UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): MAY 24, 2006
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VOXWARE, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-021403 36-3934824
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
168 Franklin Corner Road, Lawrenceville, New Jersey 08648
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(Address of Principal Executive Offices) (Zip Code)
(609) 514-4100
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(Registrant's telephone number,
including area code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425).
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12).
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)).
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)).
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On May 24, 2006 Voxware, Inc., a Delaware corporation (the "Company"),
entered into a $3,000,000 credit facility with Silicon Valley Bank ("SVB")
comprised of a $1,500,000 revolving line of credit (the "Revolver") and a
$1,500,000 Non-formula Term Loan (the "Term Loan") to fund the Company's
anticipated working capital needs pursuant to a Loan and Security Agreement (the
"Credit Facility"). This Credit Facility is in addition to the Company's already
existing credit facility and equipment line of credit with SVB. In accordance
with the terms and conditions of the Credit Facility, the Company amended its
existing credit facility with SVB pursuant to a Fifth Loan Modification
Agreement.
TERMS APPLICABLE TO THE REVOLVER
The Revolver provides for a line of credit up to $1,500,000, with a
$1,000,000 sub-limit to be established for cash management and foreign exchange
requirements. The availability under the Revolver is limited to a borrowing base
advance rate that is 80% against Eligible Accounts (as such term is defined in
the Revolver).
Amounts outstanding under the Revolver bear interest at a rate of
1.25% above the Prime Rate of interest (as such term is defined in the Credit
Facility). Upon two consecutive quarters of profitability, the interest rate
will be reduced to a rate of 0.50% above the Prime Rate of interest. The
Revolver is available until October 31, 2007.
TERMS APPLICABLE TO THE TERM LOAN
The Term Loan provides, in addition to the Company's borrowings under
its existing credit facility, for up to $1,500,000 in available funds. Amounts
outstanding under the Term Loan bear interest at a rate equal to 1.75% above the
Prime Rate of interest (as such term is defined in the Credit Facility). The
Term Loan is available until March 31, 2007. Under certain conditions, any
borrowings under the Company's Term Loan will be reserved against the
availability of the Revolver.
TERMS APPLICABLE TO THE CREDIT FACILITY
In connection with the Credit Facility, the Company made a good faith
deposit of $10,000 to defray SVB's legal and other expenses. Additionally, the
Company is obligated to pay SVB a commitment fee in the amount of $27,000, with
$15,000 payable on the Effective Date (as such term is defined in the Credit
Facility) and $12,000 payable on the earlier to occur of (a) the occurrence of
an Event of Default (as such term is defined in the Credit Facility); (b) the
one-year anniversary of the Effective Date; and (c) the termination of the
Credit Facility by the Company. The Credit Facility contains customary
affirmative and negative covenants that, among other things, require the Company
to maintain its primary operating accounts and all access liquidity with SVB.
The Credit Facility also contains financial covenants that, among other things,
require the Company to maintain a minimum $1,500,000 of unencumbered cash with
SVB and a Minimum Tangible Net Worth and Adjusted Quick Ratio(as such terms are
defined in the Credit Facility) pursuant to the terms of the Credit Facility.
The Company has granted a first perfected lien on all corporate assets and has
filed a negative pledge on intellectual property in favor of SVB. The Company
has also subordinated any amounts due to officers, directors, shareholders and
other
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lien holders to the Company's obligations owing to SVB in form and substance
that is satisfactory to SVB in its sole discretion.
The Credit Facility includes usual and customary events of default for
facilities of this nature and the remedies for such events include, but are not
limited to, payment of all amounts payable under the Credit Facility and the
termination of SVB's commitments.
A copy of the Credit Facility is being filed as an exhibit to this Form
8-K. All statements made with respect to the transaction discussed in this Item
2.03 are qualified by such reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS.
EXHIBIT NO. DESCRIPTION
10.1 Loan and Security Agreement dated as of May 24, 2006 between
Silicon Valley Bank and Voxware, Inc.
10.2 Fifth Loan Modification Agreement dated as of May 24, 2006
between Silicon Valley Bank and Voxware, Inc.
10.3 Amendment to Loan Arrangement with Voxware, Inc. dated as of May
24, 2006, from Edison Venture Fund V, L.P.
10.4 Amendment to Loan Arrangement with Voxware, Inc. dated as of May
24, 2006, from Cross Atlantic Technology Fund II, L.P.
10.5 Amendment to Loan Arrangement with Voxware, Inc. dated as of May
24, 2006, from Verbex Acquisition Corporation
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
VOXWARE, INC.
Dated: May 24, 2006 By: /S/ PAUL COMMONS
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Name: Paul Commons
Title: Vice President and Chief
Financial Officer
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