.
(c) In lieu of delivering physical certificates representing the
Common Stock issuable upon the conversion of Series B Stock or exercise of the
New Warrant, provided the Company's transfer agent is participating in the
Depositary Trust Company ("DTC") Fast Automated Securities Transfer program, on
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the written request of the Purchaser, who shall have previously instructed the
Purchaser's prime broker to confirm such request to the Company's transfer
agent, the Company shall cause its transfer agent to electronically transmit
such Common Stock to the Purchaser by crediting the account of the Purchaser's
prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC")
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system no later than the applicable Delivery Date.
ARTICLE VI
GOVERNING LAW; MISCELLANEOUS
6.1. Governing Law; Jurisdiction. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware without regard to
choice of laws or conflict of laws principles thereof. The parties hereto
irrevocably consent to the jurisdiction of the United States federal courts
located in the State of Delaware and the state courts in the State of Delaware
in any suit or proceeding based on or arising under this Agreement or the
transactions contemplated hereby and irrevocably agree that all claims in
respect of such suit or proceeding may be determined in such courts. The Company
irrevocably waives the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The Company further agrees that service of process upon
the Company mailed by the first class mail shall be deemed in every respect
effective service of process upon the Company in any suit or proceeding arising
hereunder. Nothing herein shall affect the Purchaser=s right to serve process in
any other manner permitted by law. The parties hereto agree that a final non-
appealable judgment in any such suit or
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proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
6.2. Counterparts. This Agreement may be executed in two or more
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counterparts, including, without limitation, by facsimile transmission, all of
which counterparts shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause additional
original executed signature pages to be promptly delivered to the other parties.
6.3. Headings. The headings of this Agreement are for convenience of
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reference and shall not form part of, or affect the interpretation of, this
Agreement.
6.4. Severability. If any provision of this Agreement shall be invalid or
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unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
6.5. Scope of Agreement; Amendments. This Agreement and the documents and
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instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein. No provision of this
Agreement may be waived other than by an instrument in writing signed by the
party to be charged with enforcement and no provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
Purchaser.
6.6. Notice. Any notice herein required or permitted to be given under the
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terms of this Agreement shall be in writing and may be personally served or
delivered by courier or by facsimile-machine confirmed telecopy, and shall be
deemed delivered at the time and date of receipt (which shall include telephone
line facsimile transmission). The addresses for such communications shall be:
If to the Company:
VOXWARE, INC.
Xxxxxxxxxxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
or
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 0
Xxxxxxxxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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with copies to:
Xxxx and Xxxx LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Purchaser:
CASTLE CREEK TECHNOLOGY PARTNERS LLC
c/o Castle Creek Partners, LLC, Investment Manager
000 X. Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Managing Director
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
with copies to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
0000 Xxxx Xxxxxx - 00/xx/ Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Each party shall provide notice to the other party of any change in
address.
6.7. Successors and Assigns. This Agreement shall be binding upon and inure
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to the benefit of the parties and their successors and assigns. The Company
shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Purchaser.
6.8. Third Party Beneficiaries. This Agreement is intended for the benefit
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of the parties hereto and their respective permitted successors and assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.
6.9. Survival. The representations and warranties, covenants and agreements
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in this Agreement shall survive the execution and delivery of this Agreement and
the Securities, notwithstanding any due diligence investigation conducted by or
on behalf of the Purchaser.
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6.10. Public Filings; Publicity. On the same day as the Company files the
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Form 8-K required pursuant to Section 4.3, the Company shall issue a press
release with respect to the transactions contemplated hereby. The Company and
the Purchaser shall have the right to review reasonably in advance of the
issuance any press releases (including the foregoing press release), SEC or
other filings, or any other public statements, with respect to the transactions
contemplated hereby and all reasonable comments by the Purchaser with respect
thereto shall be implemented; provided, however, that the Company shall be
entitled, without the prior approval of the Purchaser, to make any press release
or SEC, Nasdaq, NASD or exchange filings with respect to such transactions as is
required by applicable law and regulations (although the Purchaser shall (to the
extent time permits) be consulted by the Company in connection with any such
press release prior to its release and shall be provided with a copy thereof).
6.11. Further Assurances. Each party shall do and perform, or cause to be
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done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
6.12. Remedies, Characterizations, Other Obligations, Breaches and
------------------------------------------------------------
Injunctive Relief. The remedies provided in this Agreement shall be cumulative
-----------------
and in addition to all other remedies available under this Agreement, at law or
in equity (including a decree of specific performance and/or other injunctive
relief), no remedy contained herein shall be deemed a waiver of compliance with
the provisions giving rise to such remedy and nothing herein shall limit a
Purchaser's right to actual damages for any failure by the Company to comply
with the terms of this Agreement. Amounts set forth or provided for herein with
respect to payments and the like (and the computation thereof) shall be the
amounts to be received by the Purchaser and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof).
6.13. Failure or Indulgence Not Waiver. No failure or delay on the part of
--------------------------------
a Purchaser in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.
6.14. Termination. In the event that the Effective Time shall not have
-----------
occurred on or before December 31, 2001, time being of the essence, unless the
parties agree otherwise, this Agreement shall terminate at the close of business
on such date. Notwithstanding any termination of this Agreement, any party not
in breach of this Agreement shall preserve all rights and remedies it may have
against the other party hereto for a breach of this Agreement prior to or
relating to the termination.
6.15. Joint Participation in Drafting. Each party to this Agreement has
-------------------------------
participated in the drafting of this Agreement. As such, the language used
herein and therein shall be deemed to be the language chosen by the parties
hereto to express their
12
mutual intent and no rule of strict construction shall be applied against any
party to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]]
13
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
COMPANY:
VOXWARE, INC.
By: /s/ Xxxxxxxx Xxxxxx
----------------------------
Xxxxxxxx Xxxxxx
Senior Vice President and CFO
PURCHASER:
CASTLE CREEK TECHNOLOGY PARTNERS LLC
By: Castle Creek Partners, L.L.C.
Its: Investment Manager
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
Address: 000 X. Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Copy to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
0000 Xxxx Xxxxxx - 00/xx/ Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn.: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON APRIL 19, 2002
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.
Right to Purchase 2,142,000 Shares of
Common Stock
Date: August 29, 2001
VOXWARE, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, CASTLE CREEK TECHNOLOGY PARTNERS
LLC or its registered assigns (the "Holder"), is entitled to purchase from
VOXWARE, INC., a corporation organized under the laws of the State of Delaware
(the "Company"), at any time or from time to time during the period specified in
Section 2 hereof, Two Million One Hundred Forty-Two Thousand (2,142,000) fully
paid and nonassessable shares of the Company's common stock, par value $.001 per
share (the "Common Stock") for an exercise price (the "Exercise Price") per
share of Common Stock equal to One Dollar and Twenty-Five Cents ($1.25), subject
to appropriate adjustment in the event of a stock split, stock dividend, merger,
reclassification or similar event and subject to adjustment as provided in
Section 3(d) below. The term "Warrant" means this warrant. The term "Warrants"
means this Warrant and any warrants issued upon full or partial transfer of this
Warrant in accordance with its terms. The shares of Common Stock issuable upon
the exercise of this Warrant are referred to as the "Exercise Shares." This
Warrant is subject to the following terms, provisions and conditions:
1
1. Manner of Exercise; Issuance of Exercise Shares. Subject to the
-----------------------------------------------
provisions hereof, including, without limitation, the limitations contained in
Sections 2 and 8 hereof, this Warrant may be exercised by the Holder hereof, in
whole or in part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the "Exercise Agreement"), to
the Company during normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder hereof), and upon payment of the Exercise
Price to the Company in cash, by certified or official bank check or by wire
transfer to the account of the Company. The Exercise Shares so purchased shall
be deemed to be issued to the Holder hereof or such Holder's designee, as the
record owner of such shares, as of the close of business on the date on which
this Warrant shall have been surrendered, the completed Exercise Agreement shall
have been delivered, and payment shall have been made for such Exercise Shares
as set forth above or, if such date is not a business date, on the next
succeeding business day. The Exercise Shares so purchased shall be delivered to
the Holder hereof within a reasonable time, not exceeding two (2) Trading Days,
after this Warrant shall have been so exercised (the "Delivery Period").
2. Period of Exercise. This Warrant shall be exercisable at any time and
------------------
from time to time during the period from the date of initial issuance of this
Warrant (the "Issue Date") until 5:00 p.m. New York City time April 19, 2002
(the "Expiration Date"). The period beginning on the Issue Date and ending on
the Expiration Date is referred to herein as the "Exercise Period."
3. Mandatory Exercise.
-------------------
(a) On no more than three (3) occasions during the Exercise Period
(each a "Mandatory Exercise Date"), the Company may, at its sole discretion, but
subject to satisfaction (or waiver) of all of the conditions set forth in
Section 3(c) hereof, require the Holder to exercise this Warrant in accordance
with the terms set forth below (a "Mandatory Exercise"). No Mandatory Exercise
may occur prior to the date (the "Effective Date") on which the registration
statement (the Registration Statement") that is required to be filed pursuant to
Section 2.1 of the Registration Rights Agreement dated as of April 19, 2001
between the Company and the Holder (the "Registration Rights Agreement") is
declared effective by the Securities Exchange Commission ("SEC"). The initial
Mandatory Exercise may not occur until the Holder has sold at least ninety-five
percent (95%) of the shares of Common Stock acquired by it pursuant to the
Securities Purchase Agreement dated as of April 19, 2001 between the Company and
the Holder (the "Securities Purchase Agreement"). The second and third Mandatory
Exercises may not occur until the Holder has sold at least ninety-five percent
(95%) of the shares of Common Stock acquired by it pursuant to the preceding
Mandatory Exercise. The Holder shall give written notice (a "Sale Notice") to
the Company within three (3) Trading Days after it has sold at least ninety-five
percent (95%) of the Common Stock acquired by it pursuant to the Securities
Purchase Agreement or the first two Mandatory Exercises, as applicable. No
Mandatory Exercise shall occur earlier than the first Trading Day of the
calendar month immediately following the calendar month in which the applicable
Sale Notice was given.
2
(b) In order to cause a Mandatory Exercise, the Company must first
deliver to the Holder, on the date that is five (5) Trading Days prior to the
applicable Mandatory Exercise Date, a written notice (the "Mandatory Exercise
Notice"). The Mandatory Exercise Notice shall set forth the Mandatory Exercise
Date to which it relates and the number of shares of Common Stock to be subject
to the Mandatory Exercise (subject to the limitations set forth in Section 3(e)
below) and shall state that, as of the date of such Mandatory Exercise Notice
(the "Mandatory Exercise Notice Date"), all conditions to such Mandatory
Exercise have been met. On each Mandatory Exercise Date, the Company shall issue
to the Holder the number of Exercise Shares specified in the applicable
Mandatory Exercise Notice (subject to the limitations set forth in Section 3(e)
below) and the Holder shall pay the Exercise Price (determined in accordance
with Section 3(d) below) in cash, by certified check or official bank check or
by wire transfer to the account of the Company.
(c) The Holder's obligation to purchase the Exercise Shares pursuant
to a Mandatory Exercise is conditioned upon the satisfaction by the Company (or
waiver by the Holder) of each of the following events:
(i) the Company shall have purchased contemporaneously with the
Mandatory Exercise (which purchase is in compliance with applicable Delaware
corporate law) for cash from the Holder (unless the Holder declines such
purchase in writing) at the Per Share Price a number of shares of the Company's
Series B Convertible Preferred Stock (the "Series B Shares") equal to: (A)
twenty percent (20%) of the aggregate Exercise Price to be paid upon the
applicable Mandatory Exercise Date, divided by (B) the Per Share Price. The "Per
Share Price" shall be equal to One Thousand Dollars ($1,000) plus accrued and
unpaid dividends through the date of payment on such Series B Share.
(ii) the Registration Statement shall have been available to the
Holder at all times from the Effective Date up to and including the Mandatory
Exercise Date for the resale of all Registrable Securities, as defined in the
Registration Rights Agreement;
(iii) the representations and warranties of the Company set forth
in the Securities Purchase Agreement shall be true and correct in all material
respects as of the Mandatory Exercise Notice Date and the Mandatory Exercise
Date as if made on such dates;
(iv) the Company shall have complied with or performed in all
material respects all of the agreements, obligations and conditions set forth in
the Securities Purchase Agreement, the Registration Rights Agreement, the
Warrants, the Certificate of Designations (as defined in the Securities Purchase
Agreement) and all other agreements to which both the Company and the Holder are
parties that are required to be complied with or performed by the Company on or
before the Mandatory Exercise Date;
(v) the Company shall have delivered to the Holder on the
Mandatory Exercise Date a certificate, signed by an officer of the Company,
certifying that the conditions set forth in this Section 3(c) have been
fulfilled as of the Mandatory Exercise Notice Date and/or the Mandatory Exercise
Date, as applicable, it being understood that the Holder may rely on such
certificate as though it were a representation and warranty of the Company made
in the Securities Purchase Agreement and, in the event of any breach thereof,
shall be entitled to the
3
same remedies as may be available to the Holder in the event of a breach of any
such representation or warranty;
(vi) the Company shall have delivered to the Holder an opinion
of Counsel for the Company dated as of the Mandatory Exercise Date, in
substantially the form set forth on Exhibit A;
(vii) the Company shall have delivered to the Holder on the
Mandatory Exercise Date a duly executed certificate representing the number of
Exercise Shares determined in accordance with Sections 3(b) and 3(e);
(viii) the Exercise Shares shall be included for quotation on the
OTC Bulletin Board or on a national securities exchange or on the Nasdaq Stock
Market and no suspension of trading in the Common Stock on such market shall
have occurred during the thirty (30) Trading Day period preceding the applicable
Mandatory Exercise Date;
(ix) the Company's revenues shall equal at least Five Hundred
Thousand Dollars ($500,000) ($375,000 for the quarter ended March 31, 2001) for
the last completed fiscal quarter for which such revenues have been publicly
announced by a press release or a filing with the SEC as of the applicable
Mandatory Exercise Notice Date.
(x) [Intentionally omitted]
(xi) there shall have been no Change in Control Transaction (as
defined in Section 4(d)(i) below).
(d) The Exercise Price for a Mandatory Exercise shall equal Eighty
Percent (80%) of the Market Price (as defined in Section 4(d)(ii) below) on the
applicable Mandatory Exercise Date.
(e) The number of shares of Common Stock subject to a Mandatory
Exercise shall not exceed the least of:
(i) a number of shares of Common Stock that would result in an
aggregate Exercise Price for any Mandatory Exercise equal to Five Hundred
Thousand Dollars ($500,000);
(ii) the number of unexercised Exercise Shares; and
(iii) the number of shares of Common Stock permitted to be
issued on the applicable Mandatory Exercise Date pursuant to Section 8 below.
4. Certain Agreements of the Company. The Company hereby covenants and
---------------------------------
agrees as follows:
(a) Certain Actions Prohibited. The Company will not, by amendment of
--------------------------
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue
4
or sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it
hereunder, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the Holder of this Warrant in order to protect the
economic benefit inuring to the Holder hereof and the exercise privilege of the
Holder of this Warrant against dilution or other impairment, consistent with the
tenor and purpose of this Warrant.
(b) Consolidation; Merger. In case of any consolidation of the
---------------------
Company with, or merger of the Company into, any other corporation, or in case
of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the Holder hereof will have the right to acquire and receive upon
exercise of this Warrant in lieu of the Exercise Shares immediately theretofore
acquirable upon the exercise of this Warrant, such securities, cash or assets as
may be issued or payable with respect to or in exchange for the Exercise Shares
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Section 4 will thereafter be applicable as nearly as may be
in relation to any instrument or securities thereafter deliverable upon the
exercise of this Warrant.
(c) Notices. In case at any time:
-------
(i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(other than dividends or distributions payable in cash out of retained earnings
consistent with the Company's past practices with respect to declaring dividends
and making distributions) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the Company,
or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or
(iv) there shall be a voluntary dissolution, liquidation or
winding-up of the Company;
then, in each such case, the Company shall give to the Holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company shall
close or a record shall be taken for determining the holders of Common Stock
entitled to receive any such dividend, distribution, or subscription rights or
for determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation,
5
merger, sale, dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription rights or to
exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least thirty (30) days prior to the record date or the date on
which the Company's books are closed in respect thereto. Failure to give any
such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
Notwithstanding the foregoing, the Company shall publicly disclose the substance
of any notice delivered hereunder prior to delivery of such notice to the Holder
hereof.
(d) Certain Definitions.
-------------------
(i) A "Change in Control Transaction" will be deemed to have
occurred if (A) there occurs any consolidation, merger or other business
combination of the Company with or into any other corporation or other entity or
person (whether or not the Company is the surviving corporation), or any other
corporate reorganization or transaction or series of related transactions in
which in any of such events the voting stockholders of the Company prior to such
event cease to own 50% or more of the voting stock, or corresponding voting
equity interests, of the surviving corporation after such event (including
without limitation any "going private" transaction under Rule 13e-3 promulgated
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or tender offer by the Company under Rule 13e-4 promulgated pursuant to
the Exchange Act for twenty percent (20%) or more of the Company's Common
Stock), (B) any person (as defined in Section 13(d) of the Exchange Act),
together with its affiliates and associates (as such terms are defined in Rule
405 under the Securities Act), beneficially owns or is deemed to beneficially
own (as described in Rule 13d-3 under the Exchange Act without regard to the 60-
day exercise period) in excess of 50% of the Company's voting power, (C) there
is a replacement of more than one-half of the members of the Company's Board of
Directors which is not approved by those individuals who are members of the
Company's Board of Directors on the date thereof, or (D) in one or a series of
related transactions, there is a sale or transfer of all or substantially all of
the assets of the Company, determined on a consolidated basis, (E) the execution
by the Company of an agreement to which the Company is a party or by which it is
bound providing for an event set forth in (A), (B), (C) or (D) above, or
pursuant to which the Common Stock is to be converted or reclassified into other
securities, cash or property, or (F) the public announcement of a pending
transaction of the type set forth in (A), (B), (C) (D) or (E) above which has
not been abandoned or terminated.
(ii) "Market Price," as of any date, means the average of three
lowest intra-day sale prices for the shares of Common Stock on the then
principal market for the Common Stock as reported by Bloomberg Financial Markets
("Bloomberg") during the period of ten consecutive Trading Days ending on the
Trading Day immediately preceding such date. Notwithstanding anything contained
in the foregoing, in no event shall the Market Price as of any date be greater
than the lowest intra-day bid price on the Trading Day immediately prior to such
date.
6
(iii) "Trading Day" means a day on which the principal United
States securities exchange or trading market where the Common Stock is then
listed or traded as reported by Bloomberg is open for trading.
5. Transfer, Exchange, Redemption and Replacement of Warrant.
---------------------------------------------------------
(a) Restriction on Transfer. This Warrant and the rights granted to
-----------------------
the Holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Section 5(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Section 5(f) hereof and to the provisions of Section
2.6 of the Securities Purchase Agreement. Until due presentment for registration
of transfer on the books of the Company, the Company may treat the registered
Holder hereof as the owner and Holder hereof for all purposes, and the Company
shall not be affected by any notice to the contrary. Notwithstanding anything to
the contrary contained herein, the registration rights described in Section 6
hereof are assignable only in accordance with the provisions of the Registration
Rights Agreement.
(b) Warrant Exchangeable for Different Denominations. This Warrant is
------------------------------------------------
exchangeable, upon the surrender hereof by the Holder hereof at the office or
agency of the Company referred to in Section 5(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right to
purchase Exercise Shares, which may be purchased hereunder, each of such new
Warrants to represent the right to purchase Exercise Shares at the Exercise
Price therefor as shall be designated by the Holder hereof at the time of such
surrender.
(c) Replacement of Warrant. Upon receipt of evidence reasonably
----------------------
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the surrender of this
---------------------------------
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 5, this Warrant shall be promptly canceled by the Company. The
Company shall pay all issuance taxes (other than securities transfer taxes) and
charges payable in connection with the preparation, execution, and delivery of
Warrants pursuant to this Section 5. The Company shall indemnify and reimburse
the Holder of this Warrant for all losses and damages arising as a result of or
related to any breach of the terms of this Warrant, including costs and expenses
(including legal fees) incurred by such Holder in connection with the
enforcement of its rights hereunder.
(e) Warrant Register. The Company shall maintain, at its principal
----------------
executive offices (or such other office or agency of the Company as it may
designate by notice to the Holder hereof), a register for this Warrant, in which
the Company shall record the name and
7
address of the person in whose name this Warrant has been issued, as well as the
name and address of each transferee and each prior owner of this Warrant.
(f) Transfer or Exchange Without Registration. If, at the time of the
-----------------------------------------
surrender of this Warrant in connection with any transfer, or exchange of this
Warrant, this Warrant (or, in the case of any exercise, the Exercise Shares
issuable hereunder), shall not be registered under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer or exchange, (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions and reasonably
acceptable to the Company) to the effect that such transfer or exchange may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws (the cost of which shall be borne by the Company if
the Company's counsel renders such an opinion), (ii) that the Holder or
transferee execute and deliver to the Company an investment letter in form and
substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter, or status as an "accredited
investor" shall be required in connection with a transfer pursuant to Rule 144
under the Securities Act.
6. Registration Rights. The initial Holder of this Warrant (and certain
-------------------
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Exercise Shares as are set forth in the Registration Rights
Agreement, including the right to assign such rights to certain assignees, as
set forth therein.
7. Notices. Any notices required or permitted to be given under the terms
-------
of this Warrant shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier, or by
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
Voxware Inc.
Xxxxxxxxxxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000 0000
Attn: Xxxxxxxx Xxxxxx
8
with a copy simultaneously transmitted by like means to:
Xxxx and Xxxx LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
If to the Holder, at such address as such Holder shall have provided in writing
to the Company, or at such other address as such Holder furnishes by notice
given in accordance with this Section 7.
8. Additional Restriction on Exercise. Notwithstanding anything to the
----------------------------------
contrary contained herein, this Warrant shall not be exercisable by the Holder
or subject to a Mandatory Exercise by the Company to the extent (but only to the
extent) that such exercise by the Holder or Mandatory Exercise would result in
the Holder being the beneficial owner of more than 4.99% of the shares of Common
Stock. For the purposes of this paragraph, beneficial ownership and all
determinations and calculations, shall be determined in accordance with Section
13(d) of the Exchange Act and all applicable rules and regulations thereunder.
For clarification, it is expressly a term of this security that the limitations
contained in this Section 8 shall apply to each successive Holder.
9. Miscellaneous.
-------------
(a) Amendments. This Warrant and any provision hereof may only be
----------
amended by an instrument in writing signed by the Company and the Holders of a
majority in interest of the Warrants.
(b) Descriptive Headings. The descriptive headings of the several
--------------------
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.
10. Governing Law; Jurisdiction. This Warrant shall be governed by and
---------------------------
construed in accordance with the laws of the State of Delaware. The Company
irrevocably consents to the jurisdiction of the United States federal courts and
state courts located in the State of Delaware in any suit or proceeding based on
or arising under this Warrant and irrevocably agrees that all claims in respect
of such suit or proceeding may be determined in such courts. The Company
irrevocably waives any objection to the laying of venue and the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The Company
further agrees that service of process upon the Company mailed by certified or
registered mail shall be deemed in every respect effective service of process
upon the Company in any such suit or proceeding. Nothing herein shall affect the
Holder's right to serve process in any other manner permitted by law. The
Company agrees that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
9
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.
VOXWARE, INC.
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------
Xxxxxxxx Xxxxxx
Senior Vice President and CFO
10
FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
To: Voxware, Inc.
Xxxxxxxxxxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000 0000
Attn: Xxxxxxxx Xxxxxx
The undersigned hereby irrevocably exercises the right to purchase _______
shares of Common Stock of Voxware, Inc., a corporation organized under the laws
of the State of Delaware, evidenced by the attached Warrant, and herewith makes
payment of the Exercise Price with respect to such shares, all in accordance
with the conditions and provisions of said Warrant.
The undersigned agrees not to offer, sell, transfer or otherwise dispose of
the shares obtained on exercise of the Warrant, except under circumstances that
will not result in a violation of the Securities Act of 1933, as amended, or any
state securities laws.
The undersigned requests the delivery of the shares to the undersigned at
its listed below:
Dated:_________________ _____________________________________
Signature of Holder
_____________________________________
Name of Holder (Print)
Address:
_____________________________________
_____________________________________
_____________________________________
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock set forth hereinbelow, to:
Name of Assignee Address Number of Shares
---------------- ------- ----------------
, and hereby irrevocably constitutes and appoints _____________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Dated: _____________________, 2001
In the presence of
_____________________
Name: ____________________________
Signature: ________________________________
Title of Signing Officer or Agent (if any):
_________________________________
Address: _________________________________
_________________________________
Note: The above signature should correspond
exactly with the name on the face of
the within Warrant.
EXHIBIT A TO WARRANT
[Date]
Castle Creek Technology Partners LLC
c/o Castle Creek Partners, L.L.C.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: Voxware, Inc.
Ladies and Gentlemen:
This opinion is being furnished pursuant to Section 3(c)(vi) of the Common
Stock Purchase Warrant dated as of August 29, 2001 (the "Warrant"), issued by
Voxware, Inc., a Delaware corporation (the "Company"), to Castle Creek
Technology Partners LLC, a Delaware limited liability company (the "Purchaser").
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Warrant.
We have acted as counsel to the Company in connection with the preparation,
execution and delivery of the Warrant. As such counsel, we have examined and are
familiar with and have relied upon the following documents:
(a) the Certificate of Incorporation and By-laws, each as amended to date,
of the Company;
(b) a Certificate of the Secretary of State of the State of Delaware,
dated [Date], attesting to the continued legal existence and corporate
good standing of the Company in Delaware (the "Domestic Certificate");
(c) a Certificate of the Secretary of State of the State of New Jersey,
dated [Date], attesting to the good standing and due qualification of
the Company to transact business in New Jersey (the "Foreign
Qualification Certificate");
(d) the Warrant;
(e) an Officer's Certificate from the Company, dated as of the date hereof
(the "Officer's Certificate"), attesting to the Company's Certificate
of Incorporation and By-laws, certain resolutions adopted by the Board
of Directors of the Company, the incumbency of certain officers of the
Company, and to certain other matters; and
Castle Creek Technology Partners LLC
[Date]
Page 2
(f) such other records of meetings, documents, instruments and
certificates (including but not limited to certificates of public
officials and officers of the Company) as we have considered necessary
for purposes of this opinion.
In our examination of the documents described above, we have assumed the
genuineness of all signatures, the legal capacity of all individual signatories,
the completeness of all corporate and stock records provided to us, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies, and the
authenticity of the originals of such latter documents.
In rendering this opinion, we have relied, as to all questions of fact
material to this opinion, upon certificates of public officials and officers of
the Company and upon the representations and warranties made by the Company in
the Warrant. We have not attempted to verify independently such facts, although
nothing has come to our attention which has caused us to question the accuracy
of such certificates or representations and warranties.
Any reference herein to "our knowledge," or to any matter "known to us",
"coming to our attention" or "of which we are aware", or any variation of any of
the foregoing shall mean the conscious awareness of the attorneys in this firm
who have rendered substantive attention to the transaction to which this opinion
relates (including the preparation of the Warrant and the transactions
contemplated thereby) of the existence or absence of any facts which would
contradict our opinions and statements set forth herein. We have not undertaken
any independent investigation to determine the existence or absence of such
facts, and no inference as to our knowledge of the existence or absence of such
facts should be drawn from the fact of our representation of the Company.
Without limiting the foregoing, we have not conducted a search of any electronic
databases or the dockets of any court, administrative or regulatory body, agency
or other filing office in any jurisdiction.
For purposes of this opinion, we have assumed that the Warrant have been
duly authorized, executed and delivered by all parties thereto other than the
Company, and that all such other parties have all requisite power and authority
to effect the transactions contemplated by the Warrant. We have also assumed
that the Warrant is the valid and binding obligation of each party thereto other
than the Company and is enforceable against such other parties in accordance
with its terms. We do not render any opinion as to the application of any
federal or state law or regulation to the power, authority or compliance of any
party to the Warrant other than the Company.
Our opinions set forth below are qualified to the extent that they may be
subject to or affected by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws relating to or affecting the
rights of creditors generally, (ii) statutory or decisional law concerning
recourse by creditors to security in the absence of notice or hearing, (iii)
duties and standards imposed on creditors and parties to contracts, including,
without limitation, requirements of good faith, reasonableness and fair dealing,
and (iv) general equitable principles. We express no
Castle Creek Technology Partners LLC
[Date]
Page 3
opinion as to the availability of any equitable or specific performance remedy
upon any breach of any of the agreements as to which we are opining herein, or
any of the agreements, documents or obligations referred to therein, or to the
successful assertion of any equitable defenses, inasmuch as the availability of
such remedies or the success of any equitable defense may be subject to the
discretion of a court. We are expressing no opinion herein with respect to
compliance by the Company with state securities or "blue sky" laws, or with any
state or federal securities antifraud laws.
We also express no opinion herein as to any provision of any agreement (a)
which may be deemed to or construed to waive any right of the Company, (b) to
the effect that rights and remedies are not exclusive, that every right or
remedy is cumulative and may be exercised in addition to or with any other right
or remedy and does not preclude recourse to one or more other rights or
remedies, (c) relating to the effect of invalidity or unenforceability of any
provision of the Warrant on the validity or enforceability of any other
provision thereof, (d) requiring the payment of penalties, consequential damages
or liquidated damages, (e) which is in violation of public policy, including,
without limitation, any provision relating to non-competition and non-
solicitation or relating to indemnification and contribution with respect to
securities law matters, (f) purporting to indemnify any person against his, her
or its own negligence or intentional misconduct, (g) which provides that the
terms of the Warrant may not be waived or modified except in writing or (h)
relating to choice of law or consent to jurisdiction.
Our opinions expressed in paragraph 1 below, insofar as they relate to the
due organization, valid existence, due qualification and good standing of the
Company, are based solely on the Domestic Certificate and the Foreign
Qualification Certificate and are limited accordingly, and, as to such matters,
our opinions are rendered as of the respective dates of such certificates. We
express no opinion as to the tax good standing of the Company in any
jurisdiction.
Our opinion expressed in paragraph 2 below as to the issued and outstanding
shares of capital stock of the Company and outstanding convertible securities,
warrants, options or other rights of the Company is based solely on information
received from the Company's transfer agent, which we assume to be complete and
accurate, and on the Officer's Certificate.
For purposes of our opinions in paragraphs 5 and 6 below, we have relied
upon representations made by the Purchaser in Article II of the Securities
Purchase Agreement, dated as of April 19, 2001 (the "Agreement"), by and between
the Company and the Purchaser and have assumed (without any independent
investigation) the accuracy of such representations. For purposes of our
opinions in paragraphs 5 and 6 below, we have also assumed that in connection
with the offer and sale of securities to the Purchaser, neither the Company nor
any person acting on its behalf has engaged in any form of "general solicitation
or general advertising" within the meaning contemplated by Rule 502 (c) of
Regulation D.
Our opinion in paragraph 7 below is based solely on the Officer's
Certificate and is rendered as of the date of such certificate.
Castle Creek Technology Partners LLC
[Date]
Page 4
We are opining herein solely as to the state laws of the State of New
Jersey, the Delaware General Corporation Law statute and the federal laws of the
United States of America. To the extent that any other laws govern any of the
matters as to which we are opining below, we have assumed, with your permission
and without independent investigation, that such laws are identical to the state
laws of the State of New Jersey, and we express no opinion as to whether such
assumption is reasonable or correct. We note that the Warrant states that it is
governed by Delaware law.
For purposes of our opinions rendered below, we have assumed that the facts
and law governing the future performance by the Company of its obligations under
the Warrant will be identical to the facts and law governing its performance on
the date of this opinion.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to conduct its business as it
is, to our knowledge, currently conducted, to enter into and perform
its obligations under the Warrant, and to carry out the transactions
contemplated by the Warrant. The Company is duly qualified to do
business and is in good standing in the State of New Jersey.
2. The authorized capital stock of the Company on the date hereof
consists of (i) [______________] shares of Common Stock, $.001 par
value per share (the "Common Stock"), and (ii) [__________] shares of
Preferred Stock, $.001 par value per share, of which [_______] shares
have been designated as Series B Convertible Preferred Stock (the
"Series B Stock"). As of the date hereof, without giving effect to the
transactions contemplated by the Agreement, there are (i)
[___________] shares of Common Stock of record issued and outstanding
and (ii) [_________] shares of Series B Stock of record issued and
outstanding. To our knowledge, there are no outstanding convertible
securities, warrants, options or other rights to acquire any stock of
the Company, or to acquire any such convertible securities, warrants,
options or other rights, except for (i) the Purchased Securities and
convertible securities, warrants, options or other rights listed on
Schedule A hereto. [To be updated at time of delivery]. The delivery
of certificates for the Exercise Shares to the Purchaser, pursuant to
the exercise of the Warrant, are not subject to any preemptive rights
arising under the Delaware General Corporation Law statute or set
forth in the Certificate of Incorporation or By-laws of the Company
or, to our knowledge, any other preemptive right, right of first
refusal or other similar right created under any contract to which the
Company is a party which rights have not been waived.
3. The issuance and delivery by the Company of the Exercise Shares and
the repurchase of shares pursuant to Section 3(c)(i) of the Warrant
Castle Creek Technology Partners LLC
[Date]
Page 5
have been duly authorized by all necessary corporate action on the
part of the Company. When issued in accordance with the provisions of
the Warrant, the Exercise Shares will be duly and validly issued,
fully paid and non-assessable.
4. Except for applicable blue sky filings and as may be required to
register the Exercise Shares pursuant to the Registration Rights
Agreement, no authorizations or approvals of, and no filings with any
governmental or regulatory authority are necessary or required for the
issuance and delivery of the Exercise Shares and the repurchase of
shares pursuant to Section 3(c)(i) of the Warrant.
5. The issuance and delivery by the Company of the Exercise Shares and
the repurchase of shares pursuant to Section 3(c)(i) of the Warrant do
not (a) violate the provisions of any U.S. federal or New Jersey state
law, rule or regulation applicable to the Company or the Delaware
General Corporation Law statute; (b) violate the provisions of the
Company's Certificate of Incorporation or By-laws, each as amended to
date; (c) violate any judgment, decree, order or award of any court,
governmental body or arbitrator specifically naming the Company of
which we are aware; or (d) with or without notice and/or the passage
of time, conflict with or result in the breach or termination of any
term or provision of, or constitute a default under, or cause any
acceleration under, or cause the creation of any lien, charge or
encumbrance upon the properties or assets of the Company pursuant to,
any agreement to which the Company is a party and which is listed as
an Exhibit to the Company's [SEC Documents][To be updated to most
recent SEC Documents prior to delivery].
6. Based in part on the representations of each of the Purchaser in
Article II of the Agreement, the offer, issuance and sale of the
Exercise Shares pursuant to the Warrant are exempt from registration
under the Securities Act of 1933, as amended.
7. To our knowledge, except as identified on Schedule B hereto, there is
no action, proceeding or litigation pending or threatened against the
Company before any court, governmental or administrative agency or
body.
This opinion is provided to the Purchaser as a legal opinion only and not
as a guaranty or warranty of the matters discussed herein. This opinion is based
upon currently existing statutes, rules, regulations and judicial decisions and
is rendered as of the date hereof, and we disclaim any obligation to advise you
of any change in any of the foregoing sources of law or subsequent developments
in law or changes in facts or circumstances which might affect any matters or
opinions set forth herein.
This opinion is rendered only to the Purchaser and is solely for the
benefit of the Purchaser in connection with the transactions contemplated by the
Warrant. This opinion
Castle Creek Technology Partners LLC
[Date]
Page 6
may not be relied upon by the Purchaser for any other purpose, nor may this
opinion be provided to, quoted to or relied upon by any other person or entity
for any purpose without our prior written consent.
Very truly yours,
XXXX AND XXXX LLP
EXHIBIT C
to Exchange
Agreement
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON August 28, 2011
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY NOT BE
OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.
Right to Purchase 708,656 Shares of
Common Stock
Date: August 29, 2001
VOXWARE, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, CASTLE CREEK TECHNOLOGY PARTNERS
LLC or its registered assigns (the "Holder"), is entitled to purchase from
VOXWARE, INC., a corporation organized under the laws of the State of Delaware
(the "Company"), at any time or from time to time during the period specified in
Section 2 hereof, Seven Hundred and Eight Thousand Six Hundred Fifty-Six
(708,656) fully paid and nonassessable shares of the Company's common stock, par
value $.001 per share (the "Common Stock") for an exercise price (the "Exercise
Price") per share of Common Stock equal to One Cent ($0.01), subject to
appropriate adjustment in the event of a stock split, stock dividend, merger,
reclassification or similar event. The term "Warrant" means this warrant. The
term "Warrants" means this Warrant and any warrants issued upon full or partial
transfer of this Warrant in accordance with its terms. The shares of Common
Stock issuable upon the exercise of this Warrant are referred to as the
"Exercise Shares." This Warrant is subject to the following terms, provisions
and conditions:
1
1. Manner of Exercise; Issuance of Exercise Shares. Subject to the
-----------------------------------------------
provisions hereof, including, without limitation, the limitations contained in
Sections 2 and 8 hereof, this Warrant may be exercised by the Holder hereof, in
whole or in part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the "Exercise Agreement"), to
the Company during normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder hereof), and upon payment of the
Exercise Price to the Company in cash, by certified or official bank check or by
wire transfer to the account of the Company. The Exercise Shares so purchased
shall be deemed to be issued to the Holder hereof or such Holder's designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such Exercise
Shares as set forth above or, if such date is not a business date, on the next
succeeding business day. The Exercise Shares so purchased shall be delivered to
the Holder hereof within a reasonable time, not exceeding two (2) Trading Days,
after this Warrant shall have been so exercised (the "Delivery Period").
2. Period of Exercise. This Warrant shall be exercisable at any time and
------------------
from time to time during the period from the date of initial issuance of this
Warrant (the "Issue Date") until 5:00 p.m. New York City time on August 28, 2011
(the "Expiration Date"). The period beginning on the Issue Date and ending on
the Expiration Date is referred to herein as the "Exercise Period."
3. Intentionally Omitted.
----------------------
4. Certain Agreements of the Company. The Company hereby covenants and
---------------------------------
agrees as follows:
(a) Certain Actions Prohibited. The Company will not, by amendment of
--------------------------
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the Holder of this
Warrant in order to protect the economic benefit inuring to the Holder hereof
and the exercise privilege of the Holder of this Warrant against dilution or
other impairment, consistent with the tenor and purpose of this Warrant.
(b) Consolidation; Merger. In case of any consolidation of the Company
---------------------
with, or merger of the Company into, any other corporation, or in case of any
sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company at
any time during the Exercise Period, then as a condition of such consolidation,
merger or sale or conveyance, adequate provision will be made whereby the Holder
hereof will have the right to acquire and receive upon exercise of this Warrant
in lieu of the Exercise Shares immediately theretofore acquirable upon the
exercise of this Warrant, such securities, cash or assets as may be issued or
payable with respect to or in exchange for the Exercise Shares immediately
theretofore acquirable and receivable upon exercise of this Warrant had such
consolidation, merger or sale or conveyance not taken place. In any such case,
the Company will
2
make appropriate provision to insure that the provisions of this Section 4 will
thereafter be applicable as nearly as may be in relation to any instrument or
securities thereafter deliverable upon the exercise of this Warrant.
(c) Notices. In case at any time:
-------
(i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(other than dividends or distributions payable in cash out of retained earnings
consistent with the Company's past practices with respect to declaring dividends
and making distributions) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the Company,
or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or
(iv) there shall be a voluntary dissolution, liquidation or
winding-up of the Company;
then, in each such case, the Company shall give to the Holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company shall
close or a record shall be taken for determining the holders of Common Stock
entitled to receive any such dividend, distribution, or subscription rights or
for determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, notice of the date (or, if not then known, a reasonable estimate
thereof by the Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange their
Common Stock for stock or other securities or property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice shall be given at
least thirty (30) days prior to the record date or the date on which the
Company's books are closed in respect thereto. Failure to give any such notice
or any defect therein shall not affect the validity of the proceedings referred
to in clauses (i), (ii), (iii) and (iv) above. Notwithstanding the foregoing,
the Company shall publicly disclose the substance of any notice delivered
hereunder prior to delivery of such notice to the Holder hereof.
(d) Definition. "Trading Day" means a day on which the
----------
principal United States securities exchange or trading market where the Common
Stock is then listed or traded as reported by Bloomberg is open for trading.
3
5. Transfer, Exchange, Redemption and Replacement of Warrant.
---------------------------------------------------------
(a) Restriction on Transfer. This Warrant and the rights granted to
-----------------------
the Holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Section 5(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Section 5(f) hereof and to the provisions of Section
2.6 of the Securities Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered Holder hereof as the owner and Holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary.
Notwithstanding anything to the contrary contained herein, the registration
rights described in Section 6 hereof are assignable only in accordance with the
provisions of the Registration Rights Agreement.
(b) Warrant Exchangeable for Different Denominations. This Warrant is
------------------------------------------------
exchangeable, upon the surrender hereof by the Holder hereof at the office or
agency of the Company referred to in Section 5(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right to
purchase Exercise Shares, which may be purchased hereunder, each of such new
Warrants to represent the right to purchase Exercise Shares at the Exercise
Price therefor as shall be designated by the Holder hereof at the time of such
surrender.
(c) Replacement of Warrant. Upon receipt of evidence reasonably
----------------------
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the surrender of this
---------------------------------
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 5, this Warrant shall be promptly canceled by the Company. The
Company shall pay all issuance taxes (other than securities transfer taxes) and
charges payable in connection with the preparation, execution, and delivery of
Warrants pursuant to this Section 5. The Company shall indemnify and reimburse
the Holder of this Warrant for all losses and damages arising as a result of or
related to any breach of the terms of this Warrant, including costs and expenses
(including legal fees) incurred by such Holder in connection with the
enforcement of its rights hereunder.
(e) Warrant Register. The Company shall maintain, at its principal
----------------
executive offices (or such other office or agency of the Company as it may
designate by notice to the Holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
(f) Transfer or Exchange Without Registration. If, at the time of the
-----------------------------------------
surrender of this Warrant in connection with any transfer, or exchange of this
Warrant, this Warrant (or, in the case of any exercise, the Exercise Shares
issuable hereunder), shall not be registered under the
4
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer or exchange, (i)
that the Holder or transferee of this Warrant, as the case may be, furnish to
the Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable transactions
and reasonably acceptable to the Company) to the effect that such transfer or
exchange may be made without registration under the Securities Act and under
applicable state securities or blue sky laws (the cost of which shall be borne
by the Company if the Company's counsel renders such an opinion), (ii) that the
Holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter, or status as an "accredited
investor" shall be required in connection with a transfer pursuant to Rule 144
under the Securities Act.
6. Registration Rights. The initial Holder of this Warrant (and certain
-------------------
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Exercise Shares as are set forth in the Registration Rights
Agreement, including the right to assign such rights to certain assignees, as
set forth therein.
7. Notices. Any notices required or permitted to be given under the
-------
terms of this Warrant shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier, or by confirmed telecopy, in each case addressed to a party. The
addresses for such communications shall be:
If to the Company:
Voxware Inc.
Xxxxxxxxxxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000 0000
Attn: Xxxxxxxx Xxxxxx
with a copy simultaneously transmitted by like means to:
Xxxx and Xxxx LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
If to the Holder, at such address as such Holder shall have provided in writing
to the Company, or at such other address as such Holder furnishes by notice
given in accordance with this Section 7.
5
8. Additional Restriction on Exercise. Notwithstanding anything to the
----------------------------------
contrary contained herein, this Warrant shall not be exercisable by the Holder
or subject to a Mandatory Exercise by the Company to the extent (but only to the
extent) that such exercise by the Holder or Mandatory Exercise would result in
the Holder being the beneficial owner of more than 4.99% of the shares of Common
Stock. For the purposes of this paragraph, beneficial ownership and all
determinations and calculations, shall be determined in accordance with Section
13(d) of the Exchange Act and all applicable rules and regulations thereunder.
For clarification, it is expressly a term of this security that the limitations
contained in this Section 8 shall apply to each successive Holder.
9. Miscellaneous.
-------------
(a) Amendments. This Warrant and any provision hereof may only be
----------
amended by an instrument in writing signed by the Company and the Holders of a
majority in interest of the Warrants.
(b) Descriptive Headings. The descriptive headings of the several
--------------------
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.
10. Governing Law; Jurisdiction. This Warrant shall be governed by and
---------------------------
construed in accordance with the laws of the State of Delaware. The Company
irrevocably consents to the jurisdiction of the United States federal courts and
state courts located in the State of Delaware in any suit or proceeding based on
or arising under this Warrant and irrevocably agrees that all claims in respect
of such suit or proceeding may be determined in such courts. The Company
irrevocably waives any objection to the laying of venue and the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The Company
further agrees that service of process upon the Company mailed by certified or
registered mail shall be deemed in every respect effective service of process
upon the Company in any such suit or proceeding. Nothing herein shall affect
the Holder's right to serve process in any other manner permitted by law. The
Company agrees that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
6
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.
VOXWARE, INC.
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------
Xxxxxxxx Xxxxxx
Senior Vice President and CFO
7
FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
To: Voxware, Inc.
Xxxxxxxxxxxxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000 0000
Attn: Xxxxxxxx Xxxxxx
The undersigned hereby irrevocably exercises the right to purchase
_________ shares of Common Stock of Voxware, Inc., a corporation organized under
the laws of the State of Delaware, evidenced by the attached Warrant, and
herewith makes payment of the Exercise Price with respect to such shares, all in
accordance with the conditions and provisions of said Warrant.
The undersigned agrees not to offer, sell, transfer or otherwise dispose of
the shares obtained on exercise of the Warrant, except under circumstances that
will not result in a violation of the Securities Act of 1933, as amended, or any
state securities laws.
The undersigned requests the delivery of the shares to the undersigned at
its listed below:
Dated:_________________ _____________________________________
Signature of Holder
_____________________________________
Name of Holder (Print)
Address:
_____________________________________
_____________________________________
_____________________________________
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock set forth hereinbelow, to:
Name of Assignee Address Number of Shares
---------------- ------- ----------------
, and hereby irrevocably constitutes and appoints_______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Dated: _____________________, 2001
In the presence of
__________________
Name: ____________________________
Signature: _______________________
Title of Signing Officer or Agent (if any):
Address: _______________________________
_______________________________
_______________________________
Note: The above signature should correspond
exactly with the name on the face of
the within Warrant.
