<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q/A
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1997
-----------------------
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________________
Commission File Number 0-021403
----------------
VOXWARE, INC.
-------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-3934824
------------------------------- ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
---------------------
305 College Road East
Princeton, New Jersey 08540
609-514-4100
---------------------
(Address, including zip code, and telephone
number (including area code) of registrant's
principal executive office)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the last 90 days. YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares Outstanding at May 14, 1997
--------------------- ---------------------------------------
Common Stock, $.001 par value 12,466,983
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<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.1 Loan Modification Agreement dated May 5, 1997
between Silicon Valley Bank and the Company.*
10.2 Agreement dated March 31, 1997 by and between the
Company and Microsoft regarding the license of the
Company's RT24 Codec.+
10.3 Letter Agreement dated April 17, 1997 by and
between the Company and Microsoft clarifying
Microsoft's rights under the RT24 Codec license.+
10.4 Agreement dated March 31, 1997 by and between the
Company and Microsoft regarding the license of the
Company's MetaSound Codec.+
11.1 Statement re: Computation of Loss Per Share*
27 Financial Data Schedule.*
(b) Reports on Form 8-K. None.
- ----------
* previously filed.
+ A request for confidential treatment has been made for portions of such
document.
2
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 4, 1997
VOXWARE, INC.
(Registrant)
By: /s/Michael Goldstein
-------------------------
Michael Goldstein, President and
Chief Executive Officer
3
<PAGE>
Exhibit 10.2
Confidential treatment has been requested for portions of this Exhibit. The
Confidential Portions have been redacted and are denoted by [ * * * ]. The
Confidential Portions have been separately filed with the Commission.
SOFTWARE LICENSE AGREEMENT
This RT24 Basic Codec License Agreement (the "Agreement") is entered into and
effective as of March 31, 1997, (the "Effective Date") by and between MICROSOFT
CORPORATION, a Washington corporation located at One Microsoft Way, Redmond, WA
98052 ("Microsoft") and VOXWARE, INC., a Delaware corporation located at 305
College Road East, Princeton, New Jersey 08540 ("Voxware").
RECITALS
Voxware is the owner/licensor of a proprietary speech compression/decompression
codec known as the "RT24 Basic Codec."
Microsoft desires to license the RT24 Basic Codec from Voxware.
Microsoft also wishes to encourage Voxware to integrate certain standard
protocols and codecs into its TeleVox product.
Voxware wishes to license the RT24 Basic Codec to Microsoft.
Voxware also wishes to integrate certain standard protocols and codecs into its
TeleVox product.
AGREEMENT
1. DEFINITIONS
1.1 "Encoder" means the encoder portion of the RT24 Basic Codec that performs
compression of a raw audio data into coded data that can be decoded by the
Decoder, as more fully described in Exhibit A.
1.2 "Decoder" means the decoder portion of the RT24 Basic Codec that performs
decompression of coded data that has been compressed by the Encoder into
raw audio data, as more fully described in Exhibit A.
1.3 "RT24 Basic Codec" means Implementations of Voxware's proprietary speech
compression/decompression software, comprising the Encoder and Decoder and
associated documentation, as more fully described in Exhibit A.
<PAGE>
1.4 "Updates" means all subsequent public commercial releases of the RT24 Basic
Codec during the term of the Agreement, including maintenance releases,
error corrections, upgrades, enhancements, additions, improvements,
extensions, modifications, and replacement or successor versions or
products, if any, provided that they are bit-stream compatible with the
RT24 Basic Codec.
1.5 "Implementation" means all bit-stream compatible versions of the RT24 Basic
Codec for the [ * * * ] computing platforms, regardless of processor type.
1.6 "Port" means a bit-stream compatible version of the RT24 Basic Codec or
Update which runs on a computing platform other than [ * * * ].
1.7 "H.323 Conferencing Protocol" means the standard conferencing protocol
developed according to Recommendation H.323 of the SG15/SG16 of the ITU-T
and implemented according to the H.323 Implementor's Group of the IMTC, as
more fully described in Exhibit C.
1.8 "G.723 Audio Codec" means the standard audio codec developed according to
Recommendation G.723 of the SG15/SG16 of the ITU-T and implemented
according to the H.323 Implementor's Group of the IMTC, as more fully
described in Exhibit C.
1.9 "Standardized TeleVox" means a generally commercially available version of
Voxware's TeleVox product (named TeleVox or otherwise in the future)
integrating: (1) the H.323 Conferencing Protocol, and (2) the G.723 Audio
Codec; which is compatible with NetMeeting, as more fully described in
Exhibit C.
1.10 "Microsoft Products" means any current and future Microsoft product or
service, including but not limited to system, application and developer
products regardless of how the products are named, or regardless of whether
such products are marketed under a Microsoft trademark.
1.11 "Error(s)" means defect(s) in a Deliverable which prevent it from
performing in accordance with the Specifications and/or a Severity Level 1,
2 or 3 error, as such errors are defined in Exhibit B.
1.12 "Deliverables" means the physical items of the RT24 Basic Codec delivered
to Microsoft, as more fully set forth in Exhibit A.
1.13 "Confidential Information" means: (i) any trade secrets relating to either
party's product plans, designs, costs, prices and names, finances,
marketing plans, business opportunities, personnel, research development or
know-how; (ii) any information designated by the disclosing party as
confidential in writing or, if disclosed orally, reduced to writing and
designated as confidential within thirty (30) days; (iii) RT24 Basic Codec
source code; and (iv) the terms, conditions and existence of this
Agreement. "Confidential Information" shall 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
<PAGE>
rightfully known and has been reduced to tangible form by the receiving
party prior to the time of disclosure and is not subject to restriction;
(iii) is independently developed or learned by the receiving party without
use of the disclosing party's information; (iv) is lawfully obtained from a
third party, without obligation of confidentiality, that has the right to
make such disclosure; or (v) is made generally available by the disclosing
party without restriction on disclosure.
2. DEVELOPMENT, DELIVERY & ACCEPTANCE
2.1 Standardized TeleVox. Voxware shall develop and deliver the Standardized
--------------------
TeleVox to Microsoft no later than [ * * * ]. Microsoft shall evaluate the
Standardized TeleVox and provide Voxware with its determination on whether
the Standardized TeleVox is compliant with NetMeeting within thirty (30)
days following delivery. Microsoft's determination of whether the
Standardized TeleVox is compatible with NetMeeting shall be based on the
criteria described on Exhibit C. Microsoft shall have no rights or license
of any kind to the Standardized TeleVox, except for the limited internal
testing and evaluation purposes provided in this Section 2.1.
2.2 RT24 Basic Codec.
----------------
(a) Delivery. Voxware shall deliver the Deliverables in accordance with
--------
the delivery schedule set forth in Exhibit A. Voxware shall provide
Updates to Microsoft beginning with [ * * * ].
(b) Acceptance. Microsoft has evaluated the RT24 Basic Codec
----------
Deliverables, and Microsoft's execution of this Agreement evidences
Microsoft's acceptance of the RT24 Basic Codec Deliverables.
3. PAYMENT
3.1 Payment. As the sole and exclusive consideration for (a) all of the rights
-------
granted to Microsoft under this Agreement to the RT24 Basic Codec and (b)
Voxware's obligations regarding the maintenance of the RT24 Basic Codec,
Microsoft shall pay to Voxware [ * * * ] license fee of [ * * * ] payable
in four (4) installments as follows: (i) [ * * * ] within [ * * * ]
following receipt of the Initial Delivery identified on Exhibit A; (ii) [ *
* * ] upon [ * * * ] identified on Exhibit A; (iii) [ * * * ] upon [ * * *
] identified on Exhibit A; and (iv) [ * * * ] upon [ * * * ]. In the event
Voxware is unable to deliver [ * * * ], Microsoft may terminate this
Agreement for cause pursuant to Section 10.2 and shall have no further
obligation to Voxware.
3.2 Maintenance Fee. Subsequent to [ * * * ], Microsoft shall pay to Voxware [
---------------
* * * ] support fee of [ * * * ] Microsoft desires to receive Ports,
Updates, and the maintenance services described in Section 5.3. Such
support fee shall be payable [ * * * ].
<PAGE>
3.3 Terms. Voxware shall invoice Microsoft for all amounts due under this
-----
Agreement. Microsoft's payment terms are [ * * * ] after receipt of such
invoice, or as otherwise noted in Section 3.1.
3.4 License Rights. The license granted to Microsoft in Section 4 is [ * * * ]
--------------
provided that Microsoft has paid the [ * * * ] Dollars [ * * * ] described
in Section 3.1 to Voxware.
4. RIGHTS
4.1 Non-Exclusive License. Voxware hereby grants to Microsoft a nonexclusive,
---------------------
perpetual, irrevocable, royalty-free, fully paid up, worldwide right and
license under all applicable intellectual property rights (including but
not limited to patent, copyright and trade secret) to:
(a) Use, copy, edit, format, modify, translate and create derivative works
of [ * * * ] the RT24 Basic Codec and Updates for the sole purposes of
[ * * * ];
(b) Make, sell, reproduce, license, rent, lease or otherwise distribute,
and have made, sold, reproduced, licensed, rented, leased or otherwise
distributed, to and by third parties, object code of the Encoder and
Updates and Implementations thereof for use solely in conjunction with
Microsoft Products, and any derivatives thereof;
(c) Make, sell, reproduce, license, rent, lease or otherwise distribute,
and have made, sold, reproduced, licensed, rented, leased or otherwise
distributed, to and by third parties, object code of the Decoder and
Updates and Implementations thereof, and any derivatives thereof; and
(d) [ * * * ].
[ * * * ]. Microsoft will not publish or disclose [ * * * ] to third parties;
provided, however, Microsoft may license the key to third parties for the sole
purpose of [ * * * ] and its derivatives.
4.2 RT24 Basic Codec Ports. In the event Microsoft desires a Port of the RT24
----------------------
Basic Codec, Updates, or any Implementation thereof, then the parties shall
negotiate in good faith reasonable terms for Voxware to develop the Port.
If the parties fail to so agree in good faith, Microsoft's license under
Section 4.1 [ * * * ] in accordance with the terms of this Agreement.
4.3 Trademark License. Voxware hereby grants to Microsoft a non-exclusive, [ *
-----------------
* * ], worldwide right and license to use the "Trademarks" (as defined
below) in a manner which indicates to the public that it is an authorized
licensee of the RT24 Basic Codec and Updates and to advertise the RT24
Basic Codec and Updates in connection with the Microsoft Products under
such Trademarks as part of the Microsoft Products, all in accordance with
Voxware's standard
<PAGE>
Trademark usage guidelines which Voxware shall provide to Microsoft upon
execution of this Agreement. For purposes of this Agreement, "Trademarks"
shall mean those Voxware trademarks contained on or associated with the
RT24 Basic Codec and Updates. Microsoft will use reasonable efforts to
ensure that it and its distributors will not, alter or remove any
Trademark, or affix, without the written permission of Voxware, any other
trademarks, marks or other logos on the RT24 Basic Codec and Updates in a
way which would confusingly associate the RT24 Basic Codec with such other
trademarks, marks or logos. Nothing herein shall grant to Microsoft any
right, title or interest in the Trademarks. Microsoft will not challenge
or assist others to challenge the Trademarks or the registration or
validity thereof.
4.4 Ownership. Except as expressly licensed to Microsoft in this Agreement,
---------
Voxware retains all right, title and interest in and to the RT24 Basic
Codec (in any form whether object code, source code, or otherwise),
Updates, the Standardized TeleVox, and the Trademarks; and all right, title
and interest in and to any derivatives (such as Implementations and Ports)
of the RT24 Basic Codec created by or for Microsoft.
4.5 No Other Rights. Except as provided in Section 2.1 and this Section 4,
---------------
Microsoft shall not have any other rights to the RT24 Codec, Updates,
Implementations, Ports, or the Standardized TeleVox.
5. OTHER TERMS
5.1 Press Releases and other Announcements. The parties will cooperate with
--------------------------------------
each other on press releases and similar communications regarding the non-
confidential subject matter of this Agreement. The content, timing and
necessity of all such communications will be agreed upon in writing by both
parties. In addition, the parties will issue a joint press release (a)
within thirty (30) days from execution of this Agreement, or (b) upon the
commercial release of a version of a Microsoft Product that contains the
RT24 Basic Codec. Further, Microsoft agrees that Voxware may mention its
licensing of the RT24 Basic Codec in collateral materials prepared for
sales presentations provided that Microsoft has reviewed and approved any
such use prior to its publication.
5.2 Marketing. Microsoft shall reasonably assist Voxware in the marketing and
---------
promotion of Voxware's products which interoperate with Microsoft Products.
Such assistance will be at Microsoft's discretion and may take the form of
activities such as: (a) customer testimonials; (b) participation in
appropriate trade shows demonstrating interoperability between Microsoft
Products and Standardized TeleVox; (c) hot-links on Microsoft's web site,
to Voxware's web site; (d) press-related activities; (e) other activities
including adding Voxware to a catalogue, if any, that Microsoft may publish
including third party products for operation with Microsoft Products; or
(f) good faith efforts to explore other joint marketing activities not
described above.
<PAGE>
5.3 Correction of Errors. For a period of [ * * * ] following Microsoft's
--------------------
acceptance of the RT24 Basic Codec and [ * * * ], Voxware will use its best
efforts to fix all Errors found in the said Deliverables in accordance with
the severity schedule set forth in Exhibit B.
5.4 Other Development. Microsoft may request that Voxware develop
-----------------
implementations of the RT24 Basic Codec for other processors. Voxware
agrees to deliver Implementations for such processors within a reasonable
period of time, at reasonable terms to cover development costs to be agreed
upon by the parties.
6. NO OBLIGATION/INDEPENDENT DEVELOPMENT
Notwithstanding any other provision of this Agreement, Microsoft shall have no
obligation to market, sell or otherwise distribute the RT24 Basic Codec and
Updates, either alone or in any Microsoft Product. Except as provided in
Sections 4.2 and 7, nothing in this Agreement will be construed as restricting
Microsoft's ability to acquire, license, develop, manufacture or distribute for
itself, or have others acquire, license, develop, manufacture or distribute for
Microsoft, similar technology performing the same or similar functions as the
technology contemplated by this Agreement, or to market and distribute such
similar technology in addition to, or in lieu of, the technology contemplated by
this Agreement.
7. CONFIDENTIALITY
7.1 Each party shall protect the other's Confidential Information from
unauthorized dissemination and use with the same degree of care that such
party uses to protect its own like information. Neither party will use the
other's Confidential Information for purposes other than those necessary to
directly further the purposes of this Agreement. Neither party will
disclose to third parties the other's Confidential Information without the
prior written consent of the other party. Notwithstanding the foregoing,
either party may disclose Confidential Information in accordance with
judicial or other governmental order, provided the disclosing party shall
give the other party reasonable notice prior to such disclosure and shall
comply with any applicable protective order or equivalent. Except as
expressly provided in this Agreement, no ownership or license rights is
granted in any Confidential Information.
7.2 The parties' obligations of confidentiality under this Agreement shall not
be construed to limit either party's right to independently develop or
acquire products without use of the other party's Confidential Information.
Further, either party shall be free to use for any purpose the residuals
resulting from access to or work with such Confidential Information,
provided that such party shall maintain the confidentiality of and respect
the proprietary rights to the Confidential Information as provided herein.
The term "residuals" means information in non-tangible form, which may be
unintentionally retained by persons who have had access to the Confidential
Information, including ideas,
<PAGE>
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.
However, the foregoing shall not be deemed to grant to either party a
license under the other party's copyrights or patents. Residuals shall not
include activities and content such as intentional memorization for the
purpose of reproducing the Confidential Information.
8. WARRANTIES
8.1 Voxware. Voxware warrants and represents that:
-------
(a) It has the full power to enter into this Agreement and make the
assignments and license rights set forth herein;
(b) It has not previously and will not grant any rights in the
Deliverables to any third party that are inconsistent with the rights
granted to Microsoft herein;
(c) The Deliverables, RT24 Basic Codec, and Updates and any Ports provided
to Microsoft do not infringe any copyright, patent, trade secret, or
other proprietary right held by any third party; and
(d) The Deliverables, RT24 Basic Codec, Updates, and any applicable Ports
provided to Microsoft will be created by employees of Voxware within
the scope of their employment and under obligation to assign
inventions to Voxware, or by independent contractors under written
obligations to assign all rights in the Deliverables, RT24 Basic
Codec, Updates and Ports to Voxware.
8.2 Microsoft. Microsoft warrants and represents that all actions necessary to
---------
execute this Agreement have been taken by Microsoft.
9. INDEMNITY
(a) Voxware shall, at its expense and Microsoft's request, defend any
claim or action brought against Microsoft, and Microsoft's
subsidiaries, affiliates, directors, officers, employees, agents and
independent contractors, which, if true, would constitute a breach of
a warranty by Voxware in Section 8, and Voxware will indemnify and
hold Microsoft harmless from and against any costs, damages and fees
reasonably incurred by Microsoft, including but not limited to fees of
attorneys and other professionals, that are attributable to such
claim. Microsoft shall: (a) provide Voxware reasonably prompt notice
in writing of any such claim or action and permit Voxware, through
counsel mutually acceptable to Microsoft and Voxware, to answer and
defend such claim or action; and (b) provide Voxware information,
assistance and authority, at Voxware's
<PAGE>
expense, to help Voxware to defend such claim or action. Voxware will
not be responsible for any settlement made by Microsoft without
Voxware's written permission, which permission will not be
unreasonably withheld.
(b) Microsoft shall have the right to employ separate counsel and
participate in the defense of any claim or action at its own expense.
Voxware shall reimburse Microsoft upon demand for any payments made or
loss suffered by it at any time after the date hereof, based upon the
judgment of any court of competent jurisdiction or pursuant to a bona
fide compromise or settlement of claims, demands, or actions, in
respect to any damages related to any claim or action under this
Section 9.
(c) Voxware may not settle any claim or action under this Section 9 on
Microsoft's behalf without first obtaining Microsoft's written
permission, which permission will not be unreasonably withheld. In
the event Microsoft and Voxware agree to settle a claim or action,
Voxware agrees not to publicize the settlement without first obtaining
Microsoft's written permission, which permission will not be
unreasonably withheld.
(d) Voxware's maximum liability pursuant to this Section 9 shall in no
event exceed the sum of [ * * * ].
10. TERMINATION
10.1 Term. The term of this Agreement shall commence as of the Effective Date
----
and shall continue until terminated as provided in this Section 10.
10.2 Termination By Either Party for Cause. Either party may suspend
-------------------------------------
performance and/or terminate this Agreement immediately upon written notice
at any time if:
(a) The other party is in immaterial breach of any material warranty,
term, condition or covenant of this Agreement, other than those
contained in Section 7, and fails to cure that breach within thirty
(30) days after written notice thereof; or
(b) The other party is in material breach of Section 7.
Notwithstanding the foregoing, in no event shall Voxware be able to
terminate Microsoft's license rights under Section 4.
10.3 Effect of Termination. In the event of termination or expiration of this
---------------------
Agreement for any reason, Sections [ * * * ] shall survive termination.
Neither party shall be liable to the other for damages of any sort
resulting solely from terminating this Agreement in accordance with its
terms. [ * * * ] under this Agreement shall not be affected by any
termination of this Agreement [ * * * ].
<PAGE>
11. LIMITATION OF LIABILITIES
11.1 EXCEPT AS PROVIDED IN SECTION 9, NEITHER PARTY SHALL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11.2 [ * * * ].
12. GENERAL
12.1 Notices. All notices and requests in connection with this Agreement shall
-------
be deemed given as of the day they are received either by messenger,
delivery service, or in the United States of America mails, postage
prepaid, certified or registered, return receipt requested, and addressed
as follows:
To Voxware: To Microsoft:
Voxware, Inc. Microsoft Corporation
305 College Road East One Microsoft Way
Princeton, NJ 08540 Redmond, WA 98052-6399
Attention: Kenneth Traub, EVP and CFO Attention: Max Morris
Phone: (609) 514-4110 Phone: (206) 703-3569
Fax: (609) 514-4101 Fax: (206) 936-7329
Copy to: Legal Department Copy to: Law & Corporate Affairs,
US Legal
Fax: (609) 514-4102 Fax: (206) 936-7409
or to such other address as a party may designate pursuant to this notice
provision.
12.2 Independent Contractors. Voxware and Microsoft are independent contractors
-----------------------
of each other, and nothing in this Agreement shall be construed as creating
an employer-employee relationship, a partnership, or a joint venture
between the parties.
12.3 Taxes. In the event taxes are required to be withheld on payments made
-----
under this Agreement by any U.S. (state or federal) or foreign government,
Microsoft may deduct such taxes from the amount owed Voxware and pay them
to the appropriate taxing authority. Microsoft shall in turn promptly
secure and deliver to Voxware an official receipt for any taxes withheld.
Microsoft will use reasonable efforts to minimize such taxes to the extent
permissible under applicable law.
12.4 Governing Law. This Agreement shall be governed by the laws of the State
-------------
of Washington as though entered into between Washington residents and to be
performed entirely within the State of Washington, and Voxware consents to
jurisdiction and venue in the state and federal courts sitting in the State
of Washington. In any action or suit to enforce any right or remedy under
this
<PAGE>
Agreement or to interpret any provision of this Agreement, the prevailing
party shall be entitled to recover its costs, including reasonable
attorneys' fees.
12.5 Assignment. This Agreement shall be binding upon and inure to the benefit
----------
of each party's respective successors and lawful assigns; provided,
however, that neither party may assign this Agreement, in whole or in part,
without the prior written approval of the other party, which consent shall
not be unreasonably withheld.
12.6 Construction. If for any reason a court of competent jurisdiction finds
------------
any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement will be enforced to the maximum extent
permissible so as to effect the intent of the parties, and the remainder of
this Agreement will continue in full force and effect. Failure by either
party to enforce any provision of this Agreement will not be deemed a
waiver of future enforcement of that or any other provision. This
Agreement has been negotiated by the parties and their respective counsel
and will be interpreted fairly in accordance with its terms and without any
strict construction in favor of or against either party.
12.7 Entire Agreement. This Agreement does not constitute an offer by Microsoft
----------------
and it shall not be effective until signed by both parties. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and merges all prior and contemporaneous
communications. It shall not be modified except by a written agreement
dated subsequent to the date of this Agreement and signed on behalf of
Voxware and Microsoft by their respective duly authorized representatives.
<PAGE>
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date written above.
MICROSOFT CORPORATION VOXWARE, INC.
/s/ Microsoft Corporation /s/ Voxware, Inc.
- ----------------------------------- -------------------------------------
By (Sign) By (Sign)
- ----------------------------------- -------------------------------------
Name (Print) Name (Print)
- ----------------------------------- -------------------------------------
Title Title
- ----------------------------------- -------------------------------------
Date Date
<PAGE>
EXHIBIT A
DESCRIPTION OF SOFTWARE & DELIVERABLES
FUNCTIONAL SPECIFICATIONS OF THE RT24 BASIC CODEC TO BE DELIVERED TO MICROSOFT
A. OVERVIEW
There are [ * * * ], each containing [ * * * ]. There is [ * * * ]. The codec
achieves certain performance criteria. A delivery schedule is outlined.
B. GENERAL DESCRIPTION OF THE 2400 BPS ALGORITHM
A package consists of [ * * * ] implemented as follows, one encoder and one
decoder.
The encoder has the following functionality:
. input: [ * * * ];
. output: [ * * * ].
The decoder has the following functionality:
. input: [ * * * ].
. output: [ * * * ].
C. SOFTWARE PACKAGES AND DELIVERY SCHEDULE
There are [ * * * ] software packages, described below and delivered in Initial,
Second, and Third Deliveries according to the following schedule:
DELIVERABLE PACKAGE (AND PLATFORM) DELIVERY DATE
Initial Delivery [ * * * ] [ * * * ]
Initial Delivery [ * * * ] [ * * * ]
Initial Delivery [ * * * ] [ * * * ]
Initial Delivery [ * * * ] [ * * * ]
Initial Delivery [ * * * ] [ * * * ]
Initial Delivery [ * * * ] [ * * * ]
Initial Delivery [ * * * ] [ * * * ]
Initial Delivery [ * * * ] [ * * * ]
Second Delivery [ * * * ] [ * * * ]
Second Delivery [ * * * ] [ * * * ]
Second Delivery [ * * * ] [ * * * ]
<PAGE>
Third Delivery [ * * * ] [ * * * ]
Third Delivery [ * * * ] [ * * * ]
Each package will consist of the core algorithm surrounded by a wrapper (a means
of accessing the algorithm).
For example, for specifically [ * * * ].
The [ * * * ] is composed of the following two sets, where DLL is a form of
object code and API is an Application Programming Interface onto a DLL. In each
case, the code is re-entrant.
. [ * * * ]:
[ * * * ];
. [ * * * ]:
[ * * * ].
Voxware's Audio Compression Manager (ACM) driver is a standard
Microsoft ACM driver to provide access to Voxware's RT24 codec. The
interface conforms to Microsoft's specification for ACM drivers. A
manual will be provided that documents installation of the driver and
private ACM messages that Voxware supports.
The [ * * * ] is composed of the core codec [ * * * ], wrapped in an [ * * * ].
For each package, [ * * * ]. Otherwise, Voxware and Microsoft will mutually and
reasonably agree in writing to the wrapper-type.
D. [ * * * ] MECHANISM
The RT24 Basic Codec Encoder will be protected [ * * * ]. This [ * * * ]. For
example, [ * * * ]. A thorough description of the [ * * * ] will be delivered
to Microsoft along with the delivery of each package.
E. PERFORMANCE
The Voxware implementation of the 2400 bps algorithm can run [ * * * ].
<PAGE>
EXHIBIT B
MAINTENANCE PROBLEM SEVERITY AND RESOLUTIONS
Severity Criteria Time Limit
- ---------- ------------------------------- ----------
1 Critical: [ * * * ]. [ * * * ]
---------
2 Severe Impact: [ * * * ]. [ * * * ]
--------------
3 Degraded Operation: [ * * * ]. [ * * * ]
-------------------
<PAGE>
EXHIBIT C
EXPLANATIONS OF STANDARDS AND COMPATIBILITY CRITERIA
APPLICABLE TO THE STANDARDIZED TELEVOX
EXPLANATION OF [ * * * ] AND [ * * * ]
- --------------------------------------
1. [ * * * ] studying technical, operating and tariff questions and issuing
Recommendations on them with a view to standardizing telecommunications on
a worldwide basis.
2. [ * * * ] for studies relating to transport networks, switching and
transmission systems/equipment including the relevant signal processing
aspects. [ * * * ] for studies relating to multimedia service definition
and multimedia systems, including the associated terminals, modems,
protocols and signal processing.
3. [ * * * ] is to promote, encourage, and facilitate the development and
implementation of interoperable multimedia teleconferencing solutions based
on open international standards.
4. [ * * * ] responsibility to determine implementation and interoperability
guidelines of [ * * * ] systems for [ * * * ] members through technical
discussion and product testing.
5. [ * * * ].
6. [ * * * ].
COMPATIBILITY AND ACCEPTANCE CRITERIA
- -------------------------------------
1. Microsoft NetMeeting 2.0
------------------------
Microsoft NetMeeting 2.0 ("NetMeeting") is a software conferencing
application that Microsoft will make generally commercially available in [
* * * ] that provides audio, video, and data conferencing capabilities over
various data networks. To accomplish audio conferencing in particular, [ *
* * ].
2. NetMeeting Audio Conferencing Operation
---------------------------------------
The audio conferencing operation of NetMeeting using [ * * * ] .
3. Criteria for Compatibility with NetMeeting Audio Conferencing
-------------------------------------------------------------
A hardware device, software program, or combination thereof ("the other
terminal") is compatible with NetMeeting when under normal operation: [ *
* * ].
[ * * * ].
<PAGE>
Exhibit 10.3
Confidential treatment has been requested for portions of this Exhibit. The
Confidential Portions have been redacted and are denoted by [ * * * ]. The
Confidential Portions have been separately filed with the Commission.
April 17, 1996
Kenneth Traub
Executive Vice President and
Chief Financial Officer VIA FACSIMILE (609) 514-4101
Voxware, Inc.
305 College Road East
Princeton, NJ 08540
Re: Software License Agreement between Microsoft Corporation ("Microsoft") and
Voxware, Inc. ("Voxware") dated March 31, 1997 applicable to the RT24 Basic
Codec license (the "RT24 Agreement").
Dear Mr. Traub:
The Dynamic Link Library ("DLL") containing the RT24 Basic Codec delivered
to Microsoft under the RT24 Agreement includes a version of Voxware's RT29HQ
Codec, the Encoder portion of which is locked through the ACM interface ("RT29HQ
Codec"). The specifications of RT29HQ are attached hereto.
This letter is to clarify Microsoft's rights to the RT29HQ Codec under the
RT24 Agreement.
The RT29HQ Codec may be reproduced and distributed by Microsoft pursuant to
Section 4.1 of the RT24 Agreement provided that (a) Microsoft [ * * * ], (b)
Voxware is not obligated to [ * * * ]; and (c) in the event Microsoft [ * * * ]
without the prior written approval of Voxware. Further, Sections [ * * * ] do
not apply to the RT29HQ Codec.
<PAGE>
Please sign where indicated below to signify Voxware's understanding as set
forth above.
Sincerely,
AGREED AND ACKNOWLEDGED
By: /s/ Kenneth Traub
Ramiro Calvo
Program Manager Name (print): Kenneth Traub
-------------
Title: Executive VP and Chief Financial Officer
----------------------------------------
Date:
<PAGE>
Exhibit 10.4
Confidential treatment has been requested for portions of this Exhibit. The
Confidential Portions have been redacted and are denoted by [ * * * ]. The
Confidential Portions have been separately filed with the Commission.
SOFTWARE LICENSE AGREEMENT
This MetaSound Codec License Agreement (the "Agreement") is entered into and
effective as of March 31, 1997 (the "Effective Date"), by and between MICROSOFT
CORPORATION, a Washington corporation located at One Microsoft Way, Redmond, WA
98052 ("Microsoft") and VOXWARE, INC., a Delaware corporation located at 305
College Road East, Princeton, New Jersey 08540 ("Voxware").
RECITALS
Voxware is the owner/licensor of a proprietary audio compression/decompression
codec known as the "MetaSound Codec."
Microsoft desires to license the MetaSound Codec from Voxware.
Voxware wishes to license the MetaSound Codec to Microsoft.
AGREEMENT
1. DEFINITIONS
1.1 "Decoder" means the decoder portion of the MetaSound Codec that performs
decompression of coded data, that has been compressed by the Encoder, into
raw audio data, as more fully described in Exhibit A.
1.2 "Encoder" means the encoder portion of the MetaSound Codec that performs
compression of raw audio data into coded data that can be decoded by the
Decoder, as more fully described in Exhibit A.
1.3 "MetaSound Codec(s)" means Voxware's proprietary mono sound
compression/decompression software, comprising the Encoder and Decoder and
associated documentation, as more fully described in Exhibit A.
1.4 "Updates" means all subsequent public commercial releases of the MetaSound
Codec during the term of the Agreement, including maintenance releases,
error corrections, upgrades, enhancements, additions, improvements,
extensions,
<PAGE>
modifications, and replacement or successor versions or products, if any,
provided that they are bit-stream compatible with the MetaSound Codec.
1.5 "Implementation" means all bit-stream compatible versions of the MetaSound
Codec for the [ * * * ] computing platforms, regardless of processor type.
1.6 "Port" means a bit-stream compatible version of the MetaSound Codec or
Update which runs on a [ * * * ] computing platform, regardless of
processor type.
1.7 "Microsoft Products" means any current and future versions of Microsoft
NetMeeting or Microsoft NetShow, including but not limited to system,
application and developer versions regardless of how the versions are
named, or regardless of whether such versions are marketed under a
Microsoft trademark.
1.8 "Error(s)" means defect(s) in a Deliverable which prevent it from
performing in accordance with the Specifications and/or a Severity Level 1,
2 or 3 error, as such errors are defined in Exhibit B.
1.9 "Deliverables" means the physical items of the MetaSound Codec delivered to
Microsoft, as more fully set forth in Exhibit A.
1.10 "Confidential Information" means: (i) any trade secrets relating to either
party's product plans, designs, costs, prices and names, finances,
marketing plans, business opportunities, personnel, research development or
know-how; (ii) any information designated by the disclosing party as
confidential in writing or, if disclosed orally, reduced to writing and
designated as confidential within thirty (30) days; (iii) MetaSound Codec
source code; and (iv) the terms, conditions and existence of this
Agreement. "Confidential Information" shall 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
rightfully known and has been reduced to tangible form by the receiving
party prior to the time of disclosure and is not subject to restriction;
(iii) is independently developed or learned by the receiving party without
use of the disclosing party's information; (iv) is lawfully obtained from a
third party, without obligation of confidentiality, that has the right to
make such disclosure; or (v) is made generally available by the disclosing
party without restriction on disclosure.
1.11 "Real-Time" means the ability to encode or decode data streams at a rate
faster or equal to the source of data.
2. DEVELOPMENT, DELIVERY & ACCEPTANCE
-2-
<PAGE>
2.1 MetaSound Codec.
---------------
(a) Delivery. Voxware shall develop and deliver the MetaSound Codec
--------
Implementations in accordance with the schedule set forth in Exhibit
C. Voxware shall provide Updates to Microsoft as available beginning
with the Effective Date and continuing for a period of [ * * * ].
Voxware shall use reasonable efforts to provide Microsoft with beta
releases of any Update as available and [ * * * ].
(b) Acceptance. Microsoft shall evaluate each Implementation and provide
----------
Voxware with its determination on whether such Implementation is
compliant with the Specification in Exhibit A [ * * * ] following
delivery. Voxware will make all reasonable efforts to make all
required modifications [ * * * ] from receipt of Microsoft's
determination of the deliverable.
2.2 [ * * * ] Implementation. As of the Effective Date, Microsoft acknowledges
------------------------
delivery of the beta version of the [ * * * ] Implementation and execution
of this Agreement indicates Microsoft's acceptance of such Implementation.
3. PAYMENT
3.1 Payment. As the sole and exclusive consideration for (a) all of the rights
-------
granted to Microsoft under this Agreement to the MetaSound Codec and (b)
Voxware's obligations regarding the maintenance of the MetaSound Codec,
Microsoft shall pay to Voxware a [ * * * ] license fee of [ * * * ] Dollars
[ * * * ]. Such fee will be payable according to the schedule on Exhibit C
as follows: [ * * * ] Dollars [ * * * ] within [ * * * ] following
execution of this Agreement for the [ * * * ] Implementation and the
remaining amounts identified on Exhibit C on the corresponding dates
provided that Microsoft determines the Implementations meet the
specifications set forth in Exhibit A. In the event Voxware is unable to
deliver the [ * * * ] Implementations set forth in Exhibit C by [ * * * ],
Microsoft may terminate this Agreement for cause pursuant to Section 10.2
and shall have no further obligation to Voxware.
3.2 Maintenance Fee. Subsequent to [ * * * ], Microsoft shall pay to Voxware [
---------------
* * * ] support fee of [ * * * ] Dollars [ * * * ] Microsoft desires to
receive Updates, Ports, and the maintenance services described in Section
5.3. Such support fee shall be payable [ * * * ].
3.3 Terms. Voxware shall invoice Microsoft for all amounts due under this
-----
Agreement. Microsoft's payment terms are [ * * * ] of such invoice, or as
otherwise noted in Section 3.1.
-3-
<PAGE>
3.4 License Rights. The license granted to Microsoft in Section 4 is [ * * * ]
--------------
provided that Microsoft has paid the [ * * * ] Dollars [ * * * ] described
in Section 3.1 to Voxware.
4. RIGHTS
4.1 Non-Exclusive License. Voxware hereby grants to Microsoft a nonexclusive,
---------------------
perpetual, irrevocable, royalty-free, fully paid up, worldwide right and
license under all applicable intellectual property rights (including but
not limited to patent, copyright and trade secret) to:
(a) Use, copy, edit, format, modify, translate and create derivative works
of [ * * * ] the MetaSound Codec and Updates for the sole purposes of
[ * * * ];
(b) Make, sell, reproduce, license, rent, lease or otherwise distribute,
and have made, sold, reproduced, licensed, rented, leased or otherwise
distributed, to and by third parties, object code of the Encoder and
Updates and Implementations thereof for use solely in conjunction with
Microsoft Products, and any derivatives thereof;
(c) Make, sell, reproduce, license, rent, lease or otherwise distribute,
and have made, sold, reproduced, licensed, rented, leased or otherwise
distributed, to and by third parties, object code of the Decoder and
Updates and Implementations thereof, and any derivatives thereof; and
(d) [ * * * ].
[ * * * ]. Microsoft will not publish or disclose [ * * * ] to third parties;
provided, however, Microsoft may license [ * * * ] to third parties for the sole
purpose of [ * * * ] and its derivatives.
4.2 [ * * * ].
4.3 MetaSound Codec Ports. In the event Microsoft desires a Port of the
---------------------
MetaSound Codec, Updates, or any Implementation thereof, then the parties
shall negotiate in good faith reasonable terms for Voxware to develop the
Port. If the parties fail to so agree in good faith, Microsoft's license
under Section 4.1 [ * * * ] in accordance with the terms of this Agreement.
4.4 Trademark License. Voxware hereby grants to Microsoft a non-exclusive, [ *
-----------------
* * ], worldwide right and license to use the "Trademarks" (as defined
below) in a manner which indicates to the public that it is an authorized
licensee of the MetaSound Codec and Updates and to advertise the MetaSound
Codec and Updates in connection with the Microsoft Products under such
Trademarks as
-4-
<PAGE>
part of the Microsoft Products, all in accordance with Voxware's standard
Trademark usage guidelines which Voxware shall provide to Microsoft upon
execution of this Agreement. For purposes of this Agreement, "Trademarks"
shall mean those Voxware trademarks contained on or associated with the
MetaSound Codec and Updates. Microsoft will use reasonable efforts to
ensure that it and its distributors will not, alter or remove any Trademark
or any copyright of NTT in the source code or the DLL properties dialog of
the MetaSound Codec, or affix, without the written permission of Voxware,
any other trademarks, marks or other logos on the MetaSound Codec and
Updates in a way which would confusingly associate the MetaSound Codec with
such other trademarks, marks or logos. Nothing herein shall grant to
Microsoft any right, title or interest in the Trademarks. Microsoft will
not challenge or assist others to challenge the Trademarks or the
registration or validity thereof.
4.5 Ownership. Except as expressly licensed to Microsoft in this Agreement,
---------
Voxware retains all right, title and interest in and to the MetaSound Codec
(in any form whether object code, source code, or otherwise), Updates, and
the Trademarks; and all right, title and interest in and to any derivatives
(such as Implementations and Ports) of the MetaSound Codec created by or
for Microsoft.
4.6 No Other Rights. Except as provided in Section 4, Microsoft shall not have
---------------
any other rights to the MetaSound, Updates, Implementations, or Ports.
5. OTHER TERMS
5.1 Press Releases and other Announcements. The parties will cooperate with
--------------------------------------
each other on press releases and similar communications regarding the non-
confidential subject matter of this Agreement. The content, timing and
necessity of all such communications will be agreed upon in writing by both
parties. In addition, the parties will issue a joint press release no
later than (a) thirty (30) days from execution of this Agreement, or (b)
upon the commercial release of a version of a Microsoft Product that
contains the MetaSound Codec. Further, Microsoft agrees that Voxware may
mention its licensing of the MetaSound Codec in collateral materials
prepared for sales presentations provided that Microsoft has reviewed and
approved any such use prior to its publication.
5.2 Marketing. Microsoft shall reasonably assist Voxware in the marketing and
---------
promotion of Voxware's products which interoperate with Microsoft Products.
Such assistance will be at Microsoft's discretion and may take the form of
activities such as: (a) customer testimonials; (b) hot-links on
Microsoft's web site, to Voxware's web site; (c) press-related activities;
(d) other activities including adding Voxware to a catalogue, if any, that
Microsoft may publish including third party products for operation with
Microsoft Products; or (e) good faith efforts to explore other joint
marketing activities not described above.
-5-
<PAGE>
5.3 Correction of Errors. For a period of [ * * * ] following the Effective
--------------------
Date and [ * * * ], Voxware will use its best efforts to fix all Errors
found in the said Deliverables in accordance with the severity schedule set
forth in Exhibit B.
5.4 Other Development. Microsoft may request that Voxware develop
-----------------
Implementations of the MetaSound Codec for other processors. Voxware
agrees to deliver Implementations for such processors within a reasonable
period of time, at reasonable terms to cover development costs, to be
agreed upon by the parties.
6. NO OBLIGATION/INDEPENDENT DEVELOPMENT
Notwithstanding any other provision of this Agreement, Microsoft shall have no
obligation to market, sell or otherwise distribute the MetaSound Codec and
Updates, either alone or in any Microsoft product. Except as provided in
Sections 4.2 and 7, nothing in this Agreement will be construed as restricting
Microsoft's ability to acquire, license, develop, manufacture or distribute for
itself, or have others acquire, license, develop, manufacture or distribute for
Microsoft, similar technology performing the same or similar functions as the
technology contemplated by this Agreement, or to market and distribute such
similar technology in addition to, or in lieu of, the technology contemplated by
this Agreement.
7. CONFIDENTIALITY
7.1 Each party shall protect the other's Confidential Information from
unauthorized dissemination and use with the same degree of care that such
party uses to protect its own like information. Neither party will use the
other's Confidential Information for purposes other than those necessary to
directly further the purposes of this Agreement. Neither party will
disclose to third parties the other's Confidential Information without the
prior written consent of the other party. Notwithstanding the foregoing,
either party may disclose Confidential Information in accordance with
judicial or other governmental order, provided the disclosing party shall
give the other party reasonable notice prior to such disclosure and shall
comply with any applicable protective order or equivalent. Further,
Voxware may disclose the following specific terms of this Agreement to [ *
* * ]: the license rights granted, the amounts payable by Microsoft
hereunder, and any other terms that Microsoft and Voxware mutually agree
upon. Except as expressly provided in this Agreement, no ownership or
license rights is granted in any Confidential Information.
7.2 The parties' obligations of confidentiality under this Agreement shall not
be construed to limit either party's right to independently develop or
acquire products without use of the other party's Confidential Information.
Further, either party shall be free to use for any purpose the residuals
resulting from
-6-
<PAGE>
access to or work with such Confidential Information, provided that such
party shall maintain the confidentiality of and respect the proprietary
rights to the Confidential Information as provided herein. The term
"residuals" means information in non-tangible form, which may be
unintentionally retained by persons who have had access to the Confidential
Information, 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. However, the foregoing shall not be deemed to grant
to either party a license under the other party's copyrights or patents.
Residuals shall not include activities and content such as intentional
memorization for the purpose of reproducing the Confidential Information.
8. WARRANTIES
8.1 Voxware. Voxware warrants and represents that:
-------
(a) It has the full power to enter into this Agreement and make the
assignments and license rights set forth herein;
(b) It has not previously and will not grant any rights in the
Deliverables to any third party that are inconsistent with the rights
granted to Microsoft herein;
(c) The Deliverables, MetaSound Codec, and Updates and any Ports provided
to Microsoft do not infringe any copyright, patent, trade secret, or
other proprietary right held by any third party; and
(d) The Deliverables, MetaSound Codec, Updates, and any applicable Ports
provided to Microsoft will be created by its licensors, or employees
of Voxware within the scope of their employment and under obligation
to assign inventions to Voxware, or by independent contractors under
written obligations to assign all rights in the Deliverables,
MetaSound Codec, Updates and Ports to Voxware.
8.2 Microsoft. Microsoft warrants and represents that all actions necessary to
---------
execute this Agreement have been taken by Microsoft.
-7-
<PAGE>
9. INDEMNITY
(a) Voxware shall, at its expense and Microsoft's request, defend any
claim or action brought against Microsoft, and Microsoft's
subsidiaries, affiliates, directors, officers, employees, agents and
independent contractors, which, if true, would constitute a breach of
a warranty by Voxware in Section 8, and Voxware will indemnify and
hold Microsoft harmless from and against any costs, damages and fees
reasonably incurred by Microsoft, including but not limited to fees of
attorneys and other professionals, that are attributable to such
claim. Microsoft shall: (i) provide Voxware reasonably prompt
notice in writing of any such claim or action and permit Voxware,
through counsel mutually acceptable to Microsoft and Voxware, to
answer and defend such claim or action; and (ii) provide Voxware
information, assistance and authority, at Voxware's expense, to help
Voxware to defend such claim or action. Voxware will not be
responsible for any settlement made by Microsoft without Voxware's
written permission, which permission will not be unreasonably
withheld.
(b) Microsoft shall have the right to employ separate counsel and
participate in the defense of any claim or action at its own expense.
Voxware shall reimburse Microsoft upon demand for any payments made or
loss suffered by it at any time after the date hereof, based upon the
judgment of any court of competent jurisdiction or pursuant to a bona
fide compromise or settlement of claims, demands, or actions, in
respect to any damages related to any claim or action under this
Section 9.
(c) Voxware may not settle any claim or action under this Section 9 on
Microsoft's behalf without first obtaining Microsoft's written
permission, which permission will not be unreasonably withheld. In
the event Microsoft and Voxware agree to settle a claim or action,
Voxware agrees not to publicize the settlement without first obtaining
Microsoft's written permission, which permission will not be
unreasonably withheld.
(d) Voxware's maximum liability pursuant to this Section 9 shall in no
event exceed the sum of [ * * * ].
10. TERMINATION
10.1 Term. The term of this Agreement shall commence as of the Effective Date
----
and shall continue until terminated as provided in this Section 10.
10.2 Termination By Either Party For Cause. Either party may suspend
-------------------------------------
performance and/or terminate this Agreement immediately upon written notice
at any time if:
-8-
<PAGE>
(a) The other party is in material breach of any material warranty, term,
condition or covenant of this Agreement, other than those contained in Section
7, and fails to cure that breach within thirty (30) days after written notice
thereof; or
(b) The other party is in material breach of Section 7.
Notwithstanding the foregoing, in no event shall Voxware be able to
terminate Microsoft's license rights under Section 4 except as provided in
Section 3.4.
10.3 Effect of Termination. In the event of termination or expiration of this
---------------------
Agreement for any reason, Sections [ * * * ] shall survive termination.
Neither party shall be liable to the other for damages of any sort
resulting solely from terminating this Agreement in accordance with its
terms. [ * * * ] under this Agreement shall not be affected by any
termination of this Agreement [ * * * ].
11. LIMITATION OF LIABILITIES
11.1 EXCEPT AS PROVIDED IN SECTION 9, NEITHER PARTY SHALL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11.2 [ * * * ].
12. GENERAL
12.1 Notices. All notices and requests in connection with this Agreement shall
-------
be deemed given as of the day they are received either by messenger,
delivery service, or in the United States of America mails, postage
prepaid, certified or registered, return receipt requested, and addressed
as follows:
To Voxware: To Microsoft:
Voxware, Inc. Microsoft Corporation
305 College Road East One Microsoft Way
Princeton, NJ 08540 Redmond, WA 98052-6399
Attention: Kenneth Traub Attention: Ramiro Calvo
EVP and CFO Phone: (206) 703-9498
Phone: (609) 514-4110 Fax: (206) 936-7329
Fax: (609) 514-4101
Copy to: Law & Corporate Affairs,
Copy to: Legal Department US Legal
Fax: (609) 514-4102 Fax: (206) 936-7409
-9-
<PAGE>
or to such other address as a party may designate pursuant to this notice
provision.
12.2 Independent Contractors. Voxware and Microsoft are independent contractors
-----------------------
of each other, and nothing in this Agreement shall be construed as creating
an employer-employee relationship, a partnership, or a joint venture
between the parties.
12.3 Taxes. In the event taxes are required to be withheld on payments made
-----
under this Agreement by any U.S. (state or federal) or foreign government,
Microsoft may deduct such taxes from the amount owed Voxware and pay them
to the appropriate taxing authority. Microsoft shall in turn promptly
secure and deliver to Voxware an official receipt for any taxes withheld.
Microsoft will use reasonable efforts to minimize such taxes to the extent
permissible under applicable law.
12.4 Governing Law. This Agreement shall be governed by the laws of the State
-------------
of Washington as though entered into between Washington residents and to be
performed entirely within the State of Washington, and Voxware consents to
jurisdiction and venue in the state and federal courts sitting in the State
of Washington. In any action or suit to enforce any right or remedy under
this Agreement or to interpret any provision of this Agreement, the
prevailing party shall be entitled to recover its costs, including
reasonable attorneys' fees.
12.5 Assignment. This Agreement shall be binding upon and inure to the benefit
----------
of each party's respective successors and lawful assigns; provided,
however, that neither party may assign this Agreement, in whole or in part,
without the prior written approval of the other party, which consent shall
not be unreasonably withheld.
12.6 Construction. If for any reason a court of competent jurisdiction finds
------------
any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement will be enforced to the maximum extent
permissible so as to effect the intent of the parties, and the remainder of
this Agreement will continue in full force and effect. Failure by either
party to enforce any provision of this Agreement will not be deemed a
waiver of future enforcement of that or any other provision. This
Agreement has been negotiated by the parties and their respective counsel
and will be interpreted fairly in accordance with its terms and without any
strict construction in favor of or against either party.
12.7 Entire Agreement. This Agreement does not constitute an offer by Microsoft
----------------
and it shall not be effective until signed by both parties. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and merges all prior and contemporaneous
communications. It shall not be modified except by a written agreement
dated subsequent to the date of this Agreement and signed on behalf of
Voxware and Microsoft by their respective duly authorized representatives.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date written above.
MICROSOFT CORPORATION VOXWARE, INC.
/s/ Microsoft Corporation /s/ Voxware, Inc.
- -------------------------- ------------------------------
By (Sign) By (Sign)
- -------------------------- ------------------------------
Name (Print) Name (Print)
- -------------------------- ------------------------------
Title Title
- -------------------------- ------------------------------
Date Date
-11-
<PAGE>
EXHIBIT A
DESCRIPTION OF SOFTWARE DELIVERABLES
FUNCTIONAL SPECIFICATIONS OF THE METASOUND CODEC TO BE DELIVERED TO MICROSOFT
A. OVERVIEW
Voxware will deliver localizable Implementations for use with a variety of
computing platforms, regardless of processor type. Below is the table
describing general requirements of each platform.
PLATFORM ENCODER DECODER
[ * * * ] [ * * * ] [ * * * ]
[ * * * ] [ * * * ] [ * * * ]
[ * * * ] [ * * * ] [ * * * ]
[ * * * ] [ * * * ] [ * * * ]
[ * * * ] Not Applicable [ * * * ]
[ * * * ] Not Applicable [ * * * ]
[ * * * ] Not Applicable [ * * * ]
[ * * * ] Not Applicable [ * * * ]
[ * * * ] Not Applicable [ * * * ]
B. GENERAL DESCRIPTION OF THE [ * * * ] CODEC
The package consists of one encoder and one decoder.
The encoder has the following functionality:
. input: [ * * * ];
. output: [ * * * ].
The second one (the decoder) has the following functionality:
. input: [ * * * ];
. output: [ * * * ] with an average amplitude that corresponds to
[ * * * ]; output samples are generated [ * * * ], hence corresponding
to a signal sampling frequency of [ * * * ].
-12-
<PAGE>
C. GENERAL DESCRIPTION OF THE [ * * * ] CODEC
The package consists of one encoder and one decoder.
The encoder has the following functionality:
. input: [ * * * ];
. output: [ * * * ].
The second one (the decoder) has the following functionality:
. input: [ * * * ];
. output: [ * * * ]; output samples are generated [ * * * ], hence
corresponding to a signal sampling frequency of [ * * * ].
D. GENERAL DESCRIPTION OF THE [ * * * ] CODEC
The package consists of one encoder and one decoder.
The encoder has the following functionality:
. input: [ * * * ];
. output: [ * * * ].
The second one (the decoder) has the following functionality:
. input: [ * * * ];
. output: [ * * * ]; output samples are generated [ * * * ]
corresponding to a signal sampling frequency of [ * * * ].
E. GENERAL DESCRIPTION OF THE [ * * * ] CODEC
The codec consists of one encoder and one decoder.
The encoder has the following functionality:
. input: [ * * * ];
. output: [ * * * ].
The second one (the decoder) has the following functionality:
. input: [ * * * ];
. output: [ * * * ]; output samples are generated [ * * * ], hence
corresponding to a signal sampling frequency of [ * * * ].
F. PERFORMANCE
There is one package containing an algorithm implemented in software [ * *
* ]. There are four codecs. Each codec has a single flat bit rate: [ * *
* ] - [ * * * ]
-13-
<PAGE>
bps, [ * * * ] - [ * * * ] bps, [ * * * ] - [ * * * ] bps, [ * * * ] - [
* * * ] bps. The codecs achieve certain performance criteria.
The Voxware implementation of MetaSound for [ * * * ] can run on a single
processor in half duplex mode or in full duplex mode. Running in Real-Time
and in half-duplex mode using the MetaSound [ * * * ] codec, the
implementation achieves an average loading of [ * * * ] on encoding and [ *
* * ] on decoding of the MIPS capability of an [ * * * ] processor clocked
at [ * * * ]. Running in real-time and in half-duplex mode using the
MetaSound [ * * * ] codec, the implementation achieves an average loading
of [ * * * ] on encoding and [ * * * ] on decoding of the MIPS capability
of an [ * * * ] processor clocked at [ * * * ]. Running in non real-time
and in half-duplex mode using the MetaSound [ * * * ] codec, the
implementation achieves an average loading of [ * * * ] on encoding and [ *
* * ] on decoding of the MIPS capability of an [ * * * ] processor clocked
at [ * * * ]. Running in non real-time and in half-duplex mode using the
MetaSound [ * * * ] codec, the implementation achieves an average loading
of [ * * * ] on encoding and [ * * * ] on decoding of the MIPS capability
of an [ * * * ] processor clocked at [ * * * ].
<TABLE>
<CAPTION>
CODEC BANDWIDTH SAMPLING FREQUENCY ENCODE* DECODE*
RATE RESPONSE COMPLEXITY COMPLEXITY
<S> <C> <C> <C> <C> <C>
[ * * * ] [ * * * ] Kbps [ * * * ] kHz [ * * * ] kHz [ * * * ] [ * * * ]
[ * * * ] [ * * * ] Kbps [ * * * ] kHz [ * * * ] kHz [ * * * ] [ * * * ]
- -----------------------------------------------------------------------------------
[ * * * ] [ * * * ] Kbps [ * * * ] kHz [ * * * ] kHz [ * * * ] [ * * * ]
- -----------------------------------------------------------------------------------
[ * * * ] [ * * * ] Kbps [ * * * ] kHz [ * * * ] kHz [ * * * ] [ * * * ]
- -----------------------------------------------------------------------------------
</TABLE>
* Per cent CPU utilization based on a [ * * * ].
G. [ * * * ] AND [ * * * ] IMPLEMENTATION
The [ * * * ] and [ * * * ] software Implementations are composed of the
following three sets, where DLL is a form of object code and API is an
Application Programming Interface onto a DLL. In each case, the code is
re-entrant.
. [ * * * ]:
. one [ * * * ] for MetaSound encoding and decoding;
. [ * * * ]:
-14-
<PAGE>
. one [ * * * ] for the MetaSound codecs;
. [ * * * ]:
. [ * * * ] MetaSound;
. [ * * * ].
H. [ * * * ] MECHANISM
Voxware's Encoder will be protected [ * * * ]. This [ * * * ] to enable
the MetaSound Codec Encoder. [ * * * ] will be implemented as described
below and will be delivered in writing upon execution of this Agreement.
The [ * * * ]. For example:
[ * * * ]
[ * * * ];
[ * * * ] [ * * * ];
[ * * * ] [ * * * ];
[ * * * ] [ * * * ];
...
;
Thus when the program queries for [ * * * ] it returns [ * * * ]. Then the
program after it retrieves a copy of one of theses from the [ * * * ] and [
* * * ].
[ * * * ] will be defined [ * * * ] within [ * * * ] following execution of
this Agreement.
-15-
<PAGE>
EXHIBIT B
MAINTENANCE PROBLEM SEVERITY AND RESOLUTIONS
Severity Criteria Time Limit
- -------------- ------------------------------- ----------
1 Critical: [ * * * ]. [ * * * ]
---------
2 Severe Impact: [ * * * ]. [ * * * ]
--------------
3 Degraded Operation: [ * * * ]. [ * * * ]
-------------------
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<PAGE>
EXHIBIT C
DELIVERY AND PAYMENT SCHEDULE
PLATFORM PROCESSOR ENCODER DECODER OBJECT SOURCE*
[ * * * ] [ * * * ] Accepted Accepted $[ * * * ] $[ * * * ]
[ * * * ] [ * * * ] Not [ * * * ] $[ * * * ] $[ * * * ]
Applicable
[ * * * ] [ * * * ] [ * * * ] [ * * * ] $[ * * * ] $[ * * * ]
[ * * * ] [ * * * ] [ * * * ] [ * * * ] $[ * * * ] $[ * * * ]
[ * * * ] [ * * * ] Not [ * * * ] $[ * * * ] $[ * * * ]
Applicable
[ * * * ] [ * * * ] Not [ * * * ] $[ * * * ] $[ * * * ]
Applicable
[ * * * ] [ * * * ] Not [ * * * ] $[ * * * ] $[ * * * ]
Applicable
[ * * * ] [ * * * ] Not [ * * * ] $[ * * * ] $[ * * * ]
Applicable
[ * * * ] [ * * * ] Not [ * * * ] $[ * * * ] $[ * * * ]
Applicable
[ * * * ] [ * * * ] Not [ * * * ] $[ * * * ] $[ * * * ]
Applicable
[ * * * ] [ * * * ] [ * * * ] [ * * * ] $[ * * * ] $[ * * * ]
[ * * * ] [ * * * ] [ * * * ] [ * * * ] $[ * * * ] $[ * * * ]
* [ * * * ].
-17-
