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AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
August 11, 2005
To each of the Purchasers named in the
Common Stock
Purchase Agreement of even date herewith
(the
"Investors")
This will confirm that in consideration of the Investors' purchase
on
the date hereof of an aggregate of
206,250,000 shares (the "Shares") of Common
Stock, $0.001 par value (the "Common
Stock"), of Voxware, Inc., a Delaware
corporation (together with all of its
subsidiaries, the "Company"), pursuant to
the Common Stock Purchase Agreement dated
as of August 11, 2005 (the "Purchase
Agreement") between the Company and the
Investors and as an inducement to the
Investors to consummate the transactions
contemplated by the Purchase Agreement,
the parties hereto have agreed as follows
herein. All defined terms used but not
defined herein shall have the meaning
ascribed to them in the Purchase
Agreement.
WHEREAS, the Company and certain of the Investors are parties to
an
Investor Rights Agreement dated as of June
27, 2003 and amended on April 30,
2004 (the "PRIOR AGREEMENT").
WHEREAS, the parties to this Agreement that are parties to the
Prior
Agreement wish permanently to waive all
rights pursuant to and terminate the
Prior Agreement and to enter into this
Agreement, as of the date first written
above.
WHEREAS, the parties acknowledge that the Purchase Agreement
contains
certain registration rights provided to the
Purchasers as defined therein.
WHEREAS, the parties
to this Agreement have agreed to convert the Series
D Preferred Stock (as defined in the Prior
Agreement) into shares of the
Company's Common Stock pursuant to the
Purchase Agreement and this Agreement.
WHEREAS, the parties to this Agreement represent the holders of
a
majority in interest of the Restricted
Stock (as that term is defined in the
Prior Agreement), as required for amendment
or waiver of the provisions of the
Prior Agreement pursuant to Article 15(d)
thereof.
NOW
THEREFORE, in consideration of the mutual covenants herein
contained
and other valuable consideration, the
receipt and sufficiency of which are
hereby acknowledged, the parties agree as
follows:
1. CERTAIN
DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective
meanings:
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"AFFILIATE" means any Person who, directly or indirectly,
controls, is controlled by or is under
common control with any other Person.
"BOARD OF DIRECTORS"
shall mean the board of directors of the
Company as constituted from time to
time.
"COMMISSION" shall mean the Securities and Exchange Commission,
or any other federal agency at the time
administering the Securities Act.
"COMMON STOCK WARRANTS" shall mean the warrants to purchase
Common Stock outstanding as of the date of
this Agreement.
"CONVERSION SHARES" shall mean shares of Common Stock issued or
issuable upon (i) conversion of the Series
D Preferred Stock (including the
Common Stock issued or issuable upon the
conversion of Series D Preferred Stock
issued or issuable upon the exercise of the
Series D Warrants and (ii) the
exercise of the Common Stock Warrants.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute,
and the rules and regulations of the
Commission thereunder, all as the same
shall be in effect at the time.
"PERSON" or "PERSONS" shall mean an individual, corporation,
partnership, joint venture, trust, or
unincorporated organization, or a
government or any agency or political
subdivision thereof.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 8.
"RESTRICTED STOCK" shall mean the Conversion Shares now or
hereafter held by the Investors, excluding
Conversion Shares which (a) have been
registered under the Securities Act
pursuant to an effective registration
statement filed thereunder and disposed of
in accordance with the registration
statement covering them, (b) have been
publicly sold pursuant to Rule 144 under
the Securities Act or (c) are then eligible
for resale to the general public
pursuant to paragraph (k) of Rule 144 under
the Securities Act by the Investors
and all partners and affiliates of the
Investors to which such Conversion Shares
may be distributed or otherwise
transferred.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute,
and the rules and regulations of the
Commission thereunder, all as the same
shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in
Section 7.
"SERIES D WARRANTS" shall mean the warrants to purchase Series
D
Preferred Stock outstanding as of the date
of this Agreement.
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"SUBSIDIARY" or "SUBSIDIARIES" shall mean any corporation or
trust of which the Company and/or any of
its other Subsidiaries (as herein
defined) 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.
2.
RESTRICTIVE LEGEND. Each certificate representing Shares or
Restricted Stock shall, except as otherwise
provided in this Section 2 or in
Section 3, be stamped or otherwise
imprinted with a legend substantially in the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE 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."
A certificate shall not bear such legend if
in the opinion of counsel
satisfactory to the Company the securities
represented thereby may be publicly
sold without registration under the
Securities Act and any applicable state
securities laws.
3. LEGENDS
WITH RESPECT TO TRANSFERS. Each certificate for Shares
or Restricted Stock transferred as above
provided shall bear the legend set
forth in Section 2, except that such
certificate shall not bear such legend if
(i) such transfer is in accordance with the
provisions of Rule 144 (or any other
rule permitting public sale without
registration under the Securities Act) or
(ii) the opinion of counsel referred to
above is to the further effect that the
transferee and any subsequent transferee
(other than an affiliate of the
Company) would be entitled to transfer such
securities in a public sale without
registration under the Securities Act. The
restrictions provided for in this
Section 3 shall not apply to securities
which are not required to bear the
legend prescribed by Section 2 in
accordance with the provisions of that
Section.
4.
ACKNOWLEDGEMENT OF REQUIRED REGISTRATION. The parties hereto,
who were also parties to the Prior
Agreement, agree and acknowledge that all
shares of Restricted Stock covered by the
Prior Agreement have been registered
on Registration Statement on Form S-2 (No.
333-110501) and Registration
Statement on Form S-2 (No. 333-121291) both
declared effective by the Commission
on April 8, 2005.
5. INCIDENTAL
REGISTRATION. If the registration statements
identified in Section 4 are no longer
current or effective, and the Company
(other than pursuant to Section 6) proposes
to register any of its securities
under the Securities Act for sale to the
public, whether for its own
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account or for the account of other
security holders or both (except with
respect to registration statements on Forms
S-4, S-8 or another form not
available for registering the Restricted
Stock for sale to the public), each
such time it will give written notice to
all holders of outstanding Restricted
Stock of its intention so to do. Upon the
written request of any such holder,
received by the Company within 30 days
after the giving of any such notice by
the Company, to register any of its
Restricted Stock, the Company will use its
commercially reasonable efforts to cause
the Restricted Stock as to which
registration shall have been so requested
to be included in the securities to be
covered by the registration statement
proposed to be filed by the Company, all
to the extent requisite to permit the sale
or other disposition by the holder of
such Restricted Stock so registered. In the
event that any registration pursuant
to this Section 5 shall be, in whole or in
part, an underwritten public offering
of Common Stock, the number of shares of
Restricted Stock to be included in such
an underwriting may be reduced (PRO RATA
among the requesting holders based upon
the number of shares of Restricted Stock
owned by such holders) if and to the
extent that the managing underwriter shall
be of the opinion that such inclusion
would adversely affect the marketing of the
securities to be sold by the Company
therein, PROVIDED, HOWEVER, that such
number of shares of Restricted Stock shall
not be reduced if any shares are to be
included in such underwriting for the
account of any person other than the
Company or requesting holders of Restricted
Stock, and PROVIDED, FURTHER, HOWEVER, that
in no event may less than twenty
percent (20%) of the total number of shares
of Common Stock to be included in
such underwriting be made available for
shares of Restricted Stock unless the
managing underwriter shall in good faith
advise the holders proposing to
distribute their securities through such
underwriting that such level of
participation would, in its opinion,
materially adversely affect the offering
price or its ability to complete the
offering and shall specify the number of
shares of Restricted Stock which, in its
opinion, can be included in the
registration and underwriting without such
an effect.
6.
REGISTRATION ON FORM S-2 OR FORM S-3.
(a)
If the registration statements identified in Section 4
are no longer current or effective and (i)
a holder or holders of Restricted
Stock request that the Company file a
registration statement on Form S-2 or Form
S-3 or any successors thereto for a public
offering of all or any portion of the
shares of Restricted Stock held by such
requesting holder or holders, provided
that, the reasonably anticipated aggregate
price to the public of such offering
must be at least $500,000 and (ii) the
Company is a registrant entitled to use
Form S-2 or Form S-3 or any successors
thereto to register such shares, then the
Company shall use its commercially
reasonable efforts to register under the
Securities Act on Form S-2 or Form S-3 or
any successors thereto, for public
sale in accordance with the method of
disposition specified in such notice, the
number of shares of Restricted Stock
specified in such notice.
(b)
Following receipt of any notice under this Section 6,
the Company shall immediately notify all
holders of Restricted Stock and Shares
from whom notice has not been received and
such holders shall then be entitled
within 30 days thereafter to request the
Company to include in the requested
registration all or any portion of their
shares of Restricted Stock. The Company
shall use its commercially reasonable
efforts to register under the Securities
Act, for public sale in accordance with the
method of disposition described in
paragraph (a) above, the
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number of shares of Restricted Stock
specified in such notice (and in all
notices received by the Company from other
holders within 30 days after the
giving of such notice by the Company).
(c)
The Company shall be entitled to include in any
registration statement referred to in this
Section 6 shares of Common Stock to
be sold by the Company for its own account,
except as and to the extent that, in
the opinion of the managing underwriter,
such inclusion would adversely affect
the marketing of the Restricted Stock to be
sold. No other shares may be
included in such registration statement.
Except for registration statements on
Form S-4, S-8 or any successor thereto, the
Company will not file with the
Commission any other registration statement
with respect to its Common Stock,
whether for its own account or that of
other shareholders, from the date of
receipt of a notice from requesting holders
requesting sale pursuant to an
underwritten offering pursuant to this
Section 6 until the completion of the
period of distribution of the registration
contemplated thereby.
(d)
If in the opinion of the managing underwriter the
inclusion of all of the Restricted Stock
requested to be registered under this
Section 6 would adversely affect the
marketing of such shares, shares to be sold
by the holders of Restricted Stock, if any,
shall be excluded only after any
shares to be sold by the Company have been
excluded, in such manner that the
shares to be sold shall be allocated among
the selling holders PRO RATA based on
their ownership of Restricted Stock.
(e)
If at the time of any request to register Restricted
Stock pursuant to this Section 6, the
Company is engaged or has plans to engage
in a registered public offering or is
engaged in any other activity which, in
the good faith determination of the Board
of Directors, would be adversely
affected by the requested registration,
then the Company may at its option
direct that such request be delayed for a
period not in excess of 60 days from
the date of such request.
7.
REGISTRATION PROCEDURES. If and whenever the Company is
required
by the provisions of Sections 5 or 6 to use
its commercially reasonable efforts
to effect the registration of any shares of
Restricted Stock under the
Securities Act, the Company will, as
expeditiously as possible:
(a)
prepare and file with the Commission a registration
statement with respect to such securities
and use its commercially reasonable
efforts to cause such registration
statement to become and remain effective for
the period of the distribution contemplated
thereby (determined as hereinafter
provided);
(b)
prepare and file with the Commission such amendments and
supplements to such registration statement
and the prospectus used in connection
therewith as may be necessary to keep such
registration statement effective for
the period specified in paragraph (a) above
and comply with the provisions of
the Securities Act with respect to the
disposition of all Restricted Stock
covered by such registration statement in
accordance with the sellers' intended
method of disposition set forth in such
registration statement for such period;
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(c)
furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the
registration statement and the
prospectus included therein (including each
preliminary prospectus) as such
persons reasonably may request in order to
facilitate the public sale or other
disposition of the Restricted Stock covered
by such registration statement;
(d)
use its commercially reasonable efforts to register or
qualify the Restricted Stock covered by
such registration statement under the
securities or "blue sky" laws of such
jurisdictions as the sellers of Restricted
Stock or, in the case of an underwritten
public offering, the managing
underwriter reasonably shall request,
PROVIDED, HOWEVER, that the Company shall
not for any such purpose be required to
qualify generally to transact business
as a foreign corporation in any
jurisdiction where it is not so qualified or to
consent to general service of process in
any such jurisdiction;
(e)
use its commercially reasonable efforts to list the
Restricted Stock covered by such
registration statement with any securities
exchange or automated quotation service on
which the Common Stock of the Company
is then listed; PROVIDED, HOWEVER, that if
the Common Stock of the Company is
not then listed with any securities
exchange or automated quotation service,
then the Company shall use its commercially
reasonable efforts to list such
Restricted Stock with whatever quotation or
reporting service with which the
Common Stock of the Company is then
listed;
(f)
provide a transfer agent and registrar for all such
Restricted Stock, not later than the
effective date of such registration
statement;
(g)
immediately notify each seller of Restricted Stock and
each underwriter under such registration
statement, at any time when a
prospectus relating thereto is required to
be delivered under the Securities
Act, of the happening of any event of which
the Company has knowledge as a
result of which the prospectus contained in
such registration statement, as then
in effect, includes an untrue statement of
a material fact or omits to state a
material fact required to be stated therein
or necessary to make the statements
therein not misleading in light of the
circumstances then existing; PROVIDED,
MOREOVER, that the Company shall use its
commercially reasonable efforts to
prepare and furnish such amendments or
supplements to such prospectus as may be
necessary so that, as thereafter delivered
to purchases of such Restricted
Stock, such prospectus shall not include an
untrue statement of a material fact
or omit to state a material fact required
to be stated therein or necessary to
make the statements therein not misleading
in light of the circumstances then
existing;
(h)
if the offering is underwritten and at the request of
any seller of Restricted Stock, use its
commercially reasonable efforts to
furnish on the date that Restricted Stock
is delivered to the underwriters for
sale pursuant to such registration: (i) an
opinion dated such date of counsel
representing the Company for the purposes
of such registration, in form and
substance as is customarily given to
underwriters in an underwritten public
offering, addressed to the underwriters and
to such seller, and (ii) a letter
dated such date from the independent
certified public accountants retained by
the Company, in form and substance as is
customarily given to underwriters in an
underwritten public offering, addressed to
the underwriters and to such seller;
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(i)
make available for inspection by each seller of
Restricted Stock, any underwriter
participating in any distribution pursuant to
such registration statement, and any
attorney, accountant or other agent
retained by such seller or underwriter, all
financial and other records,
pertinent corporate documents and
properties of the Company, and cause the
Company's officers, directors and employees
to supply all information reasonably
requested by any such seller, underwriter,
attorney, accountant or agent in
connection with such registration
statement. The rights granted pursuant to this
subsection (h) may not be assigned or
otherwise conveyed by such person or by
any subsequent transferee of any such
rights without the written consent of the
Company, which consent shall not be
unreasonably withheld; provided that the
Company may refuse such written consent if
the proposed transferee is a
competitor of the Company as determined by
the Company's Board of Directors; and
provided further, that no such written
consent shall be required if the transfer
is made to a party who is not a competitor
of the Company and who is a parent,
subsidiary, affiliate, partner or group
member of such person;
(j)
advise each selling holder of Restricted Stock, promptly
after it shall receive notice or obtain
knowledge thereof, of the issuance of
any stop order by the Commission suspending
the effectiveness of such
registration statement or the initiation or
threatening of any proceeding for
such purpose and promptly use all
reasonable efforts to prevent the issuance of
any stop order or to obtain its withdrawal
if such stop order should be issued;
(k)
cooperate with the selling holders of Restricted Stock
and the managing underwriters, if any, to
facilitate the timely preparation and
delivery of certificates representing
Restricted Stock to be sold, such
certificates to be in such denominations
and registered in such names as such
holders or the m
