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EXHIBIT 10.25
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
AND 230.406.
AGREEMENT NO. 9705NU0060.02-SL
MAGIC NETWORK
PROTOTYPE DEVELOPMENT AGREEMENT
This agreement ("Agreement") is between Nuance Communications, a
California corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇., ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Nuance") and General Magic, Inc., a
Delaware corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("General Magic"). The effective date of this
Agreement shall be March 3, 1997 ("Effective Date").
Nuance and General Magic have agreed on business terms for the various
stages of the development and implementation of the Magic Network service
employing Nuance speech recognition as the speech interface. There are four
agreed phases: i. Development support and initial trial; ii. [**] user pilot;
iii. [**] user Magic Network deployment; iv. Post-deployment operations
beginning January 1, 1999 with an initial end date of December 31, 2001.
1. PHASE ONE: DEVELOPMENT SUPPORT AND INITIAL TRIAL
1.1. Development.
1.1.1 Scope of Development. Nuance will design and implement
the voice interface for the Magic Network prototype application which consists
of a C-based application which defines the application callflow ("Voice
Interface"). Nuance will also design and implement the recognition grammars
which operate in conjunction with the Voice Interface to define the allowable
speech input ("Recognition Grammars") for the Magic Network prototype
application. Other functions required for the Magic Network prototype
application, including information storage and retrieval and fax drivers, will
be made available by General Magic via an http server interface. General Magic
will provide a linkable C library, built on top of the current http server
interface, which contains C wrapper functions that can be used as an interface
to the server. The C wrapper function inputs and outputs will be native data
structures used by the Magic Network application, meaning that creation and
parsing of the http strings will be done within this library.
1.1.2 Development Schedule and Testing. Nuance projects a
total of six weeks required for development and initial testing of the prototype
Voice Interface and Recognition Grammars. Five weeks will be targeted as the
development period with an additional week for testing and iteration of the
prototype Voice Interface and Recognition Grammars by selected Nuance and
General Magic employees. The prototype Voice Interface and Recognition Grammars
are targeted for delivery on May 16, 1997.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
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1.1.3 Development Costs. Nuance will commit appropriate
management and development resources for design and implementation of the
prototype Voice Interface and Recognition Grammars. The aggregate charge for
contracting of development resources will be $[**] per week. General Magic will
issue an initial purchase order for six (6) weeks of development resources. A
minimum of six (6) weeks of funding, or $[**], is required and payable upon
execution of this Agreement subject to prior receipt of an invoice from Nuance
for $[**] unless such amount has been previously paid prior to execution of this
Agreement. Should development continue beyond six (6) weeks, General Magic will
issue purchase orders in one (1) week increments (although multiple weeks may be
listed in a single purchase order) and Nuance will invoice General Magic weekly
upon completion of each week's development work. Subject to receipt of Nuance's
invoices, General Magic will pay Nuance's development work invoices within
thirty (30) days of the end of each weekly development period described in a
General Magic purchase order. General Magic may terminate development by written
notice any time, subject to payment for all development resources time spent to
date.
1.2. Initial Trial. A total of 200 users will be targeted for the
initial Magic Network prototype trial of the prototype Voice Interface and
Recognition Grammars. The Voice Interface will include a logon sequence, with
users providing some means of identification (i.e. name, account number) and a
PIN for security (voice and touch-tone supported for digit entry). Once logged
in, users can retrieve voice mail and e-mail messages as well as calendar and
contact information (PIM). The prototype Voice Interface application will
include retrieval functions only, users will not be able to send voice messages
or enter contact or calendar information. Functions for messaging include List
(Scan), Play, and Delete. Functions for PIM include List Contacts, Read
Information and Fax Information. Text-to-speech will be used to read e-mail
messages. The text-to-speech for e-mail messages will be pre-processed and
available to Nuance as audio files for use within the prototype Voice Interface
and Recognition Grammars. Subsequently, as an alternative, General Magic may, in
its discretion, provide a real-time text-to-speech capability as a resource.
1.3. Purchase of Server Licenses. General Magic will purchase [**]
run-time server software licenses for the Nuance voice recognition engine [**]
to support the initial 200-user Magic Network prototype trial and subsequent
[**] user service trial currently scheduled for August, 1997. The total software
license fee for the [**] server licenses shall be $[**]. $[**] is payable on
execution of this Agreement with the remaining $[**] due on or before July 1,
1997. The Nuance voice recognition engine server software (referred to as the
"Program" in the Software License Agreement) is licensed to General Magic under
the terms of the software license as specified in Exhibit A ("Software License
and Support Agreement") and such license is applicable to the Magic Network
service system which will ultimately be used for deployment; the terms of such
software license agreement shall not change the license fees or payment terms
set forth herein. All orders for server software licenses hereunder are
non-cancelable, and sums, once paid, are non-refundable.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
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2. PHASE TWO: [**]-USER PILOT
Following the initial 200-user trial, General Magic will develop a Phase
Two pilot for the Magic Network service incorporating the Voice Interface and
Recognition Grammars configured for a total of [**] users. General Magic will
have use of the [**] server licenses purchased under the terms of Section 1.3
("Purchase of Server Licenses") to support the Phase Two [**]-user trial. In
addition, Nuance will grant General Magic up to [**] additional server licenses
for use in support of the Phase Two pilot on an as-needed, no-charge, temporary
basis. Such [**] additional server licenses will be "loaned" at no charge as
described herein through December 31, 1997.
3. PHASE THREE: 100,000- USER MAGIC NETWORK DEPLOYMENT
When General Magic makes a commitment, in its sole discretion, to deploy
the Magic Network service, a Phase Three purchase order will be issued by
General Magic to Nuance for the total number of Nuance voice recognition engine
server software licenses required to support [**] users. This Phase Three
purchase order, if any, for the applicable number of licenses as determined by
General Magic, will be delivered to Nuance on or before December 31, 1997. Upon
delivery of such Phase Three purchase order by General Magic to Nuance, such
purchase order is non-cancelable and the license fees due thereunder are
non-refundable. The total number of licenses is currently estimated at [**] but
is subject to change by General Magic depending on trial results. At a minimum,
General Magic will pay 25% of the total license fees due under the Phase Three
purchase order on or before March 31, 1998 and will pay the remaining 75% of the
license fees due under the Phase Three purchase order on or before June 30,
1998. The discount applied to server licenses ordered for the [**]-user system
shall be [**]% off the then-current Nuance list price as of the date the Phase
Three purchase order is placed.
4. PHASE FOUR: POST-DEPLOYMENT OPERATIONS
4.1. Purchase of Server Licenses. During the term of this Agreement,
General Magic shall receive a [**]% discount off the then-current Nuance list
price for any server licenses purchased for the Magic Network service in order
to serve a subscriber base of more than [**] users. Payment terms for any Nuance
voice recognition engine server software licenses ordered by General Magic other
than under the Phase Three purchase order shall be Net 30 days from the date of
the invoice.
4.2. Revenue Participation. Nuance will also share in the revenue
generated from the Magic Network service. Nuance shall receive a royalty of
$[**] the Magic Network service. The royalty will be in effect and apply to
the Magic Network service subscriber base beginning on January 1, 1999 and will
continue up through and including December 31, 2001. Such royalty will be due
thirty (30) days after the last day of each month and will be based on [**] to
the Magic Network service as tallied on the last day of each month.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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4.3. Audit. Nuance may, at Nuance's expense and not more than once
annually, audit General Magic's books and records relevant to the royalties due
under Section 4.2 ("Revenue Participation"). Any such audit shall be conducted
by an independent accounting firm selected by Nuance and shall be conducted
during General Magic's regular business hours and shall not unreasonably
interfere with General Magic's business activities. If such an audit reveals
that General Magic has underpaid royalties to Nuance, General Magic shall be
invoiced for the underpaid royalties.
4.4. Technical Support. Nuance will make technical support for the
voice recognition engine software, the Voice Interface and the Recognition
Grammars available to General Magic under the support terms in Exhibit A
("Software License and Support Agreement") and the Technical Support Policy in
Attachment A-2. General Magic agrees to purchase such technical support during
the initial term of this Agreement on an annual basis for the voice recognition
engine software and on an as needed, time and materials basis (billed at
Nuance's then current standard rate) for the Voice Interface and Recognition
Grammars. The annual technical support fee for the voice recognition engine
software will be payable annually in advance on the Effective Date and
thereafter on the Support Period Anniversary (as defined below). The technical
support fee will be calculated as [**] percent ([**]%) of the server license fee
actually invoiced to General Magic (net price) for each copy of the voice
recognition engine server software for which General Magic has purchased a
license and which is in use in the Magic Network on the Effective Date of this
Agreement and thereafter on each Support Period Anniversary (as defined below).
Nuance will prepare and issue an appropriate invoice for each successive
one-year period ("Support Period"), starting as of the Effective Date and on
each anniversary of the Effective Date ("Support Period Anniversary")
thereafter. As each new copy of the voice recognition engine server software is
licensed from Nuance and put into use in the Magic Network, Nuance will issue an
invoice for the technical support fee applicable to each such copy of the voice
recognition engine server software, pro rated to include only the months
remaining in the then-current Support Period.
5. SOFTWARE LICENSES AND PROPRIETARY RIGHTS
5.1. Software Licenses. The server software for the Nuance voice
recognition engine will be licensed to General Magic under the terms of the
software license in Exhibit A ("Software License and Support Agreement").
5.2. Acceptance of the Voice Interface and Recognition Grammars.
Nuance will deliver the Voice Interface and Recognition Grammars as developed by
Nuance hereunder in accordance with the mutually agreed upon schedule. Within
thirty (30) days of delivery of the Voice Interface and Recognition Grammars,
General Magic will review and accept or reject (with a written statement of
errors) the Voice Interface and Recognition Grammars based on the written
requirements mutually agreed upon by Nuance and General Magic in Exhibit B
("Acceptance Requirements"). The parties will mutually agree upon and add
acceptance testing procedures to Exhibit B ("Acceptance Requirements") by
amendment, within a reasonable period of time after the Effective Date but at
least prior to the beginning of the thirty (30) day acceptance period. General
Magic's deployment of the Voice Interface and Recognition Grammars in the
initial 200-user trial shall be deemed acceptance of the Voice Interface and
Recognition Grammars by General Magic.
5.3. Assignment of the Voice Interface. Nuance hereby assigns all
right, title and interest in the Voice Interface developed by Nuance hereunder
including all patent, copyright, trade secret and trademark rights to General
Magic.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
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Nuance agrees to perform all acts deemed necessary or desirable by General
Magic to permit and assist General Magic, at General Magic's expense, in
perfecting and enforcing its rights in the Voice Interface throughout the world.
Such acts may include, but are not limited to, execution of documents and
assistance or cooperation in the registration and enforcement, including
litigation, of applicable intellectual property rights or other legal
proceedings.
5.4. Ownership. General Magic shall retain all right, title and
interest in the Voice Interface, including patent, copyright, trade secret, and
trademark rights. Nuance does not acquire any rights, express or implied, in the
Voice Interface. Nuance shall retain all right, title and interest in the
Recognition Grammars, including patent, copyright, trade secret and trademark
rights. Except as licensed hereunder, General Magic does not acquire any rights,
express or implied, in the Recognition Grammars.
5.5. License to the Recognition Grammars. Nuance hereby grants to
General Magic a worldwide, nonexclusive, perpetual, irrevocable, royalty-free
license to reproduce, modify, distribute, display and perform the Recognition
Grammars in conjunction with the Magic Network service.
5.6. Warranty of Title. Nuance represents and warrants (i) that the
Voice Interface and Recognition Grammars are original works of authorship and
were created solely by Nuance, (ii) that the Voice Interface and Recognition
Grammars and the intellectual property rights associated with such applications
are free and clear of all encumbrances, including, without limitation, security
interests, licenses, liens, charges or other restrictions, and (iii) that use,
reproduction, distribution, or modification of the Voice Interface and
Recognition Grammars does not and will not violate the rights of any third party
including, but not limited to, trade secrets, copyrights and, to the best of
Nuance's knowledge, patents.
5.7. Source Code. Upon acceptance of the Voice Interface and
Recognition Grammars by General Magic, Nuance will deliver a complete copy of
the source code for the Voice Interface and Recognition Grammars, including all
programmer's comments and any proprietary tools, in object code, necessary to
compile the Voice Interface and Recognition Grammars source code as well as any
related information necessary to support the source code.
5.8. Similar Software. General Magic acknowledges that Nuance may be
requested to develop software with functions that are similar to the Voice
Interface and/or the Recognition Grammars and agrees that nothing in this
Agreement is intended to prohibit Nuance from independently developing such
similar software so long as Nuance does not copy the Voice Interface code and
does not incorporate any of General Magic's Confidential Information.
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5.9 Support Software. In order to support the functionality required
by the Magic Network Service, Nuance may develop additional software ("Support
Software") which works in conjunction with the voice recognition engine software
(examples include automatic pronunciation generation, text-to-speech integration
and call statistics). Such Support Software will be licensed to General Magic as
part of the voice recognition engine software according to the terms in Exhibit
A. Nuance shall retain all right, title and interest in the Support Software,
including patent, copyright, trade secret and trademark rights. Except as
licensed hereunder, General Magic does not acquire any rights, express or
implied, in the Support Software.
5.10. Cellular Recognition Performance. Recognition Accuracy over
cellular channels is important to consumer acceptance of the Magic Network
Service. In one study of recognition performance on 8-digit strings, the word
error rate over landline channels was [**]%, AMPS-[**]%, CDMA-[**]%, and
TDMA-[**]% (stationary handset for all cases). Nuance will apply its best
efforts to achieve equal or better accuracy in its product releases to General
Magic in addition to providing a product which performs well over GSM channels
(no tests performed to date).
6. WARRANTIES AND DISCLAIMERS
6.1. Warranty. Nuance warrants that for a period of ninety (90) days
from the Effective Date, the Voice Interface and Recognition Grammars as
delivered to and accepted by General Magic and without modification by General
Magic will perform the functions required by the acceptance requirements set
forth in Exhibit B ("Acceptance Requirements"). The foregoing warranty will not
be applicable to versions of the Voice Interface or Recognition Grammars which
have been modified by General Magic. Nuance does not warrant that the Voice
Interface and Recognition Grammars will operate in the combinations which
General Magic may select for use, that the operation of the Voice Interface and
Recognition Grammars will be uninterrupted or error-free, or that all the Voice
Interface and Recognition Grammars errors will be corrected.
6.2. Services. Nuance warrants that its technical support services
will be performed consistent with generally accepted industry standards. This
warranty shall be valid for ninety (90) days from performance of service.
6.3. Limitations. The warranties above are exclusive and in lieu of
all other warranties, whether express or implied, including the implied
warranties of merchantability and fitness for a particular purpose.
6.4. Exclusive Remedies. For any breach of the warranties contained
above, General Magic's exclusive remedy, and Nuance's entire liability, shall
be:
(a) For the Voice Interface. The correction of Voice
Interface and/or Recognition Grammars errors which are reproducible in the
unmodified versions of the Voice Interface and/or Recognition Grammars that
cause the Voice Interface and/or Recognition Grammars not to perform the
functions required by the Acceptance Requirements, or if Nuance is unable to
make the Voice Interface and/or Recognition Grammars perform as warranted,
General Magic shall be entitled to terminate the use of the Voice Interface
and/or Recognition Grammars in its sole discretion and recover the fees paid for
the Voice Interface and/or Recognition Grammars.
(b) For Services. The re-performance of the technical
support services, or if Nuance is unable to perform the services as warranted,
General Magic shall be entitled to recover the fees paid to Nuance for the
deficient services.
7. LIMITATION OF LIABILITY
In no event shall either party be liable to the other for any special,
indirect, incidental, or consequential damages, or damages for loss of profits,
savings, revenue, use, damaged files or data, or business interruption, incurred
by either party or any third party, which may arise in connection with this
Agreement or the use and support of the Voice Interface and/or Recognition
Grammars regardless of whether such claims are based or remedies are sought in
contract or tort, even if the other party has been advised of the possibility of
such damages. Under no circumstances shall Nuance's liability exceed [**].
8. INDEMNITY
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Nuance will defend and indemnify General Magic against a claim that the
unmodified Voice Interface and/or Recognition Grammars furnished and used within
the scope of this Agreement infringe a copyright, patent, or trademark, provided
that: (a) General Magic notifies Nuance of such claim in writing within thirty
(30) days of the claim; (b) at Nuance's expense, Nuance has sole control of the
defense and all related settlement negotiations, and (c) General Magic provides
Nuance with a reasonable assistance, information, and authority necessary to
perform Nuance's obligations under this Section 8 ("Indemnity"). Nuance shall
have no liability for any claim of infringement based on use of a superseded or
altered release of the Voice Interface and/or Recognition Grammars or the use of
the Voice Interface and/or Recognition Grammars in combination with other
hardware or software if the infringement would have been avoided by the use of a
current, unaltered release of the Voice Interface and/or Recognition Grammars
that Nuance provides to General Magic, or in combination with different hardware
or software, or to the extent such use is possible, use without any combination.
In the event the Voice Interface and/or Recognition Grammars are held or are
believed by Nuance to infringe, Nuance shall have the option, at its expense, to
(a) modify the Voice Interface and/or Recognition Grammars to be noninfringing;
(b) procure for General Magic a license to continue using the Voice Interface
and/or Recognition Grammars; or if it is not commercially reasonable for Nuance
to perform (a) or (b), (c) General Magic may, in its sole discretion, terminate
the use of the Voice Interface and/or Recognition Grammars and receive a refund
of the fees paid for the Voice Interface and/or Recognition Grammars. This
Section states Nuance's entire liability and General Magic's exclusive remedy
for infringement.
9. TAXES
Fees hereunder do not include local, state, or federal sales, use,
property, value-added, or other taxes based on the licenses and services
provided under this Agreement or General Magic's use thereof. General Magic
agrees to pay all such taxes as may be imposed upon Nuance or General Magic.
General Magic shall be invoiced for such taxes if Nuance is required to pay them
on General Magic's behalf. This provision shall not apply to taxes based on
Nuance's income.
10. CONFIDENTIAL INFORMATION
10.1. Obligations. By virtue of this Agreement, the parties may have
access to information that is confidential to one another ("Confidential
Information"). Confidential Information shall include the disclosing party's
business strategies, technical information related to the Magic Network service
in the case of General Magic, source code for all software delivered by Nuance
hereunder, customer information, the terms of this Agreement and pricing under
this Agreement, and in addition, all information clearly identified as
confidential if disclosed in writing (or visually) or in the case of verbal
disclosure, identified as such at the time of disclosure. The obligations of
confidentiality described herein shall be applicable during the term of this
Agreement and for a period of ten years after the termination of this Agreement.
The parties agree that, unless required by law, they will not make each other's
Confidential Information available in any form to any third party or use each
other's Confidential Information for any purpose other than the implementation
of this Agreement. Notwithstanding the foregoing, General Magic may disclose
certain Confidential Information to third parties as
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necessary to display the Magic Network so long as such disclosure is under an
obligation of confidentiality and so long as General Magic obtains Nuance's
prior written consent, which consent will not be unreasonably withheld. Each
party agrees to take all reasonable steps using at a minimum the same degree of
care as is used for its own Confidential Information to ensure that Confidential
Information is not disclosed or distributed by its employees or agents in
violation of the terms of this Agreement.
10.2. Exception. A party's Confidential Information shall not include
information that: (a) is or becomes a part of the public domain through no act
or omission of the other party; (b) was in the other party's lawful possession
prior to the disclosure and had not been obtained by the other party either
directly or indirectly from the disclosing party; (c) is lawfully disclosed to
the other party by a third party without restrictions on disclosure; or (d) is
independently developed by the other party.
11. TERM
The initial term of this Agreement shall commence on the Effective Date
and shall terminate on December 31, 2001. Thereafter, the Agreement will
automatically renew for successive one (1) year renewal terms unless either
party sends a notice of termination at least thirty (30) days prior to the last
day of the initial term or any renewal period.
12. ASSIGNMENT
Except in the case of a merger, acquisition or sale of all or
substantially all of the assets of a party, neither party may assign this
Agreement without the other party's prior written consent. Any attempt to do so
without that consent will be void. This Agreement will bind and inure to the
benefit of the parties and their respective successors and permitted assigns.
13. TERMINATION
Either party may terminate this Agreement for a material breach by the
other party upon thirty (30) days written notice and opportunity to cure during
the notice period. General Magic may terminate this Agreement at any time for
its convenience, subject to the obligation to pay for all development work,
license fees and royalties that have accrued and/or are due and owing as of the
date of termination.
14. EXPORT
General Magic agrees to comply fully with all relevant export laws and
regulations of the United States ("Export Laws") to assure that neither the
Voice Interface and/or Recognition Grammars nor any direct product thereof are
(a) exported, directly or indirectly, in violation of Export Laws; or (b)
intended to be used for any purposes prohibited by the Export laws, including,
without limitation, nuclear, chemical, or biological weapons proliferation.
15. NOTICE
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All notices under this Agreement, including notices of address change,
shall be in writing and shall be deemed to have been given when sent by
registered mail, return receipt requested, to the first address listed above.
16. LEGAL EXPENSES
In the event legal action is taken by either party to enforce this
Agreement, all costs and expenses, including reasonable attorney's fees incurred
by the prevailing party, shall be paid by the other party.
17. SEVERABILITY
If any provision of this Agreement is held by a court of competent
jurisdiction to be illegal, unenforceable, or in conflict with any law of a
federal, state, or local government, the validity of the remaining portions or
provisions shall remain in full force and effect.
18. GOVERNING LAW
This Agreement shall be construed and enforced according to the laws of
the State of California.
19. RELATIONSHIP OF THE PARTIES
The relationship of the parties is that of independent contractors. No
one party is the agent of the other and neither party is authorized to act on
behalf of the other party.
20. WAIVER
The waiver by either party of any default or breach of this Agreement
shall not constitute a waiver of any other or subsequent default or breach.
Except for actions of non-payment or breach of either party's proprietary
rights, no action, regardless of form, arising out of this Agreement may be
brought by either party more than one year after the cause of action has
accrued.
21. ENTIRE AGREEMENT
This Agreement contains all the agreements, representations, and
understandings of the parties hereto and supersedes any previous understandings,
commitments, or agreements, oral or written, with respect to the subject matter
of this Agreement. It is expressly agreed that all terms of any General Magic
purchase order or other ordering document shall be superseded by the terms of
this Agreement. This Agreement may not be modified or amended except in a
writing signed by a duly authorized representative of each party; no other act
shall be deemed to amend or modify this Agreement.
IN WITNESS WHEREOF, the authorized representatives of the parties have
executed this Agreement below.
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Nuance Communications General Magic
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- -------------------------------------
(signature) (signature)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- -------------------------------------
(name) (name)
Vice President VP & GM
-------------------------------- -------------------------------------
(title) (title)
Date: May 14, 1997 Date: May 14, 1997
------------------------------ -----------------------------------
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EXHIBIT A
SOFTWARE LICENSE AND SUPPORT AGREEMENT
This agreement ("Agreement") is Exhibit A to the Magic Network Prototype
Development Agreement ("Development Agreement") and is between Nuance
Communications, a California corporation with its principal place of business at
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Nuance") and
General Magic, Inc. a Delaware corporation with its principal place of business
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Customer"). The terms of this
Agreement shall apply to each Program license granted and to all services
provided by Nuance under this Agreement. When completed and executed by both
parties, an Order Form shall evidence the Program licenses granted and the
services that are to be provided.
I. DEFINITIONS
1.1 "PROGRAM(S)" shall mean the software programs delivered by Nuance to
Customer consisting of computer programs owned or distributed by Nuance
in object code form, data files, Documentation, and Updates.
1.2 "DOCUMENTATION" shall mean all program guides and user documentation for
use of the software provided with the Programs.
1.3 "SUPPORTED PROGRAM LICENSE(S)" shall mean any Program licenses for which
Customer has purchased Technical Support for the relevant time period.
"TECHNICAL SUPPORT" shall mean Program support provided under Nuance's
technical support policy attached hereto as Attachment A-2 ("Technical
Support Policy").
1.4 "UPDATE(S)" shall mean any bug fixes, patches, modifications, new
releases and enhancements to the Programs as may be generally made
available for Supported Program Licenses at no additional charge, other
than media and handling charges. Updates shall not include any releases,
options, or future products which Nuance licenses separately.
1.5 "LOCATION(S)" shall mean the initial Customer location(s) specified on
the applicable Order Form and any location, whether owned or leased by
Customer or a third party under agreement with Customer where Customer
may locate the Programs in the future, so long as Customer will provide
Nuance with a written identification of all such locations upon Nuance's
request from time to time.
1.6 "RECOGNITION SYSTEM(S)" shall mean the computer/operating system/IVR
combination(s) designated on the applicable Order Form. Unless otherwise
specified on the Order Form, each Program copy made from the Master Copy
may be installed on only one (1) computer at a time.
1.7 "ORDER FORM" shall mean the document in the form attached hereto as
Attachment A-1 ("Order Form") by which Customer orders Program licenses
and services from Nuance, and which is agreed to by the parties. The
Order Form shall reference the Effective Date of this Agreement.
1.8 "COMMENCEMENT DATE" shall mean the date on which the Programs are
shipped by Nuance to Customer, or, if no delivery is necessary, the
Effective Date of the relevant Order Form.
1.9 "MASTER COPY" shall mean the original copy of the Program delivered to
Customer as a reproducible master copy.
1.10 "LICENSE KEY" shall mean a CPU-specific password key provided by Nuance
to Customer to activate the Program copy made from the Master Copy for
which Customer has paid the applicable license fee to Nuance.
II. LICENSED PROGRAM LICENSE
2.1 RIGHTS GRANTED
A. In consideration for the payment of royalties as set forth in
Section 4.2 ("Revenue Participation") of the Development
Agreement and the Program license fees paid hereunder, Nuance
grants to Customer and Customer accepts a non-exclusive,
non-transferable license to use the Programs and any Updates
Customer obtains under this Agreement, as follows:
i. to use the Programs solely for Customer's own internal
business operations and Customer's Magic Network (which
is publicly available) on the Recognition Systems or on
a
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backup system at the Location(s). The Magic Network will
be used by customers and subscribers in accordance with
General Magic's then-current commercial terms applicable
to the Magic Network service. Customer shall not have
the right to manufacture, sell, or otherwise
commercially exploit, except in support of Customer's
own internal business operations and Customer's Magic
Network (which is publicly available), any product,
system, or service based in whole or in part on the
Programs. Nuance acknowledges that Customer may use
third parties to operate certain Locations and/or
Recognition Systems, however, Customer will not resell
or sublicense the Programs;
ii. to use the Documentation provided with the Programs in
support of Customer's authorized use of the Programs;
iii. to copy the Master Copy to make copies of the Program
subject to payment of license fees and to copy the
Programs for archival or backup purposes; no other
copies shall be made without Nuance's prior written
consent. Customer may use an archival copy of each copy
of the Programs on a single backup Recognition System if
the production Recognition System for which each copy of
the Program was acquired is rendered inoperable. Nuance
agrees to promptly provide the necessary License Key to
enable use of the archival copy in such case. Under no
circumstances shall Customer use the Programs on the
production Recognition System and the backup Recognition
System simultaneously. Customer agrees not to alter,
change, or remove from the Programs any identifications,
including copyright and trademark notices, and further
agrees to place such markings on any copies of the
Programs. All archival and backup copies of the Programs
are subject to the terms of this Agreement.
Customer shall not copy or use the Programs (including the
Documentation) except as otherwise specified in this Agreement.
B. Nuance shall retain all right, title and interest in the
Programs, including copyright, trade secret, and trademark
rights. Except as otherwise expressly stated in this Agreement,
Customer does not acquire any rights, express or implied, in the
Programs.
C. Customer shall not cause or permit the reverse engineering,
decompilation, disassembly or other translation of the Programs.
D. Upon Nuance's prior written consent and subject to obtaining the
necessary License Key for operation on the new Recognition
System, Customer may transfer the license previously paid for by
Customer to another Recognition System within the Magic Network,
further subject to payment of any upgrade fee to cover the
difference in license fees between the prior and the new
Recognition System. Such transfer shall be subject to Nuance's
transfer fees and policies in effect at the time at the
transfer, provided, Nuance will not charge a transfer fee for
installation of an archival copy as described in Section II,
2-1(A)(iii).
E. Customer shall have the right to allow its third party agents,
suppliers, and customers to use the Programs for Customer's
internal business purposes and Customer's Magic Network,
provided Customer's use and such third party agent, supplier and
customer use is in accordance with the terms of this Agreement.
2.2 ACCEPTANCE. Customer shall be deemed to have accepted the Programs on
the Commencement Date. If Customer is granted a right to copy the
Programs, all copies shall be deemed accepted upon acceptance of the
Master Copy.
2.3 ASSIGNMENT. Except in the case of a merger, acquisition or sale of all
or substantially all of the assets of a party, neither party may assign
this Agreement without the other party's prior written consent. Any
attempt to do so without that consent will be void. This Agreement will
bind and inure to the benefit of the parties and their respective
successors and permitted assignees.
2.4 VERIFICATION. On Nuance's written request, not more frequently than
annually, Customer shall provide to Nuance a signed certification (a)
verifying the Programs are being used in accordance with the terms of
this Agreement,
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including any use limitations; and (b) listing the locations and type(s)
of the Recognition System(s) on which the Programs are run.
Nuance may, at Nuance's expense and not more than once annually, audit
Customer's use of the Programs subject to obligations of
confidentiality. Any such audit shall be conducted during business hours
and shall not unreasonably interfere with Customer's business activities
and shall be limited to records necessary to determine whether all
license fees due have been paid. If such an audit reveals that Customer
has underpaid fees to Nuance, Customer shall be invoiced for the
underpaid fees based upon Nuance's commercial price list in effect at
the time of the audit.
III. TECHNICAL SUPPORT SERVICES
Technical Support services ordered by Customer will be provided under Nuance's
Technical Support policy, as applicable, in effect on the date Technical Support
is ordered. The Technical Support Policy in effect as of the Effective Date of
this Agreement is attached hereto as Attachment A-2 ("Technical Support
Policy"). Technical Support shall be charged for at the fees stated in the
Development Agreement. Additional telephone support services, on-site support,
assistance in developing the best uses of the Programs, and other improvements
may be obtained from Nuance under a separate agreement and for additional fees.
For any on-site services requested by Customer, Customer shall reimburse Nuance
for actual, reasonable travel and out-of-pocket expenses incurred.
IV. TERM AND TERMINATION
4.1 TERM. If not otherwise specified on the Order Form as to a specific
Program license, each Program license granted hereunder and this
Agreement shall remain in effect in perpetuity, unless otherwise
terminated as set forth below.
4.2 TERMINATION BY CUSTOMER. Customer may terminate any Program license or
this Agreement at any time upon written notice to Nuance.
4.3 TERMINATION BY NUANCE. Nuance may terminate this Agreement upon written
notice if Customer materially breaches this Agreement and fails to
correct such breach within thirty (30) days of written notice specifying
the breach. Nuance may terminate the license to any Program copy if
Customer is in breach of its payment obligation as to the applicable
license fee and fails to cure as described above.
4.4 EFFECT OF TERMINATION. Termination of this Agreement or any Program
license by either party shall not limit either party from pursuing any
other remedies available to it, including injunctive relief, nor shall
such termination release Customer from any obligation to pay all fees
that have accrued or that Customer has agreed to pay under any Order
Form under this Agreement up to the date of termination. The parties'
rights and obligations under Sections 2.1.B, 2.1.C, 2.3, and Articles
IV, V, VI, VII, and VIII shall survive termination of this Agreement.
4.5 AFTER TERMINATION. If a license granted under this Agreement expires or
otherwise terminates, Customer shall (a) cease using the applicable
Programs, and (b) certify to Nuance within thirty (30) days of
expiration or termination that Customer has destroyed or returned to
Nuance the Programs and all copies thereof remaining in Customer's
possession. This requirement applies to copies in all forms, partial and
complete, in all types of media and computer memory, and whether or not
modified or merged into other materials.
V. WARRANTIES AND LIMITATION OF LIABILITY
5.1 WARRANTIES AND DISCLAIMERS
A. Program License. Nuance warrants that for a period of ninety
(90) days from the Commencement Date each unmodified Program
will perform the functions described in the Documentation.
Nuance does not warrant that the Programs will meet Customer's
requirements, that the Programs will operate in the combinations
which Customer may select for use, that the operation of a
Program will be uninterrupted or error-free, or that all Program
errors will be corrected.
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B. Media. Nuance warrants the tapes, diskettes, or other media to
be free of defects in materials and workmanship under normal use
for ninety (90) days from the Commencement Date.
C. Services. Nuance warrants that its Technical Support services
will be performed consistent with generally accepted industry
standards. This warranty shall be valid for ninety (90) days
from performance of service.
D. LIMITATIONS. THE WARRANTIES ABOVE ARE EXCLUSIVE AND IN LIEU OF
ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. PRE-PRODUCTION RELEASES OF PROGRAMS ARE
DISTRIBUTED "AS-IS" WITHOUT WARRANTY.
5.2 EXCLUSIVE REMEDIES. For any breach of the warranties contained in
Section 5.1 above, Customer's exclusive remedy, and Nuance's entire
liability, shall be:
A. For Programs. The correction of Program errors that cause breach
of the warranty, or if Nuance is unable to make the Program work
as warranted, Customer shall be entitled to terminate the
Program license and recover the fees paid for the Program
license or Update, as applicable.
B. For Media. The replacement of defective media returned to Nuance
within ninety (90) days of the Commencement Date.
C. For Services. The performance of the Technical Support services,
or if Nuance is unable to perform the services as warranted,
Customer shall be entitled to recover the fees paid to Nuance
for the deficient services.
5.3 LIMITATION OF LIABILITY. In no event shall either party be liable to the
other for any special, indirect, incidental, or consequential damages,
or damages for loss of profits, savings, revenue, use, damaged files or
data, or business interruption, incurred by either party or any third
party, which may arise in connection with this Agreement or the use and
support of the Programs, regardless of whether such claims are based or
remedies are sought in contract or tort, even if the other party has
been advised of the possibility of such damages. Under no circumstances
shall Nuance's liability exceed the [**].
VI. INFRINGEMENT INDEMNITY
Nuance will defend and indemnify Customer against a claim that Programs
furnished and used within the scope of this Agreement infringe a copyright,
patent, or trademark, provided that: (a) Customer notifies Nuance of such claim
in writing within thirty (30) days of the claim; (b) at Nuance's expense, Nuance
has sole control of the defense and all related settlement negotiations; and (c)
Customer provides Nuance with the reasonable assistance at Nuance's expense,
information, and authority necessary to perform Nuance's obligations under this
Article. Nuance shall have no liability for any claim of infringement based on
use of a superseded or altered release of the Programs or the use of the
Programs in combination with other hardware or software if the infringement
would have been avoided by the use of a current, unaltered release of the
Programs that Nuance provides to Customer, or in combination with different
hardware or software, or to the extent such use is possible, use without any
combination.
In the event the Programs are held or are believed by Nuance to infringe, Nuance
shall have the option, at its expense, to (a) modify the Programs to be
noninfringing; (b) procure for Customer a license to continue using the
Programs; or, if it is not commercially reasonable for Nuance to perform (a) or
(b), (c) terminate the license for the infringing Programs and refund the
license fees paid for those Programs. This Article VI states Nuance's entire
liability and Customer's exclusive remedy for infringement.
VII. PAYMENT OF FEES
All fees hereunder shall be due and payable net thirty (30) days of the date of
invoice. All Technical Support fees shall be payable annually in advance, and in
accordance with the terms of Section 4.4 ("Technical Support") of the Agreement.
Any amounts payable by Customer hereunder which remain unpaid after the due date
shall be subject to late penalty fees equal to 1.5% per month from the due date
until such amount is paid. Customer agrees to pay applicable media and shipping
charges. Customer shall issue to Nuance a purchase order or other document
acceptable to Nuance on or before the effective date of the applicable Order
Form.
Fees hereunder do not include local, state, or federal sales, use, property,
value-added, or other taxes based
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on the licenses and services provided under this Agreement or Customer's use
thereof. Customer agrees to pay all such taxes as may be imposed upon Nuance or
Customer. Customer shall be invoiced for such taxes if Nuance is required to pay
them on Customer's behalf. This provision shall not apply to taxes based on
Nuance's income.
VIII. OTHER
8.1 CONFIDENTIAL INFORMATION. By virtue of this Agreement, the parties may
have access to information that is confidential to one another
("Confidential Information"). Confidential Information shall be limited
to the Programs, the terms and pricing under this Agreement, and all
information clearly identified as confidential.
A party's Confidential Information shall not include information that:
(a) is or becomes a part of the public domain through no act or omission
of the other party; (b) was in the other party's lawful possession prior
to the disclosure and had not been obtained by the other party either
directly or indirectly from the disclosing party; (c) is lawfully
disclosed to the other party by a third party without restriction on
disclosure; or (d) is independently developed by the other party.
Customer shall not disclose the results of any benchmark tests of the
Programs to any third party without Nuance's prior written approval.
The parties agree to hold each other's Confidential Information in
confidence during the term of this Agreement and for a period of two
years after the termination of this Agreement. The parties agree that,
unless required by law, they will not make each other's Confidential
Information available in any form to any third party, including
customers or customer prospects, or use each other's Confidential
Information for any purpose other than the implementation of this
Agreement. Each party agrees to take all reasonable steps to ensure that
Confidential Information is not disclosed or distributed by its
employees or agents in violation of the terms of this Agreement. Nothing
in this Agreement shall be construed as permitting Customer the right to
use the Nuance name in conjunction with any product or service offered
by Customer.
Subject to Customer's obligations with respect to confidentiality,
privacy and other limitations imposed on such disclosures by applicable
law, Customer agrees to provide Nuance with full access to all audio
input to the Programs resulting from Customer's end user calls (the
"In-Service Data") solely for Nuance's purposes of training, refining,
supplementing, or testing its speech recognition software, models, and
algorithms. Such In-Service Data shall be protected as Customer's
Confidential Information.
8.2 EXPORT. Customer agrees to comply fully with all relevant export laws
and regulations of the United States ("Export Laws") to assure that
neither the Programs nor any direct product thereof are (a) exported,
directly or indirectly, in violation of Export Laws; or (b) intended to
be used for any purposes prohibited by the Export Laws, including,
without limitation, nuclear, chemical, or biological weapons
proliferation.
8.3 NOTICE. All notices under this Agreement, including notices of address
change, shall be in writing and shall be deemed to have been given when
sent by registered mail, return receipt requested, to the first address
listed in the relevant Order Form (if to Customer) or to the Nuance
address on the Order Form (if to Nuance).
8.4 LEGAL EXPENSES. In the event legal action is taken by either party to
enforce this Agreement or any Order Form, all costs and expenses,
including reasonable attorney's fees incurred by the prevailing party,
shall be paid by the other party.
8.5 SEVERABILITY. If any provision of this Agreement is held by a court of
competent jurisdiction to be illegal, unenforceable, or in conflict with
any law of a federal, state, or local government, the validity of the
remaining portions or provisions shall remain in full force and effect.
8.6 GOVERNING LAW. This Agreement shall be construed and enforced according
to the laws of the State of California.
8.7 RELATIONSHIP OF THE PARTIES. The relationship of the parties is that of
independent contractors. No one party is the agent of the other and
neither party is authorized to act on behalf of the other party.
8.8 WAIVER. The waiver by either party of any default or breach of this
Agreement shall not constitute a waiver of any other or subsequent
default or breach. Except for actions for nonpayment or breach of
Nuance's proprietary rights in the Programs, no action, regardless of
form, arising out of this Agreement may be
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brought by either party more than one year after the cause of action has
accrued.
8.9 ENTIRE AGREEMENT. This Agreement contains all the agreements,
representations, and understandings of the parties hereto and supersedes
any previous understandings, commitments, or agreements, oral or
written, with respect to the subject matter of this Agreement. It is
expressly agreed that all terms of any Customer purchase order or other
ordering document shall be superseded by the terms of this Agreement.
This Agreement may not be modified or amended except in a writing signed
by a duly authorized representative of each party; no other act, usage,
or custom shall be deemed to amend or modify this Agreement.
The Effective Date of this Agreement shall be
-----------------------------------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
NUANCE COMMUNICATIONS CUSTOMER
Authorized Signature: Authorized Signature:
---------------- -------------------
Printed Name: Printed Name:
------------------------ ---------------------------
Title: Title:
------------------------------- ----------------------------------
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ATTACHMENT A-1
ORDER FORM
This Order is placed by General Magic, a Delaware corporation ("Customer") under
the Software License and Support Agreement dated March 3, 1997 ("Agreement").
The Agreement is incorporated by reference as though set forth in full herein.
DATE ORDER PLACED:
SOFTWARE
--------
-------------------------------------------------------------------------------------------------
NET SALE
ITEM PRODUCT DESCRIPTION QTY PRICE EACH PRICE
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
SERVICES
--------
-------------------------------------------------------------------------------------------------
NET SALE
ITEM PRODUCT DESCRIPTION QTY PRICE EACH PRICE
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
LOCATION FOR SOFTWARE INSTALLATION
----------------------------------
General Magic, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The Effective Date of this Order shall be __________________
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IN WITNESS WHEREOF, the parties have executed this Agreement.
NUANCE COMMUNICATIONS CUSTOMER
Authorized Signature: Authorized Signature:
------------------ -----------------
Printed Name: Printed Name:
-------------------------- -------------------------
Title: Title:
--------------------------------- --------------------------------
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ATTACHMENT A-2
TECHNICAL SUPPORT POLICY
TECHNICAL SUPPORT SHALL INCLUDE:
1. Updates as defined in the Software License and Support Agreement.
2. Basic Support provided from 8:00 a.m. to 5:00 p.m. PST, Monday to
Friday, with exception of Nuance holidays. Response will be given within
4 hours of a Basic Support request. Basic support includes telephone
and/or on-line support for:
o Assistance in Program Installation
o Assistance related to questions on the operational use of Program
o Assistance in identifying and resolving problems related to use of
Program
Emergency support will be provided for any Program errors which render a
production system inoperable or impair its performance significantly. Response
will be given within 2 hours of an Emergency Support request. Nuance will work
continuously and apply its best efforts to provide a fix or workaround to remedy
the Emergency situation.
Premium Technical Support is available extending hours of coverage to 24 hours a
day, seven days a week, with the same response times guaranteed for Basic
Support and Emergency Support.
3. License Transfer Support. Customer may transfer Programs from one
Recognition System to another subject to a transfer fee. If a Program
copy is transferred due to hardware failure or reallocated to another
server of equivalent performance in the same operating environment, no
transfer fee shall be levied. If a Program copy is transferred for any
other reason, the maximum transfer fee shall be [**]% of the original
Program copy license fee and shall not exceed that charged by Nuance to
other customers for the same transfer. In either case, if the Program
copy is transferred to a different model CPU, additional license fees
will be levied according to the difference in license fees, if any,
between the prior and new CPU. The license fees used to calculate any
additional license fees due shall be license fees for model of CPUs in
effect at the time of transfer.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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EXHIBIT B
Acceptance Requirements
20
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AGREEMENT NO. 9705NU0060.02-SL
ATTACHMENT A-1
ORDER FORM
This Order is placed by General Magic, a Delaware corporation ("Customer") under
the Software License and Support Agreement dated March 3, 1997 ("Agreement").
The Agreement is incorporated by reference as though set forth in full herein.
SOFTWARE
ITEM PRODUCT DESCRIPTION QTY PRICE EACH NET SALE PRICE
---- ------- ----------- --- ---------- --------------
1 V6.0 Runtime Nuance base engine runtime [**] $[**] $[**]
Server server license for use with
License Intel [**] MHz CPU or
equivalent. One license
required per CPU.
CA SALES TAX - 8.25% [**]
Total Software License Fees $[**]
SERVICES
ITEM PRODUCT DESCRIPTION QTY PRICE EACH NET SALE PRICE
---- ------- ----------- --- ---------- --------------
1 Technical 1 year of technical support [**] $[**] $[**]
Support - including bug fixes, patches,
Runtime modifications, and
Software enhancements to Nuance V6.0
Runtime Server Software.
Support provided 8:00 AM to
5:00 PM, Monday to Friday,
except Nuance holidays.
Support for all copies of
runtime server software in
use must be purchased for
Nuance to provide this
service.
Total Annual Support Fees $[**]
LOCATION FOR SOFTWARE INSTALLATION
General Magic, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
22
The Effective Date of this Order shall be May 14, 1997.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
Nuance Communications Customer
Authorized Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Authorized Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------ ------------------------------------
Title: Vice President Title: V.P.
------------------------------------------- -------------------------------------------
23
Amendment No. 1 to the "Magic Network Prototype Agreement" (Agreement No.
9705NU0060.02-SL)
This Amendment No. 1 ("Amendment") is between Nuance Communications, a
California corporation with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ("Nuance") and General Magic, Inc., a Delaware
corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("General Magic"). The effective date of this Amendment
shall be July 1, 1998.
Nuance and General Magic have entered into an Agreement (the Magic Network
Prototype Development Agreement) specifying the terms and conditions applicable
to the development and implementation of the "Magic Network." This amendment
hereby supersedes and replaces Phase Three (as described in Section 3) and Phase
4 (as described in sections 4.1 through 4.3) and modifies that Agreement as
follows:
1. Definitions: The following terms shall have the following meanings for
the purposes of this Amendment and the Agreement:
1.1 "Recognition Unit" (RU) shall mean the processing power necessary to
perform speech recognition as calculated by The Nuance Dimensioner
Tool. Specifically, it is the recognition power required to understand
a continuous stream of [**] in real time with a [**] error rate, as
represented by a [**] Nuance-supplied benchmark test set.
1.2 "Speech Channel" shall mean a single port that has been enabled for
speech recognition.
1.3 "Capacity" shall mean any combination of Recognition Units and Speech
Channels, as specifically licensed pursuant to the terms of the
Agreement.
1.4 "The Nuance Dimensioner Tool" shall mean the then-current version of
the GUI tool used to estimate the number of RUs needed for a particular
application. Nuance will make The Nuance Dimensioner Tool available to
GMI.
1.5 "The Nuance Dimensioner Tool Benchmark Version" shall mean a copy of
The Nuance Dimensioner Tool to be provided upon execution of this
Amendment No. 1, which will be used by GMI to validate that required
changes to Capacity are the result of changes to the input to The
Nuance Dimensioner Tool and not the result of changes to the algorithms
that produce the output of The Nuance Dimensioner Tool. The Nuance
Dimensioner Tool Benchmark Version will be used in conjunction with The
Nuance Dimensioner Tool Test Set.
1.6 "The Nuance Dimensioner Tool Test Set" shall mean an agreed set of GMI
inputs, as detailed in Attachment B-1, which will be used by GMI to
validate that given the same inputs, future versions of The Nuance
Dimensioner Tool will not calculate an increase in the RUs required.
2. RU Provisioning: Initial provisioning (July 1, 1998) is reflected in
Attachment A-1 ("Order Form"), and A-2 ("The Nuance Dimensioner Tool
Initial Order Assumptions"), and is based upon the call flow, busy hour
transactions, call length, speech recognition latency and grammars
specified by GMI. The pruning parameter will be assumed to be [**] for
the initial provisioning. As usage of GMI's services increases,
additional Capacity will be required. The quantity of incremental
Capacity to be invoiced to GMI will be determined in the second month
of each calendar quarter, commencing Q4 1998. The Nuance Dimensioner
Tool will be utilized to determine the Capacity required by the GMI
services. Nuance will benchmark the then current GMI grammars with
in-service speech data provided by GMI and extract call traffic
statistics to use as inputs to The Nuance Dimensioner Tool for this
determination. Nuance will invoice GMI for any additional Capacity
required for the quarter based on such determination by means of an
Order Form (substantially in the form attached hereto as Attachment
A-1), in accordance with the pricing set forth on Attachment A-1
hereto.
The Dimensioner will be run with parameters reflecting GMI's actual settings for
the following:
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
24
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
- [**]
The output of The Nuance Dimensioner Tool will specify the Capacity to be
licensed to GMI based upon the then current call flow, busy hour transactions,
call length, speech recognition latency and grammars specified by GMI (grade of
service benchmark shall be [**]% blocking; recognition latency of [**]%
seconds or less). Subsequently, if while performing operations in conformance
with the above criteria, GMI requires additional RU licenses in order to attain
the latency specified by GMI as input to The Nuance Dimensioner Tool, Nuance
will provide such additional RU licenses at no charge until the Nuance software
performs in accordance with the RU requirements specified by The Nuance
Dimensioner Tool.
3. [**] pricing: License pricing is Application-specific and licensed
solely for use in the Magic Network personal assistant application which
provides call management, electronic message retrieval and access to individual
contact or calendar information as core functions as well as access to various
other services. If transaction processing services (i.e., airline reservations,
▇▇▇▇ payment or money transfers, stock or mutual funds trading) become part of
the Magic Network personal assistant application, license fees for the
incremental Capacity utilized to provide such services will be negotiated.
4. US Equities Stock Grammar: The Nuance US Equities Grammar will be
licensed for deployment in all RecServers based on the number of RUs required to
meet usage requirements for speech recognition of company names. License fees
will be paid on a per RU basis, and are in addition to any other applicable
license fees for recognition Capacity. Transcription of utterances will be
performed from time to time (not more than once per calendar quarter) to
determine the number of utterances in the busy hour that contain a company name.
This information will then be used as input to The Nuance Dimensioner Tool to
calculate the quantity of RUs used for recognition of company names within the
US Equities Grammar with a specified latency. Adjustments to license fees per RU
for succeeding quarters will be based upon this quarterly audit of usage. In
addition, the RU quantities determined above will be used to calculate the
monthly fee for the Stock Grammar Update service. The minimum monthly fee for
the Stock Grammar Update service is $[**] per month.
5. Software License Keys: Nuance will provide GMI with software license
keys to initially enable [**] Recognition Server/Client Machine pairs with [**]
RUs and [**] Speech Channels when ordered by GMI for use in the Magic Network
personal assistant application. Nuance will provide all needed software license
keys to enable future GMI orders.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
25
NUANCE COMMUNICATIONS GENERAL MAGIC
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ------------------------------
Signature Signature
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Print Name Print Name
Vice-President, Sales V.P. and General Manager, PNSD
------------------------------ ------------------------------
Title Title
July 31, 1998 July 31, 1998
------------------------------ ------------------------------
Date Date
26
Agreement No. 9705NU0060.02-SL __________
Reference P.O. No. ________________________
ATTACHMENT A-1
ORDER FORM
This Order is placed by General Magic, a Delaware corporation ("Customer") under
Amendment No. 1 to the "Magic Network Prototype Agreement." The Agreement is
incorporated by reference as though set forth in full herein. The effective date
of this Order shall be July 1, 1998.
Software
ITEM PRODUCT DESCRIPTION QTY PRICE EACH NET PRICE
--------- --------------- ------------------------------------- -------- ------------- -----------
1 R.U. Software Nuance Recognition Unit Software [**] $ [**] $ [**]
License License - to be deployed initially
on [**] Recognition Servers.
Calculations per assumptions
contained in Attachment A-2.
2 Speech Nuance Speech Channel Software [**] $ [**] $ [**]
Channel License - to be deployed initially
License on [**] Client machines.
Calculations per assumptions
contained in Attachment A-2.
3 Stock Grammar Nuance Stock Grammar Recognition [**] $ [**] $ [**]
R.U. License Unit Software License - U.S.
Equities
4 Credit Credit for Recognition Units [**] $ [**] $ [**]
already purchased under prior
server-based pricing model - [**]
R.U.
-----------
Total Software License Fees $ [**]
===========
Services
ITEM PRODUCT DESCRIPTION QTY PRICE EACH NET PRICE
--------- --------------- ------------------------------------- -------- ------------- ----------
1 Software Annual Software Maintenance for 1 $ [**] $ [**]
Maintenance Tech Support - [**] of Net License
Fee $[**]
2 Stock Grammar Annual Software Maintenance for 1 $ [**]
Update U.S. Equities Stock Grammar - based
on pro-rated RU usage - [**]
or $[**] per month min.
----------
Total Annual Support Fees $ [**]
==========
Location for Software Installation Contact Information
---------------------------------- -------------------
General Magic, Inc. Technical Contact Person: ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Title: Technical Director
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ E-mail: ▇▇▇▇▇_▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
Nuance Communications Customer
Authorized Signature: Authorized Signate:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------- ---------------------
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
27
\
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------- ---------------
Title: Vice-President, Sales Title: V.P. and General Manager, PNSD
---------------------- ------------------------------
28
Attachment A-2
Nuance Dimensioner Tool Initial Order Assumptions
Actual Grammar Benchmark Results (from supplied audio data):
AVG. #UTT/CALL LUS PER UTT AVG. SEC/UTT
------------------------------ -------------- ------------ --------------
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
Total [**]
Other:
Busy hour call attempts [**]
Carried calls
Pruning
Call hold time
Grade of Service
Latency, [**] less than
Provisioning Results:
Speech Channels [**]
RUs required
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
29
Attachment B-1
The Nuance Dimensioner Tool Test Set
Grammar Parameters:
AVG. # UTT/CALL LUS PER UTT AVG. SEC/UTT
---------------------- ---------------- --------------- ----------------
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
Total [**]
Other Dimensioner Inputs:
Busy hour call attempts [**]
Call hold time
Grade of Service
Latency, [**]% less than
Ports
Provisioning Results: [**]
Speech Channels
Rus required
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.