Software License Agreement

SOFTWARE LICENSE AGREEMENT


BY AND BETWEEN


ONE VOICE TECHNOLOGIES


AND


PHILIPS SPEECH PROCESSING


This Software License Agreement is made as of March 3, 2000 (the "Effective Date") by and between Philips Speech Processing, a division of Philips Electronics North America Corporation, having a place of business at 64 Perimeter Center East, Atlanta, GA 30346 ("Philips"), and One Voice Technologies, Inc., having its place of business at 6333 Greenwich Drive, Suite 240 San Diego, CA 92122 ("One Voice").


RECITALS


WHEREAS, Philips is active in the development of speech recognition technology and further developing that technology for integration into, manufacturing, selling and distribution of speech enabled products and services.


WHEREAS, One Voice is active in the field of development and design of speech enabled interfaces for use with Internet and Intranet Websites as well as wireless networks and wishes to develop and design interfaces based upon Philips' proprietary speech technology.


WHEREAS, Philips is the owner of intellectual property and know-how pertaining to speech recognition technology and is prepared to grant One Voice the right of using the speech recognition technology and documentation, on the terms and conditions of this Agreement.


NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the parties hereto agree as follows:


ARTICLE 1
DEFINITIONS


Words shall have their normally accepted meanings as employed in this Agreement. The terms herein and hereof, unless specifically limited, shall have reference to the entire Agreement. The word "shall" is mandatory, the word "may" is permissive, the word "or" is not exclusive, the word "includes" and including" are not limiting and the singular includes the plural and vice versa. As used in this Agreement, the following terms will have the meanings indicated:


One Voice Technologies, Inc./Philips Speech Processing Initials:


One Voice /s/ DW
-------
Philips /s/ DWA
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1.1 "Agreement" means this present document including its appendices,
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initialed or signed by the parties and attached hereto, all of which
form an integral part hereof.


1.2 "Control" shall mean direct or indirect ownership of 50% or more of the
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outstanding voting securities of a corporate entity with the right to
vote for the election of directors or the equivalent thereof or
comparable voting interest in a non-corporate entity and shall also
mean the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such entity. The
terms "Controlling" and "Controlled" shall have correlative meanings.


1.3 "Delivery Date" means the date on which Philips has delivered to One
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Voice the Licensed Software.


1.4 "Documentation" means the technical and other information and data, in
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human and/or machine-readable form and in the form as generally
maintained by Philips and (to be) made available hereunder to One Voice
for use with the Licensed Software, as more particularly identified in
Exhibit B hereto, and any changes to such information and data which
are issued from time to time during the term of this Agreement.


1.5 "Effective Date" means the date set forth in the heading of this
--------------
Agreement.


1.6 "Internet" means a global network of interconnected computer networks,
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each using the Transmission Control Protocol/Internet Protocol and/or
such other standard network interconnection protocols as may be adopted
from time to time, which is used to transmit content that is directly
or indirectly delivered to a computer or other digital electronic
device for display to an end-user, whether delivered through online
browsers, commercial online services, offline browsers (a browser that
allows users to access a site without requiring an online connection)
or through push technology, electronic mail, broadband distribution
(high bandwidth above 56kb), satellite, wireless or otherwise.


1.7 "Introductory Licensed Product" means a computer program comprising the
-----------------------------
combination of one or more Licensed Run Time Modules integrated with
the Introductory One Voice Product.


1.8 "Introductory One Voice Product" means a speech enabled software
------------------------------
application with limited functionality designed and developed by One
Voice for licensing or sublicensing to third parties "free of charge"
as more particularly described on Exhibit D. Upon request by One Voice,
Philips may provide technical input with respect to such product;
provided however that such input shall be solely at Philips'
discretion.


2


One Voice Technologies, Inc./Philips Speech Processing Initials:


One Voice /s/ DW
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Philips /s/ DWA
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1.9 "Licensed Software" means the speech SDK software owned by Philips as
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more fully described in Exhibit B of this Agreement, Maintenance
Releases and New Releases thereto, which are commercially released by
Philips during the term of this Agreement.


1.10 "Licensed Product" shall mean a computer program comprising the
----------------
combination of one or more Licensed Run Time Modules integrated with
One Voice Products.


1.11 "Maintenance Release" means minor improvements to the current versions
-------------------
of any Licensed Software subsequent to the initial delivery that
replaces the current version and which is generally made available to
Philips' supported licensees, together with, new or revised
Documentation which properly describes the improved Licensed Software.
Maintenance Releases shall not include any newly developed products or
upgrades which Philips reserves the right to license separately.


1.12 "New Release" means a new version of the Licensed Software, or a
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replacement of the Licensed Software, containing new features or
functions as well as error corrections.


1.13 "Net Selling Price" shall mean the invoice price (expressed in US
-----------------
Dollars) of the Licensed Product Sold by One Voice to any third party,
during the term of this Agreement less (i) the invoice price of
Licensed Products returned for credit, (ii) cash discounts, (iii)
shipping, insurance, taxes and other government fees, and (b) in any
case where the Licensed Product is transferred other than by Sale, the
average Net Selling Price of the Licensed Products that are Sold
during the prior 60 day period, as calculated in accordance with (a)
above.


1.14 "One Voice Business" means the business as conducted by One Voice of
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providing the One Voice Products to third parties that provide
products and services through the Internet, Intranets and wireless
networks.


1.15 "One Voice Products" means the products identified on Exhibit D, as
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One Voice may amend from time to time with the consent of Philips
which consent shall not be unreasonably withheld or delayed.


1.16 "Philips Competitor" means those companies listed in Exhibit G.
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1.17 "Sold (Sell/Sale)" shall mean the delivery or transfer of a Licensed
----------------
Product in exchange for monetary consideration.


1.18 "Licensed Run Time Modules" means the specific applications files
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developed by One Voice from the Licensed Software for integration into
One Voice Products or the Introductory One Voice Product.


3


One Voice Technologies, Inc./Philips Speech Processing Initials:


One Voice /s/ DW
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Philips /s/ DWA
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1.19 "Territory" shall be worldwide.
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1.20 "Website" shall mean a site containing documents and other files with
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a unique uniform resource locator ("URL") address on the Internet.


1.21 "IVIT(TM)" shall mean the Intelligent Voice Interactive Technology
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that One Voice has developed and owns.


ARTICLE 2
SCOPE AND CONTENTS


2.1 Grant of license rights. Subject to the terms and conditions of this
----------------------- Agreement, Philips hereby grants to One Voice a limited, perpetual, nonexclusive, right and license to: (a) without the right to sublicense, use the Licensed Software, in object code form only and the Documentation for internal use in connection with design, development and creation of Licensed Run Tune Modules for integration with the Introductory One Voice Products and One Voice Products to create the Introductory Licensed Product and Licensed Products; and (b) market, distribute, sell, sublicense, transfer and otherwise distribute, and provide support with respect to, Introductory Licensed Products and Licensed Products within the Territory. The foregoing license to distribute is limited to distribution of the Licensed Run Time Modules integrated with the Introductory One Voice Product and One Voice Products and not as a stand-alone product (other than providing Maintenance and New Releases), whether distributed electronically, on media or by any other means now known or hereafter developed. The foregoing license shall not initially include the right to direct distribution through retail storefronts. In the event that One Voice intends to distribute the Licensed Products or Introductory Licensed Products through retail storefronts, One Voice shall notify Philips of such proposal and if One Voice does not receive notice from Philips that it rejects such proposal within ten (10) business days of receipt of such proposal, then such proposal shall be deemed accepted and the license shall be deemed amended to include such right. One Voice shall not loan, rent, lease, give, sublicense or otherwise transfer the Licensed Software or Licensed Run Time Modules, including any part thereof, or any copy thereof, in whole or in part, to any dealer, distributor, end user or any other third party other than as part of or in maintaining or updating a Licensed Product or Introductory Licensed Product as set forth herein.


2.2 Required Licensing Terms. In licensing the Licensed Products to third
------------------------ parties One Voice shall apply license terms and conditions that explicitly mention the proprietary rights of Philips as a licensor of One Voice in the Licensed Products and that effectively protect those rights. One Voice's license agreements shall include provisions which are substantially similar to Sections 2.3 and 6.3, with respect to the Licensed Run Tune Modules incorporated in the Licensed Products. If so requested, One Voice shall provide Philips with copies of its proposed licensing terms and conditions.


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One Voice Technologies, Inc./Philips Speech Processing Initials:


One Voice /s/ DW
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Philips /s/ DWA
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2.3 Ownership.
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2.3.1 By Philips. Philips retains all right, title and interest in
---------- the Licensed Software and the Documentation, including all parts thereof and any copies, in whole or in part, subject only to prior commitments and the licenses granted under the terms of this Agreement. One Voice agrees to execute (in recordable form where appropriate) any instruments and/or documents as Philips may reasonably request to verify and maintain Philips' ownership rights in the foregoing, or to transfer any part of the same which may vest in One Voice for any reason. One Voice shall not exceed the scope of the licenses granted in this Section 2 and shall not reverse engineer, decompile, disassemble or otherwise attempt to learn any source code, structure, algorithms or ideas underlying the Licensed Software, nor shall it modify, translate or create derivative works based on the Licensed Software except as part of One Voice's authorized use of the Licensed Software as provided in Section 2.1.


2.3.2 By One Voice. One Voice retains all right, title and interest
------------ in the One Voice Products and Introductory One Voice Products. One Voice also retains all right, title and interest in the software applications and other data created by or for One Voice using the Licensed Software as authorized under the terms of this Agreement, subject to Philips' underlying ownership rights in the Licensed Software identified in Section 2.3.1 and the licenses granted under the terms of this Agreement.


2.4 Reservation of Rights. Each party reserves all rights in its
--------------------- proprietary information and intellectual property that are not explicitly granted to the other party under this Agreement.


2.5 Trademarks. For Licensed Products sold through retail storefronts, if
---------- any, One Voice shall display or cause to be displayed the Philips' Trademarks shown in Schedule C (the "Trademarks") on the outside product packaging in which the Licensed Product is incorporated strictly in accordance with Philips' guidelines for the use of its trademarks as provided to One Voice by Philips. One Voice shall have no such obligation for Licensed Products or Introductory Licensed Products that are sold or otherwise distributed electronically, including without limitation through the Internet except that One Voice shall display the applicable Trademarks on the "Splash Screen" and credit Philips in the "About Box". One Voice will not delete any Trademarks, trade names or copyright notices present in or displayed by the Licensed Software. One Voice will not claim any right to use any of Philips' Trademarks except pursuant to this Agreement and its use of each Trademark will inure to the benefit of Philips. One Voice (i) will not act in any manner that might reasonably injure the rights or goodwill of Philips with respect to the Trademarks, (ii) will not challenge the validity or ownership of the Trademarks, and (iii) will protect the Trademarks as necessary and appropriate. One Voice expressly acknowledges that all of Philips' Trademarks with their associated goodwill, copyrights, trade secrets and proprietary rights falling within the scope of this Agreement are and shall remain the property of Philips.


5


One Voice Technologies, Inc./Philips Speech Processing Initials:


One Voice /s/ DW
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Philips /s/ DWA
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ARTICLE 3
PRICING


3.1 For all Licensed Product Sold or transferred by One Voice, One Voice will pay Philips licensing fees at the prices set forth in Schedule A. Notwithstanding the foregoing or any other provision of this Agreement, no licensing fees shall be due for (i) any Introductory Licensed Products (a) during the first ninety days that such Introductory Licensed Product is offered for free by One Voice and (b) after such ninety days, as long as One Voice offers for sale Licensed Products in addition to the Introductory Licensed Product; and (ii) subject to Philips' prior consent (which consent shall not be unreasonably withheld or delayed), other commercially reasonably promotional giveaways that One Voice makes available at no charge. One Voice shall promote the Licensed Products at least equally with any other revenue-bearing products of One Voice that incorporates third party technology. The fees in Schedule A do not include sales, use, excise and similar taxes, nor the cost of shipping or insurance, for which One Voice is responsible. One Voice is free to determine its own resale prices and sublicensing fees unilaterally.


3.2 During the term of this Agreement, One Voice agrees to Sell and distribute such quantities of the Licensed Products to reach the Annual Minimum Royalty Commitment as set forth on Exhibit A. If, during any annual period of the term of this Agreement, One Voice does not meet the Annual Minimum Royalty Commitment, then Philips will notify One Voice in writing, detailing the amount by which the royalties actually paid by One Voice are less than the applicable Annual Minimum Royalty Commitment ("Shortfall). One Voice will have 30 days from receipt of such notice pay the amount of the Shortfall.


3.3 Philips agrees to pay One Voice a commission in the amount specified in Exhibit A for any and all sales of Philips products to One Voice Website customers and other users that purchase Philips products through the link from the One Voice Website to the Philips Website.


3.4 During the term of this Agreement and any extension thereof, each party shall send a statement together with the appropriate payments to the other party within fifteen (15) days following the last day of March, June, September and December. In the case of One Voice, each such statement shall specify, in summary form, (i) the number of Licensed Products distributed to customers by One Voice during the prior quarterly period and (ii) the license fees on Licensed Products due for such period. In the case of Philips, each such statement shall specify (i) the number and type of Philips products purchased by One Voice Website customers and other users during the prior quarterly period, and (ii) the commissions due for such sales


3.5 Each party shall maintain for at least three (3) years its records, contracts and accounts relating to, in the case of One Voice, distribution and sale of Licensed Product and, in the case of Philips, the sale Philips products to One Voice Website customers and other users. In addition, each party may at its own expense audit the books of account of the other party relating to such records at the place where such books are kept. Any such audit shall be conducted by an independent professional auditor reasonably acceptable to both parties, on ten (10) working days prior written notice and during normal business hours. Any such audit shall be conducted no more


6


One Voice Technologies, Inc./Philips Speech Processing Initials:


One Voice /s/ DW
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Philips /s/ DWA
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frequently than once a year, must last no more than 5 business days and must not be disruptive of the audited party's business. A copy of the report made by such auditor shall be provided to both Parties at the same time and shall include only the amount of royalties or commissions, as applicable, required to be paid and the amount actually paid, during the period being audited. If during the course of such audit, it is discovered that audited party is in default of any payment obligation to the other party or the audit reveals a discrepancy in the auditing party's favor of five percent (5%) or more in the period being audited (a "Payment Default"), the cost of such audit shall be borne by the audited party. Furthermore, the audited party shall immediately remedy such Payment Default, together with interest at the rate of 18% per annum (or, if lower, the highest rate allowed by law) calculated from the date such payment was due until such payment is actually made. If the audit reveals an overpayment by the audited party, then the auditing party will promptly pay the amount of such overpayment, together with interest at the rate of 18% per annum (or, if lower, the highest rate allowed by law) calculated from the date such payment was made until such payment is actually repaid by the auditing party. Further, if no significant error or omission (i.e., less than 5%) is found as a result of any such audit, the expenses for the audited party's personnel participation in such audit (at such personnel's then current hourly rate), as well as any out-of-pocket expenses incurred by the audited party, shall be promptly reimbursed by the auditing party.


ARTICLE 4
DELIVERY


Within 5 days after the Effective Date, Philips shall make available to One Voice one (1) copy of each of the Licensed Software set forth in Exhibit B hereto, and shall provide the Documentation in the English language. In the event any deliverable is already in the possession or custody of One Voice, such item(s) shall, to the extent used in connection with the rights granted in Section 2 above, be subject to the terms of this Agreement, notwithstanding any pre-existing agreement or understanding between One Voice and Philips with respect to such items. In addition, during the term of this Agreement, Philips shall promptly provide One Voice with any updates, upgrades and other releases (collectively, "Updates") of the Licensed Software as well as any and all modifications to the Documentation, that Philips makes available to its licensees. Philips agrees that such Updates shall at a minimum include, during the term of this Agreement, (a) updating the Licensed Software to support future versions of Windows operating systems and providing such updates no later than [ 30 days prior to the release of said systems] after such versions are made commercially available, and (b) developing the languages as specified in Exhibit A.


ARTICLE 5
TECHNICAL SUPPORT


5.1 Philips shall provide the Support Services specified in Exhibit E, attached hereto.


5.2 In addition, in the event any of the Licensed Software needs to be modified, customized or extended, One Voice will provide Philips, on a project by project basis, with a


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One Voice Technologies, Inc./Philips Speech Processing Initials:


One Voice /s/ DW
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Philips /s/ DWA
...