<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>6
<FILENAME>dex101.txt
<DESCRIPTION>SERIES D CONVERITBLE PREFERRED STOCK PURCHASE AGREEMENT
<TEXT>
<PAGE>
Exhibit 10.1
VOXWARE, INC.
Series D Convertible Preferred Stock Purchase Agreement
Dated as of April 16, 2003
<PAGE>
VOXWARE, INC.
Series D Convertible Preferred Stock Purchase Agreement
Dated as of April 16, 2003
Table of Contents
Page
----
ARTICLE I PURCHASE, SALE AND TERMS OF SHARES..................................1
1.01. The Committed Series D Convertible Preferred Shares; Definitions......1
1.02. The Common Stock Warrants ............................................1
1.03. The Series D Warrants.................................................2
1.04. The Converted Shares..................................................2
1.05. The Shares............................................................2
1.06. Purchase Price and Closing............................................2
1.07. Use of Proceeds.......................................................3
1.08. Representations and Warranties by the Purchasers......................3
1.09. Purchase Price Allocation.............................................4
ARTICLE II CONDITIONS TO PURCHASERS' OBLIGATION..............................5
2.01. Representations and Warranties........................................5
2.02. Performance...........................................................5
2.03. Documentation at Closing..............................................5
2.04. Board of Directors....................................................8
2.05. Qualifications........................................................8
2.06. Consents, Waivers, Etc................................................8
2.07. Employment Agreement Amendments.......................................8
2.08. No Material Adverse Changes...........................................8
2.09. No Event of Default...................................................8
2.10. Company Subscription for Voxware Europe Shares........................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................9
3.01. Organization and Standing; Subsidiaries...............................9
3.02. Corporate Action.....................................................10
3.03. Governmental Approvals...............................................11
3.04. Litigation...........................................................11
3.05. Certain Agreements of Officers and Key Employees.....................12
3.06. Compliance with Other Instruments....................................12
3.07. Financial Information................................................12
3.08. No Insolvency........................................................13
3.09. ERISA................................................................13
3.10. Transactions with Affiliates.........................................13
3.11. Assumptions or Guaranties of Indebtedness of Other Persons...........14
3.12. Investments in Other Persons.........................................14
-i-
<PAGE>
3.13. Securities Act.......................................................14
3.14. Brokers or Finders...................................................14
3.15. Capitalization; Status of Capital Stock..............................14
3.16. Registration Rights..................................................15
3.17. Insurance............................................................15
3.18. Books and Records....................................................15
3.19. Title to Assets; Patents.............................................15
3.20. Computer Programs....................................................16
3.21. Intellectual Property Rights.........................................17
3.22. Real Property Holding Corporation....................................17
3.23. Taxes................................................................17
3.24. Other Agreements.....................................................18
3.25. Commission Filings...................................................20
3.26. Disclosure...........................................................20
ARTICLE IV - DEFINITIONS AND ACCOUNTING TERMS................................20
4.01. Certain Defined Terms................................................20
4.02. Accounting Terms.....................................................24
ARTICLE V - MISCELLANEOUS....................................................24
5.01. No Waiver; Cumulative Remedies.......................................24
5.02. Amendments, Waivers and Consents.....................................24
5.03. Addresses for Notices................................................25
5.04. Costs, Expenses and Taxes............................................25
5.05. Binding Effect; Assignment...........................................25
5.06. Prior Agreements.....................................................25
5.07. Severability.........................................................26
5.08. Governing Law........................................................26
5.09. Headings.............................................................26
5.10. Counterparts.........................................................26
5.11. Further Assurances...................................................26
5.12. Indemnification......................................................26
5.13. Placement Agent......................................................27
5.14. Exercise of Voxware Europe Call Option...............................28
5.15. Exclusivity..........................................................28
-ii-
<PAGE>
EXHIBITS
--------
1.01 List of Purchasers
1.01A Amended and Restated Certificate of Incorporation of the Company
1.02A Form of Common Stock Warrant
1.02B Form of Common Stock Warrant to Ridgecrest
1.03 Form of Series D Warrant
2.03B Opinion of Hale and Dorr LLP
2.03F Stockholders Agreement
2.03I Investor Rights Agreement
2.03K Proprietary Information and Inventions Agreement
2.03R Castle Creek Settlement Agreement and Mutual Release
2.03S Nash Fitzwilliams Consulting Agreement and Release
3.01 Subsidiaries
3.04 Litigation
3.05 Agreements with Officers and Key Employees
3.07 Financial Information
3.10 Transactions with Affiliates
3.15 Capitalization
3.16 Registration Rights
3.19 Title to Assets
3.20 Computer Programs
3.24 Agreements
4.01A Creafund Exchange Agreement
4.01B Series B Exchange Agreement
4.01C Series C Exchange Agreement
5.13 Placement Agent Purchasers
-iii-
<PAGE>
Voxware, Inc.
Lawrenceville Office Park
PO Box 5363
Princeton, NJ 08543-5363
As of April 16, 2003
TO: The Persons listed on Exhibit 1.01 hereto
Re: Series D Convertible Preferred Stock Financing
Ladies and Gentlemen:
Voxware, Inc. a Delaware corporation (the "Company"), agrees with each of
you as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SHARES
1.01 The Committed Series D Convertible Preferred Shares; Definitions. At
the time of the Closing, the Company shall have authorized the issuance and sale
of up to 485,267,267 shares (the "Committed Series D Preferred Shares") of its
previously authorized but unissued shares of Series D Convertible Preferred
Stock, par value $0.001 per share (the "Series D Preferred Stock"), at a
purchase price of $0.015 per share (the "Purchase Price") or upon the exchange
or conversion of certain equity interests in the Company as further described in
Section 1.06 and on Exhibit 1.01 hereto, the sufficiency of which the Company
hereby agrees, to the persons (collectively, the "Purchasers" and, individually,
a "Purchaser") and in the respective amounts set forth on Exhibit 1.01. A
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of the Series D Preferred Stock is set forth in
the Amended and Restated Certificate of Incorporation of the Company, the form
of which is attached hereto as Exhibit 1.01A. Capitalized terms used in this
Agreement and not elsewhere defined, are defined in Section 4.01.
1.02. The Common Stock Warrants. At the time of the Closing, the Company
shall have also authorized the issuance at the Closing of Common Stock warrants
(the "Common Stock Warrants") to certain Purchasers for the purchase (subject to
adjustment as provided therein) of up to an aggregate of 28,000,000 shares of
Common Stock in the respective amounts set forth on Exhibit 1.01 hereto under
the heading "Common Stock Warrants" based on the Warrant Percentages in Exhibit
1.01 as further discussed in Section 1.03 below; provided,
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 2
however that number of shares of Common Stock issuable upon the exercise of the
Common Stock Warrant to be issued to Ridgecrest shall be based on the terms set
forth in Section 5.13 hereto. The Common Stock Warrants shall be exercisable at
a purchase price of $0.015 per share (subject to adjustment as provided therein)
and shall be in the form set forth in Exhibit 1.02A hereto; provided, however
that the Common Stock Warrant issued to Ridgecrest shall be in the form set
forth in Exhibit 1.02B.
1.03. The Series D Warrants. At the time of the Closing, the Company shall
have also authorized the issuance at the Closing of Series D Preferred Stock
warrants (the "Series D Warrants" and, together with the Common Stock Warrants,
the "Warrants") for up to an aggregate maximum of 93,333,333 additional shares
of Series D Preferred Stock. The Series D Warrants shall be exercisable at a
purchase price of $0.001 per share (subject to adjustment as provided therein)
and shall be in the form set forth in Exhibit 1.03 hereto. The Series D Warrants
shall be issued to the Purchasers based on the respective percentage amounts
listed on Exhibit 1.01 under the heading "Warrant Percentages", which percentage
for each Purchaser shall be based upon a fraction, the numerator of which is the
cash dollar amount paid by such Purchaser under this Agreement for Committed
Series D Preferred Shares and the denominator of which is the aggregate cash
dollar amount paid by all Purchasers under this Agreement for Committed Series D
Preferred Shares. The term "Warrants" shall also include any warrant delivered
in exchange or replacement of the "Warrants."
1.04. The Converted Shares. At the time of the Closing, the Company shall
have authorized and shall have reserved and the Company hereby covenants to
continue to reserve, free of preemptive rights and other preferential rights,
(i) a sufficient number of its previously authorized but unissued shares of
Common Stock to satisfy the rights of conversion of the holders of the Series D
Preferred Stock (including the Common Stock issuable upon the conversion of
Series D Preferred Stock issuable upon the exercise of the Series D Warrants)
and any other outstanding previously issued preferred shares and the exercise
rights of the holders of the Common Stock Warrants and (ii) a sufficient number
of its previously authorized but unissued shares of Series D Preferred Stock to
satisfy the exercise rights of the holders of the Series D Warrants. Any shares
of Common Stock issuable upon conversion of the Series D Preferred Stock
(including the Common Stock issuable upon the conversion of Series D Preferred
Stock issuable upon the exercise of the Series D Warrants) and any other
outstanding previously issued preferred shares, and such shares when issued, are
herein referred to as the "Converted Shares." Any shares of Series D Preferred
Stock and Common Stock issuable upon the exercise of the Warrants, and such
shares when issued, are herein referred to as "Warrant Shares."
1.05. The Shares. The Committed Series D Preferred Shares, the Converted
Shares and the Warrant Shares are sometimes collectively referred to herein as
the "Shares."
1.06. Purchase Price and Closing. The Company agrees to issue and sell to
the Purchasers and, subject to and in reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement, the Purchasers,
severally but not jointly, agree to purchase that number of the Committed Series
D Preferred Shares and Warrants set forth opposite their
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 3
respective names in Exhibit 1.01 attached hereto under the headings "Committed
Series D Preferred Shares". The aggregate dollar purchase price of or other
consideration being given for the Committed Series D Preferred Shares and the
Warrants being purchased by each Purchaser at the Closing is set forth opposite
such Purchaser's name in Exhibit 1.01 under the heading "Aggregate Dollar
Purchase Price or Other Consideration". The purchase and sale shall take place
at a closing (the "Closing") to be held at the offices of Testa, Hurwitz &
Thibeault, LLP, 125 High Street, Boston, Massachusetts 02110, on such date and
at such time as may be mutually agreed upon, but in any event not later than
five (5) business days after formal shareholder approval of all the matters
contained in the Proxy Statement or June 30, 2003; provided that the Purchasers
with rights to purchase a majority in interest of the Committed Series D
Preferred Shares to be issued pursuant to Section 1.01 may in their sole
discretion extend such dates.
At the Closing, the Company will issue and deliver (a) certificates
evidencing the Committed Series D Preferred Shares to be sold at the Closing to
each of the applicable Purchasers (or its nominees) and (b) Warrants to each of
the applicable Purchasers (or its nominee), in each case against payment of the
full purchase price therefor by (i) wire transfer, (ii) check payable to the
order of the Company, (iii) surrender of the principal and interest amount due
under any promissory notes or debentures of the Company payable to the order of
such Purchaser, (iv) amendment of the rights, preferences, privileges,
qualifications, voting powers and other terms of the Series B Preferred Stock as
set forth in the Amended and Restated Certificate of Incorporation of the
Company, the form of which is attached hereto as Exhibit 1.01A, (v) surrender of
shares of Series C Preferred Stock (including the rights to any accrued
dividends or other payments thereon) held by such Purchaser, (vi) surrender of
interests in Voxware Europe (including the rights to any accrued dividends or
other payments with respect thereto) held by such Purchaser, (vii) surrender of
warrants to purchase Common Stock held by such Purchaser, (viii) in the case of
Ridgecrest, provision of adequate and acceptable services as provided for in
Section 5.13, or (ix) any agreed to combination of (i), (ii), (iii), (iv), (v),
(vi), (vii) and (viii) above; provided, however, that the Shares issuable
pursuant to (v) above shall be proportionately reduced for any conversion of
Series C Preferred Stock between the date hereof and the Closing. In the event
that any Purchaser makes payment in whole or in part by cancellation of
indebtedness, such Purchaser shall surrender the evidence of such indebtedness
for cancellation at the Closing.
1.07. Use of Proceeds. The Company shall use up to $650,000 of the proceeds
to pay Castle Creek in consideration of its agreement to amend the rights,
preferences, privileges, qualifications, voting powers and other terms of the
Series B Preferred Stock, up to $30,000 of the proceeds to pay the accrued and
unpaid interest owed to certain members of the Creafund Group under certain 10%
Convertible Debentures Due July 1, 2003 issued by the Company, and shall use the
remainder of such proceeds for working capital requirements and general
corporate purposes.
1.08. Representations and Warranties by the Purchasers. Each of the
Purchasers represents and warrants severally, but not jointly, that: (a) it is
an "accredited investor" within the meaning of Rule 501 under the Securities Act
of 1933, as amended (the "Securities Act"); (b) it will acquire the Series D
Preferred Stock and the Warrants to be acquired by it for its own
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 4
account and that such Series D Preferred Stock and Warrants are being and will
be acquired by it for the purpose of investment and not with a view to
distribution or resale thereof; (c) the execution of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of such Purchaser, and this Agreement has
been duly executed and delivered, and constitutes a valid, legal, binding and
enforceable agreement of such Purchaser; (d) it understands that the Series D
Preferred Stock and the Warrants have not been registered under the Securities
Act, and that no trading market exists for such securities; (e) it has reviewed
or has had an opportunity to ask questions of, and to receive answers from, the
Company and its representatives, with respect to the Company and the terms and
conditions of this transaction, and it confirms that, to its knowledge, all
information, documents, records and books pertaining to the Company and the
Purchaser's investment in the Company requested by the Purchaser have been made
available or delivered to it to the Purchaser's full satisfaction; provided,
however, that the foregoing does not limit or modify the representations and
warranties of the Company in Article III of this Agreement or the right of such
Purchaser to rely thereon; and (f) except with respect to Ridgecrest, as
applicable and as further set forth in Section 5.13 hereto, it has taken no
action which would give rise to any claim by any other person for any brokerage
commissions, finders' fees or the like relating to this Agreement or the
transactions contemplated hereby. The acquisition by each Purchaser of the
Series D Preferred Stock and the Warrants acquired by it shall constitute a
confirmation of the representations and warranties made by each such Purchaser
as at the date of such acquisition. Each of the Purchasers further represents
that it understands and agrees that, until registered under the Securities Act,
or transferred pursuant to the provisions of Rule 144 as promulgated by the
Commission, all certificates evidencing any of the Series D Preferred Stock and
all Warrants shall bear a legend, prominently stamped or printed thereon,
reading substantially as follows:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN EXEMPTION
FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS."
1.09. Purchase Price Allocation. The Company and the Purchasers (other than
Ridgecrest) having adverse interests and as a result of arm's length bargaining,
agree that (i) neither such Purchasers nor any of their partners, members or
employees has rendered or has agreed to render any services to the Company in
connection with this Agreement or the issuance of the Warrants; (ii) the
Warrants are not being issued as compensation; and (iii) for the purpose, and
within the meaning, of Section 1273(c)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), the issue price of the Warrants is $0.001 per Warrant
Share. The Company and
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 5
such Purchasers acknowledge that this allocation is based on the relative fair
market values of the Series D Preferred Stock and the Warrants. The Company and
such Purchasers recognize that this Agreement determines the original issue
discount to be taken into account by the Company and such Purchasers for federal
income tax purposes and they agree to adhere to this Agreement for such
purposes.
ARTICLE II
CONDITIONS TO PURCHASERS' OBLIGATION
The obligation of each Purchaser to purchase and pay for the Series D
Preferred Stock to be purchased by it at the Closing, as well as the Purchasers'
other respective obligations under this Agreement (other than Ridgecrest's
obligations under Section 5.13), are subject to the fulfillment to the
Purchasers' satisfaction of each of the following conditions as of the Closing
date:
2.01. Representations and Warranties. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true and
correct on the date of the Closing.
2.02. Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company at or prior to
the Closing shall have been performed or complied with.
2.03. Documentation at Closing. The Purchasers shall have received prior to
or at the Closing all of the following documents or instruments, or evidence of
completion thereof, each in form and substance satisfactory to the Purchasers
and their counsel:
(a) A copy of the Amended and Restated Certificate of
Incorporation of the Company, certified by the state secretary of the State of
Delaware as of a date not more than seven (7) days prior to the Closing date, a
copy of the votes of the Board of Directors evidencing the adoption of the
Amended and Restated Certificate of Incorporation, the approval of this
Agreement, the issuance of the Series D Preferred Stock and the Warrants and the
other matters contemplated hereby, a copy of the votes of the stockholders of
the Company evidencing the adoption of the Amended and Restated Certificate of
Incorporation, and approval of each of the other matters set forth for their
approval in the Proxy Statement, and a copy of the Bylaws of the Company, all of
which shall have been certified by the Secretary of the Company to be true,
complete and correct in every particular, and certified copies of all documents
evidencing other necessary corporate or other action and governmental approvals,
if any, with respect to this Agreement, the Shares and the Warrants.
(b) An opinion of Hale and Dorr LLP, counsel to the Company, in
the form of Exhibit 2.03B attached hereto.
(c) A certificate of the Secretary of the Company certifying the
names of the officers of the Company authorized to sign this Agreement, the
certificates for the Series D
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 6
Preferred Stock, and the other documents, instruments or certificates to be
delivered pursuant to this Agreement by the Company or any of its officers,
together with the true signatures of such officers. The Purchasers may
conclusively rely on such certificate until they shall receive a further
certificate of the Secretary or an Assistant Secretary of the Company canceling
or amending the prior certificate and submitting the signatures of the officers
named in such further certificate.
(d) A certificate of the President of the Company stating that
the representations and warranties of the Company contained in Article III
hereof and otherwise made by the Company in writing in connection with the
transactions contemplated hereby are true and correct as of the Closing and that
all conditions required to be performed prior to or at the Closing have been
performed as of the Closing.
(e) The Amended and Restated Certificate of Incorporation of the
Company shall provide for the rights and preferences of the Series D Preferred
Stock, and for the amendment of the rights and preferences of the Series B
Preferred Stock, as set forth in Exhibit 1.01A attached hereto.
(f) A Stockholders Agreement in the form set forth in Exhibit
2.03F (the "Stockholders Agreement") duly executed and delivered by the parties
named therein.
(g) A Certificate of Good Standing for the Company certified by
the state secretary of the State of Delaware as of a date not more than three
(3) business days prior to the Closing date. Certificates of good standing with
respect to the Company, certified by the respective state officer of the states
in which the conduct of the Company's business requires it to be licensed or
qualified to transact business as a foreign corporation and in good standing, in
each case as of a date not more than three (3) business days prior to the
Closing date. A certificate of good standing or other document similar in
substance for each of the Company's Subsidiaries issued by the appropriate
government official of all of the jurisdictions of incorporation and
jurisdictions of foreign qualification or licensing of such Subsidiaries.
(h) Payment for the costs, expenses, taxes and filing fees
identified in Section 5.04.
(i) An Investor Rights Agreement in the form set forth in Exhibit
2.03I (the "Investor Rights Agreement") duly executed and delivered by the
parties named therein.
(j) A copy of the Bylaws of the Company, which shall be in form
and substance reasonably satisfactory to the Purchasers and their special
counsel and which shall include the provisions set forth in Section 13(a)(xi) of
the Investor Rights Agreement.
(k) A Proprietary Information and Inventions Agreement in the
form set forth in Exhibit 2.03K duly executed and delivered by each of the Key
Employees of the Company.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 7
(l) Participation of the Creafund Group in the Closing through
(i) the surrender to the Company of all outstanding promissory notes and
debentures issued by the Company to such Persons or any related parties and (ii)
conversion of such Persons' ownership interest in Voxware Europe, in each case
on the terms set forth in this Agreement and in accordance with the terms of the
Creafund Exchange Agreement.
(m) Participation of all holders of Series B Preferred Stock in
the Closing through the amendment of the rights, preferences and other terms of
the Series B Preferred Stock, in each case on the terms set forth in this
Agreement and in accordance with the terms of the Series B Exchange Agreement.
(n) Participation of all holders of Series C Preferred Stock in
the Closing through the surrender to the Company of all outstanding shares of
Series C Preferred Stock and certain outstanding warrants to purchase shares of
Common Stock, in each case on the terms set forth in this Agreement and in
accordance with the terms of the Series C Exchange Agreement.
(o) Cancellation of all outstanding warrants issued by the
Company prior to the Closing except warrants exercisable for (i) 325,000 shares
of Common Stock issued to InRoad, Inc., with an exercise price of $0.032 per
share, (ii) 50,000 shares of Common Stock issued to Stratos Product Development,
LLC, with an exercise price of $0.032 per share, (iii) 50,000 shares of Common
Stock issued to Institutional Finance Group, LLC, with an exercise price of
$3.44 per share, (iv) 79,681 shares of Common Stock issued to Mark Olivola, with
an exercise price of $0.1255, (v) 29,880 shares of Common Stock issued to
Burnbrae Ltd., with an exercise price of $0.1255, (vi) 9,960 shares of Common
Stock issued to Diathermi Investment Ltd., with an exercise price of $0.1255,
(vii) 39,840 shares of Common Stock issued to Mark Wentworth Foster-Brown, with
an exercise price of $0.1255, (viii) 59,761 shares of Common Stock issued to
Pictet Private Equity Investors SA, with an exercise price of $0.1255, (ix)
278,884 shares of Common Stock issued to Oracle Management, with an exercise
price of $0.1255, and (x) 39,840 shares of Common Stock issued to Barry Frankel,
with an exercise price of $0.1255.
(p) Each holder of Series B Preferred Stock, Series C Preferred
Stock and any other capital stock of the Company shall have waived all its
respective cash redemption rights, pre-emptive rights, rights of first refusal,
co-sale rights and anti-dilution protections, as applicable, with respect to the
transactions contemplated hereby and by the other Financing Documents.
(q) Participation of the Purchasers specified on Exhibit 1.01
hereto to participate in the Closing on the terms set forth in this Agreement.
(r) A Settlement Agreement and Mutual Release in the form set
forth in Exhibit 2.03R (the "Settlement Agreement") duly executed and delivered
by the parties named therein with respect to certain claims against the Company
by Castle Creek.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 8
(s) A Consulting Agreement and a Release, each in the form set
forth in Exhibit 2.03S and each duly executed and delivered by the parties named
therein, with respect to certain consulting services to be performed by Nash
Fitzwilliams for the Company and certain claims against the Company by Nash
Fitzwilliams, respectively.
2.04. Board of Directors. The Board of Directors at the time of the Closing
shall consist of up to seven (7) members, of which the members shall be
Bathsheba J. Malsheen, David B. Levi, Eli Porat, and four (4) members nominated
by the holders of a majority in interest of the Series D Preferred Stock, who
shall initially be Joseph A. Allegra, Mike Janis, Ross T. Martinson and Glenn
Rieger, or such other individuals as nominated by the proposed Purchasers of a
majority in interest of the Series D Preferred Stock.
2.05. Qualifications. As of the Closing, all authorizations, approvals or
permits of or filings with, any governmental authority, including state
securities or "Blue Sky" offices, that are required by law in connection with
the lawful sale and issuance of the Series D Preferred Stock and the Warrants
shall have been duly obtained by the Company and shall be effective as of the
Closing, except for any notice that may be required subsequent to the Closing
under applicable state and/or federal securities laws (which, if required, shall
be filed on a timely basis).
2.06. Consents, Waivers, Etc. Prior to the Closing, the Company shall have
obtained all consents or waivers, if any, necessary to execute and deliver this
Agreement and issue the Series D Preferred Stock and the Warrants, and to carry
out the transactions contemplated hereby and thereby, and all such consents and
waivers shall be in full force and effect. All corporate and other action and
governmental filings necessary to effectuate the terms of this Agreement, the
Series D Preferred Stock, the Warrants and other agreements and instruments
executed and delivered by the Company in connection herewith shall have been
made or taken, except for any post-sale filing that may be required under
federal or state securities laws. In addition to the documents set forth above,
the Company shall have provided to the Purchasers any other information or
copies of documents that the Purchasers may reasonably request.
2.07. Employment Agreement Amendments. The Company and each of Bathsheba J.
Malsheen and Nicholas Narlis shall have entered into amendments to their
respective existing employment agreements, in form acceptable to the Investors
regarding the respective terms of their employment.
2.08 No Material Adverse Changes. Edison shall not have concluded that a
material adverse change in the financial condition, business, operations,
affairs or prospects of the Company has occurred, nor that any fact exists nor
has any event or circumstance occurred which reasonably could give rise to such
a material adverse change.
2.09 No Event of Default. No Event of Default (as such term is defined in
the Settlement Agreement) shall have occurred under the Settlement Agreement,
and the Company shall not have received any notice alleging an Event of Default
under the Settlement Agreement.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 9
2.10 Company Subscription for Voxware Europe Shares. The Company shall have
purchased the additional number of common shares of Voxware Europe necessary in
order to reinstall the minimum required capital of Voxware Europe according to
Articles 633 and 634 of the Corporation Law of Belgium and as further set forth
in Section 4.5.a. of the Creafund Exchange Agreement, which common shares shall
be paid for by the Company through a reduction of the inter-company loan account
currently owed by Voxware Europe to the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
For purposes of this Article III, unless otherwise specified or the context
otherwise requires, the term "Company" shall include the Company and each of its
Subsidiaries. The Company represents and warrants to the Purchasers as follows:
3.01. Organization and Standing; Subsidiaries.
(a) The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority for the ownership and operation of its
properties and for the carrying on of its business as now conducted and as now
proposed to be conducted. The Company is duly licensed or qualified and in good
standing as a foreign corporation authorized to do business in all jurisdictions
wherein the character of the property owned or leased, or the nature of the
activities conducted, by it makes such licensing or qualification necessary,
except for any jurisdiction where the failure to be so qualified or licensed
would not result in a Material Adverse Change to the business, operations,
affairs or financial condition of the Company or in its properties or assets
taken as a whole.
(b) The attached Exhibit 3.01 contains a list of all Subsidiaries
of the Company. Except for such Subsidiaries, the Company does not (i) own of
record or beneficially, directly or indirectly, (A) any shares of capital stock
or securities convertible into capital stock of any other corporation or (B) any
participating interest in any partnership, joint venture or other non-corporate
business enterprise, or (C) any assets comprising the business or material
obligations of any other corporation, partnership, joint venture or other
non-corporate business enterprise or (ii) control, directly or indirectly, any
other entity.
(c) Each of the Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and is duly licensed or qualified to transact
business as a foreign corporation and is in good standing in each jurisdiction
in which the nature of the business transacted by it or the character of the
properties owned or leased by it requires such licensing or qualification,
except for any jurisdiction where the failure to be so qualified or licensed
would not result in a Material Adverse
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 10
Change to the business, operations, affairs or financial condition of such
Subsidiary or in its properties or assets taken as a whole. Each of the
Subsidiaries has the corporate power and authority to own and hold its
properties and to carry on its business as now conducted and as now proposed to
be conducted. Except as disclosed on Exhibit 3.01, all of the outstanding shares
of capital stock of each of the Subsidiaries are owned beneficially and of
record by the Company, one of its other wholly owned Subsidiaries, or any
combination of the Company and/or one or more of its other wholly owned
Subsidiaries, all as specified in Exhibit 3.01, in each case free and clear of
any liens, charges, restrictions, claims or encumbrances of any nature
whatsoever, except for those disclosed in Exhibit 3.01; and, except as disclosed
in Exhibit 3.01, there are no outstanding subscriptions, warrants, options,
convertible securities, or other rights (contingent or other) pursuant to which
any of the Subsidiaries is or may become obligated to issue any shares of its
capital stock to any Person other than the Company or one of the other
Subsidiaries.
3.02. Corporate Action. The Company has all necessary corporate power and,
subject to the approval of the stockholders of the Company of the matters set
forth for their approval in the Proxy Statement, has taken all corporate action
required to enter into and perform this Agreement and any other agreements and
instruments contemplated hereby or executed in connection herewith
(collectively, the "Financing Documents"). Subject to the approval of the
stockholders of the Company of the matters set forth in the Proxy Statement, the
Financing Documents are valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, (b) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (c) to the extent the indemnification
provisions contained in any of the Financing Documents may be limited by
applicable federal or state securities laws. The issuance, sale and delivery of
the Series D Preferred Stock and the Warrants in accordance with this Agreement
have been duly authorized by all necessary corporate action on the part of the
Company, subject to the approval of the stockholders of the Company of the
matters set forth for their approval in the Proxy Statement. The issuance and
delivery of the Converted Shares upon conversion of the Series D Preferred Stock
and any other preferred shares and the issuance and delivery of the Warrant
Shares upon the exercise of the Warrants have been duly authorized by all
necessary corporate action on the part of the Company, subject to the approval
of the stockholders of the Company of the matters set forth for their approval
in the Proxy Statement. At the time of the Closing, sufficient authorized but
unissued shares of Common Stock and Series D Preferred Stock shall have been
reserved by appropriate corporate action in connection with the prospective
conversion or exercise, as applicable, of the Series D Preferred Stock
(including the Common Stock issuable upon the conversion of Series D Preferred
Stock issuable upon the exercise of the Series D Warrants), the Warrants and any
other preferred shares or warrants at their respective conversion or exercise
prices. The Series D Preferred Stock and the Warrants, when issued, sold and
delivered in accordance with the terms of this Agreement, will be duly and
validly issued, fully paid and non-assessable, are not subject to preemptive
rights or other preferential rights in any present or future stockholders of the
Company other than as set forth in the Stockholders Agreement, will not be
subject to any Lien, and will not conflict with any provision of any agreement
or instrument to which the Company is a party or by which it or its property is
bound. The Converted Shares upon the conversion of the Series D Preferred Stock
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 11
and any other preferred shares, and the Warrant Shares upon the exercise of the
Warrants will be duly and validly issued, fully paid and non-assessable, will
not be subject to preemptive rights or other preferential rights in any present
or future stockholders of the Company other than as set forth in the
Stockholders Agreement, will not be subject to any Lien, and will not conflict
with any provision of any agreement or instrument to which the Company is a
party or by which it or its property is bound.
3.03. Governmental Approvals. Except for the filing of the Proxy Statement
with the Commission and the filing of any notice subsequent to the Closing that
may be required under applicable state and/or federal securities laws (which, if
required, shall be filed on a timely basis), no authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is or will be necessary for the execution and delivery by
the Company of this Agreement, for the offer, issue, sale and delivery of the
Series D Preferred Stock or the Warrants, for the issue and delivery of the
Converted Shares upon conversion of the Series D Preferred Stock or any other
preferred shares, for the issue and delivery of the Warrant Shares upon the
exercise of the Warrants, or for the performance by the Company of its
obligations under this Agreement.
3.04. Litigation. Except as described in Exhibit 3.04, there is no
litigation or governmental proceeding or investigation pending or, to the
Company's knowledge, threatened against the Company affecting any of its
respective material properties or assets, or against any officer of the Company
or Key Employee relating to any such person's performance of duties for the
Company or relating to his stock ownership in the Company or otherwise relating
to the business of the Company, nor to the knowledge of the Company has there
occurred any event or does there exist any condition on the basis of which any
such material litigation, proceeding or investigation might properly be
instituted. The Company is not in default with respect to any order, writ,
injunction, decree, ruling or decision of any court, commission, board or other
governmental agency. To the knowledge of the Company, no officer of the Company
or Key Employee is in default with respect to any order, writ, injunction,
decree, ruling or decision of any court, commission, board or other governmental
agency relating to such person's performance of duties for the Company or
relating to his stock ownership in the Company or otherwise relating to the
business of the Company. Except as described in Exhibit 3.04, there are no
actions, suits, claims, investigations or proceedings pending or, to the
knowledge of the Company, threatened which could reasonably be expected to
result, either in any case or in the aggregate, in any material adverse effect
on the business, operations, affairs or condition (financial or otherwise) of
the Company or in its properties or assets taken as a whole, or which directly
or indirectly challenge the validity of this Agreement, any of the Shares or the
Warrants, or any action taken or to be taken pursuant hereto or thereto (each a
"Material Adverse Effect"). The foregoing sentences include, without limiting
their generality, actions pending or, to the knowledge of the Company,
threatened involving the prior employment of any of the Company's officers or
Key Employees or their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 12
3.05. Certain Agreements of Officers and Key Employees.
(a) Except as listed in Exhibit 3.05, the Company is not a party
to or obligated in connection with its business with respect to (i) outstanding
contracts with employees, agents, consultants, advisers, sales representatives,
distributors, sales agents or dealers or (ii) collective bargaining agreements
or contracts with any labor union or other representative of employees or any
employee benefits provided for by any such agreement.
(b) To the knowledge of the Company, no officer or Key Employee
of the Company is in violation of any term of any employment contract, patent
disclosure agreement, proprietary information agreement, noncompetition
agreement, or any other contract or agreement or any restrictive covenant
relating to the right of any such officer or Key Employee to be employed by the
Company because of the nature of the business conducted or now proposed to be
conducted by the Company or relating to the use of trade secrets or proprietary
information of others, and, to the knowledge of the Company, the continued
employment of the Company's officers and Key Employees does not subject the
Company or any Purchaser to any liability to third parties.
(c) To the knowledge of the Company, no officer of the Company
nor any Key Employee of the Company whose termination, either individually or in
the aggregate, would have a Material Adverse Effect, has expressed any present
intention of terminating his employment with the Company.
3.06. Compliance with Other Instruments. The Company is in compliance with
the terms and provisions of this Agreement and of its Certificate of
Incorporation and Bylaws, each as amended, and with all material mortgages,
indentures, leases, agreements and other instruments, if any, by which it is
bound or to which it or any of its respective properties or assets are subject.
The Company is in compliance with all material judgments, decrees, governmental
orders, statutes, rules or regulations by which it is bound or to which any of
its properties or assets are subject. Neither the execution and delivery of this
Agreement or the issuance of the Shares or the Warrants, nor the consummation of
any transaction contemplated by this Agreement, (i) has constituted or resulted
in or will constitute or result in a default or violation of any term or
provision of any of the foregoing documents, instruments, judgments, agreements,
decrees, orders, statutes, rules and regulations, (ii) has resulted in a
violation of or will result in a violation of any currently outstanding
redemption rights, pre-emptive rights, rights of first refusal or co-sale rights
applicable to the Company or the capital stock or other securities of the
Company, or (iii) will trigger any currently outstanding anti-dilution
protections with respect to the capital stock or other securities of the
Company.
3.07. Financial Information. The audited financial statements of the
Company as of and for the period ended June 30, 2002 and the unaudited financial
statements of the Company as of and for the period ended December 31, 2002,
attached hereto as Exhibit 3.07, present fairly the financial position of the
Company as of the dates thereof and the results of operations for the periods
covered thereby (subject, in the case of such unaudited financial statements, to
immaterial year-end audit adjustments) and have been prepared in accordance with
generally
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 13
accepted accounting principles consistently applied, except for the absence of
footnotes not customarily included in such statements (the "Financial
Statements"). The Company does not know of any material liability, contingent or
otherwise, not adequately reflected in or reserved against in the aforesaid
financial statements or in the notes thereto. Except as set forth in Exhibit
3.07, since December 31, 2002, (i) there has been no Material Adverse Change,
(ii) neither the business, condition, or operations of the Company nor any of
the properties or assets of the Company have been materially adversely affected
as the result of any legislative or regulatory change, any revocation or change
in any franchise, permit, license or right to do business, or any other event or
occurrence, whether or not insured against; and (iii) the Company has not
entered into any material transaction other than in the ordinary course of
business, made any dividend or distribution on its capital stock, or redeemed or
repurchased any of its capital stock other than as contemplated by this
Agreement.
3.08. No Insolvency. No insolvency proceeding of any character, including,
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting the Company or
any of its assets or properties, is pending or, to the knowledge of the Company,
threatened. The Company has not taken any action in contemplation of, or that
would constitute the basis for, the institution of any such insolvency
proceedings.
3.09. ERISA. The Company has complied in all material respects with all
applicable laws relating to wages, hours and collective bargaining. The Company
has not maintained, sponsored, adopted, made contributions to or obligated
itself to make contributions to or to pay any benefits or grant rights under or
with respect to any "Employee Pension Benefit Plan" as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
"Employee Welfare Benefit Plan" (as defined in Section 3(1) of ERISA),
"multi-employer plan" (as defined in Section 3(37) of ERISA), plan of deferred
compensation, medical plan, life insurance plan, long-term disability plan,
dental plan or other plan providing for the welfare of any of the Company's or
any Affiliate's employees or former employees or beneficiaries thereof,
personnel policy, excess benefit plan, bonus or incentive plan (including but
not limited to stock options, restricted stock, stock bonus and deferred bonus
plans), salary reduction agreement, change-of-control agreement, consulting
agreement, worker's compensation law, unemployment compensation law, social
security law or any other benefit program or contract, except as required by
law.
3.10. Transactions with Affiliates. Except as set forth on Exhibit 3.10 and
except as contemplated hereby or consented to by the Purchasers in accordance
with this Agreement, there are no loans, leases, royalty agreements or other
continuing transactions between the Company and (a) any officer, employee or
director of the Company, or (b) any Person owning 5% or more of any class of
capital stock of the Company, or (c) any member of the immediate family of such
officer, employee, director or stockholder, or (d) any corporation or other
entity controlled by such officer, employee, director or stockholder or a member
of the immediate family of such officer, employee, director or stockholder.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 14
3.11. Assumptions or Guaranties of Indebtedness of Other Persons. Except as
contemplated hereby or consented to by the Purchasers in accordance with this
Agreement, the Company has not assumed, guaranteed, endorsed or otherwise become
directly or contingently liable on (including, without limitation, liability by
way of agreement, contingent or otherwise, to purchase, to provide funds for
payment, to supply funds to or otherwise invest in the debtor or otherwise to
assure the creditor against loss), any Indebtedness of any other Person.
3.12. Investments in Other Persons. The Company has not made any loan or
advance to any Person, other than in the normal course of business and on an
arm's length basis on commercially reasonable terms and as reflected in the
Financial Statements, which, after giving effect to the transactions
contemplated hereby, is outstanding on the date of this Agreement, nor is it
committed or obligated to make any such loan or advance.
3.13. Securities Act. The Company has complied and will comply with all
applicable federal and state securities laws in connection with the offer,
issuance and sale of the Shares. Neither the Company nor anyone acting on its
behalf has or will sell, offer to sell or solicit offers to buy the Shares or
the Warrants, or solicit offers with respect thereto from, or enter into any
preliminary conversations or negotiations relating thereto with, any Person, so
as to bring the issuance and sale of the Shares or the Warrants under the
registration provisions of the Securities Act and applicable state securities
laws.
3.14. Brokers or Finders. Except as set forth in Section 5.13 hereto, no
Person has or will have, as a result of the transactions contemplated by this
Agreement, any right, interest or valid claim against or upon the Company for
any commission, fee or other compensation as a finder or broker because of any
act or omission by the Company or any of their respective agents.
3.15. Capitalization; Status of Capital Stock. The Company has a total
authorized capitalization consisting of (i) 180,000,000 shares of Common Stock,
par value $.001 per share, of which 26,210,001 shares are issued and outstanding
on the date hereof; and (ii) 10,000,000 shares of preferred stock, par value
$.001 per share, (a) 4,000 of which shares are designated as Series A Preferred
Stock, of which no shares are issued and outstanding on the date hereof, (b)
3,635 of which shares are designated as Series B Preferred Stock, of which
approximately 2,087 shares are issued and outstanding on the date hereof, and
(c) 2,000 of which shares are designated as Series C Preferred Stock, of which
1,795 shares are issued and outstanding on the date hereof, in each case without
giving effect to the transactions contemplated hereby. As of the Closing, the
Company shall have 600,000,000 shares of its preferred stock which shall have
been designated as Series D Preferred Stock. A complete list of the capital
stock of the Company and the names in which such capital stock is currently
registered on the stock transfer books of the Company is set forth in Exhibit
3.15 hereto. All the outstanding shares of capital stock of the Company have
been duly authorized, and are validly issued, fully paid and non-assessable. The
Series D Preferred Stock and the Warrants, when issued and delivered in
accordance with the terms hereof and after payment of the purchase price or
provision of such other applicable consideration therefor, will be duly
authorized, validly issued, fully paid and non-assessable. The Converted Shares,
when issued and delivered upon conversion of the Series D Preferred Stock or any
other preferred shares and the Warrant Shares, when issued and delivered upon
the exercise
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 15
of the Warrants, will be duly authorized, validly issued, fully-paid and
non-assessable. Except as otherwise set forth in Exhibit 3.15, no preemptive,
conversion or other rights, options, warrants, subscriptions or purchase rights
of any nature to acquire from the Company shares of capital stock or other
securities are authorized, issued or outstanding, nor is the Company obligated
in any other manner to issue shares of its capital stock or other securities
except as contemplated by this Agreement. Except as set forth in Exhibit 3.15,
there are no restrictions on the transfer of shares of capital stock of the
Company other than those imposed by relevant federal and state securities laws
and as otherwise contemplated by this Agreement, the Stockholders Agreement and
the Investor Rights Agreement. Other than as provided in this Section, there are
no agreements, understandings, trusts or other collaborative arrangements or
understandings concerning the voting of the capital stock of the Company.
Subject to applicable representations and warranties by purchasers of the
Company's capital stock, the offer and sale of all capital stock and other
securities of the Company issued before the Closing complied with or were exempt
from all applicable federal and state securities laws and no stockholder has a
right of rescission with respect thereto.
3.16. Registration Rights. Except for the rights granted to the Purchasers
pursuant to the Investor Rights Agreement or as set forth in Exhibit 3.16, no
Person has demand or other rights to cause the Company to file any registration
statement under the Securities Act relating to any securities of the Company or
any right to participate in any such registration statement.
3.17. Insurance. The Company carries insurance in reasonably adequate
amounts covering its properties and businesses customary for the type and scope
of its properties and businesses.
3.18. Books and Records. The books of account, ledgers, order books,
records and documents of the Company accurately and completely reflect all
material information relating to the business of the Company, the location and
collection of its assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the Company.
3.19. Title to Assets; Patents.
(a) The Company has good and marketable title in fee to such of its fixed
assets, if any, as are real property, and good and marketable title to all of
its other assets and properties, free of any mortgages, pledges, charges, Liens,
security interests or other encumbrances of any kind, except for those disclosed
on Exhibit 3.19. The Company enjoys peaceful and undisturbed possession under
all leases under which it is operating, and all said leases are valid and
subsisting and in full force and effect.
(b) Set forth in Exhibit 3.19 is a list and brief description of all
patents, patent applications, trademarks, trademark applications, service marks,
service mark applications, trade names and registered copyrights, and
applications for such that are in the process of being prepared, owned by or
registered in the name of the Company, or of which the Company is a licensor or
licensee or in which the Company has any right, and in each case a brief
description of the nature of such right. Except as set forth in Exhibit 3.19,
there is no adverse claim that
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 16
would interfere with the Company's right to use the patents, patent rights,
permits, licenses, trade secrets, trademarks, trademark rights, trade names or
trade name rights or franchises, copyrights, inventions, software and
intellectual property rights being used in the Company's business as now
operated and as now proposed to be operated; the conduct of the Company's
business as now operated and as now proposed to be operated does not conflict
and will not conflict with valid patents, patent rights, permits, licenses,
trade secrets, trademarks, trademark rights, tradenames or tradename rights or
franchises, copyrights, inventions, and intellectual property rights of any
other Person. No product or process presently used or now proposed to be
manufactured, marketed, offered, sold or used by the Company violates (or will
violate based on any now proposed use) any license or infringe on any
intellectual property rights of any other Person; and, except as set forth in
Exhibit 3.19, neither the Company's property rights nor the present operation or
now proposed operation of the Company's business conflicts with the rights of
others. Except as set forth in Exhibit 3.19, no claim is pending or, to the
Company's knowledge, threatened to the effect that any such intellectual
property owned or licensed by the Company, or which the Company otherwise has
the right to use, is invalid or unenforceable by the Company, and the Company
has no reason to believe that any patents or intellectual property rights owned
or used by the Company may be invalid. The Company has no obligation to
compensate any Person for the use of any such patents or rights and the Company
has not granted any Person any license or other rights to use in any manner any
of the patents or rights of the Company, whether requiring the payment of
royalties or not. The Company has not entered into any agreement to indemnify
any other Person against any charge of infringement of any patent, trademark,
trade name, service mark or copyright.
3.20. Computer Programs.
(a) Set forth in Exhibit 3.20 is a list and brief description of the
Computer Programs (other than off-the-shelf Computer Programs) owned, licensed
or otherwise used by the Company in connection with the operation of its
business as currently conducted or now proposed to be conducted (such Computer
Programs being referred to herein as the "Company Software"), identifying with
respect to each such Computer Program whether it is owned, licensed or otherwise
used by the Company. Exhibit 3.20 identifies all material agreements relating to
the Company Software (the "Software Contracts") and further classifies each such
Software Contract under one of the following categories: (A) license to use
third party software; (B) development contract, work-for-hire agreement, or
consulting agreement; (C) distributor, dealer or value added reseller agreement;
(D) license or sublicense to a third party (including agreements with
end-users); (E) maintenance, support or enhancement agreement; or (F) other.
(b) Except as disclosed in Exhibit 3.20, the Computer Programs
included in the Company Software are (i) owned by the Company, (ii) currently in
the public domain or otherwise available to the Company without the approval or
consent of any third party, or (iii) licensed or otherwise used by the Company
pursuant to the terms of valid, binding written agreements.
(c) The Company Software owned, designed or developed by the Company
or any of its employees, consultants or agents conforms in all material respects
to the technical
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 17
specifications for the design, performance, operation, test, support and
maintenance of the Company's Software, and all other documentation relating to
such technical specifications. No portion of the Company Software sold or
licensed by the Company directly or indirectly to end users contained, on the
date of shipment by the Company, no portion of the Company Software currently
for sale or license directly or indirectly to end users contains, and, to the
knowledge of the Company, no portion of any other Company Software contains any
software routines or hardware components designed to permit unauthorized access;
to disable or erase software, hardware or data; or to perform any other such
actions.
(d) All personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception and
development of any of the Company Software either (i) have been party to a
"work-for-hire" arrangement or agreement with the Company, whether in accordance
with applicable federal and state law, domestic or foreign, or otherwise, that
has accorded the Company full, effective, exclusive and original ownership of
all tangible and intangible property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company full, effective and exclusive ownership of all
tangible and intangible property thereby arising.
3.21. Intellectual Property Rights. The Company owns or possesses or
otherwise has the legally enforceable perpetual right to use, and has the right
to bring actions for infringement of, all Intellectual Property Rights necessary
or required for the conduct of its business as currently conducted or now
proposed to be conducted, including all Intellectual Property Rights pertaining
to the Company Software.
3.22. Real Property Holding Corporation. Since its date of incorporation,
the Company has not been, and as of the date of the Closing shall not be, a
"United States real property holding corporation," as defined in Section
897(c)(2) of the Internal Revenue Code of 1986 (the "Code"), and in Section
1.897-2(b) of the Treasury Regulations issued thereunder. The Company has no
current plans or intentions which would cause the Company to become a "United
States real property holding corporation," and the Company has filed with the
IRS all statements, if any, with its United States income tax returns which are
required under Section 1.897-2(h) of the Treasury Regulations.
3.23. Taxes. The Company has filed, or obtained appropriate extensions for,
all tax returns, federal, state, county and local, domestic and foreign,
required to be filed by it, and the Company has paid all taxes shown to be due
by such returns as well as all other taxes, assessments and governmental charges
which have become due or payable, including without limitation all taxes which
the Company is obligated to withhold from amounts owing to employees, creditors
and third parties. The Company has established adequate reserves for all taxes
accrued but not yet payable to the extent required by generally accepted
accounting principles. All material tax elections of any type which the Company
has made as of the date hereof are set forth in the financial statements
referred to in Section 3.07. No deficiency assessment with respect to or,
proposed adjustment of the Company's federal, state, county or local taxes,
domestic and foreign, is pending or, to the knowledge of the Company,
threatened. There is no tax lien (other than for current taxes not yet due and
payable), whether imposed by
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 18
any federal, state, county or local taxing authority, domestic or foreign,
outstanding against the assets, properties or business of the Company. Neither
the Company nor any of its present or former stockholders has ever filed an
election pursuant to Section 1362 of the Internal Revenue Code of 1986 (the
"Code"), that the Company be taxed as an S corporation.
3.24. Other Agreements. Except for the Software Contracts identified in
Exhibit 3.20 or as otherwise set forth in the attached Exhibit 3.24, the Company
is not a party to or otherwise bound by any written or oral:
(a) distributor, dealer or manufacturer's representative contract
or agreement which is not terminable on less than ninety (90) days' notice
without cost or other liability to the Company (except for contracts which, in
the aggregate, are not material to the business of the Company);
(b) sales agreement which entitles any customer to a rebate or
right of set-off, to return any product to the Company after acceptance thereof
or to delay the acceptance thereof, or which varies in any material respect from
the Company's standard form contracts (except for contracts which, in the
aggregate, are not material to the business of the Company);
(c) agreement with any labor union in the United States (and, to
the Company's knowledge, no organizational effort is being made with respect to
any of its employees);
(d) agreement with any supplier containing any provision
permitting any party other than the Company to renegotiate the price or other
terms, or containing any pay-back or other similar provision, upon the
occurrence of a failure by the Company to meet its obligations under the
agreement when due or the occurrence of any other event (except for contracts
which, in the aggregate, are not material to the business of the Company);
(e) agreement for the future purchase of fixed assets or for the
future purchase of materials, supplies or equipment in excess of its normal
operating requirements;
(f) agreement for the employment of any officer, individual,
employee or other Person (whether of a legally binding nature or in the nature
of informal understandings) on a full-time or consulting basis which is not
terminable on notice without cost or other liability to the Company, except
accrued vacation pay (an "Employment Agreement");
(g) bonus, pension, profit-sharing, retirement, hospitalization,
insurance, stock purchase, stock option or similar plan, agreement or
understanding pursuant to which benefits are provided to any employee of the
Company (other than group insurance plans applicable to employees generally or
as otherwise required by law);
(h) agreement or indenture relating to the borrowing of money or
to the mortgaging or pledging of, or otherwise placing a lien or security
interest on, any material asset of the Company;
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 19
(i) agreement, or group of related agreements with the same party
or any group of affiliated parties, under which the Company has advanced or
agreed to advance money, has agreed to lease any real property as lessee or
lessor, or has agreed to lease any personal property as lessee or lessor if such
lease for personal property was not entered into in the ordinary course of
business;
(j) agreement or obligation (contingent or otherwise) to issue,
sell or otherwise distribute or to repurchase or otherwise acquire or retire any
shares of its capital stock or any of its other equity securities (other than in
connection with the transactions contemplated by this Agreement);
(k) assignment, license or other agreement with respect to any
form of intangible property, which assignment, license or other agreement was
entered into other than in the ordinary course of business;
(l) agreement under which it has granted any person registration
rights with respect to its capital stock (other than the Investor Rights
Agreement);
(m) agreement under which it has limited or restricted its right
to compete with any Person in any respect;
(n) except as set forth above, any other agreement or group of
related contracts with the same party involving more than $250,000 or continuing
over a period of more than six months from the date or dates thereof (including
renewals or extensions of options with another party), which agreement or group
of agreements is not terminable by the Company without penalty upon notice of
sixty (60) days or less, but excluding any agreement or group of agreements with
a customer of the Company for the sale, lease or rental of the Company's
products or services if such agreement or group of agreements was entered into
by the Company in the ordinary course of business; or
(o) other contract, instrument, commitment, plan or arrangement,
a copy of which would be required to be filed with the Commission as an exhibit
to a registration statement on Form S-1 if the Company were registering
securities under the Securities Act.
Except as set forth on Exhibit 3.24, the Company and, to the Company's
knowledge, each other party thereto have in all material respects performed all
the actions required to be performed by them to date, have received no notice of
default and are not in material default under any lease, agreement or contract
now in effect to which the Company is a party or by which it or its property may
be bound. The Company has no present expectation or intention of not fully
performing all its respective material obligations under each such lease,
contract or other agreement, and the Company has no knowledge of any material
breach or anticipated breach by the other party to any contract or commitment to
which the Company is a party. The Company is in material compliance with all of
the terms and provisions of its Certificate of Incorporation and Bylaws, each as
amended.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 20
3.25. Commission Filings. The Company has filed all forms, reports and
documents required to be filed by Company with the Commission since the
effective date of the registration statement for the Company's initial public
offering and has made available to the Purchasers such forms, reports and
documents in the form filed with the Commission as requested by the Purchasers.
All such required forms, reports and documents (including those that the Company
may file subsequent to the date hereof) are referred to herein as the "Company
Commission Reports." As of their respective dates, the Company Commission
Reports (i) were prepared in accordance with the requirements of the Securities
Act, or the Securities Exchange Act of 1934, as amended, as the case may be, and
the rules and regulations of the Commission thereunder applicable to such
Company Commission Reports and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except to the extent corrected prior to the date of
this Agreement by a subsequently filed Company Commission Report. None of the
Company's subsidiaries is required to file any forms, reports or other documents
with the Commission.
3.26. Disclosure. Neither this Agreement nor any other agreement, document,
certificate or written statement furnished to the Purchasers or their special
counsel by or on behalf of the Company in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading. There is no fact within the knowledge of the Company
which has not been disclosed herein or in writing to the Purchasers and which
would have a Material Adverse Effect. Without limiting the generality of the
foregoing, neither the Company nor any of its Subsidiaries has any knowledge
that there exists, or there is pending or planned, any statute, rule, law,
regulation, standard or code which would have a Material Adverse Effect.
ARTICLE IV
DEFINITIONS AND ACCOUNTING TERMS
4.01. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Affiliate" means any Person who, directly or indirectly, controls, is
controlled by or is under common control with any other Person.
"Agreement" means this Series D Convertible Preferred Stock Purchase
Agreement as from time to time amended and in effect between the parties,
including all Exhibits hereto.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 21
"Board of Directors" means the board of directors of the Company as
constituted from time to time.
"Castle Creek" means the Purchaser by the name of Castle Creek Technology
Partners, LLC and its Affiliates.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" includes (a) the Company's Common Stock, $.001 par value, as
authorized on the date of this Agreement, (b) any other capital stock of any
class or classes (however designated) of the Company, authorized on or after the
date hereof, the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall ordinarily, in the
absence of contingencies or in the absence of any provision to the contrary in
the Amended and Restated Certificate of Incorporation, be entitled to vote for
the election of a majority of directors of the Company (even though the right so
to vote has been suspended by the happening of such a contingency or provision),
and (c) any other securities into which or for which any of the securities
described in (a) or (b) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
"Company" means and shall include, unless otherwise specified or the
context otherwise requires, Voxware, Inc., a Delaware corporation, and each of
its predecessors, successors and assigns.
"Computer Programs" means (i) any and all computer programs (consisting of
sets of statements or instructions to be used directly or indirectly in a
computer in order to bring about a certain result), and (ii) all associated data
and compilations of data, regardless of their form or embodiment. "Computer
Programs" shall include, without limitation, all source code, object code and
natural language code therefor, all versions thereof, all screen displays and
designs thereof, all component modules, all descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the foregoing,
and all documentation, including without limitation user manuals and training
materials, relating to any of the foregoing.
"Consolidated" and "consolidating" when used with reference to any term
defined herein mean that term as applied to the accounts of the Company and its
Subsidiaries consolidated in accordance with generally accepted accounting
principles.
"Creafund Exchange Agreement" means the Exchange Agreement, dated as of the
date hereof, by and between the Company and all of the members of the Creafund
Group, which Persons are the holders of (i) all outstanding 10% Convertible
Debentures Due July 1, 2003 of the Company and (ii) certain ownership interests
in Voxware Europe, which agreement is in the form attached hereto as Exhibit
4.01A.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 22
"Creafund Group" means (i) Creafund NV, a corporation organized under the
laws of Belgium, (ii) Avvision BVBA, a company organized under the laws of
Belgium, (iii) Eurl Val D'Auso, a company organized under the laws of France,
and (iv) BVBA Com2Wizards, a company organized under the laws of Belgium, (v)
Karine Vandenberghe, (vi) Wim Deneweth and (vii) Pascal Persyn.
"Edison" means the Purchaser by the name of Edison Venture Fund V, L.P. and
its Affiliates.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Indebtedness" means all obligations, contingent and otherwise, which
should, in accordance with generally accepted accounting principles, be
classified upon the obligor's balance sheet (or the notes thereto) as
liabilities, but in any event including liabilities secured by any mortgage on
property owned or acquired subject to such mortgage, whether or not the
liability secured thereby shall have been assumed, and also including (i) all
guaranties, endorsements and other contingent obligations, in respect of
Indebtedness of others, whether or not the same are or should be so reflected in
said balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business and (ii) the present value of any lease payments due
under leases required to be capitalized in accordance with applicable Statements
of Financial Accounting Standards, determined by discounting all such payments
at the interest rate determined in accordance with applicable Statements of
Financial Accounting Standards.
"Intellectual Property Rights" means all of the following: (i) patents,
patent applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, re-examination, utility, model,
certificate of invention and design patents, patent applications, registrations
and applications for registrations, (ii) trademarks, service marks, trade dress,
logos, tradenames, service names and corporate names and registrations and
applications for registration thereof, (iii) copyrights and registrations and
applications for registration thereof, (iv) mask works and registrations and
applications for registration thereof, (v) trade secrets and confidential
business information, whether patentable or nonpatentable and whether or not
reduced to practice, know-how, manufacturing and product processes and
techniques, research and development information, copyrightable works,
financial, marketing and business data, pricing and cost information, business
and marketing plans and customer and supplier lists and information, (vi)
Computer Programs, (vii) other proprietary rights relating to any of the
foregoing (including without limitation associated goodwill and remedies against
infringements thereof and rights of protection of an interest therein under the
laws of all jurisdictions) and (viii) copies and tangible embodiments thereof.
"Investor Stock" has the meaning ascribed to it in that certain
Shareholders Agreement, dated as of October 2, 2002, by and among the Company
and certain members of the Creafund Group.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 23
"Key Employee" means and includes the president, chief executive officer,
chief financial officer, chief operating officer, chief technology officer, vice
president of operations, finance, research, development, sales or marketing, or
any other individual who performs a significant role in the operations of the
Company or a Subsidiary as may be reasonably designated by the Board of
Directors.
"Lien" means, any mortgage, pledge, assessment, securities interest,
encumbrance, lien, lease, levy, claim or charge of any kind, including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction and including
any lien or charge arising by statute or other law.
"Material Adverse Change" means a material adverse change in the business,
operations, affairs, or condition (financial or otherwise) of the Company and
its Subsidiaries, as a whole.
"Nash Fitzwilliams" means the entity by the name of Nash Fitzwilliams,
Ltd., which has its principal place of business at 7 St James's St., London,
England SW1A 1EE, and its Affiliates.
"Person" means an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Proxy Statement" means the final Notice of Meeting and Proxy Statement to
be filed with the Commission and mailed to the stockholders of the Company in
connection with the transactions and agreements contemplated by the Financing
Documents.
"Purchaser" and "Purchasers" has the meaning attributable to those words in
Section 1.01 of this Agreement and shall include the Purchasers and also any
other valid holder of any of the Series D Preferred Stock, the Warrants, any
Converted Shares issued or issuable upon conversion of such Series D Preferred
Stock, and any Warrant Shares issued or issuable upon conversion of such
Warrants.
"Ridgecrest" means the Purchaser by the name of Ridgecrest Capital
Partners, which Purchaser has been engaged by the Company to perform placement
agent and other services with respect to the Company's issuance and sale of the
Series D Preferred Stock.
"Series A Preferred Stock" means the Series A Convertible Preferred Stock
of the Company, par value $.001 per share.
"Series B Preferred Stock" means the Series B Convertible Preferred Stock
of the Company, par value $.001 per share.
"Series B Exchange Agreement" means the Exchange Agreement, dated as of the
date hereof, by and between the Company and Castle Creek, the holder of all
outstanding shares of the Series B Preferred Stock, which agreement is in the
form attached hereto as Exhibit 4.01B.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 24
"Series C Preferred Stock" means the Series C Convertible Preferred Stock
of the Company, par value $.001 per share.
"Series C Exchange Agreement" means the Exchange Agreement, dated as of the
date hereof, by and among the Company and the holders of all outstanding shares
of the Series C Preferred Stock, which agreement is in the form attached hereto
as Exhibit 4.01C.
"Subsidiary" or "Subsidiaries" means any corporation or trust of which the
Company and/or any of its other Subsidiaries directly or indirectly owns at the
time outstanding shares of every class of such corporation or trust other than
directors' qualifying shares comprising at least fifty percent (50%) of the
voting power of such corporation or trust.
"Voxware Europe" means the subsidiary of the Company known as Voxware NV, a
limited liability company organized under the laws of the Belgium.
4.02. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistently applied, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.
ARTICLE V
MISCELLANEOUS
5.01. No Waiver; Cumulative Remedies. No failure or delay on the part of
any party to this Agreement in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
5.02. Amendments, Waivers and Consents. Except as otherwise provided in
this Agreement, changes in or additions to this Agreement may be made, and
compliance with any covenant or provision set forth herein may be omitted or
waived, if the Company (i) shall obtain consent thereto in writing from the
holder or holders of at least a majority in interest of the Committed Series D
Preferred Shares, and (ii) shall deliver copies of such consent in writing to
any holders of any Shares and Warrants who did not execute such consent. Any
waiver or consent may be given subject to satisfaction of conditions stated
therein and any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Notwithstanding anything
to the contrary contained herein, any amendment which (i) increases any
Purchaser's obligations hereunder, or (ii) grants to any one or more Purchasers
any rights more favorable than any rights granted to all other Purchasers
hereunder, must be approved by a particular Purchaser so as to be effective
against such Purchaser.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 25
5.03. Addresses for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including facsimile
communication) and mailed, faxed or delivered to each applicable party at the
address set forth in Exhibit 1.01 hereto or at such other address as to which
such party may inform the other parties in writing in compliance with the terms
of this Section.
If to any other holder of the Shares: at such holder's address for notice
as set forth in the register maintained by the Company, or, as to each of the
foregoing, at the addresses set forth on Exhibit 1.01 hereto or at such other
address as shall be designated by such Person in a written notice to the other
parties complying as to delivery with the terms of this Section.
If to the Company: at the address set forth on page 1 hereof, or at such
other address as shall be designated by the Company in a written notice to the
other parties complying as to delivery with the terms of this Section.
All such notices, requests, demands and other communications shall, when
mailed (which mailing must be accomplished by first class mail, postage prepaid;
express overnight courier service; or registered mail, return receipt requested)
or transmitted by facsimile, be effective three days after deposited in the
mails or upon transmission by facsimile, respectively, addressed as aforesaid,
unless otherwise provided herein.
5.04. Costs, Expenses and Taxes. The Company agrees to pay in connection
with the preparation, execution and delivery of this Agreement and the issuance
of the Shares and the Warrants, up to $75,000 of the reasonable fees and
expenses of Testa, Hurwitz & Thibeault, LLP, special counsel for Edison Venture
Fund V, L.P., and due diligence fees and out-of-pocket expenses of the
Purchasers with respect thereto as well as the reasonable fees and out-of-pocket
expenses of legal counsel, independent public accountants and other outside
experts reasonably retained by the Purchasers in connection with the amendment
or enforcement of this Agreement. In addition, the Company shall pay any and all
stamp and other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement, the issuance of the Shares and the
Warrants and the other instruments and documents to be delivered hereunder or
thereunder, and agrees to save the Purchasers harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes.
5.05. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company and the Purchasers and their respective
heirs, successors and valid assigns, except that the Company shall not have the
right to delegate any of its respective obligations hereunder or to assign its
respective rights hereunder or any interest herein without the prior written
consent of the holders of at least a majority in interest of the Committed
Series D Preferred Shares.
5.06. Prior Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the purchase and sale of the Shares and the Warrants.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 26
5.07. Severability. The provisions of this Agreement and the terms of the
Series D Preferred Stock are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of a provision contained in this Agreement or the Preferred Stock shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement or the terms of the Series D
Preferred Stock; but this Agreement and the terms of the Series D Preferred
Stock shall be reformed and construed as if such invalid or illegal or
unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible.
5.08. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the General Corporation Law of the
State of Delaware as to matters within the scope thereof, and as to all other
matters shall be construed and enforced in accordance with and governed by the
internal laws of the State of New Jersey, without regard to its principles of
conflicts of laws.
5.09. Headings. Article, Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
5.10. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
5.11. Further Assurances. From and after the date of this Agreement, upon
the request of any Purchaser or the Company, the Company and the Purchasers
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the Shares.
5.12 Indemnification.
(a) The Company shall, with respect to the representations, warranties
and agreements made by it herein, indemnify, pay, defend and hold the Purchasers
and each of the Purchasers' officers, directors, employees and agents and their
respective Affiliates (the "Indemnitees") harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
("Damages"), including, without limitation, the fees and disbursements of
counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall be
designated a party thereto, which may be (i) imposed on such Indemnitee, (ii)
incurred by such Indemnitee, or (iii) asserted against such Indemnitee by a
third party, as a result of the misrepresentation, violation or breach of any
representation, warranty or covenant of the Company under this Agreement, the
Investor Rights Agreement or the Stockholders Agreement or otherwise asserted
against the Purchasers by a third party based
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 27
on the transactions and other actions contemplated by the Financing Documents,
including without limitation the filing of the Proxy Statement; provided,
however, that the Company will not be liable in any such case if and to the
extent that such Damages arise out of or are based upon an untrue statement or
alleged untrue statement or omission by the Company or alleged omission by the
Company that was made in conformity with information furnished by such
Indemnitee in writing specifically for use in the Proxy Statement. Without
limiting the generality of the foregoing, the Purchasers shall be deemed to have
suffered liability, loss or damage as a result of the untruth, inaccuracy or
breach of any such representations or warranties if such liability, loss or
damage shall be suffered by the Company as a result of, or in connection with,
such untruth, inaccuracy or breach of any facts or circumstances constituting
such untruth, inaccuracy or breach.
(b) The representations and warranties of the Company set forth in
this Agreement and the indemnification obligations set forth in Section 5.12(a)
of this Agreement shall survive until the expiration of eighteen (18) months
following the Closing and be of no further force or effect as of such date,
except that the representations and warranties set forth in Sections 3.02, 3.03
and 3.15, subparagraphs 3.19(b) and 3.20(d) and Section 3.21 shall survive
forever and shall not terminate, the representations and warranties set forth in
Section 3.20 (other than subparagraph 3.20(d)) shall survive until the
expiration of three (3) years following such Closing and the representations and
warranties set forth in Section 3.23 shall survive such Closing for the
applicable statutory period plus three (3) months.
(c) Any payment owing to the Purchasers from the Company, which
obligation results from a claim for indemnification pursuant to the provisions
of Section 5.12(a) above, may, at the option of the Purchaser or Purchasers
making such claim, be satisfied by payment to such Purchaser or Purchasers of
monetary damages or the issuance to such Purchaser or Purchasers of additional
Series D Preferred Stock calculated by dividing the aggregate amount of such
obligation by purchase price of the Series D Preferred Stock per share.
5.13 Placement Agent. The Company has retained the services of Ridgecrest
Capital Partners ("Ridgecrest") to assist it in the negotiations with the
holders of its Series B Preferred Stock and Series C Preferred Stock and in the
placement of the Series D Preferred Stock. In consideration of such services and
in connection with and upon the Closing, the Company has agreed to pay
Ridgecrest a fee of $100,000, plus issue to Ridgecrest a warrant exercisable for
such number of shares Common Stock as shall equal 2.5% of the number of
Committed Series D Preferred Shares sold to the Purchasers, exercisable at a
purchase price of $0.015 per share (subject to adjustment as provided therein).
Ridgecrest shall also receive an additional cash amount equal to 5.0% of the
cash amount invested by any Purchasers placed in the transaction by Ridgecrest
and listed on Exhibit 5.13, plus a warrant exercisable for such number of shares
Common Stock as shall equal 2.5% of the number of Committed Series D Preferred
Shares so placed by Ridgecrest, exercisable at a purchase price of $0.015 per
share (subject to adjustment as provided therein); provided, however, that
Edison Venture Fund V, L.P. in its sole discretion may refuse any dollar amount
and/or investors that Ridgecrest proposes to be included in the transactions
contemplated by this Agreement and no dollar, share, warrant or other amounts
shall be owed to Ridgecrest with respect to such refused dollar amounts or
investors.
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement -- Page 28
5.14 Exercise of Voxware Europe Call Option. Conditional upon the
subscription by the Company for additional common shares of Voxware Europe as
noted in Section 2.10 above, the Purchaser by the name of Avvision BVBA, a
company organized under the laws of Belgium and a member of the Creafund Group,
hereby irrevocably exercises, effective and contingent upon the Closing, that
certain "call option" with respect to 301 of the shares of Investor Stock of
Voxware Europe currently held by the Purchaser by the name of Creafund NV, a
corporation organized under the laws of Belgium, which exercise is further
reflected in the Creafund Exchange Agreement.
5.15 Exclusivity. From the date hereof until the earlier of the Closing and
May 31, 2003 (the "Exclusivity Period"), subject to applicable fiduciary duties
of the Company's Board of Directors, if any, neither the Company nor any of the
Company's directors, officers, employees, agents or representatives will
solicit, encourage or entertain proposals from or enter into negotiations with
or furnish any nonpublic information to any other person or entity regarding the
possible sale of the Company's capital stock. During the Exclusivity Period, the
Company shall notify the Purchasers promptly of any proposals by third parties
with respect to the acquisition of the Company's capital stock and furnish the
Purchasers the material terms thereof. During the Exclusivity Period, the
Company shall deal exclusively with the Purchasers with respect to any such
possible transaction and the Purchasers shall have the right to match such
proposed transactions in lieu of such third parties.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement - Signature Page
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal as of the date first above written.
**********
<TABLE>
<S> <C>
THE COMPANY: PURCHASERS
VOXWARE, INC. EDISON VENTURE FUND V, L.P.
By: /s/ Nicholas Narlis By: EDISON PARTNERS V, L.P.,
-------------------------------------- its General Partner
Name: Nicholas Narlis
--------------------------------
Title: Senior Vice President & CFO
-------------------------------
By: /s/ Joseph A. Allegra
--------------------------------------
Lawrenceville Office Park Name: Joseph A. Allegra
PO Box 5363 --------------------------------
Princeton, NJ 08543-5363 Title: General Partner
Telephone: 609-514-4100 -------------------------------
Fax: 609-514-4101
1009 Lenox Drive #4
Lawrenceville, New Jersey 08648
Telephone: (609) 896-1900
Fax: (609) 896-0066
PURCHASERS:
CROSS ATLANTIC TECHNOLOGY FUND II, L.P.
/s/ Yildiray Albayrak
By: CROSS ATLANTIC CAPITAL PARTNERS, INC., ---------------------------------------
its General Partner YILDIRAY ALBAYRAK
By: /s/ Glenn T. Rieger Address:
-------------------------------------- ------------------------------
Name: Glenn T. Rieger Address:
-------------------------------- ------------------------------
Title: President Telephone:
------------------------------- ----------------------------
Fax:
----------------------------------
Five Radnor Corporate Center, Suite 555
100 Matsonford Road
Radnor, PA 19087
Telephone: (610) 995-2650
Fax: (610) 971-2062
</TABLE>
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement - Signature Page
<TABLE>
<S> <C>
DIATHERMI INVESTMENT LTD.
By: /s/ /s/ Mukesh Agarwal
--------------------------------- ---------------------------------------
Name: MUKESH AGARWAL
---------------------------
Title:
--------------------------
Address:
------------------------------
Address: Address:
---------------------------- ------------------------------
Address: Telephone:
---------------------------- ----------------------------
Telephone: Fax:
-------------------------- ----------------------------------
Fax:
--------------------------------
BURNBRAE LTD.
/s/ Michael Ettinger By: /s/
------------------------------------- -----------------------------------
MICHAEL ETTINGER Name:
-----------------------------
Title:
----------------------------
Address:
----------------------------
Address: Address:
---------------------------- ------------------------------
Telephone: Address:
-------------------------- ------------------------------
Fax: Telephone:
-------------------------------- ----------------------------
Fax:
----------------------------------
/s/ William H. B. Hamill /s/ Mark Wentworth Foster-Brown
------------------------------------- ---------------------------------------
WILLIAM H. B. HAMILL MARK WENTWORTH FOSTER-BROWN
Address: Address:
---------------------------- ------------------------------
Address: Address:
---------------------------- ------------------------------
Telephone: Telephone:
-------------------------- ----------------------------
Fax: Fax:
-------------------------------- ----------------------------------
J T HOAGLAND LLC
/s/ Juergen C. H. Lemmermann By: /s/
------------------------------------- -----------------------------------
JUERGEN C. H. LEMMERMANN Name:
-----------------------------
Title:
Address: ----------------------------
----------------------------
Address: Address:
---------------------------- ------------------------------
Telephone: Address:
-------------------------- ------------------------------
Fax: Telephone:
-------------------------------- ----------------------------
Fax:
----------------------------------
</TABLE>
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement - Signature Page
<TABLE>
<S> <C>
/s/ Sherri L. Meade /s/ David B. Levi
------------------------------------- ---------------------------------------
SHERRI L. MEADE DAVID B. LEVI
Address: Address:
---------------------------- ------------------------------
Address: Address:
---------------------------- ------------------------------
Telephone: Telephone:
-------------------------- ----------------------------
Fax: Fax:
-------------------------------- ----------------------------------
PICTET PRIVATE EQUITY INVESTORS SA
By: /s/ /s/ Nicholas Narlis
--------------------------------- ---------------------------------------
Name: NICHOLAS NARLIS
---------------------------
Title:
--------------------------
Address:
------------------------------
Address: Address:
---------------------------- ------------------------------
Address: Telephone:
---------------------------- ----------------------------
Telephone: Fax:
-------------------------- ----------------------------------
Fax:
--------------------------------
SCORPION NOMINEES LIMITED
By: /s/ William Spencer /s/ Elliot S. Schwartz
--------------------------------- ---------------------------------------
Name: William Spencer ELLIOT S. SCHWARTZ
---------------------------
Title: Director
--------------------------
Address:
------------------------------
Address: Address:
---------------------------- ------------------------------
Address: Telephone:
---------------------------- ----------------------------
Telephone: Fax:
-------------------------- ----------------------------------
Fax:
--------------------------------
/s/ Raymond E. Tropiano /s/ Donald H. Siegel
------------------------------------- ---------------------------------------
RAYMOND E. TROPIANO DONALD H. SIEGEL
Address: Address:
---------------------------- ------------------------------
Address: Address:
---------------------------- ------------------------------
Telephone: Telephone:
-------------------------- ----------------------------
Fax: Fax:
-------------------------------- ----------------------------------
</TABLE>
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement - Signature Page
<TABLE>
<S> <C>
CASTLE CREEK TECHNOLOGY PARTNERS LLC
/s/ Kenneth M. Finkel By: /s/ Thomas A. Frei
------------------------------------- --------------------------------------------------
KENNETH M. FINKEL Name: Thomas A. Frei
--------------------------------------------
Title: Managing Director
-------------------------------------------
Address: Address:
---------------------------- ---------------------------------------------
Address: Address:
---------------------------- ---------------------------------------------
Telephone: Telephone:
-------------------------- -------------------------------------------
Fax: Fax:
-------------------------------- -------------------------------------------------
CREAFUND NV
By: /s/ Dirk Haerinck /s/
--------------------------------- ------------------------------------------------------
Name: Dirk Haerinck SCOTT D.TURBAN
---------------------------
Title: Managing Partner
--------------------------
Address:
---------------------------------------------
Address: Address:
---------------------------- ---------------------------------------------
Address: Telephone:
---------------------------- -------------------------------------------
Telephone: Fax:
-------------------------- -------------------------------------------------
Fax:
--------------------------------
BVBA COM/2/WIZARDS AVVISION BVBA
By: /s/ Jon Vermeesch By: /s/ Pascal Persyn
--------------------------------- ---------------------------------------------------
Name: Jon Vermeesch Name: Pascal Persyn
--------------------------- --------------------------------------------
Title: President Title: Managing Director
-------------------------- -------------------------------------------
Address: Address:
---------------------------- ---------------------------------------------
Address: Address:
---------------------------- ---------------------------------------------
Telephone: Telephone:
-------------------------- -------------------------------------------
Fax: Fax:
-------------------------------- -------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
EURL VAL D'AUSO
By: /s/ Dominic Vlieghe /s/ Wim Deneweth
--------------------------------- ---------------------------------------
Name: Dominic Vlieghe WIM DENEWETH
---------------------------
Title: Attorney-in-fact
--------------------------
Address:
------------------------------
Address: Address:
---------------------------- ------------------------------
Address: Telephone:
---------------------------- ----------------------------
Telephone: Fax:
-------------------------- ----------------------------------
Fax:
--------------------------------
RIDGECREST CAPITAL PARTNERS
By: /s/ /s/ H. B. E. van Cutsem
--------------------------------- ---------------------------------------
Name: HUGH BERNARD EDWARD VAN CUTSEM
---------------------------
Title:
--------------------------
Address:
------------------------------
Address: Address:
---------------------------- ------------------------------
Address: Telephone:
---------------------------- ----------------------------
Telephone: Fax:
-------------------------- ----------------------------------
Fax:
--------------------------------
</TABLE>
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement
Exhibit 1.01
<TABLE>
<CAPTION>
Aggregate Shares of Series D Preferred Stock and Warrants to be Received by the Purchasers
-----------------------------------------------------------------------------------------------------------------------------------
Committed Series D Preferred
Name of Purchaser Shares Warrant Percentages Series D Warrants Common Stock Warrants
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Edison Venture Fund V, L.P. 250,000,000 66.96 62,500,000 12,500,000
-----------------------------------------------------------------------------------------------------------------------------------
Cross Atlantic Technology Fund
II, L.P. 83,333,334 22.31 20,833,334 4,166,666
-----------------------------------------------------------------------------------------------------------------------------------
Agarwal, Mukesh 2,246,810 0.23 216,667 43,333
-----------------------------------------------------------------------------------------------------------------------------------
Albayrak, Yildiray 690,072 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Burnbrae Ltd. 2,587,769 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Diathermi Investment Ltd. 862,590 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Ettinger, Michael 392,110 0.04 33,333 6,667
-----------------------------------------------------------------------------------------------------------------------------------
Foster-Brown, Mark Wentworth 8,650,358 1.39 1,300,000 260,000
-----------------------------------------------------------------------------------------------------------------------------------
Hamill, William H. B. 2,791,846 0.29 266,667 53,333
-----------------------------------------------------------------------------------------------------------------------------------
J T Hoagland LLC 5,650,358 0.59 550,000 110,000
-----------------------------------------------------------------------------------------------------------------------------------
Lemmermann, Juergen C. H. 305,851 0.04 33,333 6,667
-----------------------------------------------------------------------------------------------------------------------------------
Levi, David B. 11,234,050 1.16 1,083,333 216,667
-----------------------------------------------------------------------------------------------------------------------------------
Meade, Sherri L. 345,036 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Narlis, Nicholas 305,851 0.04 33,333 6,667
-----------------------------------------------------------------------------------------------------------------------------------
Pictet Private Equity Investors
SA 8,442,204 0.88 816,667 163,333
-----------------------------------------------------------------------------------------------------------------------------------
Schwartz, Elliot S. 392,110 0.04 33,333 6,667
-----------------------------------------------------------------------------------------------------------------------------------
Scorpion Nominees Limited 39,285,842 4.05 3,783,333 756,667
-----------------------------------------------------------------------------------------------------------------------------------
Siegel, Donald H. 545,036 0.05 50,000 10,000
-----------------------------------------------------------------------------------------------------------------------------------
Tropiano, Raymond E. 1,395,923 0.14 133,333 26,667
-----------------------------------------------------------------------------------------------------------------------------------
van Cutsem, Hugh Bernard Edward 6,666,667 1.79 1,666,667 333,333
-----------------------------------------------------------------------------------------------------------------------------------
Castle Creek Technology
Partners LLC 6,038,127 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Finkel, Kenneth M 345,036 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Turban, Scott D. 2,760,287 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Creafund NV 31,097,982 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Avvision BVBA 16,241,553 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
BVBA Com/2/Wizards 498,837 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Deneweth, Wim 332,558 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Eurl Val D'Auso 1,829,070 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Ridgecrest Capital Partners -- -- -- 9,333,333
-----------------------------------------------------------------------------------------------------------------------------------
TOTALS: 485,267,267 Shares 100% 93,333,333 Warrants 28,000,000 Warrants
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Series D Convertible Preferred Stock Purchase Agreement
Exhibit 1.01
<TABLE>
<CAPTION>
Aggregate Dollar Purchase Price or Other Consideration
-----------------------------------------------------------------------------------------------------------
Cancellation of Existing
Name of Purchaser U.S. Dollars Paid Series C Converted Warrants for Common
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
Edison Venture Fund V, L.P. 3,750,000 -- --
-----------------------------------------------------------------------------------------------------------
Cross Atlantic Technology Fund II, L.P. 1,250,000 -- --
-----------------------------------------------------------------------------------------------------------
Agarwal, Mukesh 13,000 40.0 127,490
-----------------------------------------------------------------------------------------------------------
Albayrak, Yildiray -- 20.0 63,745
-----------------------------------------------------------------------------------------------------------
Burnbrae Ltd. -- 75.0 239,044
-----------------------------------------------------------------------------------------------------------
Diathermi Investment Ltd. -- 25.0 79,681
-----------------------------------------------------------------------------------------------------------
Ettinger, Michael 2,000 7.5 23,904
-----------------------------------------------------------------------------------------------------------
Foster-Brown, Mark Wentworth 78,000 100.0 318,725
-----------------------------------------------------------------------------------------------------------
Hamill, William H. B. 16,000 50.0 159,362
-----------------------------------------------------------------------------------------------------------
J T Hoagland LLC 33,000 100.0 318,725
-----------------------------------------------------------------------------------------------------------
Lemmermann, Juergen C. H. 2,000 5.0 15,936
-----------------------------------------------------------------------------------------------------------
Levi, David B. 65,000 200.0 637,450
-----------------------------------------------------------------------------------------------------------
Meade, Sherri L. -- 10.0 31,872
-----------------------------------------------------------------------------------------------------------
Narlis, Nicholas 2,000 5.0 15,936
-----------------------------------------------------------------------------------------------------------
Pictet Private Equity Investors SA 49,000 150.0 478,088
-----------------------------------------------------------------------------------------------------------
Schwartz, Elliot S. 2,000 7.5 23,904
-----------------------------------------------------------------------------------------------------------
Scorpion Nominees Limited 227,000 700.0 2,231,076
-----------------------------------------------------------------------------------------------------------
Siegel, Donald H. 3,000 10.0 31,872
-----------------------------------------------------------------------------------------------------------
Tropiano, Raymond E. 8,000 25.0 79,681
-----------------------------------------------------------------------------------------------------------
van Cutsem, Hugh Bernard Edward 100,000 --
-----------------------------------------------------------------------------------------------------------
Castle Creek Technology Partners LLC -- 175.0 637,450
-----------------------------------------------------------------------------------------------------------
Finkel, Kenneth M -- 10.0 31,872
-----------------------------------------------------------------------------------------------------------
Turban, Scott D. -- 80.0 318,725
-----------------------------------------------------------------------------------------------------------
Creafund NV -- -- --
-----------------------------------------------------------------------------------------------------------
Avvision BVBA -- -- --
-----------------------------------------------------------------------------------------------------------
BVBA Com/2/Wizards -- -- --
-----------------------------------------------------------------------------------------------------------
Deneweth, Wim -- -- --
-----------------------------------------------------------------------------------------------------------
Eurl Val D'Auso -- -- --
-----------------------------------------------------------------------------------------------------------
Ridgecrest Capital Partners -- -- --
-----------------------------------------------------------------------------------------------------------
TOTALS: $5,600,000 1,795 shares 5,864,538 warrants
-----------------------------------------------------------------------------------------------------------
<CAPTION>
Aggregate Dollar Purchase Price or Other Consideration
-------------------------------------------------------------------------------
Conversion of Conversion of Voxware
Name of Purchaser Debentures Europe Interest
-------------------------------------------------------------------------------
<S> <C> <C>
-------------------------------------------------------------------------------
Edison Venture Fund V, L.P. -- --
-------------------------------------------------------------------------------
Cross Atlantic Technology Fund II, L.P. -- --
-------------------------------------------------------------------------------
Agarwal, Mukesh -- --
-------------------------------------------------------------------------------
Albayrak, Yildiray -- --
-------------------------------------------------------------------------------
Burnbrae Ltd. -- --
-------------------------------------------------------------------------------
Diathermi Investment Ltd. -- --
-------------------------------------------------------------------------------
Ettinger, Michael -- --
-------------------------------------------------------------------------------
Foster-Brown, Mark Wentworth -- --
-------------------------------------------------------------------------------
Hamill, William H. B. -- --
-------------------------------------------------------------------------------
J T Hoagland LLC -- --
-------------------------------------------------------------------------------
Lemmermann, Juergen C. H. -- --
-------------------------------------------------------------------------------
Levi, David B. -- --
-------------------------------------------------------------------------------
Meade, Sherri L. -- --
-------------------------------------------------------------------------------
Narlis, Nicholas -- --
-------------------------------------------------------------------------------
Pictet Private Equity Investors SA -- --
-------------------------------------------------------------------------------
Schwartz, Elliot S. -- --
-------------------------------------------------------------------------------
Scorpion Nominees Limited -- --
-------------------------------------------------------------------------------
Siegel, Donald H. -- --
-------------------------------------------------------------------------------
Tropiano, Raymond E. -- --
-------------------------------------------------------------------------------
van Cutsem, Hugh Bernard Edward
-------------------------------------------------------------------------------
Castle Creek Technology Partners LLC -- --
-------------------------------------------------------------------------------
Finkel, Kenneth M -- --
-------------------------------------------------------------------------------
Turban, Scott D. -- --
-------------------------------------------------------------------------------
Creafund NV 216,994 365
-------------------------------------------------------------------------------
Avvision BVBA 39,329 301
-------------------------------------------------------------------------------
BVBA Com/2/Wizards 7,374 --
-------------------------------------------------------------------------------
Deneweth, Wim 4,916 --
-------------------------------------------------------------------------------
Eurl Val D'Auso 27,038 --
-------------------------------------------------------------------------------
Ridgecrest Capital Partners -- --
-------------------------------------------------------------------------------
TOTALS: $295,651 666 Shares
-------------------------------------------------------------------------------
</TABLE>
</TEXT>
</DOCUMENT>