EXHIBIT 10.1
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of February 1, 1999, by
and between Voxware, Inc. ("Borrower") and Silicon Valley Bank, a
California-chartered bank ("Lender") with a loan production office located at
Wellesley Office Park, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, doing
business under the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other obligations which may be
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owing by Borrower to Lender, Borrower has an obligation to Lender pursuant to,
among other documents executed by Borrower, a Promissory Note, dated October 18,
1996 in the original principal amount of Two Million and 00/100 Dollars
($2,000,000.00), as may be amended (the "Revolving Facility"), and a Master
Note, dated May 5, 1997 in the original principal amount of One Million Five
Hundred Thousand and 00/100 Dollars ($1,500,000.00) (the "Lease Facility"). The
Revolving Facility and the Lease Facility are sometimes referred to collectively
herein as the "Notes". The Notes, together with other promissory notes from
Borrower to Lender, are governed by the terms of a Letter Agreement, dated
October 18, 1996, between Borrower and Lender, as such agreement may be amended
from time to time (the "Loan Agreement"). Capitalized terms used but not
otherwise defined herein shall have the same meaning as in the Loan Agreement.
As of the date hereof, there is no amount outstanding under the Revolving
Facility.
Hereinafter, all obligations owing by Borrower to Lender shall be referred to as
the "Indebtedness."
2. DESCRIPTION OF COLLATERAL: As an accommodation to Borrower and for good and
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valuable consideration, including, Lender's agreement to no longer require to
compliance with the existing financial covenants, Lender shall return to
Borrower the executed financing statements which Lender was holding and not
perfecting until an Event of Default occurred, provided, that Borrower shall
secure all outstanding Indebtedness with cash held at the offices of Lender in
an amount not less than 100% of the outstanding amount of all Indebtedness
Borrower owes to Lender. Borrower hereby acknowledges that Lender may place a
"hold" on any deposit account pledged as Collateral. Such grant of security
interest shall be pursuant to that certain Commercial Security Agreement, dated
May 5, 1997 (the "Security Agreement").
Hereinafter, the above-described security documents, together with all other
documents securing payment of the Indebtedness shall be referred to as the
"Security Documents". Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Indebtedness shall be referred to as
the "Existing Loan Documents."
3. DESCRIPTION OF CHANGE IN TERMS.
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A. Modification to Revolving Facility.
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1. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on March 30, 2000. In
addition, Borrower will pay regular monthly payments of accrued unpaid
interest, beginning February 28, 1999, and all subsequent interest
payments will be due on the same day of each month thereafter.
B. Modification to Loan Agreement.
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1. The paragraph beginning with the words "Borrowings under the
Loans..." is hereby amended to read in its entirety, as follows:
Borrowings under the Loans shall be secured by a first security
interest in Borrower's cash, which shall be held in an account at
the offices of Lender in an amount not less than 100% of all
outstanding Indebtedness owing from Borrower to Lender. Borrower
hereby authorizes Lender to place a hold on any such amount
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(which shall remain in place until Borrower's repayment
obligations hereunder are satisfied in full, provided, however,
that the amount of such hold will decrease with the amount paid
toward the outstanding Indebtedness).
2. The paragraph beginning with the words "Funds shall be
advanced..." is hereby amended to read in its entirety as
follows:
Funds shall be advanced under the Revolving Facility according to
an Advance Rate, defined as follows: the lesser of (a)
$2,000,000.00 minus the face amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit) minus
the Foreign Exchange Reserve or (b) 100% of the cash pledged to
Lender.
3. The Financial Covenants are hereby deleted in their entirety,
accordingly, Borrower shall no longer be entitled to comply with
the Financial Covenants.
C. Modification(s) to Security Agreement.
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1. The "Collateral" description is hereby amended to read, as
follows:
All cash held in an account with Lender in an amount not less
than 100% of the outstanding amount of all Indebtedness Borrower
owes to Lender, together with all renewals and proceeds of the
foregoing.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
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necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay to Lender a fee in the amount of One
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Thousand and 00/100 Dollars ($1,000.00) (the "Loan Fee") plus all out-of-pocket
expenses.
6. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
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defenses against the obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
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existing Indebtedness, Lender is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Lender's agreement to modifications to the existing Indebtedness pursuant to
this Loan Modification Agreement in no way shall obligate Lender to make any
future modifications to the Indebtedness. Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Indebtedness. It is the
intention of Lender and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Lender in writing. No maker, endorser, or guarantor will be released by virtue
of this Loan Modification Agreement. The terms of this Paragraph apply not only
to this Loan Modification Agreement, but also to all subsequent loan
modification agreements.
8. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
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properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Lender cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa ▇▇▇▇▇ County, California.
9. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
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only when it shall have been executed by Borrower and Lender (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Lender in California).
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10. COUNTERPARTS. This Loan Modification Agreement may be executed in two or
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more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
11. CONDITIONS. The effectiveness of this Loan Modification Agreement is
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conditioned upon Borrower's payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
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BORROWER:
VOXWARE, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VP and CFO
LENDER:
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
SILICON VALLEY BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
(Signed at Santa ▇▇▇▇▇ County, CA)