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Exhibit 10.11
SpeechWorks International, Inc. has omitted from this Exhibit 10.11 portions of
the Agreement for which SpeechWorks International, Inc. has requested
confidential treatment from the Securities and Exchange Commission. Omitted
language is indicated by brackets (i.e. [ ]). The portions of the Agreement for
which confidential treatment has been requested have been filed separately with
the Securities and Exchange Commission.
AT&T AND SPEECHWORKS PROPRIETARY
DEVELOPMENT AND LICENSE AGREEMENT
BETWEEN
AT&T CORP.
AND
SPEECHWORKS INTERNATIONAL, INC.
JUNE 5, 2000
<PAGE>
DEVELOPMENT AND LICENSE AGREEMENT
THIS DEVELOPMENT AND LICENSE AGREEMENT (the "AGREEMENT") is made
effective as of June 5, 2000, (the "EFFECTIVE DATE") by and between AT&T Corp.,
a New York corporation with offices at 32 Avenue of the Americas, New York, New
York 10013-2412, USA ("AT&T"), and SpeechWorks International, Inc., a Delaware
corporation with offices at 695 Atlantic Avenue, Boston, Massachusetts 02111,
USA ("SPEECHWORKS").
AT&T has developed certain speech processing application programmer's
interface software tools.
SpeechWorks desires to license certain AT&T speech technology, to
develop speech recognition software incorporating such speech technology and to
make this software available for license by AT&T and others, as more fully
described in this Agreement.
This Agreement consists of this signature sheet, the Terms and
Conditions ("TERMS AND CONDITIONS") attached to this signature sheet, any
addenda attached to this Agreement as provided in the Terms and Conditions, and
the following Exhibits attached hereto.
Exhibit A AT&T Speech Software
Exhibit B SpeechWorks Speech Software
Exhibit C Statement of Work
Exhibit D AT&T Branding Guidelines
Exhibit E Equity Consideration
Exhibit F1 Specified AT&T Competitors
Exhibit F2 Specified SpeechWorks Competitors
Exhibit G Marketing Plan
Exhibit H Support and License Fees
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Exhibit I Minimum End User License Terms
Exhibit J Form of Source Code Escrow Agreement
Exhibit K Form of Joint Press Release
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers or representatives as
of the date first written above.
AT&T CORP. SPEECHWORKS INTERNATIONAL, INC.
By: /s/ David C. Nagel By: /s/ Stuart R. Patterson
--------------------------------- ------------------------------------
Name: David C. Nagel Name: Stuart R. Patterson
-------------------------------- ----------------------------------
Title: Chief Technology Officer Title: Chief Executive Officer
------------------------------ ---------------------------------
THIS DOCUMENT DOES NOT BIND OR OBLIGATE
EITHER PARTY IN ANY MANNER UNLESS EXECUTED BY
AUTHORIZED REPRESENTATIVES OF BOTH PARTIES
2.
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TERMS AND CONDITIONS
1. DEFINITIONS
Capitalized terms in this Agreement, including those in the Exhibits,
have the meanings set forth below or defined elsewhere in this Agreement. All
references to Sections and Exhibits in this Agreement are to Sections of and
Exhibits attached to this Agreement.
"AFFILIATE" means a corporation or other entity that controls, is
controlled by, or is under common control with another corporation or entity,
but only while that control relationship exists; "control" means the direct or
indirect ownership or control of 50% or more of the stock or other equity
interest entitled to vote for the election of directors or equivalent governing
body. AT&T Affiliates shall also include [ ], [ ] and [ ] and
exclude [ ] even if such entity would otherwise qualify as an AT&T Affiliate
under this definition.
"ALPHA VERSION" means a pre-release version of an anticipated
commercial Software product that is released for internal, but not external,
testing.
"APPLICATION" means Software designed to perform a specific function
directly for the user or, in some cases, for another application program.
"AT&T BRANDED SERVICES" means any service provided to end users,
whether individuals, businesses or other persons, entities or organizations,
under a brand name owned by AT&T or any of its Affiliates for which AT&T or any
of its Affiliates is responsible for billing end users.
"AT&T BUSINESS UNIT" means an operating unit of AT&T or of an AT&T
Affiliate.
"AT&T IPR" means any IPR owned by AT&T or under which AT&T has the
right to grant licenses to SpeechWorks of the scope granted in this Agreement
without the consent of any third party (i) without payment of royalties or other
license fees to a third party
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during the term of this Agreement, or (ii) with payment of royalties or other
license fees to a third party during the term of this Agreement, provided that
SpeechWorks agrees to reimburse AT&T for such royalties or other license fees
attributable to the licensing of such AT&T IPR to SpeechWorks.
"AT&T LABS" means the current AT&T Labs business unit within AT&T and
the successors of such business unit.
"AT&T LABS TRADEMARK" shall mean the AT&T Labs trademark designated in
EXHIBIT D.
"AT&T SPEECH SOFTWARE" means the speech processing application
programmer's interface software tools owned by AT&T as of the Effective Date
specified in EXHIBIT A.
"AT&T SPEECH TECHNOLOGY" means (a) AT&T Speech Software, (b) the AT&T
TTS Software, (c) any other AT&T IPR existing as of the Effective Date relating
to the perception and processing by a machine of human speech that enables
automatic speech recognition (ASR) (including large vocabulary recognition),
natural language understanding (NLU), dialog management (DM), speaker
verification (SV), and speaker identification (SI), including but not limited to
any such AT&T IPR that is embodied or necessarily infringed by implementation of
the AT&T Speech Software or the AT&T TTS Software, (d) improvements or
enhancements to any of the foregoing, if any, (collectively "ENHANCEMENTS") that
AT&T decides in its sole discretion to provide to SpeechWorks under Section 2.4,
and (e) bug fixes and error corrections in any of the foregoing Software
developed by AT&T during the term of this Agreement, excluding in all cases
Training Data that are not incorporated into the AT&T Speech Software. If third
party IPR is licensed to AT&T Labs as of the Effective Date relating to
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perception of and processing by a machine of human speech that enables automatic
speech recognition (ASR) (including large vocabulary recognition), natural
language understanding (NLU), dialog management (DM), speaker verification (SV),
and speaker identification (SI) and if under the terms of such license AT&T may,
with the consent of such third party licensor, grant licenses to third parties
of the scope granted in this Agreement, then if so requested by SpeechWorks,
AT&T will either request such consent or allow SpeechWorks to request such
consent. If such consent of the third party licensor is obtained, such third
party IPR shall be included within the definition of "AT&T Speech Technology"
for purposes of this Agreement, provided that SpeechWorks agrees to reimburse
AT&T for any incremental royalties or other incremental license fees (or any pro
rata portions of any fixed royalties or fixed license fees) attributable to the
licensing of such third party IPR to SpeechWorks.
"AT&T TTS SOFTWARE" means the source code and object code versions of
the application programmer's interface software tools known as AT&T TTS Version
1.4 related to the conversion of text to speech.
"AT&T TRADEMARKS" is defined in Section 5.1.
"BETA VERSION" means a pre-release version of an anticipated
commercial Software product that is released externally to third parties for
testing and evaluation.
"CONFIDENTIAL INFORMATION" is defined in Section 13.1.
"DESIRED FUNCTIONALITY" is defined in Section 2.1.
"DISCLOSER" is defined in Section 13.2.
"ENHANCEMENTS" is defined in the definition of AT&T Speech Technology.
"FAIR MARKET VALUE" is defined in Section 10.2.
3.
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"INDEPENDENTLY DEVELOPED IRP" means, for each party, all IPR (a) owned
by that party as of the Effective Date or (b) developed by or for that party
after the Effective Date.
"INITIAL TERM" is defined in Section 16.1.
"IPR" means all intellectual property rights protectable by law
anywhere throughout the world other than trademark rights, but including: all
copyrights (including any right to reproduce, distribute copies of, display or
perform, or prepare derivative works based on a copyrighted work), copyright
registrations and associated applications; Patents; mask work rights; trade
secrets; moral rights; author's rights; other rights in inventions, Software,
know-how, specifications, algorithms and databases; and all other intellectual
property rights as may exist now or hereafter come into existence, and all
renewals and extensions thereof and applications therefor, regardless of whether
any of such rights arise under the laws of the United States or of any other
state, country, or jurisdiction.
"MARKS" are defined in Section 17.8.
"PATENTS" means all patentable inventions and all patent rights
therefor, which include the right to apply for patent protection and all
associated patent applications, including the right to claim priority under
applicable international conventions, in any country in the world.
"RECIPIENT" is defined in Section 13.2.
"RENEWAL PERIOD" is defined in Section 16.1.
"SOFTWARE" means any source or object code instructions for
controlling the operation of a central processing unit or computer, together
with associated supporting documentation, if any, describing such code, its
installation or operation.
"SPECIFIED AT&T COMPETITOR(S)" means any entity listed in EXHIBIT F1
and any successor thereto.
4.
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"SPECIFIED SPEECHWORKS COMPETITOR(S)" means any entity listed in
EXHIBIT F2 and any successor thereto.
"SPEECHWORKS INTEGRATED SPEECH PRODUCT" means Software developed by or
for SpeechWorks during the term of this Agreement that incorporates any AT&T
Speech Technology and any documentation for the foregoing. SpeechWorks
Integrated Speech Product may include third party software licensed by
SpeechWorks and incorporated by or for SpeechWorks into such SpeechWorks
Integrated Speech Product.
"SPEECHWORKS IPR" means any IPR owned by SpeechWorks or generally
licensable by SpeechWorks to third parties.
"SPEECHWORKS SPEECH SOFTWARE" means all Software owned by SpeechWorks
as of the Effective Date, and all Software developed by or for SpeechWorks
during the term of this Agreement, related to enabling the perception by a
machine of human speech, the conversion of speech to text or text to speech, and
the establishment of the meaning of speech so as to enable the machine to
respond to the intentions of the speaker including any of the Software described
in EXHIBIT B, and any enhancements or improvements thereto developed by or for
SpeechWorks during the term of this Agreement, including without limitation the
SpeechWorks Integrated Speech Product. SpeechWorks Speech Software includes any
SpeechWorks IPR embodied or necessarily infringed by any implementation of any
of the foregoing Software. SpeechWorks Speech Software excludes any custom
software developed by or for SpeechWorks under contract for a specific
SpeechWorks customer and licensed to such customer; provided that SpeechWorks
shall use commercially reasonable efforts, taking into consideration the type
and volume of application, to incorporate the most advanced versions of its
Software into the SpeechWorks Speech Software licensed to AT&T and its
Affiliates pursuant to this Agreement.
5.
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"STATEMENT OF WORK" is defined in Section 2.1.
"SUPPORT SERVICES" is defined in Section 7.1.
"TERRITORY" means any country in the world to which the AT&T Speech
Technology can be lawfully exported.
"TRAINING DATA" means the audio input to Software resulting from end
users whether in a pilot, trial or production use of the Software.
"TRIGGER EVENT" is defined in Section 10.2.
2. DEVELOPMENT OF SPEECHWORKS INTEGRATED SPEECH PRODUCT
2.1 INITIAL STATEMENT OF WORK. AT&T and SpeechWorks have agreed on an
initial Statement of Work attached hereto in EXHIBIT C (the "STATEMENT OF
WORK"). Within [ ] of delivery by AT&T to SpeechWorks of the AT&T Speech
Software as it exists as of the Effective Date, SpeechWorks shall allocate at
least [ ] developers who will dedicate at least [ ] percent ([ ]%)
of their time to beginning the process of producing a SpeechWorks Integrated
Speech Product with the initial desired functionality specified in the Statement
of Work (the "DESIRED FUNCTIONALITY"). If within [ ] ([ ]) [ ] of
the Effective Date SpeechWorks and an AT&T Business Unit or a customer of an
AT&T Business Unit agree on an order for a SpeechWorks Integrated Speech Product
incorporating some or all of the Desired Functionality, SpeechWorks shall
proceed to produce such SpeechWorks Integrated Speech Product in accordance with
such order. If no such order is agreed upon within such [ ] ([ ]) [
] period, SpeechWorks shall have no obligation under this Section 2.1 to produce
a SpeechWorks Integrated Speech Product incorporating some or all of the Desired
Functionality. Unless SpeechWorks has entered into a contract with an AT&T
Business Unit or a customer of an AT&T Business Unit committing to include
specified components in a SpeechWorks Integrated Speech Product, the final
determination of what components are integrated into a SpeechWorks Integrated
Speech Product and the schedule of such integration shall be determined by
SpeechWorks. The provisions of the Statement of Work shall not serve to amend
or change any of the provisions of these Terms and Conditions and shall be
construed so as to be fully consistent with all of the provisions of these Terms
and Conditions. In the event of any conflict or inconsistency between the
Statement of Work and the Terms and Conditions of this Agreement, the Terms and
Conditions of this Agreement shall govern. The Statement of Work may only be
amended as provided in Section 17.13 of these Terms and Conditions.
2.2 SUBSEQUENT AGREEMENTS WITH AT&T BUSINESS UNITS. With respect to each
deployment of the SpeechWorks Integrated Speech Product by an AT&T Business
Unit, SpeechWorks and either that AT&T Business Unit or a third party systems
integrator designated by that AT&T Business Unit, and reasonably acceptable to
SpeechWorks, shall enter into a new statement of work. This new statement of
work shall provide for the terms of the applicable deployment including, as
appropriate, (i) a specific deployment schedule, (ii) delivery and
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acceptance criteria, (iii) functional requirements of such deployment, (iv)
performance metrics for the SpeechWorks Integrated Speech Product, and
maintenance and performance metrics for SpeechWorks, (v) a detailed agreement on
the financial terms of such deployment, and (vi) other terms such as the AT&T
Business Unit (and/or such third party systems integrator) and SpeechWorks may
agree upon. Instead of entering into a new statement of work with the
aforementioned provisions, an AT&T Business Unit may formulate its own agreement
to be agreed to by SpeechWorks to cover a deployment of the SpeechWorks
Integrated Speech Product. Regardless of whether a particular deployment is
governed by a statement of work or an agreement, the provisions of this
Agreement regarding licensing and support shall apply, including Sections 4, 6
and 7. Also, the AT&T Business Unit deploying the SpeechWorks Integrated Speech
Product shall provide SpeechWorks with reasonable compensation, to be mutually
agreed by SpeechWorks and such AT&T Business Unit, for any professional services
provided by SpeechWorks for such deployment; provided that (a) such compensation
shall be charged at a rate [ ] charged by SpeechWorks to [ ] for [ ]
services and shall in no event exceed the rates specified in Exhibit H, and
(b) in no event shall such charges include charges for productizing such
Speechworks Integrated Speech Product.
2.3 DEVELOPMENT RESOURCES. Except as otherwise expressly provided in this
Agreement, each party shall bear its respective costs in developing the
SpeechWorks Integrated Speech Product and shall fully fund and pay for the costs
and expenses of the performance of the activities or actions for which such
party is responsible under this Agreement, including (i) the salary, employee
benefits and other overhead costs for its employees and facilities; (ii) any
personal or travel expenses of its own personnel; and (iii) costs for any
consultants whose use is not mutually agreed to by both parties.
2.4 DELIVERY OF AT&T SPEECH TECHNOLOGY.
2.4.1 EXISTING AT&T SPEECH TECHNOLOGY. Within [ ] [( )]
[ ] after the Effective Date AT&T shall begin, and within [ ] [( )]
[ ] after the Effective Date AT&T shall complete, delivery to SpeechWorks the
AT&T Speech Software as it exists on the Effective Date. To effectuate the
delivery of other AT&T Speech Technology, that technology may, as AT&T
reasonably deems appropriate, be delivered in a variety of forms including
speech software in source code or object code form, written reports, or
consultation with members of AT&T Labs, provided that the initial delivery of
Software shall be in the form of a CD ROM.
2.4.2 ENHANCEMENT. Notwithstanding anything in this Agreement to the
contrary, AT&T shall not be obligated to enhance or improve the AT&T Speech
Technology after the Effective Date. If AT&T in its sole discretion develops
any Enhancements, AT&T shall not be obligated to provide those Enhancements to
SpeechWorks. If AT&T in its sole discretion elects to provide those
Enhancements to SpeechWorks, the circumstances, if any, pursuant to which AT&T
will provide such Enhancements to SpeechWorks and the applicable business terms,
shall be subject to a separate agreement to be negotiated by the parties,
provided, however, if AT&T delivers Software containing Enhancements to
SpeechWorks, such Enhancements shall be deemed to be included with AT&T Speech
Technology licensed under this Agreement unless such Software is identified by
AT&T on or prior to such delivery as being delivered for evaluation purposes
only or other similar designation. AT&T and SpeechWorks agree that upon request
they will hold periodic research level meetings with each other to discuss
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as each party deems appropriate their respective research and development
activities with respect to speech technology.
2.5 ALPHA TESTING OF THE SPEECHWORKS INTEGRATED SPEECH PRODUCT. AT&T shall
receive a [ ] license to the Alpha Version of the initial release of the
SpeechWorks Integrated Speech Product, for testing and demonstration development
purposes only, within [ ] ([ ]) [ ] of it becoming available within
SpeechWorks. SpeechWorks may license such Alpha Version to third parties
provided that the AT&T [ ] within [ ] ([ ]) [ ] after AT&T
receives notice from SpeechWorks in writing of its intent to deliver such Alpha
Version to a third party. It will be reasonable for AT&T to raise such
objection if the Alpha Version is to be delivered to [ ] or any supplier to
[ ] or if AT&T determines in its reasonable discretion that [ ] to
perform alpha testing would [ ]. The Alpha Version of the SpeechWorks
Integrated Speech Product shall be delivered to AT&T in compiled binary code
form. SpeechWorks is not obliged to provide, and AT&T is not obliged to
purchase, support for the Alpha Version of the SpeechWorks Integrated Speech
Product. In the event that AT&T provides any Enhancements to SpeechWorks under
Section 2.4, AT&T shall have the right to receive a royalty-free license to the
Alpha Version of the initial release of the SpeechWorks Integrated Speech
Product incorporating such Enhancements, for testing and demonstration
development purposes only, in compiled binary code form, within [ ]
[( )] [ ] of it becoming available within SpeechWorks.
2.6 BETA TESTING OF SPEECHWORKS INTEGRATED SPEECH PRODUCT. AT&T shall
receive a [ ] license to the Beta Version of any release of any SpeechWorks
Speech Software, for testing and demonstration development purposes only, no
later than, and on [ ] terms than any third party. SpeechWorks shall not
deliver the initial Beta Version of the SpeechWorks Integrated Speech Product
incorporating [ ] and [ ] or the initial Beta Version of the SpeechWorks
[ ] incorporating [ ] with a [ ] greater than [ ] to [ ] (or
to a supplier of [ ] [ ] for testing or evaluation by [ ] [ ])
unless AT&T has access to such Beta Version for at least [ ] ([ ])
[ ] before such Beta Version is delivered to [ ] [ ] or supplier, or
unless AT&T [ ]. Such [ ] shall not be [ ] unless AT&T determines
in its reasonable discretion that allowing that party to perform beta testing
would [ ] AT&T [ ]. AT&T may, at its sole discretion, obtain support
for the Beta Version of any SpeechWorks Speech Software from SpeechWorks on no
less favorable terms than are offered to any third party.
2.7 CONTINUED DEVELOPMENT OF THE SPEECHWORKS INTEGRATED SPEECH PRODUCT.
SpeechWorks shall use commercially reasonable efforts to continue to enhance and
improve the SpeechWorks Integrated Speech Product throughout the Term of this
Agreement and to provide any such enhancements or improvements to AT&T at AT&T's
request. Upon the commercial release of each SpeechWorks Integrated Speech
Product during the term of this Agreement, at AT&T's request SpeechWorks shall
deliver a copy in compiled binary code form of that SpeechWorks Integrated
Speech Product, along with any relevant documentation, to AT&T for evaluation
and for the purposes set forth in Section 4.2.1.
2.8 SOURCE CODE ESCROW. Within thirty days of the execution of this
Agreement, AT&T and SpeechWorks shall execute a source code escrow and license
agreement substantially in the form of EXHIBIT J with appropriate modifications
to conform to the terms of this
8.
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Agreement. Each time SpeechWorks delivers a copy of a SpeechWorks Integrated
Speech Product under Section 2.7, SpeechWorks shall, at its expense, place a
copy of the source code of the SpeechWorks Integrated Speech Product, along with
source code comments and all relevant documentation, into escrow. In the event
of a Trigger Event where the Acquiring Entity is a Specified AT&T Competitor as
specified in Section 10.2, the source code will be released to AT&T and AT&T
shall be entitled to exercise the license to such source which is specified in
Section 10.2 and the source code escrow and license agreement.
2.9 ACCESS TO SOURCE CODE FOR AT&T DESIGNATED THIRD PARTIES. AT&T may,
from time to time, request that SpeechWorks disclose and license the source code
of the SpeechWorks Integrated Speech Product to a third party on terms mutually
acceptable to SpeechWorks and such third party to the extent required for
developing and/or supporting AT&T Branded Services. SpeechWorks shall not
unreasonably deny such a request by AT&T. Reasons for such denial shall
include, but not be limited to, SpeechWorks' concern about giving access to
source code to a Specified SpeechWorks Competitor. The license granted the
third party shall also allow the third party to use, modify, and prepare
derivative works based on the source code of the SpeechWorks Integrated Speech
Product to the extent required for developing and supporting AT&T Branded
Services and include reasonable provisions to protect SpeechWorks IPR including
ownership of derivative works. SpeechWorks shall be reasonably compensated for
the license granted to the third party in an amount to be mutually agreed upon
by SpeechWorks and such third party.
3. OWNERSHIP OF INTELLECTUAL PROPERTY
3.1 INDEPENDENTLY DEVELOPED IPR. As between AT&T and SpeechWorks, each
party shall own all right, title and interest in its respective Independently
Developed IPR, regardless of whether such Independently Developed IPR existed
prior to the Effective Date or is developed by that party subsequent to the
Effective Date. Each party's rights with respect to its Independently Developed
IPR shall be subject to any IPR owned by the other party. Without limiting the
generality of the foregoing, each party shall own any derivative works or
enhancements it develops during the term of this Agreement. Nothing in this
Agreement shall be deemed or construed to grant any title or interest in or to
the other party's Independently Developed IPR, whether by implication, estoppel
or otherwise, except for the licenses granted within this Agreement.
3.2 NO JOINTLY DEVELOPED IPR. The parties do not intend, as of the
Effective Date, to conduct joint development. Nevertheless, if the parties
later determine that they wish to conduct joint development, whether in
connection with a deployment with an AT&T Business Unit or otherwise, the
parties shall enter into a separate agreement that expressly provides for the
terms and conditions of such joint development, including provisions dealing
with access to source code and ownership of such joint development.
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4. LICENSES
4.1 LICENSE GRANTS BY AT&T.
4.1.1 AT&T Speech Technology.
(a) DEVELOPMENT LICENSE. Subject to the terms and conditions of
this Agreement, AT&T hereby grants to SpeechWorks a non-exclusive, non-
transferable, royalty-free and perpetual license, under any AT&T Speech
Technology, to use, reproduce, make, have made, modify and prepare derivative
works based upon the AT&T Speech Technology solely for purposes of developing,
testing, maintaining and supporting the SpeechWorks Integrated Speech Product in
the Territory in any manner permissible under this Agreement.
(b) DISTRIBUTION LICENSE FOR COMPILED BINARY FORM. Subject to
the terms and conditions of this Agreement, AT&T hereby grants to SpeechWorks a
non-exclusive, non-transferable, royalty-free and perpetual license, under any
AT&T Speech Technology, (i) to use, reproduce, publicly display and publicly
perform the AT&T Speech Technology, or derivatives thereof, to the extent
embodied in Software and incorporated in any SpeechWorks Integrated Speech
Product, in compiled binary form, (ii) to distribute the AT&T Speech Technology,
or derivatives thereof, to the extent embodied in Software and incorporated in
any SpeechWorks Integrated Speech Product in the Territory, in compiled binary
form only, directly to end users and indirectly to end users through channels of
distribution and (iii) to sublicense the foregoing rights, through multiple
channels of distribution, to system integrators and value added resellers of any
SpeechWorks Integrated Speech Products.
(c) DISTRIBUTION LICENSE FOR SOURCE CODE. Subject to the terms
and conditions of this Agreement, AT&T hereby grants to SpeechWorks a non-
exclusive, non-transferable, royalty-free and perpetual license, under any AT&T
Speech Technology, (i) to deliver the AT&T Speech Technology, or derivatives
thereof, to the extent embodied in the Software and incorporated in any
SpeechWorks Integrated Speech Product, in the Territory, in source code form,
directly to end users and to system integrators and value added resellers of
SpeechWorks Integrated Speech Products solely for purposes of developing,
testing, maintaining and supporting SpeechWorks Integrated Speech Products and
(ii) to sublicense such end users, system integrators and value-added resellers
to use, reproduce and modify such source code solely for purposes of developing,
testing, maintaining and supporting SpeechWorks Integrated Speech Products,
subject to the following conditions: (A) SpeechWorks shall not provide source
code to [ ] unless AT&T consents in writing, such consent not to be unreasonably
withheld; (B) if SpeechWorks distributes a SpeechWorks Integrated Speech Product
containing source code of or derived from AT&T TTS Software, AT&T "Finite State
Machine" libraries greater than 100,000 words, AT&T dialog management and
natural language understanding, or AT&T speaker identification or speaker
verification, then AT&T shall be entitled to a reasonable share of any source
code license fee received by SpeechWorks with respect to such SpeechWorks
Integrated Speech Product in an amount to be mutually agreed by AT&T and
SpeechWorks, provided that AT&T's share shall in no event be greater than (x) [
] percent ([ ]%) in the case of [ ] distributed during [ ] after the Effective
Date that includes [ ], or (y) [ ] percent ([ ]%) in all other cases; and (C)
such source code shall be delivered pursuant to a written agreement with such
end user, system integrator or value-added-reseller containing reasonable
provisions to protect AT&T IPR and the confidentiality of the source code at
least as protective as the provisions under which SpeechWorks licenses source
code for its other SpeechWorks Speech Software. The foregoing notwithstanding,
SpeechWorks shall have the right in the ordinary course of business to put
source code for SpeechWorks Integrated Speech Products in escrow for the benefit
of any Specified AT&T Competitor or any other third party granted a binary code
license to such
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software under Section 4.1.1(b) above and to authorize the release of such
source to such Specified AT&T Competitor or other third party in accordance with
the terms of such escrow agreement substantially the same as those contained in
EXHIBIT J.
(d) END USER LICENSES. All copies of any SpeechWorks Integrated
Speech Product sublicensed by SpeechWorks (or by any system integrator or
reseller) to any third party shall be distributed with and subject to the
minimum terms and conditions of an end-user license substantially in the form of
EXHIBIT I.
4.1.2 TRADEMARK LICENSE. Subject to the terms and conditions of this
Agreement, AT&T hereby grants to SpeechWorks a non-exclusive, non-transferable,
[ ] license to use and reproduce the AT&T Trademarks in products utilizing
the AT&T Speech Technology, including related packaging, documentation, and
promotional materials.
4.2 LICENSE GRANTS BY SPEECHWORKS FOR SPEECHWORKS INTEGRATED SPEECH
PRODUCT.
4.2.1 DEVELOPMENT, SUPPORT, AND DEMONSTRATION LICENSE. Subject to
the terms and conditions of this Agreement, SpeechWorks hereby grants to AT&T
and its Affiliates a non-exclusive, non-transferable, royalty-free, perpetual
license, under any SpeechWorks Speech Software, to make, reproduce, use,
publicly display and publicly perform an unlimited number of copies of any
SpeechWorks Speech Software and related documentation on computer facilities
operated by or on behalf of AT&T or its Affiliates in the Territory in compiled
binary code form, for research, development, support and demonstration purposes
and not for any other commercial purposes.
4.2.2 COMMERCIAL DEPLOYMENT LICENSES. Subject to the terms and
conditions of this Agreement, SpeechWorks agrees that, upon request from time to
time during the term of this Agreement, it shall grant to AT&T and any of its
Affiliates licenses, under any SpeechWorks Speech Software, to reproduce, use,
publicly display and publicly perform any SpeechWorks Speech Software and
related documentation, alone or as part of other Software, on computer
facilities owned and operated by or on behalf of AT&T or its Affiliates in the
Territory, in compiled binary code form, for purposes of providing commercial
services directly and through channels of distribution, to third parties without
limitation on the number of ports which may be licensed by AT&T, subject to
payment for the applicable license fees specified in Section 6.2 and agreement
between SpeechWorks and the applicable AT&T Business Unit upon appropriate
license terms consistent with the term of this Agreement applicable to such
license and other mutually agreeable terms.
4.2.3 SUBLICENSING. The licenses granted under Section 4.2.1 include,
and the licenses to be granted under Section 4.2.2 will include, the right to
sublicense the rights under such licenses only to third parties to whom AT&T or
its Affiliates outsources the provisioning of AT&T Branded Services or to whom
AT&T and its Affiliates contract for the development, deployment or provisioning
of AT&T Branded Services including systems integrators and platform developers,
provided that (i) AT&T shall provide notice to SpeechWorks of such sublicenses;
(ii) AT&T shall pay the applicable license fees under Section 6.2 with respect
thereto; and (iii) such sublicense shall be pursuant to a written agreement with
such sublicensee containing reasonable provisions to protect SpeechWorks IPR
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consistent with the terms of this Agreement other mutually agreeable terms
mutually agreed by SpeechWorks and AT&T.
4.3 RESERVATION OF RIGHTS. Notwithstanding any other provision in this
Agreement, no rights or licenses are granted under this Agreement, and no
provision of this Agreement shall be construed as conferring by implication,
estoppel or otherwise any license or right, to SpeechWorks or to any customer of
SpeechWorks, including without limitation any end users, system integrators or
value-added resellers of SpeechWorks Integrated Speech Products, under any claim
in any patent of AT&T IPR unless such claim is completely embodied in the
SpeechWorks Integrated Speech Product (in the case of an apparatus claim) or
such claim is completely performed by execution of the SpeechWorks Integrated
Speech Product (in the case of a method claim), as such product is furnished (or
as a combination of such products is furnished at one time) by SpeechWorks to
its customers, without the need for any additional product, service,
development, modification, Software or programming by SpeechWorks' customers or
a third party.
5. DISTRIBUTION OF COMMERCIAL PRODUCTS
5.1 BRANDING. SpeechWorks shall distribute products utilizing any AT&T
Speech Technology, or derivative works based thereon, with the AT&T Labs
Trademark and/or any other AT&T trademark designated in writing by AT&T
(collectively, "AT&T TRADEMARKS"), solely as provided in EXHIBIT D of this
Agreement, provided that for deployment [ ], if SpeechWorks [ ] that
[ ], SpeechWorks may provide the SpeechWorks Integrated Speech Product [ ].
Use of the AT&T Trademarks shall be in accordance with AT&T's then-current
trademark guidelines. SpeechWorks shall be given reasonable advance written
notice of any change in AT&T's trademark guidelines and a reasonable
opportunity, [ ] ([ ]) [ ], to liquidate existing inventory which
does not comply with the changed guideline. Upon AT&T's reasonable request,
SpeechWorks will provide AT&T with a reasonable number of copies of products
utilizing AT&T Speech Technology and any materials bearing any AT&T Trademark so
that AT&T can verify that SpeechWorks' use of the AT&T Trademarks is in
accordance with the requirements of this Agreement. In the event that AT&T
notifies SpeechWorks that SpeechWorks' use of AT&T Trademarks does not comply in
a material respect as reasonably determined by AT&T with AT&T's then-current
trademark guidelines (which set forth both guidelines for the use of the marks
and for quality assurance) and/or other requirements under this Agreement,
SpeechWorks shall suspend distribution of the products containing such
deficiencies until such deficiencies are corrected. The packaging,
documentation, and promotional materials for products utilizing the AT&T Speech
Technology, whether distributed to AT&T and its Affiliates or to third parties,
shall include credit, in form to be mutually agreed by the parties, that the
products contain certain speech Software components originating from AT&T Labs.
The form and content of all such statements referring to AT&T, AT&T Labs or AT&T
Speech Technology must be mutually agreed upon by both parties, but once AT&T
approves the form and substance of materials using the AT&T Trademarks,
SpeechWorks may reuse such materials without seeking AT&T's consent for each
use.
5.2 APPOINTMENT OF AT&T AS RESELLER OF THE SPEECHWORKS INTEGRATED SPEECH
PRODUCT. Any AT&T Business Unit shall have the right to be a reseller of the
SpeechWorks Integrated Speech Product for distribution to third parties on no
less favorable terms than any
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other reseller of SpeechWorks Speech Software. Any AT&T Business Unit may
exercise its right to become such a reseller at any time during the term of this
Agreement by written notice to SpeechWorks and by executing a mutually agreeable
SpeechWorks Reseller Agreement.
5.3 DISTRIBUTION TO SYSTEM INTEGRATORS AND PLATFORM DEVELOPERS. To
incentivize third party integrators and developers to incorporate the
SpeechWorks Integrated Speech Product in their solutions and platforms,
SpeechWorks will offer to enter into agreements on commercially reasonable
terms, taking into consideration resource availability, with system integrators
and platform developers designated by AT&T for use and distribution of the
SpeechWorks Integrated Speech Product.
6. FINANCIAL CONSIDERATION
6.1 EQUITY CONSIDERATION PROVIDED BY SPEECHWORKS. In consideration for the
licenses granted by AT&T under this Agreement, AT&T shall receive the equity
consideration set forth in EXHIBIT E.
6.2 LICENSE FEE PRICING TO BUSINESS UNITS. Any AT&T Business Unit that,
during the term hereof, requires licenses of a SpeechWorks Integrated Speech
Product shall be entitled to obtain such license(s) from SpeechWorks for, and
shall pay SpeechWorks, a license fee as specified in EXHIBIT H. If any such
AT&T Business Unit enters into a new license for SpeechWorks Integrated Speech
Product, or adds additional ports to any existing license for which it is not
yet contractually committed to pay the applicable fee, SpeechWorks shall notify
such AT&T Business Unit of the license fee to which such AT&T Business Unit is
entitled under this Section 6.2 and make such license fee available to such AT&T
Business Unit with respect to such new license or such additional ports.
6.3 PAYMENT OF SUPPORT FEES BY AT&T. If any AT&T Business Unit that
licenses a SpeechWorks Integrated Speech Product as described in Section 6.2
wishes to obtain support for such SpeechWorks Integrated Speech Product, such
AT&T Business Unit shall pay SpeechWorks support fees as specified in EXHIBIT H.
If any such AT&T Business Unit enters into a new support agreement, or obtains
additional support under an existing support agreement for which it is not yet
contractually committed to pay the applicable support fee, SpeechWorks shall
notify such AT&T Business Unit of the support fee to which such AT&T Business
Unit is entitled under this Section 6.3 and make such support fee available to
such AT&T Business Unit with respect to such new support agreement or such
additional support.
6.4 PAYMENT OF PROFESSIONAL SERVICES FEES BY AT&T. Any professional
services provided by SpeechWorks to any AT&T Business Unit shall be provided by
SpeechWorks at [ ].
7. SUPPORT AND MAINTENANCE
7.1 SUPPORT PROVIDED TO AT&T. For purposes of this Agreement, "SUPPORT
SERVICES" means the support services for the SpeechWorks Speech Software to be
provided by SpeechWorks to AT&T Business Units that license SpeechWorks Speech
Software, including technical support services, error correction services,
maintenance updates, training and other similar services. AT&T and its
Affiliates may purchase Support Services on an annual or such
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other basis as may be mutually agreed. The details of the Support Services shall
be subject to one or more separate agreements between AT&T or the applicable
AT&T Affiliate and SpeechWorks.
7.2 SUPPORT TO BE PROVIDED TO THIRD PARTY CUSTOMERS. SpeechWorks shall be
exclusively responsible for providing Support Services to purchasers of
SpeechWorks products incorporating AT&T Speech Technology. AT&T shall have no
obligation to provide Support Services to such purchasers, even if the purchaser
requires technical assistance on an issue related to the AT&T Speech Technology.
The Support Services offered by SpeechWorks to such purchasers must include at
least technical support services, error correction services, maintenance
updates, and training.
7.3 SUPPORT PROVIDED BY AT&T TO SPEECHWORKS. AT&T shall provide support
to SpeechWorks, at no charge, for the initial transfer of the AT&T Speech
Software, up to a maximum of [ ] ([ ]) hours of technical support during
the first [ ] ([ ]) [ ] following the Effective Date. Unless
otherwise mutually agreed by the parties, AT&T shall provide that support at
AT&T facilities, or remotely through means such as telephone, facsimile, or e-
mail, and the support shall be provided by personnel designated by AT&T. After
AT&T has provided [ ] ([ ]) hours of support, or [ ] ([ ])
[ ] after the Effective Date, whichever occurs first, AT&T shall have no
further obligation to provide any support to SpeechWorks.
8. PUBLICITY; MARKETING
8.1 JOINT PRESS ANNOUNCEMENTS. Consistent with the applicable regulatory
requirements, the parties shall issue a joint press release announcing their
relationship in the substantially in the form attached hereto as EXHIBIT K
within ten (10) days after the Effective Date. The parties will agree on the
timing of the announcement for maximum impact, where "maximum impact" considers,
among other things, the availability of spokespeople from both companies.
8.2 MARKETING OUTSIDE OF AT&T. SpeechWorks is solely responsible for
promoting and marketing the SpeechWorks Integrated Speech Product, but at
SpeechWorks' request, AT&T [ ] with SpeechWorks in its promotional and
marketing efforts [ ] in its [ ] such [ ]. SpeechWorks may, without
notifying AT&T or obtaining AT&T's consent, promote SpeechWorks Integrated
Speech Product as long as SpeechWorks does not mention or allude to AT&T, except
as the parties mutually agree in advance for the designation for use of the AT&T
Labs Trademark in SpeechWorks Integrated Speech Products as provided in EXHIBIT
D. The foregoing notwithstanding, SpeechWorks may, without obtaining AT&T's
consent, allude to its relationship with AT&T in slideware, PowerPoint
presentations and the like, data sheets and white papers relating to the
SpeechWorks Integrated Speech Product in accordance with specimen that been pre-
approved by AT&T in accordance with EXHIBIT D. SpeechWorks shall obtain AT&T's
written consent before mentioning or alluding to AT&T in the course of any
promotional activities other than those authorized above or in EXHIBIT D.
8.3 [ ] WITHIN AT&T. To help [ ] and [ ] the SpeechWorks
Integrated Speech Product within AT&T, AT&T Labs shall:
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(a) [ ] with AT&T [ ] for [ ] [ ] projects
listed in EXHIBIT G, and
(b) appoint an AT&T Labs employee to assist SpeechWorks on
executing the [ ] for such projects.
SpeechWorks acknowledges and agrees that each AT&T Business Unit has the [ ]
in determining its respective [ ], and this Agreement does not [ ] that
any AT&T Business Unit shall [ ] any SpeechWorks [ ].
9. OTHER SPEECHWORKS PRODUCTS AND SERVICES
AT&T shall also have the option to purchase from time to time all other
existing and future SpeechWorks products and services related to the provision
of voice-enabled services, at [ ] then [ ] for [ ] and [ ].
The terms and conditions for such purchases if any shall be mutually agreed upon
by the parties and embodied in a separate purchase agreement.
10. ASSIGNMENT AND CHANGE OF CONTROL
10.1 ASSIGNMENT. Except as expressly permitted herein, neither party may
assign, transfer or pledge this Agreement, or any interest, license, or rights
of any kind herein, in any manner, without the prior written consent of the
other party to this Agreement, except (i) in the case of SpeechWorks, in
connection with a merger, reorganization or sale of substantially all of the
business of SpeechWorks or, (ii) in the case of AT&T, in connection with a
merger, reorganization or sale of substantially all of the business relating to
AT&T Speech Technology to an entity which is not a Specified SpeechWorks
Competitor. Any purported assignment, transfer or pledge of this Agreement in
violation of this Section 10 shall be null and void. Any permitted assignment,
transfer or pledge of this Agreement shall be subject to Section 10.2.
10.2 MERGERS, ACQUISITION OF ASSETS, OR CHANGE OF CONTROL. If either
party enters any agreement or consummates any permitted transaction or series of
transactions under which an entity (the "ACQUIRING ENTITY") would acquire,
whether by merger or otherwise, (a) substantially all of the business of such
party (or in the case of AT&T, substantially all of the business relating to
AT&T Speech Technology) or (b) beneficial ownership or control, directly or
indirectly, of more than fifty percent (50%) of the outstanding shares or
securities representing the right to vote for the election of directors of the
assigning party (each a "TRIGGER EVENT"), this Section 10.2 shall apply. If the
Triggering Event will result in the Acquiring Entity acquiring substantially all
of the business of the assigning party (or in the case of AT&T, substantially
all of the business relating to AT&T Speech Technology), then prior to
consummating such transaction or series of transactions, the Acquiring Entity
shall agree in writing to be bound by the terms and conditions of this
Agreement. If the Acquiring Entity fails at or before consummation of such a
Trigger Event to agree in writing to be bound by the terms and conditions of
this Agreement, the other party shall be entitled, at its option, to terminate
this Agreement upon thirty (30) days written notice. If SpeechWorks is the
assigning party and the Acquiring Entity is a Specified AT&T Competitor, then
upon consummation of the Trigger
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Event, the following shall apply even if AT&T has exercised the termination
right stated in this Section 10.2:
(i) The source code of the SpeechWorks Integrated Speech
Product shall be released to AT&T and AT&T shall be entitled to exercise the
license to such source code according to the terms of the source code escrow and
license agreement in EXHIBIT J.
(ii) The Acquiring Entity shall provide at least [ ] man
hours of engineering support over the [ ] ([ ]) [ ] period
following release of the source code, free of charge, to AT&T to assist AT&T to
support and continue development of the SpeechWorks Integrated Speech Product.
(iii) SpeechWorks or the Acquiring Entity shall pay to AT&T
(in addition to any share consideration that may be otherwise due in connection
with SpeechWorks equity then owned by AT&T) a supplemental license fee for the
licenses granted under this Agreement in cash in an amount equal to (a) if the
Trigger Event occurs on or before two years after the Effective Date, the lesser
of five percent (5%) of the Fair Market Value of SpeechWorks equity at the time
of consummation of the Trigger Event and Twenty-five Million Dollars
($25,000,000), or (b) if the Trigger Event occurs more than two years after the
Effective Date, the lesser of three percent (3%) of the Fair Market Value of
SpeechWorks equity at the time of consummation of the Trigger Event and Fifteen
Million Dollars ($15,000,000). "FAIR MARKET VALUE" for purposes of this
Agreement shall mean (a) if the shares of SpeechWorks are publicly traded
securities at the date of consummation of the Trigger Event, the closing market
price on such date or the most recent closing market price if there was no
closing market price on such date times the total number of outstanding shares
of SpeechWorks, or (b) if the shares of SpeechWorks are not publicly traded
securities at the time of determination of such Fair Market Value, the fair
market value of SpeechWorks as determined in such Trigger Event transaction or
if the Fair Market Value is not determined in such Trigger Event transaction,
then the fair market value of SpeechWorks as determined by an independent
investment banker or qualified appraiser selected in good faith by the Board of
Directors of SpeechWorks and approved by AT&T, such approval not to be
unreasonably withheld, which determination shall be binding on SpeechWorks, the
Acquiring Entity (in the case of determination in the case of a Trigger Event
under this Section 10.2) and AT&T.
(iv) In addition to and without limiting the other provisions
of this Section 10.2, if as a result of the Trigger Event AT&T does not receive
cash or readily tradable securities in exchange for all shares of SpeechWorks
held by AT&T, AT&T shall have the right to require SpeechWorks (or the Acquiring
Entity if SpeechWorks is not the surviving entity) to purchase all shares of
SpeechWorks held by AT&T (or other consideration received by AT&T in exchange
for its shares of SpeechWorks) for cash or readily tradable securities equal to
the Fair Market Value of the SpeechWorks equity owned by AT&T at the time of the
Trigger Event.
10.3 MOST FAVORED TREATMENT. If at any time AT&T controls, is controlled
by or is under common control with (as control is defined in the definition of
Affiliate) a specific SpeechWorks competitor, then the rights of AT&T and its
Affiliates to receive most favorable, most favored, no less favorable, and the
like sorts of treatment pursuant to this Agreement shall terminate.
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11. REPRESENTATIONS AND WARRANTIES
11.1 BY AT&T. AT&T makes the following representations and warranties to
SpeechWorks, each of which is true and correct on the date hereof and shall
continue to be true and correct at all times during the term of this Agreement,
and hereby covenants as follows:
(a) ORGANIZATION, STANDING AND POWER. AT&T is a corporation duly
organized and validly existing under the laws of the state of New York and has
all requisite corporate power and authority to execute, deliver and perform this
Agreement and any other agreements contemplated hereby and to consummate the
transactions contemplated hereby.
(b) NO CONFLICTING AGREEMENTS. AT&T is not currently obligated nor
will it assume any future obligation under any contract (including without
limitation any license, covenant or commitment of any nature) or other
agreement, instrument or arrangement that could conflict with its obligations
under this Agreement.
11.2 BY SPEECHWORKS. SpeechWorks makes the following representations and
warranties to AT&T, each of which is true and correct on the date hereof and
shall continue to be true and correct at all times during the term of this
Agreement, and hereby covenants as follows:
(a) ORGANIZATION, STANDING AND POWER. SpeechWorks is a corporation
duly organized and validly existing under the laws of the state of Delaware and
has all requisite corporate power and authority to execute, deliver and perform
this Agreement and any other agreements contemplated hereby and to consummate
the transactions contemplated hereby.
(b) NO CONFLICTING AGREEMENTS. SpeechWorks is not currently obligated
nor will it assume any future obligation under any contract (including without
limitation any license, covenant or commitment of any nature) or other
agreement, instrument or arrangement that could conflict with its obligations
under this Agreement.
12. RISK ALLOCATION
12.1 LIMITATION OF WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTIES WHATSOEVER WITH RESPECT TO
THE AT&T SPEECH TECHNOLOGY, THE SPEECHWORKS SPEECH SOFTWARE OR THE SPEECHWORKS
INTEGRATED SPEECH PRODUCT, AS APPLICABLE, UNDER THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS. ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
12.2 LIMITATION ON LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER OR TO ANY THIRD PARTY FOR ANY CONSEQUENTIAL, EXEMPLARY, PUNITIVE,
INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES OR COSTS (INCLUDING REASONABLE
ATTORNEYS' FEES) OR FOR ANY LOSS OF PROFITS OR GOODWILL HOWEVER ARISING OUT OF
OR RELATED TO THIS
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AGREEMENT, WHETHER OR NOT EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES OR COSTS. EITHER PARTY'S CUMULATIVE LIABILITY TO THE OTHER PARTY
FOR DAMAGES HEREUNDER, EXCEPT FOR DAMAGES ARISING FROM INFRINGEMENT CLAIMS AS
PROVIDED IN SECTION 12.3, SHALL IN NO EVENT EXCEED FIVE MILLION DOLLARS
(U.S. $5,000,000).
12.3 INDEMNIFICATION.
12.3.1 SPEECHWORKS' DUTY TO INDEMNIFY AT&T. Subject to the
conditions set forth in this Section 12.3, SpeechWorks at its own expense shall
indemnify, defend and hold AT&T and its Affiliates harmless from any and all
claims, damages, losses, costs, actions and expenses, including reasonable
attorneys' and experts' fees, arising from (i) any breach of SpeechWorks'
representations or warranties set forth in Section 11.2 hereof, (ii) the use or
distribution of any SpeechWorks Speech Software by SpeechWorks or its
distributors or customers (other than AT&T or its Affiliates), and (iii) any
claim or contention that any SpeechWorks Speech Software infringes any third
party's IPR or trademark rights, provided that SpeechWorks shall have no duty to
indemnify, defend or hold harmless AT&T and its Affiliates under this Section
12.3.1 with respect to any claim or contention for which AT&T is obligated to
indemnify SpeechWorks under Section 12.3.2.
12.3.2 AT&T'S DUTY TO INDEMNIFY SPEECHWORKS. Subject to the
conditions set forth in this Section 12.3, AT&T at its own expense shall
indemnify, defend and hold SpeechWorks harmless from any and all claims,
damages, losses, costs, actions and expenses, including reasonable attorneys'
and experts' fees, arising from (i) any breach of AT&T's representations and
warranties set forth in Section 11.1 hereof, and (ii) any claim or contention
that the AT&T Speech Software or the AT&T TTS Software as furnished infringes
any third party's IPR or that the use of the AT&T trademarks in accordance with
Section 4.1.2 infringes any third party's trademark; provided that AT&T shall
have no obligation to indemnify, defend, or hold SpeechWorks harmless from any
claims, damages, losses, costs, actions or expenses arising from any claim or
contention arising out of or based upon (a) the combination, operation, or use
of the AT&T Speech Software with programs or data not supplied by AT&T or (b)
any modification of any AT&T Speech Software made by any person or entity other
than AT&T.
12.3.3 CONDITIONS TO DUTY TO INDEMNIFY. Prior to incurring any
indemnifiable expenses, the indemnitee shall promptly notify the indemnifying
party in writing of any claim, suit, expense or the like for which the
indemnifying party will indemnify the indemnitee under this Section 12.3. The
indemnifying party shall be entitled, at its election, to control the defense
and settlement of any claim, action, proceeding or suit, and the indemnitee
shall cooperate with the indemnifying party, at the indemnitee's expense, in
providing such assistance in defending such claim, action, proceeding or suit as
the indemnifying party may reasonably request. If the indemnifying party elects
not to assume control of the matter, it shall indemnify the indemnitee as
provided in this Section 12.3; provided that the indemnitee shall obtain the
indemnifying party's prior written approval of any settlement, which approval
the indemnifying party agrees not to unreasonably withhold.
12.3.4 SPEECHWORKS' OPTIONS. If the SpeechWorks Speech Software
should become the subject of any claim or contention of infringement of the IPR
of any third party, or in SpeechWorks' opinion be likely to become subject to
such a claim or contention, SpeechWorks may, but shall not be obligated to, at
its option and expense, and without limiting its obligations under Section
12.3.1 (a) procure the right for AT&T to use such SpeechWorks Speech Software
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in accordance with the licenses granted under this Agreement, (b) replace or
modify the SpeechWorks Speech Software so as to make it non-infringing, or (c)
if options (a) and (b) are not available on commercially reasonable terms,
terminate the licenses granted under this Agreement with respect to the portion
of such SpeechWorks Speech Software subject to such claim or contention. If
SpeechWorks terminates licenses under option (c) of this Section 12.3.4,
SpeechWorks shall compensate AT&T for reasonable engineering costs incurred in
removing the affected SpeechWorks Speech Software. Any amounts paid by
SpeechWorks under this Section 12.3.4 shall be included within, and subject to,
the limitation on liability specified in Section 12.3.6.
12.3.5 AT&T'S OPTIONS. If the AT&T Speech Technology should become
the subject of any claim or contention of infringement of the IPR of any third
party, or in AT&T's option be likely to become subject to such a claim or
contentions, AT&T may, but shall not be obligated to, at its option and expense,
and without limiting its obligations under Section 12.3.2 (a) procure the right
for SpeechWorks to use such AT&T Speech Software in accordance with the licenses
granted under this Agreement, (b) replace or modify the AT&T Speech Software so
as to make it non-infringing, or (c) if options (a) and (b) are not available on
commercially reasonably terms, terminate the licenses granted under this
Agreement with respect to the portion of such AT&T Speech Software subject to
such claim or contention. If AT&T terminates licenses under option (c) of this
Section 12.3.5, AT&T shall compensate SpeechWorks for reasonable engineering
costs incurred in removing the affected AT&T Speech Software. Any amounts paid
by AT&T under this Section 12.3.5 shall be included within, and subject to, the
limitation on liability specified in Section 12.3.6.
12.3.6 Sole Remedy; LIMITATION OF LIABILITY. The indemnifying
party's performance under this Section 12.3 shall be indemnitee's sole and
exclusive remedy in the event of infringement or misappropriation of the
copyright, patent, trademarks, trade secrets or any other IPR of any third
parties. Each party's cumulative liability to the other party under this Section
12.3 with respect to claims or contentions of infringement or misappropriation
of the copyright, patents, trademarks, trade secrets or any other IPR of third
parties shall in no event exceed in the aggregate (a) Five Million Dollars
(U.S.$5,000,000) cash, plus (b) an amount, not to exceed Fifteen Million Dollars
(U.S.$15,000,000), equal to the sum of the Fair Market Value of all shares of
SpeechWorks received by AT&T under this Agreement and held by AT&T determined as
of the date AT&T is obligated to make payment under this Section 12.3 and the
net proceeds from any prior sale by AT&T of shares of SpeechWorks received by
AT&T under this Agreement. AT&T may, at its election and in its sole discretion,
satisfy any portion of its liability under item (b) of this Section 12.3.6 by
surrendering to SpeechWorks shares of SpeechWorks held by AT&T and upon such
surrender AT&T shall be deemed to have discharged its liability under this
Section 12.3.6(b) in an amount equal to the Fair Market Value of such
surrendered shares. If AT&T, at its election and in its discretion , elects to
surrender all shares of SpeechWorks received by AT&T under this Agreement then
held by AT&T, plus the net proceeds from any prior sale of SpeechWorks shares
received by AT&T under this Agreement, AT&T shall be deemed to have fully
satisfied its liability under item (b) of this Section 12.3.6 and in that event
AT&T's total remaining liability to SpeechWorks under this Section 12.3 shall be
limited to the Five Million Dollars (U.S.$5,000,000) cash referenced in item
(a) of Section 12.3.6.
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13. CONFIDENTIALITY
13.1 CONFIDENTIAL INFORMATION. The parties acknowledge that they have
received or may receive confidential information relating to the other party's
products, product, business and financial plans, customer lists and information
and trade secrets in connection with the performance of this Agreement, together
with such other information designated as confidential or proprietary by one
party, ("CONFIDENTIAL INFORMATION"). Confidential Information shall be limited
to information which (i) if furnished in writing or other tangible form, is
clearly and conspicuously marked at the time of disclosure with a legend
identifying it as "CONFIDENTIAL" or "PROPRIETARY", or (ii) if presented orally
or in other intangible form, is identified as confidential or proprietary at or
before the time of disclosure or should be reasonably understood by the
recipient to be confidential information of the disclosing party or (iii) is
source code. For purposes of this section, the text of email messages shall be
treated as oral communications, but any attachment information shall be treated
as if furnished in writing. Confidential Information shall not include any
information which: (i) is or falls into the public domain without fault of the
receiving party; or (ii) the receiving party can show was in its possession
prior to receipt thereof from the disclosing party; or (iii) the receiving party
receives from a third party with no obligation of confidence to the disclosing
party; or (iv) the disclosing party discloses to a third party with no
obligation of confidence to the disclosing party; or (v) the receiving party can
demonstrate was independently developed without benefit of any Confidential
Information of the disclosing party.
13.2 USE OF CONFIDENTIAL INFORMATION. Except as (i) contemplated,
permitted, or required in carrying out this Agreement or in exercising the
licenses granted under Section 4, or (ii) required by law or by any competent
government authority, or (iii) such limited disclosures in confidence as may be
reasonably necessary to either party's attorney's and accountants, the receiving
party of any Confidential Information ("RECIPIENT") disclosed by a disclosing
party ("DISCLOSER") shall not use such Confidential Information or disclose such
Confidential Information to any third party, either during the term of this
Agreement or thereafter, without the prior written consent of Discloser. Prior
to making a disclosure pursuant to (ii) above, the Recipient shall give
Discloser as much advance notice as is practicable and cooperate with Discloser
in its attempts to obtain a protective order. Thus, Recipient shall use the
Confidential Information only to perform its obligations and exercise its rights
under this Agreement and to the extent permitted in the licenses granted
hereunder. In the event that either party is required by law to disclose the
existence or the substance of this Agreement for purposes of an SEC disclosure
or other legal process, the party wishing to make such disclose shall give the
other party prior notice to pursuant to Section 17.4 and shall permit such other
party a reasonable opportunity to seek to protect from disclosure all or certain
portions of this Agreement by redaction or otherwise.
13.3 OWNERSHIP OF CONFIDENTIAL INFORMATION. All Confidential Information
shall remain the property of Discloser and shall be returned upon written
request, except if the exception in subsection (i) of Section 13.2 applies.
Recipient's duty to protect Confidential Information commences upon receipt of
the Confidential Information.
13.4 DISCLOSURE OF CONFIDENTIAL INFORMATION TO EMPLOYEES AND CONTRACTORS.
Except as otherwise provided in or permitted by this Agreement, neither party
shall use,
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reproduce, duplicate, copy, or otherwise disclose, distribute, or disseminate
any part of the other party's Confidential Information except for internal use
by employees or contractors of such party or its Affiliates on a need-to-know
basis. Prior to disclosing Confidential Information to a contractor, Recipient
shall have executed with such contractor an agreement which restricts use or
disclosure of Discloser's Confidential Information (or categories of
Confidential Information which encompass Confidential Information) in a manner
consistent with this Agreement.
13.5 NO LICENSES OR WARRANTIES FOR CONFIDENTIAL INFORMATION. Except as
otherwise provided in this Agreement; no license under any IPR is granted or
implied by the conveying of Confidential Information to Recipient. None of the
Confidential Information which may be disclosed by Discloser shall constitute
any representation, warranty, assurance, guarantee, or inducement by Discloser
of any kind, and, in particular, with respect to the non-infringement of any
intellectual property rights, or other rights of third persons or of Disclosure.
13.6 RESIDUALS. Anything in this Agreement to the contrary
notwithstanding, either party shall be free to use for any purpose the
"residuals" resulting from access to or work with the Confidential Information
of the other party. The term "residuals" means information which is not
protected by patent or copyright, in non-tangible form, that may be retained by
persons who have has access to the Confidential Information, without the aid of
reference to such Confidential Information in tangible form, including ideas,
concepts, know-how, or techniques contained therein. Neither party shall have
any obligation to limit or restrict the assignment of such persons or to pay
royalties for any work resulting from the use of residuals, provided that the
foregoing shall not be deemed to grant to either party a license under the other
party's copyrights or patents except as specified herein. Notwithstanding the
above, the parties shall not sell, license, or distribute the residuals as
stand-alone products or services.
13.7 DISCLOSURE OF AGREEMENT. Except for the information disclosed as
provided in Section 8, neither party shall disclose the existence or any of the
terms of this Agreement at any time, without the prior written approval of the
other party, except (i) as may be required by law or by any competent government
authority (provided such disclose shall be subject to the last sentence of
13.2), or (ii) such limited disclosures in confidence as may be reasonably
necessary to either party's bankers, investors or potential investors,
acquirors, attorneys and accountants.
14. DISPUTE RESOLUTION
14.1 AMICABLE RESOLUTION. The parties shall first attempt to amicably
resolve any dispute that may arise under this Agreement. If the parties cannot
resolve the dispute within 30 days, either party may refer the dispute to
arbitration pursuant to Section 14.2.
14.2 ARBITRATION. Subject to first attempting to amicably resolve disputes
pursuant to Section 14.1 hereof, either party may, upon written notice to the
other and the CPR Institute for Dispute Resolution ("CPR"), submit any dispute
or controversy relating to or arising out of the subject matter of this
Agreement to binding arbitration. The arbitration shall be conducted in
accordance with the then current CPR "Non-Administered Arbitration Rules" or any
successor CPR rules, and the procedures specified in this Section. The
arbitration shall be conducted by one (1) arbitrator who is selected from a CPR
panel having members knowledgeable in the legal and technical aspects of the
subject matter of this Agreement. If the parties cannot mutually
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agree upon an arbitrator within ten (10) days after submission of the dispute to
the CPR, the CPR shall appoint the arbitrator. The arbitrator shall determine
issues of arbitrability, but may not limit, expand or otherwise modify the terms
of this Agreement nor have authority to award punitive or other damages in
excess of compensatory damages and each party irrevocably waives any claim
thereto. Each party shall bear its own expenses, but those related to the
compensation of the arbitrator and the costs of arbitration shall be borne
equally. Discovery shall be strictly limited to the production of documents
directly relevant to the stated claims and each party shall be limited to three
(3) depositions of no longer than three (3) hours each. Any award shall be made
within six (6) months of selection of the arbitrator and may be entered in any
court having competent jurisdiction. The arbitrator shall orally disclose to the
parties the reasoning behind the award but shall not prepare any written
statement other than the remedies granted. The parties, their representatives,
other participants and the arbitrators shall hold the existence, content and
result of the arbitration in confidence. The parties agree that the decision of
the arbitrator shall be deemed a compromise of a dispute under Rule 408 of the
U.S. Federal Rules of Evidence, shall not be discoverable in any proceeding,
shall not be admissible in any court (except for the enforcement thereof) or
arbitration and shall not bind or collaterally estop either party with respect
to any claim or defense made by any third party. The arbitration shall be
conducted in New York, New York.
14.3 IPR CLAIMS. Notwithstanding anything to the contrary in Section 14.2,
the parties shall not be required to attempt to amicably resolve or arbitrate
claims concerning the validity, enforceability, scope or infringement of any IPR
or any trademark rights, and shall retain the right to pursue all such claims in
any court of competent jurisdiction. In the event of any such infringement or
misappropriation, the parties recognize that money damages may not be an
adequate remedy and therefore agree that, in addition to any other remedies
available hereunder, by law or otherwise, a party whose IPR or trademark rights
have been infringed or misappropriated by the other party shall be entitled to
seek injunctive relief against any such continued infringement or
misappropriation.
15. EXPORT MATTERS
15.1 EXPORT LAWS. The parties acknowledge that Software, services
(including Support Services), and technical information, if any, provided under
this Agreement may be subject to U.S. export laws and regulations and any use or
transfer of such Software, services, and technical information must be
authorized under those regulations (U.S. Export Administration Regulations, 15
CFR et seq.). Each party will not use, distribute, transfer or transmit the
Software, services, or technical information (even if incorporated into other
products) obtained from the other party pursuant to this Agreement except in
compliance with U.S. export regulations.
15.2 PROHIBITED COUNTRIES. Regardless of whether the export or reexport of
Software, services (including Support Services), and technical information
provided hereunder is restricted under applicable laws and regulations, the
parties assure one another that they each will not, without the other's prior
written consent, directly or indirectly, export or reexport any such Software,
services, and technical information obtained hereunder to any country which is
in the then current list of prohibited countries specified in the U.S. export
laws and regulations. For the purposes of this Section 15, "export" and
"reexport" mean transferring or releasing to another country or to a national of
another
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country (wherever that person is located) by any means, including physical,
electronic, or otherwise.
16. TERM AND TERMINATION
16.1 TERM. The initial term of this Agreement shall commence on the
Effective Date and shall continue for five (5) years thereafter (the "INITIAL
TERM"). After the Initial Term, this Agreement shall automatically renew for
successive six (6) month periods (each a "RENEWAL PERIOD") unless (i) either
party notifies the other party of its decision not to renew the term of this
Agreement at least two (2) months prior to the end of the then current term or
(ii) this Agreement is terminated pursuant to Section 16.2.
16.2 TERMINATION. This Agreement may be terminated prior to the expiration
of the applicable term as follows:
(i) by either SpeechWorks or AT&T upon thirty (30) days prior
notice for any material default or breach of any of the material terms and
conditions of this Agreement by the other party, unless the defaulting party has
cured such failure or default within such 30-day period;
(ii) by either party immediately upon notice, if (a) the other
party is adjudicated as bankrupt or makes an assignment for the benefit of
creditors, or if a receiver, liquidation, administrator or trustee is appointed
for such party's affairs or any analogous procedure is initiated or (b) the
other party is dissolved; or
(iii) provided that AT&T has fulfilled its obligations under
Section 8.3 hereof, at any time following the date that is six (6) months
following the Effective Date, by AT&T upon sixty (60) days prior notice to
SpeechWorks.
16.3 EFFECT OF TERMINATION. The license granted in Section 4.1.1 shall
survive termination of this Agreement. Upon termination of this Agreement for
any reason, the provisions of this Section 16 (Term and Termination) and of
Section 3 (Ownership of Intellectual Property), Section 11 (Representations and
Warranties), Section 12 (Risk Allocation), Section 13 (Confidentiality), Section
14 (Dispute Resolution), Section 15 (Export Matters), and Section 17 (General
Provisions) shall survive and remain effective. Termination of this Agreement
shall not prejudice any claim of either party accrued on account of any default
or breach by the other. Upon termination of this Agreement for any reason, the
provisions of Section 4.2 (License for SpeechWorks Integrated Speech Product)
shall survive and remain effective; except that commercial deployment licenses
granted under Section 4.2.2 after termination shall be subject to payment of the
following license fees: (a) in the case of termination for any reason other than
termination by SpeechWorks by reason of AT&T's breach, subject to the provisions
of Section 10.3, [ ] pricing terms; (b) in the case of termination by
SpeechWorks by reason of AT&T's breach, SpeechWorks' then standard pricing
subject to such discount as may be mutually agreed by the SpeechWorks and the
applicable AT&T Business Unit.
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17. GENERAL PROVISIONS
17.1 (a) FURTHER ASSURANCES. Each of the parties covenants to execute
upon request any further documents reasonably necessary to effect the express
terms and conditions of this Agreement, including such documents as are
reasonably necessary to vest title in IPR as provided in this Agreement. Each
party shall, without any cost to the other, take such action as is necessary to
secure from its project personnel the rights required to effect the ownership of
IPR as provided in this Agreement.
(b) NON-SOLICITATION. During the Term of this Agreement and for six
(6) months thereafter, neither party nor any of its controlled Affiliates shall,
directly or indirectly, whether by itself, its employees or agents and whether
on its own behalf or on behalf of any other person, firm or company or otherwise
howsoever, solicit for the purpose of hiring any employee, of the other party,
whether or not that person would commit any breach of any contract of employment
by reason of his/her leaving the service of such other party, without such other
party's written consent. For purposes of this Section 17(b), general
solicitations through advertisements, trade shows, job fairs and the like shall
deemed not to constitute solicitations.
17.2 THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express or
implied, is intended to or shall confer on any third party any rights (including
third-party beneficiary rights), remedies, obligations or liabilities under or
by reason of this Agreement. This Agreement shall not provide any third parties
with any remedy, claim, liability, reimbursement, cause of action or other right
in excess of those existing without reference to the terms of this Agreement.
No third party shall have any right, independent of any right that exists
irrespective of this Agreement, to bring any suit at law or equity for any
matter governed by or subject to the provisions of this Agreement.
17.3 COMPUTATION OF TIME. If a time period provided in this Agreement
requires a certain action be performed within ten (10) or less days, then
intervening Saturdays, Sundays and legal holidays shall not be included in the
computation of time. If a time period requires a certain action be performed
within eleven (11) or more days, then intervening Saturdays, Sundays and legal
holidays shall be included in the computation of time. In the event that a time
period expires on a Saturday, Sunday or legal holiday, the time period shall be
deemed to expire on the next day that is not a Saturday, Sunday or legal
holiday. For purposes of this Agreement, "legal holidays" shall mean New Year's
Day, Birthday of Martin Luther King, Jr., President's Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and
the Friday thereafter, and Christmas Day, whether or not observed by a party
hereto.
17.4 NOTICES. Unless otherwise provided in this Agreement, all notices
permitted or required under this Agreement shall be in writing, shall reference
this Agreement, and shall be sent by any of the following methods: (a) certified
mail, postage-prepaid, return-receipt requested, or (b) a delivery service which
requires proof of delivery signed by the recipient. A party may change its
address for notice by written notice delivered in accordance with this Section.
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If to SpeechWorks: SpeechWorks International, Inc.
695 Atlantic Avenue
Boston, Massachusetts 02111
Attn: President
With copy to General Counsel (at the same address)
and to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Attn: Steven P. Rosenthal, Esquire
If to AT&T: AT&T Labs
180 Park Ave.
Florham Park, New Jersey 07932
Attn: President of AT&T Labs
With copy to: AT&T Corp.
295 N. Maple Ave.
Basking Ridge, New Jersey 07920
Attn: Vice President of Law
17.5 FORCE MAJEURE. Except as otherwise set forth in this Agreement, a
party will not be deemed to have materially breached this Agreement to the
extent that performance of its obligations or attempts to cure any breach are
delayed or prevented by reason of any act of God, fire, natural disaster,
accident, act of government, shortage of materials or supplies beyond the
reasonable control of such party, strike, labor dispute or walkout, or any other
cause beyond the reasonable control of each party (a "FORCE MAJEURE EVENT");
provided that the party whose performance is delayed or prevented promptly
notifies the other party of the nature and duration of the force majeure event
and uses commercially reasonable efforts to overcome the difficulties created
thereby and resumes performance of its obligations as soon as practicable.
17.6 NO OTHER OBLIGATIONS. This Agreement is non-exclusive and, except as
this Agreement provides, will not be interpreted (i) to limit either party's
right to obtain products or services from other sources; (ii) to prohibit or
restrict either party from independently developing or acquiring new products or
services, improving existing products or services, or marketing any new,
improved, or existing products or services; (iii) to restrict either party from
making, having made, using leasing, licensing, selling, or otherwise disposing
of any existing or future products or services of any type; (iv) to limit either
party's right to deal with any other vendors, suppliers, contractors, or
customers; or (v) to commit either party to favor or recommend any product or
service of the other party; to be binding, any such restriction or commitment
must be in writing and signed by both parties. The preceding sentence will not
be interpreted as an implied license under any patent, copyright, trademark, or
other intellectual property right of either party. Without limitation on the
generality of the foregoing, AT&T shall not be obligated to use the SpeechWorks
Speech Software to commercially provide AT&T Branded Services.
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17.7 INDEPENDENT CONTRACTORS. In performing this Agreement, each of the
parties will operate as, and have the status of, an independent contractor.
This Agreement does not create any agency, employment, partnership, joint
venture, franchise or other similar or special relationship between the parties.
Neither party will have the right or authority to assume or create any
obligations or to make any representations, warranties or commitments on behalf
of any other party, whether express or implied, or to bind the other party in
any respect whatsoever.
17.8 MARKS. Except as otherwise provided in this Agreement, neither party
shall (i) display or use, in advertising or otherwise, any of the other party's
trade names, logos, trademarks, trade devices, trade dress, service marks,
symbols, abbreviations or registered marks, or contractions or simulations
thereof, or any other indicia of origin (hereinafter referred to collectively as
"MARKS") or (ii) authorize or permit the other party's Marks to be used or
displayed by any Person. Neither party shall claim ownership or any other
rights in the other party's Marks.
17.9 SEVERABILITY. If any provision of this Agreement or portion thereof
is determined by a court of competent jurisdiction, or declared under any law,
rule or regulation of any government having jurisdiction over the parties
hereto, to be invalid, illegal or otherwise unenforceable, then such provision
will, to the extent permitted by the court or government not be voided but will
instead be construed to give effect to its intent to the maximum extent
permissible under applicable law and the remainder of this Agreement will remain
in full force and effect according to its terms.
17.10 COMPLIANCE WITH LAW. Each party agrees that all of its obligations
contained in this Agreement and any action taken by it pursuant to this
Agreement shall be performed in accordance with all applicable laws, statutes,
rules, regulations and ordinances.
17.11 CHOICE OF LAW. This Agreement shall be governed by and construed
under, and the legal relations between the parties hereto shall be determined in
accordance with, the laws of the State of New York, without giving effect to
such state's conflict of law principles.
17.12 RULES OF CONSTRUCTION. As used in this Agreement, (i) neutral
pronouns and any derivations thereof shall be deemed to include the feminine and
masculine and all terms used in the singular shall be deemed to include the
plural and vice versa, as the context may require; (ii) the words "HEREOF" and
"HEREUNDER" and other words of similar import refer to this Agreement as a
whole, including all exhibits and schedules as the same may be from time to time
amended or supplemented and not to any subdivision of this Agreement; (iii) the
words "PARTY" and "PARTIES" refer, respectively, to a party or to both of the
parties to this Agreement; (iv) the word "including" is not intended to be
exclusive and means "including without limitation"; and (v) descriptive headings
are inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement. This Agreement shall
be fairly interpreted in accordance with its terms and without any strict
construction in favor of or against either party.
17.13 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement, including
the Exhibits, constitutes the entire agreement of the parties concerning its
subject matter and supersedes any and all prior or contemporaneous, written or
oral negotiations, correspondence,
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understandings and agreements between the parties respecting the subject matter
of this Agreement. No supplement, modification or amendment to this Agreement
shall be binding unless evidenced by a writing that references this Agreement
and is signed by the party against whom it is sought to be enforced. No waiver
of any of the provisions of this Agreement shall be deemed, or shall constitute,
a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
17.14 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original instrument enforceable in accordance
with its terms.
17.15 MOST FAVORABLE. When the expressions, "most favorable," "most
favored," " no less favorable" and the like are used in this Agreement to
compare an arrangement offered under this Agreement to an arrangement offered to
a third party, all salient economic terms of the two arrangements shall be
considered in making such comparison.
[Remainder of this page intentionally left blank]
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EXHIBIT A
AT&T SPEECH SOFTWARE
Watson Network 1.0, including modules thereof that enable automatic speech
recognition (ASR) (including large vocabulary recognition), natural language
understanding (NLU), dialog management (DM), speaker verification (SV), and
speaker identification (SI).
Exhibit A - Pg. 1.
<PAGE>
EXHIBIT B
SPEECHWORKS SPEECH SOFTWARE
. SpeechWorks 6, including SpeechWorks SMARTRecognizer(TM) core recognition
engine; SpeechWorks DialogModule(TM) building blocks; and SpeechWorks
Development and Tuning Tools for rapid application development.
. SpeechSiteTM packaged application solution, including a built-in 5000 name
(base) auto-attendant.
Exhibit B - Pg. 1.
<PAGE>
EXHIBIT C
STATEMENT OF WORK
The description of the work to be performed by AT&T and SpeechWorks for a
SpeechWorks Integrated Speech Product is divided into two parts. The first part
describes the process that we have agreed to for defining, evaluating, and
developing functionality for the SpeechWorks Integrated Speech Product. The
second part describes the initial functionality that we agree to pursue in the
initial phases of the relationship. Both of these may change over time (as
specified in the terms and conditions). The process may change if we learn
better ways to work together. The desired functionality will change as the
market for speech products evolves (both within and outside of AT&T).
PROCESS
The overall goal is to combine the technologies of SpeechWorks and AT&T Labs to
create a SpeechWorks Integrated Speech Product which best satisfies the needs of
the market (both within and outside of AT&T). The needs of the market can be
characterized by a number of desired features or capabilities of the SpeechWorks
Integrated Speech Product. These desired features and capabilities could be
satisfied through a variety of means. The following process will be used to
define and develop the best implementation of these desired features and
capabilities:
1. The project managers from AT&T and SpeechWorks will agree on desired
functionality, characteristics and target platforms of the SpeechWorks
Integrated product. This should be driven by requirements from the market
(both within and outside of AT&T). These requirements will of course change
over time, but based on information at any given point in time, the project
managers from AT&T and SpeechWorks will agree on a current set of
priorities.
2. Define tests to measure how well the SpeechWorks Integrated Speech Product
is meeting the desired needs. We will use these tests to measure where we
are at any point in time in meeting the requirements of the market. The
job of the SpeechWorks development team will be to optimize performance on
these tests, so it is important that the tests truly reflect the needs in
the marketplace, both current and immediately predictable (e.g. IP based).
3. Measure performance of the current SpeechWorks Integrated Engine and the
performance of any available technologies from SpeechWorks and AT&T on the
tests defined in #2. The methods for measuring the impact of individual
component technologies will vary depending on the technology and the
capability to be measured, but the goal will be to determine the best
available technology or combination of technologies for any individual
product requirement.
4. Based on these evaluations, SpeechWorks will work with AT&T to determine
the best approach to getting individual technology components into the
SpeechWorks Integrated Speech Product. These enhancements would either be
targeted to a particular
Exhibit C - Pg. 1.
<PAGE>
SpeechWorks product release (and controlled by the SpeechWorks release
schedule), or could be done as part of special releases driven by deals
with AT&T business units.
5. SpeechWorks is responsible for developing the SpeechWorks integrated
technology components as defined above and for formal testing of the
resulting SpeechWorks Integrated Speech Product on tests defined in #2.
INITIAL DESIRED FUNCTIONALITY
The initial joint work on the SpeechWorks Integrated engine will fall into three
broad categories:
1. Support for "How May I Help You (HMIHY) Dialog Systems". Current
SpeechWorks applications use a combination of machine-initiative dialogs
with limited use of natural language processing. There is a class of
applications that require a much greater user initiative. Applications
such as call routing or help desk must allow the user to specify their
request in an open manner, since the user may be unable to map their need
onto the structure of a more machine-directed system. AT&T has developed
natural language and dialog management technologies to enable such open-
ended dialogs for this class of applications. A key initial target will be
to include this functionality in the SpeechWorks Integrated Speech Product.
The tests used [ ]. The metrics used for evaluation will be those that
are related to the overall success of such applications. SpeechWorks will
integrate AT&T's speech recognition, spoken language understand and dialog
management technologies, which support this class of applications, into the
product and make it available for customers within [ ].
2. Large name list recognition (of approximately [ ] names). The target
applications for this include [ ]. In addition to being able to handle
very large name lists, the SpeechWorks Integrated Speech Product needs to
have the ability to [ ]. Tests for this capability will come from
[ ], [ ].
3. Overall recognition performance on current SpeechWorks capabilities.
SpeechWorks measures product performance (accuracy, computation, and
rejection) on a fairly extensive product test suite. SpeechWorks and AT&T
will work together to make sure that the SpeechWorks Integrated engine has
the best combination of available technologies for optimizing performance
on this suite of tests.
To satisfy the initial requirement set, as listed above, the recognition tasks
to be defined and used for performance measurements will include:
. [ ]
. [ ] ([ ]) [ ]
. [ ] ([ ])
. [ ]
. [ ]
. [ ]
. [ ]
. [ ] ([ ])
Exhibit C - Pg. 2.
<PAGE>
. [ ]
. [ ]
. [ ] ([ ])
. [ ]
. "How May I Help You" capabilities [ ]
The initial quality requirements to be met by SpeechWorks for TSS synthesized
speech include:
. [ ]
[ ] PRODUCTIZATION PLAN.
SpeechWorks will provide a product incorporating AT&T's TTS Software engine and
female and male voices within [ ] ([ ]) [ ] of [ ] Software and
will integrate [ ] ([ ]) [ ].
Exhibit C - Pg. 3.
<PAGE>
EXHIBIT D
AT&T BRANDING GUIDELINES
AT&T generally requires the use of special guidelines when the AT&T
LABS name is used in connection with certain technology so as to clearly define
the nature of the AT&T/SpeechWorks relationship.
The AT&T LABS BRANDING.
The "AT&T Labs Branding" refers to the "POWERED BY AT&T LABS
TECHNOLOGY" slogan or some other mutually agreeable terms (hereinafter "SLOGAN")
Placement of AT&T LABS Branding.
PACKAGING / MEDIA: If the SpeechWorks Integrated Speech Product is distributed
in non-electronic form, then the Slogan must be displayed on the lower-right
corner of the back or front of the packaging which contains the media, subject
to the prohibitions recited below.
Usage of AT&T Labs Branding
POSITION OF LOGO. The SpeechWorks logos should be at least double the size of
the Slogan and adequate spacing between the Slogan and the SpeechWorks brand
should always be maintained. The Slogan may only appear in the size that it was
originally provided by AT&T.
SCALING. The Slogan shall appear centered on top of any logo in a font (10
point minimum and a total of 25 characters) that is consistent with the rest of
the SpeechWorks web site and marketing materials. The distance from the top of
any logo to the baseline of the qualifying phrase is 10 points.
Other requirements
LICENSE TO USE. AT&T grants SpeechWorks a personal, non-exclusive, non-
transferable, non-assignable, limited right to use the Slogan solely in
accordance with this Agreement. If SpeechWorks breaches any requirement of this
Agreement, including failing to use the Slogan in a manner which these
Guidelines state that SpeechWorks must, then such failure shall be considered a
breach of this Agreement. Notwithstanding the foregoing, the Slogan may never
be used in connection with services or products that do not contain AT&T
technology. Other than as expressly set forth herein, nothing in this Agreement
shall be construed as conferring upon SpeechWorks any right to use in any manner
any reference to any AT&T Marks or any other indicia of origin owned by AT&T or
to indicate that SpeechWorks' products or services are in any way sponsored,
approved or endorsed by AT&T. AT&T does not grant, and SpeechWorks does not
have, any right to grant or purport to grant any sublicense to the Slogan.
NO ALTERATIONS. The Slogan must always be used in the original form as created
and delivered by AT&T. SpeechWorks may not alter the Slogan in any way.
Exhibit D - Pg. 1.
<PAGE>
SPECIMENS. SpeechWorks must submit specimens of all screen shots of the
SpeechWorks Integrated Speech Product and other materials (including marketing
literature) which include the Slogan, prior to their publication. If AT&T
determines that SpeechWorks' use of the Slogan conflicts with or is not
expressly permitted by this Agreement, then AT&T shall advise SpeechWorks of
same and SpeechWorks shall not distribute the materials to any third party until
appropriate corrective action is taken to the satisfaction of AT&T. If AT&T
fails to communicate its approval or disapproval of a specimen within [ ]
([ ]) [ ] after receipt, and if SpeechWorks has used Reasonable Efforts to
verbally inform AT&T that SpeechWorks did not hear from AT&T during such [ ]
([ ]) [ ] period, and if the specimen does not conflict with these
Guidelines, then the specimen shall be deemed approved. Upon approval by AT&T
of a specified specimen for a specific purpose, SpeechWorks may make reprints or
updated versions of such specimen without AT&T approval, provided that, the
format of the Slogan in the specimen has not been changed, modified or otherwise
altered. Materials shall not be altered without the prior written approval of
AT&T. Such specimens shall be sent in an email containing the subject line
"Request for Slogan Approval" to the following address:
Name: [ ]
AT&T Brand Management
295 N. Maple Ave.
Basking Ridge, NJ 07920
Room [ ]
[ ]
([ ]) [ ]-[ ]
PRE-APPROVED SPECIMENS
Specimens to be mutually agreed within [ ] ([ ]) days of the Effective
Date.
COOPERATION. SpeechWorks agrees to execute all papers reasonably requested by
AT&T to effect further registration of, maintenance and renewal of the Slogan in
connection with licenses granted hereunder and, where applicable, to record
SpeechWorks as a registered user of the Slogan.
DIFFERENTIATION. Notwithstanding any other provision of these Guidelines,
SpeechWorks' use of the Slogan must accurately represent the relationship
between AT&T and SpeechWorks as licensor/SpeechWorks and must not foster any
misleading or mistaken belief that AT&T is jointly providing a service or
product with SpeechWorks.
ACKNOWLEDGMENTS. SpeechWorks acknowledges and agrees that: it will not register
or apply for, and that it has not registered or applied for, any name or mark
confusingly similar to the Slogan in any country; that it will not use the
Slogan, or any mark confusingly similar thereto, as part of its corporate name
or trade name; that it will not obtain any ownership interest in the Slogan or
any other right or entitlement to continued use of the Slogan, regardless of how
long this Agreement remains in effect and regardless of any reason or lack of
reason for the termination thereof by AT&T; that any and all goodwill and other
rights that may be acquired by the use of the Slogan shall inure to the sole
benefit of AT&T; and that SpeechWorks will not
Exhibit D - Pg. 2.
<PAGE>
challenge the ownership or validity of the Slogan; and AT&T MAKES NO WARRANTIES,
EXPRESS OR IMPLIED, REGARDING THE SLOGAN, INCLUDING THE OWNERSHIP, VALIDITY OR
NON-INFRINGEMENT THEREOF.
LEGENDS AND NOTICES. AT&T may require SpeechWorks to include a notice on any
product, item or service upon which SpeechWorks uses the Slogan in order to
identify the licenses granted hereunder and the proprietary rights of AT&T.
PROHIBITED USES. SpeechWorks shall not use the Slogan in connection with the
SpeechWorks Integrated Speech Product to create any documents or in connection
with any information which: (a) violates any applicable federal, state or local
law of the United States or any foreign country having jurisdiction or (b)
violates the property rights of others, including unauthorized copyrighted text,
images or programs, trade secrets or other confidential proprietary information,
or trademarks or service marks used in an infringing fashion. None of the
foregoing limitations shall be construed in a manner to expand any licenses
granted hereunder. SpeechWorks shall not use the Slogan on any content that in
AT&T's reasonable opinion:
. Relates to illegal activities;
. Demeans, ridicules or attacks an individual or group on the basis of age,
color, national origin, race, religion, sex, sexual orientation or handicap;
. Is pornographic, obscene, vulgar or sexually explicit/suggestive;
. Relates to tobacco and/or alcoholic beverages;
. Relates to firearms, ammunition and/or fireworks;
. Relates to gambling;
. Relates to contraceptives;
. Relates to violence;
. Includes vulgar, obscene language; or
. Relates to the solicitation of funds (excluding legal electronic commerce).
LIMIT OF GUIDELINES. These Guidelines pertain only to the Slogan. Nothing in
these Guidelines may be construed as conveying any other rights to SpeechWorks,
including intellectual property rights or the right to provide any software
mentioned herein. The terms of the License Agreement shall prevail over any
conflicting terms of these Guidelines.
CHANGES TO GUIDELINES. AT&T may modify the Guidelines from time-to-time in its
sole discretion, including changing web site designations and contact
information. If AT&T makes a material change to the manner of use set forth in
the Guidelines despite SpeechWorks' written objections, SpeechWorks shall have
[ ] ([ ]) days after receiving notice of such change to terminate this
Agreement.
QUALITY CONTROL. IF AT&T DETERMINES IN ITS REASONABLE SOLE DISCRETION THAT
THE PRODUCTS, SERVICES OR MATERIALS PROVIDED BY SPEECHWORKS HEREUNDER ARE
INCONSISTENT WITH AT&T'S INTENTIONS FOR ITS MARKS, THEN AT&T MAY IMMEDIATELY
TERMINATE THE SPEECHWORKS' RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT UPON
WRITTEN NOTICE TO SPEECHWORKS.
Exhibit D - Pg. 3.
<PAGE>
Questions and requests for changes
If SpeechWorks has any questions or requested changes to these Guidelines
(such as size requirements), please contact [ ] at the above-
identified location. These Guidelines cannot be changed or waived except by
a writing signed by AT&T.
Exhibit D - Pg. 4.
<PAGE>
EXHIBIT E
EQUITY CONSIDERATION
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement dated as of June 5, 2000 is entered
into by and between SpeechWorks International, Inc., a Delaware corporation (the
"Company"), and AT&T Corp., a New York corporation ("AT&T").
WHEREAS, on the date hereof the Company and AT&T are entering into a
Development and License Agreement (the "License Agreement") pursuant to which
AT&T will license certain technology (the "Technology") to the Company in
exchange for shares of common stock of the Company as specified herein; and
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
parties hereto agree as follows:
Issuance of the Common Stock.
In consideration of the license of the Technology by AT&T to the Company,
the Company agrees to issue to AT&T (i) 1,045,158 shares (the "Shares") of the
Company's common stock, $0.001 par value per share (the "Common Stock"). Such
issuance shall take place at a closing (the "Closing") to be held at Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., on June 5, 2000 at 10:00 a.m., or
on such other date and at such time as may be mutually agreed upon by the
Company and AT&T. Subject to the satisfaction of the conditions set forth in
Section 5 hereof, at the Closing the Company will issue and deliver a
certificate evidencing the Shares to AT&T registered in the name of AT&T.
1. Representations of the Company. The Company hereby represents and
warrants to the AT&T as follows:
(a) Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted by it and to enter into and
perform this Agreement and to carry out the transactions contemplated by this
Agreement. The Company is duly qualified to do business as a foreign
corporation and is in good standing in The Commonwealth of Massachusetts and in
every other jurisdiction in which the failure to so qualify would have a
material adverse effect on the operations or financial condition of the Company
and its subsidiaries taken as a whole.
(b) Capitalization. The authorized capital stock of the Company consists
of 35,000,000 shares of Common Stock, of which 6,000,103 shares were outstanding
as of May 31, 2000, and 11,791,662 shares of Preferred Stock, $0.001 par value
per share (the "Preferred Stock") consisting of 2,475,000 shares of Series A
Convertible Participating Preferred Stock,
Exhibit E - Pg. 1.
<PAGE>
$0.001 par value per share, all of which shares are issued or outstanding as of
the date hereof, 2,474,500 shares of Series B Convertible Preferred Stock,
$0.001 par value per share, all of which shares are issued and outstanding as of
the date hereof, 1,626,092 shares of Series C Convertible Preferred Stock,
$0.001 par value per share, all of which shares are issued and outstanding as of
the date hereof, 2,671,389 shares of Series D Convertible Preferred Stock,
$0.001 par value per share, all of which shares are issued and outstanding as of
the date hereof and 2,544,681 shares of Series E Convertible Preferred Stock,
$0.001 par value per share, all of which shares are issued and outstanding as of
the date hereof. All of the issued and outstanding shares of Common Stock and
Preferred Stock have been duly authorized and validly issued and are fully paid
and nonassessable. The Shares, when issued and delivered in accordance with the
terms hereof, will be duly authorized, validly issued and fully paid and
nonassessable. Except as set forth in Schedule 2(b), there are no options,
warrants or rights to purchase shares of the Company's capital stock. Except as
provided for in the Company's Certificate of Incorporation, the Company is not
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock. Except as set forth in the
Company's Fourth Amended and Restated Stockholders Agreement, dated as of April
11, 2000, as amended, no holder of any security of the Company is entitled to
preemptive or similar statutory or contractual rights, either arising pursuant
to any agreement or instrument to which the Company is a party or that are
otherwise binding upon the Company. The rights, privileges and preferences of
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock and Series E Preferred Stock are as stated in
the Certificate of Incorporation.
(c) Issuance of the Shares. The issuance of the Shares in accordance with
this Agreement have been duly authorized by all necessary corporate action on
the part of the Company.
(d) Authority for Agreement. The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action. This Agreement has been duly executed and delivered
by the Company and constitutes the valid and binding obligation of the Company
enforceable in accordance with its terms. The execution of and performance of
the transactions contemplated by this Agreement and compliance with the
provisions hereof by the Company will not violate any provision of law and will
not conflict with or result in any breach or violation of any of the terms,
conditions or provisions of, or constitute a default under, or require a consent
or waiver under, its Certificate of Incorporation or By-Laws (each as amended to
date) or any mortgage, indenture, lease, material agreement or other instrument
to which the Company is a party or by which it or any of its properties is
bound, or any decree, judgment, order, statute, rule or regulation applicable to
the Company. The Company is not in violation or default of any term of its
Certificate of Incorporation or Bylaws, or any provision of any mortgage,
indenture, lease, agreement, or other instrument to which it is party or by
which it is bound.
(e) Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
governmental authority is required on the part of the Company in connection with
the execution and delivery of this Agreement or the issuance and delivery of the
Shares. Based on the representations made by AT&T in Section 3 hereof, the
issuance and delivery of Shares to AT&T is in compliance with applicable federal
and state securities laws.
Exhibit E - Pg. 2.
<PAGE>
(f) Litigation. There is no action, suit, proceeding, governmental inquiry
or investigation pending or, to the best of the Company's knowledge, currently
threatened against the Company that questions the validity of this Agreement or
the License Agreement or the right of the Company to enter into them, or to
consummate the transactions contemplated hereby or thereby, or that might
reasonably result, either individually or in the aggregate, in any material
adverse changes in the business, assets, condition, prospects or affairs of the
Company, financially or otherwise, or any change in the current equity ownership
of the Company. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate that might
reasonably result either individually or in the aggregate, in any material
adverse changes in the assets, condition prospects or affairs of the Company,
financially or otherwise.
(g) Intellectual Property. To the best of the Company's knowledge, the
Company owns or has a valid right to use the patents, patent rights, licenses,
trade secrets, trademarks, trademark rights, trade names or trade name rights,
domain names or franchises, copyrights, inventions, and intellectual property
rights necessary to the conduct of the business as now operated or proposed to
be operated (the "Company's Intellectual Property") and, to the best of the
Company's knowledge, except as described in the Disclosure Schedule, the
Company's Intellectual Property (including embodiments thereof) does not violate
licenses or conflict with or violate valid patents, patent rights, trade
secrets, trademarks, trademark rights, trade names or trade name rights, domain
names or franchises, copyrights or intellectual property rights of others. All
licenses and other agreements relating to the Company's Intellectual Property
Rights are in full force and effect without default by the Company or to the
best of the Company's knowledge by any party thereto. To the best of the
Company's knowledge, no officer or employee of the Company is, or is now
expected to be, in violation of any term of any employment contract, patent
disclosure agreement, non-competition agreement, or any other contract or
agreement or any restrictive covenant relating to the right of any such officer
or employee to be employed by the Company because of the nature of the business
conducted or to be conducted by the Company or relating to the right of any such
officer or employee to be employed by the Company because of the nature of the
business conducted or to be conducted by the Company or relating to the use of
trade secrets or proprietary information of others. Each employee, officer,
consultant and contractor of the Company has entered into and executed the
Company's standard form Non-Disclosure and Development Agreement and such
agreements are in full force and effect.
(h) Financial Statements. The Company has delivered to AT&T its (a)
audited financial statements (including balance sheet, statement of
shareholders' equity/income statement and statement of cash flows) as of and for
the twelve-month period ended December 31, 1999 (the "Audited Balance Sheet
Date"), together with a report thereon, from the Company's independent auditors,
and (b) unaudited financial statements (included balance sheet, statement of
shareholders' equity/income statement and statement of cash flows) as of and for
the three-month period ended March 31, 2000 (collectively, the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, except that the unaudited Financial Statements
may not contain all footnotes required by generally accepted
Exhibit E - Pg. 3.
<PAGE>
accounting principles. The Financial Statements fairly present the financial
condition and operating results of the Company as of the dates, and for the
periods, indicated therein.
(i) Changes. Since March 31, 2000, there has not been
(i) any change in contracts, assets, liabilities, financial condition
or operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business that have not
been, in the aggregate, materially adverse;
(ii) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
prospects, or financial condition of the Company, as such business is presently
conducted and as it is proposed to be conducted.
(iii) except as set forth on the Disclosure Schedule, any
declaration, setting aside or payment or other distribution in respect to any of
the Company's capital stock, or any direct or indirect redemption, purchase, or
other acquisition of any of such stock by the Company;
(iv) any material change in any compensation arrangement or agreement
with any employee, officer, director or shareholder;
(v) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(vi) any other event or condition of any character that might
materially and adversely affect the business, properties, prospects or financial
condition of the Company (as such business is presently conducted and as it is
proposed to be conducted); or
(vii) any arrangement or commitment by the Company to do any of the
things described above in this Section.
(j) Title to Property and Assets. The Company owns its property and assets
free and clear of all mortgages, liens, loans, claims and encumbrances, except
such encumbrances and liens which arise in the ordinary course of business and
do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets it leases, the Company is in
compliance with such leases and, to its knowledge, holds a valid leasehold
interest free of any liens, claims or encumbrances.
(k) Insurance. The Company has in full force and effect insurance policies
customary for similarly situated companies in the same or similar business as
the Company.
(l) Taxes. All federal, state, local and foreign tax returns required to
be filed by the Company have been filed, or if not yet filed have been granted,
extensions of the filing dates, which extensions have not expired, and all
taxes, assessments, fees, and other governmental charges upon the Company, or
upon any of its properties, income or franchises, shown in such returns and on
assessments received by the Company to be due and payable have been paid, or
adequate reserves therefor have been set up and have been disclosed in the
Company's financial statements. No such taxes are being contested.
Exhibit E - Pg. 4.
<PAGE>
(m) Brokers. The Company represents that no person, firm or corporation
has or will have, as a result of any act or omission by it, any right, interest
or valid claim against AT&T for any commission, fee or other compensation as a
finder or broker, or in any similar capacity, in connection with the
transactions contemplated by this Agreement.
(n) Employees. To the Company's knowledge, there is no strike, labor
dispute or union organization activities pending or threatened between it and
its employees and none of the Company's employees belongs to any union or
collective bargaining unit. The Company has complied in all material respects
with all applicable state and federal equal opportunity and other laws related
to employment. The Company is presently not aware that any officer or key
employee, or that any group of key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing.
(o) Acquisitions. The Company has not engaged in the past six months in
any substantive discussions (i) with any representative of any person or entity
regarding the consolidation or merger of the Company with or into any such
person or entity, (ii) with any person or entity regarding the sale, conveyance
or disposition of all or substantially all of the assets of the Company or a
transaction or series of related transactions in which more than 50 percent of
the voting power of the Company would be disposed of or (iii) regarding any
other form of acquisition, liquidation, dissolution or winding up of the
Company.
(p) Disclosure. None of the information provided to AT&T in connection
with the transactions contemplated by this Agreement or the License Agreement,
nor any representation or warranty of the Company contained in this Agreement
and the exhibits and schedules attached hereto or any certificate furnished or
to be furnished to AT&T at the Closing contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made.
2. Representations of AT&T. AT&T hereby represents and warrants to the
Company as follows:
(a) Investment. AT&T is acquiring the Shares only for its own account for
investment purposes and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same.
(b) Authority. AT&T has full power and authority to enter into and to
perform this Agreement in accordance with its terms. This Agreement has been
duly executed and delivered on behalf of AT&T and is a valid and binding
agreement enforceable against AT&T in accordance with its terms.
(c) Experience. AT&T has reviewed the representations concerning the
Company contained in this Agreement, has made a detailed inquiry concerning the
Company, its business and its personnel; the officers of the Company have made
available to AT&T any and all written information which it has requested and
have answered to AT&T's satisfaction all inquiries made by AT&T and AT&T has
sufficient knowledge and experience in investing in companies similar to the
Company so as to be able to evaluate the risks and merits of its investment in
the Company.
Exhibit E - Pg. 5.
<PAGE>
(d) Accredited Investor. AT&T is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act of 1933, as amended
(the "Securities Act").
(e) Legend. AT&T understands and agrees that (i) the Shares have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act, (ii) the Shares
must be held indefinitely unless a registration statement covering such shares
is effective under the Securities Act or unless an exemption from registration
under such Act is available, (iii) the Shares will bear a legend to that effect
and (iv) the Company will make a notation on its transfer books to such effect.
(f) Brokers. AT&T represents that no person, firm or corporation has or
will have, as a result of any act or omission by it, any right, interest or
valid claim against the Company for any commission, fee or other compensation as
a finder or broker, or in any similar capacity, in connection with the
transactions contemplated by this Agreement.
3. Closing Conditions.
(a) Conditions to the Company's Obligations. The Company's obligation to
issue and deliver the Shares to AT&T at the Closing is subject to the
satisfaction by AT&T of the following conditions:
(i) The Company and AT&T shall have executed the License Agreement;
and
(ii) AT&T shall have executed the Lock-Up Agreement in the form
attached as Exhibit E-1 hereto.
(b) Conditions to AT&T's Obligations. AT&T's obligation to license the
Technology to the Company and to purchase the Shares at the Closing is subject
to the satisfaction by the Company of the following conditions:
(i) The Company shall have obtained all consents or waivers,
including, without limitation, required waivers of preemptive and first refusal
rights with respect to the issuance of the Shares necessary to execute and
deliver this Agreement, issue the Shares to carry out the transactions
contemplated hereby and thereby, and all such consents and waivers shall be in
full force and effect. All corporate and other action and governmental filings
necessary to effectuate the terms of this Agreement, the Shares, and other
agreements and instruments executed and delivered by the Company in connection
herewith shall have been made or taken, except for any post-sale filings that
may be required under federal and state securities laws, as to which filings the
Company agrees to make promptly after such Closing;
(ii) The Company, AT&T and the holders of the requisite number of
shares of Registrable Stock (as defined in the Company's Fourth Amended and
Restated Registration Rights Agreement) shall have executed the Second Amendment
to the Company's Fourth Amended and Restated Registration Rights Agreement in
the form Attached as Exhibit E-2 hereto;
(iii) The Company and AT&T shall have executed the License Agreement;
and
(iv) The Company shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement and in the
Agreements
Exhibit E - Pg. 6.
<PAGE>
referenced herein that are required to be performed or complied with by it on or
before the Closing.
(v) On the Closing Date, AT&T shall have received from Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the Company, an opinion in the
form and substance reasonable satisfactory to AT&T and its counsel.
(vi) AT&T shall have received copies of a certificate from the
Secretary or any Assistant Secretary of the Company dated as of the date of the
Closing certifying: (1) that attached thereto is a true and complete copy of
the By-laws of the Company as in effect on the date of such certification; (2)
that attached thereto is a true and complete copy of all resolutions and votes
adopted by the Board of Directors of the Company authorizing the execution,
delivery and performance of this Agreement, and the License Agreement and the
transactions contemplated hereby and thereby and that all such votes are in full
force and effect; (3) that attached thereto is a true and complete copy of the
Certificate of Incorporation of the Company, certified as of a recent date by
the Secretary of State of Delaware and is in effect on the date of such
certification and that the Certificate of Incorporation has not been amended
since the date of the certificate of the Secretary of State of Delaware; and (4)
to the incumbency and specimen signature of each officer of the Company executed
on behalf of the Company this Agreement and the License Agreement, the stock
certificates representing the Shares and any certificate or instrument furnished
pursuant in connection herewith and therewith, and a certification by another
officer of the Company as to the incumbency and signature of the officer signing
the certificate referred to in this clause.
4. General.
(a) Notices. All notices, requests, demands and other communications
provided for hereunder shall be in writing and sent by registered or certified
mail, by any guaranteed overnight delivery service, or by facsimile transmission
delivered to the applicable party in person or at the addresses indicated below:
If to the Company: SpeechWorks International, Inc.
695 Atlantic Avenue
Boston, MA 02111
Attn: Stuart R. Patterson, President
Fax: (617) 757-2211
With copies to: SpeechWorks International, Inc.
695 Atlantic Avenue
Boston, MA 02111
Attn: Rick Olin, General Counsel
Fax: (617) 757-2211
With copies to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Attn: Steven P. Rosenthal, Esq.
Fax: (617) 542-2241
Exhibit E - Pg. 7.
<PAGE>
If to AT&T: AT&T Corp.
180 Park Avenue
P.O. Box 971
Florham, NJ 07932-0000
Attn: Alan Schwartz
Fax:
With copy to: AT&T Corp.
295 North Maple Avenue
Basking Ridge, New Jersey 07920
Attention: VP Law and Secretary
Telecopy: (908) 221-6618
or as to each of the foregoing, at such other address as shall be designated by
such person in a written notice to the other party complying as to delivery with
the terms of this Section.
All notices, requests, consents and other communications hereunder shall be
deemed to have been received (i) if by hand, at the time of delivery thereof to
the receiving party at the address of such party set forth above or as so
designated, (ii) if made by facsimile transmission, at the time that receipt
thereof has been acknowledged by electronic confirmation or otherwise, (iii) if
sent by overnight courier, on the next business day following the day such
notice is delivered to the courier service, or (iv) if sent by registered or
certified mail, on the fifth business day following the day such mailing is
made.
(b) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
(c) Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), with the
written consent of the Company and AT&T. No waivers of or exceptions to any
term, condition or provision of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
(e) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
[Signature page to follow]
Exhibit E - Pg. 8.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Common Stock Purchase Agreement
to be executed as of the date first written above.
SPEECHWORKS INTERNATIONAL, INC.
By:_____________________________________
Name:
Title:
AT&T CORP.
By:_____________________________________
Name:
Title:
Exhibit E - Pg. 9.
<PAGE>
DISCLOSURE SCHEDULE TO AT&T COMMON
STOCK PURCHASE AGREEMENT
SECTION 2(b): CAPITALIZATION; STATUS OF CAPITAL STOCK. A complete list (dated
as of 5/31/00) of stockholders, option holders, and warrant holders, and their
respective holdings is attached.
SECTION 2(h): INTELLECTUAL PROPERTY. The Company has received a letter from
Mason's a firm representing an entity that is the owner of the registered
Trademark "Speechworks" in the United Kingdom. The Company has initiated
negotiations with the owners; however, no assurance can be given at this time
that an amicable resolution can be attained, in which case the Company will have
to determine alternative branding for that territory.
SECTION 2(j)(iii): CHANGES. The Company granted "SOAR" option grants to
employees in May, 2000, all of which are reflected on the attached
Capitalization table.
Matters set forth under any one or more sections of this Disclosure Schedule or
with respect to any particular reference to the Agreement are disclosed with
respect to any other section of the Disclosure Schedule or any other reference
to the Agreement if such matter is directly related to such other section or
reference. Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement. All section numbers of this Disclosure
Schedule correspond to the relevant sections in the Agreement.
Exhibit E - Pg. 10.
<PAGE>
EXHIBIT E-1
FORM OF LOCK-UP AGREEMENT
Chase Securities Inc.
J. P. Morgan & Co.
U. S. Bancorp Piper Jaffray
As Representatives of the
Several Underwriters
c/o Chase Securities Inc.
One Bush Street
San Francisco, California 94104
Ladies and Gentlemen:
The undersigned is a shareholder of SpeechWorks International, Inc. (the
"Company") and wishes to facilitate the public offering (the "Offering") of
Common Stock of the Company ("Common Stock") pursuant to a Registration
Statement on Form S-1 (the "Registration Statement"), transmitted for filing
with the Securities and Exchange Commission on or about April 20, 2000.
In consideration of the foregoing, and in order to induce you to act as
underwriters in the Offering, the undersigned hereby irrevocably agrees that it
will not, directly or indirectly, sell, offer, contract to sell, transfer the
economic risk of ownership in, make any short sale, pledge or otherwise dispose
of any shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any other rights to purchase or acquire Common Stock,
without the prior written consent of Chase Securities Inc. acting alone or of
each of the Representatives of the Underwriters acting jointly, for a period of
180 days from the effective date of the Registration Statement.
Notwithstanding the foregoing, if the undersigned is an individual, he or
she may transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for the Company's Common Stock either during his or
her lifetime or on death by will or intestacy to his or her immediate family or
to a trust the beneficiaries of which are exclusively the undersigned and/or a
member or members of his or her immediate family; provided, however, that prior
to any such transfer each transferee shall execute an agreement, satisfactory to
Chase Securities Inc., pursuant to which each transferee shall agree to receive
and hold such shares of Common Stock, or securities convertible into or
exchangeable or exercisable for the Common Stock, subject to the provisions
hereof, and there shall be no further transfer except in accordance with the
provisions hereof. For the purposes of this paragraph, "immediate family" shall
mean spouse, lineal descendant, father, mother, brother or sister of the
transferor.
It is agreed and understood that nothing in this agreement shall prohibit
the undersigned from (1) exercising any stock option granted as a direct or
indirect result of any Company program (other than any form of "cashless"
exercise generally available for such grants), provided that the resulting
shares from stock exercise are not sold during the period of this agreement; (2)
transferring Common Stock to the acquiring entity in the event the Company is
consolidated with or acquired by another entity in a merger, tender offer or
otherwise; (3) using any Common Stock or stock options as collateral for a loan;
(4) transferring Common Stock to any affiliate, as such term is defined in Rule
405 under the Securities Act of 1933; and (5) selling
Exhibit E-1 - Pg. 1.
<PAGE>
any shares acquired in the open market, provided that such sale is an open
market non-derivative sale in the open market pursuant to a brokers'
transaction; provided that in the case of transfers under clauses (3) and (4)
that prior to any such transfer each transferee shall execute an agreement,
satisfactory to Chase Securities Inc., pursuant to which each transferee shall
agree to receive and hold such shares of Common Stock, or securities convertible
into or exchangeable or exercisable for the Common Stock, subject to the
provisions hereof, and there shall be no further transfer except in accordance
with the provisions hereof.
If any shares held by a stockholder who is bound by a lock-up agreement
with you in connection with the Offering (an "Investor") are released (the
"Released Stockholder"), a number of shares held by each Investor shall be
released equal to the product of the number of shares held by such Investor
multiplied by a fraction, the numerator of which shall be equal to the number of
shares held by the Released Stockholder that were released and the denominator
of which shall be the total number of shares held by the Released Stockholders.
The undersigned hereby waives any rights of the undersigned to sell shares
of Common Stock or any other security issued by the Company pursuant to the
Registration Statement, and acknowledges and agrees that for a period of 180
days from the effective date of the Registration Statement the undersigned has
no right to require the Company to register under the Securities Act of 1933
such Common Stock or other securities issued by the Company and beneficially
owned by the undersigned.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of Common Stock or other securities of the Company held by
the undersigned except in compliance with this agreement.
Very truly yours,
AT&T CORP.
Dated: June 5, 2000 By:__________________________________
Name:
Title:
Exhibit E-1 - Pg. 2.
<PAGE>
EXHIBIT E-2
FORM OF
SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS SECOND AMENDMENT, dated as of June 5, 2000 (the "Agreement"), to the
Fourth Amended and Restated Registration Rights Agreement dated as of April 11,
2000 as amended by the First Amendment thereto dated May 16, 2000 (the
"Registration Rights Agreement"), by and among SPEECHWORKS INTERNATIONAL, INC.,
a Delaware corporation (the "Company") and the stockholders of the Company named
therein, is by and among the Company and AT&T Corp. (the "New Investor") and the
persons named on the signature page hereto as Investors (collectively, the
"Investors"). All other capitalized terms used herein and not otherwise defined
have their respective meanings set forth in the Registration Rights Agreement.
WHEREAS, the New Investor is acquiring this date 1,045,158 shares of the
Common Stock, $0.001 par value per share (the "Shares"), of the Company pursuant
to the terms of a certain Common Stock Purchase Agreement dated the date hereof
(the "Purchase Agreement");
WHEREAS, the Purchase Agreement contemplates in Section 5 thereof that the
Registration Rights Agreement shall be amended to add the New Investor as a
party to the Registration Rights Agreement; and
WHEREAS, the Investors who are signatories hereto hold in the aggregate a
sufficient number of shares of Registrable Stock to amend the Registration
Rights Agreement in accordance with Section 14 thereof to add the New Investor
as party thereto.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties agree as follows:
1. Amendment to Schedule RRA (Revised). From and after the date hereof,
Schedule RRA (Revised) to the Registration Rights Agreement is deleted and
replaced by Schedule RRA (2nd Revised), dated the date hereof and attached
hereto and the term "Investors" as used therein and herein shall mean and refer
to all the persons and entities identified on said Schedule RRA (2nd Revised).
2. Amendment to Definition of "Registrable Stock". The definition of
"Registrable Stock" set forth in Section 1 of the Registration Rights Agreement
is hereby deleted and replaced by the following definition:
"Registrable Stock" means (a) the Common Stock issued or issuable upon
conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock or Series E Preferred Stock, and owned
of record by any Investor or an Affiliate of any Investor; (b) all Common Stock
now or hereafter owned of record by any Investor which is acquired otherwise
than upon conversion of the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock or Series E Preferred Stock,
so long as it is held by any Investor or an Affiliate of the Investor, (c) all
the shares of Common Stock issued or issuable upon exercise of any warrant now
or hereafter held by Lighthouse, (d) all the shares of Common Stock issued or
issuable upon exercise of any warrant now or hereafter held
Exhibit E-2 - Pg. 1.
<PAGE>
by InterVoice-Brite, Inc., (e) all Common Stock now or hereafter owned by the
New Investor and (f) any other shares of Common Stock issued in respect of such
shares by way of a stock dividend, or stock split or in connection with a
combination of shares, recapitalization, merger or consolidation or
reorganization, provided, however, that shares of Common Stock shall only be
treated as Registrable Stock (i) if and so long as they have not been (x) sold
to or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (y) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect to such Common Stock are removed upon the consummation of such
sale.
3. Continued Effect. As amended hereby, the Registration Rights Agreement
is hereby ratified and confirmed and agreed to by all of the parties hereto and
continues in full force and effect.
4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5. Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Delaware.
[Signature pages follow]
Exhibit E-2 - Pg. 2.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
the Fourth Amended and Restated Registration Rights Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
SPEECHWORKS INTERNATIONAL, INC.
By:_______________________________________
Stuart Patterson, President and Chief
Executive Officer
NEW INVESTOR:
AT&T CORP.
By:_________________________________________
Name:
Title:
INVESTORS:
IGATE VENTURES I, L.P.
By:_________________________________________
Name:
Title:
REUTERS HOLDINGS SWITZERLAND SA
By:_________________________________________
Name:
Title:
CITICORP STRATEGIC TECHNOLOGY CORP.
By:_________________________________________
Name:
Title:
Exhibit E-2 - Pg. 3.
<PAGE>
GE CAPITAL EQUITY INVESTMENTS, INC.
By:_________________________________________
Name:
Title:
MCI WORLDCOM VENTURE FUND, INC.
By:_________________________________________
Name:
Title:
CHARLES RIVER PARTNERSHIP VII
By:_________________________________________
Name:
Title:
ATLAS VENTURE FUND II, L.P.
By: Atlas Venture Associates II, L.P., its
general partner
By:_________________________________________
Name:
Title:
QUESTMARK PARTNERS, L.P.
By:_________________________________________
Name:
Title:
INTEL 64 FUND, LLC
By: INTEL 64 FUND OPERATIONS, INC.,
its Coordinating Member
By:_________________________________________
Name:
Title:
Exhibit E-2 - Pg. 4.
<PAGE>
BANK OF AMERICA VENTURES
By:_________________________________________
Name:
Title:
BA VENTURE PARTNERS III
By:_________________________________________
Name:
Title:
RIGGS CAPITAL PARTNERS
By:_________________________________________
Name:
Title:
MINTZ LEVIN INVESTMENTS LLC
By:_________________________________________
Name:
Title:
____________________________________________
Steven P. Rosenthal
____________________________________________
Suzanne Abair and Kathleen MacDonald
____________________________________________
Robert S. Fore
Exhibit E-2 - Pg. 5.
<PAGE>
LEE CAPITAL HOLDINGS
By:_________________________________________
Name:
Title:
CITIZENS CAPITAL INCORPORATED
By:_________________________________________
Name:
Title:
____________________________________________
JOSEPH MURPHY
DIGITAL BANDWIDTH LLC
By:_________________________________________
Name: David B. Weinberg
Title: President
INTEL CORPORATION
By:_________________________________________
Name:
Title:
SAP AMERICA, INC.
By:_________________________________________
Name:
Title:
____________________________________________
Paul Yovovich
____________________________________________
Ralph Mor
Exhibit E-2 - Pg. 6.
<PAGE>
____________________________________________
Hedva Mor
____________________________________________
Jeffrey Mor
____________________________________________
Jean Guy Dahan
____________________________________________
Naim Murad
____________________________________________
John Meyrick
____________________________________________
Brett Phaneuf
____________________________________________
William J. O'Farrell
__________________________________________
Noreen D. O'Farrell
____________________________________________
William Ledingham
____________________________________________
William Haney
____________________________________________
Anne G. Haney
Exhibit E-2 - Pg. 7.
<PAGE>
LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: LIGHTHOUSE MANAGEMENT
PARTNERS, L.P., its general partner
By: LIGHTHOUSE CAPITAL
PARTNERS, INC., its general partner
By:_________________________________________
Title:______________________________________
____________________________________________
Mark Holthouse
____________________________________________
Stephen Smith
____________________________________________
Sol Lerner
____________________________________________
Henry Lerner
____________________________________________
Leonard Epstein
____________________________________________
Bella Lerner
____________________________________________
Miriam Epstein
____________________________________________
Brian S. Eberman
____________________________________________
Edward J. McCaffrey
____________________________________________
Joyce V. McCaffrey
INTERVOICE-BRITE, INC.
By:_________________________________________
Name:
Title:
Exhibit E-2 - Pg. 8.
<PAGE>
Schedule RRA (2nd Revised)
June 5, 2000
Investors and Mailing Addresses:
AT&T Corp.
[ ]
iGate Ventures I, L.P.
1004 McKee Road
Oakdale, PA 15071
Counsel:
Buchanan Ingersoll Professional Corporation
One Oxford Centre, 20th Floor
301 Grant Street
Pittsburgh, PA 15219
Attn: James J. Barnes, Esq.
(412) 562-1415
(412) 562-1041 (Fax)
Reuters Holdings Switzerland SA
153 Route de Thonon
1245 Collogne-Bellerive
Switzerland
(with copies to: Reuters Limited
85 Fleet Street
London EC4P 4AJ
United Kingdom
Attention: General Counsel)
Citicorp Strategic Technology Corp.
909 Third Avenue,
16th Floor, New York, NY 10043
Attention: William F. Carson
GE Capital Equity Investments, Inc.
120 Long Ridge Road, Stamford, CT 06927
Attention: General Counsel
MCI WorldCom Venture Fund, Inc.
1801 Pennsylvania Avenue N.W.
6th Floor
Washington D.C. 20006
Exhibit E-2 - Pg. 9.
<PAGE>
Mintz Levin Investments LLC
One Financial Center
Boston, MA 02111
Attention: Steven P. Rosenthal, Esq.
Steven P. Rosenthal
40 Bartlett Street
Marblehead, MA 01945
Suzanne Abair & Kathleen MacDonald
16 Dartmouth Street
Boston, MA 02116
Atlas Venture Fund II, L.P.
222 Berkeley Street
Boston, MA 02116
Attention: Axel Bichara
Charles River Partnership VII
1000 Winter Street
Suite 3300
Waltham, MA 02154
Attention: Richard Burnes
Digital Bandwidth LLC
One First National Plaza
Suite 3140
Chicago, IL
Attention: David B. Weinberg
Bank of America Ventures
950 Tower Lane, Suite 700
Foster City, CA 94404
Attention: Robert Obuch
BA Venture Partners III
950 Tower Lane, Suite 700
Foster City, CA 94404
Attention: Robert Obuch
Intel Corporation
5200 N.E. Elam Young Parkway
Hillsboro, OR 07123
Attention: Ken Matthews
Exhibit E-2 - Pg. 10.
<PAGE>
SAP America, Inc.
3999 WestChester Pike
Newton Square, PA 19073
Attention: Gary Fromer
QuestMark Partners, L.P.
One South Street, Suite 800
Baltimore, Maryland 21202
Attention: Tim Krongard
Riggs Capital Partners
800 17th Street, N.W.
Washington, DC 20006-3944
Attention: Vicken Dombalagian
Intel 64 Fund Operations, Inc.
2200 Mission College Blvd.
Santa Clara, CA 95052
Attn: Portfolio Manager - M/S: RN6-46
With a copy to:
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052
Attention: General Counsel
Robert S. Fore
520 Georgetown Avenue
San Mateo, CA 94402
Edward J. McCaffrey
23 Warwick Road
Winnetka, IL 60093
Joyce V. McCaffrey
23 Warwick Road
Winnetka, IL 60093
Paul Yovovich
1007 Forest Avenue
Wilmete, IL 60091-1757
Ralph Mor
11 Brook Road
Sharon, MA 02067
Hedva Mor
Rechov Hatziporen
6-Aleph
Bet Shemesh, ISRAEL 99000
Exhibit E-2 - Pg. 11.
<PAGE>
Jeffrey Mor
Rechov Hatziporen
6-Aleph
Bet Shemesh, ISRAEL 99000
Jean Guy Dahan
12 Colburne Crescent, Apt. #3
Brookline, MA 02146
Naim Murad
75 Glengarry #502
Town of Mount Royal, PQ
H3R 1A2
Canada
John Meyrick
22 Lotus Avenue
Scituate, MA 02066
Brett Phaneuf
380 Pine Street
Marshfield, MA 02050
William J. O'Farrell
76 Taber Avenue
Providence, RI 02906
Noreen D. O'Farrell
76 Taber Avenue
Providence, RI 02906
William Ledingham
15 Wingate Road
Wellesley, MA 02181
William Haney
61 Lincoln Road
Wayland, MA 01778
Anne G. Haney
61 Lincoln Road
Wayland, MA 01778
Lighthouse Capital Partners, L.P.
100 Drake's Landing, Suite 260
Greenbrae, CA 94904-3121
Exhibit E-2 - Pg. 12.
<PAGE>
Mark Holthouse
163 Upland Road
Newtonville, MA 02160
Stephen Smith
5404 Spangler Avenue
Bethesda, MD 20816
Sol Lerner
10 Flintlock Road
Sharon, MA 02067
Henry Lerner
One Celler Road
Edison, NJ
Leonard Epstein
193 Cheswick Road
Brighton, MA 02135
Bella Lerner
One Celler Road
Edison, NJ
Miriam Epstein
193 Chiswick Road
Brighton, MA 02135
Brian S. Eberman
10 LaFayette Road
Newton, MA 02162
Lee Capital Holdings, LLC
One International Place
Boston, MA 02110
Attn: Jonathan Lee
Citizens Capital Incorporated
28 State Street, 15th Floor
Boston, MA 02109
Attn: Robert Garrow
Joseph Murphy
40 Maynard Farm Road
Sudbury, MA 01776
Intervoice-Brite, Inc.
17811 Waterview Parkway
Dallas, TX 75252
Exhibit E-1 - Pg. 13.
<PAGE>
EXHIBIT F1
SPECIFIED AT&T COMPETITORS
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Exhibit F-1 - Pg. 1.
<PAGE>
EXHIBIT F2
SPECIFIED SPEECHWORKS COMPETITORS
Lernout & Hauspie
Nuance
Philips Electronics
IBM
Lucent Speech Services Division of Lucent Technologies (excluding without
limitation
Conversant and another hardware business division of Lucent Technologies)
Microsoft Corporation
Phonetic Systems
Exhibit F-2 - Pg. 1.
<PAGE>
EXHIBIT G
Marketing Plan
AT&T Proprietary & Confidential
-------------------------------
AT&T Speech Funnel
------------------
DATED: MAY 12, 2000
--------------------
SUMMARY: This document represents AT&T Labs analysis to date of the projects
within AT&T (and in some cases with AT&T customers) that may require Speech-
enabled services over the next 1-6 years. This document is a work in progress,
and will be updated by SpeechWorks and the AT&T Labs personnel managing the
business interface with SpeechWorks from time to time. Upon execution of the
Agreement, the SpeechWorks and AT&T representatives shall meet to discuss an
action plan for initiating contacts with the various business units and
customers, verifying the accuracy of the information contained herein, and
identify a short list of projects and next steps associated with those projects.
The action plan could include a "SpeechWorks Day" at AT&T where we invite
targeted business units to a presentation by Labs and SpeechWorks and/or
individual meetings scheduled with the appropriate individuals in the business
units.
CONSUMER MARKET'S (CMD)
1) HMIHY TRIAL WITH AT&T CUSTOMER SERVICE. An application for AT&T Customer
Service (ACS) to offer "HMIHY" [ ] ([ ]-[ ]% [ ]) [ ]
based on customer response (see 800-9GET-ATT).
2) INNOVATION DEVELOPMENT CENTER (IDC)/ [ ]. The IDC has built a trial
[ ] ([ ]), [ ]), [ ]. [ ].
3) TOLL-FREE DIRECTORY SERVICE (1-800-555-1212). [ ] a [ ] automated
director service for [ ] ([ ]% [ ]). FCC [ ]-- [ ].
4) 00 INFO/00 MINUS. Use Speech to automate part or all of each directory
assistance. [ ]: (i) [ ], [ ], (ii) [ ], [ ]
5) ONECOMM. AT&T has a [ ].
6) CALLING CARD SERVICES. There are several services: (i) basic calling card,
(ii) prepaid, (iii) 0+ calling. card. [ ]
7) AT&T ANYWHO. AT&T online directory (www.anywho.com), could benefit from
[ ].
8) CMD OPERATOR SERVICES. [ ]. [ ].
WIRELESS
9) AT&T WIRELESS. AWS has [ ] initiatives: (i) [ ], (ii) [ ],
(iii) [ ], [ ], and (iv) [ ]. AWS currently has [ ]
subscribers using speech enabled services, [ ] ([ ]) [ ].
[ ]. [ ] [ ]-[ ]% [ ]. [ ]. A driving factor in
the rush to get recognition in to the platform is the prospect of
legislation limiting mobile phone usage while driving. Current projects
include:
Exhibit G - Pg. 1.
<PAGE>
. OmniSky: OmniSky/Palm V-- CDPD Model allows for wireless data
connectivity; [ ]; [ ], [ ], [ ]; [ ]
. Microsoft/BT: Announced in March a collaboration on wireless data
software [ ] ([ ]); [ ] ([ ]).
. NextGen [ ] Apps done by [ ]--[ ], [ ]
. [ ] Messaging [ ]: Internal trial of [ ].
. Directories: Wireless has a relationship with [ ]; this is an
opportunity for [ ]
INFOWORXS. AT&T Call Center Services division, [ ]
10) BMP. BMD's BMP to use ASR on InfoWorks to [ ]. Current plan is to
use [ ]. [ ] there are talks underway to deploy [ ].
Est. ports: [ ] total opportunity
Contacts: [ ] ([ ]); [ ]; [ ]
Funding: Funded through [ ] is [ ] $[ ];
Platforms: [ ], [ ]; date, [ ] number [ ] ([ ]);
App needs [ ]; [ ] is done with [ ]
Status: [ ] customers [ ], [ ], [ ], [ ],
[ ], [ ], etc.
Partner Role: Need to position Partner [ ]
Next Steps: Explore funding [ ]
11) VOICE DIALING WITH POST. [ ] a speech driven application offering
voice dialing [ ].
12) ESCAPE PROJECT. [ ] customers [ ]
NETWORK SERVICES
13) NETWORK IPE PROJECT. [ ] is currently taking bids for platform upgrade
options to [ ]; looking for a deployment to [ ]; [ ] will be
most economical Vendor for [ ]. However deployment of more complicated
applications will require the use of an external box hanging off LINKS.
[ ]: (i) [ ], (ii) [ ], [ ] ([ ]), [ ]. [ ].
BUSINESS MARKETS (BMD)
14) NETWORK BMD CALL PROMPTER. AT&T 800 service currently uses [ ]
channels of speech recognition for [ ]. Phase 1 is adding [ ]
opens a new revenue stream and greater customer capabilities for [ ]
or [ ].
15) HMIHY TRIAL WITH PRUDENTIAL. AT&T Labs is preparing a trial to use speech
recognition [ ] to offer AT&T's "How May I Help You" service to
[ ].
16) BNSVC "HMIHY. . Several [ ] customers have expressed interest in
HMIHY. Following [ ] could support getting their customers these new
apps
. [ ] ([ ]) and [ ]
. [ ]
. [ ]
. [ ]
. [ ] ([ ])
. [ ]
. [ ]
Exhibit G - Pg. 2.
<PAGE>
. [ ] ([ ])
. [ ]
. [ ]
. [ ] ([ ]) - [ ]
. [ ]
. [ ]
. [ ]
17) AT&T SOLUTIONS. Solutions has been working with several customer to offer
[ ]. Customer list is similar to above.
18) AT&T GLOBAL SOLUTIONS. Solutions looking to launch a [ ] project; is
working with an outside company [ ] to come up with an [ ]
19) [ ] "HOW MAY I HELP YOU" APPLICATION. [ ] goal is to evolve to a
"World Class Customer Service Organization". They want to provide service
to [ ]. In 2000, they will receive approximately 98 million calls on their
customer facing toll-free numbers. The Level of Service (percentage of
calls answered to demand) is [ ]%. The [ ] is due, in part, to [ ].
Currently, they have [ ] ([ ]) instead of [ ]. A [ ] ([ ]) greets [ ]
dialing one of several 800 numbers. Callers are routed through [ ] ([ ]) to
a [ ] or a [ ] ([ ]) - [ ]. If the caller does not respond to [ ] ([ ] or [
]), they are sent to a [ ]. [ ]. If these callers could be handled [ ], [
]. In addition, [ ]. This results in a [ ]. Implementing the How May I Help
You (HMIHY) service will [ ].
20) [ ]"HOW MAY I HELP YOU" APPLICATION. [ ] has two very large [ ]
([ ] and [ ]) which provide [ ] customers the opportunity to
order a [ ] and/or [ ]. These applications also allow [ ]
customers to track [ ]. There are many other AT&T - [ ]
Applications which would benefit in a similar fashion as the ones listed
above, these include the [ ] - [ ] ([ ]) and [ ]
([ ]). AT&T also recently [ ] ([ ]) which allows [ ]
customers to order and [ ]. By providing this type of technology
[ ] which supports a [ ], we are adding great value to a [ ]
and thus opening the door for a multitude of [ ].
21) [ ] HOW MAY I HELP YOU APPLICATION. [ ] uses a [ ] ([ ])
for access to the [ ]. There are [ ] nationwide that [ ].
Callers are currently [ ]. Approximately [ ]% of the calls are
directed to [ ]. [ ] would like to offer additional automated
services, but the current [ ] is very lengthy and complex and believe
the [ ].
AT&T LABS
22) PHONEMAIL. Labs project that allows [ ].
23) PHONEWEB. AT&T Labs has developed an architecture known as Phone Web which
permits customers to build "[ ]" ([ ]) [ ]. The Phone Web
[ ], when combined with [ ] and [ ] that [ ].
AT&T WORLNET
24) WORLDNET VOICEMAIL. AT&T is working with WorldNet to offer a service
allowing caller to [ ] and [ ].
25) WORLDNET CUSTOMER CARE.
Exhibit G - Pg. 3.
<PAGE>
AT&T BROADBAND SERVICES (ABS)
[ ]
OTHERS
26) [ ].
27) NET2PHONE. AT&T-led consortium ([ ]) owns 39 percent voting stake in
Net2Phone. Rumor has it Net2Phone is working with SpeechWorks. WorldNet
has announced a promotion with Net2Phone [ ].
28) INTERACTIVE TELESIS . Specializes in voice response (IVR) services and
deployment of speech recognition technologies. They announced a
partnership with SWI on 4/17/00. Target customers include: [ ]
29) EXCALIBUR The combination of AT&T's Digital Video Library (DVL) and
Excalibur Screening Room(TM) enables users to search, browse and
selectively retrieve video content online.. AT&T Labs will incorporate
its industry-leading image and audio processing, along with its [ ],
into Excalibur's Screening Room. As part of the agreement, the resulting
new product will be available from Excalibur and AT&T as a completely
outsourced solution for video asset management.
Exhibit G - Pg. 4.
<PAGE>
EXHIBIT H
Support and License Fees
Definitions: For purposes of this Exhibit H, the following terms shall have
the following meaning:
"ASSESSABLE THIRD PARTY LICENSING FEES" means the amount of any per unit license
fees paid by SpeechWorks for third party software licensed by SpeechWorks and
embedded in or distributed with an applicable product. Assessable Third Party
Licensing Fees excludes third party fees that are assessed as a percentage of
revenues
I. License fees for SpeechWorks Integrated Speech Products that include:
(i) Deployments using Dialog Management/Natural Language Understanding
(e.g., "How may I help you?") Technology, (ii) Large Vocabulary Recognition
(i.e., greater than 100,000 words) deployments using AT&T Speech Technology,
and/or (iii) Speaker Identification or Speaker Verification deployments using
AT&T Speech Technology, in each case shall be the least of:
(a) [ ]% of the[ ] price offered by SpeechWorks for any deployment of
such product, plus Assessable Third Party Licensing Fees for such product,
if any; and
(b)
(c) the [ ] price offered by SpeechWorks for any deployment of such
product; and
(d)
(c) $[ ]/ [ ] for the 1st through the [ ] [ ]
$[ ]/ [ ] for the [ ] through the [ ] [ ]
$[ ]/ [ ] for the [ ] through the [ ] [ ]
$[ ]/ [ ] after the [ ] [ ].
The number of [ ] shall be considered cumulatively for all AT&T Business
Units for each specific type of deployment described in (i) - (iii) above. For
example, all "How may I help you?" deployments by [ ] shall be considered in the
aggregate for the above chart; however, [ ] deployed for different applications,
e.g., Large Vocabulary deployments, shall NOT be aggregated with other type of
deployments. Further, each of the following shall apply to this Section I:
(i) the foregoing aggregation shall reset on [ ] and on each [ ]
anniversary thereof thereafter prior to the expiration of the initial five
year term of the Agreement, provided that this reset shall not apply (i) if
AT&T has made at least $[ ] dollars in payments for SpeechWorks Speech
Software (including license fees, maintenance and professional services and
other similar fees) in the previous [ ] period or (ii) with respect to
further deployments by the same [ ] of the [same application] (i.e.,
each [ ] shall receive the benefit of the [ ] schedule for all
[ ] deployments of the [ ]);
(ii) each purchase of [ ] shall be in a minimum amount equal to [ ]
[ ] (i.e., this does not mean that a Business Unit must deploy at
least [ ] [ ], only that for deployments less than [ ] [ ]
each Business Unit must pay license fees for at least [ ] [ ] as
per the above schedule); and
Exhibit H - Pg. 1.
<PAGE>
(iii) in the event that any deployment uses more than one of the applications
described in (i) through (iii) above, AT&T shall pay the applicable
[ ] fees for each application.
II. License fees for all other SpeechWorks Integrated Speech Products (other
than SpeechWorks Integrated Speech Products that include either (i) any of the
applications described in Section I above or (ii) "TTS" functionality) shall be
the least of:
(i) [ ]% of the [ ] price offered by SpeechWorks for any deployment of
such product, plus Assessable Third Party Licensing Fees for such product,
if any; and
(ii) the [ ] price offered by SpeechWorks for any deployment of such
product; and
(iii) [ ]% off of the amount computed after applying the discount schedule
set forth below to SpeechWorks' standard license fees as of the Effective
Date (SpeechWorks may amend its standard price list from time to time in
the ordinary course of SpeechWorks' business, but shall not increase
prices in the such list for AT&T deployments for at least [ ] from
the Effective Date) for the applicable SpeechWorks Speech Software, or,
expressed as formula: [ ] [ ]
where S is SpeechWorks standard license fees as of the Effective Date
as follows:
- SpeechWorks Base ((Lesser than)[ ]): $[ ]/ [ ]
- SpeechWorks Extended ((Lesser than)[ ]): $[ ]/ [ ]
- SpeechWorks Pro ((Greater than)[ ]): $[ ]/ [ ]
Discount is the discount computed in accordance with the following
schedule:
Cumulative Purchase Total Discount (for cumulative purchases up to this level)
Less than (Lesser than)$[ ] [ ]%
$[ ] to $[ ] [ ]%
$[ ] to $[ ] [ ]%
$[ ] [ ]%
$[ ] to $[ ] [ ]%
$[ ] to $[ ] [ ]%
$[ ] to $[ ] [ ]%
$[ ] to $[ ] [ ]%
$[ ] to $[ ] [ ]%
(Greater than)$[ ] [ ]%
Exhibit H - Pg. 2.
<PAGE>
Cumulative purchase total dollar amounts for this Section II shall be computed
in the aggregate for all payments (including license fees, maintenance, but
excluding professional services) by AT&T Business Units to SpeechWorks during
the term of this Agreement, provided that the above discount schedule shall be
reset on [ ] and [ ] on each [ ] date thereof during the initial 5
year term of the Agreement.
III. LICENSE FEES FOR TTS FUNCTIONALITY IN ANY SPEECHWORKS INTEGRATED SPEECH
PRODUCT shall be the lesser of:
(a) $[ ]/ [ ] until the [ ] following the Effective Date and $[ ]/[ ]
thereafter, and
(b) [ ]% off of SpeechWorks [ ] pricing for [ ] paid by [ ] entity.
For purposes of this Section III., [ ] shall be defined as a [ ]; the
number of ports shall be based on the [ ]. Cumulative purchases of [ ]
during the term of this Agreement
IV. SUPPORT FEES for SpeechWorks Integrated Speech Products licensed to AT&T
Business Units shall be the lesser of:
(a) [ ] by a [ ], and
(b) Standard (M-F, business hours) [ ]% of net license fees (i.e. after
applying all discounts, including AT&T discounts)
Around the Clock [ ]% of net license fees (i.e. after applying all
discounts, including AT&T discounts)
where "[ ]" means: license fees [ ], by the applicable AT&T Business
Unit for the SpeechWorks Speech Software for which the Support Services are
provided.
V. PROFESSIONAL SERVICES FEES are as follows: Per Diem rates
Project Management $ 2,500
Application Consulting $ 2,000
Speech Scientist $ 2,000
Speech User Interface Design $ 1,500
Application Development $ 1,500
Systems Integration $ 1,500
Operations Support $ 1,000
Installation Services $ 1,000
Exhibit H - Pg. 3.
<PAGE>
The foregoing professional services fees shall be fixed for the [ ] period
following the Effective Date, ending on [ ], and then shall be equal to
SpeechWorks' then-current fees.
Support Services on Professional Services cost per year
- Standard (M-F, business hour) [ ]% of Application
Development Fee
- Around the Clock [ ]% of Application
Development Fee
Note: When a particular order traverses a level (either a threshold on number
of [ ] or a Payments threshold) on a schedule in this Exhibit H, the per [ ]
pricing shall be prorated so that one order may have different port pricing. All
discounts expire upon the expiration of the initial five-year term of the
Agreement.
Exhibit H - Pg. 4.
<PAGE>
EXHIBIT I
Minimum End User License Terms
Software License Agreement
THIS SOFTWARE LICENSE AGREEMENT, dated as of ________________, 2000 (the
"Effective Date"), is by and between SPEECHWORKS INTERNATIONAL, INC., a Delaware
corporation ("SWI"), with offices at 695 Atlantic Ave., Boston, MA 02111; and
_____________________, a _________________ corporation ("Licensee"), with
offices at ____________________, ________ __ _____.
INTRODUCTION
A. SWI is the developer and owner of certain speech recognition technology and
certain related software for automating telephone-based, network-based and
internet-based transactions.
B. SWI has agreed to grant to the Licensee and the Licensee has agreed to
accept from SWI a License (as hereafter defined) to use such software upon
the terms and conditions set forth below.
For and in consideration of, and conditioned on, the covenants stated
herein, and for other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties hereby agree as
follows:
TERMS OF AGREEMENT
SECTION 1 -- DEFINITIONS
1.1 Defined Terms. In addition to the terms defined above and elsewhere
in this Agreement, the following terms as used in this Agreement shall have the
meanings set forth below:
"Agreement" shall mean this Agreement, all attached exhibits, and any
other documents made a part of hereof or incorporated by reference
herein, including any written amendments hereto.
"SWI Software" shall mean, collectively or individually, the software
programs described in Exhibit I-1 attached hereto, in object code
format, and including all corrections, modifications, enhancements and
upgrades to such software which may be provided to Licensee by SWI
hereunder pursuant to the terms of this Agreement or any separate
license and/or support agreement entered into by the parties hereto.
"Documentation" shall mean the operating manuals, including a
description of the functions performed by the SWI Software, user
instructions, technical literature and all other related materials in
the English language, in both eye-readable and machine-readable,
printable form, which may, from time to time, be supplied to Licensee
by SWI to facilitate the use and application of the SWI Software.
"License" shall mean the license in the SWI Software granted in
Section 2.1 of this Agreement.
Exhibit I - Pg. 1.
<PAGE>
SECTION 2 -- GRANT OF RIGHTS
2.1 Software License. Subject to the terms, conditions and restrictions
set forth in this Agreement, SWI hereby grants, and Licensee hereby accepts, a
non-exclusive, non-transferable, right and license to use the SWI Software.
2.2 Documentation License. Subject to the terms, conditions and
restrictions set forth in this Agreement, SWI hereby grants, and Licensee
accepts, a non-exclusive license, to use the Documentation, and to copy the
Documentation only for use by its employees or consultants.
2.3 Term. The License granted to Licensee herein, and the other rights and
obligations of the parties under this Agreement, shall commence on the Effective
Date, and shall continue indefinitely unless terminated under the provisions of
Section 7 ("Termination") of this Agreement.
2.4 Copies. Licensee may make a reasonable number of copies of the SWI
Software for Licensee's internal back-up and archival purposes only, provided
that all such copies shall bear the original and unmodified copyright, patent
and other intellectual property markings as originally delivered by SWI.
2.5 Restrictions; Acknowledgement of Proprietary Rights. Licensee
acknowledges that SWI retains all right, title and interest in and to the
original, and any copies, of the SWI Software and Documentation, and ownership
of all patent, copyright, trade secret, trademarks and other intellectual
property rights pertaining thereto, shall be and remain the sole property of
SWI. Licensee shall not be an owner of any copies of, or have any interest in,
the SWI Software or Documentation, but rather, is licensed, pursuant to and
subject to the limitations in this Agreement, to use such copies. Without
limiting the generality of the foregoing, Licensee receives no rights and agrees
that it will not itself, or through any parent, subsidiary, affiliate, agent or
other third party: (a) modify, port, translate, localize, or create derivative
works of the SWI Software or upon any Confidential Information of SWI; (b)
decompile, disassemble, reverse engineer or attempt to reconstruct, identify or
discover any source code, underlying ideas, underlying user interface techniques
or algorithms of the SWI Software by any means whatsoever, or disclose any of
the foregoing; (c) sell, lease, license, sublicense, copy, market or distribute
the SWI Software; (d) encumber or suffer to exist any lien or security interest
on any SWI Software; (e) knowingly take any action that would cause any SWI
Software to be placed in the public domain; and (f) use the SWI Software in any
computer environment not specified in Exhibit I-1.
2.6 Trademarks. Licensee acknowledges that SWI owns, and shall continue to
own, all right, title and interest in the trademarks "DialogModules",
"SpeechSite", "SpeechPortal", "SpeechWorks", "SpeechWorks Here", SWI's logos and
the percolation noise that is part of the SWI Software and Licensee agrees that
it will do nothing inconsistent with such ownership.
2.7 Additional Terms and Conditions. The licenses and other rights granted
pursuant to this Agreement shall be subject to the additional terms and
conditions set forth in the Exhibits hereto.
SECTION 3-- CONSIDERATION; LICENSE SUPPORT AND MAINTENANCE
3.1 License Fee. In consideration of the License granted in Section 2
("Grant of Rights"), Licensee hereby agrees to pay to SWI the license fees, in
the amounts and at the times specified in Exhibit I-1.
Exhibit I - Pg. 2.
<PAGE>
3.2 Taxes. Licensee shall pay or reimburse all federal, state and local
taxes (exclusive of taxes on SWI's net income) and assessments arising on or
measured by amounts payable to SWI under this Agreement, or furnish SWI with
evidence acceptable to the taxing authority to sustain an exemption therefrom.
3.3 License Support and Maintenance; Fees. Support and maintenance
services shall be provided in accordance with the terms and conditions set forth
in Exhibit I-2 hereto.
SECTION 4 -- CONFIDENTIAL INFORMATION
4.1 Confidential Information. A party may from time to time disclose (the
"Disclosing Party") to the other party (the "Receiving Party") certain
Confidential Information (as hereinafter defined) of the Disclosing Party.
Except as expressly permitted by this Agreement, for a period of five (5) years
from the termination of this Agreement, the Receiving Party shall protect the
Confidential Information of the Disclosing Party from unauthorized
dissemination, using the same degree of care which the Receiving Party
ordinarily uses with respect to its own proprietary information, but in no event
with less than reasonable care. The Receiving Party shall not use the
Confidential Information of the Disclosing Party for any purpose not expressly
permitted by this Agreement, and shall limit the disclosure of the Confidential
Information of the Disclosing Party to the employees or agents of the Receiving
Party who have a need to know such Confidential Information for purposes of this
Agreement, and who are, with respect to the Confidential Information of the
Disclosing Party, bound in writing by confidentiality terms no less restrictive
than those contained herein. The Receiving Party shall provide copies of such
written agreements to the Disclosing Party upon request; provided, however, that
such agreement copies shall themselves be deemed the Confidential Information of
the Receiving Party. Notwithstanding the foregoing, Confidential Information
may be disclosed if such disclosure is required by law or by the order or a
court or similar judicial or administrative body; provided, however, that the
Receiving Party shall notify the Disclosing Party of such requirement
immediately and in writing, and shall cooperate reasonably with the Disclosing
Party, at the Disclosing Party's expense, in the obtaining of a protective or
similar order with respect thereto.
4.2 Definition of Confidential Information. For purposes of this
Agreement, the term "Confidential Information" shall mean (a) the SWI Software,
in object and source code form, and any related technology, idea, algorithm or
information contained therein, including without limitation any trade secrets
related to any of the foregoing; (b) a party's product plans, designs, costs,
prices and names; non-published financial information, marketing plans, business
opportunities, personnel, research, development or know-how; (c) any information
designated by the Disclosing party as confidential in writing or, if disclosed
orally, designated as confidential at the time of disclosure and reduced to
writing and designated as confidential in writing within thirty (30) days; and
(d) the terms and conditions of this Agreement; provided, however that
"Confidential Information" will not include information that: (i) is or becomes
generally known or available by publication, commercial use or otherwise through
no fault of the receiving party; (ii) is known and has been reduced to tangible
form by the receiving party at the time of disclosure and is not subject to
restriction; (iii) is independently developed by the receiving party without use
of the disclosing party's Confidential Information; (iv) is lawfully obtained
from a third party who has the right to make such disclosure; or (v) is released
for publication by the disclosing party in writing.
4.3 Return of Confidential Information. The Receiving Party shall return
to the Disclosing Party, destroy or erase all Confidential Information of the
Disclosing Party in tangible form: (a) upon the written request of the
Disclosing Party; or (b) upon the expiration or termination of this Agreement,
whichever comes first, and in both cases, the Receiving Party shall certify
promptly and in writing that it has done so.
Exhibit I - Pg. 3.
<PAGE>
SECTION 5 -- LIMITED WARRANTY AND DISCLAIMER
5.1 Warranty of Authority. SWI represents and warrants that it has the
right and authority to grant to Licensee the rights and licenses set forth
herein.
5.2 Limited Warranty. Subject to the limitations and exceptions set forth
in this Section 5.2 and in Section 6.3 ("Limitation of Liability; Licensee
Indemnity"), SWI warrants for a period of thirty (30) days from the Effective
Date that the SWI Software, and if properly installed by Licensee in accordance
with SWI's published instructions, will substantially conform to the
specifications in the Documentation and that the media on which the software is
delivered will be free of defects. In the event of nonconformity of the SWI
Software to such specification, Licensee shall promptly notify SWI and provide
SWI with all available information in written or electronic form so that SWI can
reproduce any such nonconformity. SWI's sole obligation is to undertake
reasonable commercial efforts to correct a nonconformity so reported to SWI
during the warranty period. SWI's SOLE LIABILITY AND LICENSEE'S EXCLUSIVE
REMEDY WITH RESPECT TO BREACH OF THE FOREGOING LIMITED WARRANTY WILL BE LIMITED
TO ERROR CORRECTION OR PRODUCT REPLACEMENT, OR IF NEITHER IS IN SWI'S OPINION IS
COMMERCIALLY FEASIBLE, REFUND OF THE LICENSE FEE RECEIVED BY SWI FROM LICENSEE.
5.3 DISCLAIMER. THE FORGOING PROVISIONS OF THIS SECTION 5 STATE SWI'S
SOLE AND EXCLUSIVE WARRANTY AND SOLE AND EXCLUSIVE OBLIGATION TO LICENSEE FOR
BREACH OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS SECTION 5,
SWI MAKES NO ADDITIONAL WARRANTY, EXPRESS OF IMPLIED, STATUTORY OR OTHERWISE, AS
TO ANY MATTER WHATSOEVER AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS ARE EXPRESSLY
EXCLUDED.
SECTION 6 - INFRINGEMENT MATTERS; INDEMNITIES
6.1 Indemnity. SWI agrees, at its own expense, to defend or, at its
option, to settle, any claim or action brought against Licensee to the extent it
is based on a claim that Licensee's use of the SWI Software in accordance with
the scope of this Agreement infringes or violates any United States patent,
United States copyright, trademark, or trade secret of a third party, and will
indemnify and hold Licensee harmless from and against any damages, costs and
fees reasonably incurred (including reasonable attorneys' fees) that are
attributable to such claim or action and which are assessed against Licensee in
a final judgment. Licensee agrees that SWI shall have the foregoing obligation
only if Licensee provides SWI with: (a) prompt written notification of the claim
or action; (b) sole control and authority over the defense or settlement
thereof; and (c) all available information, assistance and authority to settle
and/or defend any such claim or action.
6.2 Limited Remedies. If any SWI Software becomes, or in the opinion of
SWI is likely to become, the subject of an infringement claim or action, SWI may
at its sole option: (a) procure, at no cost to Licensee, the right to continue
using the SWI Software; (b) replace or modify the SWI Software to render it
noninfringing, provided there is no material loss of functionality; or (c) if,
in SWI's reasonable opinion, neither (a) nor (b) above are commercially
feasible, terminate the license and refund the amounts Licensee paid for such
SWI Software as depreciated on a straight-line sixty (60) month basis. Except
as provided in Section 6.1 ("Indemnity"), the foregoing provisions of this
Section 6.2 state SWI's sole obligation and Licensee's exclusive remedy in the
event any such claim or action is commenced or is likely to be commenced.
Exhibit I - Pg. 4.
<PAGE>
6.3 Limitation of Liability; Licensee Indemnity. SWI will have no
liability under this Section 6 or the limited warranty provided for in Section
5.2 ("Limited Warranty") for any claim or action where: (a) such claim or action
would have been avoided but for modifications of the SWI Software, or portions
thereof, made after delivery to Licensee; (b) such claim or action would have
been avoided but for the combination or use of the SWI Software, or portions
thereof, with other products, processes or materials; (c) Licensee continues
allegedly infringing activities after being notified thereof or after being
informed of modifications that would have avoided the alleged infringement; or
(d) Licensee's use of the SWI Software is not strictly in accordance with the
terms of this Agreement. Licensee agrees to indemnify and hold SWI harmless from
and against all losses, damages and expenses, including reasonable attorney's
fees, in connection with any claims brought against SWI and its officers,
employees, agents or subcontractors arising as a result of any of the conditions
described in clauses (a) through (d) above. SWI agrees that Licensee shall be
released from the foregoing obligation unless SWI provides Licensee with: (i)
prompt written notification of the claim or action; (ii) sole control and
authority over the defense or settlement thereof; and (iii) all available
information, assistance and authority to settle and/or defend any such claim or
action.
6.4 LIMITATION OF LIABILITY. SWI's total liability to Licensee and its
officers, customers and employees for any claim arising under this Agreement, or
otherwise arising from the transactions contemplated under this Agreement,
regardless of the form of action (including, but not limited to actions for
breach of contract, negligence, strict liability, rescission and breach of
warranty) will not exceed the lesser of (a) the aggregate fees actually paid to
SWI during the one (1) year period preceding such claim of damages, or (b) the
actual damages sustained by Licensee.
6.5 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL SWI BE LIABLE FOR ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS
OF REVENUES AND LOSS OF PROFITS, EVEN IF SWI HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
SECTION 7 -- TERMINATION
7.1 Termination By Either Party. Either party may terminate this Agreement
immediately upon giving notice in writing to the other party if such other party
commits a material breach of this Agreement and shall have failed to cure such
breach within thirty (30) days of receipt of a request in writing from the
notifying party to do so; provided, however, that a breach by SWI of its
obligations under Section 5 shall not be deemed to be a material breach but
instead shall be subject to the exclusive remedies set forth in Section 6.2
("Limited Remedies").
7.2 Termination by SWI. SWI may terminate this Agreement immediately upon
giving notice in writing to Licensee in the following circumstances (a) If
Licensee fails to pay any sums due to SWI pursuant to the terms of this
Agreement, or any other agreement between the parties, within thirty (30) days
of the due date, whether or not demanded by SWI; (b) If Licensee infringes SWI's
intellectual property or commits, or permits any third party to commit, any
breach of confidentiality obligations owed to SWI; or (c) If Licensee files or
has filed against it a petition in bankruptcy, has a receiver appointed to
handle its assets or affairs or admits that it is insolvent or is otherwise
unable to pay its debts as they mature.
Exhibit I - Pg. 5.
<PAGE>
7.3 Effect of Termination. Immediately upon the termination of this
Agreement (whether pursuant to this Section 7 or for any other reason): (a)
Licensee shall immediately cease use of the SWI Software (in any form, including
partial copies in its possession or under its control), and, within ten (10)
days of such termination, return all copies of the SWI Software to SWI, and
certify in writing to SWI that no copies have been retained by it; and (b) any
outstanding amounts due to SWI hereunder shall immediately become due and
payable.
7.4 Survival. Notwithstanding anything to the contrary in this Section 7,
the provisions of Sections 3, 4, 5, 6, 7, and 8 shall survive termination of
this Agreement.
SECTION 8 -- GENERAL TERMS
8.1 Assignment. Licensee shall not be entitled to assign or otherwise
transfer rights or obligations under this Agreement whether in whole or in part,
except with the prior written consent of SWI.
8.2 Force Majeure. Except for the obligation to make payments,
nonperformance of either party shall be excused to the extent that performance
is rendered impossible by strike, fire, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to perform
is beyond the reasonable control of the nonperforming party.
8.3 Notices. Any required notices hereunder shall be given in writing at
the address of each party set forth above, or to such other in the manner
contemplated herein, and shall be deemed served when delivered or, if delivery
is not accomplished by reason or some fault of the addressee, when tendered.
8.4 Relationship Between the Parties. In all matters relating to this
Agreement, Licensee and SWI shall act as independent contractors. Except as may
be otherwise expressly permitted hereunder, neither party will represent that it
has any authority to assume or create any obligation, expressed or implied, on
behalf of the other party, or to represent the other party as agent, employee,
or in any other capacity. Neither party shall have any obligation, expressed or
implied, except as expressly set forth herein.
8.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without giving
effect to principles of conflicts of laws and Licensee hereby submits to the
exclusive jurisdiction of the federal and state courts situated in said
Commonwealth and the applicable service of process.
8.6 Injunctive Relief. Licensee recognizes and acknowledges that any use
or disclosure of the SWI Software; Documentation or SWI's Confidential
Information by the Licensee in a manner inconsistent with the provisions of this
Agreement may cause SWI irreparable damage for which remedies other than
injunctive relief may be inadequate, and Licensee agrees that in any request by
SWI to a court of competent jurisdiction for injunctive or other equitable
relief seeking to restrain such use or disclosure, Licensee will not maintain
that such remedy is not appropriate under the circumstances. The parties further
agree that in the event such equitable relief is granted in the United States,
they will not object to courts in other jurisdictions granting provisional
remedies enforcing such United States judgments.
Exhibit I - Pg. 6.
<PAGE>
8.7 Export Controls; Government Use. Licensee agrees and certifies that
neither the SWI Software, nor any other technical data received from SWI, nor
the direct product thereof, will be exported or re-exported outside the United
States except as authorized and as permitted by the laws and regulations of the
United States. Any use of the SWI Software by the U.S. Government is conditioned
upon the Government agreeing that the SWI Software is subject to Restricted
Rights as provided under the provisions set forth in subdivision (c)(1)(ii) of
Clause 252.227-7013 of the Defense Federal Acquisition Regulations Supplement,
or the similar acquisition regulations of other applicable U.S. Government
organizations.
8.8 Entire Agreement; Headings; Counterparts. This Agreement constitutes
the entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior agreements, arrangements and
undertakings between the parties. No addition to or modification of any
provision of this Agreement shall be binding upon the parties unless made by a
written instrument signed by a duly authorized representative of each of the
parties. The headings to the sections of this Agreement are for ease of
reference only and shall not affect the interpretation or construction of this
Agreement. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which shall be deemed to be an original
instrument.
8.9 Publicity. Licensee agrees to cooperate with SWI in order to develop
and distribute a mutually agreeable press release within fourteen (14) days of
the Effective Date.
8.10 Partial Invalidity; Waiver. If any provision of this Agreement or the
application thereof to any party or circumstances shall be declared void,
illegal or unenforceable, the remainder of this Agreement shall be valid and
enforceable to the extent permitted by applicable law. In such event the parties
shall use their best efforts to replace the invalid or unenforceable provision
by a provision that, to the extent permitted by applicable law, achieves the
purposes intended under the invalid or unenforceable provision. Any deviation by
either party from the terms and conditions with applicable laws, rules and
regulations shall not be considered a breach of this Agreement. No failure of
either party to exercise any power or right given either party hereunder or to
insist upon strict compliance by either party with its obligations hereunder,
and no custom or practice of the parties at variance with the terms hereof shall
constitute a waiver of either party's right to demand exact compliance with the
terms hereof.
In Witness Whereof, the parties have caused this Agreement to be executed
by their respective duly authorized representative as an instrument under seal
effective as of the Effective Date.
_______________________________ SPEECHWORKS INTERNATIONAL, INC.
By: By:
---------------------------- ----------------------------------
Name: Name: Richard J. Westelman
---------------------------
Title: Title: Chief Financial Officer
---------------------------
ATTACHED EXHIBITS:
Exhibit I-1 - SWI Software, Fees, etc.
Exhibit I-2 -Maintenance and Support Terms
Exhibit I - Pg. 7.
<PAGE>
EXHIBIT I-1
SWI Software; Fees; Etc.
SpeechWorks(R) Pro, Version 5.0 for WindowsNT/Dialogic Developer's Toolkit,
Serial Number SW______________
(see table below for description)
<TABLE>
<CAPTION>
Recognition System FEE/PORT LICENSE
PRODUCT NAME PRODUCT DESCRIPTION Ports Seats OR SEAT FEES
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
SpeechWorks Includes:
[ -- ] Version . SpeechWorks Recognition Engine 1 N/A $_____ $_____
5.0 with . DialogModules: [ ]
Dialog Module
Bundle [ -- ]
-----------------------------------------------------------------------------------------------------------
SpeechWorks Includes: N/A 1 $15,000 $15,000
Tools Version . Vocabulary Editor (allows developers
5.0 to generate and maintain large
vocabulary lists)
. Grammar Specification and Tuning Tools
(allows developers to build custom
applications and tune their performance)
-----------------------------------------------------------------------------------------------------------
TOTAL LICENSE FEES: $___________
</TABLE>
The term "recognition ports" shall mean the number telephone channels enabled
with the software included in SpeechWorks Dialog Module Bundle C that is capable
of either recognizing spoken words or performing "barge-in" for a discrete
period of time. SWI acknowledges that telephone lines or ports can be configured
with or without speech recognition dynamically, and as such, charges are based
on the maximum number of simultaneous speech recognizers currently configured in
the total system. The term "system seats" shall mean the number of end-users
permitted to concurrently access and use, at the same time, the SpeechWorks
Tools and Grammar Libraries.
PAYMENT SCHEDULE:
All license fees to be paid by Licensee under this Exhibit I-1 shall be due
and payable prior to shipment of the software.
Exhibit I-1 - Pg. 1.
<PAGE>
EXHIBIT I-2
Maintenance and Support Terms
Pursuant to Section 3.3 of the Agreement, SWI shall provide to
___________________ ("Customer") the Maintenance and Support Services described
in this Exhibit. In the event of a conflict of terms with respect to
Maintenance and Support Services between the Agreement and this Exhibit, the
terms of this Exhibit shall govern.
SECTION 1 -- DEFINITIONS
1.1 Defined Terms. Terms used and not otherwise defined in this Exhibit
shall have the meanings set forth in the Agreement. In addition, the following
terms as used in this Exhibit shall have the meanings set forth below:
"Covered Software" shall mean the SWI Software and any Custom Software for
which SWI is obligated to provide Maintenance and Support Services.
"Custom Software" shall mean the specific computer programs developed (or
to be developed) by SWI and described on Annex 2 to this Exhibit.
"Custom Software Documentation" means the written description of the
functions performed by the Custom Software, user instructions, and
technical literature supplied to Customer by SWI to facilitate the use and
application of the Custom Software.
"Effective Date" shall have the meaning set forth on Annex 1 hereto.
"Error" shall mean any failure of the SWI Software to conform in all
material respects to Documentation or, in the case of Customer Software,
the failure to conform to the Custom Software Documentation; provided,
however, any nonconformity resulting from (a) Customer's misuse, improper
use, alteration, or damage of any Covered Software, (b) Customer's failure
to implement all Updates issued to Customer; or (c) combining or merging
any Covered Software with any hardware or software not supplied or
identified as compatible by SWI, shall not be considered an Error.
"Exhibit" shall mean this Exhibit and Annex 1 and Annex 2 attached hereto,
including any written amendments hereto or thereto.
"Level 1 Error" shall mean an Error that reduces by fifty percent (50%) or
more the service, operation or transaction processing capabilities of the
Covered Software.
"Level 2 Error" shall mean an Error, other than a Level 1 Error, that
reduces by ten percent (10%) or more the service, operation or transaction
processing capabilities of the Covered Software.
"Level 3 Error" shall mean an Error that causes an operational problem
with the Covered Software that is not a Level 2 or 3 Error.
Exhibit I-2 - Pg. 1.
<PAGE>
"Level 4 Error" shall mean any other Error that is not a Level 1, 2 or 3
Error including, without limitation, Documentation or administrative screen
errors, such as typographical errors, screen format
errors or syntax errors.
"Maintenance and Support Services" shall mean the services described in
Section 2 of this Exhibit subject to the exclusions set forth in Sections 4
and 7 of this Exhibit.
"Support Plan" shall mean the maintenance option that Customer elects
pursuant to Section 2.1 of this Exhibit.
"Updates" means a release or version of the SWI Software containing
functional enhancements, modifications, extensions, and/or Error
corrections. The content and timing of all Updates shall be decided upon
by SWI in its sole discretion and will generally include changes that
correct defects as well as upgrade the SWI Software to the most current
release or version of the SWI Software then being generally marketed by
SWI.
SECTION 2 - MAINTENANCE AND SUPPORT SERVICES
2.1 Election of Support Option. Customer hereby elects the Support Plan
designated on Annex 1 hereto for the initial twelve-month period following the
Effective Date. Such designation shall remain in effect for each subsequent
twelve-month period that the provisions of this Exhibit are in effect (as
provided in Section 6), unless Customer delivers a purchase order to SWI
requesting a change in the Support Plan at least ninety (90) days prior to
beginning of the twelve-month period in which Customer desires such change to
take effect (or such shorter period as SWI may approve). The Support Plan that
Customer selects shall apply to all Covered Software.
2.2 Condition to SWI Obligations. Unless Customer has paid all fees set
forth in Section 5 of this Exhibit in a timely manner, SWI shall have no
obligation to provide to Customer the Maintenance and Support Services
applicable under the Support Plan.
2.3 Scope of Maintenance and Support Services. (a) The Maintenance and
Support Services to be provided hereunder are intended only to correct Errors
(subject to service level provisions of Section 2.8) and to provide Updates to
the SWI Software. This Exhibit does not provide for enhancements, Updates, or
new features or functionality for any Custom Software.
(b) The Maintenance and Support Services may be purchased pursuant to
this Exhibit for the SWI Software, or the SWI Software and Custom Software, as
listed in Annex 1 to this Exhibit. If Maintenance and Support Services are not
purchased for the Custom Software then the terms and conditions set forth herein
applicable to the Custom Software for which no Maintenance and Support Services
are purchased shall be inapplicable to Customer and this Exhibit shall be read
and construed as if such terms were not included. Maintenance and Support
Services may not be purchased for Custom Software alone.
2.4 Maintenance. SWI shall provide Customer with (a) Updates, if any, and
appropriate Documentation delivered electronically for installation by Customer
and (b) periodic software bulletins providing additional documentation and
provisional solutions to reported problems.
Exhibit I-2 - Pg. 2.
<PAGE>
2.5 Telephone Support. If Customer elects a Support Plan that includes
telephone support services, then SWI shall provide telephone assistance to
Customer with respect to the Covered Software in accordance with the response
and error correction time targets set forth in Annex 1 attached hereto, such
services to include (a) clarification of functions and features of the Covered
Software, (b) clarification of Documentation or Customer Software Documentation
pertaining to the Covered Software, (c) guidance in the operation of the Covered
Software, and (d) Error verification, analysis and code corrections, as
necessary, to cause the Covered Software to perform in accordance with the
specifications set forth in the most current Documentation or Custom Software
Documentation, as the case may be, as updated by SWI from time to time, to the
extent possible (except for code corrections) by telephone.
2.6 Annual Account Review. SWI shall provide Customer with one (1) day of
free consulting at Customer's facility each year to review the status of the
Covered Software, assess Customer's ongoing and future use of the Covered
Software, solicit input from Customer on future development and direction of the
Covered Software, and to make recommendations regarding Customer's use of the
Covered Software.
2.7 Classification of Errors. Upon identification of any Error, Customer
shall notify SWI of such Error and provide SWI with enough information to
locate and/or replicate the Error. SWI shall determine in its reasonable
judgment the classification of such Error as either a Level 1, 2, 3 or 4 Error,
provided, however, that if the Service Plan selected by Customer only provides
for correction of Errors in the next major release of SWI Software, then no such
classification shall be made.
2.8 Service Level Objectives. SWI and Customer acknowledge the potentially
idiosyncratic nature of any Error in the Covered Software. While the response
times and target resolution times set forth in Annex 1 to this Exhibit
constitute targeted goals of the Maintenance and Support Services, it is
understood that SWI shall use all reasonable commercial efforts to attempt to
resolve any problems within the target times specified in Annex 1 but that
failure to meet these targeted times shall not constitute a failure to perform a
material provision of this Exhibit.
2.9 Place of Performance. The Maintenance and Support Services provided
hereunder shall be performed by remote access unless SWI determines that on-site
service at the Customer's site is required in which event Customer shall pay for
the associated travel and accommodation expenses.
2.10 Customer Obligations. Customer shall:
(a) provide supervision, control and management of the use of the Covered
Software. In addition, Customer shall implement procedures for the
protection of information and the implementation of backup procedures
in the event of Errors or malfunction of the Covered Software or
equipment upon which the Covered Software is loaded or operating;
(b) during normal business hours, provide SWI with reasonable access
either telephonically or on a remote basis to Customer's personnel and
equipment upon which the Covered Software is loaded or operating. This
access shall include, when applicable, the ability to dial-in to
equipment on which the Covered Software is operating. SWI will inform
Customer of the specifications of the modem equipment needed, and
Customer will be responsible for the costs and use of said equipment
at the Customer's location;
(c) document and promptly report all Errors or malfunctions of the Covered
Software to SWI. Customer shall take all steps necessary to carry out
procedures for the rectification of such Errors or malfunctions within
a reasonable time after such procedures have been provided by SWI;
Exhibit I-2 - Pg. 3.
<PAGE>
(d) maintain a current backup copy of all programs and data; and
(e) properly train its personnel in the use and application of the Covered
Software and the equipment on which the Covered Software is loaded or
operating.
SWI is entitled to suspend Support Services under this Exhibit to the extent
that Customer's failure to comply with this Section 2.10 increases the cost or
difficulty of SWI providing such services.
2.11 Additional Services. In the event Customer requests, and SWI, in its
sole discretion, agrees to provide, materials or services for the Covered
Software for problems encountered by Customer that are outside of the scope of
the Maintenance and Support Services or that Customer desires to have resolved
on a more expedited basis than Customer has contracted for under this Exhibit,
SWI shall invoice Customer for SWI's time, materials used and travel expenses
and any other reasonable expenses incurred by SWI in providing such materials
and service. Customer shall pay SWI the full amount of any such invoice within
thirty (30) days after receipt and interest shall accrue at the lesser of the
highest lawful rate or one percent (1%) per month for any amounts not paid by
the date due.
SECTION 3 -- ADDITIONS
The annual fees for Maintenance and Support Services shall be adjusted to
reflect any increases in Customer's license fee that are attributable to
Customer's licensing, from time to time, additional software from SWI. Such
adjustment shall be equal to the applicable percentage of the full purchase
price of such additional software corresponding to the Support Plan selected by
Customer under the purchase order for such Maintenance and Support Services.
Additionally, notwithstanding anything herein to the contrary, the obligation of
SWI to continue to provide Maintenance and Support Services to Customer after
any such increase in the license fee shall be subject to payment of a fee equal
to the difference between the Annual Maintenance Fee before and after such
adjustment, prorated for the remaining term of the then current twelve (12)
month term of this Exhibit, as measured from the date of such change.
SECTION 4 -- EXCLUSIONS
4.1 Prior Software Versions. Maintenance and Support Services are provided
with respect to versions of the SWI Software that, in accordance with SWI
policy, are then being supported by SWI and, in any event, SWI shall only be
obligated to support the then current production version of the SWI Software and
to support the immediately prior release for a period of six (6) months after
the release of the then current production version.
4.2 Operating Environment. Insofar as the use of a certain release of the
SWI Software requires the use of a particular release of system software (such
as operating system, firmware or utilities) on the equipment specified in the
Agreement, Customer shall be responsible for ensuring that the latter is used.
Otherwise, SWI is entitled to suspend all Support Services under this Exhibit
until the necessary system software is installed. Customer's obligation to pay
any fees and charges hereunder up to the expiration of this Exhibit shall in no
way be affected by such suspension.
Exhibit I-2 - Pg. 4.
<PAGE>
SECTION 5 - CONSIDERATION
5.1 Fees. Customer shall be invoiced by SWI at the beginning of each
twelve-month period for which this Exhibit is in effect, the
applicable annual fee for the Support Plan.
5.2 Time of Payment. Except as otherwise provided in this Exhibit all
amounts due SWI shall be paid within thirty (30) days of Customer's
receipt of invoice from SWI.
SECTION 6 - TERM AND TERMINATION
6.1 Term. The provisions of this Exhibit shall become effective on the
Effective Date, shall remain in effect for an initial term of twelve (12)
months, and shall thereafter automatically be renewed for successive twelve (12)
month terms, unless either party gives the other notice at least ninety (90)
days prior to the expiration of a twelve (12) month term that such renewal shall
not occur, in which event the provisions of this Agreement shall expire at the
end of such term, except as otherwise provided in this Exhibit. In no event,
however, shall any obligation of SWI to provide Maintenance and Support Services
extend beyond the termination or expiration of the Agreement or commence prior
to the execution of the Agreement, unless otherwise agreed by the parties.
6.2 Termination. The obligations of SWI and Customer under this Exhibit
(a) shall terminate immediately upon the termination of the Agreement or (b) may
be terminated by either party immediately upon giving written notice to the
other party if such other party commits a material breach of this Exhibit and
shall have failed to cure such breach within thirty (30) days of receipt of a
request in writing from the notifying party to do so; provided, however, that
upon any termination under this Section 6.2 or otherwise, all earned and unpaid
fees and other charges payable under this Exhibit shall become immediately due
and payable.
6.3 Survival of License. Termination of Maintenance and Support Services
upon failure to renew will not affect the license of the SWI Software.
SECTION 7 -- OWNERSHIP AND WARRANTY DISCLAIMER
7.1 Title. All Updates and other changes, improvements, bug fixes or
other modifications to the SWI Software provided under this Exhibit shall be
deemed to be included within the SWI Software and will be subject to the terms
and conditions of the agreement pursuant to which such software was licensed.
7.2 Limited Warranty of Performance and Exclusive Remedy SWI warrants
that it shall use commercially reasonable efforts to provide effective
Maintenance and Support Services while this Exhibit remains in effect. This
warranty shall not apply to the Covered Software if such Covered Software has
been modified by any party other than SWI or its third party contractors. In
the event that SWI fails to provide Maintenance and Support Services according
to the provisions of Section 2, SWI's only responsibility shall be to attempt
diligently to remedy such failure through further Maintenance and Support
Services. Customer acknowledges that Maintenance and Support Services can,
under certain circumstances, result in damage to data. Customer will therefore
ensure that all data are secured from such damage during the performance of
Maintenance and Support Services. SWI shall not be responsible for any re-
creation or reconstruction of data. The warranty under this Exhibit is made
only to Customer and SWI shall have no liability to any third party with respect
to the Covered Software as a result of such warranty. SWI shall have no
obligation to Customer under the warranty, or otherwise, if an Error is the
result of (a) Customer's failure to implement all Updates or modifications to
the Covered Software; (b) changes to the operating system or environment which
adversely affect the Covered Software; (c) any alterations of or additions to
the Covered Software performed by parties other than SWI or not at the
Exhibit I-2 - Pg. 5.
<PAGE>
direction of SWI; (d) interconnection or integration of the Covered Software
with other software products not supported by SWI, or (e) use of the Covered
Software on equipment other than the equipment for which such Covered Software
was designed for use on. Under no circumstances does SWI warrant or represent
that all Errors can or will be corrected.
7.3 Limited Remedy. If defects which considerably impede the operation of
the Covered Software supplied by SWI cannot be eliminated by SWI Maintenance and
Support Services after repeated attempts, then Customer may cancel this Exhibit
for the balance of the current annual period, upon thirty (30) days prior
written notice to SWI, for the SWI Software or Customer Software or any
applicable modules or portions thereof, which cannot be used
7.4 DISCLAIMER. THE FOREGOING PROVISIONS OF SECTIONS 7.2 and 7.3 STATE
SWI'S SOLE AND EXCLUSIVE WARRANTY TO CUSTOMER AND SOLE OBLIGATION TO CUSTOMER
FOR BREACH OF WARRANTY, WITH RESPECT TO THIS EXHIBIT. EXCEPT FOR THE EXPRESS
WARRANTIES STATED IN THIS SECTION, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, NO ADDITIONAL WARRANTY, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, AS TO
THE CONDITION, QUALITY, COMPLETENESS, PERFORMANCE, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF THE MAINTENANCE AND SUPPORT SERVICES, ERROR
CORRECTIONS, OR UPDATES, OR THE COMPREHENSIVENESS OF ANY DOCUMENTATION FURNISHED
HEREUNDER IS GIVEN OR ASSUMED BY CUSTOMER AND ALL SUCH WARRANTIES, CONDITIONS,
UNDERTAKING AND TERMS ARE HEREBY EXCLUDED.
Exhibit I-2 - Pg. 6.
<PAGE>
ANNEX NO. 1 TO EXHIBIT I-2
Description of Support Plans
1. SUPPORT PLAN SELECTED BY CUSTOMER FOR INITIAL YEAR: ___________________
2. EFFECTIVE DATE: ________________________
3. DESCRIPTION OF SUPPORT PLANS:
<TABLE>
<CAPTION>
AROUND-THE-CLOCK SUPPORT
BASIC SUPPORT PLAN EXTENDED SUPPORT PLAN PLAN
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hours service is available: 9:00 a.m. to 5:00 8:30 a.m. to 5:30 p.m. Twenty-four hours a day
p.m. during business during business days seven days a week
days (including holidays)
---------------------------------------------------------------------------------------------------------------------
INITIAL RESPONSE Next major release of 4 hours 4 hours
the SWI Software.
Level 4 errors in
Custom Software shall
only be corrected at
SWI's discretion
---------------------------------------------------------------------------------------------------------------------
TARGET RESOLUTION: LEVEL 1 ERRORS N/A 2 business days 2 business days
---------------------------------------------------------------------------------------------------------------------
TARGET RESOLUTION: LEVEL 2 ERRORS N/A 5 business days 5 business days
---------------------------------------------------------------------------------------------------------------------
TARGET RESOLUTION: LEVEL 3 ERRORS N/A 20 business days 20 business days
---------------------------------------------------------------------------------------------------------------------
TARGET RESOLUTION: LEVEL 4 ERRORS N/A Next major release of SWI Next major release of SWI
Software. Level 4 errors Software. Level 4 errors
in Custom Software shall in Custom Software shall
only be corrected at only be corrected at
SWI's discretion SWI's discretion
---------------------------------------------------------------------------------------------------------------------
FEES (SWI SOFTWARE) 12% of Licensed Fees 15% of license fees 20% of license fees
---------------------------------------------------------------------------------------------------------------------
FEES (CUSTOM SOFTWARE) Basic support plan is 25% of fixed 30% of fixed
not available for development price development price
Custom Software
---------------------------------------------------------------------------------------------------------------------
</TABLE>
All Support Plans provide Customer with Updates to SWI Software as well as
periodic software bulletins providing additional documentation and provisional
solutions to reported problems. As used in the tables above, the term "business
day" means Monday through Friday (excluding national holidays). All times are
in Eastern Standard Time.
Exhibit I-2 - Pg. 7.
<PAGE>
ANNEX NO. 2 TO EXHIBIT I-2
Description of Custom Software
None
Or
[custom software may be described by referencing the professional
services agreement it was created under, i.e.:
Custom Software shall mean the applications described in the
Statement(s) of Work attached to the Professional Services Agreement, dated
_____, 20__, between SWI and Customer.
Exhibit I-2 - Pg. 8.
<PAGE>
EXHIBIT J
FORM OF SOURCE CODE ESCROW AND LICENSE AGREEMENT
SPEECHWORKS INTERNATIONAL, INC.
MASTER PREFERRED ESCROW AGREEMENT
This Agreement is effective June __, 2000 among DSI Technology Escrow
Services, Inc. ("DSI"), SpeechWorks International, Inc. ("Depositor") and any
additional party signing the Acceptance Form attached to this Agreement
("Preferred Beneficiary"), who collectively may be referred to in this Agreement
as "the parties."
A. Depositor and preferred Beneficiary have entered or will enter
into a license agreement, development agreement, and/or other agreement
(referred to in this Agreement as "the License Agreement") regarding certain
proprietary technology of Depositor, pursuant to which Depositor will license to
Preferred Beneficiary one or more of Depositor's products (referred to in this
Agreement collectively as the "Product").
B. Depositor desires to avoid disclosure of its proprietary
technology except under certain limited circumstances.
C. The availability of the proprietary technology of Depositor is
critical to Preferred Beneficiary in the conduct of its business and, therefor,
Preferred Beneficiary needs access to the proprietary technology under certain
limited circumstances.
D. Depositor and preferred Beneficiary desire to establish an escrow
with DSI to provide for the retention, administration and controlled access of
certain proprietary technology materials of Depositor.
E. The parties desire this Agreement to be supplementary to the
License Agreement pursuant to 11 United States [Bankruptcy] Code, Section 365
(n).
ARTICLE 1
DEPOSITS
1.1 Obligation to Make Deposit. Upon the signing of this Agreement by the
parties, including the signing of the Acceptance Form, Depositor shall deliver
to DSI the proprietary technology and other materials ("Deposit Materials")
required to be deposited by the License Agreement or, if the License Agreement
does not identify the materials to be deposited with DSI, then such materials
will be identified on an Exhibit J-1. If Exhibit J-1 is applicable, it is to be
prepared and signed by Depositor and preferred Beneficiary. DSI shall have no
obligation with respect to the preparation, signing or delivery of Exhibit J-1.
Exhibit J - Pg. 1.
<PAGE>
1.2 IDENTIFICATION OF TANGIBLE MEDIA. Prior to the delivery of the
Deposit Materials to DSI, Depositor shall conspicuously label for identification
each document, magnetic tape, disk, or other tangible media upon which the
Deposit Materials are written or stored. Additionally, Depositor shall complete
Exhibit J-2 to this Agreement by listing each such tangible media by the item
label description, the type of media and the quantity. The Exhibit J-2 must be
signed by Depositor and delivered to DSI with the Deposit Materials. Unless and
until Depositor makes the initial deposit with DSI, DSI shall have no obligation
with respect to this Agreement, except the obligation to notify the parties
regarding the status of the deposit account as required in Section 2.2 below.
1.3 DEPOSIT INSPECTION. When DSI receives the Deposit Materials and the
Exhibit J-2, DSI will conduct a deposit inspection by visually matching the
labeling of the tangible media containing the Deposit Materials to the item
descriptions and quantity listed n the Exhibit J-2. In addition to the deposit
inspection, Preferred Beneficiary may elect to cause a verification of the
Deposit Materials in accordance with Section 1.6 below.
1.4 ACCEPTANCE OF DEPOSIT. At completion of the deposit inspection, if
DSI determines that the labeling of the tangible media matches the item
descriptions and quantity on Exhibit J-2, DSI will date and sign the Exhibit J-2
and mail a copy thereof to Depositor and Preferred Beneficiary. If DSI
determines that the labeling does not match the item descriptions or quantity on
the Exhibit J-2, DSI will (a) note the discrepancies in writing on the Exhibit
J-2; (b) date and sign the Exhibit J-2 with the exceptions noted; and (c) mail a
copy of the Exhibit J-2 to Depositor and Preferred Beneficiary. DSI's
acceptance of the deposit occurs upon the signing of the Exhibit J-2 by DSI.
Delivery of the signed Exhibit J-2 to Preferred Beneficiary is Preferred
Beneficiary's notice that the Deposit Materials have been received and accepted
by DSI.
1.5 DEPOSITOR'S REPRESENTATIONS. Depositor represents as follows:
(A) Depositor lawfully possesses all of the Deposit Materials
deposited with DSI;
(B) With respect to all of the Deposit Materials, Depositor has the
right and authority to grant to DSI and Preferred Beneficiary the rights as
provided in this Agreement;
(C) The Deposit Materials are not subject to any lien or other similar
encumbrance, other than any lien that Depositor may have granted in the
proprietary technology that is embodied in the Deposit Materials;
(D) The Deposit Materials consist of the proprietary technology and
other materials identified either in the License Agreement or Exhibit J-1, as
the case may be; and
(E) The Deposit Materials are readable and useable in their current
form or, if the Deposit Materials are encrypted, the decryption tools and
decryption keys have also been deposited.
1.6 VERIFICATION. Preferred Beneficiary shall have the right, at
Preferred Beneficiary's expense, to cause a verification of any Deposit
Materials. A verification
Exhibit J - Pg. 2.
<PAGE>
determines, in different levels of detail, the accuracy, completeness,
sufficiency and quality of the Deposit Materials. If a verification is elected
after the Deposit Materials have been delivered to DSI, then only DSI, or at
DSI's election an independent person or company selected and supervised by DSI
and who has signed a confidentiality agreement with terms and conditions
substantially similar to those set forth in Section 2.1, in which Depositor is
named as a third party beneficiary, may perform the verification. Such
verification may be requested once per Exhibit J-2, no later than thirty (30)
days after delivery thereof to DSI by Depositor. Depositor may at its discretion
designate a representative to be present at the verification.
1.7 DEPOSIT UPDATES. Unless otherwise provided by the License Agreement,
Depositor shall update the Deposit Materials within 60 days of each release of a
new version of the Product to be delivered under the License Agreement. Such
updates will be added to the existing deposit. All deposit updates shall be
listed on a new Exhibit J-2 and the new Exhibit J-2 shall be signed by
Depositor. Each Exhibit J-2 will be held and maintained separately within the
escrow account. An independent record will be created which will document the
activity for each Exhibit J-2. The processing of all deposit updates shall be
in accordance with Sections 1.2 through 1.6 above. All references in this
Agreement to the Deposit Materials shall include the initial Deposit Materials
and any updates.
1.8 REMOVAL OF DEPOSIT MATERIALS. The Deposit Materials may be removed
and/or exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.
ARTICLE 2
CONFIDENTIALITY AND RECORD KEEPING
2.1 CONFIDENTIALITY. DSI shall maintain the Deposit Materials in a
secure, environmentally safe, locked facility which is accessible only to
authorized representatives of DSI. DSI shall have the obligation to reasonably
protect the confidentiality of the Deposit Materials. Except as provided in
this Agreement. DSI shall not disclose, transfer, make available, or use the
Deposit Materials. DSI shall not disclose the content of this Agreement to any
third party. If DSI receives a subpoena or other order of a court or other
judicial tribunal pertaining to the disclosure or release of the Deposit
Materials, DSI will immediately notify the parties to this Agreement. It shall
be the responsibility of Depositor and/or Preferred Beneficiary to challenge any
such order; provided, however, that DSI does not waive its rights to present its
position with respect to any such order. DSI will not be required to disobey
any court or other judicial tribunal order. (See Section 7.5 below for notices
of requested orders.)
2.2. STATUS REPORTS. DSI will issue to Depositor and Preferred
Beneficiary a report profiling the account history at least semi-annually. DSI
may provide copies of the account history pertaining to this Agreement upon the
request of any party to this Agreement.
2.3 AUDIT RIGHTS. During the term of this Agreement, Depositor and
preferred Beneficiary shall each have the right to inspect the written records
of DSI pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.
Exhibit J - Pg. 3.
<PAGE>
ARTICLE 3
GRANT OF RIGHTS TO DSI
3.1 TITLE TO MEDIA. Depositor hereby transfers to DSI the title to the
media upon which the proprietary technology and materials are written or stored.
However, this transfer does not include the ownership of the proprietary
technology and materials contained on the media such as any copyright, trade
secret, patent or other intellectual property rights.
3.2 RIGHT TO MAKE COPIES. DSI shall have the right to make copies of the
Deposit Materials as reasonably necessary to perform this Agreement. DSI shall
copy all copyright, nondisclosure, and other proprietary notices and titles
contained on the Deposit Materials onto any copies made by DSI. With all
Deposit Materials submitted to DSI. Depositor shall provide any and all
instructions as may be necessary to duplicate the Deposit Materials including
but not limited to the hardware and/or software needed.
ARTICLE 3
RELEASE OF DEPOSIT
4.1 RELEASE CONDITION. As used in this Agreement, "Release Condition"
shall mean the following:
(a) The occurrence and continuance of a material breach by Depositor
of its maintenance and support obligations under the License Agreement, which
adversely affects core functionality of the Product licensed to Preferred
Beneficiary under the License Agreement, and which remains uncured ninety (90)
days after written notice thereof; or
(b) Any rejection or termination of the License Agreement under Title
II of the United States Code, as now constituted or hereafter amended (the
"Bankruptcy Code"), or any other federal, or state bankruptcy, insolvency,
receivership, or similar law; or
(c) Depositor ceases doing business in the normal course for a
continuous period of ninety (90) days.
4.2 FILING FOR RELEASE. If Preferred Beneficiary believes in good faith
that a Release Condition has occurred, Preferred Beneficiary may provide to DSI
written notice of the occurrence of the Release Condition and a request for the
release of the Deposit Materials. Upon receipt of such notice, DSI shall
provide a copy of the notice to Depositor by commercial express mail.
4.3 CONTRARY INSTRUCTIONS. From the date DSI mails the notice requesting
release of the Deposit Materials, Depositor shall have twenty business days to
deliver to DSI Contrary Instructions. "Contrary Instructions" shall mean the
representation by Depositor that a Release Condition has not occurred or has
been cured. Upon receipt of Contrary Instructions, DSI shall send a copy to
Preferred Beneficiary by commercial express mail. Additionally, DSI shall
notify both Depositor and Preferred Beneficiary that there is a dispute to be
resolved pursuant to the Dispute Resolution section of this Agreement (Section
7.3). Subject to Section 5.2, DSI will
Exhibit J - Pg. 4.
<PAGE>
continue in store the Deposit Materials without release pending (a) joint
instructions from Depositor and Preferred Beneficiary; (b) resolution pursuant
to the Dispute Resolution provisions; or (c) order of a court.
4.4 RELEASE OF DEPOSIT., If DSI does not receive Contrary Instructions
from the Depositor, DSI is authorized to release the Deposit Materials to the
Preferred Beneficiary or, if more than one beneficiary is registered to the
deposit, to release a copy of the Deposit Materials to the Preferred Beneficiary
requesting release. However, DSI is entitled to receive any fees due DSI before
making the release. Any copying expense in excess of $300 will be chargeable to
Preferred Beneficiary. Upon any such release, the escrow arrangement will
terminate as it relates to the Depositor and Preferred Beneficiary involved in
the release.
4.5 RIGHT TO USE AFTER RELEASE. Unless otherwise provided in the License
Agreement, upon release of the Deposit Materials in accordance with this Article
4, Preferred Beneficiary shall have the right to use the Deposit Materials for
the sole purpose of supporting licensed copies of the then current version of
the Product that Preferred Beneficiary is contractually obligated to support,
and not for the purpose of developing or distributing enhancements of the
Product., Preferred Beneficiary shall be obligated to maintain the
confidentiality of the released Deposit Materials.
ARTICLE 5
TERM AND TERMINATION
5.1 TERM OF AGREEMENT. The initial term of this Agreement is for a period
of one year. Thereafter, this Agreement shall automatically renew from year-to-
year unless (a) Depositor and Preferred Beneficiary jointly instruct DSI in
writing that the Agreement is terminated; (b) Preferred Beneficiary instructs
DSI in writing that the Agreement is terminated as it relates to Preferred
Beneficiary; or (c) the Agreement is terminated by DSI for nonpayment in
accordance with Section 5.2. If the Acceptance Form has been signed at a date
later than this Agreement, the initial term of the Acceptance Form will be for
one year with subsequent terms to be adjusted to match the anniversary date of
this agreement. If the deposit materials are subject to another escrow
agreement with DSI, DSI reserves the right, after the initial one year term, to
adjust the anniversary date of this agreement to match the then prevailing
anniversary date of such other escrow arrangement.
5.2 TERMINATION FOR NONPAYMENT. In the event of the nonpayment of fees
owed to DSI, DSI shall provide written notice of delinquency to the parties to
this Agreement affected by such delinquency. Any such party shall have the
right to make the payment to DSI to cure the default. If the past due payment
is not received in full by DSI within one month of the date of such notice, then
at any time thereafter DSI shall have the right to terminate this Agreement to
the extent it relates to the delinquent party by sending written notice of
termination to such affected parties. DSI shall have no obligation to take any
action under this Agreement so long as any payment due to DSI remains unpaid.
5.3 DISPOSITION OF DEPOSIT MATERIALS UPON TERMINATION. Upon termination
of this Agreement, DSI shall destroy, return, or otherwise deliver the Deposit
Materials in accordance
Exhibit J - Pg. 5.
<PAGE>
with Depositor's instructions. If there are no instructions, DSI may, at its
sole discretion, destroy the Deposit Materials or return them to Depositor. DSI
shall have no obligation to return or destroy the Deposit Materials if the
Deposit Materials are subject to another escrow agreement with DSI.
5.4 SURVIVAL OF TERMS FOLLOWING TERMINATION. Upon termination of this
Agreement, the following provisions of this Agreement shall survive:
(a) Depositor's Representations (Section 1.5);
(b) The obligations of confidentiality with respect to the Deposit
Materials;
(c) The rights granted in the sections entitled Right to Transfer Upon
Release (Section 3.3) and Right to Use Following Release (Section 4.5), if a
release of the Deposit Materials has occurred prior to termination;
(d) The obligation of Preferred Beneficiary to pay DSI any fees and
expenses due;
(e) The provisions of Article 7; and
(f) Any provisions in this Agreement which specifically state they
survive the termination or expiration of this Agreement.
ARTICLE 6
DSI'S FEES
6.1 FEE SCHEDULE. All fees and expenses charged by [ ]. [ ] shall
not be required to [ ] for any such fees, expenses or other charges billed
to [ ]. DSI is entitled to be paid its standard fees and expenses
applicable to the services provided. DSI shall notify [ ], the party
responsible for payment of DSI's fees hereunder, at least 90 days prior to any
increase in fees. For any service not listed on DSI's standard fee schedule,
DSI will provide a quote prior to rendering the service, if requested.
6.2 PAYMENT TERMS. DSI shall not be required to perform any service
unless the payment for such service and any outstanding balances owed to DSI are
paid in full. Fees are due upon receipt of a signed contract or receipt of the
Deposit Materials whichever is earliest. If invoiced fees are not paid, DSI may
terminate this Agreement in accordance with Section 5.2. Late fees on past due
amounts shall accrue interest at the rate of one and one-half percent per on the
(18% per annum) from the date of the invoice.
ARTICLE 7
LIABILITY AND DISPUTES
7.1 RIGHT TO RELY ON INSTRUCTIONS. DSI may act in reliance upon any
instruction, instrument, or signature reasonably believed by DSI to be genuine.
DSI may assume that any
Exhibit J - Pg. 6.
<PAGE>
employee of a party to this Agreement who gives any written notice, request, or
instruction has the authority to do so. DSI shall not be responsible for failure
to act as a result of causes beyond the reasonable control of DSI.
7.2 INDEMNIFICATION. DSI shall be responsible to perform its obligations
under this Agreement and to act in a reasonable and prudent manner with regard
to this escrow arrangement. Provided DSI has acted in the manner stated in the
preceding sentence, Depositor and preferred Beneficiary each agree to indemnify,
defend and hold harmless DSI from any and all claims, actions, damages,
arbitration fees and expenses, costs, attorney's fees and other liabilities
incurred by DSI relating in any way to this escrow arrangement.
7.3 DISPUTE RESOLUTION. Any dispute relating to or arising from this
Agreement shall be resolved by arbitration under the Commercial Rules of the
American Arbitration Association. Unless otherwise agreed by Depositor and
Preferred Beneficiary, arbitration will take place in Boston, Massachusetts,
USA. Any court having jurisdiction over the matter may enter judgment on the
award of the arbitrator(s). Service of a petition to confirm the arbitration
award may be made by First Class mail or by commercial express mail, to the
attorney for the party or, if unrepresented, to the party at the last known
business address.
7.4 CONTROLLING LAW. This Agreement is to be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts without regard to
its conflict of law provisions.
7.5 NOTICE OF REQUESTED ORDER. If any party intends to obtain an order
from the arbitrator or any court of competent jurisdiction which may direct DSI
to take, or refrain from taking any action, that party shall:
(a) Give DSI at least two business days' prior notice of the hearing;
(b) Include in any such order that, as a precondition to DSI's
obligation, DSI be paid in full for any past due fees and be paid for the
reasonable value of the services to be rendered pursuant to such order; and
(c) Ensure that DSI not be required to deliver the original (as
opposed to a copy) of the Deposit Materials if DSI may need to retain the
original in its possession to fulfill any of its other escrow duties.
ARTICLE 8
GENERAL PROVISIONS
8.1 ENTIRE AGREEMENT. This Agreement, which includes the Acceptance Form
and the Exhibits described herein, embodies the entire understanding among all
of the parties with respect to its subject matter and supersedes all previous
communications, representations or understandings, either oral or written. DSI
is not a party to the License Agreement between Depositor and preferred
Beneficiary and has no knowledge of any of the terms or provisions of any such
License Agreement. DSI's only obligations to Depositor or Preferred Beneficiary
are as set forth in this Agreement. No amendment or modification of this
Agreement shall be valid
Exhibit J - Pg. 7.
<PAGE>
or binding unless signed by all the parties hereto, except that Exhibit J-1 need
not be signed by DSI, Exhibit J-2 need not be signed by preferred Beneficiary
and the Acceptance Form need only be signed by the parties identified therein.
8.2 NOTICES. All notices, invoices, payments, deposits and other
documents and communications shall be given to the parties at the addresses
specified in the attached Exhibit C and Acceptance Form. It shall e the
responsibility of the parties to notify each other as provided in this Section
in the event of a change of address. The parties shall have the right to rely
on the last known address of the other parties. Unless otherwise provided in
this Agreement, all documents and communications may be delivered by First Class
mail.
8.3 SEVERABILITY. In the event any provision of this Agreement is found
to be invalid, voidable or unenforceable, the parties agree that unless it
materially affects the entire intent and purpose of this agreement, such
invalidity, voidability or unenforceability shall affect neither the validity of
this agreement nor the remaining provisions herein, and the provision in
question shall be deemed to be replaced with a valid and enforceable provision
most closely reflecting the intent and purpose of the original provision.
8.4 SUCCESSORS. This Agreement shall be binding upon and shall inure to
the benefit of the successors and assigns of the parties. However, DSI shall
have no obligation in performing this Agreement to recognize any successor or
assign of Depositor or Preferred Beneficiary unless DSI receives clear,
authoritative and conclusive written evidence of the change of parties.
8.5 REGULATIONS. Depositor and Preferred Beneficiary are responsible for
and warrant compliance with all applicable laws, rules and regulations,
including but nor limited to customs laws, import, export, and re-export laws
and government regulations of any country from or to which the Deposit Materials
may be delivered in accordance with the provisions of this Agreement.
Exhibit J - Pg. 8.
<PAGE>
SPEECHWORKS INTERNATIONAL, INC. DSI TECHNOLOGY ESCROW SERVICES, INC.
By: By:
------------------------- ---------------------------
Name: Name:
------------------------- ---------------------------
Title: Title:
------------------------- ---------------------------
Date: Date:
------------------------- ---------------------------
Exhibit J - Pg. 9.
<PAGE>
PREFERRED BENEFICIARY
ACCEPTANCE FORM
Account Number
Depositor, Preferred Beneficiary and DSI Technology Escrow Services,
Inc. ("DSI"), hereby acknowledge that ______________________________ is the
Preferred Beneficiary referred to in the Master Preferred Escrow Agreement
effective ______________, 20_____ with DSI as the escrow agent and SpeechWorks
International, Inc. as the Depositor. Preferred Beneficiary hereby agrees to be
bound by all provisions of such Agreement.
Depositor hereby enrolls Preferred Beneficiary to the following account(s):
Account Name Account Number
---------------------------------- ---------------------------------------
---------------------------------- ---------------------------------------
---------------------------------- ---------------------------------------
Notices and communications to Preferred Invoices should be addressed to
Beneficiary should be addressed to: Preferred Beneficiary at:
Company Name:
--------------------- ---------------------------------------
Address:
-------------------------- ---------------------------------------
-------------------------- ---------------------------------------
-------------------------- ---------------------------------------
Designated Contact: Contact:
--------------- -------------------------------
Telephone:
------------------------ ---------------------------------------
Facsimile: P.O. #, if required:
------------------------ ---------------------------------------
SPEECHWORKS INTERNATIONAL, INC.
----------------------------------------
Exhibit J - Pg. 10.
<PAGE>
Preferred Beneficiary
By: By:
---------------------------- ------------------------------
Name: Name:
---------------------------- ------------------------------
Title: Title:
---------------------------- ------------------------------
Date: Date:
---------------------------- ------------------------------
DSI Technology Escrow Services, Inc.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Date:
----------------------------
Exhibit J - Pg. 11.
<PAGE>
EXHIBIT J-1
MATERIALS TO BE DEPOSITED
Account Number
----------------------
Depositor represents to Preferred Beneficiary that Deposit Materials delivered
to DSI shall consist of the following:
SPEECHWORKS INTERNATIONAL, INC.
---------------------------------------
Preferred Beneficiary
By: By:
---------------------------- ------------------------------
Name: Name:
---------------------------- ------------------------------
Title: Title:
---------------------------- ------------------------------
Date: Date:
---------------------------- ------------------------------
Exhibit J-1 - Pg. 1.
<PAGE>
EXHIBIT J-2
DESCRIPTION OF DEPOSIT MATERIALS
Depositor: SPEECHWORKS INTERNATIONAL, INC.
Account Number:
---------------------------------------------------------------
Product Name: Version
---------------------------------- ---------------------
(Product Name will appear on Account History report)
DEPOSIT MATERIAL DESCRIPTION:
<TABLE>
<CAPTION>
Quantity Media Type & Size Label Description of Each Separate Item
(Please use other side if additional space is needed)
<S> <C> <C>
__________ Disk 3.5" or _____
__________ DAT tape ____ mm
__________ CD-ROM
__________ Data cartridge tape ___
__________ TK 70 or ____ tape
__________ Magnetic tape ____
__________ Documentation
__________ Other __________________
</TABLE>
PRODUCT DESCRIPTION
Operating System:
-------------------------------------------------------------
Hardware Platform:
-------------------------------------------------------------
DEPOSIT COPYING INFORMATION
Is the media encrypted: Yes/No If yes, please include any passwords and the
decryption tools.
Exhibit J-2 - Pg. 1.
<PAGE>
Encryption tool name: Version
---------------------------- ----------------------
Hardware required:
-------------------------------------------------------------
Software required:
-------------------------------------------------------------
I certify for DEPOSITOR that the above DSI has inspected and accepted the
described Deposit Materials have been above materials (any exceptions are
transmitted to DSI: noted above):
Signature: Signature:
-------------------------- --------------------------
Print Name: Print Name:
-------------------------- --------------------------
Date: Date Accepted:
-------------------------- --------------------------
Exhibit J-2#:
--------------------------
Send materials to: DSI, 9265 Sky Park Court, #202, San Diego, CA 92123
(858) 499-1600
Exhibit J-1 - Pg. 2.
<PAGE>
EXHIBIT J-3
DESIGNATED CONTACT
Account Number
---------------------
Notices and communications should be Invoices should be addressed to
addressed to: Preferred Beneficiary at:
Company Name: SpeechWorks
------------------------ ------------------------------------
International, Inc.
------------------------ ------------------------------------
Address: 695 Atlantic Avenue
---------------------------- ------------------------------------
Boston, MA 02111
---------------------------- ------------------------------------
---------------------------- ------------------------------------
Designated Contact: Corporate Counsel Contact:
----------------- ----------------------------
Telephone: 617-428-4444
--------------------------- ------------------------------------
Facsimile: 617-428-1122 P.O. #, if required:
--------------------------- ----------------
Requests to change the designated contact should be given in writing by the
designated contact or an authorized employee.
Contracts, Deposit Materials and Invoice inquiries and fee
notices to DSI should be addressed to: remittances to DSI should be
addressed to:
DSI DSI
Contract Administration Accounts Receivable
Suite 202 Suite 1450
9265 Sky Park Court 425 California Street
San Diego, CA 92123 San Francisco, CA 94104
Telephone: (858) 499-1600 (415) 398-7900
Facsimile: (858) 694-1919 (415) 398-7914
Date:
--------------------------------------------
Exhibit J-3 - Pg. 1.
<PAGE>
EXHIBIT K
Form of Joint Press Release
Kevin Compton, AT&T Leah Lesser, SpeechWorks
650-463-7069 617-428-4444
[email protected] [email protected]
---------------- ---------------------------
For Release Monday, June 12, 2000
AT&T, SPEECHWORKS PARTNER ON SPEECH-ENABLED SERVICES
SpeechWorks Solutions to Incorporate State-of-Art AT&T Labs Technologies
------------------------------------------------------------------------
BASKING RIDGE, N.J. and BOSTON, MA. - AT&T and SpeechWorks International,
Inc., today announced an agreement for SpeechWorks to develop products, using
AT&T Labs' leading-edge speech-processing technologies, that the two parties
will market to AT&T business units serving 80 million customers.
The agreement pairs AT&T, with its long history of world-class speech
research and related services, with SpeechWorks' development capabilities as a
leading provider of speech-enabled products that today serve the customers of
Apple Computer, Cellular One, E*Trade, Federal Express, Hewlett-Packard, United
Airlines and other businesses. In return for a license to its technologies,
AT&T receives a minority ownership stake in the privately-held SpeechWorks.
AT&T and SpeechWorks will collaborate to deploy next-generation, speech-
enabled services such as:
-- AT&T "How May I Help You?SM" Service: a natural-language processing
application that lets customers calling into a call center speak freely with an
automated customer support application. Unlike applications that exist in the
market today, "How May I Help You?" does not require users to speak pre-defined
phrases to the application.
-- Directory Assistance Using Large-Vocabulary Recognition: an application
that enables automated directory assistance (e.g., retrieving name and number or
email address) with over 100,000 entries. Current systems in the market do not
allow as many entries, and so are not sufficient for the large-vocabulary
applications AT&T requires in deploying such services.
Exhibit K - Pg. 1.
<PAGE>
-- Next-Generation Text-to-Speech Technology: a computer application that
can generate nearly natural-sounding speech for services such as retrieving
information from a database (e.g., restaurant names, driving directions), or for
having email read over the phone automatically.
"Working with a fast-moving partner like SpeechWorks allows us to take our
technologies to market much more quickly," said Dave Nagel, AT&T Labs President
and AT&T CTO. "We've identified a number of areas where we could benefit from
speech-enabled solutions, including customer care operations, and mobile
services for which speech will be a logical interface - especially when
cellphones are the size of fountain pens. And with more cellphones being sold
today than personal computers, we expect that speech could do for the wireless
Web what the browser did for the Internet"
SpeechWorks will receive support from AT&T Labs' expert researchers to
provide enhancements to its products in the future, and AT&T will receive
discounts on the support required to put those products to work in its business
and consumer offerings.
"AT&T's world-renowned speech technology gives us a competitive advantage
in tying the phone to the Internet, and to customer care applications," said
Stuart Patterson, CEO of SpeechWorks. "It will help us fundamentally improve
and broaden the usefulness of the telephone."
About AT&T Labs
---------------
AT&T's services are backed by the research and development capabilities of
AT&T Labs, which is working to create the information services and
communications network of tomorrow. AT&T Labs is a leader in the development of
technologies and standards for audio, speech, video and image compression;
electronic commerce and digital copyright management; search and directory
services; speech processing and coding of all sorts; network architecture,
design, engineering and operations; and other areas critical to the advancement
of new broadband communications and Internet offerings. [List several key
advances to speech technology from AT&T over the years?]
About SpeechWorks International, Inc.
-------------------------------------
Headquartered in Boston with offices worldwide, SpeechWorks is a privately
held corporation with financing from Bank of America Ventures, Citigroup's e-
Citi Unit, GE Equity, Intel Corporation, MCI WorldCom Venture Fund, Reuters and
SAP. Additional funding comes from venture capital firms including Atlas
Venture, Charles River Ventures, iGate Ventures, The Intel64 Fund, QuestMark
Partners and Riggs Capital. To experience the power of SpeechWorks, call toll-
free: 1.888.SAY.DEMO. For additional information, call 617.428.4444 or visit
http://www.speechworks.com.
Exhibit K - Pg. 2.
