<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, MA 01880
July 15, 1996 VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Boston Technology, Inc.
Commission File No. 0-17384
Form 10-K/A
____________
Dear Sir/Madam:
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), enclosed for filing in EDGAR electronic
format is a copy of the Form 10-K/A and required Exhibit for the year ended
January 31, 1996.
If you have any questions or comments regarding the enclosed material, please
contact the undersigned.
Very truly yours,
/s/ Carol B. Langer
________________________________
Carol B. Langer, Chief Financial Officer
<PAGE>
<PAGE>
=========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No.1
Form 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended January 31, 1996
Commission File No. 0-17384
Boston Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-3073385
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
100 Quannapowitt Parkway
Wakefield, Massachusetts 01880
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 246-9000
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange on
Title of each class which registered
------------------- ----------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
Common Stock Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days.
Yes X No .
--- ---
Indicate by check mark if the disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in the definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or an amendment to this Form 10-K. [X]
The aggregate market value of Common Stock held by nonaffiliates of the
Registrant as of April 19, 1996 was $365,458,943 based on the closing sale of
Common Stock as reported on the Nasdaq National Market on such date. At April
19, 1996, there were issued and outstanding 24,882,311 shares of Common Stock,
par value $.001 per share.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held June 25, 1996 are incorporated herein by reference
into Part III hereof.
=======================================================================<PAGE>
<PAGE>
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain information required by Item 10 is incorporated herein by reference
to the Company's Proxy Statement for the Annual Meeting of Stockholders to
be held on June 25, 1996 (the "Proxy Statement") under the captions
"Election of Directors" and "Executive Officers."
Pursuant to the agreement entered into during the fourth quarter of fiscal
1996 between the Company and AT&T, during the term of such agreement, and at
its first meeting after such request, the Company's Board of Directors shall
increase its size by one member and elect AT&T's nominee to fill such newly-
created vacancy, subject to reasonable approval of such nominee by the
Company's Board of Directors. Thereafter, and if AT&T retains a 10% or more
shareholder interest in the Company through its ownership of warrants or
Common Stock of the Company, the Company's Board of Directors shall (subject
to the following sentence) nominate the AT&T representative for reelection as
a director and use the same efforts to cause the reelection of that AT&T
representative as a director as are used with respect to all other nominees
for election as a director. In the event that the AT&T representative resigns
as a director, dies or is no longer employed by AT&T, AT&T shall have the
right, subject to the reasonable approval of the Company's Board of Directors,
to designate a replacement for such AT&T representative to serve on the
Company's Board of Directors.
To date, AT&T has not exercised its rights to increase the size of the
Company's Board and elect an AT&T nominee.
<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 15, 1996
BOSTON TECHNOLOGY, INC.
By: /s/ Francis E. Girard
__________________________
Francis E. Girard
President and Chief
Executive Officer
<PAGE>
<PAGE> EXHIBIT INDEX
Exhibit
Number Title
________ ________
(2) 3.1 -Certificate of Incorporation of Registrant, as amended
(9) 3.2 -By-laws of the Registrant, as amended
(9) 4.1 -Specimen Common Stock Certificate
(10) 4.2 -Shareholder Rights Agreement dated as of May 9, 1991 between
the Registrant and The First National Bank of Boston
(11) 4.2(a) -Assignment of Shareholder's Rights Agreement
(11) 10.1 -$25 Million Credit Agreement dated January 31, 1996 between
the Registrant and Silicon Valley Bank and CoreStates Bank
(1)t 10.2 -AT&T Memorandum of Agreement dated November 22, 1995
(6) 10.3 -Lease dated November 5, 1990 between the Registrant and
Wakefield Park Limited Partnership
(3) 10.4 -First Amendment dated as of March 31, 1993 to Lease dated
November 5, 1990 between the Registrant and Wakefield Park
Limited Partnership
(4) 10.5 -Second Amendment dated as of August 31, 1994 to Lease dated
November 5, 1990 between the Registrant and Wakefield Park
Limited Partnership
(9) 10.6 -License Agreement dated November 15, 1988 between the
Registrant and VMX, Inc
(7) 10.7 -License Agreement dated January 22, 1990 between the
Registrant and Dytel Corporation
(5) 10.8 -Settlement Agreement dated December 28, 1993 between the
Registrant and Theis Research, Inc. and Peter F. Theis
(2)* 10.9 -1995 Director Stock Option Plan
(5)* 10.10 -1992 Directors' Stock Option Plan, as amended
(5)* 10.11 -1994 Stock Incentive Plan
(8)* 10.12 -1989 Incentive Stock Option Plan, as amended
(9)* 10.13 -Employee Savings and Profit Sharing Plan
(10)* 10.14 -Employee Severance Benefit Plan
(11) 11. -Statement of Weighted Shares Used in Computation of Earnings
Per Share
(11) 23. -Consent of Coopers & Lybrand L.L.P
(11) 27. -Financial Data Schedule
__________________________
(1) Filed herewith.
(2) Incorporated by reference to the Registrant's Form 10-Q for the
period ended July 31, 1995.
(3) Incorporated by reference to the Registrant's Form 10-Q for the
period ended October 31, 1993.
(4) Incorporated by reference to the Registrant's Form 10-K for the
fiscal year ended January 31, 1995.
(5) Incorporated by reference to the Registrant's Form 10-K for the
fiscal year ended January 31, 1994.
(6) Incorporated by reference to the Registrant's Form 10-K for the
fiscal year ended January 31, 1991.
(7) Incorporated by reference to the Registrant's Form 10-K for the
fiscal year ended January 31, 1990.
(8) Incorporated by reference to the Definitive Proxy Materials for the
Registrant's Annual Meeting of Stockholders held July 14, 1992.
(9) Incorporated by reference to the Registrant's Form S-1 (Registration
No. 33-32134).
(10) Incorporated by reference to the Registrant's Form 8-K dated
May 9, 1991.
(11) Previously filed.
* Management contract, compensation plan or arrangement filed as an
exhibit pursuant to Item 14(c) of Form 10-K.
t Confidential treatment requested as to certain portions.<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement ("MOA") is effective this 22nd
day of November 1995 between AT&T Corp., a New York corporation
with its principal place of business at 295 N. Maple Avenue,
Basking Ridge, New Jersey 07920 (hereinafter "AT&T") and Boston
Technology, Inc., a Delaware corporation with its principal place
of business at 100 Quannapowitt Parkway, Wakefield, MA 01880
(hereinafter "BTI").
WHEREAS, AT&T has selected BTI as a vendor to provide BTI's
AccessNP Services Platform for deployment in support of AT&T's
mailbox and messaging services; and
WHEREAS, AT&T, with this selection, has agreed to commit to
purchase and license from BTI its AccessNP System, including
Hardware and Software, for an initial commitment of $15 million,
with planned purchases of an additional $30 million during
calendar year 1996; and
WHEREAS, AT&T is desirous of purchasing a shareholder
interest in BTI, as described in this MOA.
NOW, THEREFORE, it is hereby agreed by the parties hereto
that:
1. This MOA states the terms and conditions related to the
Purchase and License by AT&T of BTI's Platforms and
Software, and the issuance of Warrants to AT&T by BTI in
conjunction with this Agreement. It is further agreed
by BTI and AT&T, that this entire MOA and the related
attachments in the following order of precedence, is
deemed a binding Agreement: (a) the provisions of this
MOA and its Attachment A, (b) Exhibit A - Product
Requirement Summary; (c) Exhibit B - the relevant terms
from AT&T's Standard Procurement Terms; (d) Exhibit C -
the relevant terms from BTI's Purchase and License
Agreement; and (e) Exhibit D - Common Stock Purchase
Warrant. The parties agree to work together and within
the next thirty (30) days of the date hereof,
incorporate the above items into a Master Purchase and
License Agreement, which if successfully completed would
replace this MOA and the aforesaid Exhibits. This
agreement will commence on the date of this MOA and
continue for a period of five (5) years.<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
2. AT&T will purchase from BTI, between ******* AccessNP
50/60 Platforms equipped with Universal APU's each
configured for ** ports, and ***************, with an
initial minimum of ** ports. Such purchases will also
conform to the Product Requirements Summary shown in
Exhibit A and will commence on the date of this MOA, and
continue through December 31, 1996. All such Platforms
are to be installed by BTI by January 31, 1997. Each
AccessNP 50/60 with Universal APU's will be priced at
*************** and each Access NP 5 with Universal
APU's will be priced at **************. The pricing
described above, for this product and any successor
product referred to in the next sentence, will continue
for the life of this Agreement (five (5) years) at the
lower of the above prices, or the most favored nation
pricing in effect at the time of an Order. BTI will
make this product, or a fully compatible product,
substantially similar to this product in form, fit and
function, and which has performance equal to this
product, available to AT&T during the full term of this
Agreement.
3. AT&T will further license from BTI, its Operating System
and Application Software, (BTI Software) to run on the
Platforms for a one-time royalty fee of **************
which will also include the royalty fees for any
software referenced in paragraphs 7 and 8 below and
Exhibit A, payment for which will be due within thirty
(30) days after such BTI Software is installed and
Accepted and the ports are made available for service on
each Platform.
4. BTI represents that the prices for products and services
which it provides to AT&T under this Agreement are not
less favorable than the prices offered to any of BTI's
other customers acquiring such products and services in
similar or lesser quantities during the term of this
Agreement. If BTI offers lower prices to any customer
inconsistent with this provision, then BTI agrees to
promptly notify AT&T of such occurrence, and to
concurrently extend such prices to AT&T. This Agreement
and any applicable orders, at AT&T's option, shall be
deemed amended to provide such terms to AT&T.
- 2 -<PAGE>
<PAGE>
5. BTI will be responsible for shipping, insurance,
delivery to the site designated by AT&T, and
installation. Title to each Platform will pass upon
shipment, with payment due within thirty (30) days after
each Platform is Accepted by AT&T.
6. The initial orders for $15 million in purchases under
paragraphs 2 and 3, will be issued by January 31, 1996,
and subject to the last sentence in paragraph 12 herein,
with further orders, planned for an additional $30
million in purchases, being issued through December 31,
1996. BTI will install Platforms and BTI Software
pursuant to an installation schedule agreed upon by the
parties.
7. Upon installation of the BTI Software on each of the
Platforms, BTI will grant to AT&T a non-exclusive, non-
transferable license to use the BTI Software, and the
accompanying Documentation, in accordance with the
attached End-User Software License Agreement (Attachment
A). To the extent, however, that BTI's existing
contracts or agreements with other AT&T controlled
entities allow, software developed for these AT&T
entities shall be made available to AT&T, for its use,
under equivalent terms.
8. BTI will license to AT&T its AccessMAX Software Tool set
for use by AT&T, on its premises, to develop and test
applications to run on BTI Platforms. Any Application
Software developed by AT&T, which are not derivatives of
BTI's Software, will be wholly owned by AT&T.
9. As to the ownership of Intellectual Property under this
Agreement, in addition to the ownership rights described
in paragraphs 7 and 8 above, AT&T shall exclusively own
Software developed by BTI for AT&T which AT&T pays for
pursuant to a Contract Services Agreement, or on a Time
and Materials basis. AT&T shall exclusively own
AccessMAX Applications which may use AccessMAX objects
and require the AccessMAX runtime environment, if they
are developed by AT&T, or for AT&T by BTI under a
Contract Services Agreement or on a Time and Materials
basis. If AT&T allows a third party, not covered by
this Agreement, to use such Applications, then AT&T will
require such third party to obtain a license from BTI to
use the AccessMAX runtime environment. Unless otherwise
agreed, either party shall own any Software which that
party develops at its own expense.
- 3 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
Except as provided above, if BTI owned Software is to be used by
AT&T to develop Applications for use by AT&T on the BTI platforms,
such use of BTI owned Software and the terms and conditions of the
ownership of such Applications will be mutually agreed upon in a
separate Agreement.
For any Applications owned exclusively by AT&T, BTI will not
provide Software support unless otherwise agreed to between the
parties.
10. BTI will warrant the Platforms and BTI Software for a
period of one (1) year after Acceptance in accordance
with the enclosed warranty terms. After the first year,
AT&T may choose to have BTI provide Tier 2 and Tier 3
Maintenance Services on a Time and Materials *******
****************** basis, or on a fixed rate as provided
for in BTI's Extended Material Support and Technical
Service Proposal.
11. BTI will provide post warranty Annual Software
Maintenance at a fee, not to exceed the lower of *****
********************** of the then in effect most
favored nation pricing for equivalent software, for the
useful life of the BTI Software. Software maintenance
will include fixes and extensions of functionality, in
the form of upgrades, and updates to the extent provided
to other BTI customers with Software Maintenance
Agreements for such Software.
12. AT&T may further agree to enter into a generic Contract
Services Agreement with BTI for the provision of
services such as Custom Software Development, Dedicated
Application Development Engineers and Medalist
Marketing Support Services (beyond the services provided
free-of-charge with each such Platform purchased or
those referenced in paragraph 13). AT&T agrees to pay
BTI its Cost for each service on a Time and Material,
*************** basis.
Except for AT&T's commitment to purchase Platforms in
paragraph 2, to license Software in paragraph 3, to
acquire Software Maintenance in paragraph 11, and to
acquire Contract Services as expressly stated in this
MOA and Exhibit A, AT&T is not obligated to acquire
products and services from BTI except as the parties
expressly agree in the form of Accepted Purchase Orders
or other binding contractual arrangements.
- 4 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
13. **** will provide **************************************
for ****************************************
************************ for ************************
and ****************************************************
and *************************************************
********* for each *********************************
*** will also provide *********************************
********** commensurate with the ********************
*********** however, **** further agrees to *********
**************************************************
***************************************.
14. In conjunction with the ***********************
**************************************************
*****************. BTI will be responsible for
providing a minimum 24 hour response time for Spare
Parts. The determination as to the location of the
Spare Part Depots will be based upon a mutual agreement
between AT&T and BTI.
15. In consideration of the minimum purchase commitments
described above, BTI hereby grants to AT&T a warrant to
purchase 4,908,800 shares of BTI Common Stock ("The
Warrant") at an exercise price of $14 per share (subject
to proportionate adjustment for stock splits, stock
dividends and other similar events affecting the Common
Stock after the date hereof). The above shares of BTI
Common Stock represent 19.9% of the outstanding shares
of BTI Common Stock as of the end of the business day on
November 17, 1995. The Warrant will become exercisable
in annual increments of 981,760 shares each, commencing
on the Anniversary Date of this MOA, and for four (4)
years thereafter. The Warrant will be non-transferable,
and each exercisable portion of the Warrant will remain
exercisable for a period of two and one-half (2 1/2)
years after such portion first becomes exercisable, at
which time such portion will expire and no longer be
exercisable. The shares issued upon exercise of the
Warrant will be "Restricted securities" under Rule 144
under the Securities Act of 1933, as amended (the
"Securities Act"). The definitive form of Warrant is
attached hereto as Exhibit D, and shall be executed
simultaneously with the execution of this Agreement.
- 5 -<PAGE>
<PAGE>
16. Restrictions on Certain Actions. AT&T acknowledges that
it is acquiring the Warrants and the shares of Common
Stock issuable upon exercise of the Warrants (the
"Warrant Shares") (the Warrants and the Warrant Shares
are collectively referred to as the "Securities") for
investment purposes and that AT&T is not acquiring the
Securities with the intent or objective of affecting or
influencing the management or control of the business,
operations or affairs of BTI. In furtherance of the
foregoing, AT&T agrees, for a period beginning on the
date hereof and ending on December 31, 2000 (the
"Restricted Period"), that it shall not, directly or
indirectly, and shall not permit any of its Affiliates
or Associates (as such terms are defined in Rule 12b-2
promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), directly or
indirectly, to, without the prior written consent of
BTI:
(a) purchase, acquire or own, or offer or agree to
purchase, acquire or own, any securities of BTI or
any of its subsidiaries which are entitled to, or
may be entitled to, vote or by the terms thereof
are convertible into or exchangeable for securities
which are entitled to vote (collectively, "Voting
Securities"), other than (i) the Securities, (ii)
any securities which may be issued with respect to
the Securities as a result of any stock splits,
dividends, distributions, recapitalizations or
similar events and (iii) other Voting Securities so
long as its beneficial ownership (as defined in
Rule 13 d-3 under the Exchange Act) after giving
effect to the acquisition of beneficial ownership
of such additional Voting Securities does not
exceed 30% of the Company's outstanding Voting
Securities; or
(b) make, or in any way participate in, any
"solicitation" of proxies or be a "Participant" in
an "election contest" or "solicitation" (as such
terms are defined or used in Regulation 14A under
the Exchange Act), initiate, propose, communicate
with or otherwise solicit stockholders of BTI for
the approval of one or more stockholder proposals
or induce or attempt to induce any other person to
initiate any stockholder proposal; or
(c) form, join, in any way participate in, or encourage
the formation of, a group (as such term is defined
in Section 13 (3) of the Exchange Act) with respect
to any Voting Securities; or
- 6 -<PAGE>
<PAGE>
(d) deposit any Voting Securities into a voting trust,
or subject any Voting Securities to any agreement
or arrangement with respect to the voting of any
Voting Securities or other agreement having similar
effect, except as provided herein; or
(e) otherwise act, alone or in concert with others, to
seek to affect or influence the control of the
management or Board of Directors of BTI or the
business, operations or affairs of BTI or its
subsidiaries; or
(f) take any other action inconsistent with the
foregoing;
(g) notwithstanding any provisions of this Agreement to
the contrary, the trusts for any of the benefit
plans of AT&T or any of its affiliates may acquire
or dispose of shares of the Company's securities in
the ordinary course of their business.
17. Purchase Not For Distribution. AT&T hereby represents
and warrants to BTI that the Warrant and, if and to the
extent the Warrant is exercised, the Warrant Shares are
being acquired for investment and not with a view to the
public distribution thereof, and will not be transferred
or otherwise disposed of except in a transaction
registered or exempt from registration under the
Securities Act and in compliance with any applicable
state securities law and this Agreement. This
representation shall be deemed to be remade and ratified
upon each exercise of the Warrant with respect to the
Warrant Shares acquired upon such exercise.
18. Upon request of AT&T, during the term of this Agreement,
and at its first meeting after such request, BTI's Board
of Directors shall increase its size by one member and
elect AT&T's nominee to fill such newly-created vacancy,
subject to reasonable approval of such nominee by BTI's
Board of Directors. Thereafter, and if AT&T retains a
10% or more shareholder interest in BTI through Warrants
or Common Stock, BTI's Board of Directors shall (subject
to the following sentence) nominate the AT&T
representative for reelection as a director and use the
same efforts to cause the reelection of that AT&T
representative as a director as are used with respect to
all other nominees for election as a director. In the
event that the AT&T representative resigns as a
director, dies or is no longer employed by AT&T, AT&T
shall have the right, subject to the reasonable approval
of BTI's Board of Directors, to designate a replacement
for such AT&T representative to serve on BTI's Board of
Directors.
- 7 -<PAGE>
<PAGE>
19. Nothing in this Agreement shall restrict in any way the
business and activities of, nor in any way bind or
obligate, the entities that AT&T will be spinning off or
out or otherwise disposing of as part of the planned
restructuring announced September 20, 1995, after such
entities become public companies or are sold or have
substantially all of their assets sold or are otherwise
disposed of.
20. AT&T and BTI agree that they will jointly approve a News
Release regarding the subject matter of this
transaction, and will make no other public statements or
statements to third parties, beyond those contained in
such approved News Release or other jointly approved
public statements. If either party, including their
officers, directors, employees or agents make false,
misleading or incorrect statements regarding the subject
matter of this MOA, or beyond those contained in jointly
approved statements, then they each agree to indemnify
and hold each other, their affiliates, officers,
directors, shareholders, employees, and agents harmless
(including the reimbursement of reasonable attorney's
fees and all associated costs of the litigation) against
any claims brought against the other relating in any way
to such communications.
IN WITNESS WHEREOF, each party hereto has executed this
Memorandum of Agreement by a representative duly authorized as of
the date set forth above.
AT&T CORP. BOSTON TECHNOLOGY, INC.
By: /s/Waring Partridge By: /s/John C.W. Taylor
_______________________ ________________________
Waring Partridge Dr. John C. W. Taylor
Print Name Print Name
Title: V.P.-Consumer, Multimedia Title: President & Chief
Messaging and Wireless Executive Officer
Services
- 8 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with
the Commission. Asterisks denote such omissions.
Exhibit A
Product Requirement Summary
Equipment:
**************** shall be installed *************** and equipped
to be ************************** shall be ***********************
************************ equipped with *****************
*********************************** can be *******************
***************** Vendor agrees to ******************************
*********************************** Vendor agrees to *******
************************************************************
************************************************************
**************************************** All costs and management
of shipping and insurance, and equipment delivery and installation
shall be the *************************
Vendor warrants that their ***************************************
************************************************************
**********.
Vendor will ****************************************************
************************************************************
************************************************************
******************************** will be used.
AT&T agrees to ********************************** and Vendor
agrees to **************************************************
************************************************************
************************************************************
********** shall be agreed upon.********************************
***************************** At initial installation, each
****** shall be equipped with **************** (except as provided
above).
DSP Daughter Card Capacity:
***************************************************** Vendor will
supply and install **********************************************
***** Vendor will **********************************************
**************************************************************
**************************************************************
************************************************* will be
performed *********************** The cost of additional source
software ******************************************************
*******************************************
- 9 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
********************************************** will purchase an
**************************************** at a price not to exceed
************************
Vendor will *****************************************************
**************************************************************
**************************************************************
**************
Product Requirements:
The contents of the appended Product Requirements summary
(Attachment A) dated October 31, 1995 are included as product
requirements, augmented by specifications herein.
Software:
Vendor will supply system software and applications appropriate to
the services AT&T plans to offer in the market. Vendor will
collaborate with AT&T to specify and implement these applications.
Vendor agrees to *********************************************
**************************************************************
**************************************************************
**************************************************************
********************** the per port Software license fee
referenced below.
Included in the per port price for software quoted below will be
**************************************************************
**************************************************************
********************
****************************************** will include the
following functionality.
*************************************
AT&T has *****************************************************
and work has begun between the parties so that Vendor may deliver
**************************************************************
***************** Attachment B (appended) lists some detailed
development requirements which must be addressed *************
*********
- 10 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
****************************************
****************************************
****************************************
****************************************
****************************************
****************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
***********************************
****************************************
****************************************
The System shall **********************************************
*********************************************** It is required
**************************************************************
************************ will be included in the *************
**************************************************************
************************************************ AT&T will
accept, upon agreement of the parties, ***********************
**************************************************************
********************************************** it will be provided
upon agreement of the parties. *******************************
********* This will require a ********************************
****************** will be treated as *************************
***************************************************************
******************** which use the ****************************
****************************************
****************************************
****************************************
AT&T and Vendor agree to *************************************
**************************************************************
**************************************************************
******************************** will be furnished later on dates
to be mutually determined.
****************************************
****************************************
AT&T and Vendor will *****************************************
**************************************************************
****************************
- 11 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
To the extent allowed by *************************************
**************************************************************
shall be made available to ***********************************
*****************************
Platform Evolution:
Vendor shall provide AT&T with *********************************
***************** including the evolution of its standard platform
**************************************************************
********************** and AT&T shall provide Vendor with ****
******************************************************** Vendor
shall ************************************************************
**************************************************************
***************************************************
Service Description Documents:
AT&T will furnish ****************************************
********************************** and will work with Vendor to
**************************************************************
********************
Open Architecture:
**************************************************************
******************************************************* determines
it can **********************************************************
**************************************************************
****************************************** BTI will have the
**************************************************************
*********************** to supply to ***************************
***************************** necessary to meet such requirements
************************************
**************************************************************
within the specified time, ***********************************
*************************************************************
********************************************* to those
specifications) *************************************** or have a
************************************ If such product is then
**************************************************************
****************************************** as negotiated at that
time, ***********************************************************
****************************************************** at the time
for such component.
- 12 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
Vendor agrees to *********************************************
**************************************************************
**************************************************************
**************************************************************
*********** Vendor further agrees, *************************
**************************************************************
******************************************** These will be
treated as Contracted Services.
Hardware Maintenance:
Installed hardware will be **************************************
************************************************************
******************* Vendor may provide **************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
************************** Vendor agrees to **************
************************************************************
****************
**************************************************************
******************************* will be available from Vendor on a
*************************************
Software Maintenance:
Software maintenance for the *********************************
*************************************************************
**************************************************************
**************************************************************
******************** Software maintenance shall include ******
******************************** in the form of ******************
************************** that these are provided also to any
*************************************************** for such
software.
Training:
Vendor will provide base level maintenance and system
administration training for ************************************
***********************************
Vendor will provide training related to administration, systems
and application development for ******************************
********************
- 13 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
Marketing Support:
Vendor will provide marketing support *************************
**************************************************************
**************************************************************
enabled by this contract.
Pricing:
The foregoing shall be priced at ********************************
**************************
**************************************************************
*********************************************** will be priced at
*************
Once Vendor ****************************************************
**************************** may purchase *****************
*************************************************************
********
************************************************** will be priced
***************
Software license fee will be ***********************************
**************************************************************
**************************************************************
Annual Software Maintenance will be priced at ***************
************
Contracted Services:
Contracted Services shall be billed at **********
AT&T may contract with Vendor for a variety of services, including
but not limited to developing custom applications and
administration and operations functionality. *****************
**************************************************************
**************************************************************
Vendor agrees to work jointly with AT&T via Contracted Services to
support development in the following areas:
****************************************
****************************************
****************************************
- 14 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
Vendor agrees to provide as Contracted Services the minimum of
**************************************************************
**************************************************************
*************************************************************
- 15 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
ATTACHMENT A
PRODUCT REQUIREMENTS 10/31/95
System Level Requirements:
******** **************************************
**************** **************************************
**************************************
**************************************
**************************************
**************** **************************************
**************************************
. *****************
. *****************
. *****************
. *****************
**************** **************************************
**************************************
*************
Applications Requirements:
**************** **************************************
**************************************
*************************************
*************
. *****************
. *****************
. *****************
. *****************
Administrative Requirements:
**************** **************************************
**************************************
**************************************
*************
- 16 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
**************** **************************************
**************************************
*************
Network Interface Requirements:
**************** **************************************
**************************************
*************
**************************************
**************************************
*****************************************************************
*****************************************************************
*******************
*****************************************************************
*******************
Notification Requirements:
**************** **************************************
**************************************
**************** **************************************
**************************************
*************
**************** **************************************
**************************************
*************
- 17 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
ATTACHMENT B
Development Requirements to Support User Interface for ********
*********
Vendor will ************************************************
*****************************
*************************************************************
**************************************************************
**************************************************************
*********
**************************************************************
*************************************************************
*********
**************************************************************
**************************************************************
*******************************
**************************************************************
*********
**************************************************************
*********
**************************************************************
*********
**************************************************************
*********
**************************************************************
Development Requirements to Support User Interface *******
*********
Vendor will ************************************************
*****************************
**************************************************************
**************************************************************
*********
- 18 -<PAGE>
<PAGE>
EXHIBIT B SELECTED TERMS AND CONDITIONS
Definitions
The definitions of this Exhibit B, which are set forth below in
capital letters, apply to all the terms of this Exhibit B:
ASSOCIATED ENTITY means a corporation partnership or venture,
a majority of whose voting stock or ownership interest is
owned directly or indirectly by AT&T Corp. and includes those
listed in Appendix A.
EQUIPMENT means data processing and similar equipment and
also includes options, accessories and attachments for more
basic equipment. EQUIPMENT includes as a component thereof
any MEDIA fixedly embedded therein in that it is not normally
replaced except for maintenance and repair. EQUIPMENT may
include in its meaning, depending upon context, a system of
systems consisting of tangible EQUIPMENT and intangible
SOFTWARE.
IDENTIFICATION means any copy or semblance of any trade name,
trademark, service mark, insignia, symbol, logo, or any other
product, service, or organization designation, or any
specification or drawing of AT&T Corp. or an ASSOCIATED
ENTITY, or evidence of inspection by or for any of them.
INDEMNITEES means AT&T, its customers, officers, directors,
employees and representatives, others doing work under its
immediate or ultimate direction and control, its end
customers and intermediaries in the distribution chain, and
its successors and assigns.
INFORMATION means any idea, data, program, technical,
business or other intangible information, however conveyed.
LEASE means rental and does not include third-party leasing
transactions.
MATERIALS mean repair, maintenance or replacement parts for
EQUIPMENT, MEDIA not fixedly embedded in EQUIPMENT, and
tangible supplies of other kinds which are for or associated
with EQUIPMENT.
MEDIA or MEDIUM means any document, print, tape, disc,
semiconductor chip or other tangible information-conveying
article.
- 19 -<PAGE>
<PAGE>
ORDER means AT&T's form of purchase order or contract used
for the purpose of ordering EQUIPMENT, SOFTWARE, SERVICES or
MATERIALS.
SERVICES mean maintenance services and other services in
support of purchased or leased EQUIPMENT.
SOFTWARE means intangible INFORMATION constituting one or
more computer or apparatus programs and the informational
content of such programs, together with any documentation
supplied in conjunction with and supplementing such programs,
the foregoing being provided to AT&T by way of electronic
transmission or by being fixed in MEDIA furnished to AT&T.
WORK means (1) the provision of maintenance or other SERVICES
under this Agreement and (2) the subject matter called for by
any ORDER, specifications, drawings, and samples.
INSTALLATION DATE means the dates by which the EQUIPMENT or
MATERIALS are (1) to be delivered and (2) to be installed and
ready for use.
ENHANCEMENTS mean all SOFTWARE changes, including
enhancements, new releases, product improvements, system
modifications, updates, upgrades, field modifications and the
like.
MODIFICATIONS mean AT&T additions to the SOFTWARE, deletions
from the SOFTWARE, or merges of the SOFTWARE with one or more
programs owned or licensed by AT&T forming an updated and
otherwise modified SOFTWARE.
SOFTWARE SOURCE MATERIAL means INFORMATION consisting of all
intangible source programs, technical documentation and other
information required for maintenance, modification or
correction of the most current version of the SOFTWARE
supplied to AT&T.
SPECIFICATIONS means the SPECIFICATIONS for the SOFTWARE as
set forth in the ORDER, or if not so set forth, shall mean
BTI's current published SPECIFICATIONS and user documentation
for the SOFTWARE as of the date of the ORDER. Any provisions
contained in BTI's SPECIFICATIONS in conflict with the
provisions of this Agreement shall be deemed deleted.
USE means use by any individual having authorized access to the
computer on which the SOFTWARE is operated.
- 20 -<PAGE>
<PAGE>
Sale
BTI shall sell its EQUIPMENT and MATERIALS to AT&T upon provisions
set forth in this Agreement and in ORDERS placed by AT&T pursuant
to this Agreement. Contents of Order
An ORDER for the purchase of EQUIPMENT or MATERIALS shall be
written on AT&T's purchase order form and shall contain the
following:
1. The incorporation by reference of this Agreement;
2. The incorporation by reference of the applicable
functional performance specifications;
3. A complete list of the EQUIPMENT or MATERIALS to be
purchased specifying quantity, type, model, feature
description and purchase price to be paid (net of
purchase option credit if applicable) and the invoice
address;
4. The location at which the EQUIPMENT is to be installed
or the MATERIALS to be delivered and used including
floor, street, city and state;
5. The INSTALLATION DATE; and
6. A complete list of the SERVICES and associated costs, if
any, such as, but not limited to, training, if any
required, and a schedule of their performance.
Ordered items shall be shipped complete on date(s) specified in an
ORDER unless otherwise agreed to by AT&T.
Equipment Modification
AT&T may substitute components or supplement the EQUIPMENT by
making alterations or installing attachments to modify the range
of features that the EQUIPMENT provides. AT&T shall notify BTI in
advance of its intent to modify, and BTI shall grant a trade-in
allowance against the purchase price of the new items in
accordance with applicable allowances in effect at the time of
modification.
Operating System Software
Title to intellectual property rights in operating system software
shall remain in BTI. For the life of the EQUIPMENT listed in the
ORDER for purchased EQUIPMENT, or during the duration of the
EQUIPMENT LEASE ORDER, as applicable, BTI grants to AT&T a
- 21 -<PAGE>
<PAGE>
nonexclusive license to use, and have used therefor, SOFTWARE on
the EQUIPMENT or for which it was delivered. AT&T may copy the
SOFTWARE for use on such EQUIPMENT with or for which it was
delivered, and for archival purposes, but shall not knowingly
reproduce either the original operating system software or other
of the SOFTWARE for distribution to others. AT&T may not add to,
delete from or modify the SOFTWARE, in any manner nor alter BTI's
intellectual property rights to such delivered SOFTWARE.
Price Adjustment
If BTI's published price for any EQUIPMENT or MATERIALS is lower
on the delivery date for MATERIALS or the INSTALLATION DATE for
EQUIPMENT than the price stated in an ORDER, the price for the
EQUIPMENT or MATERIALS shall be reduced to the published price.
Return of Equipment
Whenever EQUIPMENT under warranty is shipped for repair or
replacement purposes from and then back to AT&T, BTI shall furnish
all labor and MATERIALS necessary for packing the EQUIPMENT at no
charge to AT&T. BTI shall arrange for and bear all costs
including, but not limited to, those of packing, rigging,
transportation and insurance. BTI shall also bear all risk of
loss or damage from the time the EQUIPMENT is removed from AT&T's
site until the EQUIPMENT is returned to the site.
Return of Materials
BTI shall accept for credit MATERIALS returned under any of the
following circumstances:
1. AT&T termination or cancellation of an ORDER for BTI's
EQUIPMENT or exchange by AT&T of one BTI machine for another
BTI machine within ninety (90) days of the termination or
cancellation, provided MATERIALS are not usable in other
equipment within the location;
2. BTI or AT&T error in the ordering or shipping process,
provided the MATERIALS are returned by AT&T to BTI within
ninety (90) days of receipt; or
3. Receipt of defective MATERIALS or failure of MATERIALS under
the applicable warranty.
MATERIALS returned for credit must be in complete cartons and in
good resalable condition, except where the MATERIALS are defective
or fail under the applicable warranty.
- 22 -<PAGE>
<PAGE>
Risk of Loss
BTI shall retain risk of loss and damage to the EQUIPMENT or
MATERIALS prior to the passage of title pursuant to the Title
clause unless caused by the willful or negligent acts of AT&T or
its employees.
Site Preparation and Installation
BTI shall promptly furnish to AT&T detailed written site
preparation specifications to ensure that the EQUIPMENT to be
installed will operate in an efficient and environmentally safe
manner. AT&T shall prepare the site at its own expense and in
accordance with the specifications furnished by BTI. Any
alterations or modifications in site preparation that are
attributable to BTI's incomplete or erroneous specifications shall
be made at BTI's expense.
BTI shall, at its expense, ship and install the EQUIPMENT ready
for use by the INSTALLATION DATE, furnish all labor and MATERIALS
necessary for unpacking, placement and installation of the
EQUIPMENT, which BTI shall supervise, without charge to AT&T. Not
later than the INSTALLATION DATE, BTI shall certify in writing to
AT&T that the EQUIPMENT has been properly installed and is ready
for use and that the SOFTWARE routines, if any, specified in an
ORDER are operational. If the EQUIPMENT is certified to be ready
for use prior to the day before the INSTALLATION DATE, AT&T may
elect to use the EQUIPMENT and change the INSTALLATION DATE
accordingly. At any time prior to the date indicated in an ORDER
for delivery of the EQUIPMENT, AT&T may, upon written notice to
BTI, delay the INSTALLATION DATE, but such delay shall not exceed
thirty (30) days.
Standard of Performance and Acceptance of Equipment and Software
The intent of this clause is to establish a standard of
performance which must be attained before AT&T accepts the
EQUIPMENT and SOFTWARE.
1. If the purchase price of the EQUIPMENT is less than $10,000,
BTI shall certify to AT&T in writing that the EQUIPMENT has
been properly installed and is being operated by AT&T's
personnel in conformance with BTI's technical specifications
and any specifications submitted to BTI by AT&T. Upon
satisfactory attainment of this standard of performance, the
EQUIPMENT shall be accepted in writing by AT&T.
If the purchase price of the EQUIPMENT is greater than
$10,000, paragraph 2 through 7 of this clause shall apply.
- 23 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
2. The performance period shall begin on the INSTALLATION DATE
and shall end when the EQUIPMENT and SOFTWARE, operated by
AT&T personnel, has met with both BTI's technical
specifications (Systems Acceptance Test) and any
specifications submitted to BTI by AT&T at an average
effectiveness level of one hundred (100) percent for a period
of ************************* days. AT&T may shorten the
Acceptance Test period if it deems that a shorter period will
be adequate to accurately evaluate the EQUIPMENT and
SOFTWARE. AT&T will, with BTI's assistance develop a Systems
Acceptance Test which establishes appropriate load testing
and other criteria. If the hundred (100) percent
effectiveness level is not attained during the initial
************************* day period, the performance period
shall be extended ********************* until the hundred
(100) percent effectiveness level has been attained for
************************* days. If the hundred (100) percent
effectiveness level has not been attained for *************
*********** days within *************** calendar days from
the INSTALLATION DATE, AT&T may either (a) terminate the
ORDER and have the EQUIPMENT and SOFTWARE promptly removed,
(b) require a replacement be installed, or (c) continue the
performance period subject to its rights under clauses (a)
and (b) of this sentence.
3. EQUIPMENT and SOFTWARE which shall have been accepted by AT&T
and then modified or replaced shall be deemed to have met
AT&T's standard of performance if it operates in conformance
with both BTI's published technical specifications, and any
specifications submitted to BTI by AT&T, at an average
effectiveness level of one hundred (100) percent or more
during a ************************* day period.
4. AT&T shall maintain appropriate daily records to reflect
operation of the EQUIPMENT and SOFTWARE pursuant to this
Standard of Performance and Acceptance of EQUIPMENT and
SOFTWARE clause.
5. Upon satisfactory completion of the System Acceptance Test,
the EQUIPMENT and SOFTWARE shall be accepted in writing by
AT&T.
- 24 -<PAGE>
<PAGE>
Title
AT&T shall accept title to the EQUIPMENT after the EQUIPMENT
satisfactorily attains the standard of performance pursuant to the
Standard Of Performance And Acceptance Of Equipment clause. Upon
receipt of payment, BTI shall furnish AT&T a bill of sale and all
other documents requested by AT&T to enable it to perfect
unencumbered title to the EQUIPMENT.
Title to MATERIALS shall rest in AT&T upon their acceptance which
shall be deemed to occur upon receipt of the MATERIALS at AT&T's
receiving dock unless otherwise specified by AT&T before or
promptly after such receipt.
Equipment Warranty
BTI warrants to AT&T and its customers that the EQUIPMENT and
MATERIALS furnished shall be merchantable and free from defects in
design, material and workmanship and shall conform to and perform
in accordance with the specifications, drawings and samples.
These warranties extend to the future performance of the EQUIPMENT
and MATERIALS and shall continue for the longer of (a) one year
after the EQUIPMENT or MATERIALS are accepted by AT&T, or (b) a
greater period if specified elsewhere in this Agreement or an
ORDER. BTI also warrants to AT&T and its customers that the
EQUIPMENT and MATERIALS shall be new or remanufactured and that
SERVICES shall be performed in a first class, workmanlike manner.
In addition, if the EQUIPMENT or MATERIALS furnished contains one
(1) or more manufacturer's warranties, BTI hereby assigns those
warranties to AT&T and its Customers. EQUIPMENT, MATERIALS or
SERVICES not meeting the warranties will, at AT&T's option, (a) be
returned for or subject to refund, repair, replacement, or
reperformance by BTI at no cost to AT&T or its customers and with
transportation costs and risk of loss and damage in transit borne
by BTI, or (b) be subject to refund.
All warranties shall continue in full force and effect
notwithstanding transfer of title to the EQUIPMENT or MATERIALS by
AT&T, so long as AT&T, its customers or its ASSOCIATED ENTITIES
shall remain the user of the EQUIPMENT or MATERIALS. All
warranties shall also survive inspection, acceptance and payment.
License Grant
BTI hereby grants to AT&T a nonexclusive, nontransferable (except
as set forth in this Agreement) perpetual license so USE the
SOFTWARE. Upon delivery to AT&T, all media shall become the
property of AT&T except that fixed in EQUIPMENT, title to which
- 25 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
shall pass to AT&T upon acceptance of the EQUIPMENT. SOFTWARE
includes the basic items defined in the SOFTWARE and Programming
aids clause and any other basic items listed on an ORDER. The
foregoing license extends to any use of any program or software
derived from the SOFTWARE. The foregoing license is for SOFTWARE
different from the originally delivered SOFTWARE referred to in
the Operating System Software clause.
License Fee
Fees for the license of the SOFTWARE and the maintenance of the
SOFTWARE are designated in this Agreement or will be separately
agreed to by the parties. Once a year only, BTI may change the
fees for recurring charges if (1) such change is part of a change
to BTI's published price list, and (2) if ninety (90) days prior
written notice is given to AT&T. Any provisions included in BTI's
published price list other than those relating to price and
description of items to which prices apply shall be deemed
deleted. Fee(s) changes shall not become effective until BTI
receives AT&T's written consent to the specific fee(s) changes (or
until ninety (90) days from BTI's notice with no reply from AT&T.)
BTI agrees that any increase in fees will be no more than ****
************ of the fees in effect at the time of the written
notice of such change.
Centralized Maintenance
AT&T may specify in an ORDER that, for centralized maintenance
purposes all SOFTWARE changes, including ENHANCEMENTS, provided by
BTI shall be provided only to the AT&T's Centralized Support
Organization. BTI will in that event, be responsive to
maintenance requests which the AT&T's Centralized Support
Organization issues. This Organization will be responsible for
SOFTWARE application, initial acceptance testing and distribution
of the SOFTWARE to all licensed installations.
BTI grants AT&T the right to transmit the SOFTWARE by means of
data links from AT&T's Centralized Support Organization to each
licensed installation.
BTI grants to AT&T, ********************* a license to USE a copy
of the SOFTWARE for centralized maintenance purposes only. BTI
shall provide this maintenance copy of the SOFTWARE in response to
an ORDER requesting same. The maintenance copy provided to the
AT&T's Centralized Support Organization will be used only to
perform systems or application support functions for the AT&T's
application programmers, except as provided hereinafter. If the
- 26 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
maintenance copy of the SOFTWARE provided pursuant to this clause
or a copy thereof is later incorporated by the AT&T's Centralized
Support Organization into a AT&T system or application support
SOFTWARE, AT&T shall notify BTI and shall pay BTI the current
applicable rate paid by AT&T for USE of the SOFTWARE.
Contents of Order
An ORDER for SOFTWARE shall be written on AT&T's purchase order
form and shall contain the following:
1. The incorporation by reference of this Agreement;
2. A complete list of the SOFTWARE to be included in the
license, including a reference to and incorporation of
the applicable SOFTWARE reference manuals;
3. The fee for the SOFTWARE furnished and license granted;
4. The location or locations at which the SOFTWARE is to be
delivered and invoiced;
5. The date or dates by which the SOFTWARE shall be
delivered; and
6. Any other special provisions agreed upon by both
parties.
Enhancements and Maintenance
BTI shall promptly furnish to AT&T during the duration of the
ORDER, at an agreed upon charge, if any, all SOFTWARE
ENHANCEMENTS, made available by BTI to any of its customers and
shall promptly provide to AT&T any revisions to the basic Software
items defined in the SOFTWARE and Programming Aids clause to
reflect the ENHANCEMENTS. All ENHANCEMENTS shall be considered
SOFTWARE subject to the provisions of the ORDER. AT&T may
incorporate the ENHANCEMENTS into the SOFTWARE or continue using
previous versions of the SOFTWARE, at AT&T's option. AT&T may, at
any time and at its discretion, discontinue maintenance of the
SOFTWARE. BTI shall not charge AT&T for ENHANCEMENTS or any other
maintenance during the warranty period. Charges for upgrading a
license from one tier grouping to a higher tier grouping shall not
exceed ***************** of the license fee paid for the current
license.
- 27 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
Intellectual Property Rights
Title to the SOFTWARE and to intellectual property rights therein
shall remain in BTI or BTI's licensor, as applicable. AT&T shall
have the right to make a reasonable number of copies of the
SOFTWARE for USE as authorized in the ORDER or elsewhere in this
Agreement. AT&T however, shall not knowingly reproduce copies of
the SOFTWARE for the purpose of supplying it to others except
individuals authorized herein. This Paragraph applies only to
preexisting BTI software and not to software developed by or for
AT&T.
Remote Access
AT&T shall have the right at no additional charge or fee, to have,
the SOFTWARE used at any other location by means of remote
electronic access.
Risk of Loss
If any SOFTWARE fixed in MEDIA is lost, damaged or made invalid
during shipment, BTI will promptly replace the SOFTWARE and MEDIA
therefor at no additional charge to AT&T. If any SOFTWARE is
lost or damaged while in the possession of AT&T, BTI will promptly
replace the SOFTWARE at the established charge for the associated
MEDIA unless such is provided by AT&T.
SOFTWARE and Programming Aids
On the delivery date, BTI shall furnish to AT&T, ****************
************** at least the following basic items:
1. Object program (the fully compiled or assembled series of
instructions, written in machine language, ready to be loaded
into the computer, that guides the operations of the
computer) stored in a MEDIUM compatible with the equipment
described in the ORDER;
2. Program implementation and user instructions and required
procedures;
3. The SOFTWARE SPECIFICATIONS, as well as the required machine
configuration;
- 28 -<PAGE>
<PAGE>
Confidential materials omitted and filed separately with the
Commission. Asterisks denote such omissions.
4. Sample data output, such as printouts or typical screen
displays, and any other programs, routines, subroutines,
utility or service programs, flow charts, logic diagrams and
listings, descriptive SPECIFICATIONS and acceptance
SPECIFICATIONS or related material BTI may have which is
necessary or useful for the full implementation and USE of
the SOFTWARE and which BTI normally furnishes to users of the
SOFTWARE ********************************.
5. Source Program (the computer program expressed in a source
language) if licensed by BTI as part of the SOFTWARE ordered
hereunder.
Source Programs and Technical Documentation
BTI shall, at AT&T's request, enter into an Escrow Agreement
substantially the same in form and substance to the form attached
(Appendix B) to this Agreement to safeguard BTI's SOFTWARE
SPECIFICATIONS and source code at any time during the duration of
this Agreement. Both parties shall negotiate in good faith such
Escrow Agreement.
If the parties have not entered into an Escrow Agreement then the
following clause shall apply:
If BTI, among other things, becomes insolvent, ceases to carry on
business on a regular basis or fails to perform its obligations
under the ORDER, and during a period of thirty (30) days
thereafter BTI (or some other financially and technically
responsible successor in interest acceptable to AT&T which assumes
in writing BTI's obligations, under the ORDER) does not continue
to perform those obligations, then (a) BTI, or others acting on
behalf of BTI, shall furnish to AT&T all SOFTWARE SOURCE MATERIALS
and (b) BTI will be deemed to have granted to AT&T a perpetual
non-exclusive royalty-free right to USE the SOFTWARE and the
SOFTWARE SOURCE MATERIALS under the provisions of the ORDER. If
AT&T's USE of the SOFTWARE Source Materials involves USE or
copying of copyrighted material or the practice of any invention
covered by a patent, BTI shall not assert the copyright or patent
against AT&T.
Software Warranty
BTI warrants to AT&T and its customers all of the following:
- 29 -<PAGE>
<PAGE>
1. The SOFTWARE will be free from significant errors, will
conform to and perform in accordance with the
SPECIFICATIONS and will function properly. The MEDIA
conveying the SOFTWARE will be free from defects in
material and workmanship. The SOFTWARE will be
compatible with and may be used in conjunction with
other SOFTWARE as described in the SPECIFICATIONS. If
an ORDER states that the SOFTWARE is to be used in
conjunction with certain data processing equipment, the
SOFTWARE shall be compatible with that equipment. The
foregoing warranties extend to the future performance of
the SOFTWARE or of products which incorporate the
SOFTWARE and shall continue for the longer of (a) the
warranty period applicable to AT&T's sublicense to its
customers of the SOFTWARE or of the products which
incorporate the SOFTWARE, (b) twelve (12) months after
the SOFTWARE is accepted by AT&T, or (c) a greater
period specified elsewhere in this Agreement or an
ORDER.
2. WORK will be performed in a first-class, workmanlike
manner.
3. There are no copy protection or similar mechanisms
within the SOFTWARE which will, either now or in the
future, interfere with the grants made in this Agreement
or an ORDER.
4. AT&T and its customers shall have quiet enjoyment of the
SOFTWARE.
5. As to SOFTWARE for which BTI does not solely own all
intellectual property rights, BTI has full right, power
and authority to license the SOFTWARE to AT&T and its
customers as provided in this Agreement or an ORDER.
6. If the SOFTWARE, or any portion thereof, is or becomes
unusable, totally, or in any respect during the
applicable warranty period, or if the WORK fails to meet
the warranties, BTI will reperform WORK, correct errors,
defects and nonconformities and restore the SOFTWARE to
conforming condition free of significant errors at no
cost to AT&T or its customers. Corrected SOFTWARE shall
be warranted as set forth in this clause.
- 30 -<PAGE>
<PAGE>
7. The SOFTWARE does not contain any malicious code,
program, or other internal component (e.g. computer
virus, computer worm, computer time bomb, or similar
component), which could damage, destroy, or alter
SOFTWARE, firmware, or hardware or which could, in any
manner, reveal, damage, destroy, or alter any data or
other information accessed through or processed by the
SOFTWARE in any manner. BTI shall immediately advise
AT&T, in writing, upon reasonable suspicion or actual
knowledge that the SOFTWARE provided under this
Agreement or an ORDER may result in the harm described
above. BTI shall indemnify and hold AT&T and its
customers harmless from any damage resulting from the
harm described above.
8. All warranties shall survive inspection, acceptance and
payment.
Taxes
AT&T shall reimburse BTI for only the following tax payments with
respect to transactions under this Agreement or an ORDER unless
AT&T advises BTI that an exemption applies: State and local sales
and uses taxes, as applicable. Taxes payable by AT&T shall be
billed as separate items on BTI's invoices and shall not be
included in BTI's prices. AT&T shall have the right to have BTI
contest any such taxes that AT&T deems improperly levied at AT&T's
expense and subject to AT&T's direction and control.
- 31 -<PAGE>
<PAGE>
EXHIBIT C
BTI Purchase and License Agreement
1. DEFINITIONS
1.1 For the purpose of this Agreement, the terms below shall
have the following definitions as indicated:
1.1.1 "Effective Date" -- the earliest date that a
duly authorized officer of both parties sign
this Agreement.
1.1.2 "Equipment" -- means Access NP Platforms.
1.1.3 "Software" -- the executable (object code)
version of BTI's proprietary computer software
as developed by and/or licensed to BTI.
Software does not include any customized
software prepared by or for AT&T.
1.1.4 "System(s)" -- means collectively the
Equipment and Software as those terms are
defined above.
1.1.5 "Documentation" -- all existing written user
manuals, reference manuals, training manuals,
release notes and/or other relevant materials
in English, as may be further described in
Schedule A attached hereto, that are produced
by BTI to assist AT&T on how to use the
System.
2. TERM
2.1 The term of this Agreement shall commence on the
Effective Date and unless otherwise terminated as
provided herein, shall continue in full force and
effect.
3. SCOPE OF AGREEMENT
3.1 BTI agrees to sell and license to AT&T, and AT&T may
purchase and license from BTI, the System(s) for AT&T's
internal use only.
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3.2 In performing its obligations hereunder, each party
shall employ its own personnel and shall be responsible
for them and their acts. Each party shall in no way be
liable for any losses, injuries, or damages caused by or
attributed to the acts and/or omissions of the other
party, its employees, or its agents.
3.3 The parties hereto agree that they are independent
contractors. This Agreement shall not be construed to
create or result in a partnership or joint venture
between the parties hereto, nor to make either party the
agent of the other party.
4. ORDERS
4.1 Unless otherwise agreed, the prices for the Systems on
all orders placed by AT&T hereunder must be stated in
U.S. dollars.
4.2 On all purchase orders placed, AT&T shall have the right
to modify or change each System assembly up to thirty
(30) days prior to scheduled shipment, without incurring
any additional charge. In the event AT&T desires to
modify or change a System assembly mix less than thirty
(30) days prior to shipment, BTI reserves the right to
place additional charges on such shipment upon BTI's
showing of incremental costs substantiating such
charges, and advance notice to AT&T, and AT&T agrees to
pay such charges. Such additional charges shall
represent BTI's cost for labor, materials, and expedited
materials, plus a reasonable profit, for such requested
assembly mix modifications or changes. No such
modifications or changes may be made after shipment.
4.3 AT&T may purchase and license each System by submitting
purchase orders for same by hard copy or facsimile. All
orders conforming with the agreements between BTI and
AT&T must be accepted.
4.4 Unless BTI expressly agrees in writing, no additional or
different provisions appearing anywhere on AT&T's
purchase order shall become part of such order.
4.5 BTI shall have the right to modify, in any manner, the
System(s), spares and/or services offered hereunder upon
thirty (30) days prior written notice to AT&T, subject
to AT&T's acceptance.
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5. ACCEPTANCE AND SHIPMENT OF ORDERS
5.1 BTI agrees to notify AT&T promptly regarding a) whether
BTI accepts or, solely if an order does not conform with
the Agreement between the parties, rejects each of
AT&T's purchase orders, b) shipping details associated
with each order, and c) any subsequent changes in BTI's
delivery schedule and/or shipping plans subject to
approval by AT&T.
5.2 Shipment of standard Systems will be on terms agreed to
by the parties and shipment of customized Systems must
be negotiated by the parties.
6. DELIVERY
6.1 Except as otherwise agreed, BTI shall deliver each
System to AT&T F.O.B. point of destination. In the
absence of specific shipping instructions from AT&T, BTI
will select a common and/or freight forwarder carrier,
and shall assume any liability in connection with the
shipment of any System delivered hereunder.
6.2 Insurance coverage for in-transit goods, beyond such
coverage provided by the common carrier/freight
forwarder, will be agreed to by the parties.
7. LICENSES
7.1 AT&T shall not remove or alter, nor permit the removal
or alteration of, any designated BTI trademarks, tags,
labels or other identifying markings placed by BTI on
any Systems, products, packages or containers provided
hereunder without the prior written consent of BTI. In
no event shall AT&T have the right to market, sell,
lease, license or otherwise distribute, directly or
indirectly, the Systems.
8. WARRANTIES
8.1 Each party hereto warrants to the other party that it
has full right, interest and authority to enter into and
perform its obligations under this Agreement.
8.2 BTI warrants to AT&T that upon payment in full of the
purchase price, AT&T shall acquire good title to the
Equipment being purchased hereunder, free and clear of
all liens and encumbrances.
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8.3 BTI warrants that the Equipment delivered hereunder will
be free from material defects in workmanship and
materials for a period of one (1) year starting at the
later of AT&T's date of acceptance or forty-five (45)
days after the date of initial shipment of the Equipment
to AT&T (the "Warranty Period"). If any item of
Equipment shall require repair or replacement by BTI in
accordance with such warranty, BTI will effect
replacement or repair as soon as possible and subject to
service commitments agreed to by the parties. BTI also
warrants that the repaired or replacement item will be
free from material defects in workmanship and materials
for the balance of the Warranty Period of the replaced
item, or for ninety (90) days, whichever is longer. BTI
warrants all spare parts will be free from material
defects in workmanship and materials for a period of
ninety (90) days from the date of installation.
8.3.1 Upon notice to BTI, defective Equipment will
be returned to BTI for repair or replacement,
at BTI's election, with risk of in-transit
loss or damage borne by AT&T and
transportation charges paid by BTI. AT&T is
responsible for obtaining an appropriate
Return Material Authorization ("RMA") from BTI
prior to returning defective Equipment to BTI
in accordance with the Return Material
Authorization Procedure, as set forth in
Schedule C attached hereto. Unless otherwise
agreed upon by BTI and AT&T, BTI shall
complete repairs and ship the repaired
Equipment within twenty (20) business days of
receipt of defective Equipment. BTI shall
bear the risk of in-transit loss or damage and
shall prepay and bear the cost of
transportation charges for shipments to AT&T
of any repaired or replaced Equipment.
8.4 During the Warranty Period referenced in Section 8.3
above, all Software licensed hereunder will conform to
BTI's applicable then current published specifications
when delivered. AT&T must notify BTI in writing of any
defect in the Software, and if the Software is found to
be substantially defective, BTI's obligation under this
warranty is to correct such defect. BTI does not
warrant that the Software will meet all requirements of
AT&T, or that the operation of the Software will be
completely error free, or that all non-material Software
defects will be corrected. BTI will correct any and all
service affecting Software deficiencies or provide an
adequate work-around(s) for same.
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8.5 The foregoing warranties above are contingent upon
proper use and maintenance of the System by AT&T, in
accordance with written standards communicated by BTI to
AT&T. In addition, however, the foregoing warranties
shall not apply to defects or failures in the System
due, without limitation, to the following to the extent
caused by AT&T's negligence: (i) accident, neglect or
misuse; (ii) failure or defect of electrical power,
electrical static discharges, external electrical
circuitry, air-conditioning or humidity control; (iii)
the use of items not provided by BTI; (iv) unusual
stress; or (v) any party other than BTI or a AT&T
representative trained and certified by BTI modifying,
adjusting, repairing, servicing or installing the
System.
8.6 Post-Warranty Support. Upon the expiration of the
Warranty Period for the System, BTI will provide the
same support services described in this Section 8 for
each System, provided AT&T has paid to BTI the annual
support fee set forth in Schedule A or as subsequently
mutually agreed to by the parties.
8.7 SUBJECT TO THE FOREGOING WARRANTIES, BTI MAKES NO
IMPLIED WARRANTIES HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
9. INDEMNIFICATION
9.1 BTI agrees to defend, indemnify and hold AT&T harmless
from and against any and all loss, damage, liability or
expense (including reasonable attorneys' fees) assessed
against AT&T or incurred by AT&T, arising out of any
claim, suit or proceeding brought against AT&T asserting
or alleging that the System in the form furnished
hereunder constitutes an infringement of any patent,
trademark or copyright, provided AT&T notifies BTI
promptly in writing information of any such claim, suit
or proceeding and gives full and complete authority, and
acts reasonably, providing information, and assistance
to BTI in the defense of such claim, suit or proceeding,
and provided further that BTI shall have control of the
defense of any such claim, suit or proceeding and of all
negotiations for its settlement or compromise.
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9.2 If the System is held to be infringing and its use is
enjoined, BTI shall be discharged from its prospective
liabilities if, at its own expense and election, it does
one of the following: (1) procure for AT&T the right to
continue using the System, or (2) modify the System so
it becomes non-infringing. BTI shall not have any
liability to AT&T under this Agreement if any allegation
of infringement is based upon the interconnection and/or
modification and/or use of the System in combination
with other devices not furnished by BTI and which have
not been disclosed to BTI as part of AT&T's proposed
configuration where the System would not by itself be
infringing, or if the infringement arises out of
compliance with AT&T's specifications or designs or out
of modifications made to the System unless such
modifications are made by BTI.
9.3 Nothing in this Agreement grants to either party rights
to the other party's patents or copyrights.
Furthermore, BTI has no rights to AT&T's other
Intellectual Property except as otherwise agreed to
herein.
10. LIMITATION OF LIABILITY
10.1 IN NO EVENT SHALL BTI BE LIABLE HEREUNDER FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
LEGAL THEORY, EVEN IF BTI HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
11. DEFAULT AND OPPORTUNITY TO CURE
11.1 Subject to the provisions of Section 12.1 below, neither
party shall be deemed to be in default under the terms
of this Agreement unless the party alleging the default
sends a written notice setting forth the nature of the
alleged default, and the defaulting party shall fail to
substantially cure such default within thirty (30) days
following the receipt of such notice.
12. TERMINATION
12.1 For Cause -- This Agreement may be terminated by either
party upon the failure of the other party to cure any
material default following the notice and opportunity to
cure set forth in Section 11.1. above, provided,
however, that:
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12.1.1 Sixty (60) days prior written notice shall be
required and this Agreement shall terminate
after said sixty (60) day period if any of the
following circumstances remain uncured: (i)
if the other party becomes insolvent or unable
to pay its debts in the ordinary course of its
business; (ii) if a voluntary or involuntary
petition under applicable bankruptcy laws is
filed by or against the other party; (iii) if
a receiver is appointed for the business
affairs of the other party or the other party
makes an assignment for the benefit of
creditors; (iv) if the other party liquidates
or ceases doing business as a going concern;
or (v) if there is a change in the control or
majority ownership of one party not otherwise
expressly assented to by the other party.
13. TRAINING AND OTHER SUPPORT SERVICES
13.1 BTI will provide technical training for AT&T's
personnel to prepare them to operate, administer
and maintain the System. AT&T shall be responsible
for all travel and living expenses of its employees
related to such training. Training for additional
employees of AT&T will be available in accordance
with BTI's then standard practices and pricing.
14. LAWS AND REGULATIONS
14.1 This Agreement is specifically made subject to any and
all laws, regulations, orders or other restrictions on
the export from the United States of America of computer
software, hardware, telecommunications equipment and
technical knowledge or know-how relating thereto, which
may be imposed from time to time by the Government of
the United States of America. AT&T agrees that Systems
purchased/licensed hereunder will not be exported or
otherwise transferred, directly or indirectly, in whole
or in part, without AT&T first obtaining , where
applicable, a license from the U.S. Department of
Commerce and/or any other appropriate agency of the U.S.
Government, as required.
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15. GENERAL PROVISIONS
15.1 All notices required to be given hereunder shall be in
writing and shall be deemed given if delivered
personally, or if sent by facsimile (whereby the
receiving party shall acknowledge receipt of same by
facsimile within two (2) business days from receipt of
the initial facsimile) with a copy of such notice sent
by air mail, to the person identified below at the
address as set forth at the beginning of this Agreement,
or such other person or address as may be specified in a
written notice delivered in accordance with this
Section 15.1:
If to BTI: Attention: A. K. Wnorowski
Senior Vice President,
Strategic Alliances
If to AT&T: Attention: ________________________
__________________________
15.2 Neither party may assign its rights and/or obligations
hereunder without the prior written consent of the other
party, which consent shall not be unreasonably withheld
provided, however, AT&T reserves the right to assign its
rights to any successor corporation which assumes
responsibility for the businesses contemplated
hereunder.
15.3 This Agreement shall be governed by, and construed in
accordance with, the laws of New York, without reference
to the conflict of laws provisions thereof.
15.4 If any provision of this Agreement is held to be invalid
under any applicable law, such provision shall, to the
extent of such invalidity, be deemed to be omitted here
from, and all other provisions of this Agreement shall
continue in full force and effect.
15.5 Any failure by either party to enforce strict
performance by the other party of any provision herein
shall not constitute a waiver of the right to
subsequently enforce such provision or any other
provision of this Agreement.
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15.6 Any controversy or claim arising out of or related to
this Agreement shall be submitted to binding arbitration
in New York City, before a single arbitrator in
accordance with the then prevailing Rules of the
American Arbitration Association. Any such arbitration
shall be held in English and shall be administered by
the American Arbitration Association. Any arbitrator(s)
used shall be knowledgeable in telecommunications and
data processing systems. The parties consent to the
jurisdiction of the Courts of New York in connection
with respect to any award made by the arbitrator(s).
Each party shall bear its own costs, expenses of fees
(including attorneys' fees) incurred in connection with
this Section 15.6. The parties hereby acknowledge that
monetary damages may not be a sufficient remedy for
breaches of Section 7, above and that either party, as
appropriate, may be entitled to such injunctive or
equitable relief for actions or claims arising solely
under Section 7, as may be deemed proper by a court of
competent jurisdiction.
15.7 Neither party shall be liable to the other party for any
failure to perform hereunder due to contingencies beyond
its reasonable control, including but not limited to,
riots, wars, fires or Acts of God; in the event of such
situation, the party excused from such obligation shall
use best efforts to meet its commitments as soon as
possible, and the other party reserves its rights to
cancel its corresponding obligations effective upon
notice.
15.8 No modification of this Agreement shall be binding upon
either party unless made in writing and executed on
behalf of that party by its duly authorized
representative.
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THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
Number of Shares: 4,908,800 shares (subject to adjustment as
provided herein)
Date of Issuance: November 22, 1995
BOSTON TECHNOLOGY, INC.
Common Stock Purchase Warrant
Boston Technology, Inc., a Delaware corporation (the
"Company"), for value received, hereby certifies that AT&T
Corporation ("AT&T"), is entitled, subject to the terms set forth
below, to purchase from the Company, at any time or from time to
time during the periods specified herein, 4,908,800 shares of
Common Stock, $.001 par value per share, of the Company (the
"Common Stock"), at a purchase price of $14.00 per share. The
shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to
the provisions of this Warrant, are hereinafter referred to as the
"Warrant Shares" and the "Purchase Price", respectively.
1. Exercise.
(a) This Warrant shall become exercisable as to twenty
percent (20%) of the Warrant Shares on each of the first five
anniversaries of the date hereof. This Warrant shall remain
exercisable as to particular Warrant Shares for a period of thirty
(30) months after such Warrant Shares first become exercisable,
and no longer, and shall expire as to such Warrant Shares if not
exercised prior to the end of such thirty-month period. The
following table summarizes the foregoing:
Warrant Shares Become Exercisable Expire
981,760 November 22, 1996 May 22, 1999
981,760 November 22, 1997 May 22, 2000
981,760 November 22, 1998 May 22, 2001
981,760 November 22, 1999 May 22, 2002
981,760 November 22, 2000 May 22, 2003
In addition to the foregoing, in the event that any person or
entity acquires a majority of the Company's outstanding voting
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securities, then this Warrant shall immediately become exercisable
in full.
(b) Each exercise of this Warrant shall be effected by
surrender of this Warrant, with the purchase form appended hereto
as Exhibit I duly executed by AT&T, at the principal office of the
Company, accompanied by payment in full, by wire transfer, bank
check or other method acceptable to the Company, of the Purchase
Price payable in respect of the number of Warrant Shares purchased
upon such exercise.
(c) AT&T may, at its option, elect to pay some or all
of the Purchase Price payable upon an exercise of this Warrant by
cancelling a portion of this Warrant (to the extent then
exercisable) with respect to such number of Warrant Shares as is
determined by dividing (i) the total Purchase Price payable in
respect of the number of Warrant Shares being purchased upon such
exercise by (ii) the excess of the Fair Market Value per share of
Common Stock as of the effective date of exercise, as determined
below (the "Exercise Date"), over the Purchase Price per share.
The Fair Market Value per share of Common Stock shall be
determined as follows:
(i) If the Common Stock is listed on a national
securities exchange, the Nasdaq National Market or another
nationally recognized exchange or trading system as of the
Exercise Date, the Fair Market Value per share of Common Stock
shall be deemed to be the last reported sale price per share of
Common Stock thereon on the Exercise Date, or, if no such price is
reported on such date, such price on the next preceding business
day for which such price is reported.
(ii) If the Common Stock is not listed on a
national securities exchange, the Nasdaq National Market or
another nationally recognized exchange or trading system as of the
Exercise Date, the Fair Market Value per share of Common Stock
shall be deemed to be the amount determined in good faith by the
Board of Directors to represent the fair market value per share of
the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock
under an employee benefit plan of the Company).
(d) Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on
the day on which this Warrant shall have been surrendered to the
Company as provided in Section 1(b) above. At such time, AT&T
shall be deemed to have become the holder of record of the Warrant
Shares issuable upon such exercise.
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(e) As soon as practicable after the exercise of this
Warrant in full or in part, the Company, at its expense (including
without limitation the payment of any applicable stamp taxes),
will cause to be issued in the name of, and delivered to, AT&T:
(i) a certificate for the number of full Warrant
Shares to which AT&T shall be entitled upon such exercise plus, in
lieu of any fractional share to which AT&T would otherwise be
entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new
warrant (dated the date hereof) of like tenor, calling on the face
thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares
called for on the face of this Warrant minus the sum of (a) the
number of such shares purchased by AT&T upon such exercise plus
(b) the number of Warrant Shares (if any) covered by the portion
of this Warrant cancelled in payment of the Purchase Price payable
upon such exercise pursuant to Section 1(c) above.
2. Adjustments.
(a) If outstanding shares of the Common Stock shall be
subdivided into a greater number of shares or a dividend in Common
Stock shall be paid in respect of Common Stock, the Purchase Price
in effect immediately prior to such subdivision or at the record
date of such dividend shall simultaneously with the effectiveness
of such subdivision or immediately after the record date of such
dividend be proportionately reduced. If outstanding shares of
Common Stock shall be combined into a smaller number of shares,
the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination,
be proportionately increased. When any adjustment is required to
be made in the Purchase Price, the number of Warrant Shares
purchasable upon the exercise of this Warrant shall be changed to
the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Purchase
Price in effect immediately prior to such adjustment, by (ii) the
Purchase Price in effect immediately after such adjustment.
(b) If there shall occur any capital reorganization or
reclassification of the Common Stock (other than a change in par
value or a subdivision or combination as provided for in
Section 2(a) above), or any consolidation or merger of the Company
with or into another corporation, or a transfer of all or
substantially all of the assets of the Company, then, as part of
any such reorganization, reclassification, consolidation, merger
or sale, as the case may be, lawful provision shall be made so
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that AT&T shall have the right thereafter to receive upon the
exercise hereof the kind and amount of shares of stock or other
securities or property which AT&T would have been entitled to
receive if, immediately prior to any such reorganization,
reclassification, consolidation, merger or sale, as the case may
be, AT&T had held the number of shares of Common Stock which were
then purchasable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined in good
faith by the Board of Directors of the Company) shall be made in
the application of the provisions set forth herein with respect to
the rights and interests thereafter of AT&T, such that the
provisions set forth in this Section 2 (including provisions with
respect to adjustment of the Purchase Price) shall thereafter be
applicable, as nearly as is reasonably practicable, in relation to
any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(c) When any adjustment is required to be made in the
Purchase Price, the Company shall promptly mail to AT&T a
certificate setting forth the Purchase Price after such adjustment
and setting forth a brief statement of the facts requiring such
adjustment. Such certificate shall also set forth the kind and
amount of stock or other securities or property into which this
Warrant shall be exercisable following the occurrence of any of
the events specified in Section 2(a) or Section 2(b) above.
3. Fractional Shares. The Company shall not be required
upon the exercise of this Warrant to issue any fractional shares,
but shall make an adjustment therefor in cash on the basis of the
Fair Market Value per share of Common Stock, as determined
pursuant to Section 1(c) above.
4. Transfer Restrictions.
(a) This Warrant may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of,
whether voluntarily or by operation of law.
(b) Upon each and every exercise of this Warrant
(whether an exercise for cash or in a "cashless" exercise as
permitted by Section 1(c) above), AT&T agrees not to sell,
exchange, transfer, pledge, hypothecate or otherwise dispose of
the Warrant Shares issued upon such exercise for a period of time
after such exercise (the "Rule 144 Period") determined as follows.
The Rule 144 Period shall be two years, unless the Securities and
Exchange Commission (the "SEC") reduces the holding period
specified in paragraph (d) of Rule 144 ("Rule 144") under the
Securities Act of 1933, as amended (the "Securities Act"), in
which event the Rule 144 Period shall simultaneously be reduced to
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such shorter period as has been established by the SEC for
paragraph (d) of Rule 144.
(c) After the expiration of the Rule 144 Period, the
Warrant Shares may be sold or transferred if either (i) they first
shall have been registered under the Securities Act or (ii) the
Company first shall have been furnished with an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration
requirements of the Securities Act.
(d) Each certificate representing Warrant Shares shall
bear a legend substantially in the following form:
"The securities represented by this
certificate are subject to restrictions
on transfer and may not be sold,
exchanged, transferred, pledged,
hypothecated or otherwise disposed of
except in accordance with and subject to
all the terms and conditions of a certain
Warrant dated as of November 22, 1995, a
copy of which the Company will furnish to
the holder of this certificate upon
request and without charge."
"The securities represented by this
certificate have not been registered
under the Securities Act of 1933, as
amended, and may not be sold, exchanged,
transferred, pledged, hypothecated or
otherwise disposed of unless and until
such securities are registered under such
Act or an opinion of counsel satisfactory
to the Company is obtained to the effect
that such registration is not required."
5. No Impairment. The Company will not, by amendment of
its charter or through reorganization, consolidation, merger,
dissolution, sale of assets or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the
rights of AT&T against impairment.
6. Notices of Record Date, etc. In case:
(a) the Company shall take a record of the holders of
its Common Stock (or other stock or securities at the time
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deliverable upon the exercise of this Warrant) for the purpose of
entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to
receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the
Company is the surviving entity), or any transfer of all or
substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be
mailed to AT&T a notice specifying, as the case may be, (i) the
date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other
stock or securities at the time deliverable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least ten (10) days
prior to the record date or effective date for the event specified
in such notice.
7. Covenants of the Company.
(a) Exchange Listing. The Company will at all times
that this Warrant remains exercisable, in whole or in part,
maintain the listing (or authorization for quotation) of the
Common Stock on a national securities exchange, the Nasdaq
National Market or another nationally recognized exchange or
trading system.
(b) Reservation of Shares. The Company will at all
times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, such number of Warrant Shares
and other stock, securities and property, as from time to time
shall be issuable upon the exercise of this Warrant.
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(c) Rule 144 Information. The Company will at all
times that this Warrant remains exercisable, in whole or in part,
maintain "adequate current public information" regarding the
Company within the meaning of paragraph (c) of Rule 144.
(d) Required Registration. If the Company fails to
maintain "adequate current public information" as required by
Section 7(c), AT&T may request, in writing, that the Company
effect the registration on Form S-3, or if the Company is not then
eligible to use Form S-3 for such a registration, on Form S-1, of
the Warrant Shares for resale of the Warrant Shares. If AT&T
intends to distribute the Warrant Shares by means of an
underwriting, AT&T shall so advise the Company in its request.
Upon receipt of such request, the Company shall, as expeditiously
as possible, use its best efforts to effect the registration on
Form S-3 or on Form S-1, as the case may be, of the Warrant
Shares. The Company shall not be required to effect more than one
registration pursuant to this Section 7(d).
(e) Registration Procedures. If the Company is
required by the provisions of this Agreement to use its best
efforts to effect the registration of the Warrant Shares under the
Securities Act, the Company shall:
(i) file with the SEC a Registration Statement
with respect to the Warrant Shares and use its best efforts to
cause that Registration Statement to become and remain effective
until the earlier of (x) the time all Warrant Shares have been
sold pursuant thereto or otherwise; (y) the time all Warrant
Shares could be sold by AT&T within a three-month period without a
registration statement under Rule 144 or otherwise; or (z) 45 days
from the date that such Registration Statement is declared
effective by the SEC;
(ii) as expeditiously as possible prepare and file
with the SEC any amendments and supplements to the Registration
Statement and the prospectus included in the Registration
Statement as may be necessary to keep the Registration Statement
effective;
(iii) as expeditiously as possible furnish to AT&T
such reasonable numbers of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as AT&T may reasonably
request in order to facilitate the public sale or other
disposition of the Warrant Shares; and
(iv) as expeditiously as possible use its best
efforts to register or qualify the Warrant Shares covered by the
Registration Statement under the securities or "Blue Sky" laws of
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<PAGE>
such states as AT&T shall reasonably request, and do any and all
other acts and things that may be necessary or desirable to enable
AT&T to consummate the public sale or other disposition in such
states of the Warrant Shares; provided, however, that the Company
shall not be required in connection with this paragraph (iv) to
qualify as a foreign corporation or execute a general consent to
service of process in any jurisdiction.
If the Company has delivered preliminary or final
prospectuses to AT&T and after having done so the prospectus is
amended to comply with the requirements of the Securities Act, the
Company shall promptly notify AT&T and, if requested, AT&T shall
immediately cease making offers of Warrant Shares and return all
prospectuses to the Company. The Company shall promptly provide
AT&T with revised prospectuses and, following receipt of the
revised prospectuses, AT&T shall be free to resume making offers
of the Warrant Shares.
(f) Prospectus Delivery Requirements. AT&T shall not
make any sales of Warrant Shares without causing the prospectus
delivery requirements under the Securities Act to be satisfied and
AT&T shall promptly advise the Company of any changes in the
information concerning AT&T contained in any prospectus included
in any Registration Statement. AT&T acknowledges that
occasionally there may be times when the Company must suspend the
use of the prospectus forming a part of a Registration Statement
until such time as an amendment to such Registration Statement has
been filed by the Company and declared effective by the SEC, or
until such time as the Company has filed an appropriate report
with the SEC pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Without limiting the generality of
the foregoing, the Company shall be entitled to suspend the use of
the prospectus forming a part of such Registration Statement in
any of the following periods:
(i) any period during which the Company is engaged
in any activity or transaction or preparations or negotiations for
any activity or transaction ("Company Activity") that the Company
desires to keep confidential for business reasons, if the Company
determines in good faith that the public disclosure requirements
imposed on the Company under the Securities Act in connection with
the Registration Statement would require disclosure of the Company
Activity; or
(ii) any period during which the Company is
offering or selling shares of its capital stock pursuant to a
registration statement (other than a registration statement on
Form S-4 or Form S-8, or any successor Form) filed with the SEC
under the Securities Act (with such period to begin three weeks
prior to the date established in good faith by the Company as its
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<PAGE>
target date for the pricing of such offering and terminate upon
the closing of (or decision to abandon) the sale of such shares).
AT&T hereby covenants that it will not offer or sell any
Warrant Shares pursuant to any prospectus during the period
commencing at the time at which the Company gives it notice of the
suspension of the use of said prospectus and ending at the time
the Company gives it notice that AT&T may thereafter effect sales
pursuant to said prospectus.
(g) Allocation of Expenses. The Company shall pay all
Registration Expenses of any registration under this Section 7.
The term "Registration Expenses" shall mean all expenses incurred
by the Company in complying with the registration provisions of
this Setion 7, including without limitation all registration and
filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the Company and state "Blue Sky" fees and
expenses, but excluding underwriting discounts, selling
commissions and the fees and expenses of AT&T's own counsel.
(h) Indemnification.
(i) In the event of registration of the Warrant
Shares under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless AT&T, each underwriter of
such Warrant Shares, and each other person, if any, who controls
AT&T or such underwriter within the meaning of the Securities Act
or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which AT&T or such underwriter
or controlling person may become subject under the Securities Act,
the Exchange Act, state securities or "Blue Sky" laws or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Warrant
Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or
alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and the Company will reimburse AT&T and such
underwriter and each such controlling person for any legal or any
other expenses reasonably incurred by AT&T and such underwriter or
controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon any untrue statement or omission made in
such Registration Statement, preliminary prospectus or final
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<PAGE>
prospectus, or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the Company, in
writing, by or on behalf of AT&T or such underwriter or
controlling person specifically for use in the preparation
thereof.
(ii) In the event of registration of the Warrant
Shares under the Securities Act pursuant to this Agreement, AT&T
will indemnify and hold harmless the Company, each of its
directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter
within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or
several, to which the Company, such directors and officers,
underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or "Blue Sky" laws
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement under which
such Warrant Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to the
Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to AT&T and furnished
in writing to the Company by or on behalf of AT&T specifically for
use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided, however,
that the obligations of AT&T hereunder shall be limited to an
amount equal to the proceeds to AT&T of the Warrant Shares sold in
connection with such registration.
(iii) Each party entitled to indemnification under
this Section 7(h) (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit
the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom; provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld); and, provided,
further, that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 7(h). The Indemnified Party may
participate in such defense at such party's expense; provided,
however, that the Indemnifying Party shall pay such expense if
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<PAGE>
representation of such Indemnified Party by the counsel retained
by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party and
any other party represented by such counsel in such proceeding.
No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect of such claim or
litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior
written consent of the Indemnifying Party.
(i) Information by AT&T. AT&T shall furnish to the
Company such information regarding AT&T and the distribution
proposed by AT&T as the Company may reasonably request in
connection with, and otherwise cooperate with the Company in the
filing of, any registration, qualification or compliance referred
to in this Agreement.
(j) Transfers of Rights. None of the rights set forth
in this Section 7 may be transferred or assigned, whether
voluntarily or by operation of law, without the prior written
consent of the Company.
8. Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount
reasonably satisfactory to the Company, or (in the case of
mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
9. Mailing of Notices. All notices and other
communications in connection herewith from the Company to AT&T
shall be mailed by first-class certified or registered mail,
postage prepaid, to the address furnished to the Company in
writing by AT&T. All notices and other communications from AT&T
in connection herewith to the Company shall be mailed by first-
class certified or registered mail, postage prepaid, to the
address furnished to AT&T in writing by the Company.
10. No Rights as Stockholder. Until the exercise of this
Warrant, AT&T shall not have or exercise any rights by virtue
hereof as a stockholder of the Company.
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<PAGE>
11. Change or Waiver. Any term of this Warrant may be
changed or waived only by an instrument in writing signed by the
party against which enforcement of the change or waiver is sought.
12. Headings. The headings in this Warrant are for purposes
of reference only and shall not limit or otherwise affect the
meaning of any provision of this Warrant.
13. Governing Law. This Warrant will be governed by and
construed in accordance with the laws of the State of Delaware.
BOSTON TECHNOLOGY, INC.
By:________________________________
Title:_____________________________
AGREED:
AT&T CORPORATION
By:________________________________
Title:_____________________________
EXHIBIT I
PURCHASE FORM
To: Boston Technology, Inc. Dated:______________
The undersigned, pursuant to the provisions set forth in the
attached Warrant, hereby irrevocably elects to purchase _____
shares of the Common Stock covered by such Warrant. The
undersigned herewith makes payment of $____________, representing
the full purchase price for such shares at the price per share
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<PAGE>
provided for in such Warrant. Such payment takes the form of
(check applicable box or boxes):
___
|___| $_________ by wire transfer, bank check or other
method acceptable to Boston Technology, Inc.,
and/or
___
|___| the cancellation of such portion of the attached
Warrant as is exercisable for a total of ______
Warrant Shares (using a Fair Market Value of
$_______ per share for purposes of this
calculation).
AT&T CORPORATION
By:________________________________
Title:_____________________________
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