SEVENTH LOAN MODIFICATION
AGREEMENT
This Seventh Loan Modification Agreement (this
“ Loan Modification Agreement ”) is entered into
as of September 9, 2009, (the “ Seventh Loan Modification
Effective Date ”), by and between SILICON VALLEY
BANK , a California corporation, with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 and
with a loan production office located at One Newton Executive Park,
Suite 200, 2221 Washington Street, Newton, Massachusetts 02462
(“ Bank ”) and VOXWARE, INC. , a Delaware
corporation with its chief executive office located at 300 American
Metro Blvd, Suite 155, Hamilton, NJ 08619 (“ Borrower
”).
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND
OBLIGATIONS . Among other
indebtedness and obligations which may be owing by Borrower to
Bank, Borrower is indebted to Bank pursuant to a loan arrangement
dated as of January 3, 2007, but effective as of December 29, 2006,
evidenced by, among other documents, a certain Amended and Restated
Loan and Security Agreement dated as of January 3, 2007, but
effective as of December 29, 2006, by and between Borrower and
Bank, as amended by a certain First Loan Modification Agreement
dated as of February 2, 2007, as further amended by a certain
Second Loan Modification Agreement, dated as of February 13, 2008
but effective as of December 27, 2007, as further amended by a
certain Waiver and Third Loan Modification Agreement, dated as of
November 14, 2008, as further amended by a certain Waiver and
Fourth Loan Modification Agreement, dated as of February 17, 2009,
as further modified by a certain Fifth Loan Modification Agreement,
dated as of March 31, 2009, and as further amended by a certain
Sixth Loan Modification Agreement, entered into as of June 24,
2009, with an effective date of June 1, 2009, in each case by and
between Borrower and Bank (as amended, the “ Loan
Agreement ”). Capitalized terms used but not otherwise
defined herein shall have the same meaning as defined in the Loan
Agreement.
2. DESCRIPTION OF COLLATERAL
. Repayment of the Obligations is
secured by the Collateral as described in the Loan Agreement and
the Intellectual Property Collateral as described in a certain
Intellectual Property Security Agreement dated as of December 29,
2003 (as amended, the “ IP Security Agreement ”)
(together with any other collateral security granted to Bank, the
“ Security Documents ”).
Hereinafter, the Security
Documents, together with all other documents evidencing or securing
the Obligations shall be referred to as the “ Existing
Loan Documents ”.
3. DESCRIPTION OF CHANGE IN TERMS
.
A.
Modifications to Loan Agreement .
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1
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The Loan Agreement shall be amended by deleting
the following Section 2.3(a)(i) thereof in its entirety:
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“(i) Advances . Subject to Section
2.3(b), the principal amount outstanding under the Revolving Line
shall accrue interest at a floating per annum rate equal to one and
three-quarters of one percentage points (1.75%) above the Prime
Rate (which shall be reduced to one-half of one percentage point
(.50%) above the Prime Rate, beginning on the first Payment Date
following the occurrence of the Profitability Event), which
interest shall be payable monthly in accordance with Section 2.3(f)
below. Commencing on the 2008 Closing Date and subject to Section
2.3(b), the principal amount outstanding under the Revolving Line
shall accrue interest at a floating per annum rate equal to
one-half of one percentage point (0.50%) above the Prime Rate,
which interest shall be payable monthly in accordance with Section
2.3(f) below. Commencing on the Third Loan Modification Effective
Date and subject to Section 2.3(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a
floating per annum rate equal to three percentage points (3.00%)
above the Prime Rate, which interest shall be payable monthly in
accordance with Section 2.3(f) below.”
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and inserting in lieu thereof the
following:
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“(i) Advances . Subject to Section
2.3(b), the principal amount outstanding under the Revolving Line
shall accrue interest at a floating per annum rate equal to one and
three-quarters of one percentage points (1.75%) above the Prime
Rate (which shall be reduced to one-half of one percentage point
(.50%) above the Prime Rate, beginning on the first Payment Date
following the occurrence of the Profitability Event), which
interest shall be payable monthly in accordance with Section 2.3(f)
below. Commencing on the 2008 Closing Date and subject to Section
2.3(b), the principal amount outstanding under the Revolving Line
shall accrue interest at a floating per annum rate equal to
one-half of one percentage point (0.50%) above the Prime Rate,
which interest shall be payable monthly in accordance with Section
2.3(f) below. Commencing on the Third Loan Modification Effective
Date and subject to Section 2.3(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a
floating per annum rate equal to three percentage points (3.00%)
above the Prime Rate, which interest shall be payable monthly in
accordance with Section 2.3(f) below. Commencing on the Seventh
Loan Modification Effective Date and subject to Section 2.3(f), the
principal amount outstanding under the Revolving Line shall accrue
interest at a floating rate per annum equal to two and one- quarter
percentage points (2.25%) above the Prime Rate, which interest
shall be payable monthly in accordance with Section 2.3(f) below;
provided , however , that during a Streamline Period,
and subject to Section 2.3(f), the principal amount outstanding
under the Revolving Line shall accrue interest at a floating rate
per annum equal to one and one-quarter percentage points (1.25%)
above the Prime Rate, which interest shall be payable monthly in
accordance with Section 2.3(f) below.”
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2
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The Loan Agreement shall be amended by deleting
the following text from Section 2.4 thereof:
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“(b) Unused Revolving Line Facility
Fee . A fee (the “ Unused Revolving Line Facility
Fee ”), payable monthly, in arrears, on the last day of
each month, in an amount equal to one-quarter of one percent
(0.25%) per annum of the average unused portion of the Revolving
Line, as determined by Bank. Borrower shall not be entitled to any
credit, rebate or repayment of any Unused Revolving Line Facility
Fee previously earned by Bank pursuant to this Section
notwithstanding any termination of the within Agreement or the
suspension or termination of Bank’s obligation to make loans
and advances hereunder; and
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(c) Bank Expenses . All Bank Expenses
(including reasonable attorneys’ fees and expenses, plus
expenses, for documentation and negotiation of this Agreement)
incurred through and after the Effective Date, when
due.”
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and inserting in lieu thereof the
following:
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“(b) Unused Revolving Line Facility
Fee . A fee (the “ Unused Revolving Line Facility
Fee ”), payable monthly, in arrears, on the last day of
each month, in an amount equal to one-quarter of one percent
(0.25%) per annum of the average unused portion of the Revolving
Line, as determined by Bank. Borrower shall not be entitled to any
credit, rebate or repayment of any Unused Revolving Line Facility
Fee previously earned by Bank pursuant to this Section
notwithstanding any termination of the within Agreement or the
suspension or termination of Bank’s obligation to make loans
and advances hereunder;
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(c) Collateral Monitoring Fee . A monthly
collateral monitoring fee of $500, payable in arrears on the last
day of each month (prorated for any partial month at the beginning
and upon termination of this Agreement); provided , that
such fee will be waived for any calendar month in which there are
no Credit Extensions outstanding under the Revolving Line on each
day of such calendar month; and
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(d) Bank Expenses . All Bank Expenses
(including reasonable attorneys’ fees and expenses, plus
expenses, for documentation and negotiation of this Agreement)
incurred through and after the Effective Date, when
due.”
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3
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The Loan Agreement shall be amended by deleting
the following text from Section 6.2(a) thereof in its
entirety:
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“Notwithstanding the foregoing, during any
period in which Borrower maintains unrestricted and unencumbered
cash at Bank, plus the Availability Amount, in an amount greater
than $2,500,000, or when there are no Credit Extensions outstanding
or requested under the Revolving Line, Borrower shall only be
required to provide the Bank with reports pursuant to clause (a)(i)
above on a monthly basis.”
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and inserting in lieu thereof the
following:
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“Notwithstanding the foregoing, during a
Streamline Period, or when there are no Credit Extensions
outstanding or requested under the Revolving Line, Borrower shall
only be required to provide the Bank with reports pursuant to
clause (a)(i) above on a monthly basis, within fifteen (15) days
after the end of such month.”
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4
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The Loan Agreement shall be amended by deleting
the following Section 6.3(c) thereof in its entirety:
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“(c) Collection of Accounts .
Borrower shall have the right to collect all Accounts, unless and
until a Default or an Event of Default has occurred and is
continuing. Whether or not an Event of Default has occurred and is
continuing, Borrower shall hold all Payments on, and proceeds of,
Accounts in trust for Bank, and Borrower shall immediately deliver
all such payments and proceeds to Bank in their original form, duly
endorsed, to be applied to the Obligations pursuant to the terms of
Section 9.4 hereof. Accounts shall be deposited by Borrower into a
lockbox account, or such other “blocked account” as
Bank may specify, pursuant to a blocked account agreement in such
form as Bank may specify in its good faith business
judgment.”
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and inserting in lieu thereof the
following:
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“(c) Collection of Accounts .
Borrower shall ha
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