Exhibit 10.1
EIGHTH LOAN MODIFICATION AGREEMENT
     This Eighth Loan Modification Agreement (this “Loan Modification
Agreement”) is entered into as of this 29th day of December, 2005, by and
between SILICON VALLEY BANK, a California-chartered bank, 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 NUANCE
COMMUNICATIONS INC, formerly known as SCANSOFT, INC., a Delaware corporation
with offices at 9 Centennial Drive, Peabody, Massachusetts 01960 (“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 October 31, 2002,
evidenced by, among other documents, (i) a certain Loan and Security Agreement
dated as of October 31, 2002 between Borrower and Bank, as amended by a certain
First Loan Modification Agreement dated May 7, 2003, effective as of March 31,
2003, as further amended by a certain Second Loan Modification Agreement dated
as of June 18, 2003, as further amended by a certain Third Loan Modification
Agreement dated as of August 11, 2003, as further amended by a certain Fourth
Loan Modification Agreement dated as of September 30, 2003, as further amended
by a certain Fifth Loan Modification Agreement dated as of March 31, 2004, as
further amended by a certain Sixth Loan Modification Agreement dated as of
March 29, 2005, and as further amended by a certain Seventh Loan Modification
Agreement dated as of September 29, 2005 (as may be further amended from time to
time, the “Loan Agreement”), and (ii) a certain Negative Pledge Agreement dated
as of October 31, 2002 (the “Negative Pledge Agreement”). Capitalized terms used
but not otherwise defined herein shall have the same meaning as in the Loan
Agreement.         Hereinafter, all indebtedness and obligations owing by
Borrower to Bank shall be referred to as the “Obligations”.     2.   DESCRIPTION
OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as
described in the Loan Agreement and a certain Pledge Agreement dated October 31,
2002 (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.

Modifications to Loan Agreement.

  1.   The Loan Agreement shall be amended by deleting Section 5 of the Schedule
to the Loan Agreement, entitled “Financial Covenants”, in its entirety and
inserting in lieu thereof the following:

“5. FINANCIAL COVENANTS. (Section 5.1)
(a) Minimum Unrestricted Cash. On the Closing Date and at all times thereafter,
the Borrower shall maintain unrestricted cash in accounts with the Bank in an
amount equal to or great than the aggregate amount of all Obligations
(including, without limitation, contingent Obligations such as reimbursement
obligations for any issued Letters of Credit) of the Borrower to Bank.”

  2.   Notwithstanding Section 6(i) and Section 6(iv) of the Schedule to the
Loan Agreement, Borrower shall deliver its monthly consolidated balance sheet
and income statements, together with a Compliance Certificate to the Bank on or
before November 15, 2005.

 

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  4.   FEES. Borrower shall pay to Bank a modification fee equal to Ten Thousand
Dollars ($10,000.00) which fee shall be due on the date hereof and shall be
deemed fully earned as of the date hereof. Borrower shall also reimburse Bank
for all legal fees and expenses incurred in connection with this amendment to
the Existing Loan Documents.     5.   RATIFICATION OF NEGATIVE PLEDGE AGREEMENT.
Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms
and conditions of the Negative Pledge Agreement and acknowledges, confirms and
agrees that the Negative Pledge Agreement remains in full force and effect.    
6.   CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.     7.   RATIFICATION OF LOAN
DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and
conditions of all security or other collateral granted to the Bank, and confirms
that the indebtedness secured thereby includes, without limitation, the
Obligations.     8.   NO DEFENSES OF BORROWER. Borrower hereby acknowledges and
agrees that Borrower has no offsets, defenses, claims, or counterclaims against
Bank with respect to the Obligations, or otherwise, and that if Borrower now
has, or ever did have, any offsets, defenses, claims, or counterclaims against
Bank, whether known or unknown, at law or in equity, all of them are hereby
expressly WAIVED and Borrower hereby RELEASES Bank from any liability
thereunder.     9.   CONTINUING VALIDITY. Borrower understands and agrees that
in modifying the existing Obligations, Bank 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. Bank’s agreement to modifications to the existing Obligations
pursuant to this Loan Modification Agreement in no way shall obligate Bank to
make any future modifications to the Obligations. Nothing in this Loan
Modification Agreement shall constitute a satisfaction of the Obligations. It is
the intention of Bank and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by Bank in
writing. No maker will be released by virtue of this Loan Modification
Agreement.     10.   JURISDICTION/VENUE. Borrower accepts for itself and in
connection with its 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 Bank cannot avail itself of the courts of the
Commonwealth of Massachusetts, then venue shall lie in Santa Clara County,
California.     11.   COUNTERSIGNATURE/EFFECTIVENESS. This Loan Modification
Agreement shall become effective only when it shall have been executed by
Borrower and Bank.

 

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     This Loan Modification Agreement is executed as a sealed instrument under
the laws of the Commonwealth of Massachusetts as of the date first written
above.

              BORROWER:
 
            NUANCE COMMUNICATIONS INC. F/K/A SCANSOFT, INC.
 
       
 
  By:   /s/ James R. Arnold, Jr.
 
       
 
  Name:   James R. Arnold, Jr.
 
  Title:   Chief Financial Officer, Nuance
 
       
 
  BANK:
 
            SILICON VALLEY BANK
 
       
 
  By:   /s/ Mark Gallagher
 
       
 
  Name:   Mark Gallagher
 
  Title:   SVP

 

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     The undersigned ratifies, confirms and reaffirms, all and singular, the
terms and conditions of a certain Unconditional Guaranty dated October 31, 2002
(the “Guaranty”) and a certain Security Agreement dated October 31, 2002 (the
“Security Agreement”) and acknowledges, confirms and agrees that the Guaranty
and the Security Agreement shall remain in full force and effect and shall in no
way be limited by the execution of this Loan Modification Agreement, or any
other documents, instruments and/or agreements executed and/or delivered in
connection herewith.

          CAERE CORPORATION      
By:
  /s/ James R. Arnold, Jr.    
 
       
Name:
  James R. Arnold, Jr.    
Title:
  Chief Financial Officer, Nuance    

     The undersigned each hereby ratifies, confirms and reaffirms, all and
singular, the terms and conditions of certain Unconditional Guarantees each
dated September 30, 2003 (collectively, the “Guaranty”) and acknowledges,
confirms and agrees that the Guaranty shall remain in full force and effect and
shall in no way be limited by the execution of this Loan Modification Agreement,
or any other documents, instruments and/or agreements executed and/or delivered
in connection herewith.

          SPEECHWORKS SECURITIES CORP.    
 
       
By:
  /s/ James R. Arnold, Jr.
 
   
Name:
  James R. Arnold, Jr.    
Title:
  Chief Financial Officer, Nuance    
 
        SPEECHWORKS INTERNATIONAL HOLDINGS, INC.    
 
       
By:
  /s/ James R. Arnold, Jr.
 
    
Name:
  James R. Arnold, Jr.    
Title:
  Chief Financial Officer, Nuance    
 
        SPEECHWORKS ACQUISITION CORP.    
 
       
By:
  /s/ James R. Arnold, Jr.
 
   
Name:
  James R. Arnold, Jr.    
Title:
  Chief Financial Officer, Nuance    
 
        SPEECHWORKS INTERNATIONAL, INC.    
 
       
By:
  /s/ James R. Arnold, Jr.
 
   
Name:
  James R. Arnold, Jr.    
Title:
  Chief Financial Officer, Nuance