EXHIBIT 10.1
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
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This SECURITIES PURCHASE AGREEMENT ("Agreement")is entered into as of
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August 10, 2000, by and between VOXWARE, INC., a Delaware corporation (the
"Company"), with principal executive office located at 000 Xxxxxxxx Xxxxxx Xxxx,
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Xxxxx 0, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000, and Castle Creek Technology Partners,
LLC, a Delaware limited liability company (the "Purchaser") with principal
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offices located at 00 Xxxx Xxxxxx Xxxxx, 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 the provisions of Regulation D ("Regulation D"), as promulgated by the United
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States Securities and Exchange Commission (the "SEC") under the Securities Act
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of 1933, as amended (the "Securities Act").
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B. The Purchaser desires to purchase and the Company desires to issue and
sell upon the terms and conditions stated in this Agreement for an aggregate
purchase price of $4,000,000 (i) 4,000 shares (the "Shares of Series A Preferred
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Stock") of the Company's 7% Series A Convertible Preferred Stock, par value
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$0.001 per share and stated value of $1,000 per share (the Series A Preferred
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Stock) which shall be governed by the Certificate of Designations in the form
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attached hereto as Exhibit A (the "Certificate of Designations") and (ii) a
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warrant in the form attached hereto as Exhibit B (the "Common Stock Warrant") to
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purchase a number of shares of the Company's Common Stock, par value $0.001 per
share (the "Common Stock"), equal to 50% of the quotient of (x) the Purchase
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Price, divided by (y) the Market Price (as defined in the Certificate of
Designations). The Shares of Series A Preferred Stock and the Common Stock
Warrant are sometimes referred to herein as the "Purchased Securities". The
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shares of Common Stock issuable upon the exercise of or otherwise pursuant to
the Common Stock Warrant are referred to as "Warrant Shares". The shares of
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Common Stock issuable upon the conversion of or otherwise pursuant to the Shares
of Series A Preferred Stock are referred to as "Conversion Shares". The shares
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of Series A Preferred Stock, the Common Stock Warrant, the Warrant Shares and
the Conversion Shares are referred to herein as the "Securities".
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C. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
in the form attached hereto as Exhibit C (the "Registration Rights Agreement"),
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pursuant to which the Company has agreed to provide certain registration rights
under the Securities
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Act, the rules and regulations promulgated thereunder and applicable state
securities laws.
AGREEMENTS
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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
PURCHASE AND SALE OF SECURITIES; SECURITY
1.1. Purchase of shares of Series A Preferred Stock and Common Stock
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Warrant. The purchase price to be paid by the Purchaser for the shares of
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Series A Preferred Stock and the Common Stock Warrant being purchased by the
Purchaser hereunder shall be Four Million Dollars ($4,000,000) (the "Purchase
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Price"). On the Closing Date (as defined herein), subject to the terms and the
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satisfaction (or waiver) of the conditions set forth in Articles VI and VII of
this Agreement, the Company shall issue and sell to the Purchaser, and the
Purchaser shall purchase from the Company (i) the Shares of Series A Preferred
Stock and (ii) the Common Stock Warrant.
1.2. Form of Payment. At the Closing, the Purchaser shall pay the
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Purchase Price for (i) the Shares of Series A Preferred Stock and (ii) the
Common Stock Warrant, by wire transfer of immediately available funds to the
Company, in accordance with the Company's written wiring instructions, and the
Company shall deliver to the Purchaser one or more executed certificates
representing the Shares of Series A Preferred Stock and the Common Stock Warrant
and a duly executed Registration Rights Agreement.
1.3. Closing Date. Subject to the satisfaction (or waiver) of the
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conditions set forth in Articles VI and VII below, the date and time of the
issuance, sale and purchase of the Purchased Securities pursuant to this
Agreement (the "Closing") shall be August 14, 2000 (such date being hereinafter
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referred to as the "Closing Date"). The Closing shall occur on the Closing Date
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at 11:00 a.m. New York City time, at the offices of Wolf, Block, Xxxxxx and
Xxxxx Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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 purchasing the Purchased
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Securities (and the Conversion Shares and Warrant Shares issuable upon
conversion or exercise of the Purchased Securities, as the case may be) for its
own account 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
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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 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. Accredited Investor Status. The Purchaser is an "accredited investor"
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as that term is defined in SEC Rule 501(a) of Regulation D, as presently in
effect, under the Securities Act.
2.3. Reliance on Exemptions. The Purchaser understands that the Purchased
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Securities are being offered and sold to the Purchaser in reliance upon specific
exemptions from the registration requirements of the United States federal and
state securities laws and that the Company is relying upon the truth and
accuracy of the representations and warranties of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Securities.
2.4. Information. The Purchaser and its counsel have been furnished all
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materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Purchased Securities which have
been requested by the Purchaser. The Purchaser has been afforded the opportunity
to ask questions of the Company and has received what the Purchaser believes to
be satisfactory answers to any such inquiries. The Purchaser understands and
acknowledges that such discussions, as well as any written information issued by
the Company, (i) were intended to describe the aspects of the Company's business
and prospects which the Company believes to be material, but were not
necessarily an exhaustive description, and (ii) may have contained forward-
looking statements involving known and unknown risks and uncertainties which may
cause the Company's actual results in future periods or plans for future periods
to differ materially from what was anticipated and that, except as specifically
set forth elsewhere herein, no representations or warranties were or are being
made with respect to any such forward-looking statements or the probability of
achieving any of the results projected in any of such forward-looking
statements. Neither such materials or inquiries nor any other due diligence
investigation conducted by the Purchaser nor any of its representations,
warranties, covenants or agreements shall modify, amend or affect the
Purchaser's right to rely on the Company's representations and warranties
contained in Article III. The Purchaser understands that the Purchaser's
investment in the Purchased Securities involves a high degree of risk.
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2.5. Governmental Review. The Purchaser understands that no United States
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federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities or an
investment therein.
2.6. 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).
2.7. Legends. The Purchaser understands that, subject to Article V hereof,
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the certificates for the Shares of Series A Preferred Stock and the Common Stock
Warrant and, until such time as the Conversion Shares and Warrant 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 the Warrant Shares will bear a restrictive legend (the "Legend") in the
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following form:
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.
Except for the Legend in accordance with this Section 2.7 and Section 5.1
hereof, the Securities shall bear no other legend.
2.8. Authorization; Enforcement. This Agreement and the Registration
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Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of
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the Purchaser and are valid and binding agreements of the Purchaser enforceable
against the Purchaser in accordance with their respective 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. The Company and each of its
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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 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 Series A Preferred Stock, the Common Stock
Warrant and the Registration Rights Agreement (collectively, the "Investment
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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 each of the Investment Agreements, (ii) issue, sell and perform its
obligations with respect to the Purchased Securities in accordance with the
terms hereof and thereof, (iii) issue the Conversion Shares in accordance with
the terms and conditions of the Certificate of Designations and (iv) issue
Warrant Shares in accordance with the terms and conditions of the Common Stock
Warrant; (b) the execution, delivery and performance of this Agreement and the
other Investment Agreements and the execution and delivery of the by the Company
and the consummation by the Company of each of the transactions contemplated
hereby and thereby (including without limitation the issuance of the Purchased
Securities and the reservation for issuance and issuance of the number of
Conversion Shares and the Warrant Shares initially issuable pursuant to the
conversion of the Series A Preferred Stock and the exercise of the Common Stock
Warrant) 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 the Company's Board of Directors in connection with the registration of
Conversion Shares and Warrant Shares in accordance with the Registration Rights
Agreement); (c) the Investment Agreements have been duly executed
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and delivered by the Company; (d) the Certificate of Designations has been filed
with the Secretary of Delaware; and (e) each of the Investment Agreements
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. Capitalization. The capitalization of the Company as of the date of
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this Agreement, including the authorized capital stock, the number of shares
issued and outstanding, the number of shares reserved for issuance pursuant to
the Company's stock option plans, the number of shares reserved for issuance
pursuant to securities (other than the Securities), directly or indirectly,
exercisable for, or convertible into or exchangeable for any shares of Common
Stock, the number of shares of Common stock to be initially reserved for
issuance upon conversion of the Shares of Series A Preferred Stock and the
exercise of the Common Stock Warrant is set forth on Schedule 3.3. All
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outstanding shares of the Company's capital stock have been validly issued,
fully paid and non-assessable. Except as disclosed in Schedule 3.3, (i) no
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shares of capital stock of the Company (including the Purchased Securities, the
Warrant Shares and the Conversion Shares) are subject to preemptive rights or
any other similar rights of the stockholders of the Company or any liens or
encumbrances granted or created by the Company preemptive or similar, and (ii)
there are no outstanding debt securities issued by the Company; (iii) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries; (iv) there
are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of their securities under
the Securities Act (except the Registration Rights Agreement)1; (v) there are no
outstanding securities or instruments of the Company or any of its subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
subsidiaries is or may become bound to redeem a security of the Company or any
of its subsidiaries; and (vi) the Company does not have any stock appreciation
rights or "phantom stock" plans or agreements or any similar plan or agreement.
The Company has furnished or made available to the Purchaser true and correct
copies of the its Certificate of Incorporation as currently in effect
("Certificate of Incorporation"), and its By-laws as currently in effect (the
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"By-laws"). The Company has set forth on Schedule 3.3 all instruments and
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agreements (other than the Certificate of Incorporation and By-laws) governing
securities convertible
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1 Schedule 3.3 should include the Common Stock Warrant, Shares of Series A
Preferred Stock, the Inroad Warrant, Stratos Warrant and Inroad Registration
Rights Agreement.
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into or exercisable or exchangeable for Common Stock or the Company's preferred
stock, par value $0.001 per share ("Preferred Stock") and the Company shall
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provide to the Purchaser copies thereof upon the request of the Purchaser.
Except as set forth on Schedule 3.3, the Company has no indebtedness for
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borrowed money and no agreement providing for indebtedness for borrowed money.
The Company has no subsidiaries, except as provided on Schedule 3.3. All such
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subsidiaries included on Schedule 3.3. are one hundred percent (100%) owned by
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the Company. Except as provided on Schedule 3.3, the Company has no investments,
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either debt or equity, in any other entity.
3.4. Issuance of Shares. The Shares of Series A Preferred Stock are duly
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authorized and reserved for issuance, and when issued and delivered in
accordance with the terms hereof will be validly issued, fully paid and non-
assessable, free from all taxes, liens claims and encumbrances and entitled to
the rights and preferences set forth in the Certificate of Designations 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. The number of Conversion Shares and the
Warrant Shares initially issuable pursuant to the conversion of the Series A
Preferred Stock and the exercise of the Common Stock Warrant are duly authorized
and reserved for issuance, and, upon conversion of the Series A Preferred Stock
and the exercise of the Common Stock Warrant, each in accordance with its
respective terms, the Conversion Shares and the Warrant Shares will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances and will not be subject to preemptive rights or other similar
rights will not trigger any anti-dilution provisions in any securities of the
Company or any other agreements to which the Company is a party which rights or
provisions have not been waived.
3.5. Listing. The Company's Common Stock is approved for listing and
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quotation on the Nasdaq National Market System and is traded on the Nasdaq
National Market System. The Company is not aware of any threat to delist or
suspend such quotation, listing and/or trading, including a threat that may be
occasioned by falling below the minimum listing maintenance requirements of the
Nasdaq National Market System. The Conversion Shares and the Warrant Shares
have been approved for listing, subject to official notice of issuance, on the
Nasdaq National Market System and no further corporate authorization or approval
is required under the rules of the National Association of Securities Dealers
(the "NASD") applicable to the listing (or continued listing) requirements for
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securities on the Nasdaq National Market System, for the issuance of the
Conversion Shares and the Warrant Shares of the Certificate of Designations and
the Common Stock Warrant, as the case may be. No further authorization or
approval is required for the continued listing of the Common Stock on the Nasdaq
National Market or for the issuance of an aggregate number of Conversion Shares
and Warrant Shares in excess of the Exchange Cap (as defined in the Certificate
of Designations), other than the approval by the stockholders of the Company
pursuant to NASD Rule 4460(I), relating to Nasdaq National Market issuers.
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3.6. No Conflicts. The execution, delivery and performance of each of the
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Investment Agreement, by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including the issuance of the
Purchased Securities and the reservation for issuance, as applicable, of the
Warrant Shares and the Conversion 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. Neither the Company nor any of its
subsidiaries is in violation of its certificate of incorporation, by-laws or
other organizational documents, and neither the Company nor any of its
subsidiaries is in default (and no event has occurred which, with notice or
lapse of time or both, would put the Company or any of its subsidiaries in
default) under, nor to the Company's knowledge, has there occurred any event
giving others (with notice or lapse of time or both) 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. The
business of the Company and its subsidiaries is not being conducted in violation
of any law, ordinance, rule, regulation, order, judgment or decree of any
governmental entity, court or arbitration tribunal in any material respect. 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 any of the Investment
Agreements or to perform its obligations in accordance with the terms hereof or
thereof.
3.7. SEC Documents; Financial Statements. The Common Stock is registered
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under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and has been so registered since October 30, 1996. The Company
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has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act or pursuant to the registration and reporting requirements
of the Securities Act (all of the foregoing filed after June 30, 1998, and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, and all correspondence to and from
the SEC related thereto, being referred to herein as the "SEC Documents").
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Schedule 3.7 sets forth a complete list of the SEC Documents. The Company has
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delivered or made available to the Purchaser true and complete copies of the SEC
Documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the
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SEC Documents, at the time they were filed with the SEC contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Document is, or has been, required to be updated
or amended under applicable law, except as listed on Schedule 3.7. The financial
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statements of the Company included in the SEC Documents were prepared in
accordance with U.S. generally accepted accounting principles, consistently
applied, and the rules and regulations of the SEC during the periods involved
and present accurately and completely the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
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consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, immaterial year-
end audit adjustments). Except as set forth in the financial statements of the
Company included in the SEC Documents, the Company has no liabilities,
contingent or otherwise, other than (i) liabilities incurred subsequent to the
date of such financial statements in the ordinary course of business consistent
with past practice and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in such financial statements, in each case
of clause (i) and (ii) next above which, individually and in the aggregate, are
not material to the financial condition, business, operations, properties or
operating results of the Company and its subsidiaries taken on a whole. The
Company meets the requirements for use of Form S-3 for registration of the
resale of Registrable Securities, as defined in the Registration Statement.
3.8. Absence of Certain Changes. Except as set forth in Schedule 3.8,
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since March 31, 2000, there has been no change and no development in the
business, properties, operations, financial condition or results of operations
of the Company which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.
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3.9. Absence of Litigation. Except as disclosed in Schedule 3.9 or the
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SEC Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, governmental agency or authority, or self-
regulatory organization or body pending or, to the knowledge of the Company or
any of its subsidiaries, threatened against or affecting the Company, any of its
subsidiaries, or any of their respective directors or officers in their
capacities as such, wherein an unfavorable decision, ruling or finding could
have a Material Adverse Effect or would adversely affect the transactions
contemplated by this Agreement or any of the documents contemplated hereby or
which would adversely affect the validity or enforceability of, or the authority
or ability of the Company to perform its obligations under, this Agreement or
any of such other documents. To the Company's knowledge, there are no facts
which, if known by a potential claimant or governmental agency or authority,
could give rise to a claim or proceeding against the Company or any of its
subsidiaries which, if asserted or conducted with results unfavorable to the
Company or any of its subsidiaries, could have a Material Adverse Effect.
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3.10. Disclosure. No information relating to or concerning the Company
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set forth in this Agreement or provided to the Purchaser in connection with the
transactions contemplated hereby contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements made
herein or therein, in light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or exists with respect to the
Company or its subsidiaries or their respective businesses, properties,
prospects, operations or financial conditions, which has not been publicly
disclosed other than the transactions contemplated hereby. There is no fact
(other than matters of a general economic or political nature which do not
uniquely affect the business, properties, operations or financial condition of
the company) known to the Company that has not been disclosed by the Company to
the Purchaser and to the public that might reasonably be expected to have or
result in a material effect on the business, properties, operations or financial
condition of the Company and its subsidiaries taken as a whole or have a
material effect on the ability of the Company to conduct its business after the
Closing in all material respects as currently conducted.
3.11. Acknowledgment Regarding Purchaser's Purchase 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 purchase 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.
3.12. No General Solicitation. Neither the Company nor any person acting
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on behalf of the Company has conducted any "general solicitation," as described
in Rule 502(c) under Regulation D, with respect to any of the Securities being
offered hereby.
3.13. No Integrated Offering. Neither the Company, nor any of its
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affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would prevent the parties hereto from
consummating the transactions contemplated hereby pursuant to an exemption from
registration under the Securities Act pursuant to the provisions of Regulation
D. The transactions contemplated hereby are exempt from the registration
requirements of the Securities Act, assuming the accuracy of the representations
and warranties herein contained of the Purchaser to the extent relevant for such
determination.
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3.14. No Brokers. The Company has taken no action which would give rise
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to 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, except for dealings with Institutional Finance Group, Inc.,
the fees and expenses of which shall be paid in full by the Company.
3.15. Acknowledgment of Dilution. The potential number of Conversion
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Shares and Warrant 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 dilutive 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
Conversion Shares and Warrant Shares in accordance with the terms of the
Certificate of Designations and the Common Stock Warrant, respectively, and such
obligation is binding upon it and enforceable regardless of the dilution that
such issuance may have on the ownership interests of other stockholders.
3.16. Intellectual Property. Except as set forth in the SEC Documents, to
---------------------
the Company's knowledge each of the Company and its subsidiaries, owns or
possesses adequate and enforceable rights to use all patents, patent
applications, trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) and other similar rights and proprietary
knowledge (collectively, "Intangibles") used or necessary for the conduct of its
-----------
business as now being conducted and as described in the Company's SEC Documents.
Except as set forth in the SEC Documents, neither the Company nor any subsidiary
of the Company infringes on or is in conflict with any right of any other person
with respect to any Intangibles nor is there any claim of infringement made by a
third party against or involving the Company or any of its subsidiaries, which
infringement, conflict or claim, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect. Except as set forth in the SEC Documents, none of the
Intangibles used in the Company's business is expected to expire or terminate
within two years from the date of this Agreement, except where such expiration
or termination would not result, either individually or in the aggregate, in a
Material Adverse Effect. The Company and its subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their Intangibles.
3.17. Foreign Corrupt Practices. Neither the Company, nor any of its
-------------------------
subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any subsidiary has, in the course of his actions
for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful
11
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee. Without limiting the generality of the
foregoing, the Company and its subsidiaries have not directly or indirectly made
or agreed to make (whether or not said payment is lawful) any payment to obtain,
or with respect to, sales other than usual and regular compensation to its or
their employees and sales representatives with respect to such sales.
3.18. Officers and Directors. No executive officer (as defined in Rule
----------------------
501(f) promulgated under the Securities Act) or director of the Company or any
of its subsidiaries, is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary
information agreement, non-competition agreement, or any other contract or
agreement or any restrictive covenant between such officer or director and the
Company and its subsidiaries or between the such officer or director and any
other third party. No officer or director has, to the knowledge of the Company
and its subsidiaries, any intention to terminate or limit his or her employment
with, or services to, the Company or any of its subsidiaries, nor is any such
officer subject to any constraints which would cause such person to be unable to
devote his full time and attention to such employment or services.
3.19. Solvency. As of the Closing, the Company (i) has not incurred and
--------
does not intend to incur, or believe that it will incur, debts beyond its
ability to pay such debts as they become due, (ii) owns assets, the fair
saleable value of which is greater than the total amount of its liabilities
(including contingent liabilities), and (iii) has and will have capital that is
not unreasonably small in relation to its business as presently conducted and as
proposed to be conducted.
3.20. Title to Properties; Liens and Encumbrances. The Company has good
-------------------------------------------
and marketable title to all of its material properties and assets, both real and
personal, and has good title to all its leasehold interests, in each case
subject only to mortgages, pledges, liens, security interests, conditional sale
agreements, encumbrances or charges created in the ordinary course of business.
3.21. Employment Matters. The Company is in compliance in all material
------------------
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
-----
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
----
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has
12
occurred, whether by action or by failure to act, which would cause the loss of
such qualification. Neither the Company nor any of its subsidiaries is involved
in any union labor dispute nor, to the knowledge of the Company or any of its
subsidiaries, is any such dispute threatened. To the knowledge of the Company,
none of the Company's or its subsidiaries' employees is a member of a union
which relates to such employee's relationship with the Company. Neither the
Company nor any of its subsidiaries is a party to a collective bargaining
agreement, and the Company and its subsidiaries believe that their relations
with their employees are good.
3.22. Insurance. The Company maintains property and casualty, general
---------
liability, personal injury, director and officer liability and other similar
types of insurance with financially sound and reputable insurers that is
adequate, consistent with industry standards and the historical claims
experience of the Company and its subsidiaries. The Company has not received
notice from, and has no knowledge of any threat by, any insurer (that has issued
any insurance policy to the Company or any of its subsidiaries) that such
insurer intends to deny coverage under or cancel, discontinue or not renew any
insurance policy covering the Company or any of its subsidiaries presently in
force.
3.23. Taxes. All applicable tax returns required to be filed by the
-----
Company and each of its subsidiaries have been prepared and filed in compliance
with all applicable laws, or if not yet filed have been granted extensions of
the filing dates which extensions have not expired, and all taxes, assessments,
fees and other governmental charges upon the Company, its subsidiaries, or upon
any of their respective properties, income or franchises, shown in such returns
and on assessments received by the Company or its subsidiaries to be due and
payable have been paid, or adequate reserves therefor have been set up if any of
such taxes are being contested in good faith; or if any of such tax returns have
not been filed or if any such taxes have not been paid or so reserved for, the
failure to so file or to pay would not in the aggregate have a Material Adverse
Effect.
3.24. Internal Controls. The Company maintains a system of internal
-----------------
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.25. Contracts. The SEC Documents, as supplemented by Schedule 3.25
--------- --------------
hereto, contain a complete and accurate list of all material undischarged
written or oral contracts, agreements, leases or other instruments to which the
Company or any subsidiary is a party or by which the Company or any subsidiary
is bound or to which any of the properties or assets of the Company or any
subsidiary is subject (each a "Contract"). None of the Company, its
--------
subsidiaries or, to the knowledge of the Company, any of the other parties
thereto, is in breach or violation of any Contract, which breach or
13
violation relates to indebtedness for borrowed money, is with respect to an
obligation in excess of Seventy-Five Thousand Dollars ($75,000) or would have a
Material Adverse Effect. No event, occurrence or condition exists which, with
the lapse of time, the giving of notice, or both, or the happening of any
further event or condition, would become a breach or default by the Company or
its subsidiaries under any Contract which breach or default would have a
Material Adverse Effect.
3.26. Year 2000 Processing. The computer systems used by the Company and
--------------------
its subsidiaries (the "Systems"), both hardware and software, are in good
-------
working order. The occurrence of the year 2000 has not materially and adversely
affected the Systems of the Company, its subsidiaries, or their business, and no
material expenditures in excess of currently budgeted items are or will be
required in order to cause such Systems to operate properly as a result of the
change of the year 1999 to 2000. The Company and its subsidiaries have resolved
any issues discovered as a result of year 2000 inquires and compliance testing
or otherwise known to the Company.
3.27. Environmental Matters. Neither the Company and its subsidiaries,
---------------------
nor to the Company's knowledge, any predecessor in interest, has ever caused or
permitted any Hazardous Material (as defined below) to be released, treated or
disposed of on, at, under or within any real property owned, leased or operated
by the Company and its subsidiaries or any predecessor in interest, and no such
real property has ever been used (either by the Company and its subsidiaries or
any predecessor in interest ) as a treatment, storage or disposal site for any
Hazardous Material. The Company has no liabilities with respect to Hazardous
Materials, and to the Company's knowledge, no facts or circumstances exist which
could give rise to liabilities with respect to Hazardous Materials, which could
have any reasonable likelihood of having a Material Adverse Effect on the
Company. For purposes of this Agreement "Hazardous Materials" shall mean (a)
-------------------
any pollutants or contaminations, (b) any asbestos or insulation or other
material composed of or containing asbestos and (c) any petroleum product and
any hazardous, toxic or dangerous waste, substance or material defined as such
in, or for purposes of, the Comprehensive Environmental Response, Compensation
and Liability Act, any so-called "Superfund" or "Superlien" law, or (d) any
other applicable federal, state, local or other statute, law, ordinance, code,
rule, regulation, order or decree concerning the protection of human health or
the environment or otherwise regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect.
3.28. Regulatory Permits. Except for Permits (as defined below) the
------------------
absence of which would not result, either individually or in the aggregate, in a
Material Adverse Effect, the Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses (the "Permits"), and neither the Company nor any such Subsidiary has
-------
received any notice of proceedings relating to the revocation or modification of
any such Permit.
14
3.29. Transactions With Affiliates. Except as set forth in the SEC
----------------------------
Documents and other than the grant of stock options disclosed on Schedule 3.29,
-------------
none of the officers, directors or employees of the Company is presently a party
to any transaction with the Company or any of its subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any such officer, director, or employee has a substantial interest or is
an officer, director, trustee or partner.
3.30. Application of Takeover Protections. The Company and its board of
-----------------------------------
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar anti-
takeover provision under the Certificate of Incorporation or the laws of the
state of its incorporation which is or could become applicable to the Purchaser
as a result of the transactions contemplated by the Investment Agreements,
including, without limitation, the Company's issuance of the Securities and the
Purchaser's ownership of the Securities.
ARTICLE IV
COVENANTS
4.1. Efforts. The Company and the Purchaser shall use commercially
-------
reasonable efforts timely to satisfy each of the conditions described in Article
VI and VII of this Agreement.
4.2. Securities Laws. The Company agrees to file a Form D with respect to
---------------
the Securities with the SEC as required under Regulation D and to provide a copy
thereof to the Purchaser within fifteen (15) days of the Closing. The Company
agrees to file a Current Report on Form 8-K disclosing this Agreement and the
transactions contemplated hereby with the SEC within one (1) business day
following the Closing Date. Such Form 8-K shall contain as exhibits this
Agreement, the form of Certificate of Designations, the form of Common Stock
Warrant and the form of Registration Rights Agreement. The Company shall, on or
prior to the Closing, take such action as is necessary to sell the Shares of
Series A Preferred Stock and Common Stock Warrant to the Purchaser in accordance
with applicable securities laws of the states of the United States, and shall
provide evidence of any such action so taken to the Purchaser on or prior to the
date of the applicable Closing. Without limiting any of the Company's
obligations under any Investment Agreement from and after the Closing Date,
neither the Company nor any person acting on its behalf shall take any action
which would adversely affect any exemptions from registration under the
Securities Act with respect to the transactions contemplated hereby.
4.3. Reporting Status. So long as the Purchaser beneficially owns any
----------------
Securities, the Company shall timely file all reports required to be filed with
the SEC
15
pursuant to the Exchange Act, and the Company shall not terminate its status as
an issuer required to file reports under the Exchange Act even if the Exchange
Act or the rules and regulations thereunder would permit such termination.
4.4. Use of Proceeds. The Company shall use the proceeds from the sale of
---------------
the Securities for general corporate purposes only, in the ordinary course of
its business and consistent with past practice and, without limiting the
generality of the foregoing, shall not use such proceeds to make a loan to any
employee, officer, director or stockholder of the Company, to repay any loan or
other obligation of the Company to any such person or to repurchase or pay a
dividend on shares of Common Stock or other securities of the Company, other
than any such payment explicitly required or permitted by the terms of this
Agreement, the Certificate of Designations or the other Investment Agreements.
4.5. Financing Restrictions. During the period beginning on the Closing
----------------------
Date and ending on the date which is three (3) months following the effective
date of the registration statement contemplated by Section 2.1 of the
Registration Rights Agreement (the "Effective Date") (provided, however, that
--------------
such period shall be extended by the number of days equal to the number of days
during which there is a Registration Suspension (as defined in the Registration
Rights Agreement) during such period) (the "Financing Restriction Period", the
----------------------------
Company shall not, and shall cause its direct and indirect subsidiaries not to,
issue or agree to issue any equity, equity-like or equity-linked securities of
the Company or any security convertible into or exercisable or exchangeable,
directly or indirectly, for equity, equity-like or equity-linked securities of
the Company, other than Excluded Securities (any such securities, "Restricted
----------
Securities"). The term "Excluded Securities" means capital stock issued and
----------- -------------------
sold by the Company: (i) to the Purchaser pursuant to this Agreement and the
Common Stock Warrant, including the Warrant Shares and the Conversion Shares,
(ii) pursuant to any employee stock option, stock purchase or restricted stock
plan of the Company, so long as the issuance of such stock or option is approved
by a committee of independent directors of the Company, (iii) pursuant to
strategic investments, the primary purpose of each of which is not to raise
equity capital and provided that such strategic investors shall be prohibited
from reselling their shares of the Company's capital stock during such Financing
Restriction Period and further provided that if the Company requests a waiver of
the reselling prohibition set forth in this subclause (iii) and demonstrates to
the Purchaser that a potential strategic investor is unable to make a strategic
investment in the Company as a consequence of such reselling prohibition,
Purchaser will not unreasonably withhold its consent to the waiver of the
reselling prohibition set forth in this subclause (iii) with respect to such
strategic investment, (iv) in a firm commitment underwritten public offering,
where the net proceeds to the Company exceed $15 million, (v) pursuant to
warrants dated as of April 4, 2000 (the "Inroad Warrants") to purchase an
---------------
aggregate of 325,000 shares of Common Stock issued in connection with the
Company's acquisition of Inroad, Inc. in April 2000 (the "Inroad Acquisition"),
------------------
(vi) 650,000 shares of Common Stock issued to Inroad, Inc. in connection with
the Inroad Acquisition, (vii) warrants dated as of April 4, 2000 (the "Stratos
-------
Warrants") to purchase an aggregate of 50,000 shares of Common Stock issued to
--------
Stratos Product Development LLC ("Stratos") in connection with the Inroad
-------
Acquisition and (viii) warrants to purchase an aggregate of
16
50,000 shares of Common Stock to be issued to Institutional Finance Group, Inc.
in connection with the transactions contemplated hereby.
4.6. Additional Registrations. Except for the Excluded Securities
------------------------
described in subclauses (i), (ii), (iv), (v), (vi) or (vii) of the definition of
Excluded Securities, the Company will not cause any Restricted Securities or any
Excluded Securities to be covered by a registration statement that is to be
filed or declared effective by the Commission until the earlier to occur of (A)
the expiration of the Financing Restriction Period or (B) the date that the
registration statement filed by the Company pursuant to its obligations under
the Registration Rights Agreement has been effective under the Securities Act
for a period of at least one-hundred and eighty (180) days, during which one
hundred eighty (180) day period the Company shall not have notified the
Purchaser that such registration statement or the prospectus included in such
registration statement includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
4.7. Right of First Refusal. During the nine (9) months period beginning
----------------------
on the date immediately following the final day of the Financing Restriction
Period, the Company shall not, and shall cause each of its direct and indirect
subsidiaries not to, issue or agree to issue or offer to issue or solicit any
offer or inquiry with regard to any Restricted Securities unless the Company has
satisfied or has caused its subsidiary to satisfy all of the following
requirements with respect to such issuance:
(a) The Company or the subsidiary shall have delivered a notice to the
Purchaser (the "Transfer Notice"), which notice shall include (A) the terms and
---------------
conditions of the securities and the consideration per unit which the Company or
the subsidiary desires to receive for the securities (which, in the case where
the Company or the subsidiary shall have received an offer to purchase such
securities other than from the Purchaser (a "Third Party Offer") shall be the
-----------------
consideration set forth in such offer) and (B) all of the material terms and
conditions, including the terms and conditions of payment, upon which the
Company, or the subsidiary proposes to transfer said securities (which, in the
case of a Third Party Offer, shall be the terms and conditions set forth in the
Third Party Offer).
(b) Upon the delivery of the Transfer Notice, the Purchaser shall have
an option to purchase (i) up to one-third of the aggregate number of the
securities described therein or (ii) all, but not greater than one-third and
less than all, of the securities described therein. Such option shall be
exercisable by the Purchaser by service of written notice upon the Company or
the subsidiary within ten (10) business days of receipt of the Transfer Notice.
(c) If the option created in clause (b) hereof is not exercised by
Purchaser within ten (10) business days of service of the Transfer Notice, or if
such option is exercised only in part, (to the extent permitted by clause (b)
hereof), then, within a period of thirty (30) days beginning on the day
following the date of expiration
17
of the option period, the Company or the subsidiary may issue some or all of the
securities sought to be issued as to which such option was not exercised, at a
price which is not less than one hundred percent (100%) of the price specified
in the Transfer Notice and on terms and conditions not less favorable to the
Company or the subsidiary than those specified in the Transfer Notice.
4.8. Expenses. The Company shall pay to Castle Creek Technology Partners
--------
LLC ("CC") or its designee, up to Thirty Thousand ($30,000.00) Dollars, as
reimbursement for the expenses incurred by CC and its affiliates and advisors in
connection with the negotiation, preparation, execution, and delivery of this
Agreement and the other agreements and documents to be executed in connection
herewith, including, without limitation, CC's and its affiliates' and advisors'
due diligence and reasonable attorneys' fees and expenses (the "Expenses") upon
--------
presentation of documentary evidence of such Expenses. The Company shall
reimburse CC at the Closing for such Expenses, and thereafter upon CC's written
request therefor, subject to such $30,000.00 limit.
4.9. Listing Requirements. The Company shall continue the trading and
--------------------
listing of its Common Stock on the Nasdaq National Market or the New York Stock
Exchange and shall include in such listing the Warrant Shares and the Conversion
Shares and shall comply in all respects with the Company's filing and other
obligations under the rules of the NASD or the New York Stock Exchange as
applicable and shall not permit the suspension or termination of any such
trading and listing, and if such trading and listing of Common Stock is
suspended or terminated, the Company will use its reasonable best efforts to
requalify its Common Stock or otherwise cause such trading and listing to
resume. The Company shall promptly provide to the Purchaser copies of any
notices it receives from the NASD regarding the continued eligibility of the
Common Stock for listing and trading on the Nasdaq National Market. The Company
shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4.9.
4.10. Corporate Existence. So long as the Purchaser beneficially owns any
-------------------
Securities, the Company shall maintain its corporate existence, except in the
event of a Major Transaction (as defined in the Certificate of Designations)
merger, consolidation or sale of all or substantially all of the Company's
assets, as long as the surviving or successor entity in such transaction (i)
assumes the Company's obligations hereunder and under the agreements and
instruments entered into in connection herewith regardless of whether or not the
Company would have had a sufficient number of shares of Common Stock authorized
and available for issuance in order to effect the conversion of all Series A
Preferred Stock outstanding as of the date of such transaction and (ii) is a
publicly traded corporation whose Common Stock is quoted and listed for trading
on the Nasdaq National Market or the New York Stock Exchange.
4.11. Reserved Amount; Allocation of Exchange Cap.
--------------------------------------------
(a) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock a sufficient number of shares
of
18
Common Stock to provide for the (i) full conversion of all Shares of Series A
Preferred Stock and payment in shares of Common Stock of all accrued and unpaid
dividends on Shares of Series A Preferred Stock and (ii) the exercise, in whole
and not in part, of the Common Stock Warrant and issuance of the Warrant Shares
in connection therewith. In the event that any approvals, including stockholder
approval are required to increase the number of Shares of Common Stock reserved
for issuance as provided in the preceding sentence, the Company shall take all
actions necessary to obtain such approval(s) as soon as possible.
(b) To the extent that the Exchange Cap (as defined in the Certificate
of Designations) would limit at any time or from time to time the number of
Conversion Shares and/or Warrant Shares then issuable, the number of shares of
Common Stock issuable upon the conversion of Series A Preferred Stock and
exercise of the Common Stock Warrants shall be allocated pro rata to the holders
of the Series A Preferred Stock and holders of Common Stock Warrants in the same
proportion as the aggregate number of Conversion Shares and Warrant Shares
issuable to a holder (without reference to the Exchange Cap) bears to all
Conversion Shares and Warrant Shares issuable to all holders (without reference
to the Exchange Cap).
(c) The Company shall promptly deliver to each holder of Series A
Preferred Stock and each holder of Common Stock Warrant(s) a written report
notifying the holder of any occurrence which prohibits the Company from issuing
Common Stock upon conversion of the Series A Preferred Stock or exercise of the
Common Stock Warrant(s). Such report shall also specify (i) the total number
of shares of Series A Preferred Stock outstanding as of the date of the report
and the total number of Common Stock Warrant(s) outstanding as of the date of
the report, (ii) the total number of shares of Common Stock issued upon all
conversions of Series A Preferred Stock through the date of the report and the
total number of shares of Common Stock issued upon the exercise of Common Stock
Warrant(s) through the date of the report, (iii) the total number of shares of
Common Stock which are reserved for issuance upon conversion of the Series A
Preferred Stock as of the date of the report and the total number of shares of
Common Stock which are reserved for issuance upon the exercise of the Common
Stock Warrant(s) as of the date of the report, (iv) the total number of shares
of Common Stock which may thereafter be issued by the Company upon conversion of
the Series A Preferred Stock and the total number of shares of Common Stock
which may thereafter be used by the Company upon the exercise of the Common
Stock Warrant(s) before the Company would exceed the Exchange Cap and (v) the
amount of the Conversion Price (as defined in the Certificate of Designations)
and Exercise Price (as defined in the Common Stock Warrant) as of the date of
the report. Upon request of any holder of Series A Preferred Stock or any
holder of Common Stock Warrant, the Company shall promptly confirm for such
holder that sufficient shares of Common Stock are reserved for issuance upon
conversion of such holder's Series A Preferred Stock or such holder's of Common
Stock Warrant, as the case may be, as of the date of the report.
4.12. Transactions with Affiliates. The Company and each of its
----------------------------
subsidiaries will not enter into any agreement or arrangement, written or oral,
directly or indirectly,
19
with any officer, director, employee or other person holding in excess of 5% of
the Company's capital stock or any other person controlling, controlled by or
under common control with the Company, or provide services or sell goods to, or
for the benefit of, or pay or otherwise distribute monies, goods or other
valuable consideration to, an affiliate, except upon fair and reasonable terms
no less favorable to the Company and each of its subsidiaries than terms in a
comparable arm's length transaction with an unaffiliated person or entity and
except for existing intercompany debt and upon the approval of the disinterested
members of the Company's Board of Directors, after full disclosure.
4.13. Limitation of Agreements. The Company will not, and will not permit
------------------------
any subsidiary to, enter into any contract, or any amendment, modification,
extension or supplement to any existing contract, which contractually prohibits
the Company from performing its obligations under the Series A Preferred Stock
or any of the other Investment Agreements.
4.14. Exchange Cap. If, at any time or from time to time, in the
-------------
reasonable judgment of the Purchaser (or the holders of a majority of the
Registrable Shares (as defined in the Registration Rights Agreement) issuable
upon conversion of or otherwise pursuant to the Series A Preferred Stock or upon
the exercise in whole and not in part of the Common Stock Warrant(s)) an
ambiguity exists relating to the Exchange Cap, including the applicability of
the Exchange Cap at any time or from time to time to the holders of Series A
Preferred Stock and/or holders of Common Stock Warrant(s), the Company shall use
commercially reasonable efforts to (i) assist the Purchaser or such holders, as
the case may be, in obtaining clarification from the NASD or any other exchange
on which Common Stock is then listed of the rules of or relating to the Exchange
Cap and any other rules and regulations applicable to maintaining the listing
and trading of the Common Stock on the Nasdaq National Market, or any other
exchange on which the Common Stock is then listed, and (ii) to obtain all
approvals required to maintain the listing and trading of the Common Stock on
the Nasdaq National Market, or any other exchange on which the Common Stock is
then listed, including if applicable, the approval of the Company's stockholders
as required by NASD Rule 4460 (with respect to Nasdaq National Market issuers)
or the New York Stock Exchange Rules.
4.15. Bankruptcy Waiver. In the event the Company becomes a debtor under
-----------------
the Bankruptcy Code, the Company hereby waives to the fullest extent permitted
any rights to relief it may have under 11 U.S.C. 362 in respect of the
conversion of the Shares of Series A Preferred Stock and the exercise of the
Common Stock Warrant. At the direction of Purchaser, the Company agrees,
without cost or expense to the Purchaser, to take or consent to any and all
action necessary to effectuate relief under 11 U.S.C. 362.
ARTICLE V
LEGEND REMOVAL, TRANSFER AND CERTAIN SALES
5.1. Removal of Legend. The Legend shall be removed and the Company shall
-----------------
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
20
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.
---------------------------
(a) The Company shall instruct its transfer agent to issue
certificates, registered in the name of the Purchaser or its nominee, for the
Shares of Series A Preferred Stock in accordance with the terms of this
Agreement, Conversion Shares and the Warrant Shares in such amounts as specified
from time to time by the Purchaser to the Company upon, and in accordance with
the terms of the Certificate of Designations or Common Stock Warrant, as the
case may be. 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 2.6 hereof in the case of the Conversion
Shares and the Warrant 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 and Warrant Shares 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.
21
(b) Purchaser shall exercise its right to convert the Shares of Series
A Preferred Stock or to exercise the Common Stock Warrant by faxing an executed
and completed Notice of Conversion or Form of Exercise Agreement to Purchase, as
applicable, to the Company, and delivering within two (2) business days
thereafter, the original Notice of Conversion (and the related certificates
representing the shares of Series A Preferred Stock, as applicable) or Form of
Exercise Agreement (and the related original Common Stock Warrant and exercise
price in the case of a non-cashless exercise of the Common Stock Warrant) to the
Company by hand delivery or by express courier, duly endorsed. Each date on
which a Notice of Conversion or Form of Election to Purchase is faxed in
accordance with the provisions hereof shall be deemed a "Conversion Date." The
---------------
Company will transmit the certificates representing the Common Stock issuable
upon conversion of any shares of Series A Preferred Stock or upon exercise of
any Common Stock Warrant (together with the shares of Series A Preferred Stock
not so converted or the Stock Purchase Warrants not so exercised) to the
Purchaser via express courier as soon as practicable, but no later than in the
case of the conversion of Series A Preferred Stock, the later of (i) three (3)
business days after the Conversion Date or (ii) one (1) business day after
delivery of certificates representing the Series A Preferred Stock so converted,
and in the case of the exercise of the Common Stock Warrant no later than three
(3) business days after the Conversion Date (each such delivery date, together
with the Dividend Delivery Date referred to in paragraph (c) below, is referred
to herein as a "Delivery Date"). For purposes of this Agreement, any conversion
-------------
of the Shares of Series A Preferred Stock and any exercise of the Common Stock
Warrant shall be deemed to have been made immediately prior to the close of
business on the Conversion Date.
(c) If requested by the holder in the Notice of Conversion, the
Company will instruct its transfer agent to transmit the certificates
representing the Common Stock issuable in lieu of dividends payable on any
shares of Series A Preferred Stock to the Purchaser via express courier on the
Delivery Date applicable to the converted shares of Series A Preferred Stock.
(d) In lieu of delivering physical certificates representing the
Common Stock issuable upon the conversion of, or in lieu of dividends on, the
Shares of Series A Preferred Stock or upon the exercise of the Common Stock
Warrant(s), provided the Company's transfer agent is participating in the
Depositary Trust Company ("DTC") Fast Automated Securities Transfer program, on
---
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")
----
system no later than the applicable Delivery Date.
22
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
6.1. Conditions to the Company's Obligation to Sell. The obligation of
----------------------------------------------
the Company hereunder to issue and sell the Purchased Securities to the
Purchaser at the Closing is subject to the satisfaction, as of the date of such
Closing, of each of the following conditions thereto, provided that these
conditions are for the Company=s sole benefit and may be waived by the Company
at any time in its sole discretion:
(a) The Purchaser shall have executed this Agreement and the
Registration Rights Agreement and delivered the same to the Company.
(b) The Purchaser shall deliver the Purchase Price in immediately
available funds for the Shares of Series A Preferred Stock and the Common Stock
Warrant.
(c) The representations and warranties of the Purchaser shall be true
and correct as of the date when made and as of the Closing as though made at
that time, and each Purchaser shall have performed, satisfied and complied in
all material respects with the covenants and agreements required by this
Agreement to be performed or complied with by the Purchaser at or prior to the
Closing.
(d) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
restricts or prohibits the consummation of any of the transactions contemplated
by this Agreement.
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE
7.1. Conditions to the Closing. The obligation of the Purchaser hereunder
-------------------------
to purchase the Shares of Series A Preferred Stock and the Common Stock Warrant
to be purchased by it on the Closing Date is subject to the satisfaction of each
of the following conditions, provided that these conditions are for the
Purchaser's sole benefit and may be waived by the Purchaser at any time in the
Purchaser's sole discretion:
(a) The Company shall have executed this Agreement, the Common Stock
Warrant and the Registration Rights Agreement and delivered the same to the
Purchaser.
(b) The Company shall have delivered at the Closing one or more duly
executed certificate representing the Shares of Series A Preferred Stock, in
such denominations as the Purchaser shall request.
23
(c) The Common Stock shall be designated for quotation and listed on
the Nasdaq National Market or the New York Stock Exchange and trading in the
Common Stock shall not have been suspended by the SEC or the Nasdaq National
Market or the New York Stock Exchange, as the case may be nor shall suspension
by the SEC or the Nasdaq National Market or the New York, Stock Exchange, as the
case may be, be threatened either in writing or by falling below the minimum
listing maintenance requirements of the Nasdaq National Market or New York Stock
Exchange, as the case may be and no de-listing or suspension shall be reasonably
likely in the judgment of the Purchaser for the foreseeable future.
(d) The representations and warranties of the Company shall be true
and correct as of the date when made and as of the Closing (except for those
that address matters as of a particular date, which need only be true as of such
date) as though made at that time and the Company shall have performed,
satisfied and complied with the covenants and agreements required by this
Agreement to be performed or complied with by the Company at or prior to the
Closing, except where the breach of such representation, warranty or covenant
would not have a Material Adverse Effect. The Purchaser shall have received a
certificate, executed by the Chief Executive Officer or Chief Financial Officer
of the Company, dated as of the Closing to the foregoing effect and as to such
other matters as may be reasonably requested by the Purchaser.
(e) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(f) The Purchaser shall have received an opinion of the Company=s
counsel, dated as of the Closing, in the form attached hereto as Exhibit D.
---------
(g) The Certificate of Designations shall have been accepted for
filing with the Secretary of State of the State of Delaware and a copies thereof
certified by the Secretary of State of Delaware shall have been delivered to
Purchaser and the Certificate of Incorporation and the Certificate of
Designations shall not have been amended, modified or rescinded after the date
of its filing and acceptance.
(h) The Company shall have filed all notices, including, without
limitation, the application for listing of the Conversion Shares and the Warrant
Shares, as required under the rules of NASD or shall have obtained an effective
waiver of such requirements and the Conversion Shares and Warrant Shares shall
have been approved for listing, subject to official notice of issuance, on the
Nasdaq National Market.
(i) On or prior to the Closing Date, there shall not have occurred any
of the following: (i) a suspension or material limitation in the trading of
securities generally on the Nasdaq National Market or the New York Stock
Exchange; (ii) a general moratorium on commercial banking activities in New York
declared by the applicable
24
banking authorities; (iii) the outbreak or escalation of hostilities involving
the United States, or the declaration by the United States of a national
emergency or war; or (iv) a change in international, political, financial or
economic conditions, if the effect of any such event, in the judgment of the
Purchaser, makes it impracticable or inadvisable to proceed with the purchase of
the shares of Series A Preferred Stock and the Common Stock Warrant on the terms
and in the manner contemplated in this Agreement and in the other Investment
Agreements.
(j) On the Closing Date, the Company shall have reimbursed the
Purchaser for the Purchaser's Expenses incurred in connection with the
transactions contemplated by this Agreement (including reasonable fees and
disbursements of the Purchaser's legal counsel) as provided in Section 4.9
hereof.
(k) On the Closing Date, the Purchaser shall have received a six month
lock-up agreement, dated the Closing Date, from Xxxxxxxxx X. Xxxxxxxx, Xxxxxxxx
Xxxxxx, Xxx Xxxxx and Xxxxx X. Xxxx in substantially the form as attached in
Exhibit E.
---------
(l) Prior to the opening of trading on the Nasdaq National Market on
August 11, 2000, the Company shall have issued a press release of its financial
results for the fourth quarter and fiscal year ended June 30, 2000.
ARTICLE VIII
GOVERNING LAW; MISCELLANEOUS
8.1. Governing Law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York 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 New York and the state courts located in the County of
New York in the State of New York 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
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
8.2. Counterparts. This Agreement may be executed in two or more
------------
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
25
means of delivery shall cause additional original executed signature pages to be
promptly delivered to the other parties.
8.3. Headings. The headings of this Agreement are for convenience of
--------
reference and shall not form part of, or affect the interpretation of, this
Agreement.
8.4. Severability. If any provision of this Agreement shall be invalid or
------------
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.
8.5. Scope of Agreement; Amendments. This Agreement and the documents and
------------------------------
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.
8.6. Notice. Any notice herein required or permitted to be given under the
------
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
with copies to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx Xxxxxx, Esq.
26
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Purchaser:
CASTLE CREEK TECHNOLOGY PARTNERS LLC
c/o Castle Creek Partners, LLC, Investment Manager
00 Xxxx Xxxxxx Xxxxx
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.
8.7. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure 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.
8.8. Third Party Beneficiaries. This Agreement is intended for the
-------------------------
benefit 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.
8.9. Survival. The representations and warranties, covenants and
--------
agreements in this Agreement shall survive the execution and delivery of this
Agreement and the Securities under the Investment Agreements, notwithstanding
any due diligence investigation conducted by or on behalf of the Purchaser. All
covenants and agreements of the Company in respect of which performance is
contemplated to occur following the Closing shall survive the Closing.
Notwithstanding the foregoing, except for the representations and warranties in
Section 3.1 and 3.3, all representations and warranties of the Company shall (a)
terminate and expire two years after the Closing, with respect to any claim
other than a tax claim, environmental claim or ERISA claim (as such terms are
27
hereafter defined); (b) terminate and expire with respect to any claim relating
to any inaccuracy in or any breach of representation or warranty of the Company
contained in Section 3.23 (a "tax claim") on the later of (i) the date upon
---------
which the liability to which such tax claim may relate is barred by all
applicable statutes of limitations or (ii) the date upon which any claim for a
refund or credit related to such tax claim is barred by all applicable statutes
of limitations; (c) terminate and expire five (5) years after the Closing, with
respect to any claims or losses imposed under or pursuant to any safety or
environmental laws or principles of common law relating to pollution or
protecting the environment or concerning health or safety in connection with the
release of Hazardous Materials (an "environmental claim"); and (d) terminate and
-------------------
expire with respect to any claim based upon or arising out of or otherwise in
respect of any inaccuracy in or any breach of representation or warranty of the
Company contained in Section 3.21 (an "ERISA claim") on the date upon which the
-----------
liability to which such ERISA claim may relate is barred by all applicable
statutes of limitation. The Company agrees to indemnify and hold harmless the
Purchaser and each of the Purchaser=s officers, directors, members, managers,
employees, partners, agents and affiliates and any direct or indirect officers,
directors, shareholders, members, managers, employees, partners, agents and
affiliates of any of the foregoing for loss or damage arising as a result of or
related to (a) any breach by the Company of any of its representations,
warranties, covenants and agreements set forth herein, or (b) any cause of
action, suit or claim brought or made against such indemnitee, other than
directly by the Company solely for breach of this Agreement, the Common Stock
Warrant, the Series A Preferred Stock or the Registration Rights Agreement by
the indemnitee or by governmental or regulatory authorities, and arising out of
or resulting from (whether in whole or in part) the execution, delivery,
performance by the Company or enforcement of this Agreement or any other
Investment Agreements or any other instrument, document or agreement executed
pursuant hereto or thereto or contemplated hereby or thereby (including without
limitation the acquisition of the Series A Preferred Stock, the Common Stock
Warrant, the Convertible Shares, and/or the Warrant Shares), any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Securities or the status of the Purchaser as an
investor in the Company, except to the extent that such actual loss or damage
directly results from a breach by such indemnitee of this Agreement, the Common
Stock Warrant, or the Registration Rights Agreement or from a violation of law
or gross negligence or willful misconduct; provided, that, indemnification under
the Registration Rights Agreement shall be governed by and construed in
accordance with such agreement. The right to indemnification shall include the
right to advancement of expenses as they are incurred; provided, however, that
any expenses so advanced shall be returned in the event a final nonappealable
judgment is rendered by a court of competent jurisdiction to the effect that
such indemnification is not required under the terms of this Agreement or
permitted under applicable law. Notwithstanding the foregoing, the Company
shall not be required to indemnify and hold harmless any person for any loss
occasioned by a limitation set forth in the Certificate of Designation or Common
Stock Warrant on the Company's ability to issue Conversion Shares or Warrant
Shares in excess of the Exchange Cap.
28
8.10. Public Filings; Publicity. On the same day as the Company files the
-------------------------
Form 8-K required pursuant to Section 4.2, 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; 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).
8.11. Further Assurances. Each party shall do and perform, or cause to be
------------------
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.
8.12. 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).
8.13. 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.
8.14. Termination. In the event that the Closing shall not have occurred
-----------
on August 14, 2000, 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.
8.15. Joint Participation in Drafting. Each party to this Agreement and
-------------------------------
to the Investment Agreements has participated in the drafting of such
Agreements. As such, the language used herein and therein shall be deemed to be
the language chosen by the
29
parties hereto to express their mutual intent and no rule of strict construction
shall be applied against any party to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
30
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
-------------------
Name: Xxxxxxxx Xxxxxx
Title: Senior Vice President and Chief Financial Officer
PURCHASER:
CASTLE CREEK TECHNOLOGY PARTNERS LLC
By: Castle Creek Partners, L.L.C.
Its: Investment Manager
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Address: 00 Xxxx Xxxxxx Xxxxx
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.
Facsimile: (000) 000-0000
31
