1
Exhibit 10.1
DISTRIBUTION AGREEMENT
This Distribution Agreement is made this 23rd day of June, 1997 by and
between Dialogic Corporation, a New Jersey corporation, with headquarters at
0000 Xxxxx 00, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Dialogic"), and Voice Control
Systems, Inc., a Delaware corporation, with headquarters at 00000 Xxxxxx Xxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000 ("VCS").
BACKGROUND INFORMATION
Dialogic is a manufacturer of voice processing components. One of
Dialogic's products lines is based on its SCSA architecture; the speech
recognition platform that is available in the SCSA architecture is known as
Antares. VCS has developed speech recognition technology that is available with
a variety of capabilities. Dialogic has licensed certain speech recognition
capabilities from VCS under a License Agreement dated June 8, 1990, that has
subsequently been amended several times. VCS provides support to Dialogic for
the Basic Technology it has licensed under a Support Agreement dated September
20, 1991, as subsequently amended. In addition to the Basic Technology that
Dialogic has licensed, VCS has certain Enhanced Technologies available that
provide capabilities such as High-Density Continuous, Speaker-Dependent,
Speaker Verification, PowerBundle, Discrete Word Spotting, and Alphanumeric.
VCS continues to develop new Enhanced Technologies such as Password
Verification. Dialogic currently sells Antares products with VCS' Basic
Technology, and Dialogic wishes to offer Enhanced Technologies to its customers
who are then purchasing or have already purchased Antares products with Basic
Technology ("Customers"). VCS is willing to permit Dialogic to do so on the
terms and conditions of this Agreement.
Accordingly, in consideration of the above and the mutual agreements below, and
using certain terms herein in accordance with the definitions attributed to
them in Addendum I attached hereto and incorporated herein by reference,
Dialogic and VCS agree as follows:
SUBSTANTIVE PROVISIONS
1. Appointment. VCS hereby appoints Dialogic as its non-exclusive
distributor of licenses for Enhanced Technologies for use on Dialogic's Antares
products and Dialogic accepts the appointment. Dialogic will offer and actively
promote VCS' Enhanced Technologies to Antares Customers. In order to induce
Antares Customers to order VCS' Enhanced Technologies, Dialogic agrees to
credit * ports towards a Customer's VPA contract for each port of VCS' Enhanced
Technologies that the Customer licenses from Dialogic.
2. Configuration. Dialogic will offer Enhanced Technologies in fixed board
configurations based on the maximum DSP loads of each technology. The
preliminary list of configurations is set forth in Exhibit B attached hereto
and incorporated herein by reference; Dialogic has developed or will develop
Dongles and VCS will develop software packages of the Enhanced Technologies in
these
* Confidential treatment requested.
2
configurations in each operating system that the companies mutually agree
provide the best business opportunity. Each software package will include the
appropriate Enhanced Technologies, release notes, a license, an instruction
letter in the form of Exhibit A attached hereto and incorporated herein by
reference and any other software required to run the Enhanced Technologies on
the Antares platform. The package will be sealed with appropriate instructions
regarding the order in which to open envelopes within the package. The
configuration list will be expandable, and VCS and Dialogic agree to work
together to determine the appropriate number and configuration of product
offerings. As configurations are added to the list by mutual agreement of the
parties (which shall be evidenced by initializing amendments to Exhibit A),
Dialogic will develop Dongles for them. Additions to the configuration list
require at least two to three weeks lead time. If a Customer has an immediate
need for a non-standard configuration, Dialogic will provide non-production
Dongles and VCS will provide an appropriate software package software for
Enhanced Technologies the Customer has ordered for shipment to the Customer.
The configuration represented in the non-production Dongles will be added to
the configuration list after shipment, and Dialogic will develop a production
Dongle for that configuration. The Customer who received a non-production
Dongle will be required to exchange it for the production Dongle when it is
available.
2.1 Enhanced API Features In Basic Packages. VCS desires to maintain a
single code base and include its Enhanced Technology API functions in the Basic
Technology software packages tested and shipped by Dialogic, but Dialogic is
concerned that problems encountered with these elements of the Enhanced
Technology API functions could cause Dialogic to re-test and re-release Basic
Technology software packages that would have otherwise have required no action.
Therefore, the parties will limit the number of Basic Technology software
package re-tests and re-releases to one per quarter per operating system, which
may be exceeded if both parties agree it is in their mutual best interest or if
a problem is encountered in elements of the Basic Technology software package.
3. Order Fulfillment and Payment. Dialogic will purchase software
packages for each configuration from VCS at a price of * per package. Upon
accepting a purchase order for VCS Enhanced Technologies, Dialogic will deliver
the Dongle and software package that the Customer requires to implement the
Enhanced Technologies he has ordered. Dialogic will xxxx the Customer for the
Enhanced Technologies and collect its charges. Dialogic shall pay VCS for each
Enhanced Technology software package sold according to the price schedule shown
in Exhibit C attached hereto and incorporated herein by reference. Payments
will be due quarterly by the 15th day of April, July, October, and January for
Enhanced Technologies software packages sold during the preceding calendar
quarter, as evidenced by either shipment of the software package or invoicing.
Dialogic will also provide Enhanced Technologies sales reports on a monthly
basis, by including Enhanced Technology sales information in the reports
currently prepared and delivered for Basic Technology sales. Each monthly
report will furnish VCS the name of each customer who purchased an Enhanced
Technology during the month, its VPA level, a summary of the Dongles and
software packages purchased, and any other information reasonably requested by
VCS. With respect to any amount owed to VCS that is not paid by the due date,
VCS shall have the right to require that Dialogic pay VCS interest from the due
date to date of payment at the rate of one and one-half (1-1/2%) percent per
month on the unpaid balance (or such lower rate as may be the
* Confidential treatment requested.
3
maximum allowable by law), together with VCS' costs of collection (including
reasonable attorney's fees).
3.1 Upgrades. Customers using existing Basic Technologies and wishing
to upgrade to an Enhanced Technology product will be required to order and
license the appropriate Enhanced Technology Dongle and software package. Upon
receiving the Enhanced Technology Dongle, the Customer will return the Basic
Technology Dongle to Dialogic and receive full credit for the Basic Technology
license. No other credits will be allowed for open packages of software.
4. Audit Rights. Dialogic hereby grants to VCS' duly accredited
representative, who shall be a certified public accountant, the right to
periodically inspect and make copies of Dialogic's books of accounts and
records pertaining to shipment of Dongles and Enhanced Technologies during
ordinary business hours, only for the purpose of (a) verifying payments made
under this Agreement, and/or (b) to obtain information as to payments due and
payable. Such inspections shall be made no more often than annually and only
upon five days prior written notice to Dialogic. The cost of such inspection
will be borne by VCS, except if upon examination it is agreed that VCS has been
underpaid by 5% or more by Dialogic, then such payment and all reasonable costs
associated with the examination shall be paid by Dialogic within ten (10) days
following such agreement.
5. Modification. VCS may modify the vocabulary or other elements of the
Enhanced Technologies software, including, without limitation, modifying a
PowerBundle by adding words to the basic vocabulary to meet a Customer's
requirements, but VCS will not add ports, modify the configuration or change
the basic functionality.
6. Warranty. VCS warrants that the diskette on which Enhanced
Technologies are furnished to the Customer shall be free from defects in
materials and workmanship under normal use for a period of 90 days from the
date of delivery to the Customer. If such a defect appears within the warranty
period, the Customer may return the defective diskette to VCS for replacement
without charge. Replacement is the Customer's sole remedy with respect to such
a defect.
7. Support. Dialogic will provide support for Customers for problems
incurred during downloading and running the Antares demonstration program
(a.k.a. Rec-Play demo). Customers purchasing Enhanced Technologies will be
automatically shipped the Basic Technology package by Dialogic in addition to
the Enhanced Technology software. Customers will be instructed to install,
configure and run the Basic Technology demonstration programs first. Customers
will be instructed to contact Dialogic directly if any problems are encountered
to this point. If the Basic Technology has been installed and run to the
Customer's satisfaction, they will then be instructed to install and configure
the Enhanced Technology software. From this point forward, all support calls
will be directed to VCS. Customers using a mixture of Basic and Enhanced
Technologies in the same system will receive all support for both Basic and
Enhanced technologies directly from VCS after initial basic installation as
described here.
8. Additional VCS Charges. VCS may charge Customers who acquire Enhanced
Technologies engineering fees and support fees for services rendered to them.
VCS will provide the appropriate Dialogic Account Manager with the details of
such arrangement including the
* Confidential treatment requested.
4
anticipated charges. Such charges will be negotiated by VCS and paid directly
by the Customer to VCS.
9. Term. This Agreement shall become effective on the date hereof and
unless sooner terminated extend for a period of one year; this Agreement will
be renewed from year to year thereafter unless terminated by either party by
giving written notice of non-renewal at least 30 days prior to the end of the
then-current term.
10. Termination. This Agreement may be terminated as follows:
10.1 If either party fails to fulfill any material obligations or
conditions hereof, or commits any other breach or is in default in any other
way with regard to any of the provisions of this Agreement, and such failure,
breach, or default is not cured within thirty (30) days of written notice to
the defaulting party by the other party specifying the nature of the default,
the aggrieved party will have the right to terminate this Agreement by giving
written notice of termination to the defaulting party, whereupon this Agreement
shall automatically terminate on the 30th day after such termination notice is
given. Either party will have the right to cure any such default up to but not
after receiving notice of termination.
10.2 In the event that under the laws of the United States either
party files for bankruptcy or is deemed insolvent or is obliged to cease to
trade or to wind-up its affairs and go into liquidation, or should it seek
protection from its creditors or a rearrangement of its obligations by legal
process, or otherwise, or a committee of creditors be appointed, or any similar
proceedings be had or commenced pursuant to the laws of any jurisdiction or
otherwise, the other party shall be entitled to give written notice terminating
this Agreement forthwith without prejudice to any rights of either Licensee or
VCS which may have accrued hereunder at or as of the date of such termination.
10.3 If Dialogic's annual payments to VCS under all agreements between
them, including, without limitation, this Agreement, any license agreement or
any support agreement do not exceed * in any calendar year, VCS shall have the
right to terminate this Agreement by giving written notice to Dialogic.
Termination of this Agreement for any cause shall not be construed as
a waiver in respect of either party of any of its rights, claims (including
claims for damages) or obligations that have accrued up to and including the
date of termination, including Dialogic's obligation to pay any sums accrued to
VCS.
11. Patent Warranty and Indemnity. VCS represents and warrants that it
has the right to grant licenses to Customers regarding use of its Enhanced
Technologies. VCS and Dialogic will cooperate to assure that all requisite
patent, trademark and copyright notices are provided. VCS shall indemnify and
hold Dialogic and Customers harmless against any and all costs, claims,
damages, expenses, losses and demands (including legal expenses) incurred by or
against Dialogic or a Customer as a result of or in connection with any claim
made or alleged that an Enhanced Technology infringes any United States or
European Union patent, copyright, trade secret, trademark or other intellectual
property rights of any third party, conditioned on the following:
* Confidential treatment requested.
5
(A) That VCS shall be notified promptly in writing by Dialogic of any
notice of such claims; and
(B) That VCS shall have the sole control of the defense of any action
on such claim and all negotiations for its settlement or compromise.
Should an Enhanced Technology be held, or in VCS' opinion be likely to
be held, to infringe such intellectual property rights, VCS shall, at its
expense, (i) procure for Customers the right to continue using the Enhanced
Technology, (ii) replace or modify the same so that it becomes noninfringing
but still performs substantially the same functions that the Enhanced
Technology performed prior to replacement or modification, or (iii) withdraw
the Enhanced Technology and refund to Customer the amortized charge for the
Enhanced Technology paid to VCS by Dialogic as herein provided, as amortized
ratably over sixty months.
Notwithstanding the foregoing, VCS shall have no liability to Dialogic
or its Customers with respect to any claim of patent infringement which is
based upon a claim that an application in which an Enhanced Technology is used
violates the intellectual property rights of another person or entity.
12. Training. VCS will provide training to Dialogic's sales force to
assist in selling Enhanced Technologies.
13. Exclusivity. VCS will generally refer Antares Customers desiring
Enhanced Technologies to Dialogic and endeavor to persuade Antares Customers to
order Enhanced Technologies from Dialogic; however, this Agreement is
non-exclusive and VCS is permitted to market its Enhanced Technologies to
Antares Customers where business reasons indicate such action is appropriate.
14. Headings. Headings used in this Agreement are to facilitate reference
only, do not form a part of this Agreement, and shall not in any way affect the
interpretation hereof.
15. Assignability. This Agreement, and all rights and obligations
hereunder, are personal as to the parties hereto and may not be assigned, in
whole or in apart, by any of the parties to any other person, firm or
corporation without the prior written consent thereto by the other party
hereto, which consent shall not be unreasonably withheld; except that either
party may freely assign any or all of its rights and obligations hereunder to
any Affiliate. An Affiliate assignee will thereupon be free to assign the
rights and obligations under this Agreement to any other Affiliate. Any
assignment contrary to the terms hereof shall be null and void and of no force
or effect.
16. No Waiver. No failure on the part of any party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof. Nor shall any single or partial exercise of any right or remedy
hereunder exclude any other or further exercise thereof or the exercise of any
other right hereunder.
17. Entire Agreement. This Agreement and all schedules and exhibits
annexed hereto constitute the entire agreement among the parties respecting the
subject matter hereof and supersedes all prior
* Confidential treatment requested.
6
agreements among the parties relative to the subject matter hereof. In entering
this Agreement, Dialogic did not rely on any representations or warranties of
VCS or its employees or agents other than those set forth in this Agreement.
This Agreement may not be modified or amended except by a writing that states
that it is an amendment to this Agreement and that is signed by duly authorized
representative of the parties. In the event of any conflict between the terms
of this Agreement and any purchase orders, acknowledgments, submissions,
correspondence, memoranda, listing sheets or any other documents, the terms of
this Agreement, as amended from time to time, will govern and prevail.
18. Notices. All notices required or permitted to be given hereunder shall
be in writing and will be valid and sufficient if dispatched either (i) by hand
delivery, (ii) by telex, cable or facsimile transceiver, with confirming letter
mailed promptly thereafter in accordance with clause (iv) hereof, (iii) by
reputable overnight express courier or (iv) by certified mail, postage prepaid,
return receipt requested, deposited in any post office in the United States, in
any case, addressed to the addresses set forth on the first page of this
Agreement, or such other addresses as may be provided from time to time in the
manner set forth above. When sent by cable or facsimile as aforesaid, notices
given as herein provided will be considered to have been received when sent
during normal business hours; otherwise, notices will be considered to have
been received only upon delivery or attempted delivery during normal business
hours.
19. Partial Invalidity. If any clause or provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Agreement, then and in that event, it is the
intention of the parties hereto that the remainder of this Agreement shall not
be affected thereby, and it is also the intention of the parties to this
Agreement that in lieu of each clause or provision of this Agreement that is
held to be illegal, invalid, or unenforceable, there be added as a part of this
Agreement a clause or provision as similar in terms to such illegal, invalid,
or unenforceable clause or provision as may be possible and still be legal,
valid, and enforceable.
20. Costs and Attorneys' Fees. The prevailing party in any litigation,
arbitration or other proceedings arising out of this Agreement shall be
reimbursed by the other party for all costs and expenses incurred in such
proceedings, including reasonable attorneys' fees.
21. Force Majeure. No party hereto shall be liable for delay or default in
performing hereunder, other than a delay or default in payment of any monies
due to the other party, if such performance is delayed or prevented by a Force
Majeure Condition. If a Force Majeure Condition occurs, the party delayed or
unable to perform shall give prompt notice of such occurrence to the other
party. The party affected by the other party's inability to perform may, after
sixty (60) days, elect to either terminate this Agreement or continue
performance with the option of extending the terms of the Agreement up to the
length of time the Force Majeure Condition endures. The party experiencing the
Force Majeure Condition must inform the other party in writing when such a
condition ceases to exist.
22. Confidentiality. Each party covenants and agrees that at all times
hereafter it will keep secret all information communicated to it which has been
designated as confidential or proprietary, and that it will not divulge the
same to any person, firm, or corporation or use it for its benefit or for
* Confidential treatment requested.
7
the benefit of others without the prior written consent of the other party.
This obligation shall apply only if in the case of written communication, the
document has been conspicuously labeled as "confidential" or "proprietary" and
in the event of an oral communication, the information has been identified as
confidential or proprietary at the time of disclosure and a written summary of
the confidential or proprietary information, conspicuously marked as such, has
been prepared by the disclosing party and sent to the receiving party within 30
days of the disclosure. The recipient shall take reasonable steps to safeguard
such confidential information, using at a minimum the same degree of care that
the recipient uses to protect its own similar categories of confidential and
proprietary information. The provisions of this Article shall not apply to:
(A) Information that at the time of receipt can be shown by reasonable
evidence to be in the public domain;
(B) Information that can be shown by reasonable evidence to have been
legally in possession of the party receiving such information prior to
the time of it being received from the other party; or
(C) Information that can be shown by reasonable evidence to have
legally become part of the public domain, other than by acts or
omissions of the party receiving such information.
For the purpose of sub-paragraphs (A) and (C) of this section,
information shall not be considered to be in the public domain merely because a
more generalized disclosure of information, which does not specify the details
of the information received, is in the public domain.
If any party is required to disclose information to a third party
pursuant to a lawfully issued subpoena or other formal demand for the
production of information by a court of competent jurisdiction or a regulatory
body with jurisdiction over the party, the party ordered to produce such
information shall promptly notify the other party and shall use its best
efforts to maintain the confidentiality of such information. In addition, if
either party determines that this Agreement is a "material contract," that
party may file this Agreement with the Securities and Exchange Commission,
provided that it notifies the other party at least fifteen (15) days prior to
such filing and cooperates with the other party to seek confidential treatment
of provisions reasonably designated by the other party for such treatment. Each
party may use confidential information obtained solely as a result of this
Agreement only for the purpose of performing hereunder. Neither party may use
the other party's confidential information for any other purpose without the
express written agreement of the owner.
The parties will cooperate in taking steps to protect the confidential
information, including software, from copying by others, including Customers.
VOICE CONTROL SYSTEMS, INC. DIALOGIC CORPORATION
By: /s/ Xxx X. Xxxxx By: /s/ A. Xxxx Xxxx
-------------------------- -----------------------------
Its: V.P. Finance Its: Senior Product Manager
* Confidential treatment requested.
8
ADDENDUM I
"Affiliate" means (a) an entity that owns all or substantially all of the
outstanding stock or other indicia of ownership of a party to this Agreement,
(b) an entity all or substantially all of whose stock or other indicia of
ownership is owned by a party to this Agreement, or (c) an entity under common
ownership with a party to this Agreement.
"Alphanumeric" means the ability to recognize letters of the alphabet in
addition to the basic vocabulary available in the Basic Technology.
"Antares Customer" means a customer who has purchased an Antares board with
Basic Technology.
"Basic Technology" means the technology licensed by VCS to Dialogic under that
certain License Agreement dated June 8, 1990, as amended.
"Customer" means an Antares Customer who has ordered an Enhanced Technology.
"Digit verification" means the ability to authenticate a speaker of a
prerecorded digit string.
"Dongle" means a piece of equipment that enables an Antares board to accept a
configuration of Enhanced Technologies.
"Enhanced Technology" means any speech recognition product VCS currently makes,
or in the future will make, available to customers who have Basic Technology to
provide additional capabilities such as PowerBundle, speaker-dependent, word
spotting, alpha-numeric, digit verification, and high density continuous.
"Force Majeure Condition" shall mean any condition or event beyond the control
of the party affected thereby, including, but not limited to, fire, explosion,
or other casualty, act of God, war or civil disturbance, acts of public
enemies, embargo, the performance or non-performance of third parties, acts of
city, state, local or federal governments in their sovereign, regulatory, or
contractual capacity, labor difficulties, and strikes.
"High Density Continuous" means an ability to provide continuous digit speech
recognition on 8 channels for each Texas Instruments C-31 50Mz digital signal
processor.
Speaker Dependent" means technology that permits the user to train the
recognizer to respond in a user-programmed manner to inputs that he chooses,
the vocabulary being dependent on the inputs the user selects.
"Discrete Word Spotting" means high rejection, speaker-independent vocabulary
supporting recognition of a single key word spoken in isolation.
Addendum 1 - Page 1 of 2
9
"PowerBundle" means a bundled software package available only for terrestrial
telecommunications applications suitable for use in voice dialing consisting of
continuous speaker independent and speaker dependent speech recognition.
Addendum 1 - Page 2 of 2
10
EXHIBIT A
SUPPORT LETTER
Dear VCS Enhanced Technology Customer:
Thank you for purchasing VCS Enhanced Technologies on the Antares
Platform. We greatly appreciate your business and request that you review this
brief letter before continuing. To provide the most efficient support structure
for this product, VCS and Dialogic have developed a special support scheme for
their customers. To quickly contact the appropriate technical support
specialist assigned to your product, please perform the following:
1) Make sure that you have received two software packages with this
shipment:
a. The Dialogic Antares Developers Base Package.
b. The VCS Enhanced Technology software contained in
the VCS-labeled xxxxx package.
If you have not received both of these packages, please contact your Dialogic
Account Manager at 0-000-000-0000.
2) Before installing any software, please read the Getting Started With a
Technology on Antares booklet provided in package a above (booklet
part numbers by operating system: MS-DOS, 00-0000-000; UNIX,
00-0000-000; OS/2, 00-0000-000; WinNT, 05-0687-001). Having read this
document, please proceed as follows:
a. Configure your Dialogic system,
b. Install the System Release and Antares host software,
c. Run the Antares Record/Play demo (as described in the
"Troubleshooting" section of the Getting Started With
a Technology on Antares booklet).
If any difficulty is encountered while performing these steps, please contact
Dialogic Customer Engineering at 0-000-000-0000.
3) If no problems are encountered during the installation and set-up of
the Dialogic boards or software, and the Antares Record/Play demo
operates properly, proceed to install the software in the VCS package
according to the installation instructions in the VCS Enhanced
Technology release notes. If any difficulty is encountered at this
point, please contact VCS' Technical Support Group directly at (972)
386-0300.
Since we have developed this support program to expedite our
customers' integration of advanced technologies into their applications, we
trust that this improved access to the appropriate system experts will reduce
your development cycle time and further enable your
Exhibit A - Page 1 of 2
11
market success. Thank you again for choosing Dialogic and VCS, and we look
forward to our continued relationship.
Exhibit A - Page 2 of 2
12
EXHIBIT B
PRELIMINARY LIST OF CONFIGURATIONS
--------------------------------------------------------------
DIALOGIC VCS ENHANCED NUMBER OF
PART NUMBER TECHNOLOGY CHANNELS
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
00-0000-000 PowerBundle 2
--------------------------------------------------------------
00-0000-000 PowerBundle 4
--------------------------------------------------------------
00-0000-000 PowerBundle 6
--------------------------------------------------------------
00-0000-000 PowerBundle 8
--------------------------------------------------------------
00-0000-000 Digit Verification* 8
--------------------------------------------------------------
00-0000-000 Digit Verification* 16
--------------------------------------------------------------
00-0000-000 Digit Verification* 24
--------------------------------------------------------------
00-0000-000 Digit Verification* 32
--------------------------------------------------------------
00-0000-000 Alphanumeric 8
--------------------------------------------------------------
00-0000-000 Alphanumeric 16
--------------------------------------------------------------
00-0000-000 Alphanumeric 24
--------------------------------------------------------------
00-0000-000 Alphanumeric 32
--------------------------------------------------------------
00-0000-000 Continuous w/cut-thru 4
--------------------------------------------------------------
Alphanumeric 16
--------------------------------------------------------------
00-0000-000 Discrete w/cut-thru 8
--------------------------------------------------------------
Alphanumeric 16
--------------------------------------------------------------
00-0000-000 Discrete 16
--------------------------------------------------------------
Alphanumeric 16
--------------------------------------------------------------
00-0000-000 Discrete w/cut-thru 4
--------------------------------------------------------------
Continuous w/cut-thru 4
--------------------------------------------------------------
Alphanumeric 8
--------------------------------------------------------------
00-0000-000 Discrete 8
--------------------------------------------------------------
Continuous w/cut-thru 4
--------------------------------------------------------------
Alphanumeric 8
--------------------------------------------------------------
00-0000-000 Discrete w/cut-thru 4
--------------------------------------------------------------
Continuous w/cut-thru 2
--------------------------------------------------------------
Exhibit B - Page 1 of 2
13
--------------------------------------------------------------
Alphanumeric 8
--------------------------------------------------------------
00-0000-000 Discrete 8
--------------------------------------------------------------
Continuous w/cut-thru 2
--------------------------------------------------------------
Alphanumeric 8
--------------------------------------------------------------
00-0000-000 Continuous w/cut-thru 2
--------------------------------------------------------------
Alphanumeric 8
--------------------------------------------------------------
00-0000-000 Discrete w/cut-thru 4
--------------------------------------------------------------
Alphanumeric 8
--------------------------------------------------------------
00-0000-000 Discrete 8
--------------------------------------------------------------
Alphanumeric 8
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
* When available, current availability expected in 4th quarter
1997.
Exhibit B - Page 2 of 2
14
EXHIBIT C
Dialogic will pay VCS the greater of (a) * of its charges for Enhanced
Technologies licensed to Customers in accordance with this Agreement or (b) the
amount determined from the following schedules:
For licenses to Customers who are not enrolled in a Dialogic VPA program, a
per-port amount based on the Enhanced Technology acquired:
Speaker Dependent *
Discrete Word Spotting *
Continuous HD *
Alphabet *
PowerBundle *
Digit Verification *
For licenses to Customers who are enrolled in a Dialogic VPA program, a
per-port amount based on the Enhanced Technology acquired and the number of
ports of Dialogic products the Customer has committed to purchase from Dialogic
in the year as follows:
VPA LEVEL
====================================================================================================================
400 1000 2000 4000 6000 8000 10,000 12,000 15,000
------------------------- --------- --------- ---------- --------- -------- --------- --------- --------- ----------
Speaker Dependent@ or * * * * * * * * *
Discrete Word Spotting@
------------------------- --------- --------- ---------- --------- -------- --------- --------- --------- ----------
Continuous HD+@ * * * * * * * * *
------------------------- --------- --------- ---------- --------- -------- --------- --------- --------- ----------
Alphabet * * * * * * * * *
------------------------- --------- --------- ---------- --------- -------- --------- --------- --------- ----------
PowerBundle# * * * * * * * * *
------------------------- --------- --------- ---------- --------- -------- --------- --------- --------- ----------
Digit Verification* * * * * * * * * *
====================================================================================================================
@ requires custom development, business opportunity only
# available only to Customers who have acquired continuous Basic Technology
through Dialogic
* When available, currently expected availability 4th quarter 1997
+ requires engineering and support contract
For Enhanced Technologies developed after the date of this Agreement, such as
Password Verification, the parties will agree upon the minimum per port payment
schedule prior to Dialogic soliciting any orders for that Enhanced Technology.
The schedules are subject to change by VCS on 90 days prior written notice to
Dialogic, but not more than once annually and no increase shall exceed the
price that would result from cumulative annual increases of *.
* Confidential treatment requested.
Exhibit C - Page 1 of 1
15
EXHIBIT C-1
Continuous HD Pricing (32 PORTS)
6-24 25-99 100-249 250-499 400 1,000 2,000 4,000 6,000 8,000
Units Units Units Units Ports Ports Ports Ports Ports Ports
VCS Royalty * * * * * * * * * *
10,000 12,000 15,000 20,000 25,000 30,000 40,000 50,000
Ports Ports Ports Ports Ports Ports Ports Ports
VCS Royalty * * * * * * * *
ContinuousHD Pricing (16 PORTS)
6-24 25-99 100-249 250-499 400 1,000 2,000 4,000 6,000 8,000
Units Units Units Units Ports Ports Ports Ports Ports Ports
VCS Royalty * * * * * * * * * *
10,000 12,000 15,000 20,000 25,000 30,000 40,000 50,000
Ports Ports Ports Ports Ports Ports Ports Ports
VCS Royalty * * * * * * * *
* Confidential treatment requested.
Exhibit C-1 - Page 1 of 1
