Exhibit 4.7
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS SO REGISTERED OR AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.
No. CD-[ ]
VOXWARE, INC.
10% Convertible Debenture Due July 1, 2003
(euro)[Amount] Lawrenceville, New Jersey
October 2, 2002
Voxware, Inc., a Delaware corporation (the "Company"), for value received,
hereby promises to pay to [Lender] or registered assigns (the "Lender"), the
principal sum of up to 220.699,32 Euro (the "Principal Amount") on July 1, 2003,
and to pay interest (computed on the basis of a 365-day year) from July 1, 2002
on the unpaid balance of such Principal Amount from time to time outstanding at
the rate of ten percent (10%) per annum, such interest to be due and payable
upon payment of the Principal Amount hereunder. Of the aggregate Principal
Amount, 100.699,32 Euro has been loaned by the Lender to the Company on July 1,
2002. The remainder of the Principal Amount shall be loaned by the Lender to the
Company on the date hereof. For purposes hereof, a Qualifying Subscription shall
mean the execution, before the close of business on November 30, 2002, of
subscription agreements (containing such terms as are reasonably acceptable to
the Lender), substantially in the form as attached in Schedule 1 hereto, with
one or more bona fide investors providing for the issuance of 2,500,000 U.S.
Dollars or more of equity of the Company in one or more related financings.
This is one of a series of the Company's Debentures known as its 10%
Convertible Debentures Due July 1, 2003 (individually referred to herein as the
"Debenture" and collectively referred to herein as the "Debentures"), all of
like tenor, except as to the identifying number and principal amount thereof.
The Debentures are limited in aggregate principal amount to 300.699,32 Euro.
1. Use of Proceeds.
- The Company shall use a portion of the proceeds of the loan
evidenced by the Debenture to fund the Company's capital
investment in Voxware NV, a limited liability company under
Belgian Law, founded by Creafund NV and the Company on July 1,
2002.
- The other proceeds shall only be used to fund the operational
expenses of Voxware NV, excluding expenses or invoices generated
by the Company (other than the acquisition of the Company's
voiced based solutions).
- Under all scenarios the Company will be equipped to finance full
operations in Voxware NV from October 1, 2002 regardless of
actual timing of closing of the Qualifying Fundraising. In
furtherance of the foregoing, the Company hereby agrees to
provide at least $90,000 in funding to Voxware NV on or before
October 31, 2002, including $15,000 to be paid within ten (10)
business days of the date hereof.
2. [Intentionally omitted.]
3. Default Interest.
In the event the Company does not enter into a Qualifying Subscription,
every amount overdue under this Debenture shall bear interest from and after the
date on which such amount first became overdue at an annual rate of fifteen
percent (15%). Such interest on overdue amounts under this Debenture shall be
payable by force of law and without need for notice and shall accrue until the
obligation of the Company with respect to the payment of such interest has been
discharged (whether before or after judgment). In no event shall any interest
charged, collected or reserved under this Debenture exceed the maximum rate then
permitted by applicable law and if any such payment is paid by the Company, then
such excess sum shall be credited by the Lender as a payment of principal.
4. Conversion.
(a) General. This Debenture shall be subject to optional conversion and
mandatory conversion as set forth below:
(i) Mandatory Conversion. Upon the consummation of a Qualifying
Fundraising, the entire outstanding amount of this Debenture (principal and
interest) shall automatically be converted into fully-paid and
non-assessable shares of capital stock of the Company as issued in the
Qualifying Fundraising at a price no higher than the price to be paid by
the holders of Series C Preferred Stock of the Company participating in the
Qualifying Fundraising, and otherwise on the same terms and conditions, as
agreed upon by the other subscribers to the Qualifying Fundraising, but in
no event less than the terms and conditions agreed upon by the holders of
Series C Preferred Stock of the Company participating in the Qualifying
Fundraising. In case these terms and conditions would materially differ
from the terms and conditions as set forth in the Term Sheet between the
Company and Creafund NV signed on June 19, 2002, the Lender can, at its
sole discretion, require that the shares resulting from the conversion have
the same terms and conditions as set forth in the aforementioned Term
Sheet. For the purpose of this Debenture, the shares resulting from the
mandatory conversion will be referred to as Preferred Stock. The Company
shall cause notice of mandatory conversion to be mailed to the Lender, at
the Lender's address appearing in the Debenture Register (as defined in
Section 8(a) below), at least ten (10) days prior to the date fixed for
mandatory conversion of this Debenture. On or before the date fixed for
mandatory conversion, the holder shall surrender this Debenture at the
place designated in such notice, together with a statement of
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the name or names (with address) in which the certificate or certificates
for shares of Preferred Stock which shall be issuable on such conversion
shall be issued. For purposes of this Debenture, a Qualifying Fundraising
shall mean (i) a Qualifying Subscription and (ii) the consummation of the
equity financing of the Company contemplated by the Qualifying Subscription
by the close of business on February 28, 2003.
(ii) Optional Conversion. In the event a Qualifying Subscription has
not occurred by November 30, 2002 and/or in the event a Qualifying
Fundraising is not consummated by February 28, 2003 (whether by failure of
clause (i) or (ii) as set forth in the definition of Qualifying
Fundraising), the Lender has the right, at its option, at any time prior to
the close of business on July 1, 2003, to convert the outstanding principal
amount and accrued interest, or a portion thereof, of this Debenture into
fully-paid and non-assessable shares of preferred stock (the "Senior
Stock") of the Company, with new rights, preferences and privileges, as set
forth in Schedule 2 hereto, senior to the rights, preferences and
privileges of the Company's existing preferred stock. In case the Company
is listed or traded on a stock exchange, any regulated market or on the
OTC-BB on the date of the exercise of the option by the Lender, the price
for the Senior Stock shall be 33% of the average share price for the Shares
for the 30 trading days prior to the date of the exercise of the option by
the Lender. In case the Company is not listed or traded on a stock
exchange, a regulated market or the OTC-BB on the day of the exercise of
the option, the price for the Senior Stock shall be 33% of the intrinsic
value of the Company on the date of the exercise of the option by the
Lender, which will be defined by an independent expert, appointed by the
board of directors of the Company and reasonably acceptable to the Lender.
The option of the Lender will be deemed to have been exercised on the
Conversion Date, as defined below. In order to exercise this optional
conversion privilege, the Lender shall surrender this Debenture to the
Company during usual business hours at the Company's principal executive
office, accompanied by written notice in form satisfactory to the Company
that the Lender elects to convert the principal amount and accrued interest
of this Debenture or a portion hereof specified in such notice. Such notice
shall also state the name or names (with address) in which the certificate
or certificates for shares of Senior Stock which shall be issuable on such
conversion shall be issued.
(b) Surrender of Debenture and Delivery of Certificates. When surrendered
for optional or mandatory conversion, this Debenture shall, unless the shares
issuable on conversion are to be issued in the same name as the name in which
this Debenture is then registered, be duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the Lender or his or its duly authorized attorney. As promptly as practicable
after the surrender of this Debenture for conversion and the receipt of the
notice specified above (in the case of optional conversion), the Company shall
deliver or cause to be delivered at its principal executive office to the
Lender, or on the Lender's written order, a certificate or certificates for the
number of full shares of Preferred Stock or Senior Stock issuable upon the
conversion of this Debenture, or portion hereof, in accordance with the
provisions hereof. Such conversion shall be deemed to have been made at the time
this Debenture shall have been surrendered for conversion and the notice
specified above (in the case of optional conversion) shall have been received by
the Company at its principal executive office (the "Conversion Date"), and the
Lender in whose name any certificate or certificates for shares of Preferred
Stock or Senior Stock shall be issuable upon such conversion shall be deemed to
have become on the Conversion Date the holder of record of the shares
represented thereby. If less than the entire
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outstanding principal amount of this Debenture is being converted (in the case
of optional conversion), a new Debenture shall promptly be delivered to the
Lender for the unconverted principal balance and shall be of like tenor as to
all terms as the Debenture surrendered.
(c) Fractional Shares. No fractional shares of capital stock shall be
issuable upon conversion of this Debenture, but a payment in cash will be made
in respect of any remaining principal and interest not converted hereunder.
(d) Stockholder Approval. The Lender acknowledges that approval of the
Company's stockholders is required for (i) consummation of the Qualifying
Fundraising and (ii) issuance of the Preferred Stock or Senior Stock.
(e) Securities Act of 1933. Upon conversion of this Debenture, the Lender
may be required to execute and deliver to the Company an instrument, in form
satisfactory to the Company, representing that the shares issuable upon
conversion hereof are being acquired for investment and not with a view to
distribution within the meaning of the Securities Act of 1933, as amended.
5. Redemption.
(a) In the event (i) a Qualifying Subscription has not occurred by November
30, 2002 and/or in the event a Qualifying Fundraising is not consummated by
February 28, 2003 (whether by failure of clause (i) or (ii) as set forth in the
definition of Qualifying Fundraising) or (ii) the stockholder approval mentioned
in Section 4.d(ii) is not obtained, this Debenture may, at the option of the
Lender, be called for redemption at any time after such failure at one hundred
percent (100%) of the principal amount so redeemed, plus accrued and unpaid
interest on such redeemed principal amount to the date fixed for redemption. The
Lender shall give at least thirty (30) days prior written notice of redemption
to the Company its address as shown in Section 9(f) below, and the notice of
redemption shall specify the date designated for redemption.
(b) On or after the redemption date fixed in the notice of redemption, this
Debenture (to the extent so redeemed) shall cease to be convertible as set forth
in Section 4 above. Payment of the redemption price shall be made to the Lender
upon presentation and surrender of this Debenture accompanied by a duly executed
instrument of transfer in blank, at the principal executive office of the
Company. In the event of a partial redemption, this Debenture shall be presented
to the Company for endorsement of the amount of payment and date paid as a
condition precedent to such payment.
(c) In the event the Company is not legally able to pay the redemption
price to the Lender on the redemption date fixed in the notice of redemption,
interest on the Debenture shall accrue at the default rate set forth in Section
3 above.
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6. Prepayment of Principal.
The indebtedness represented by this Debenture may be prepaid in whole or
in part, subject to the ten business days prior written notice to the Lender,
and without payment of any penalty. During this period of ten business days, the
Lender will still have the opportunity to exercise his or its Optional
Conversion privilege as mentioned in Section 4(a)(ii) hereof, even before
February 28, 2003 (i.e. even before a Qualifying Subscription has occurred
and/or a Qualifying Fundraising is consummated). In no event shall any
prepayment of principal be made with respect to any of the other Debentures
unless and until the Company shall have offered to prepay a like proportion of
this Debenture.
7. Default.
The entire unpaid principal of this Debenture and the interest then accrued
on this Debenture shall become and be immediately due and payable upon written
demand of the Lender, without any other notice or demand of any kind or any
presentment or protest, if any one of the following events shall occur and be
continuing at the time of such demand, whether voluntarily or involuntarily, or,
without limitation, occurring or brought about by operation of law or pursuant
to or in compliance with any judgment, decree or order of any court or any
order, rule or regulation of any governmental body:
(a) If default shall be made in the payment of any installment of principal
of any of the Debentures, and if any such default shall remain unremedied for
ten (10) days; or
(b) If the Company (i) makes a composition or an assignment for the benefit
of creditors or trust mortgage, (ii) applies for, consents to, acquiesces in,
files a petition seeking or admits (by answer, default or otherwise) the
material allegations of a petition filed against it seeking the appointment of a
trustee, receiver or liquidator, in bankruptcy or otherwise, of itself or of all
or a substantial portion of its assets, or a reorganization, arrangement with
creditors or other remedy, relief or adjudication available to or against a
bankrupt, insolvent or debtor under any bankruptcy or insolvency law or any law
affecting the rights of creditors generally, or (iii) admits in writing its
inability to pay its debts generally as they become due; or
(c) If an order for relief shall have been entered by a bankruptcy court or
if a decree, order or judgment shall have been entered adjudging the Company
insolvent, or appointing a receiver, liquidator, custodian or trustee, in
bankruptcy or otherwise, for it or for all or a substantial portion of its
assets, or approving the winding-up or liquidation of its affairs on the grounds
of insolvency or nonpayment of debts, and such order for relief, decree, order
or judgment shall remain undischarged or unstayed for a period of sixty (60)
days; or if any substantial part of the property of the Company is sequestered
or attached and shall not be returned to the possession of the Company or such
subsidiary or released from such attachment within sixty (60) days.
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8. Debenture Register.
(a) The Company shall keep at its principal executive office a register
(herein sometimes referred to as the "Debenture Register"), in which, subject to
such reasonable regulations as it may prescribe, but at its expense (other than
transfer taxes, if any), the Company shall provide for the registration and
transfer (subject to applicable securities laws) of this Debenture.
(b) Whenever this Debenture shall be surrendered at the principal executive
office of the Company for transfer or exchange, accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company duly
executed by the Lender or his or its attorney duly authorized in writing, the
Company shall execute and deliver in exchange therefor a new Debenture or
Debentures, as may be requested by such Lender, in the same aggregate unpaid
principal amount and payable on the same date as the principal amount of the
Debenture or Debentures so surrendered; each such new Debenture shall be dated
as of the date to which interest has been paid on the unpaid principal amount of
the Debenture or Debentures so surrendered and shall be in such principal amount
and registered in such name or names as such Lender may designate in writing.
(c) Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Debenture and of indemnity
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Debenture (in case of mutilation) the Company will make and deliver in lieu
of this Debenture a new Debenture of like tenor and unpaid principal amount and
dated as of the date to which interest has been paid on the unpaid principal
amount of this Debenture in lieu of which such new Debenture is made and
delivered.
9. General.
(a) Successors and Assigns. This Debenture, and the obligations and rights
of the Company hereunder, shall be binding upon and inure to the benefit of the
Company, the Lender, and their respective heirs, successors and assigns.
(b) Adjustment for stock splits, etc. Wherever in this Debenture there is a
reference to shares of capital stock of the Company of any class or series,
then, upon the occurrence of any subdivision, combination or stock dividend of
such class or series of stock, the number of shares so referenced in this
Debenture shall automatically be proportionally adjusted to reflect the effect
on the outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.
(c) Security; Recourse. This Debenture shall be secured by that certain
Security Agreement between the Company and the Lender dated as of the date
hereof (the "Security Agreement"). Recourse under this Debenture shall be
limited to the Collateral (as defined in the Security Agreement) and the general
unsecured assets of the Company only and in no event to the officers, directors
or stockholders of the Company.
(d) Changes. Changes in or additions to this Debenture may be made or
compliance with any term, covenant, agreement, condition or provision set forth
herein may be omitted or
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waived (either generally or in a particular instance and either retroactively or
prospectively), upon written consent of the Company and the Lender.
(e) Currency. All payments shall be made in such coin or currency of Europe
(= Euro / (euro)) as at the time of payment shall be legal tender therein for
the payment of public and private debts.
(f) Notices. All notices, requests, consents and demands shall be made in
writing and shall be mailed postage prepaid, or delivered by hand, to the
Company or to the Lender at their respective addresses set forth below or to
such other address as may be furnished in writing to the other party hereto:
If to the Lender:
[ ]
If to the Company:
Voxware, Inc.
Lawrenceville Office Park
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
(g) Saturdays, Sundays, Holidays. If any date that may at any time be
specified in this Debenture as a date for the making of any payment of principal
or interest under this Debenture shall fall on Saturday, Sunday or on a day
which in the Lawrenceville, New Jersey shall be a legal holiday, then the date
for the making of that payment shall be the next subsequent day which is not a
Saturday, Sunday or legal holiday.
(h) Severability. If any provision of this Debenture becomes invalid,
illegal or unenforceable in any respect under any law, the validity, legality or
enforceability of the remaining provisions shall not in any way be affected or
impaired. Such invalid, illegal or unenforceable provision will then, by
agreement between the parties, be replaced by such a provision as reflects best
the purpose and contents of the invalid, illegal or unenforceable provision.
(i) Failure to exercise. The failure by either party to enforce at any time
any of the provisions of this Debenture or to require at any time performance by
another party of any such provision, shall, in no way, be construed to be a
waiver of such provisions, nor in any way affect the validity of this Debenture
or any part thereof, or the right of either party thereafter to enforce each and
every provision.
(j) Governing Law. This Debenture shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the Country of Belgium. All
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disputes arising in connection with the present Debenture between the parties
shall be finally settled in Brussels by three arbitrators appointed in
accordance with the rules of CEPINA. The language of the procedure will be
English.
IN WITNESS WHEREOF, this ▇▇▇▇▇▇▇▇▇ has been executed and delivered as a
sealed instrument on the date first above written by the duly authorized
representative of the Company.
VOXWARE, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
[LENDER]
By:
----------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Secretary
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Name Principal Amount of Debenture
---- -----------------------------
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▇▇▇ ▇▇▇▇▇▇▇▇ (euro) 5.000,00
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BVBA Com2Wizards (euro)7.500,00
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Eurl Val D'Auso (euro) 27.500,00
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Avvision BVBA (euro) 40.000,00
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Creafund NV (euro) 220.699,32
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TOTAL (euro) 300.699,32
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