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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996)
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
Commission file number 0-15578
DAVOX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 02-0364368
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6 Technology Park Drive
Westford, Massachusetts 01886
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 952-0200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 Par Value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
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Indicate by check mark if 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 registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Aggregate market value, as of February 27, 1998 of Common Stock held by non-
affiliates of the registrant: $352,073,568 based on the last reported sale price
on the National Market System as reported by Nasdaq on that date.
Number of shares of Common Stock outstanding at February 27, 1998: 11,902,378
DOCUMENTS INCORPORATED BY REFERENCE
The registrant intends to file a definitive Proxy Statement pursuant to
Regulation 14A within 120 days of the end of the fiscal year ended December 31,
1997. Portions of such Proxy Statement are incorporated by reference in Part
III.
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PART I
ITEM 1 - BUSINESS
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GENERAL
Davox Corporation ("Davox" or the "Company") is principally a software and
systems integration company that develops, markets, implements, supports and
services management systems for call center operations. These call center
operations are responsible for business applications including
credit/collections, customer service, telephone sales and fund raising. Davox
systems assist calling operations, integrate existing voice and data systems,
manage outbound and inbound calling applications and focus on improving the
quality of each customer contact, as well as the quantity of calls handled. This
increased productivity and efficiency, documented by Davox users, has resulted
in lower labor costs, increased revenue and/or increased transaction capacity
for the user organization, and improved service levels. Davox systems include
intelligent outbound calling, inbound call handling, inbound/outbound call
blending and call center network management.
Davox, through its direct sales force and through its distribution channel,
has provided unified call center solutions to banks, consumer finance
organizations, retailers, entertainment companies, telemarketing organizations,
telecommunications companies and utilities. Among the Company's current
customers are: British Telecom, Chemical Bank, General Electric Capital
Corporation (GECC), Household Finance, NationsBank, May Companies, AT&T, NYNEX,
Precision Response Corporation, Superstar Satellite Entertainment, Gottschalks
Department Stores, USAA Federal Savings Bank, TeleTech Holding, Unitel
Corporation, and WGBH television.
Statements in this Form 10-K that are not historical facts, so-called
"forward-looking statements," are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that all forward-looking statements involve risks and uncertainties, including
those detailed in the Company's filings with the Securities and Exchange
Commission. See also "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Certain Factors That May Affect Future
Results."
The Company was incorporated in Massachusetts in 1981 and reorganized in
Delaware in 1982. The Company's principal offices are located at 6 Technology
Park Drive, Westford, Massachusetts 01886 and its telephone number is (978) 952-
0200.
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OVERVIEW
Today's businesses realize that their most important asset and source for
additional business is their customer; therefore, within most corporations,
several departments are in almost constant contact with buyers or users of their
goods or services. These departments, or call centers, place and/or receive
phone calls, email and faxes supplying information to or receiving information
from the customer, or processing account information from a database. The
mission of call center management is to increase the productivity of telephone
agents, improve the efficiency of the calling operation and enhance the quality
of customer service.
To achieve the mission of the call center, businesses have invested in
different types of technology to accommodate different types of customer
contact, such as incoming and outgoing calls. However, these discrete
proprietary systems result in an environment characterized as "islands of
technology" which limit the productivity and efficiency of the call center and
may degrade customer service. The majority of today's businesses are under
economic and competitive pressure to protect their investment in technology and
require a method for integrating existing disparate technologies. By
integrating these technologies, a business can share its resources and provide
its customers a higher quality of service.
Davox recognized the growing demand for systems that would unify these
disparate resources and calling applications. To deliver the level of
integration necessary to unite a business' customer contact applications, Davox
introduced in late 1993 the Unison(R) call center management system which
represented a new generation technology for the outbound call center market.
UNISON(R) FAMILY OF CALL CENTER MANAGEMENT SOLUTIONS
Unison(R) technology today is incorporated into systems specifically
designed for call centers with outbound, inbound and inbound/outbound call
blended requirements. This Unison(R) family of call center management systems
combines open system, client/server, and relational database technology with
sophisticated applications.
The Company currently markets three distinct Unison products:
. Unison(R) call center management system for credit/collections
. Unison(R) call center management system for telemarketing
. IN/UNISON(TM) call center management system for inbound call centers
Davox also offers optional SCALE(TM) software functionality that
incorporates computer telephony integration to blend inbound and outbound calls,
allowing a single agent to efficiently handle both types of calls.
UNISON(R) APPLICATIONS SOFTWARE
. UNISON STRATEGIST(TM) Applications Software lets supervisors specify and
modify comprehensive calling strategies.
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. UNISON TACTICIAN(TM) Applications Software makes it easy for supervisors
to monitor agent productivity during individual campaigns and shift
resources quickly when needed.
. UNISON PRECISION DIAL(TM) Applications Software streamlines call center
operations by allowing the supervisor to control the parameters that
affect the actual call placement, freeing agents to focus on engaging in
productive conversations with customers.
THE UNISON(R) OPEN SYSTEMS ENVIRONMENT
A single Unison(R)-based agent workstation can handle voice/data tasks
associated with calls -- incoming or outgoing, regardless of point of origin.
The system tracks all calls in real-time, allowing managers to identify quickly
both positive and negative trends as they develop. As a result, adjustments can
be made instantly to correct unfavorable trends and exploit positive ones.
One characteristic of the Unison(R) system is its Rules-Based(TM)
management software which allows a call center manager to design, adjust, refine
and implement calling strategies in real-time. With this Rules-Based(TM)
management capability, the Unison(R) system's user can target outbound calling
campaigns based on user-defined criteria such as location, income level, or
outstanding balance.
This capability also allows call centers to match specific customers with
telephone agents who have the necessary skills to handle these customer
accounts. For example, foreign language speaking agents can be automatically
assigned to handle calls to or from households where only that language is
spoken; or agents skilled in handling a specific product can be assigned to
those accounts.
Using the Unison(R) system's Rules-Based management capability, a call
center manager can set the calling "rules" for each campaign, such as:
. The order in which phone numbers will be called
. Acceptable talk time
. The time of day clients will be called
. Acceptable after call work time
. Which accounts will be called
The Unison(R) system monitors each campaign in real-time, notifying the
call center's supervisors immediately if performance deviates from the
prescribed norm, enabling the supervisor to take immediate corrective action.
The Rules-Based(TM) management capability provides Unison(R) system users with
real-time information to adapt their system "on the fly" to changing priorities
within the call center. Unison users have reported that this Rules-Based(TM)
management capability also helps them to maintain compliance with FTC/FCC
regulations.
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KEY FUNCTIONALITY FOR MANAGING THE CALL CENTER
The SMART MANAGEMENT CENTER(R) (SMC(R)) console is the central management
engine which implements the Unison(R) system's Rules-Based(TM) management
strategies and a broad range of software-driven features that allow the
intelligent, strategic integration of call center resources. The SMC(R) (a
UNIX(TM) RISC-based management system built on the Sun Microsystems, Inc.
Ultra(TM) architecture) manages, monitors, processes, reports, communicates,
integrates and controls a broad range of telephony and data-oriented call center
tasks -- all in real-time and using a friendly, point-and-click graphical user
interface. The SMC(R) utilizes limited run time Sybase Incorporated relational
database management software which supports the Rules-Based(TM) management
capability and is integral to call center improvements in the areas of quality
contact, productivity, effectiveness and resource management.
The Company's ONESTATION(TM) software product provides universal agent
audio connectivity to an existing PBX/ACD. In conjunction with installed data
resources, ONEStation(TM) functionality allows agents to access available voice
and data resources from any single existing workstation located anywhere in the
company's data network.
The Company's SMART ACCESS(TM) software product provides a flexible
management network allowing users to:
. Access, monitor and control multiple calling sites in real-time
. Distribute information and outbound call campaigns to any center on the
network
CALL MANAGEMENT FEATURES AUTOMATE, STREAMLINE OUTBOUND OPERATIONS
The Unison(R) system's sophisticated dial and pacing technology, campaign
flow, dynamic campaign generation and filter capabilities streamline outbound
call operations by automating a number of time-consuming processes. Supervisors
control the parameters that affect the actual call placement, freeing agents to
focus on engaging in productive conversations with customers. Layered upon this
powerful dialing engine is Davox's broad array of real-time campaign
management/measurement capabilities.
INTELLIGENT INTEGRATION OPTIONS FOR CALL BLENDING
Because Davox understands that a single call blending solution may not be
appropriate for every call center, the Company offers both a Computer Telephony
Integration (CTI) and a non-CTI Unison(R) system option.
The Company's SCALE(TM) (Seamless Call and Agent Load Equalization)
software is available for call centers that wish to utilize CTI for their call
handling. With SCALE(TM) functionality, all designated agents function as both
inbound and outbound agents, and the movement of those agents from inbound to
outbound calls is automatic; no separate login procedures are required. The
standard Unison(R) system campaign management capabilities are
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available to SCALE(TM) users. In addition, Unison(R) agent management and real-
time voice and data reporting features are available for inbound as well as
outbound agents.
The Company's SMART ACD(TM) software product provides non-CTI
inbound/outbound notification. Smart ACD(TM) software:
. Interfaces with a call center's existing ACD and PBX
. Monitors all designated ACD queues and displays inbound traffic
information in real-time
. Automatically and intelligently instructs agents to handle ACD queues
and outbound calling lists as necessary to maximize productivity while
maintaining the proper service levels
WEB-BASED BROWSER TECHNOLOGY TO BUILD AND DEPLOY APPLICATIONS
Perhaps the most exciting new product to emerge from the Company's labs in
1997 was the LYRICall(TM) application and script design software scheduled for
general availability in the first quarter of 1998. The Company believes this is
the first product of its kind to bring browser-based technology to the call
center agent's desktop.
LYRICall(TM) software incorporates Web-based browser technology that gives
call center management the ability to easily build and then deploy robust,
platform-independent agent applications. LYRICall(TM) software can be used in
dedicated inbound, outbound, or blended call center environments.
LYRICall(TM) software utilizes open Internet standards such as HTML,
browser technology and Java computing. By incorporating these standards,
LYRICall(TM) software distinguishes itself as a platform-independent product
that enables users to create an application once and then run it on most devices
and operating systems. LYRICall(TM) software can run on any device capable of
running a Netscape browser and Java script, including PCs, UNIX workstations and
network computers.
LYRICall(TM) software gives non-programmers the ability to build
applications. Those designing these applications are guided through application
creation using templates, wizards and intuitive point-and-click operations. This
highly intuitive browser interface guides agents through each call, allowing
them to work more productively and effectively.
LYRICall(TM) software offers telemarketing, collections, support and other
customer service oriented call centers a practical tool for meeting a wide range
of business requirements.
REPORTING SOLUTIONS FOR CALL CENTER PRODUCTIVITY
Davox has always understood that running an effective call center requires
more than simply developing calling strategies and automating operations. At the
heart of a call center's success is its ability to obtain and analyze data in a
timely fashion. In 1997, Davox announced two new product options designed to
significantly broaden the Company's Unison(R) system's reporting capabilities.
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COMPOSE IT(TM) software, which is scheduled for general availability in the
first quarter of 1998, provides a number of pre-designed, standard call center
reports for routine reporting needs. It also features a user-friendly graphical
interface that allows custom report generation with point-and-click navigation.
Users can create, edit, save, print and export reports - without learning SQL
(Structured Query Language) commands or turning to the IS department.
SELECTVIEW(TM) software is an open database connectivity (ODBC) product
that allows users to create custom reports (based on Unison(R) system activity)
from a PC running either Microsoft(R) Windows 95(R), Windows 3.1, or Windows
NT(R). As an ODBC standards-based tool, the SelectView(TM) application offers an
easy way to combine Unison(R) system data with information from a wide variety
of databases on PC, mini, and mainframe platforms.
RELIABILITY AT THE HEART OF THE SYSTEM
In 1997, Davox took steps to identify technology that would provide an
enhanced level of system reliability. In the fourth quarter, the Company
selected for inclusion into its Unison(R) systems a technology that spreads data
across multiple disks and provides a mechanism for reconstruction of data in the
event of damage to any single disk. Known as RAID (Redundant Array of
Inexpensive Disks), this technology is scheduled for availability in the first
quarter of 1998 as an option to Unison(R) systems. This technology is designed
to reconstruct data and ensure the integrity of a customer's file while at the
same time providing high availability of the Unison(R) system.
UNISON SYSTEM PRICING
The Unison(R) system price begins at approximately $90,000. Specific and
variable customer requirements, such as the number of agent positions, extent of
inbound integration and multi-site connectivity determine actual Unison(R)
system prices.
MARKETS AND APPLICATIONS
Davox markets its unified call center solutions to corporations that rely
heavily on the telephone to conduct business with their customers. These
corporations have typically made large investments in building inbound and/or
outbound calling operations. The function of these operations is to place and
receive customer calls. In many cases, these calling operations are responsible
for specific business applications such as collections, customer service, fund-
raising or telephone sales.
The Company believes that Unison(R) systems can significantly increase
productivity in many applications where repetitive tasks can be automated.
Additionally, Davox believes that its products are well suited to meet evolving
CTI standards due to their multi-protocol capabilities, integrated voice
functions and flexible software design.
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SIGNIFICANT CUSTOMERS
In 1997, the Company's largest single customer was Datapoint (a distributor
of Davox products to British Telecom), accounting for 11% of total revenue. In
1996, GE Capital Corporation was the largest single customer, accounting for 4%
of total revenue, and in 1995 AT&T was the Company's largest single customer,
accounting for 12% of the Company's total revenue. Total revenue from the
Company's top three customers amounted to 20% of total revenue in 1997, 12% of
total revenue in 1996 and 20% of total revenue in 1995. The Company believes
that its dependence on any one end user customer is not likely to increase
significantly as the Company continues to penetrate the broader call center
market and expand its alternate distribution channels.
MARKETING AND SALES
Davox takes a solutions-oriented approach to marketing its Unison(R)
systems. The integration and management capabilities of the systems are
presented as tools to help customers meet their business goals and objectives
for customer service. This approach has two major benefits:
. First, as Davox's relationship with a customer grows, the Company is
able to increase sales by developing additional call center capabilities
for the customer.
. Second, Davox can identify additional applications in other areas of the
customer's business.
Additionally, by focusing on common applications and identifying industries
with similar organizational or functional structures, Davox can address new
markets with relatively small incremental development costs and a short training
period for its sales force.
The Company's sales force follows a disciplined selling program that
focuses on selling business solutions, rather than stressing the features of
individual products. Having identified departments in which Unison(R) systems
may provide significant productivity increases, Davox sales representatives and
technical consultants (system/application specialists) work with the customer to
analyze the business and production objectives for the calling operation. This
consultative "team" approach is best suited to establish a long-term
relationship with the customer.
The Company continues to expand market penetration through its Business
Partners Program. The Company licenses its products through a third-party
distribution channel through referral, joint marketing, distributor and reseller
relationships. Examples of third-party partners include telecommunication system
manufacturers, software vendors and systems integrators. The Company plans to
continue to expand its Business Partners Program, with particular emphasis on
customer contact software vendors and telecommunication system providers.
NORTH AMERICAN OPERATIONS -- In North America, the Company markets its products
primarily through a direct sales force with contributions from the Business
Partners Program. Direct sales
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personnel are supported by a team of marketing professionals based at the
Company's headquarters.
. In 1997, Davox signed distribution agreements with Lucent Technologies
Inc. and Siemens Business Communication Systems to resell the
Unison(R) system as the preferred call center management system each
will offer their customers in the United States and Canada.
INTERNATIONAL OPERATIONS -- Davox manages international activities for several
global regions. The Company's products are offered in Europe, Latin America,
South Africa, and the Pacific Rim primarily through a series of mostly
nonexclusive distribution agreements.
. In 1997, Davox significantly expanded the human and technical resources
located at its European subsidiary headquarters in the United Kingdom
that provides direct marketing, technical support, and service to its
United Kingdom and European customers.
. Also in 1997, Davox established a subsidiary in Mexico to bring direct
marketing and technical support to the Company's customers in that
country.
In connection with sales outside the United States, Davox products are
subject to regulation by foreign governments, which requires the Company to
follow certification procedures for some countries. Failure to obtain necessary
local country approvals or certifications will restrict Davox's ability to sell
into some countries. International product revenue was $13.9 million, $7.6
million and $4.5 million or 18%, 14% and 12% of total revenue in 1997, 1996, and
1995, respectively.
CUSTOMER SUPPORT AND SERVICE
Davox provides maintenance and systems integration services that include
not only call center system installation and training, but also:
. Call center network planning, design and implementation services
. Professional services that include call center consulting, custom
application design, and development services
Davox customer support is comprised of:
. Support teams responsible for ongoing account management and customer
satisfaction of the installed base
. On-site hardware support and either on-site or remote software support
as required
. A Worldwide Support Center located in the corporate offices in Westford,
Massachusetts, that provides centralized access to hardware and software
support as required on a worldwide basis to end-users and distributors
. Software services that enhance or modify current systems
. Professional services that deliver consulting and customized project
services as required
. Training for customers' and distributors' personnel, delivered both in
Davox's Acton, Massachusetts, training facility and at customer sites
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WORLD CLASS TRAINING CENTER -- Responding to increased demand for educational
services, Davox in 1997 opened a state-of-the-art training facility in Acton,
only minutes from the Company's Westford corporate headquarters. The opening of
the new facility caps a year that saw significant investments in sophisticated
technology and people aimed at expanding the instructional services Davox offers
its customers.
PROFESSIONAL SERVICES ADDS TO ITS OFFERINGS -- As call center technologies
continue to evolve, many customers are finding that they lack the internal
resources needed to implement these technologies effectively. In early 1997,
Davox introduced a new Professional Services program staffed by specialists with
the integration, networking, hardware and software skills required to support
the Company's customers' in-house resources. During the year, the Company
expanded those offerings and resources to include consulting in system
implementation, script and graphical interface development, call center
operations and call center management.
HARDWARE SUPPORT -- Under the terms of an agreement with Grumman Systems Support
Corporation (GSSC), a wholly-owned subsidiary of Northrop Grumman Corp., GSSC
delivers hardware support services for the Unison(R) system and older CAS(R) and
SMC(R) product lines within the continental United States and Canada while Davox
continues to deliver software support services. In addition, GSSC provides
network design and systems integration services allowing Davox to focus its
expertise on customizing advanced calling centers for its clients.
CUSTOMER SERVICE REVENUE -- Customer service revenue accounted for $23.8 million
or 31.0% of the Company's total revenue in 1997, an increase of $7.4 million
from $16.5 million or 30.7% of the Company's total revenue in 1996, and an
increase of $9.6 million from $14.2 million or 37.7% of the Company's total
revenue in 1995. Customer service revenue as a percentage of total revenue
decreased in 1996 as compared to 1995 due largely to a 59% increase in product
revenue in 1996.
RESEARCH, DEVELOPMENT AND ENGINEERING
The Company employs an open system, client/server, relational database
approach in developing its unified call center solutions. The platform selected
for this approach is the Sun ULTRA(TM)/2/ family of workstations from Sun
Microsystems Inc. The Company's development efforts are focused on enhancing and
expanding the functionality of the Unison(R) system. Davox currently anticipates
that areas of potential product development may include integration links to
additional call center telephony components and the development of additional
telephone management and reporting capabilities.
The Company's continued success depends on, among other factors,
maintaining close working relationships with its customers and resellers and
anticipating and responding to their evolving applications needs. The Company is
committed to the development of new products, the improvement of existing
products and the continuing evaluation of new technologies.
During 1997, 1996 and 1995, the Company's research, development and
engineering costs were approximately $8.5 million, $5.9 million and $4.0
million, respectively, representing approximately 11.0%, 10.9% and 10.7%,
respectively, of total revenue during these periods. In the future, the Company
expects to incur approximately the same level of research, development
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and engineering expenditures as a percentage of total revenue as it did during
1997. In addition, the Company did not capitalize any of its software
development costs in 1997 or 1996.
OPERATIONS
While the majority of the Company's hardware needs are met by readily
available off-the-shelf technology, a small portion remains proprietary. These
proprietary hardware components are manufactured by third-party contractors, and
the Company believes there are many qualified vendors for these services. The
Company's production process consists primarily of final test, quality assurance
and systems integration that occurs at its Westford facility.
The Company attempts to maintain multiple sources of supply for key items
and believes it has adequate sources of supply for its expected needs. While any
of these sources could be replaced if necessary, the Company might face
significant delays in establishing replacement sources or in modifying its
products to incorporate replacement components or software code. There can be no
assurance that the Company will not suffer delays resulting from non-performance
by its vendors or cost increases due to a variety of factors, including
component shortages or changes in laws or tariffs applicable to items imported
by the Company.
COMPETITION
Davox systems compete against various outbound, inbound and blend calling
systems. Companies such as Mosaix Inc. (formerly Digital Systems International,
Inc.), Melita International Corporation, EIS International, Inc. and Genesys
Telecommunication Laboratories, Inc. Each company offers products with varying
levels of functionality in terms of system management, integration and
workstation support.
Certain of the Company's current and potential competitors are larger
companies that have greater financial, technical and marketing resources. It is
possible that competitors could produce products that perform the same or
similar functions as those performed by the Company's products.
The Company believes that the principal factors affecting competition are
ease of use and range of functionality, reliability, performance, price and
customer service, and that the Company competes favorably as to these factors.
RELIANCE ON INTELLECTUAL PROPERTY
The Company relies on a combination of patent, copyright, trademark,
contract and trade secret laws to establish and protect its proprietary rights
in its technology. The Company owns and licenses a number of patents relating to
predictive dialing, real-time telecommunication management and user interfaces.
Software products are furnished under software license agreements that grant
customers licenses to use, rather than to own, the products. The license
agreements contain provisions protecting the Company's ownership of the
underlying technology. Upon commencement of employment, employees execute an
agreement under which inventions developed during the course of employment will,
at the election of the Company, be assigned to the Company, and which further
prohibits disclosure of confidential Company information. In addition, effective
protection of intellectual property rights may be limited or unavailable in
certain foreign countries. There can be no assurances that the steps
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taken by the Company in this regard will be adequate to prevent misappropriation
of its technology or that Davox's competitors will not independently develop
technologies that are substantially equivalent of superior to Davox's
technology.
EMPLOYEES
As of December 31, 1997, the Company had 315 full-time employees, of whom
27 were engaged in operations, 203 in sales, marketing and customer support, 56
in research, development and engineering and 29 in general and administrative
functions. The Company's ability to attract and retain qualified personnel is
essential to its continued success. None of the Company's employees is
represented by a collective bargaining agreement, nor has the Company ever
experienced any work stoppage. The Company believes that its employee relations
are good.
ITEM 2-PROPERTIES
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The Company's administrative offices and its operations and development
facilities are located at a 60,000 square foot, two-story building in Westford,
Massachusetts. The facility is occupied under a lease that expires in September
2000. In addition, the Company leases facilities for district and regional
sales and service offices in seven states as well as in the U.K. and Mexico. The
current aggregate annual rental payments for all of the Company's facilities are
approximately $1.0 million.
ITEM 3-LEGAL PROCEEDINGS
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The Company is from time to time subject to claims arising in the ordinary
course of business. While the outcome of the claims cannot be predicted with
certainty, management does not expect these matters to have a material adverse
effect on the results of operations and financial condition of the Company.
ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 1997.
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ITEM 4A-EXECUTIVE OFFICERS OF THE REGISTRANT
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The executive officers of the Company, the age of each, and the period
during which each has served in his present office are as follows:
MR. ALPHONSE M. LUCCHESE (62) has served as Chairman and Chief Executive Officer
since July 1994, and also served as President from July 1994 until January of
1998. Mr. Lucchese joined Davox following seven years as President and Chief
Executive Officer at Iris Graphics, a manufacturer of high quality color
printers. Prior to joining Iris, Mr. Lucchese had served as Vice President of
Sales at Xyvision, Inc., a manufacturer of computer-integrated publishing
systems sold to Fortune 500 companies, commercial printers and typesetters, and
government agencies. Mr. Lucchese was Vice President of Sales for Davox
Corporation from 1983 until 1984. Earlier, he had spent six years at Raytheon
Data Systems, where he attained the position of Vice President and General
Manager of Northeastern Operations. Following service in the U.S. Army during
the mid-1950s, Mr. Lucchese began his professional career at IBM as a systems
engineer, later moving into the position of marketing representative.
MR. LOUIS MARIANACCI (43) was named President of Davox and officially joined the
company in January of 1998. Mr. Marianacci's primary focus is on defining and
executing Davox's international growth strategy, third-party relationship
program, and acquisition strategy. Prior to joining Davox, Mr. Marianacci was
Vice President of Customer Sales and Service at Lucent Technologies' Call Center
business unit from 1995 to 1997. Prior to joining Lucent, Mr. Marianacci was
Vice President, Worldwide Industry Marketing Transportation at AT&T Global
Information Systems from 1994 to 1995. He also held executive management
positions of increasing responsibility at Unisys Corporation from 1989 to 1993,
Control Data Corporation from 1981 to 1988, and Ultramar Canada, Inc. from 1976
to 1981.
MR. DOUGLAS W. SMITH (55) has served as Vice President, Sales and Marketing
since September 1, 1994. Mr. Smith is responsible for the Company's direct and
reseller sales in both the United States and Canada, as well as product and
industry marketing, sales support and marketing communications. Mr. Smith
joined Davox in 1994, following seven years at Iris Graphics where he
contributed to that company's extraordinary growth. Prior to joining Iris, Mr.
Smith worked for nearly 20 years in sales, managerial, and executive-level
capacities for General Electric Information Systems, Honeywell Information
Systems, Raytheon Data Systems, and Phoenix Data Systems.
MR. JOHN J. CONNOLLY (41) has served as Vice President, Finance and Chief
Financial Officer since August 1, 1994, and was elected Treasurer in January
1997. Mr. Connolly joined Davox from Iris Graphics where he had been Vice
President of Finance since 1989. Prior to joining Iris, Mr. Connolly held
finance and accounting positions of increasing responsibilities at
Instrumentation Laboratory, a manufacturer of medical equipment.
MR. JAMES F. MITCHELL (51) is a founder of the Company and has served as Senior
Vice President and Chief Technical Officer since 1983. From September 1993 to
August 1994, Mr. Mitchell managed the domestic sales operations of the Company.
From 1981 to 1983, he was Vice President, Engineering of the Company. Prior to
joining Davox in 1981, Mr. Mitchell served as Manager of Systems Development at
Applicon, Inc., a producer of CAD/CAM products.
13
<PAGE>
MR. MARK DONOVAN (43) has served as Vice President, Operations since August
1994. Since joining Davox in 1983, Mr. Donovan has held management positions of
increasing responsibility, including Vice President, Customer Service. He has
also held various materials and manufacturing management positions within the
Company. Prior to joining Davox, Mr. Donovan held various management positions
with Applicon, Inc. and Raytheon Corporation.
MR. JOHN E. CAMBRAY (42) has served as Vice President, Product Development since
August 1993. Mr. Cambray has been with Davox since early 1982 and has held
various software development and engineering management positions during this
time. Prior to joining Davox, Mr. Cambray held various design and management
positions with FASFAX Corporation and Sanders Associates.
MR. DOUGLAS P. LANGENBERG (52) has served as Vice President, Customer Services
since May 1996. Mr. Langenberg joined Davox following four years at Stratus
Computer, Inc., where he held the position of Vice President, Customer Services.
Prior to joining Stratus, Mr. Langenberg held executive-level positions with
Apollo Computer, Inc. and Digital Equipment Corporation, as well as founding and
serving as principal in a service-oriented consulting firm.
RICHARD P. SANTOS (61) has served as Vice President of International Operations
since May 1996. In this position, Mr. Santos is responsible for Davox's
international sales and support activities. His duties also include management
and development of Davox's distribution channels into its key international
markets, including Europe, Latin America, Asia/Pacific Rim, Middle East, and
Africa. Mr. Santos brings to Davox nearly 35 years of domestic and international
experience in management, sales, marketing, and business development. Prior to
joining Davox, he held senior level business development and management
positions with several leading high-technology companies, including President
and Chief Executive Officer of Monet, Inc., President of Pako Corporation, and
co-founder and Senior Vice President of Iris Graphics.
Officers are elected by and serve at the discretion of the Board of Directors.
14
<PAGE>
PART II
ITEM 5-MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- --------------------------------------------------------------------------------
Davox's Common Stock has been traded on the Nasdaq stock market under the symbol
"DAVX" since its initial public offering on April 28, 1987. Prior to that date
there was no public market for Davox's Common Stock. The following table sets
forth the range of high and low sale prices per share of Common Stock on the
National Market System for each quarter of the years ended December 31, 1997 and
1996 as reported by the National Association of Securities Dealers Automated
Quotation System (NASDAQ). On April 24, 1997, the Company effected a three for
two stock split through the issuance of a 50% stock dividend payable on May 28,
1997 to shareholders of record on May 13, 1997. All share and per share
amounts affected by this split, that are contained in this annual report on Form
10-K have been retroactively adjusted for all periods presented.
<TABLE>
<CAPTION>
Fiscal 1997
High Low
--------------
<S> <C> <C>
First Quarter 30-1/6 16-2/3
Second Quarter 35-7/8 20
Third Quarter 38-5/8 27-3/4
Fourth Quarter 39-3/4 25-1/8
</TABLE>
<TABLE>
<CAPTION>
Fiscal 1996
High Low
--------------
<S> <C> <C>
First Quarter 12-1/4 7-1/2
Second Quarter 21-2/3 11-1/2
Third Quarter 26-1/6 15-5/6
Fourth Quarter 30-1/6 20-1/2
</TABLE>
As of February 27, 1998, there were approximately 320 holders of record of the
Company's Common Stock and approximately 3,150 beneficial shareholders of the
Company's Common Stock.
The Company has never paid cash dividends on its Common Stock and has no present
intentions to pay cash dividends in the future. The Company intends to retain
any future earnings to finance the growth of the Company.
The Company has not sold any equity securities during the period covered by this
report that were not registered under the Securities Act of 1933, as amended.
15
<PAGE>
ITEM 6 SELECTED FINANCIAL DATA
The following table sets forth certain condensed consolidated financial data
with respect to the Company for each of the five years in the period ended
December 31, 1997:
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(In Thousands, Except Share Amounts)
<S> <C> <C> <C> <C> <C>
Condensed Consolidated Statement of Operations Data:
Total revenue................................... $76,815 $53,642 $37,556 $30,047 $33,756
Cost of revenue................................. 26,550 21,577 16,451 16,234 17,488
------------ --------- --------- --------- ---------
Gross profit............................... 50,265 32,065 21,105 13,813 16,268
Research, development and
engineering expenses........................ 8,479 5,861 4,020 3,540 3,391
Selling, general and
administrative expenses..................... 22,852 17,213 12,166 12,681 12,472
Restructuring costs ............................ - - - - - - - - - 3,379 - - -
------------ -------- -------- --------- ---------
Income (loss) from operations................... 18,934 8,991 4,919 (5,787) 405
Interest income, net............................ 1,952 1,137 421 37 20
------------ -------- -------- --------- ---------
Income (loss) before provision
for income taxes........................... 20,886 10,128 5,340 (5,750) 425
Provision for income taxes...................... 2,506 1,013 534 - - - 40
------------ -------- -------- --------- ---------
Net income (loss).......................... $18,380 $9,115 $4,806 ($5,750) $385
============ ======== ======== ========= =========
Earnings per share
Basic $1.60 $.85 $.48 ($.67) $.05
============ ======== ======== ========= =========
Diluted.................................... $1.45 $.74 $.42 ($.67) $.04
============ ======== ======== ========= =========
Weighted average shares outstanding
Basic...................................... 11,522,057 10,730,760 10,077,380 8,533,095 7,898,361
============ ========== ========== ========= =========
Diluted.................................... 12,663,245 12,285,244 11,565,830 8,533,095 8,663,963
============ ========== ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
-----------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Condensed Consolidated Balance Sheet Data:
Working capital........................... $48,804 $18,710 $8,589 $1,807 $3,627
Total assets.............................. 75,168 39,729 20,825 14,777 17,681
Long-term debt............................ - - - - - - 45 138 96
Stockholders' equity...................... 54,157 22,835 10,912 5,492 8,881
</TABLE>
16
<PAGE>
Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
- -------------
All statements contained herein that are not historical facts, including, but
not limited to, statements regarding anticipated future capital requirements,
the Company's future development plans, the Company's ability to obtain debt,
equity or other financing, and the Company's ability to generate cash from
operations, are based on current expectations. These statements are forward
looking in nature and involve a number of risks and uncertainties, as more fully
described under "Factors Affecting Future Performance." Actual results may
differ materially.
The following table sets forth, for the periods indicated, the percentage of
revenue represented by items as shown in the Company's Consolidated Statements
of Operations. This table should be read in conjunction with the Selected
Financial Data, Consolidated Financial Statements and Notes to Consolidated
Financial Statements contained elsewhere herein.
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL REVENUE FOR THE
YEARS ENDED DECEMBER 31,
- --------------------------------------------------------------------
1997 1996 1995
- --------------------------------------------------------------------
<S> <C> <C> <C>
Product revenue 69.0% 69.3% 62.3%
Service revenue 31.0 30.7 37.7
- --------------------------------------------------------------------
Total revenue 100.0 100.0 100.0
Cost of revenue 34.6 40.2 43.8
- --------------------------------------------------------------------
Gross profit 65.4 59.8 56.2
Research, development
and engineering expenses 11.0 10.9 10.7
Selling, general and
administrative expenses 29.7 32.1 32.4
- --------------------------------------------------------------------
Income from operations 24.7 16.8 13.1
Interest income 2.5 2.1 1.1
- --------------------------------------------------------------------
Income before provision
for income taxes 27.2 18.9 14.2
Provision for income taxes 3.3 1.9 1.4
- --------------------------------------------------------------------
Net income 23.9% 17.0% 12.8%
- --------------------------------------------------------------------
</TABLE>
17
<PAGE>
Total revenue was approximately $76.8 million, $53.6 million and $37.6
million for the fiscal years ended December 31, 1997, 1996 and 1995,
respectively. Total revenue increased 43.2% for the year ended December 31,
1997 compared to the same period in 1996 and increased 42.8% in fiscal year 1996
compared to fiscal year 1995. Total cost of revenues as a percentage of total
revenue was 34.6% in fiscal year 1997, 40.2% in fiscal year 1996 and 43.8% in
fiscal year 1995.
Product revenue was approximately $53.0 million, $37.2 million and $23.4
million in fiscal years 1997, 1996 and 1995, respectively. Product revenue
increased by 42.5% from 1996 to 1997 and increased 59.0% from 1995 to 1996.
These increases were caused by increased demand for the Unison(R) call center
management system, especially the telemarketing and collections capabilities, as
well as the inbound/outbound call blending capabilities in 1997.
Cost of product revenue as a percentage of product revenue was 22.4%, 29.3%
and 30.6% in fiscal years 1997, 1996 and 1995, respectively. The continued
improvements in product margin in 1997 represent the increased volume of product
shipments relative to fixed costs, and a higher margin product mix.
Service revenue was approximately $23.8 million, $16.5 million, and $14.2
million in fiscal years 1997, 1996 and 1995, respectively. Service revenue
increased 44.7% from 1996 to 1997 and 16.2% from 1995 to 1996. The increases in
1997 and 1996 were due to an increase in maintenance revenue related to the
growth in the installed base of the Company's products in recent years and
increased installation and training revenue related to the increased volume of
product shipments.
Cost of service revenue as a percentage of service revenue was 61.6%, 64.9%
and 65.6% in 1997, 1996 and 1995, respectively. The decreases as a percentage
of service revenue were primarily attributable to the higher service revenue
relative to fixed costs.
Revenue from the Company's largest single customer in each of 1997, 1996
and 1995 was 11%, 4% and 12% of total revenue, respectively. Revenue from the
Company's three largest customers amounted to 20% of total revenue in 1997, 12%
of total revenue in 1996 and 20% of total revenue in 1995. The Company intends
to broaden its base of existing and new customers by penetrating new markets,
expanding its direct international sales force and using alternate channels of
distribution, thereby decreasing its dependence on its largest end user
customers.
Research, development and engineering expenses were approximately $8.5
million, $5.9 million and $4.0 million, representing 11.0%, 10.9% and 10.7% of
total revenue during 1997, 1996 and 1995, respectively. These increases were
primarily attributable to higher payroll and related expenses resulting from
personnel increases in 1996 and 1997.
Selling, general and administrative (SG&A) expenses were approximately
$22.9 million, $17.2 million and $12.2 million, representing 29.7%, 32.1% and
32.4% of total revenue during 1997, 1996 and 1995, respectively. The absolute
dollar increases were primarily attributable to increased payroll and related
expenses resulting from personnel increases, and direct and indirect selling
expenses related to the increased revenue. The decreases as a
18
<PAGE>
percentage of revenue in 1997 and 1996 were mostly attributable to the
significant increase in revenues.
Interest income, derived primarily from money market instruments and
investments in bonds and commercial paper increased 70.4% from 1996 to 1997 and
159.9% from 1995 to 1996. These increases were due primarily to the
significantly higher average cash and cash equivalent and marketable securities
balances from year to year, and, to a lesser extent, due to higher interest
rates.
INCOME TAXES
The Company's effective income tax rate in 1997 was approximately 12%. This
is lower than the combined federal and statutory tax rates due primarily to
utilization and recognition of net operating loss carryforwards. The Company's
provision for income taxes in 1996 and 1995 was at the federal and state minimum
rates. The Company believes that the effective tax rate will increase
significantly in 1998.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1997, the Company's principal sources of liquidity were
its cash and cash equivalent balances of approximately $25.4 million, and its
marketable securities of approximately $23.8 million. As of the end of fiscal
1996, the Company's cash and cash equivalent balances were approximately $21.3
million, and its marketable securities were approximately $9.8 million. The
overall increase in cash and cash equivalents and marketable securities was due
primarily to the favorable operating results, collection of deferred annual
maintenance contracts, and proceeds from exercises of stock options. In
addition, the Company has an agreement for a working capital line of credit with
a bank for up to $2.0 million based on eligible receivables, as defined. There
were no outstanding balances as of December 31, 1997 or 1996 under this line of
credit.
The Company's primary investing activities were purchases and sales of
marketable securities and purchases of property and equipment. Property and
equipment investments were approximately $3.9 million in 1997 compared to
approximately $4.1 million in 1996. Purchases and sales of marketable
securities generated a net cash outflow approximately $14.0 million in 1997
compared to a net cash outflow of approximately $9.8 million in 1996.
Cash provided by financing activities is generated primarily from proceeds
from exercises of stock options. Proceeds from exercises of stock options were
approximately $1.8 million in 1997 and 1996.
Working capital as of December 31, 1997 was approximately $48.8 million as
compared to approximately $18.7 million as of December 31, 1996. Total assets
as of December 31, 1997 were approximately $75.2 million compared to
approximately $39.7 million as of December 31, 1996. The increase from 1996 to
1997 was primarily attributable to increases in cash and cash equivalents,
marketable securities and accounts receivable due to the favorable operating
results for 1997, as well as the recognition of a deferred tax asset in 1997.
19
<PAGE>
Management believes, based on the current operating plan, that the
Company's existing cash and cash equivalents, marketable securities, cash
generated from operations and amounts available under its working capital line
of credit will be sufficient to meet the Company's cash requirements for the
foreseeable future.
IMPACT OF INFLATION
The Company believes that inflation did not have a material effect on the
results of operations in 1997.
NEW ACCOUNTING STANDARDS
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
SFAS No. 130 requires disclosure of all components of comprehensive income on an
annual and interim basis. Comprehensive income is defined as the change in
equity of a business enterprise during a period from transactions and other
events and circumstances from nonowner sources. SFAS No. 130 is effective for
fiscal years beginning after December 15, 1997. Management does not expect the
adoption of this standard to have a material impact on the Company and its
operations.
In July 1997, the FASB issued SFAS No. 131, Disclosures About Segments of
Enterprise and Related Information. SFAS No. 131 requires certain financial and
supplementary information to be disclosed on an annual and interim basis for
each reportable segment of an enterprise. SFAS No. 131 is effective for fiscal
years beginning after December 15, 1997. Unless impracticable, companies would
be required to restate prior period information upon adoption. Management does
not expect the adoption of this standard to have a material impact on the
Company and its operations.
IMPACT OF YEAR 2000 ISSUE
The Year 2000 issue results from computer programs written using two digits
rather than four to define the applicable year. Any of the Company's computer
programs that have date-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a system failure
or miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
The Company is in the process of conducting an assessment of its computer
information systems and is beginning to take the necessary steps to determine
the nature and extent of the work required to make its systems Year 2000
compliant, where necessary. These steps will require the Company to modify,
upgrade or replace some of its internal financial and operational systems. The
Company continues to evaluate the estimated cost of bringing all internal
systems, equipment and operations into Year 2000 compliance, but has not yet
finished determining the total cost of these compliance efforts. While these
efforts will involve additional costs, the Company believes, based upon
currently available information, that these costs will not have a material
adverse effect on its business, financial condition or results of
20
<PAGE>
operations. However, if these efforts are not completed on time, or if the cost
of updating or replacing the Company's information systems exceeds the Company's
current estimates, the Year 2000 issue could have a material adverse impact on
the Company's business, financial condition or results of operations.
The Company also intends to determine the extent to which the Company may
be vulnerable to any failures by its major suppliers, distributors and service
providers to remedy their own Year 2000 issues, and is in the process of
initiating formal communications with these parties. At this time the Company is
unable to estimate the nature or extent of any potential adverse impact
resulting from the failure of third party suppliers, distributors and service
providers to achieve Year 2000 compliance, although the Company does not
currently anticipate that it will experience any material shipment delays from
its major product suppliers or any material sales delays from its major
distributors due to Year 2000 issues. However, there can be no assurance that
these third parties will not experience Year 2000 problems or that any problems
would not have a material effect on the Company's product supply and
distribution channels. Because the cost and timing of Year 2000 compliance by
third parties such as suppliers, distributors and service providers is not
within the Company's control, no assurance can be given with respect to the cost
or timing of such efforts or any potential adverse effects on the Company of any
failure by these third parties to achieve Year 2000 compliance.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
From time to time, information provided by the Company, statements made by
its employees or information included in its filings with the Securities and
Exchange Commission (including this Form 10-K) may contain statements which are
not historical facts, so-called "forward-looking statements," which involve
risks and uncertainties. In particular, but without limitation, statements in
"Item 1. Business" relating to expansion of the Business Partners Program, and
in "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations" relating to the Company's intent to broaden its customer
base and decrease reliance on its largest customers and the sufficiency of
working capital, may be forward-looking statements. The Company's actual future
results may differ significantly from those stated in any forward-looking
statements. Factors that may cause such differences include, but are not
limited to, the factors discussed below. Each of these factors, and others, are
discussed from time to time in the Company's filings with the Securities and
Exchange Commission.
The Company's future results may be subject to substantial risks and
uncertainties. The Company purchases certain equipment for its products from
third-party suppliers and licenses certain components of its software code from
a number of third-party vendors. While the Company believes that third-party
equipment and software vendors could be replaced if necessary, the Company might
face significant delays in establishing replacement sources or in modifying its
products to incorporate replacement components or software code. There can be
no assurance that the Company will not suffer delays resulting from non-
performance by its vendors or cost increases due to a variety of factors,
including component shortages. Also, the Company relies on certain intellectual
property protections to preserve its intellectual property rights. Any
invalidation of the Company's intellectual property rights or lengthy and
21
<PAGE>
expensive defense of those rights could have a material adverse affect on the
financial position and results of operations of the Company. The development of
new products, the improvement of existing products and the continuing evaluation
of new technologies is critical to the Company's success. Successful product
development and introduction depends upon a number of factors, including
anticipating and responding to the evolving applications needs of customers and
resellers, timely completion and introduction of new products, and market
acceptance of the Company's products. The telecommunications industry is
extremely competitive. Certain current and potential competitors of the Company
are more established, benefit from greater market recognition and have
substantially greater financial, development and marketing resources than the
Company.
The Company's quarterly and annual operating results are affected by a wide
variety of factors that could materially adversely affect revenue and
profitability, including the timing of customer orders; the Company's ability to
introduce new products on a timely basis; introduction of products and
technologies by the Company's competitors; and market acceptance of the
Company's and its competitors' products; the ability to hire and retain key
personnel. International sales are expected to continue to account for a
significant portion of Davox's net sales in future periods. International sales
are subject to certain inherent risks, including unexpected changes in
regulatory requirements and tariffs, difficulties in staffing and managing
foreign operations, longer payment cycles, problems in collecting accounts
receivable and potentially adverse tax treatment. As a result of the foregoing
and other factors, the Company may experience material fluctuations in future
operating results on a quarterly or annual basis, which could materially and
adversely affect its business, financial condition, results of operations and
stock price.
Year 2000 Systems Modifications - We are continually in the process of
updating our information and network systems and, as part of that process, we
are evaluating the costs associated with modifying and testing our systems for
the Year 2000. We expect to make some of the necessary modifications through
our ongoing investment in systems upgrades. We are not yet able to estimate the
incremental cost of the Year 2000 conversion effort but such costs will be
expensed as incurred. The costs incurred to date have not been material. There
can be no assurance, however, that there will not be a delay in, or increased
costs associated with, the implementation of such changes, and the Corporation's
inability to implement such changes could have an adverse effect on future
results of operations.
22
<PAGE>
ITEM 8 CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ---------------------------------------------------------------
Index to Consolidated Financial Statements
- ------------------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants 24
Consolidated Balance Sheets as of December 31,
1997 and 1996 25
Consolidated Statements of Income for the Years
Ended December 31, 1997, 1996 and 1995 26
Consolidated Statements of Stockholders' Equity
for the Years Ended December 31, 1997, 1996
and 1995 27
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1997, 1996 and 1995 28
Notes to Consolidated Financial Statements 29
Report of Independent Public Accountants on Financial
Statement Schedule 45
Financial Statement Schedule 46
</TABLE>
23
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Davox Corporation:
We have audited the accompanying consolidated balance sheets of Davox
Corporation (a Delaware corporation) and subsidiaries as of December 31, 1997
and 1996, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Davox Corporation and
subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 26, 1998
24
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
-------------- --------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 25,366 $ 21,333
Marketable securities 23,802 9,780
Accounts receivable, net of reserves of
approximately $1,048 and $699
in 1997 and 1996, respectively 10,359 3,185
Deferred tax asset 9,319 - - - -
Prepaid expenses and other current assets 969 1,306
-------------- --------------
Total current assets 69,815 35,604
Property and equipment, net 4,585 4,051
Long-term deferred tax asset 669 - - - -
Other assets, net 99 74
-------------- --------------
$ 75,168 $ 39,729
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,987 $ 4,811
Accrued expenses 10,223 6,175
Customer deposits 2,018 3,414
Deferred revenue 3,783 2,494
-------------- --------------
Total current liabilities 21,011 16,894
-------------- --------------
Commitments and Contingencies (Note 6)
Stockholders' equity:
Common stock, $.10 par value -
Authorized - 30,000,000 shares
Issued - 11,864,216 and 11,080,749
shares in 1997 and 1996, respectively 1,186 1,108
Capital in excess of par value 57,758 44,894
Accumulated deficit (4,763) (23,143)
-------------- --------------
54,181 22,859
Less - Treasury Stock, 3,294 shares at (24) (24)
-------------- --------------
Total stockholders' equity 54,157 22,835
-------------- --------------
$ 75,168 $ 39,729
============== =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
25
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Amounts)
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Product revenue $52,993 $37,177 $23,382
Service revenue 23,822 16,465 14,174
------------- ------------ -------------
Total revenue 76,815 53,642 37,556
------------- ------------ -------------
Cost of product revenue 11,874 10,883 7,156
Cost of service revenue 14,676 10,694 9,295
------------- ------------ -------------
Total cost of revenue 26,550 21,577 16,451
------------- ------------ -------------
Gross profit 50,265 32,065 21,105
------------- ------------ -------------
Research, development and
engineering expenses 8,479 5,861 4,020
Selling, general and administrative
expenses 22,852 17,213 12,166
------------- ------------ -------------
Total operating expenses 31,331 23,074 16,186
------------- ------------ -------------
Income from operations 18,934 8,991 4,919
Interest income 1,952 1,137 421
------------- ------------ -------------
Income before provision
for income taxes 20,886 10,128 5,340
Provision for income taxes 2,506 1,013 534
------------- ------------ -------------
Net income $ 18,380 $ 9,115 $ 4,806
============ =========== ============
Earnings per share:
Basic $1.60 $0.85 $0.48
============ =========== ============
Diluted $1.45 $0.74 $0.42
============ =========== ============
Weighted average shares outstanding:
Basic 11,522,057 10,730,760 10,077,380
============ =========== ============
Diluted 12,663,245 12,285,244 11,565,830
============ =========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
26
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands, Except Share Amounts)
<TABLE>
<CAPTION>
Capital in Total
Common Stock Excess of Accumulated Treasury Stock Stockholders'
Shares Par Value Par Value Deficit Shares Amount Equity
----------- ----------- ------------- ------------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 9,869,494 $ 987 $ 41,593 $ (37,064) (3,294) $ (24) $ 5,492
Proceeds from exercise of stock
options, including related tax benefit 385,137 39 539 - - - - - - - - - - - - 578
Proceeds from employee stock
purchase plan 13,104 1 35 - - - - - - - - - - - - 36
Net income - - - - - - - - - - - - 4,806 - - - - - - - - 4,806
----------- ----------- ------------- ------------- -------- --------- -------------
BALANCE, December 31, 1995 10,267,735 1,027 42,167 (32,258) (3,294) (24) 10,912
Proceeds from exercise of stock
options, including related tax benefit 798,035 79 2,638 - - - - - - - - - - - - 2,717
Proceeds from employee stock
purchase plan 14,979 2 89 - - - - - - - - - - - - 91
Net income - - - - - - - - - - - - 9,115 - - - - - - - - 9,115
----------- ----------- ------------- ------------- -------- --------- -------------
BALANCE, December 31, 1996 11,080,749 1,108 44,894 (23,143) (3,294) (24) 22,835
Proceeds from exercise of stock
options, including related tax benefit 771,314 77 12,620 - - - - - - - - - - - - 12,697
Proceeds from employee stock
purchase plan 12,153 1 244 - - - - - - - - - - - - 245
Net income - - - - - - - - - - - - 18,380 - - - - - - - - 18,380
-------------- ----------- ------------- ------------- -------- --------- -------------
BALANCE, December 31, 1997 11,864,216 $ 1,186 $ 57,758 $ (4,763) (3,294) $ (24) $ 54,157
============== =========== ============= ============= ======== ========= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
27
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------
1997 1996 1995
------------- ----------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $18,380 $ 9,115 $ 4,806
Adjustments to reconcile net income to net cash
provided by operating activities -
Depreciation and amortization 3,387 2,373 2,644
Deferred income taxes 0 - - - - - -
Changes in current assets and liabilities -
Accounts receivable (7,174) 1,275 240
Prepaid expenses and other current assets 337 (245) (84)
Accounts payable 176 1,844 397
Accrued expenses 4,947 3,039 71
Customer deposits (1,396) 2,121 462
Deferred revenue 1,289 865 (229)
------------- ----------- ----------
Net cash provided by operating activities 19,946 20,387 8,307
------------- ----------- ----------
Cash flows from investing activities:
Purchases of property and equipment (3,921) (4,134) (1,230)
(Increase) decrease in other assets (25) 3 41
Purchases of marketable securities (39,025) (10,865) - - -
Sales/maturities of marketable securities 25,003 1,085 - - -
------------- ----------- ----------
Net cash used in investing activities (17,968) (13,911) (1,189)
------------- ----------- ----------
Cash flows from financing activities:
Proceeds from exercise of stock options 1,810 1,830 504
Proceeds from exercise of employee stock purchase plan 245 91 36
------------- ----------- ----------
Net cash provided by financing activities 2,055 1,921 540
------------- ----------- ----------
Net increase in cash and cash equivalents 4,033 8,397 7,658
Cash and cash equivalents, beginning of year 21,333 12,936 5,278
------------- ----------- ----------
Cash and cash equivalents, end of year $25,366 $ 21,333 $12,936
============= =========== ==========
Supplemental disclosures of cash flow information:
Cash paid for-
Income taxes $ 265 $ 429 $ 185
============= =========== ==========
Supplemental disclosure of non-cash investing and financing activities:
Recognition of tax benefit relating to disqualifying
dispositions and exercise of non-qualified stock options $10,887 $ 888 $ 73
============= =========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
28
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(1) Operations and Significant Accounting Policies
Davox Corporation (the Company) is a software and systems integration
company that develops, markets, implements, supports and services management
systems for call center operations located throughout the world. These systems
are marketed directly, through joint marketing relationships and distribution
agreements. The Company markets its systems to banks, consumer finance
organizations, retailers, entertainment companies, telemarketing organizations
and utilities.
These consolidated financial statements reflect the application of certain
significant accounting policies as described below and elsewhere in the
accompanying consolidated financial statements.
(a) Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(b) Revenue Recognition
The Company recognizes revenue in accordance with the provisions of
Statement of Position No. 91-1 (SOP 91-1), Software Revenue Recognition. The
Company generates software revenue from licensing the rights to use its software
products. The Company also generates service revenues from the sale of product
maintenance contracts and consulting services.
Revenue from software license fees are recognized upon delivery, net of
estimated returns, provided there are no significant postdelivery obligations,
and payment is due within one year and is probable of collection. If acceptance
is required, software license revenue is recognized upon customer acceptance.
Fees for consulting services are recognized upon customer acceptances or over
the period in which services are provided if customer acceptance is not
required, and the revenue is fixed and determinable. Maintenance revenue is
deferred at the time of software license revenue recognition and is recognized
ratably over the term of the support period, which is typically one year.
In October 1997, the American Institute of Certified Public Accountants
issued SOP 97-2, Software Revenue Recognition. The Company believes that its
revenue recognition practices are consistent with those required by SOP 97-2.
29
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(1) Operations and Significant Accounting Policies (Continued)
(c) Warranty Costs
The Company warrants its products for 90 days and provides for estimated
warranty costs upon shipment of such products. Warranty costs have not been and
are not anticipated to be significant.
(d) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
(e) Postretirement Benefits
The Company has no obligations for postretirement or general postemployment
benefits.
(f) Cash, Cash Equivalents and Marketable Securities
The Company considers all highly liquid investments with original
maturities of three months or less at the time of acquisition to be cash
equivalents. Cash equivalents consist mainly of commercial paper.
The Company accounts for investments in accordance with Statement of
Financial Accounting Standard (SFAS) No. 115, Accounting for Certain Investments
in Debt and Equity Securities. Under SFAS No. 115, securities that the Company
has the positive intent and ability to hold to maturity are reported at
amortized cost and are classified as held-to-maturity. Held-to-maturity
securities consisted mainly of investments in Euro dollar bonds and high grade
commercial paper instruments at December 31, 1997 and high grade commercial
paper instruments at December 31, 1996. All of these investments are classified
as current as they mature within one year.
30
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(l) Operations and Significant Accounting Policies (Continued)
(f) Cash, Cash Equivalents and Marketable Securities (Continued)
At December 31, 1997 and 1996, marketable securities consisted of the
following (in thousands):
<TABLE>
<CAPTION>
1997 1996
Total Total Total Total
Market Amortized Market Amortized
Value Cost Value Cost
--------------------------------------
<S> <C> <C> <C> <C>
Euro dollar bonds.......................................... $11,326 $11,334 $ ----- $ -----
(maturity 4-6 months)
Commercial paper obligations............................... 7,082 7,040 9,780 9,780
(maturity 3-6 months)
Corporate bonds............................................ 3,447 3,448 ----- -----
(maturity 4-5 months)
Federal agency issues...................................... 2,010 1,980 ----- -----
------- ------- ------- ---------
(maturity 6 months) $23,865 $23,802 $ 9,780 $ 9,780
======= ======= ======= =========
</TABLE>
(g) Property and Equipment
The Company provides for depreciation and amortization of property and
equipment using the straight-line and declining-balance methods by charges to
operations in amounts to allocate the cost of the property and equipment over
their estimated useful lives. The cost of property and equipment and their
useful lives are summarized as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
---------------------------
Estimated
Asset Classification Useful Life 1997 1996
- -------------------- ----------- ---- ----
<S> <C> <C> <C>
Office equipment and software.. 2-5 Years $ 9,996 $6,705
Rental and demonstration
equipment................... 2-3 Years 367 427
Service equipment.............. 1-5 Years 2,166 2,180
Leasehold improvements......... Life of Lease 199 184
------- ------
12,728 9,496
Less-Accumulated depreciation
and amortization............ 8,143 5,445
------- ------
$ 4,585 $4,051
======= ======
</TABLE>
31
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(1) Operations and Significant Accounting Policies (Continued)
(h) Research and Development and Software Development Costs
Research and development costs have been charged to operations as incurred.
SFAS No. 86, Accounting for the Costs of Computer Software To Be Leased, Sold,
or Otherwise Marketed, requires the capitalization of certain computer software
development costs incurred after technological feasibility is established. The
Company believes that once technological feasibility of a software product has
been established, the additional development costs incurred to bring the product
to a commercially acceptable level are not significant.
(i) Earnings Per Share
In March 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 128, Earnings per Share. This statement established standards for computing
and presenting earnings per share and applies to entities with publicly traded
common stock or potential common stock. This statement is effective for fiscal
years ending after December 15, 1997. The prior years' earnings per share have
been retroactively restated in accordance with this statement. Basic earnings
per share was determined by dividing net income by the weighted average shares
of common stock outstanding during the year. Diluted earnings per share
reflects the dilution of the potentially dilutive securities, primarily stock
options based on the treasury stock method.
The calculations of basic and diluted earnings per share are as follows (in
thousands, except per share data):
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Net Income $18,380 $ 9,115 $ 4,806
======= ======= =======
Basic weighted average shares outstanding 11,522 10,731 10,077
Weighted average common equivalent shares 1,141 1,554 1,489
------- ------- -------
Diluted weighted average shares outstanding 12,663 12,285 11,566
======= ======= =======
Basic earnings per share $ 1.60 $ 0.85 $ 0.48
Diluted earnings per share $ 1.45 $ 0.74 $ 0.42
</TABLE>
32
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(1) Operations and Significant Accounting Policies (Continued)
Earnings Per Share (Continued)
In 1997, 55,042 weighted average common equivalent shares were not included
in the diluted weighted average shares outstanding as they were antidilutive.
There were no antidilutive shares in 1996 and 1995.
(j) Concentration of Credit Risk
SFAS No. 105, Disclosure of Information About Financial Instruments with
Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit
Risk, requires disclosure of any significant off-balance sheet and credit risk
concentrations. Financial instruments that potentially expose the Company to
concentrations of credit risk consist primarily of cash and cash equivalents,
short-term investments and trade accounts receivable. The Company places its
temporary cash investments in financial institutions. The Company has not
experienced significant losses related to receivables from individual customers
or groups of customers in any specific industry or by geographic area. Due to
these factors, no additional credit risk beyond amounts provided for collection
losses is believed by management to be inherent in the Company's accounts
receivable. The Company had one customer and no customers with amounts due to
the Company of greater than 10% of accounts receivable as of December 31, 1997
and 1996, respectively.
(k) Derivative Financial Instruments and Fair Value of Financial Instruments
The Company does not have any derivative or other financial instruments as
defined by SFAS No. 119, Disclosures About Derivative Financial Instruments and
Fair Value of Financial Instruments.
SFAS No. 107, Disclosures About Fair Value of Financial Instruments,
requires disclosure of an estimate of the fair value of certain financial
instruments. The Company's financial instruments consist of cash equivalents,
short term investments, accounts receivable and accounts payable. The estimated
fair value of these financial instruments approximates their carrying value at
December 31, 1997 and 1996 due to the short-term nature of these instruments.
33
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(1) Operations and Significant Accounting Policies (Continued)
(l) Recently Issued Accounting Standards
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
SFAS No. 130 requires disclosure of all components of comprehensive income on an
annual and interim basis. Comprehensive income is defined as the change in
equity of a business enterprise during a period from transactions and other
events and circumstances from nonowner sources. SFAS No. 130 is effective for
fiscal years beginning after December 15, 1997. Management does not expect the
adoption of this standard to have a material impact on the Company and its
operations.
In July 1997, the FASB issued SFAS No. 131, Disclosures About Segments of
Enterprise and Related Information. SFAS No. 131 requires certain financial and
supplementary information to be disclosed on an annual and interim basis for
each reportable segment of an enterprise. SFAS No. 131 is effective for fiscal
years beginning after December 15, 1997. Unless impracticable, companies would
be required to restate prior period information upon adoption. Management does
not expect the adoption of this standard to have a material impact on the
Company and its operations.
(2) Line of Credit
The Company has a working capital line of credit (line of credit) with a
bank that expires in June 1998, if not renewed, pursuant to which the Company
may borrow up to the lesser of $2.0 million or a percentage of accounts
receivable, as defined. Borrowings under the line of credit will bear interest
at the bank's prime rate (8.5% at December 31, 1997). There were no borrowings
under the line of credit during 1997 and 1996.
(3) Accrued Expenses
Accrued expenses consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
-----------------
1997 1996
-------- -------
<S> <C> <C>
Income taxes..................... $ 2,230 $ ---
Payroll and payroll related...... 3,217 2,064
Other............................ 4,776 4,111
------- ------
$10,223 $6,175
======= ======
</TABLE>
34
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(4) 401(k) Plan
The Company maintains The Davox Corporation 401(k) Retirement Plan (the
Plan), which is a deferred contribution plan that covers all full-time employees
over 21 years of age who have completed at least six months of service with the
Company. The participants may make pretax deferred contributions to the plan of
up to 15% of the annual compensation, as defined. Contributions by the Company
are discretionary and are determined by the Board of Directors. The Company made
discretionary contributions of approximately $214,000 and $161,000 in 1997 and
1996, respectively. There were no Company contributions to the Plan in 1995.
(5) Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes (FAS 109). Under the liability method specified by
FAS 109, a deferred tax asset or liability is determined based on the difference
between the financial statement and tax bases of assets and liabilities, as
measured by the enacted tax rates assumed to be in effect when these differences
are expected to reverse.
The components of the provision for income taxes consist of the following
(in thousands):
<TABLE>
<CAPTION>
Fiscal Years Ended December 31,
-------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Current:
Federal.......................... $ 5,700 $ 203 $ 107
State............................ 1,606 810 427
----- --- ---
Total current.................. 7,306 1,013 534
----- ----- ---
Deferred:
Federal.......................... (4,300) ---- ----
State............................ (500) ---- ----
----- ---- ----
Total deferred................. (4,800) ---- ----
------- ----- -----
Provision for Income Taxes................ $ 2,506 $ 1,013 $ 534
===== ======= ======
</TABLE>
35
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(5) Income Taxes (Continued)
The provision for income taxes that is currently payable for the years
ended December 31, 1997 and 1996 does not reflect $10,887,000 and $888,000,
respectively, of tax benefits included in additional paid in capital related to
disqualifying dispositions and the exercise of non-qualified stock options.
The approximate income tax effect of each type of temporary difference
comprising the deferred tax asset is approximately as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
-------- ---------
<S> <C> <C>
Net operating loss carryforwards.. $ 5,190 $ 8,153
Depreciation...................... 762 571
Inventory reserves................ 1,442 561
Tax credit carryforwards.......... 800 577
Other temporary differences....... 2,594 1,940
------- --------
10,788 11,802
Valuation allowance............... (800) (11,802)
------- --------
$ 9,988 $ ------
======== ========
</TABLE>
At December 31, 1997, the Company has available net operating loss
carryforwards and tax credit carryforwards of approximately $13,097,000 and
$800,000, respectively, expiring through 2009. These carryforwards may be used
to offset future income taxes payable, if any, and are subject to review by the
Internal Revenue Service. All of the net operating loss carryforwards as of
December 31, 1997 relate to the excess tax benefit of disqualifying dispositions
and the exercise of non-qualified stock options, which is included in additional
paid in capital as discussed below.
In accordance with FAS 109, the Company records a valuation allowance
against its deferred tax asset to the extent management believes it is more
likely than not that the asset will be realized. As of December 31, 1997, the
Company believes that its deferred tax asset will be realizable except to the
extent of certain tax credit carryforwards which may expire. Accordingly, the
reduction in the valuation allowance during 1997 was recorded as a $4.8 million
reduction of the provision for income taxes for the net operating losses, not
attributed to stock options, and a $10.9 million credit to additional paid in
capital relating to the tax benefit of certain stock option exercises.
36
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(5) Income Taxes (Continued)
A reconciliation of the federal statutory rate to the Company's effective tax
rate is as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------
1997 1996 1995
-------- -------- -------
<S> <C> <C> <C>
Federal statutory tax rate............................. 34.0% 34.0% 34.0%
State income taxes, net of federal income tax benefit.. 5.0 6.3 6.3
Reduction in valuation allowance/utilization of
net operating loss carryforwards....................... (28.0) (29.0) (27.7)
Foreign sales corporation benefit...................... (1.0) --- ---
Other.................................................. 2.0 (1.3) (2.6)
----- ----- -----
Effective tax rate..................................... 12.0% 10.0% 10.0%
===== ===== =====
</TABLE>
(6) Commitments and Contingencies
(a) Operating Lease Commitments
The Company leases its facilities and sales offices under operating leases
that expire at various dates through October 2001. The Company's lease for its
corporate headquarters expires in September 2000. Pursuant to the lease
agreements, the Company is responsible for maintenance costs and real estate
taxes. Total rental expense for all operating leases for the years ended
December 31, 1997, 1996 and 1995 amounted to approximately $803,000, $507,000
and $551,000, respectively.
37
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(6) Commitments and Contingencies (Continued)
(a) Operating Lease Commitments (Continued)
Future minimum lease payments are approximately as follows at December 31,
1997 (in thousands):
<TABLE>
<CAPTION>
Years Ending December 31, Amount
--------------------------- -------
<S> <C>
1998.................... $ 977
1999.................... 816
2000.................... 579
2001.................... 85
------
$2,457
======
</TABLE>
(b) Employment and Severance Agreements
The Company has entered into employment and severance agreements with
certain officers and key employees whereby the Company may be required to pay
the officers and employees a total of approximately $1,537,000 upon termination
of employment by the Company under certain circumstances, as defined.
(c) Litigation
The Company is presently engaged in various legal actions and its ultimate
liability, if any, cannot be determined at the present time. However,
management has consulted with legal counsel, and management believes that any
such liability will not have a material adverse effect on the Company's
financial position or its results of operations.
(7) Stockholders' Equity
(a) Stock Split
On April 24, 1997, the Company effected a three-for-two stock split through
the issuance of a 50% stock dividend payable on May 28, 1997 to shareholders of
record on May 13, 1997. All share and per share amounts have been
retroactively adjusted for all periods presented.
38
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(7) Stockholders' Equity (Continued)
(b) 1986 Stock Plan
The Company's 1986 Stock Plan (the "1986 Plan"), administered by the Board
of Directors authorizes the issuance of a maximum of 3,696,429 shares of common
stock for the exercise of options in connection with awards or direct purchases
of stock. Options granted under the 1986 Plan may be either nonstatutory stock
options or options intended to constitute "incentive stock options" under the
Internal Revenue Code. Stock options may be granted to employees, officers,
employee-directors or consultants of the Company and are exercisable in such
installments as the Board of Directors may specify. The options granted
currently vest over a four-year period and expire ten years from the date of
grant. The 1986 Plan terminated pursuant to its terms in September 1996.
(c) 1996 Stock Plan
The Company's 1996 Stock Plan (the "1996 Plan") administered by the Board
of Directors authorizes the issuance of a maximum of 1,350,000 shares of common
stock for the exercise of options in connection with awards or direct purchases
of stock. Options granted under the 1996 Plan may be either nonstatutory stock
options or options intended to constitute "incentive stock options" under the
Internal Revenue Code. Stock options may be granted to employees, officers,
employee-directors or consultants of the Company and are exercisable in such
installments as the Board of Directors may specify. The shares currently vest to
the individual over a four-year period. There were 300,461 shares available for
future grants under the 1996 Plan at December 31, 1997.
(d) Stock Options to Directors
The Company's 1988 Non-employee Director Stock Option Plan (the "1988
Plan"), as amended, is administered by the Board of Directors and authorizes the
issuance of a maximum of 600,000 shares of common stock for the exercise of
options. The 1988 Plan provides for the automatic grant of options for 60,000
shares to each newly elected non-employee director and additional grants of
15,000 options per biennial anniversary of election to the Board of Directors.
Options granted under the 1988 Plan vest 25% per year beginning one year from
the date of grant and expire five years from the date of grant. There are
326,250 shares available for future grants under the 1988 Plan at December 31,
1997.
39
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(7) Stockholders' Equity (Continued)
(e) Stock Plan Summary
The following is a summary of the stock option activity for all plans for
the years ended December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Weighted
Number of Exercise Average
Options Price Range Exercise Price
---------- ----------------- --------------
<S> <C> <C> <C>
Outstanding, December 31, 1994 2,555,740 $ 1.17 - $ 3.67 $ 2.07
Granted......................... 169,312 4.50 - 8.17 6.12
Exercised....................... (306,917) 1.17 - 4.75 1.64
Canceled........................ (66,788) 1.17 - 8.17 3.23
--------- ----------------- ------
Outstanding, December 31, 1995 2,351,347 1.17 - 8.17 2.38
Granted......................... 431,325 8.09 - 26.33 19.26
Exercised....................... (797,950) 1.17 - 16.17 2.29
Canceled........................ (76,201) 1.17 - 8.17 3.11
--------- ----------------- ------
Outstanding, December 31, 1996 1,908,521 1.33 - 26.33 6.21
Granted......................... 978,643 24.33 - 34.13 26.33
Exercised....................... (771,313) 1.33 - 26.33 3.50
Canceled........................ (42,357) 1.33 - 31.00 20.86
--------- ----------------- ------
Outstanding, December 31, 1997 2,073,494 $ 1.33 - $34.13 $16.41
========= ================= ======
Exercisable, December 31, 1997 545,419 $ 1.33 - $26.33 $ 8.21
========= ================= ======
</TABLE>
The range of exercise prices for options outstanding and options exercisable at
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Weighted Average Options Outstanding Options Exercisable
------------------------- -----------------------
Range of Remaining Contractual Weighted Average Weighted Average
Exercise Prices Life (in years) Number Exercise Price Number Exercise Price
- ------------------ ---------------------- ------- ---------------- ------- --------------
<S> <C> <C> <C> <C> <C>
$1.33 - $1.67 5.90 375,179 $ 1.62 179,130 $ 1.62
1.92 - 3.25 6.38 242,382 2.54 160,822 2.48
3.50 - 16.17 6.80 209,602 7.58 55,357 6.32
16.75 - 24.33 9.02 822,433 22.88 117,419 21.96
26.25 - 34.13 9.32 423,898 29.26 32,691 26.30
--------- -------
2,073,494 545,419
========= =======
</TABLE>
40
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(7) Stockholders' Equity (Continued)
(f) Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan (the "Purchase Plan") under
which a maximum of 150,000 shares of Common Stock may be purchased by eligible
employees. Substantially all full-time employees of the Company are eligible to
participate in the Purchase Plan.
The Purchase Plan provides for two "purchase periods" within each of the
Company's fiscal years, the first commencing on January 1 of each calendar year
and continuing through June 30 of such calendar year, and the second commencing
on July 1 of each year and continuing through December 31 of such calendar year.
Eligible employees may elect to become participants in the Purchase Plan for a
purchase period by completing a stock purchase agreement prior to the first day
of the purchase period for which the election is made. Shares are purchased
through accumulation of payroll deductions (of not less than 0.5% nor more than
10% of compensation, as defined) for the number of whole shares, determined by
dividing the balance in the employee's account on the last day of the purchase
period by the purchase price per share for the stock determined under the
Purchase Plan. The purchase price for the shares will be the lower of 85% of
the fair market value of the Common Stock at the beginning of the purchase
period or 85% of such value at the end of the purchase period (rounded to the
nearest quarter). During 1997, 1996 and 1995, 12,153, 14,979 and 13,104 shares,
respectively, were purchased under the Purchase Plan.
(g) Accounting for Stock-Based Compensation
The Company accounts for its stock-based compensation under Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. In
October 1995, the Financial Accounting Standards Board issued SFAS No. 123,
Accounting for Stock-Based Compensation, which established a fair-value-based
method of accounting for stock-based compensation plans. The Company has
adopted the disclosure-only alternative under SFAS No. 123, which requires the
disclosure of the pro forma effects on earnings and earnings per share as if
SFAS No. 123 had been adopted, as well as certain other information.
The Company has computed the pro forma disclosures required under SFAS No.
123 for all stock options granted (including the employee stock purchase plan)
as of December 31, 1997 and 1996 using the Black-Scholes option pricing model
prescribed by SFAS No. 123.
41
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(7) Stockholders' Equity (Continued)
(g) Accounting for Stock-Based Compensation (Continued)
The assumptions used and the weighted average information for the years ended
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Years ended December 31,
------------------------
1997 1996
---- ----
<S> <C> <C>
Risk-free interest rates.................................. 5.71% - 6.83% 5.36% - 6.64%
Expected dividend yield................................... ----- -----
Expected lives............................................ 4.78 years 5.50 years
Expected volatility....................................... 66% 71%
Weighted average grant-date fair value of
options granted during the period........................ $16.00 $12.80
Weighted-average exercise price........................... $16.41 $6.21
Weighted-average remaining contractual life
of options outstanding.................................. 7.98 years 7.45 years
</TABLE>
The effect of applying SFAS No. 123 would be as follows (in thousands except
per share data):
<TABLE>
<CAPTION>
Years ended December 31,
------------------------
1997 1996
---- ----
<S> <C> <C>
Net income as reported.................................... $ 18,380 $ 9,115
======== =======
Pro forma net income...................................... $ 14,584 $ 8,290
======== =======
Net income per share as reported
Basic.................................................. $1.60 $0.85
===== =====
Diluted................................................ $1.45 $0.74
===== =====
Pro forma net income per share............................
Basic.................................................. $1.24 $0.75
===== =====
Diluted................................................ $1.13 $0.66
===== =====
</TABLE>
42
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(8) Significant Customers
Revenue from the Company's largest single customer was 11%, 4% and 12% of
total revenue in 1997, 1996 and 1995, respectively. Revenue from the Company's
three largest customers amounted to 20%, 12% and 20% of total revenue in 1997,
1996 and 1995, respectively.
(9) Export Sales
Export product sales, primarily to Canada, Europe, Mexico, Australia and
Japan, accounted for 18%, 14% and 12% of total revenue in 1997, 1996 and 1995,
respectively. All of the Company's sales for the years ended December 31, 1997,
1996 and 1995 were originated from its headquarters located in the United
States.
43
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Continued)
(10) Quarterly Results of Operations (Unaudited)
The following table presents a condensed summary of quarterly results of
operations for the years ended December 31, 1997 and 1996 (in thousands):
<TABLE>
<CAPTION>
Year Ended December 31, 1997
----------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total revenue $17,269 $18,170 $19,805 $21,571
Gross profit 10,960 11,498 13,162 14,645
Net income 3,886 4,075 4,953 5,466
Net income
per share- Basic $0.35 $0.36 $0.43 $0.46
Diluted $0.31 $0.32 $0.39 $0.43
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1996
----------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total revenue $11,410 $12,665 $14,079 $15,488
Gross profit 6,732 7,527 8,451 9,356
Net income 1,758 2,048 2,477 2,831
Net income
per share- Basic $0.17 $0.19 $0.23 $0.26
Diluted $0.15 $0.17 $0.20 $0.23
</TABLE>
44
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To Davox Corporation:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Davox Corporation and subsidiaries
included in this Form 10-K, and have issued our report thereon dated January 26,
1998. Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and regulations
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, fairly states, in all material
respects, the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 26, 1998
45
<PAGE>
DAVOX CORPORATION AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)
<TABLE>
<CAPTION>
Balance at Charged to Deductions Balance at
Beginning Costs and from End of
of Year Expenses Reserves Year
------- -------- -------- ----
<S> <C> <C> <C> <C>
ACCOUNTS RECEIVABLE
RESERVES:
December 31, 1997 $699 $463 $114 $1,048
December 31, 1996 665 98 64 699
December 31, 1995 638 242 215 665
</TABLE>
46
<PAGE>
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
Not Applicable.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
Directors
The information concerning directors of the Company required under this item
is incorporated herein by reference to the Company's definitive proxy statement
pursuant to Regulation 14A, to be filed with the Commission not later than 120
days after the close of the Company's 1997 fiscal year ended December 31, 1997
under the heading "Election of Directors."
Executive Officers
See Item 4A.
ITEM 11 - EXECUTIVE COMPENSATION
- --------------------------------
The information required under this item is incorporated herein by reference
to the Company's definitive proxy statement pursuant to Regulation 14A, to be
filed with the Commission not later than 120 days after the close of the
Company's 1997 fiscal year ended December 31, 1997, under the heading
"Compensation and Other Information Concerning Directors and Officers."
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
The information required under this item is incorporated herein by reference
to the Company's definitive proxy statement pursuant to Regulation 14A, to be
filed with the Commission not later than 120 days after the close of the
Company's 1997 fiscal year ended December 31, 1997, under the headings
"Principal Holders of Voting Securities" and "Election of Directors."
ITEM 13 - CERTAIN RELATIONSHIPS AND TRANSACTIONS
- ------------------------------------------------
The information required under this item is incorporated herein by reference
to the Company's definitive proxy statement pursuant to Regulation 14A, to be
filed with the Commission within 120 days after the close of the Company's 1997
fiscal year ended December 31, 1997, under the headings "Principal Holders of
Voting Securities" and "Election of Directors."
47
<PAGE>
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(a) Financial Statements and Financial Statement Schedules
1. Financial Statements.
The following financial information is incorporated in Item 8 above.
Report of Independent Public Accountants
Consolidated Balance Sheets as of December 31, 1997 and 1996.
Consolidated Statements of Income for the years ended
December 31, 1997, 1996 and 1995.
Consolidated Statements of Stockholders' Equity for the years
ended December 31, 1997, 1996 and 1995.
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedule.
The following financial information is incorporated in Item 8 above.
Report of Independent Public Accountants on Schedule II - Valuation and
Qualifying Accounts.
All other schedules are not submitted because they are not applicable, not
required or because the information is included in the Financial Statements
or Notes to Financial Statements.
(b) Reports on Form 8-K
The Company did not file any Current Report on Form 8-K during the fourth
quarter of the fiscal year ended December 31, 1997.
(c) List of Exhibits
Exhibit
Number Description of Exhibit
------ ----------------------
3.01 Restated Certificate of Incorporation of the Registrant,
as amended.
48
<PAGE>
(c) List of Exhibits (Continued)
3.02 By-laws of the Registrant, as amended.
4.01 Description of Capital Stock contained in the Registrant's
Restated Certificate of Incorporation, as amended, filed
as Exhibit 3.01.
10.01(1) 1986 Stock Plan of the Registrant, as amended.
10.02 Amended and Restated 1988 Non-Employee Director Stock
Option Plan of the Registrant.
10.03 Form of Option Agreement under the Registrant's 1988
Non-Employee Director Stock Option Plan.
10.04(4) Special support services agreement between Registrant and
Datapoint (UK) Ltd., dated August 1, 1997.
10.05 1991 Employee Stock Purchase Plan, as amended.
10.06(1) Common Stock Purchase Agreement dated September 23, 1994
between the Registrant and the purchasers named therein.
10.07(1) Letter agreement dated December 30, 1994 between the
Registrant and Fleet Bank of Massachusetts, N.A.
10.08(2)(4) Third party service provider agreement between the
Registrant and Grumman Systems Support Corporation.
10.09(3) 1996 Stock Plan of the Registrant, as amended by amendment
No. 1, attached hereto as exhibit 10.09.
10.10(3) Form of Incentive Stock Option Agreement under the
Registrant's 1996 Stock Plan.
10.11(3) Form of Non-Qualified Stock Option Agreement under the
Registrant's 1996 Stock Plan.
49
<PAGE>
(c) List of Exhibits (Continued)
10.12(3) Executive Compensation Plan.
10.13 Lease agreement between Registrant and Michelson Farm
Westford Technology Park VI Limited Partnership
for Westford Technology Park Building Six.
10.14(4) Distribution agreement between Lucent Technologies
Inc. (by and through its Business Communications
Systems Division) and the Registrant, dated May 2, 1997.
21. Subsidiaries of the Registrant.
24. Consent of Arthur Andersen LLP.
27. Financial Data Schedule.
(1) Previously filed as an exhibit to Form 10-K for the fiscal year ended
December 31, 1994.
(2) Previously filed as an exhibit to Form 10-K for the fiscal year ended
December 31, 1995.
(3) Previously filed as an exhibit to Form 10-K for the fiscal year ended
December 31, 1996.
(4) Confidential treatment requested. Redacted version filed herewith.
50
<PAGE>
SIGNATURES
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, in the Town of Westford,
Commonwealth of Massachusetts, on the 3rd day of March 1998.
Davox Corporation
By: /s/ Alphonse M. Lucchese
----------------------------
Alphonse M. Lucchese
Chief Executive Officer
and Chairman
POWER OF ATTORNEY
Each person whose signature appears below this Annual Report on Form 10-K hereby
constitutes and appoints Alphonse M. Lucchese and Timothy C. Maguire and each of
them, with full power to act without the other, his true and lawful attorney-in-
fact and agent, with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead in any and all capacities (until
revoked in writing) to sign all amendments (including post-effective amendments)
to this Annual Report on Form 10-K of Davox Corporation, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes as
he might or could do in person thereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her substitute,
may lawfully do or cause to be done by virtue hereof.
51
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, this report has been
signed below by the following persons in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alphonse M. Lucchese Chief Executive
- ------------------------
Alphonse M. Lucchese Officer and Chairman
(Principal Executive
Officer) March 3, 1998
/s/ John J. Connolly Vice President of
- --------------------
John J. Connolly Finance and Chief
Financial Officer
(Principal Financial
Officer) March 3, 1998
/s/ Michael D. Kaufman Director March 3, 1998
- ----------------------
Michael D. Kaufman
/s/ R. Scott Asen Director March 3, 1998
- -----------------
R. Scott Asen
/s/ Walter J. Levison Director March 3, 1998
- ---------------------
Walter J. Levison
</TABLE>
52
<PAGE>
Exhibit Index
------- -----
Exhibit
Number Description of Exhibit
------ ----------------------
3.01 Restated Certificate of Incorporation of the Registrant,
as amended.
3.02 By-laws of the Registrant, as amended.
4.01 Description of Capital Stock contained in the Registrant's
Restated Certificate of Incorporation, as amended, filed
as Exhibit 3.01.
10.01(1) 1986 Stock Plan of the Registrant, as amended.
10.02 Amended and Restated 1988 Non-Employee Director Stock
Option Plan of the Registrant.
10.03 Form of Option Agreement under the Registrant's 1988
Non-Employee Director Stock Option Plan.
10.04(4) Special support services agreement between Registrant and
Datapoint (UK) Ltd., dated August 1, 1997.
10.05 1991 Employee Stock Purchase Plan, as amended.
10.06(1) Common Stock Purchase Agreement dated September 23, 1994
between the Registrant and the purchasers named therein.
10.07(1) Letter agreement dated December 30, 1994 between the
Registrant and Fleet Bank of Massachusetts, N.A.
10.08(2)(4) Third party service provider agreement between the
Registrant and Grumman Systems Support Corporation.
10.09(3) 1996 Stock Plan of the Registrant, as amended by amendment
No. 1, attached hereto as exhibit 10.09.
10.10(3) Form of Incentive Stock Option Agreement under the
Registrant's 1996 Stock Plan.
10.11(3) Form of Non-Qualified Stock Option Agreement under the
Registrant's 1996 Stock Plan.
<PAGE>
10.12(3) Executive Compensation Plan.
10.13 Lease agreement between Registrant and Michelson Farm
Westford Technology Park VI Limited Partnership
for Westford Technology Park Building Six.
10.14(4) Distribution agreement between Lucent Technologies
Inc. (by and through its Business Communications
Systems Division) and the Registrant, dated May 2, 1997.
21. Subsidiaries of the Registrant.
24. Consent of Arthur Andersen LLP.
27. Financial Data Schedule.
(1) Previously filed as an exhibit to Form 10-K for the fiscal year ended
December 31, 1994.
(2) Previously filed as an exhibit to Form 10-K for the fiscal year ended
December 31, 1995.
(3) Previously filed as an exhibit to Form 10-K for the fiscal year ended
December 31, 1996.
(4) Confidential treatment requested. Redacted version filed herewith.
<PAGE>
Exhibit 3.01
------------
DAVOX CORPORATION
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
Davox Corporation, a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware does hereby certify:
FIRST: That the Board of Directors of said corporation, at a regularly
scheduled meeting at which all of the members of the Board of Directors were
present and acting throughout, duly adopted a resolution proposing and declaring
advisable the following amendment to the Restated Certificate of Incorporation
of said corporation:
RESOLVED, to recommend to the Stockholders of the Corporation, as
advisable, approval of the proposal to amend the Restated Certificate of
Incorporation of the Corporation by deleting the first sentence of Article
FOURTH thereof, and substituting therefor the following:
The total number of shares of stock which the corporation shall have
the authority to issue is Ten Million (10,000,000) shares of Common
Stock, and the par value of each such share is Ten Cents ($.10),
amounting in the aggregate to One Million Dollars ($1,000,000).
SECOND: That thereafter, the stockholders of said Corporation, by vote of
3,633,812 shares of Common Stock, constituting the necessary number of shares as
required by statute, voted in favor of the amendment.
THIRD: That the amendment herein set forth has been duly adopted in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, Davox Corporation has caused its corporate seal to be
hereunto affixed and this certificate to be signed by its President and its
Assistant Secretary this 31st day of July 1990.
DAVOX CORPORATION
By: /s/ Daniel A. Hosage
--------------------------
Daniel A. Hosage
President
ATTEST:
/s/ Timothy C. Maguire
- -------------------------------
Timothy C. Maguire
Assistant Secretary
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
DAVOX CORPORATION
Davox Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
1. That the original Certificate of Incorporation of said corporation was
filed with the Secretary of State of the State of Delaware of June 15, 1982, and
that the name under which the corporation was originally incorporated was
Datavox Communications Corp.
2. That the text of the Certificate of Incorporation as amended or
supplemented heretofore is restated hereby to read as herein set forth in full:
Restated Certificate of Incorporation of Davox Corporation.
FIRST: The name of the corporation is:
Davox Corporation
SECOND: The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporation may be
organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is Seven Million Five Hundred Thousand (7,500,000)
shares of Common Stock, and the par value of each of such share is Ten Cents
($.10), amounting in the aggregate to Seven Hundred Fifty Thousand Dollars
($750,000).
FIFTH: The Board of Directors is authorized to make, alter or repeal the
by-laws of the corporation. Election of directors need not be by ballot.
SIXTH: The corporation eliminates the personal liability of each member
of its Board of Directors to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that the foregoing
shall not eliminate the liability of a director (i) for any breach of such
director's duty of loyalty to the corporation or its stockholders,
<PAGE>
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of
the Delaware Code of (iv) for any transaction from which such director derived
an improper personal benefit.
IN WITNESS WHEREOF, the said Davox Corporation has caused this Restated
Certificate of Incorporation to be signed by Daniel A. Hosage, President, and
attested by Timothy C. Maguire, Assistant Secretary, this 26th day of May, 1988.
DAVOX CORPORATION
By:/s/ Daniel A. Hosage
----------------------------
Daniel A. Hosage, President
Attest:
By:/s/ Timothy C. Maguire
-----------------------------
Timothy C. Maguire
Assistant Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
DAVOX CORPORATION
Davox Corporation, a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, at a regularly
scheduled meeting at which all of the members of the Board of Directors were
present and acting throughout, duly adopted a resolution proposing and declaring
advisable an amendment to the Amended and Restated Certificate of Incorporation
of said Corporation. The resolution setting forth the proposed amendment is as
follows:
RESOLVED: That it is advisable and in the best interests of the Corporation
that the Restated Certificate of Incorporation of the Corporation be
amended to increase the number of authorized shares of the
Corporation's Common Stock, $.10 par value, to 30,000,000, and that a
proposal to effectuate such amendment is recommended to the
stockholders as being in the best interests of the Company.
SECOND: That the stockholders of the Corporation have duly approved said
amendment by a vote of the requisite majority of the outstanding capital stock
of said Corporation entitled to vote thereon in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, said Davox Corporation has caused this certificate to
be signed by Alphonse M. Lucchese, President, Chief Executive Officer and
Chairman of the Board of Directors, and attested to by Timothy C. Maguire,
Secretary, on this 24th day of April, 1997.
DAVOX CORPORATION
By: /s/ Alphonse M. Lucchese
--------------------------
Alphonse M. Lucchese
President
ATTEST:
By: /s/ Timothy C. Maguire
--------------------------
Timothy C. Maguire
Secretary
[Corporate Seal]
<PAGE>
Exhibit 3.02
DAVOX CORPORATION
* * * * *
B Y - L A W S
* * * * *
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places both
within and without the State of Delaware as the board of directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of directors
shall be held in the Town of Merrimack, State of New Hampshire, at such place as
may be fixed from time to time by the board of directors, or at such other place
either within or without the State of Delaware as shall be designated from time
to time by the board of directors and stated in the notice of the meeting.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
<PAGE>
Section 2. Annual meetings of stockholders, commencing with the year
1982, shall be held on the second Friday of October if not a legal holiday, and
if a legal holiday, then on the next secular day following, at 2:00 P.M., or at
such other date and time as shall be designated from time to time by the board
of directors and stated in the notice of the meeting, at which they shall elect
by a plurality vote a board of directors, and transact such other business as
may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten nor more than sixty days before the date of the
meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning not less than 10%
of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting stating the place, date
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be given not less than
-2-
<PAGE>
ten nor more than sixty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 10. Unless otherwise provided in the certificate of incorporation
each stockholder shall at every meeting of the stockholders be entitled to one
vote in person or by proxy for each share of the capital stock having voting
power held by such stockholder, but no proxy shall be voted on after three years
from its date, unless the proxy provides for a longer period.
-3-
<PAGE>
Section 11. Unless otherwise provided in the certificate of incorporation,
any action required to be taken at any annual or special meeting of stockholders
of the corporation, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole board
shall be not less than two nor more than eight. The first board shall consist
of two directors. Thereafter, within the limits above specified, the number of
directors shall be determined by resolution of the board of directors or by the
stockholders at the annual meeting. The directors shall be elected at the
annual meeting of the stockholders, except as provided in Section 2 of this
Article, and each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in
-4-
<PAGE>
the manner provided by statute. If, at the time of filling any vacancy or any
newly created directorship, the directors then in office shall constitute less
than a majority of the whole board (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent of the total number of the shares at
the time outstanding having the right to vote for such directors, summarily
order an election to be held to fill any such vacancies or newly created
directorships, or to replace the directors chosen by the directors then in
office.
Section 3. The business of the corporation shall be managed by or under
the direction of its board of directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the certificate of incorporation or by these by-laws directed or required to
be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
-5-
<PAGE>
Section 6. Regular meetings of the board of directors may be held without
notice at such time and at such place as shall from time to time be determined
by the board.
Section 7. Special meetings of the board may be called by the president
on one day's notice to each director, either personally or by mail or by
telegram; special meetings shall be called by the president or secretary in like
manner and on like notice on the written request of two directors unless the
board consists of only one director; in which case special meetings shall be
called by the president or secretary in like manner and on like notice on the
written request of the sole director.
Section 8. At all meetings of the board a majority of the directors shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the board of directors, except as may be otherwise specifically provided by
statute or by the certificate of incorporation. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these by-laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
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<PAGE>
COMMITTEES OF DIRECTORS
Section 11. The board of directors may, by resolution passed by a majority
of the whole board, designate one or more committees, each committee to consist
of one or more of the directors of the corporation. The board may designate one
or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee.
In the absence or disqualification of a member of a committee, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the board of directors to act at the meeting in the place of any such
absent or disqualified member.
Any such committee, to the extent provided in the resolution of the board
of directors, shall have and may exercise all the powers and authority of the
board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the board of directors.
Section 12. Each committee shall keep regular minutes of its meetings and
report the same to the board of directors when required.
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COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
REMOVAL OF DIRECTORS
Section 14. Unless otherwise restricted by the certificate of
incorporation or by-laws, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail,
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addressed to such director or stockholder, at his address as it appears on the
records of the corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-presidents,
and one or more assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each annual
meeting of stockholders shall choose a president, one or more vice-presidents, a
secretary and a treasurer.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
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Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall
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perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
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<PAGE>
Section 11. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than one,
the assistant treasurers in the order determined by the board of directors (or
if there be no such determination, then in the order of their election, shall,
in the absence of the treasurer or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the treasurer and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
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Section 1. Every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by, the
chairman or vice-chairman of the board of directors, or the president or a vice-
president and the treasurer or an assistant treasurer, or the secretary or an
assistant secretary of the corporation, certifying the number of shares owned by
him in the corporation.
Certificates may be issued for partly paid shares and in such case upon the
face or back of the certificates issued to represent any such partly paid
shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in Section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
Section 2. Any of or all the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
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LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
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Section 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination or stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
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Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual meeting,
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
CHECKS
Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
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<PAGE>
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new by-
laws may be adopted by the stockholders or by the board of directors, when such
power is conferred upon the board of directors by the certificate of
incorporation at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption or new by-
laws be contained in the notice of such special meeting. If the power to adopt,
amend or repeal by-laws is conferred upon the board of directors by the
certificate of incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal by-laws.
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ARTICLE IX
INDEMNIFICATION
Section 1. Actions other than by or in the Right of the Corporation. The
--------------------------------------------------------
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
---- ----------
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Actions by or in the Right of the Corporation. The
---------------------------------------------
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee
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or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable unless and only to the
extent that the Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery of the State of Delaware or such other court shall
deem proper.
Section 3. Success on the Merits. To the extent that any person
---------------------
described in Section 1 or 2 of this Article IX has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in said
Sections, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 4. Specific Authorization. Any indemnification under Section 1
----------------------
or 2 of this Article IX (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of any person described in said Sections is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Sections. Such determination shall be made (1) by the board of directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (2) if such a quorum is not obtainable, or
even if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the stockholders of
the corporation.
Section 5. Advance Payment. Expenses incurred in defending a civil or
---------------
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such
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action, suit or proceeding upon receipt of an undertaking by or on behalf of any
person described in said Section to repay such amount if it shall ultimately be
determined that he is not entitled to indemnification by the corporation as
authorized in this Article IX.
Section 6. Non-Exclusivity. The indemnification and advancement of
---------------
expenses provided by, or granted pursuant to, the other Sections of this Article
IX shall not be deemed exclusive of any other rights to which those provided
indemnification or advancement of expenses may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.
Section 7. Insurance. The board of directors may authorize, by a vote of
---------
the majority of the full board, the corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of this Article IX.
Section 8. Continuation of Indemnification and Advancement of Expenses.
-----------------------------------------------------------
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article IX shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 9. Severability. If any word, clause or provision of this
------------
Article IX or any aware made hereunder shall for any reason be determined to be
invalid, the provisions hereof shall not otherwise be affected thereby but shall
remain in full force and effect.
Section 10. Intent of Article. The intent of this Article IX is to
-----------------
provide for indemnification and advancement of expenses to the fullest extent
permitted by Section 145 of the General Corporation Law of Delaware. To the
extent that such Section or any successor
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section may be amended or supplemented from time to time, this Article IX shall
be amended automatically and construed so as to permit indemnification and
advancement of expenses to the fullest extent from time to time permitted by
law.
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<PAGE>
Exhibit 10.02
DAVOX CORPORATION
AMENDED AND RESTATED
1988 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose. This Non-Qualified Stock Option Plan to be known as the 1988
-------
Non-Employee Director Stock Option Plan (hereinafter, the "Plan") is intended to
promote the interests of Davox Corporation (hereinafter, the "Company") by
providing an inducement to obtain and retain the services of qualified persons
who are neither employees nor officers of the Company to serve as members of the
Board of Directors and to demonstrate the Company's appreciation for their
service upon the Company's Board of Directors.
2. Rights to be Granted. Under the Plan, options are granted that give an
--------------------
Optionee the right for a specified time period to purchase a specified number of
shares of Common Stock, par value $0.10, of the Company. The option price is
determined in each instance in accordance with the terms of this Plan.
3. Available Shares. The total number of shares of Common Stock, par
----------------
value $0.10, of the Company, for which options may be granted shall not exceed
four hundred thousand (400,000) shares subject to adjustment in accordance with
Section 13 hereof. Shares subject to the Plan are authorized but unissued
shares or shares that were once issued and subsequently reacquired by the
Company. If any options granted under this Plan are surrendered before exercise
or lapse without exercise, in whole or in part, the shares reserved therefor
revert to the option pool and continue to be available for grant under the Plan.
4. Administration. The Plan shall be administered by the Compensation
--------------
Committee of the Board of Directors of the Company (the "Committee"). The
Committee shall, subject to the provisions of the Plan and Section 17 hereof in
particular, have the power to construe the Plan, to determine all questions
thereunder, and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable.
5. Option Agreement. Each option granted under the provisions of this
----------------
Plan shall be evidenced by an option Agreement, in such form as may be approved
by the Board, which Agreement shall be duly executed and delivered on behalf of
the Company and by the Optionee to whom such option is granted. The Agreement
shall contain such terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Board.
6. Eligibility and Limitations. Options may be granted pursuant to the
---------------------------
Plan only to non-employee members of the Board of Directors of the Company who
are not officers of the Company.
7. Option Price. The purchase price of the stock covered by an option
------------
granted pursuant to the Plan shall be 100% of the fair market value of such
shares on the day the option is granted. The option price will be subject to
adjustment in accordance with the provisions of
<PAGE>
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Section 13 hereof. For purposes of the Plan, the fair market value of a share
of Common Stock on any day shall be the last reported sales price of such share
on the last day preceding the date of option grant as listed on the NASDAQ
National Market System, or if there were no such trades on such day the last
reported sales price of such share on the NASDAQ National Market System on the
last preceding day on which it was traded.
8. Automatic Grant of Options. Each member of the Company's Board of
--------------------------
Directors serving on December 12, 1991, who is neither an employee nor an
officer of the Company, is automatically granted on such date, without further
action by the Board, an option to purchase forty thousand (40,000) shares of the
Company's Common Stock. Thereafter, so long as such member remains on the Board
of Directors and remains neither an officer nor an employee of the Company, such
member shall be automatically granted, on each biennial anniversary of December
12, 1991, an additional option to purchase ten thousand (10,000) shares of the
Company's Common Stock. Each person who is neither an employee nor an officer
of the Company who is first elected to the Board of Directors after December 12,
1991 shall be automatically granted, on the date of such election without
further action by the Board of Directors, an option to purchase forty thousand
(40,000) shares of the Company's Common Stock. Each such member who is first
elected to the Board of Directors after December 12, 1991 and remains neither an
officer nor an employee of the Company shall be automatically granted, on each
biennial anniversary of the date of the first grant of an option hereunder to
such member, an additional option to purchase ten thousand (10,000) shares of
the Company's Common Stock. Anything in the Plan to the contrary
notwithstanding, the effectiveness of the grant of all options hereunder on or
after December 12, 1991 is in all respects subject to, and shall be of no force
and effect and such options shall not in any way vest or become exercisable
unless and until, approval of the Plan, as hereby amended and restated, by the
affirmative vote of a majority of the Company's shares present in person or by
proxy and entitled to vote at a meeting of shareholders at which the Plan, as
hereby amended and restated, is presented for approval. In the event that such
approval as aforesaid has not been received on or before December 12, 1992, then
in either such event the Plan, as herein amended and restated, and any options
granted hereunder shall be null and void, and upon the occurrence of such
approval as aforesaid, the Plan, as hereby amended and restated, and such
options shall become effective as of December 12, 1991.
9. Period of Option. The options granted hereunder shall expire on a date
----------------
which is five (5) years after the date of grant of the options and the Plan
shall terminate when all options granted hereunder have terminated.
10. Exercise of Option. Subject to the terms and conditions of the Plan
------------------
an the Option Agreement, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by mail or in person addressed to Treasurer, Davox Corporation, Three
Federal Street, Billerica, Massachusetts 01821, stating the number of shares
with respect to which the option is being exercised, accompanied by payment in
full for such shares, which payment may be in whole or in part in shares of the
Common Stock of the Company already owned by the person or persons exercising
the option, valued at fair market value determined in accordance with the
provisions of Section 7 hereof; provided, however, that there shall be no such
exercise at any one time as to fewer than one hundred (100)
<PAGE>
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shares or all of the remaining shares then purchasable by the person or persons
exercising the option, if fewer than one hundred (100) shares. Upon
notification from the Company, the Transfer Agent shall, on behalf of the
Company, prepare a certificate or certificates representing such shares acquired
pursuant to exercise of the option, shall register the Optionee as the owner of
such shares on the books of the Company and shall cause the fully executed
certificates representing such shares to be delivered to the optionee as soon as
practicable after payment of the option price in full. The holder of an option
shall not have any rights of a shareholder with respect to the shares covered by
the option, except to the extent that one or more certificates for such shares
shall be delivered to him upon the due exercise of the option.
11. Vesting of Shares and Non-Transferability of Options.
----------------------------------------------------
(a) Vesting. Options granted under the Plan shall vest in the
-------
Optionee and thus become exercisable, in accordance with the following schedule:
<TABLE>
<CAPTION>
<S> <C>
Cumulative Number
of Shares for which
option is Exercisable Date of Vesting
1/4 of total option Shares 1 year anniversary of the date of the grant of
the option
2/4 of total Option Shares 2 year anniversary of the date of the grant of
the option
3/4 of total Option Shares 3 year anniversary of the date of the grant of
the option
100% of total Option Shares 4 year anniversary of the date of the grant of
the option
</TABLE>
The number of shares as to which the option may be exercised shall be
cumulative, so that once the option shall become exercisable as to any shares it
shall continue to be exercisable as to said shares, until expiration or
termination of the option as provided in the Plan.
(b) Legend on Certificates. The certificates representing such shares
----------------------
shall carry such appropriate legend, and such written instructions shall be
given to the Company's Transfer Agent, as may be deemed necessary or advisable
by counsel to the Company in order to comply with the requirements of the
Securities Act of 1933 or any state securities laws.
(c) Non-Transferability. Any option granted pursuant to the Plans all not
-------------------
be assignable or transferable other than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only by
him.
12. Termination of Option Rights.
----------------------------
<PAGE>
-4-
(a) In the event an Optionee ceases to be a member of the Board of
Directors of the Company for any reason other than death or disability, any then
unexercised options granted to such optionee shall, to the extent not then
exercisable, immediately terminate and become void, and any options which are
then exercisable but have not been exercised at the time the Optionee so ceases
to be a member of the Board of Directors may be exercised, to the extent they
are then exercisable, by the optionee within a period of ten (10) days following
such time the Optionee so ceases to be a member of the Board of Directors, but
in no event later than the expiration date of the option.
(b) In the event that an Optionee ceases to be a member of the Board of
Directors of the Company by reason of his or her disability or death, any option
granted to such Optionee may be exercised, to the extent of the number of shares
with respect to which an Optionee could have exercised it on the date of such
disability or death (by the Optionee's personal representative, heir or legatee,
in the event of death) during the period ending one hundred eighty (180) days
after the date the Optionee so ceases to be a member of the Board of Directors,
but in no event later than the expiration date of the option.
13. Adjustments Upon Changes in Capitalization and other Matters. In the
------------------------------------------------------------
event that the outstanding shares of the Common Stock of the Company are changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation by reason of any reorganization,
merger, consolidation, recapitalization or reclassification, or in the event of
a stock split, combination of shares or dividends payable in capital stock,
automatic adjustment shall be made in the number and kind of shares as to which
outstanding options or portions thereof then unexercised shall be exercisable
and in the available shares set forth in Section 3 hereof, to the end that the
proportionate interest of the option holder shall be maintained as before the
occurrence of such event. Such adjustment in outstanding options shall be made
without change in the total price applicable to the unexercised portion of such
options and with a corresponding adjustment in the option price per share.
If an option hereunder shall be assumed, or a new option substituted
therefor, as a result of sale of the Company, whether by a corporate merger,
consolidation or sale of property or stock, then membership on the Board of
Directors of such assuming or substituting corporation or by a parent
corporation or a subsidiary therefor shall be considered for purposes of an
option to be membership on the Board of Directors of the Company.
14. Restrictions on Issuance of Shares. Notwithstanding the provisions of
----------------------------------
Sections 8 and 10 hereof, the Company shall have no obligation to deliver any
certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:
(i) The shares with respect to which the option has been exercised are at
the time of the issue of such shares effectively registered under applicable
Federal and state securities acts as now in force or hereafter amended; or
<PAGE>
-5-
(ii) Counsel for the Company shall have given an opinion that such shares
are exempt from registration under Federal and state securities acts as now in
force or hereafter amended; and until the Company has complied with all
applicable laws and regulations, including without limitation all regulations
required by any stock exchange upon which the Company's outstanding Common Stock
is then listed.
The Company shall use its best efforts to bring about compliance with the
above conditions within a reasonable time, except that the Company shall be
under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense solely for
the purpose of covering the issue of shares in respect of which any option may
be exercised.
15. Representation of Optionee. The Company shall require the Optionee to
--------------------------
deliver written warranties and representations upon exercise of the option that
are necessary to show compliance with Federal and state securities laws
including to the effect that a purchase of shares under the option is made for
investment and not with a view to their distribution (as that term is used in
the Securities Act of 1933).
16. Approval of Stockholders and Securities and Exchange Commission. The
---------------------------------------------------------------
effectiveness of this Plan and of the grant of all options hereunder is in all
respects subject to approval by the Company's shareholders as more fully set
forth in Section 8 hereof.
17. Termination and Amendment of Plan. The Board may at any time
---------------------------------
terminate or amendment the Plan or make such modification or amendment thereof
as it deems advisable, provided, however, that the Board may not, without
approval by the affirmative vote of the holders of a majority of the shares
present in person or by proxy and entitled to vote at the meeting, (a) increase
the maximum number of shares for which options may be granted under the Plan or
the number of shares for which an option may be granted to any participating
Director hereunder; (b) change the provisions of the Plan regarding the
termination of the options or the time when they may be exercised; (c) change
the period during which any options may be granted or remain outstanding or the
date on which the Plan shall terminate; (d) change the designation of the class
of persons eligible to receive options, or otherwise change Section 7 hereof;
(e) materially increase benefits accruing to option holders under the Plan. In
no event, however, may any provision of this Plan specified in Rule
16b3(c)(2)(ii)(A) (or any successor or amended provision thereof) of the
Securities Exchange Act of 1934 (including without limitation, provisions as to
eligibility and who may participate in the Plan, the amount and price of shares
for which options may be granted or the timing of awards,) be amended more than
once in any six month period, other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder. Termination or any modification or amendment of the Plan shall not,
without consent of a participant, affect his rights under an option previously
granted to him.
<PAGE>
Exhibit 10.03
DAVOX CORPORATION
Non-Qualified Stock Option Agreement
------------------------------------
for Non-Employee Directors
--------------------------
Davox Corporation, a Massachusetts corporation (the "Company"), hereby
grants this ((Date)) to ((Name)) (the "Optionee"), an option to purchase a
maximum of ((Shares)) shares of its Common Stock, $.10 par value (the "Option
Shares"), at the price of ((Price)) per share, on the following terms and
conditions:
1. Grant Under 1988 Non-Employee Director Stock Option Plan.
This option is granted pursuant to and is governed by the Company's 1988 Non-
Employee Director Stock Option Plan (the "Plan") and, unless the context
otherwise requires, terms used herein shall have the same meaning as in the
Plan. Determinations made in connection with this option pursuant to the Plan
shall be governed by the Plan as it exists on this date. In the event of any
conflict between this Agreement and the provisions of the Plan, the Plan shall
govern.
2. Grant as Non-Qualified Option: Other Options. This option is
intended to be a non-qualified option (rather than an incentive stock option),
and the Board of Directors intends to take appropriate action, if necessary, to
achieve this result. This option is in addition to any other options heretofore
or hereafter granted to the Optionee by the Company, but a duplicate original of
this instrument shall not effect the grant of another option.
3. Extent of Option if Service as a Director Continues.
(a) If the Optionee has continuously served as a member of
the Board of Directors through the following dates, the Optionee may exercise
this option for the number of shares set opposite the applicable date:
<TABLE>
<CAPTION>
Cumulative Number of Shares
for which Option is Exercisable Date of Vesting
------------------------------- ---------------
<S> <C>
1/4 of total Option Shares One year after date of option grant
1/2 of total Option Shares Two years after date of option grant
3/4 of total Option Shares Three years after date of option grant
100% of total Option Shares Four years after date of option grant
</TABLE>
The foregoing rights are cumulative.
(b) While the Optionee continues to serve as a member of the
Board of Directors, the rights under Article 3(a) hereof, as applicable, may be
exercised up to and including the date which is five (5) years from the date
this option is granted. All of the foregoing rights are subject to Article 4
hereof, as appropriate, if the Optionee ceases to serve as
<PAGE>
-2-
a member of the Board of Directors or dies or becomes disabled while serving as
a member of the Board of Directors.
4. Termination of Option Rights.
(a) In the event the Optionee ceases to be a member of the
Board of Directors of the Company for any reason other than death or permanent
disability, the then unexercised portion of this Option shall, to the extent not
then vested, immediately terminate and become void; the portion of this Option
then vested but which has not been exercised at the time the Optionee so ceases
to be a member of the Board of Directors may be exercised, to the extent then
vested, by the Optionee within ten (10) days of the date of the Optionee ceases
to be a member of the Board of Directors of the Company, but in no event later
than the expiration date of the option.
(b) In the event that the Optionee ceases to be a member of
the Board of Directors of the Company by reason of his permanent disability or
death, any option granted to the Optionee may be exercised, to the extent of the
number of shares with respect to which the Optionee could have exercised it on
the date of such disability or death (by the Optionee's personal representative,
heir or legatee, in the event of death) during the period ending one hundred
eighty (180) days after the date the Optionee so ceases to be a member of the
Board of Directors, but in no event later than the expiration date of the
option.
5. Partial Exercise. Exercise of this option up to the extent
above stated may be made in part at any time and from time to time within the
above limits and within any limits established by the Plan, except that this
option may not be exercised for a fraction of a share unless such exercise is
with respect to the final installment of stock subject to this option and a
fractional share (or cash in lieu thereof) must be issued to permit the Optionee
to exercise completely such final installment. Any fractional share with respect
to which an installment of this Option cannot be exercised because of the
limitation contained in the preceding sentence shall remain subject to this
Option and shall be available for later purchase by the Optionee in accordance
with the terms hereof.
6. Payment of Price. The option price is payable in United
States dollars and may be paid: (a) in cash or by check, or any combination of
the foregoing, equal in amount to the option price; or (b) in the discretion of
the Board of Directors, in cash, by check, by delivery of shares of the
Company's Common Stock having a fair market value (as determined by the Board of
Directors) equal as of the date of exercise to the option price, or by any
combination of the foregoing, equal in amount to the option price.
If the Optionee delivers Common Stock held by the Optionee (the "Old
Stock") to the Company in full or partial payment of the option price, and the
Old Stock so delivered is subject to restrictions or limitations imposed by
agreement between the Optionee and the Company, the Common Stock received by the
Optionee on the exercise of this option shall be subject to all restrictions and
limitations applicable to the Old Stock to the extent that the Optionee paid for
<PAGE>
-3-
such Common Stock by delivery of Old Stock, in addition to any restrictions or
limitations imposed by this Agreement.
7. Agreement to Purchase for Investment. By acceptance of this
option, the Optionee agrees that a purchase of shares under this option will not
be made with a view to their distribution, as that term is used in the
Securities Act of 1933, as amended, unless in the opinion of counsel to the
Company such distribution is in compliance with or exempt from the registration
and prospectus requirements of that Act, and the Optionee agrees to sign a
certificate to such effect at the time of exercising this option and agrees that
the certificate for the shares so purchased may be inscribed with a legend to
ensure compliance with that Act.
8. Method of Exercising Option. Subject to the terms and conditions
of this Agreement, this option may be exercised by written notice to the
Company, addressed to the Treasurer, at the principal executive office of the
Company. Such notice shall state the election to exercise this option and the
number of shares in respect of which it is being exercised and shall be signed
by the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company or its transfer agent shall deliver a certificate or certificates
representing such shares as soon as practicable after the notice shall be
received. The certificate or certificates for the shares as to which this option
shall have been so exercised shall be registered in the name of the person or
persons so exercising this option (or, if this option shall be exercised by the
Optionee and if the Optionee shall so request in the notice exercising this
option, shall be registered in the name of the Optionee and another person
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising this option. In
the event this option shall be exercised, pursuant to Article 4 hereof, by any
person or persons other than the Optionee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise this
option. All shares that shall be purchased upon the exercise of this option as
provided herein shall be fully paid and non-assessable.
9. Option Not Transferable. This option is not transferable or
assignable except by will or by the laws of descent and distribution. During the
Optionee's lifetime only the Optionee can exercise this option.
10. No Obligation to Exercise Option. The grant and acceptance of
this option imposes no obligation on the Optionee to exercise it.
11. No Rights as Stockholder until Exercise. The Optionee shall have
no rights as a stockholder with respect to any of the Option Shares until a
stock certificate therefor has been issued to the Optionee and is fully paid
for. Except as is expressly provided in the Plan with respect to certain changes
in the capitalization of the Company, no adjustment shall be made for dividends
or similar rights for which the record date is prior to the date such stock
certificate is issued.
12. Capital Changes and Business Successions. It is the purpose of
this option to encourage the Optionee to work for the best interests of the
Company and its stockholders.
<PAGE>
-4-
Since, for example, that might require the issuance of a stock dividend or a
merger with another corporation, the purpose of this option would not be served
if such a stock dividend, merger or similar occurrence would cause the
Optionee's rights hereunder to be diluted or terminated and thus be contrary to
the Optionee's interest. The Plan contains extensive provisions designed to
preserve options at full value in a number of contingencies. Therefore,
provisions in the Plan for adjustment with respect to stock subject to options
and the related provisions with respect to successors to the business of the
Company are hereby made applicable hereunder and are incorporated herein by
reference.
13. Withholding Taxes. The Optionee hereby agrees that the Company
may withhold from the Optionee's wages or other remuneration the appropriate
amount of federal, state and local taxes attributable to the Optionee's exercise
of any installment of this Option. At the Company's discretion, the amount
required to be withheld may be withheld in cash from such wages or other
remuneration, or in kind from the Common Stock otherwise deliverable to the
Optionee on exercise of this option. The Optionee further agrees that, if the
Company does not withhold an amount from the Optionee's wages or other
remuneration sufficient to satisfy the Company's withholding obligation, the
Optionee will reimburse the Company on demand, in cash, for the amount
underwithheld.
14. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the Commonwealth of
Massachusetts.
<PAGE>
-5-
IN WITNESS WHEREOF the Company and the Optionee have caused this
instrument to be executed, and the Optionee whose signature appears below
acknowledges receipt of a copy of the Plan and acceptance of an original copy of
this Agreement.
DAVOX CORPORATION
By:
-------------------------------------
Title:
----------------------------------
----------------------------------------
Optionee
<PAGE>
Exhibit 10.04
-------------
SPECIAL
SUPPORT SERVICES AGREEMENT
This Special Support Services Agreement shall be effective as of the 1st day of
August, 1997 and is entered into between Davox Corporation, A Delaware
corporation with its principal place of business at 6 Technology Park Drive,
Westford, Massachusetts 01886 ("Davox") and Datapoint (UK) Ltd., a company
organized under the laws of England, with its principal place of business at 400
North Circular Rd., London, NW10 0JG, England ("Datapoint").
WHEREAS, Datapoint is an independent distributor of Davox products to British
Telecommunications plc Direct sales unit ("BT") under a certain and separate
distributor agreement as referenced herein;
WHEREAS, Datapoint has entered into an independent agreement solely between
Datapoint and BT to furnish products from Datapoint and Davox and to provide
support of those products; and
WHEREAS, Datapoint requests that Davox furnish certain technical support as
defined herein to better enable it to support he product furnished to BT;
NOW, THEREFORE, Datapoint and Davox agree as follows:
1. COVERAGE
A. Davox agrees to provide Datapoint and Datapoint agrees to accept from Davox
technical support services, training, consulting services, and spare parts
("Support Services") under the terms and conditions set forth in this
Special Support Services Agreement with respect to support by Datapoint of
the "Direct Sales" unit (aka "BT Direct Sales") of British
Telecommunications Plc, herein referred to as "BT", within the territory of
the United Kingdom ("UK").
B. Support Services are available for the Davox proprietary computer hardware
and peripheral equipment ("Equipment") and Davox computer software
("Software") which collectively comprise a Davox Unison (TM) brand call
management system (each referred to herein as a "System") as made available
to Datapoint under a certain and separate International Distributor
Agreement dated September 8, 1995 (the "Distributor Agreement") as said
Agreement survives to the extent provided under the terms of the Mutual
Early Termination Agreement between the parties dated March 31, 1997 (the
"Termination Agreement"). Equipment eligible for support hereunder does
not include third party hardware products remarketed by Davox, such
products include, but are not limited to Sun Microsystems Computer
Corporation products. The Equipment and Software eligible for inclusion
under this Agreement shall be added as provided in Section 1.C. and 9.A.
<PAGE>
C. Datapoint agrees to cover under this Agreement, in accordance with the
terms herein, each Unison (TM) System sold and supported by Datapoint to
BT. New Systems, or additional "Seats" added thereto, will be
automatically be added to this Agreement upon "hand over" of the applicable
System, or add-on Equipment or Software comprising a "Seat", to BT. The
term "hand over" shall be construed to be that point in time when the
System, or add-on Seat, is installed, operates substantially in accordance
with its specifications and made available to BT for confirmation testing
or commercial use. Solely for administrative and invoicing purposes,
Datapoint shall confirm coverage by furnishing a purchase order in
accordance with Section 9A setting forth (i) the Equipment, Software, and
workstations comprising the System and the quantity of each, (ii) the
location of the System, (iii) name of the BT unit, and (iv) the name, phone
number, and e-mail address of a principle contact within Datapoint's
organization responsible for coordinating resolution of potential problems
with the designated System. However, notwithstanding anything herein to
the contrary, the effective date of Technical Support coverage shall
commence upon the hand over date, and the fees associated with Technical
Support shall also commence on said date. Orders for parts and other
Support Services shall be placed by Datapoint in accordance with the
provisions of Section 9 of this Agreement.
D. During the period prior to "hand over" as defined above, the System and
add-on seats shall not be covered by Support Services under this Agreement.
During said period, Datapoint may, at its election, order support on a time
and materials basis at the prices then in effect as set forth in Schedules
I and II of this Agreement. In the event Datapoint orders support on a
time an materials basis, the terms of this Agreement, exclusive of Sections
3, 4, 5, 6, and 7B shall apply. Datapoint shall submit a purchase order
conforming to Section 9, or a written request authorized by Datapoint's BT
account manager, for support ordered on a time and materials basis. Davox
shall have no obligation to support any system or Seat until said purchase
order conforming to this Agreement is received and accepted.
2. SERVICE HOURS
A. Davox shall use its best efforts (alternatively "best endeavors") to
provide Technical Support cover 24 hours, 7 days per week, out of the Davox
Worldwide Support Center in accordance with the terms below. Support
Services are managed from the Davox Worldwide Support Center, located in
Westford, Massachusetts, U.S.A. (the "WSC").
B. General WSC Coverage Hours and Mechanics.
WSC primary support hours are from 7:30 a.m. to midnight, Eastern time,
Monday through Friday and 8:00 a.m. to 5:00 p.m., Eastern time, on
Saturday, excluding Davox holidays ("WSC Standard Hours"). Supplemental
coverage for critical problems will be available between the hours of
midnight and 7:29 a.m., Eastern time, Monday through Friday and 5:01 a.m.
to midnight, Eastern time, Saturday, ("Supplemental WSC Hours"). Datapoint
is required to route all problems, questions and requests for service on
any System through the WSC. During Supplemental WSC Hours, (and any ad hoc
requests
-2-
<PAGE>
for service outside WSC Standard Hours and Supplemental WSC Hours)
inquiries for assistance will be handled through Davox third-party
messaging center and relayed to Davox support personnel, until Davox
establishes continuous staffing, excluding Davox holidays, directly in the
WSC. Support during Davox holidays will be handled as follows:
I. For general holidays (all holidays except those in Section B(II) below)
the procedure is as follows:
(a) Davox WSC operates on a reduced staff level; notwithstanding Davox
problem escalation procedures, no representation or commitment is made as
to any response time; and
(b) Calls to the WSC may be handled by an answering service, staff
notified by means of a pager, and Datapoint responded to by means of a
call back procedure.
II. On the holidays of July 4, Thanksgiving day (date varies annually) and
Christmas day (December 25) the procedure is as follows:
(a) Davox WSC operates on a reduced staff level; notwithstanding Davox
escalation procedures, no representation or commitment is made as to any
response time;
(b) Datapoint shall be permitted to contact the WSC solely for calls for
Critical problems; and;
(c) Calls to the WSC will be handled by an answering service, staff
notified by means of a pager, and Datapoint responded to be means of call
back procedure.
Note: Hours are quoted in Eastern time in the United States of America. Davox
holidays vary annually. A copy of the Davox holidays in effect for the
then current year will be furnished upon request.
C. Normal service hours for on-site support, when ordered by Datapoint and
authorized by Davox as provided herein, are 8:30 a.m. to 5:30 p.m. local
time, in the UK, Monday through Friday, excluding Davox holidays ("Normal
Service Hours").
Davox will provide on-site support outside of Normal Service Hours on the
following basis: On-site support outside Normal Service Hours ("Off Hours
Coverage") will be made available, at an additional charge, at Davox then
prevailing rates for time, with a minimum of 4 hours billable. Any such
request for Off Hours Coverage is subject to availability of local
personnel. Off Hours Coverage is not available during Davox local
holidays. Datapoint acknowledges that Davox makes no representation or
commitment that personnel will be available for Off Hours Coverage, and
Davox reserves the right to defer any request for on-site support until
Normal Service Hours during the next immediate local Davox work-day
following the request for on-site support.
3. TECHNICAL SUPPORT
Technical Support ("Technical Support") consists of the program offering set
forth in this Section 3. Datapoint will place an order to establish Technical
Support coverage, per System, as provided in Section 1(C) and Section 9 of this
Agreement.
-3-
<PAGE>
A. Datapoint assumes primary responsibility for the diagnosis and resolution
of problems with the System. All requests for support shall originate
solely with Datapoint. Davox will not accept requests for assistance from
BT for services to be delivered by Datapoint, unless such request is
acknowledged by Datapoint.
B. Datapoint, at Datapoint's expense, shall have an appropriate number of
employee(s), to be mutually agreed on by the parties in their reasonable
determination attend such Davox course(s), in the operation and repair of
Davox products consisting of such content as is similar in nature and
extent to that which Davox provides its own support employees as Davox in
its reasonable determination may deem necessary to enable Datapoint to
provide first line support of a quality consistent with that Davox
furnishes its own customers. Therefore, the standard of reasonableness
applicable to training requirements under this clause shall be limited to
requiring that a reasonably adequate number of Datapoint personnel, as
determined above, receive the same or substantially similar training as
that which Davox requires of its own personnel performing similar
functions.
One or more individuals(s) will be designated as a "Support Administrator"
and shall be the primary point of contact with Davox on matters pertaining
to the support of Systems. Datapoint's Support Administrator(s) shall
attend such additional courses as are required, in the reasonable opinion
of Davox, to support the Davox Equipment and Software which Datapoint has
installed or currently offers for sale. Datapoint also agrees that all
Datapoint employees, who are principally engaged in providing support on
Davox products to end user customers of Datapoint, shall receive training
as defined above.
C. Datapoint is responsible for contacting the WSC in the event of problems
with the system. Telephone support and remote diagnosis of problems is
available to Datapoint during WSC Standard Hours and WSC Supplemental
Hours. Upon notification that the System has malfunctioned or is
inoperative, Davox shall take steps to diagnose the cause of such
malfunction or failure to operate. Datapoint shall assist Davox in
diagnosing problems with the System. When in Davox opinion a failure has
occurred with the Equipment, Davox will advise Datapoint, and Datapoint
will replace the filed component with a functioning component from
Datapoint's Spare Parts Kit (refer Section 4, below). When in Davox
opinion there is a malfunction or failure of the Software on the System,
Davox shall correct the malfunction, or furnish a suitable work-around, and
shall furnish said correction or work-around by means of a copy of the
corrected Software on magnetic media or by means of a remote download
whichever in Davox reasonable determination is the most effective.
Datapoint is responsible for installing the corrected Software on the
System.
D. Davox will provide support on up to three (3) calls per 100 seats on
Systems covered under this Agreement per year, for the annual technical
support fee. Additional calls beyond the total of: (three calls times the
total number of seats covered annually, divided by 100), will be invoiced
to Datapoint at Davox then prevailing International Support Time and
Materials rates. Calls for Systems covered for a partial year will be pro-
rated, and added to the total allowable calls included for the annual
support fees paid to Davox.
-4-
<PAGE>
However, calls which are determined to be caused by inherent defects in the
Davox provided Equipment and/or Software, such that said Equipment and/or
Software fails to operate in accordance with its Specifications, and which
such defects have been previously un-communicated to Datapoint relative to
diagnosis and avoidance, relief procedure, or resolution, shall not count
toward the allowable number of calls for which support is included in the
basic annual fees under this Agreement.
E. On-site support by Davox personnel may be ordered when necessary. Davox
support personnel will be dispatched on a "first come, first served" basis
subject to availability of personnel and transportation. The price to
Datapoint for on-site support shall be at Davox then prevailing UK
Datapoint daily support rate, for support in the UK. For support in the UK
to be sourced from the U.S., the price shall be the International Daily
Support rate, with labor hours calculated on a portal to portal basis, plus
the reasonable costs of transportation, (which shall be "coach" or like
class unless a higher class is authorized by Datapoint as in an emergency
or where immediate on-site assistance is required and no seat in coach
class is available) meals and lodging (which shall be of average quality
associated with business travel of like kind within the industry generally)
(incurred by Davox support personnel. Davox also agrees to provide, at no
additional cost to Datapoint, on site assistance to Datapoint in resolving
up to one support call per month, using Davox UK based personnel only.
Such on site assistance will be provided subject to availability of
personnel, and will be provided on a best efforts basis once a request for
such assistance is received by Davox through the WSC, or direct to the
Davox Support Services Manager in the UK. If UK based Davox personnel are
not available at the time a request for on site assistance is received from
Datapoint, then Datapoint shall have the option to request US based
personnel to provide such assistance, at the rates and terms provided for
herein.
F. Technical Support to be provided under this Agreement does not include
repair of damage, replacement of parts or increase in support service time
attributable to reasons other than normal wear and tear, including but not
limited to the combination or operation or use of Equipment or Software
with materials not supplied by Davox or for purposes for which the
Equipment, Software or workstation was not designed, unusual physical or
electrical stress, accident, neglect, acts of God, or misuse, abuse, or
modification of the Equipment, Software or workstations by persons other
than Davox unless such modifications have been authorized in writing by
Davox signed by the Vice president of Customer Service expressly amending
this Agreement. In the event Davox reasonably determines that such
approved modifications add to the support requirements associated with the
Equipment or Software or workstation. Davox reserves the right to charge a
premium for said support and will endeavor to quote this additional charge
upon receipt of Datapoint's request for authorization. When support is
required for reasons other than normal wear and tear, support services will
be provided at Davox then prevailing time and material rates and an invoice
issued to Datapoint. If the System has been modified, except as permitted
in the preceding sentence, or if foreign devices have been added to the
System, then Davox may at its option, (i) terminate coverage on the
modified System or (ii) support such modifications and foreign devices at
its then prevailing rates for time
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and material; or (iii) refuse to support the modifications or foreign
devices. Third party hardware, including, but not limited to Sun
Microsystems Computer Corporation products are not eligible for Technical
Support (unless mutually agreed to in writing and set forth in an order for
Technical Support accepted by Davox).
G. Updates and engineering changes will be made to the Software when, in Davox
opinion, such updates and changes are necessary to correct operational
errors or deficiencies in order to conform the Software to Davox published
specifications. Davox may also make changes to the Software to enhance
performance, reliability, or service ability. All updates and changes to
the Software released by Davox shall be deemed "Revisions". Davox shall
provide Datapoint one (1) copy of general Revisions of the Software, upon
release by Davox, Datapoint shall be responsible for installation of all
Revisions. Davox shall be relieved of any liability arising out of errors
or defects in any prior version or Revision of Software twenty-one (21)
days following delivery to Datapoint of the latest Revision. The parties
agree that all of the systems covered by Technical Support shall run
Software at the appropriate Revision level as mutually agreed to from time
to time in writing by the parties, provided that any Revision does not
materially adversely affect the performance of the System in accordance
with Davox published specifications.
H. Davox agrees to provide access to Datapoint to Davox Website, where
Datapoint may elect to log calls for Davox action, to view the status of
Datapoint's open calls with Davox, to view technical documentation, and to
use search capabilities to find information or seek known solutions to
certain problem symptoms.
I. Datapoint agrees to share with Davox selected call data, on a quarterly
basis, for Systems covered under this Agreement. Such data will consist,
at a minimum, of all call incidents per identified system, a description of
each problem reported, and a description of problem resolution actions
taken on each call, as well as summary data on the achievement of targeted
response, relief, and problem resolution time frames by severity category
of problems. Datapoint also agrees to survey BT monthly during the first
year of this agreement, and thereafter quarterly, in a manner to be agreed
between BT, Datapoint, and Davox, in order to assess customer satisfaction
with support services provided, and with personnel delivering such support.
Datapoint agrees to share responses with Davox in a timely manner after
responses are received, and to meet with Davox to agree on appropriate
measures to establish, or increase customer satisfaction with product
effectiveness and support delivery. If BT expresses dissatisfaction with
individual Datapoint support personnel providing services on Unison
Systems, Datapoint agrees to seek Davox assessment of the skills and
capabilities of such personnel, and to take mutually agreed actions as may
be warranted, including additional training or change of assigned
personnel.
J. The Technical Support furnished under this Section 3 shall consist of
technical consultation, diagnosis, replacement of Equipment components
pursuant to clause 3B, and remedial measures, as defined herein, consistent
with restoring the Equipment and/or
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Software to a standard such that it operates in accordance with Davox
published specifications ("Specifications").
4. SPARE PARTS/LOGISTICS
A. As a condition to Davox furnishing Technical Support hereunder, Datapoint
shall purchase appropriate spare parts from Davox. The contents and prices
of Spare Parts Kits are as set forth on Schedule I hereto. The number of
Spare Parts Kits shall coincide with the number of Systems under Technical
Support, in accordance with the matrix in Schedule I.
B. Davox will ship replacement Equipment components to Datapoint, at Davox
expense. Datapoint will return the replacement component to the Spare
Parts Kit. Datapoint shall be responsible for removing the failed
component and installing the functioning component. Datapoint shall return
the failed component to Davox via surface carrier, at Datapoint's expense,
using the packaging and return label provided with the replacement
component. Failed components must be returned to Davox within twenty-one
(21) days of receipt of the replacement component(s) or Datapoint shall be
deemed to have purchased the replacement component(s) at Davox then
prevailing list price for such component and Davox shall issue an invoice
which shall be due in thirty (30) days from the date thereof.
C. When in the course of furnishing Support Services hereunder, the support
calls for Davox to replace a defective or malfunctioning component of the
Equipment and furnish a functioning component, the replacement component
shall become the property of Datapoint, or as applicable, the owner of the
System, and the removed component shall become the property of Davox.
D. Upon the expiration of this Agreement, Davox shall repurchase any spare
parts acquired under this Section 4, then in the possession of Datapoint
acquired for use by and held for BT. Davox shall be permitted to evaluate
the spares parts prior to purchase and those spare parts determined to be
in good working order shall be purchased at a price equal to the price of
the spare parts at cost less 20% annual depreciation measured from the time
of purchase. Datapoint shall provide Davox with a list, annually, of the
spare parts which Datapoint holds for BT and which may in the future
qualify for repurchase.
5. PRODUCT TRAINING AND TRAINING MATERIALS
Product training shall be made available to Datapoint in accordance with the
terms of this Section 5.
A. Datapoint personnel shall be permitted to attend any of Davox then offered
training courses at Davox then prevailing price and scheduled times.
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B. Datapoint may purchase course materials and the license to reproduce and
distribute these materials, under Davox Train the Trainer program, as
outlined in Schedule III.
Unless otherwise agreed in writing by Davox, courses will be taught at Davox
training facility in Westford or Acton, Massachusetts, U.S.A. Datapoint is
responsible for the cost of tuition, transportation, meals and lodging of
Datapoint's personnel attending Davox training courses, other than as provided
for below.
Davox agrees to provide, as a service included with the basic annual fees for
support services under this Agreement (Refer Schedule II (1)), five (5) days of
training per quarter at Datapoint's facilities in the UK. Datapoint agrees to
reimburse Davox for all reasonable travel, lodging, and expenses associated with
providing this training, but shall not be invoiced for tuition or instructor
time associated with this quarterly on-site training. Datapoint shall be
responsible for providing proper and adequate facilities, equipment, and
software installed and configured suitable for the training agreed to be
provided each quarter. Datapoint also agrees to name a contact to serve as
training coordinator with Davox Educational Services to act for Datapoint in
planning and implementing each quarter's training. The training (i.e. course
instruction) under this paragraph shall be deemed to have a pro forma quarterly
fee of $7,500. Datapoint may also elect, at its option, to use the $7500 pro
forma quarterly fee of this on-site training toward tuition fees for Datapoint
employees for courses at Davox training facilities in Acton, Massachusetts,
U.S.A.
6. PRODUCT DOCUMENTATION
Davox shall furnish to Datapoint one (1) copy of Davox standard user
documentation. Any internal support documentation which is provided shall be
deemed to be the confidential and proprietary information of Davox, subject to
Section 15 of this Agreement.
7. SOFTWARE
A. The Software furnished hereunder and any Revisions, modifications or
updates thereto, and the Master Release referenced below are subject to,
and shall be governed by, the terms and conditions of the Datapoint
Agreement, in particular, Section 2(f.) thereof and Schedule V, Software
License, of this Agreement, except that Datapoint shall be permitted to
furnish under sublicense Software provided hereunder, to the extent
authorized herein, to BT under the sublicense terms previously agreed to
between Datapoint and BT as expressly set forth in Schedule VI hereto.
B. Davox will furnish Datapoint one (1) master media (tape) set, as may be in
effect from time to time during the term of this Agreement, (the "Master
Release") containing the following:
a. The then current standard Revision of the commercially most
significant Software including Davox standard Software previously
included in Products furnished under the Datapoint Agreement for
distribution to BT;
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b. Sub-revisions or modifications to the Software referred to in sub-
clause a, above;
c. Code fixes or patches to the Software referred to in the sub-clause a,
above; and
d. A listing of director structure and module revision levels.
The Master Release is the confidential and proprietary information of Davox and
is authorized for use solely by Datapoint on a single system at Datapoint's
central support location. Except as permitted under clause 7A, above, Datapoint
shall not duplicate the Software in whole or in part.
8. TERM
A. This Agreement shall have a term, for a period of five (5) years from the
date first referenced above 1 August 1997, provided that neither party has
terminated for cause.
B. The term of Technical Support for each covered System shall be as follows:
The "Initial Term" shall commence upon Davox written acknowledge that an order
for coverage has been accepted by Davox and shall be for a period of one (1)
year, thereafter renewable annually. Notwithstanding the foregoing, except as
otherwise provided in this clause, either part shall be permitted to terminate
coverage for cause at any time upon thirty (30) days prior written notice to the
other, and should the cause not be extinguished by the 30th day, terminate
forthwith. Notwithstanding the above: (i) should BT terminate for any reason,
Datapoint shall be permitted to terminate upon fifteen (15) days written notice
to Davox and nay prepaid amounts for support and services not then rendered
shall be duly refunded by Davox; and (ii) Davox shall be permitted to terminate
upon fifteen (15) days prior written notice in the event Datapoint fails to make
timely payment and cure such failure with said fifteen (15) day period.
9. ORDERS AND DELIVERY
A. Placement. Datapoint will place orders for the Support Services directly
with Davox. Unless otherwise mutually agreed to in writing by the parties,
any term of any such order that conflicts with any term of this Agreement
will have no legal force or effect. All orders will be placed in writing
and reference this Agreement (either by date "Agreement of 1 August 1997"
or by number "Agreement no: D1") or in the case of orders on a time and
material basis, will be authorized in writing by Datapoint's BT account
manager. In the absence of any such designation, any order for products or
service covered by this Agreement shall be deemed governed by the terms and
conditions herein.
B. All orders are subject to credit approval by Davox, except that any order
accompanied by payment in full shall be deemed to have satisfied this
requirement.
C. Shipment/Delivery Date for Support Services. Technical Support shall be
effective in accordance with Section 1(C). For all other Support Services
the parties shall mutually agree on a performance schedule for each order
accepted from Datapoint. With respect to
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spare parts, Software, and other products available hereunder (each
referred to in this Section 9 as a "Product") Davox will ship the Products
from its distribution or support facility, as designated by Davox, in
accordance with this schedule, subject to delays beyond Davox's control.
Davox will select the method of shipment for Datapoint's account and obtain
all licenses required to export the Products from the country of origin.
Datapoint will (i) obtain all licenses required to import the Products into
the United Kingdom, (ii) clear the Products through local customs promptly
upon their arrival at the United Kingdom and (iii) pay all customs duties
and other charges assessed on such imports in the United Kingdom, if
applicable.
D. Rescheduling. Datapoint may reschedule a shipment date for the products by
notifying Davox of the proposed new shipment date, but any such proposed
new date cannot extend the original shipment date by more than one-hundred-
twenty (120) days.
E. Delivery. Davox will deliver Products to Datapoint at the distribution or
support facility designated by Davox. In the absence of written
confirmation to the contrary, the distribution or support facility shall be
deemed to be Davox facility in Westford, MA, USA ("Davox Facility"). Risk
of loss will pass to Datapoint upon delivery to a common carrier. Any use
of "EX WORKS," "FOB" or other INCOTERMS will apply only to price and not to
delivery or passage of title or risk of loss. Delivery of airway bills or
other bills of lading before or after the Products arrive in the United
Kingdom will not affect the place of delivery. Datapoint shall provide
shipping instructions either in the order or otherwise to Davox in writing
at least thirty (30) days prior to the shipment date. In the absence of
shipping instructions, Davox shall select a common carrier on behalf of
Datapoint. In no event shall Davox be liable for shipment by common
carrier nor shall such common carrier be construed to be an agent of Davox.
Technical Support shall be deemed delivered at the Davox Facility where
remote support is rendered, or , when applicable, at the system location
where on-site support is furnished.
F. Title. Title to the, components and spare parts and all risk of loss
thereto shall pass to Datapoint upon delivery to the common carrier.
Datapoint acknowledges that title to the Software will not, under any
circumstances, pass to Datapoint or BT, and Software is licensed to
Datapoint for sublicense to BT.
G. Costs. Except as otherwise provided in Clause 4B, Datapoint will pay or
reimburse Davox for all brokerage, handling, transportation, demurrage and
other delivery costs that Davox may incur in delivering Products to
Datapoint from Davox's designated distribution or support facility. Davox
will separately identify all reimbursable costs in its order confirmation
or invoice issued to Datapoint.
10. PRICES AND PAYMENT
A. The prices for Technical Support and other Support Services available
hereunder are as set forth in Schedule I, Schedule II and Schedule III
hereto. In the event no price or fee is set forth for a particular
service, the price or fee shall be Davox then prevailing
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international price or fee for the applicable time or material.
Notwithstanding the foregoing, Davox agrees not to modify the prices on
Schedules II and III on the effective date of this Agreement for a period
of one (1) year commencing on said date.
B. The fees stated for Technical Support are annual charges, quoted and to be
paid in United States dollars. The fees shall be invoiced and paid
quarterly in advance of the commencement date, except that the first
billing shall be prorated from the date Technical Support commenced to the
date of the end of the then current Datapoint quarterly period.
Datapoint's quarterly period end on October 31, January 31, April 30 and
July 31. All other charges for Support Services are quoted in United
States dollars, and shall be due and payable thirty (30) days from the date
of invoice.
C. Currency and Place. Datapoint will pay all amounts due to Davox pursuant
to this Agreement in U.S. Dollars at Davox's offices in Westford,
Massachusetts, U.S.A. Any late payment will accrue interest at the lower
of the LIBOR rate quoted on the date that the payment became past due, plus
one percent (1%) or such rate as may be allowable under the laws of
England, it being the agreement of the parties that the lower rate shall
apply.
D. Taxes. All amounts payable by Datapoint to Davox under this Agreement are
exclusive of any tax, levy or similar governmental charge that may be
assessed by any jurisdiction, whether based on gross revenue, the delivery,
possession or use of the Support Services or Products, the execution or
performance of this Agreement or otherwise, except for net income, net
worth or franchise taxes assessed on Davox outside of the United Kingdom.
Subject to these exceptions, Datapoint will pay all taxes, VAT, levies or
similar governmental charges or provide Davox with a certificate of
exemption acceptable to the taxing authority. If Datapoint is required
under the laws of the united Kingdom to deduct any withholding taxes from
payments to Davox, then (i) Datapoint will notify Davox prior to
withholding any such taxes, (ii) the price payable by Datapoint for the
Products will be increased so that the actual amount received by Davox, net
of all taxes, will be equal to the amount invoiced to Datapoint and (iii)
Datapoint will promptly furnish Davox with the official receipt of payment
of these taxes to the appropriate taxing authority.
E. For the purposes of the calculation of fees, fees for Technical Support
coverage shall commence on the date of "hand over" for the applicable
system or Seat notwithstanding the date of Datapoint's purchase order.
11. ESCALATION
During the period of Technical Support coverage on a System, Davox will use
best efforts to deal with the escalation of unresolved problems with the
system reported to the WSC in accordance with the Escalation Procedures set
forth in Schedule IV hereto, to the extent applicable. Davox Escalation
procedures do not represent a guarantee that Davox will be able to provide
problem resolution within any specified time.
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12. LIMITED WARRANTIES
A. Davox warrants that the services render under this Agreement shall be of
professional quality conforming to generally accepted practices in the
industry.
B. Warranty. Davox warrants that any spare parts furnished under this
Agreement will be free from defects in materials and workmanship and
Software furnished under this Agreement will operate substantially in
accordance with Davox then current published specifications as set forth in
Davox documentation for a period of sixty (60) days from the date Datapoint
delivers the spare part or Software to Customer. Davox does not warrant
that (i) the spare parts and Software will satisfy or may be customized to
satisfy all of the customers' requirements or (ii) the use of the Software
will be uninterrupted or error-free. Datapoint further acknowledges that
(i) the prices contemplated under this Agreement are based on the limited
warranty, disclaimer and limitation of liability specified in Sections 12,
13 and 14 and (ii) such charges would be substantially higher if any of
these provisions were unenforceable.
C. Remedies. Datapoint will promptly notify Davox in case of any alleged
breach of warranty or any other duty related to the quality of the
Equipment, spare parts, Software or other support Service. If the alleged
defect is demonstrated to fall within the express warranty contemplated
under Section 12(b), Davox will, at its option, correct or replace the
defective Equipment, spare part of Software. If the alleged deficiency is
a failure to confirm to Section 12(A) Davox shall re-perform the Support
Service, or material portion thereof, which fails to conform to the
professional standard in Section 12(A) at no additional charge. If Davox
is unable to remedy any defect in the Equipment, spare part or any non-
conforming Software under Section 12(B), or remedy any failure of
performance under Section 12(A) as required by the foregoing warranties,
Davox's liability to Datapoint shall in no event exceed the purchase price
received hereunder by Davox for the Equipment or spare part or the amount
of any license fees received by Davox for the Software, or the fee for the
applicable Support Service as of the date of the applicable warranty claim
is first made.
D. Limitation. The warranties and remedies specified in this Section will not
apply if the spare part or Software malfunctions due to extrinsic causes,
such as (i) natural disasters, including fire, smoke, water, earthquakes or
lightning, (ii) electrical power fluctuations or failures, (iii) the
neglect or misuse of the, spare part or Software or other failure to comply
with the instructions set forth in the Davox documentation, (iv) a
correction or modification of the, spare part of Software not provided by
Davox, (except to the extent expressly authorized in writing by Davox Vice
President of Customer Service referencing these Agreement) (v) a
malfunction of the customer's hardware equipment, (vi) interfaces not
developed and installed by Davox or (vii) the combination of the System
with other products not provided by Davox.
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E. Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 12 AND SECTION
13, ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES
WITH RESPECT TO THE SPARE PARTS, SOFTWARE AND OTHER SUPPORT SERVICES,
WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN
STATEMENTS BY DAVOX OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE) ARE HEREBY
OVERRIDDEN, EXCLUDED AND DISCLAIMED. However, nothing in this Section 12E
shall be deemed to modify any other warranty which may exist under the
certain and separate Distributor Agreement as modified by the Termination
Agreement with respect to Products furnished thereunder, in accordance with
the terms therein.
13. DAVOX INDEMNIFICATION OF DATAPOINT
A. Infringement. Davox will defend Datapoint and pay the costs involved in
any claim, suit or proceeding brought against Datapoint insofar as such
suit or proceeding is based on a claim that the spare part or Software
furnished hereunder infringes on any United States, Belgium, France, Spain,
Germany, Switzerland, Netherlands, Italy, Sweden, or United Kingdom, or
Republic of Ireland, patent, copyright or trademark, but only if Datapoint
notifies Davox promptly upon learning that such claim is threatened or has
been filed and served on Datapoint and gives Davox sole control of the
defense and all related settlement negotiations. Notwithstanding anything
herein to the contrary, the notice referred to by this Section shall be
sent by fax to Davox's United States headquarters. Attention: President,
at (508) 952-0200. (or such other number as Davox may notify Datapoint in
accordance with Section 21) with a confirming copy sent in accordance with
the procedures set forth in Section 21. If any claim which Davox is
obligated to defend has occurred, or in the reasonable opinion of Davox is
likely to occur, Datapoint agrees to permit Davox, at the option and
expense of Davox, either to procure for Datapoint the right to continue
using the spare part or Software or to replace or modify the spare part or
Software so that it becomes non-infringing without materially impairing
functionality and existing compliance with legal and regulatory
requirements. If neither of the foregoing alternatives is available on
terms which are reasonably acceptable to Davox, Datapoint shall return the
spare part or Software upon written request by Davox ad Datapoint agrees to
accept a refund equal to the amount paid by Datapoint less depreciation at
a rate per year over the life (five years in the case of Software and five
years in the case of spare parts) of the spare part or Software.
B. Limitations. Davox shall have no obligations under this Section 13 with
respect to claims, suits, or proceedings to the extent based on the use of
the system, spare part or Software in combination or connection with
hardware or software not provided by Davox, customization of the Software,
or upon the use of the system, spare part or Software in a manner for which
such System, spare part or Software was not designed. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, DAVOX'S TOTAL AGGREGATE LIABILITY UNDER
THIS SECTION 13 FOR ANY AND ALL
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CLAIMS ARISING UNDER THIS SECTION SHALL IN NO EVENT EXCEED AN AGGREGATE
DOLLAR AMOUNT OF THREE MILLION U.S. DOLLARS (US$3,000,000), EXCEPT THAT NO
SUCH LIMIT SHALL APPLY TO ANY CLAIM, SUIT, OR PROCEEDING ASSERTING
INFRINGEMENT OF A PATENT ISSUED UNDER THE LAWS OF THE UNITED STATES OR THE
UNITED KINGDOM.
C. Exclusive Liability. THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY
OF DAVOX FOR INFRINGEMENT OF ANY KIND AND IS IN LIEU OF ALL WARRANTIES ,
EXPRESS OR IMPLIED, IN REGARD THERETO.
D. Survival. The provisions of this Section 13 shall survive the termination
of this Agreement.
14. NO CONSEQUENTIAL DAMAGES.
UNDER NO CIRCUMSTANCES WILL DAVOX OR ITS LICENSORS BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE, OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORSEEABLE. BASED ON CLAIMS OF
DATAPOINT, OR BT OR THEIR CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS
FOR LOSS OF DATA, GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS,
INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR
IMPAIRMENT OF OTHER ASSETS), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR
IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT
LIABILITY IN TORT OR OTHERWISE. EXCEPT FOR DAVOX'S OBLIGATIONS UNDER
SECTION 13, IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH DAVOX AND ITS
LICENSORS MAY INCUR IN ANY ACTION OR PROCEEDING EXCEED THE TOTAL AMOUNT
ACTUALLY PAID TO DAVOX BY DATAPOINT FOR THE SPECIFIC SUPPORT SERVICE OR
PRODUCT FURNISHED HEREUNDER THAT DIRECTLY CAUSED THE DAMAGE. THIS SECTION
WILL NOT APPLY ONLY WHEN AND TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY
REQUIRES LIABILITY, DESPITE THE FOREGOING EXCLUSION AND LIMITATION.
15. INFORMATION
A. Confidentiality.
(1) Datapoint acknowledges that the Support Services and other products
furnished hereunder incorporate confidential and proprietary information
developed or acquired by or licensed to Davox (the "Information").
Datapoint will take all reasonable precautions necessary to safeguard the
confidentiality of the Information, including (i) those taken by Datapoint
to protect its own confidential information and (ii) those which Davox may
reasonably request from time to time. Datapoint will not allow the removal
or
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defacement of any confidentiality or proprietary notice placed on the
Support Service's materials, products or other items of Information. The
placement of copyright notices on these items will not constitute
publication or otherwise impair their confidential nature.
(2) Davox shall take all reasonable steps to insure that all documentation
and such other confidential information provided to Davox by Datapoint and
marked as "confidential" remains confidential.
B. Ownership. All patents, copyrights, circuit layouts, trade secrets and
other proprietary rights in or related to the Support Services and products
furnished hereunder are and will remain the exclusive property of Davox or
its licensors, whether or not specifically recognized or perfected under
the laws of the United Kingdom, Republic of Ireland, United States or any
other jurisdiction. Datapoint will not take any action that jeopardizes
Davox's or its licensors' proprietary rights or acquire any right in the
Support Services, products or Information, except the limited use rights
specified in Section 15(C). Datapoint hereby assigns to Davox or its
licensor all rights in any translation, modification or adaptation of, or
derivative work based on, the Support Services, products, or other items of
Information, including any improvement or development thereof, that may be
developed by or for Datapoint, but excluding external interfaces developed
by Datapoint to enable a System to operate in combination with BT's
particular computer or telephony systems. Datapoint will obtain at Davox
request, the execution of any instrument that be may appropriate to prefect
these rights in Davox or its licensor's name. Datapoint shall retain any
rights in and to any shell or supplemental software it develops to the
extent and as provided in 15C.
C. Use. Datapoint will use the Support Services, products and other items of
Information exclusively to perform its service and support activities with
respect to its BT, in accordance with the terms of this Agreement. Except
as specifically contemplated in Section 3(G), 5(B), 7(A) of this Agreement,
or Section 9(c) of the Distributor Agreement, Datapoint will not copy,
translate, modify or adapt the Support Services, Software products, or
other items of Information without Davox's prior written approval.
Datapoint will reproduce Davox's or its licensors' confidentiality and
proprietary notices on all such copies. Datapoint will not decompile,
disassemble or reverse engineer the Software or products, except as and to
the extent specifically permitted under applicable law. Datapoint will
promptly notify Davox if Datapoint intends to create any shell or
supplemental software that will be combined with the Software, Equipment or
products. At Davox's request, Datapoint will provide Davox with the
specifications, flow charts, source and object code and other documentation
for such shell or supplemental software programs ("Supplemental Software
Information") for the purpose of enabling Davox to fulfill its support
obligations under this Agreement with respect to the Equipment, Software or
products and to ascertain Datapoint's compliance with the terms herein.
Davox agrees not to disclose to any third party and treat as confidential
the Supplemental Software Information with the same degree of care Davox
uses to protect its own confidential information, which shall not be less
than a reasonable standard of care not to disclose. Davox confidentiality
obligations with respect to the Supplemental Software
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Information do not apply to information which: (i) is in the public domain;
(ii) has been received by Davox from a third party not under
confidentiality restrictions; (iii) is already known to Davox at the time
of disclosure, or is independently developed by Davox without use of the
Supplemental Software Information; (iv) is authorized to be disclosed to a
third party by Datapoint; or (v) is disclosed to BT pursuant to Davox
rightfully performing it diagnostic and support obligations under the
Agreement.
Datapoint, or its licensors, shall retain all rights, title and interest in
and to any such shell or supplemental software, except to the extent such
shell or supplemental software contains software code or Information of
Davox or its licensors.
D. Disclosure. Datapoint will not disclose, in whole or in part, the
Information except to those of Datapoint's employees who require access to
perform its obligations under this Agreement and have executed a
confidentiality agreement conforming to that set out in Schedule H of the
Distributor Agreement (the "Confidentiality Agreement"). Datapoint will
execute all Confidentiality Agreements as principal on its own behalf and,
exclusively to accept or otherwise perfect Davox's rights thereunder, as
agent on behalf of Davox. At Davox request, Datapoint will provide Davox
with copies of all Confidentiality Agreements. In no event will Datapoint
amend or cancel any Confidentiality Agreement without Davox's prior
approval.
E. Unauthorized Use or Disclosure. Datapoint acknowledges that any
unauthorized use or disclosure of the Information may cause irreparable
damage to Davox or its licensors. If an unauthorized use or disclosure
occurs, Datapoint will promptly notify Davox and take, at Datapoint's
expense, all steps which are necessary to recover the Information and to
prevent its subsequent unauthorized use or dissemination, including
availing itself of actions for seizure and injunctive relief. If Datapoint
fails to take these steps in a timely and adequate manner, Davox may take
them in its own or Datapoint's name and at Datapoint's expense.
F. Limitation. Datapoint will have no confidentiality obligation with respect
to any portion of the Information that (i) Datapoint independently knew or
developed before receiving the Support Services or Information from Davox,
(ii) Datapoint lawfully obtained from a third party under no obligation of
confidentiality or (iii) became available to the public other than as a
result of an act or omission of Datapoint or any of its employees or
customers. Under any of these circumstances, Datapoint will notify Davox
at least 30 days before disclosing such portion of the Information to any
other person.
16. COMPLIANCE WITH LAWS
A. Local Compliance. Datapoint will, at its expense, obtain and maintain the
governmental authorizations, registrations and filings that may be required
under the laws of the United Kingdom for Datapoint to execute or perform
under this Agreement any agreements with BT and will pay and bear all stamp
taxes related thereto. Datapoint will otherwise comply with all laws,
regulations and other legal requirements within the United
-16-
<PAGE>
Kingdom that apply to Datapoint's performance arising under this Agreement,
including tax and foreign exchange legislation.
B. Compliance With U.S. Laws. Datapoint agrees that it will not directly or
indirectly do any act or thing which will constitute a violation of the
United States Foreign Assets Control Regulations.
Datapoint further acknowledges and agrees that the Support Services, other
products furnished hereunder and all related technical information,
documents and materials are subject to export controls under the U.S.
Export Administration Regulations. Datapoint will comply with all
applicable requirements of the Export Administration Regulations and other
applicable export control regulations of the United States, as modified
from time to time by the Administration or the US Department of Commerce
and any corresponding export control requirements with the United Kingdom.
C. Unlawful Payments. Datapoint will not use any payment or other benefit
derived from Davox to offer, promise or pay any money, gift or any other
thing of value to any person for the purpose of influencing official
actions or decisions affecting this Agreement, while knowing or having
reason to know that any portion of this money, gift or thing will, directly
or indirectly, be given, offered or promised to (i) any employee, officer
or other person acting in an official capacity for any government or its
instrumentalities or (ii) any political party, party official or candidate
for political office. Datapoint will provide Davox with the assurances and
official documents that Davox periodically may request to verify
Datapoint's compliance with this Section.
17. INDEMNITY
Datapoint will indemnify Davox against any damage, loss, liability or
expense (including lawyers' fees) that Davox may incur (i) arising out of
any wrongful action of Datapoint, its employees, agents, subcontractors,
representatives or customers (ii) as a result of (a) any modification or
amendment of the prescribed terms of the Software Agreement in Schedule V
and, with respect to furnish Software to BT, the Software License in
Schedule VI that Davox did not specifically approve, (b) Datapoint's
failure to comply with Section 7(A), Section 15, any warranty, condition,
representation, indemnity or guarantee granted by Datapoint or provided by
applicable law with respect to the Support Services and products furnished
hereunder in addition to or in lieu of the limited warranties specified in
Section 12, (d) any omission or inaccuracy in Datapoint's advertisements
and promotional materials that relate to the Support Services and products,
(e) any modification of the Support Services or products hereunder, or (f)
Datapoint's failure to comply with Section 16. Davox shall use all
reasonable efforts to notify Datapoint of any threatened claim within ten
(10) days after Davox's receipt of written notification that such claim is
threatened and within five (5) days of the filing and service on Davox of
such claim and giving Datapoint sole control of the defense and all related
settlement negotiations. Notwithstanding anything herein to the contrary,
the notice referred to by this Section shall be sent by fax to Datapoint
(UK) Limited's
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<PAGE>
headquarters, Attention: Legal Department, at 0181-830-1516 (or such other
number as Datapoint may notify Davox of in accordance with Section 21 with
a confirming copy sent in accordance with the procedures set forth in
Section 21. This Section will not be construed to limit or exclude any
other claims or remedies which Davox may assert under this Agreement or by
law.
18. INDEPENDENT PARTIES
Davox and Datapoint are independent parties. Nothing in this Agreement
will be construed to make Datapoint an agent, employee, franchisee, joint
venturer, partner or legal representative of Davox. Except as otherwise
provided in this Agreement, Datapoint will neither have nor represent
itself to have any authority to act on Davox's behalf.
Davox is not a party to any agreement or undertaking between Datapoint and
BT by virtue of this Agreement and does not otherwise endorse or ratify any
such undertakings or agreements.
19. FORCE MAJEURE
Neither party will be liable for any failure or delay in performing an
obligation under this Agreement that is due to causes beyond its reasonable
control.
Notwithstanding the foregoing, nothing in this Section shall be construed
to excuse or delay Datapoint's payments to Davox hereunder, such payment
being a condition to the rendering of Support Service by Davox.
20. ARBITRATION
A. General. Except as contemplated under Section 20(D), any controversy or
claim arising out of or relating to this Agreement or the existence,
validity, breach or termination thereof, whether during or after its term,
will be finally settled by compulsory arbitration in accordance with the
Commercial Arbitration Rules and Supplementary Procedures for International
Commercial Arbitration of the American Arbitration Association ("AAA"), as
modified or supplemented under this Section 20.
B. Proceeding. To initiate arbitration, either party will file the
appropriate notice at the Regional Office of the AAA in Boston,
Massachusetts U.S.A. The arbitration proceeding will take place in Boston,
Massachusetts U.S.A. and will be conducted in the English language. The
arbitration panel will consist of 3 arbitrators, one arbitrator appointed
by each party and a third neutral arbitrator appointed by the two
arbitrators designated by the parties. The third arbitrator shall be a
retired US federal court or state appellate court judge. Any communication
between a party and any arbitrator will be directed to the AAA for
transmittal to the arbitrator.
-18-
<PAGE>
C. Award. The arbitral award will be the exclusive remedy of the parties for
all claims, counterclaims, issues or accountings presented or plead to the
arbitrators. The award will (i) be granted and paid in U.S. dollars
exclusive of any tax, deduction or offset and (ii) include interest form
the date of breach or other violation of the Agreement until the award is
fully paid, computed at the then-prevailing LIBOR rate. Judgment upon the
arbitral award may be entered in any court that has jurisdiction thereof.
Any additional costs, fees or expenses incurred in enforcing the arbitral
award will be charged against the party that resists its enforcement. The
parties expressly agree that the arbitrators will be empowered to (i) issue
an interim order or award, which may include but is not limited to
requiring Datapoint to cease using the Products or Information pending the
outcome of the arbitration, or (ii) grant injunctive relief.
D. Legal Actions. Nothing in this Section will prevent Davox from enforcing
its copyrights, patents or other proprietary rights against Datapoint
(including, but not limited to, obtain injunctive relief from a court of
competent jurisdiction) or filing legal actions for payment of outstanding
and past due debts in the courts of the United Kingdom, or court of
competent jurisdiction, nor shall anything in this Section prevent
Datapoint from enforcing its copyrights, patents or other proprietary
rights against Davox (including, but not limited to, obtaining injunctive
relief) in a court of competent jurisdiction.
21. GENERAL
A. No relationship with customer created. - The Datapoint Agreement and this
Agreement do not create any direct relationship with, or obligations to
Datapoint's customer BT (including any parent, subsidiary, or affiliate
entity of BT) on the part of Davox.
B. Right to request support. - The sole and exclusive remedy of Datapoint
hereunder with respect to a defective or inoperative System (inclusive of
Equipment, spare parts and Software) is to request Support Services or
replacement Equipment as provided herein.
C. Availability of personnel. - Davox shall be excused from providing on-site
support: (i) when to do so will violate the laws or regulations of the
United Kingdom and (ii) where the laws of the UK require a work permit or
visa, and then only for the period of time until such work permit or visa
is issued.
D. Notices. - Notices and approvals required hereunder shall be given in
writing and will be sent by facsimile transmission, with electronically
dated confirmation, or independent carrier, with written confirmation of
receipt or registered mail, to the designated representative, identified
below, at the address first set forth above;
If to Datapoint:
Datapoint UK Ltd.
Attn: Managing Director
Telephone: 0181 469 1222
Facsimile: 0181 830 1516
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<PAGE>
With copy to Company Attorney
If to Davox Corporation:
Attn: Vice President Customer Service
Telephone: 508 952 0200
Facsimile: 508 952 0201
With copy to Company Attorney
F. Severability. - In the event that any portion of this Agreement shall be
deemed to be illegal or unenforceable by any court of competent
jurisdiction, the remaining provisions shall be severable and enforceable
in accordance with their terms so long as the omission of such terms or
provision does not cause this Agreement to fail in its essential purpose or
purposes. The parties will negotiate in good faith to replace any such
illegal or unenforceable provisions with legal and enforceable provisions
that are intended to restore the purpose of this Agreement.
G. Waiver and Modification. - Except as otherwise provided above, any waiver,
amendment or other modification of this Agreement will not be effective
unless in writing and signed by the parties against whom it is sought to be
enforced.
H. Assignment. - Neither party may assign, delegate, subcontract or otherwise
transfer this Agreement or any rights or obligations without the other's
prior approval. Any attempt to do so will be void. Notwithstanding the
foregoing, Davox may assign or subcontract any or all of its rights and
obligations to its wholly owned subsidiary in the England, Davox (Europe)
Limited.
I. Governing Law. - This Agreement will be governed and interpreted by the
laws of the Commonwealth of Massachusetts, USA, excluding its conflict of
law principles. Davox and Datapoint exclude the United nations Convention
on Contracts for the International Sale of Goods from this Agreement and
any transaction between them that may be implemented in connection with
this Agreement.
J. Survival. - The provisions of Sections 13, 14, 15, 16, 17, 18, 20, 21(A)
and 21(H) shall survive the termination or expiration of this Agreement.
K. Breach.- In the event of a material breach of this Agreement the non-
breaching party shall give the party in breach written notice of the breach
and the breaching party shall have thirty (30) days to cure, or if the
breach is not capable of cure within thirty days then the breaching party
must have commenced to make diligent efforts to cure and actually cured
within a reasonable period of time in light of the severity and materiality
of the breach.
L. Upon termination or expiration of this Agreement, Datapoint shall return to
Davox all Information, documentation, Software, and other materials
provided to Datapoint hereunder pursuant to Sections 3(G), 7 and 15.
-20-
<PAGE>
M. Nothing in this Agreement shall be construed to relieve or modify either
party's independent obligations under the certain and separate Datapoint
Agreement.
N. Non-solicitation.- During the term of this Agreement neither party shall
knowingly solicit the technical personnel then in the direct, current,
full-time employment of the other. Notwithstanding the foregoing nothing
herein shall be construed to prevent either party from interviewing and
making offers to an employee of the other party or hiring employees of the
other party to the full extent permitted under the laws of the United
Kingdom or European Union. However, in the event a party hires an employee
of the other, the hiring party shall by way of full and complete
compensation, and without further obligation or liability hereunder, pay to
said other party an amount equal to 3 month's base salary calculated at the
monthly base salary rate then in effect for said employee by the other
party at the time the offer of employment is extended. Each party
expressly acknowledges and agrees that it is not the intent to prevent or
otherwise interfere with any employees right or privilege to freely seek
and accept employment with the other party, but to provide a mechanism to
provide compensation to the affected party in the event of the loss of an
employee material to the affected party's operation. The employment
process being personal to the candidate seeking employment, neither party
shall be required to disclose the identity of any potential employment
candidate prior to the date such candidate accepts an offer of employment
from the tendering party.
O. Special Definitions: 1. "Datapoint" - For the sake of clarity, whereas
Datapoint has limited distribution rights with respect to BT under the
Datapoint Agreement, the term "Distributor" as used with respect to this
Agreement between the parties shall refer to Datapoint UK Limited.
2. "Software" - The term Software as used herein refers to software as the
term is first used in Section 1.B and upgrades, modifications,
customization, bug fixes and enhancements thereto, Revisions, and all
software code furnished under this Agreement.
P. In the event of any conflict between the terms of this Agreement and the
Schedules set forth in Section 23, the terms of this Agreement shall
control, except that the parties agree that this Agreement and the
Schedules shall be interpreted as being consistent to the extent reasonably
possible.
22. ENTIRE AGREEMENT
This Agreement and its Schedules constitute the complete and entire
statement of all terms, conditions, and representations of the agreement
between the parties with respect to the subject matter.
It is the intent of the parties that the Distribution Agreement as modified
by the Termination Agreement (collectively the "Outside Agreements") remain
independent agreements with independent legal significance and are not made
part hereof, except that reference to specific sections or clauses of said
agreements herein shall be deemed to
-21-
<PAGE>
incorporate the same terms or obligations under this Agreement to the
extent necessary to give effect to the obligations or undertakings
expressly set forth in this Agreement, or as the context may suggest, to
acknowledge the existence of rights or obligations under such Outside
Agreements and shall not be deemed to revive, extend or modify said Outside
Agreements.
23. SCHEDULES AND EXHIBITS
Schedule I Spare Parts List and Pricing
Schedule II Annual Support and Time and Materials
Pricing
Schedule III Davox Education Course Pricing
Schedule IV BT Problem Escalation Procedure
Schedule V Software License
Schedule VI BT Sublicense
AGREED: AGREED:
Datapoint Davox
By: /s/ Blake Thomas By: /s/ John J. Connolly
--------------------------------------- -------------------------------
Title: President & Chief Operating Officer Title: VP Finance & CFO
----------------------------------- ---------------------------
Date: Date: 10/31/97
----------------------------------- ---------------------------
-22-
<PAGE>
ADDENDUM 1
This Addendum amends and modifies the Special Support Services Agreement between
Datapoint (UK) Ltd. ("Datapoint") and Davox Corporation ("Davox") with an
effective date of 1 August 1997 (the "Agreement"). To the extent of any
inconsistencies between the terms of this Addendum and the terms of the
Agreement, the terms of this Addendum shall govern. All other terms and
conditions of the Agreement remain unchanged.
1. In Clause 1.A. of the Agreement, between the phrase "United Kingdom" and
the parenthetical term "UK" insert the words "of Great Britain and Northern
Ireland."
2. Clause 21.L. of the Agreement is deleted in its entirety and replaced with
a new Clause 21.L. as follows:
"Upon expiration or termination of this Agreement, except in the event of
an uncured breach of Sections 7, Software; 10, Payment; and 15,
Information, Datapoint shall be permitted to retain and use under license,
in accordance with the terms of this Agreement, such Information, Software
and documentation furnished hereunder, as may be reasonably necessary to
support BT pursuant to any existing contractual commitments between BT and
Datapoint. Datapoint shall return all other Information, Software and
documentation upon said expiration or termination of this Agreement.
Notwithstanding anything elsewhere herein to the contrary, Davox shall have
no obligation to support, revise, or update any Information, Software or
documentation retained and used pursuant to this Clause 21.L."
AGREED: AGREED:
Datapoint Davox
By: /s/ Blake Thomas By: /s/ John J. Connolly
--------------------------------------- -------------------------------
Title: Chairman of the Board of DPT UK Title: VP Finance & CFO
----------------------------------- ---------------------------
Date: Date:
----------------------------------- ---------------------------
-23-
<PAGE>
SCHEDULE I
SPARE PARTS LIST AND PRICING
BASE CABINET -- INTERNATIONAL
<TABLE>
<CAPTION>
SPARES ASSEMBLY EXPEDITED
PART INSTALLED SYSTEMS LIST REPAIR REPAIR
NUMBER DESCRIPTION "1-5" "6-15" "16-30" "30+" PRICE CHARGE PRICE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
881194* PWA DSP CPU 1 2 2 3 $10,000 $ 3,000 $ 5,000
881202-CNET* PWA PDL BD CPU CNET 1 2 2 3 $ 750 $ 225 $ 375
881200** PWA PDL BD I/F T1 CEPT 1 2 2 3 $ 575 $ 173 $ 288
881210** PWA SW DIG DSP 1 2 2 3 $ 1,240 $ 372 $ 620
881207** PWA PDL BD SW DIG 1 2 2 3 $ 500 $ 150 $ 250
881302** POWER SUPPLY ASSY 1 1 1 2 $ 4,500 $ 1,350 $ 2,250
905349 DCS CABINET CARD CAGE 1 1 1 1 $48,675 $14,603 $24,338
883240 RIBBON CABLE DCS 1 1 1 2 $ 15 N/A N/A
881301 FAN ASSEMBLY 1 1 1 1 $ 430 N/A N/A
883245-05 CABLE T1 1 1 1 2 $ 35 N/A N/A
881300 BACK PLANE ASSEMBLY 1 1 1 2 $ 5,230 $ 1,569 $ 2,615
881197-E1 PWA INTERFACE E1 1 2 2 3 $ 5,000 $ 1,500 $ 2,500
881197-T1 PWA INTERFACE T1 1 2 2 3 $ 5,000 $ 1,500 $ 2,500
</TABLE>
-24-
<PAGE>
CABLES & ACCESSORIES
<TABLE>
<CAPTION>
SPARES ASSEMBLY EXPEDITED
PART INSTALLED SYSTEMS LIST REPAIR REPAIR
NUMBER DESCRIPTION "1-5" "6-15" "16-30" "30+" PRICE CHARGE PRICE
<C> <S> <C> <C> <C> <C> <C> <C> <C>
883195-04 MODEM CABLE 1 1 1 2 $46 N/A N/A
901585 PARALLEL CABLE 1 1 1 2 $48 N/A N/A
883246-05 SP10-WYSE CABLE 1 1 1 2 $45 N/A N/A
905450-50 THIN NET CABLE 1 1 1 2 $85 N/A N/A
905524 ADAPTER BNC 1 1 2 2 $18 N/A N/A
883192-50 SERIAL PRINTER CABLE 1 1 1 2 $58 N/A N/A
883243-20 10 BASE T CABLE 1 1 1 3 $20 N/A N/A
905836 AUDIO ADAPTER SP10 1 1 1 2 + N/A N/A
905828 SPLITTER SERIAL 1 1 1 2 + N/A N/A
</TABLE>
**/1/ For use with T1 and E1 interface
X Items required for 95% repairability
* Single point of failure if only one line DSP card in system
** Single point of failure
+ Contact your local SUN dealer for pricing and availability
-25-
<PAGE>
NON-PROPRIETARY ITEMS
<TABLE>
<CAPTION>
PART SPARES ASSEMBLY EXPEDITED
NUMBER INSTALLED SYSTEMS LIST REPAIR REPAIR
VENDOR DESCRIPTION "1-5" "6-15" "16-30" "30+" PRICE CHARGE PRICE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
905822 HUB TEN BASE T 1 1 2 3 $ 350
MIL-4000H MILAN TECH
906026 MODEM 14 4K BD 1 1 2 3 $ 650
00268-00 U.S. ROBOTICS
905865 DRIVE DISK OPTICAL 1 1 2 3 $1,500
PMO-130 PINNACLE
905979 PRINTER LA 424 1 1 1 2 $1,875
LA424-CA DIGITAL EQUIP
10VSK7 FILTER CORCOM 1 1 2 2 $ 60
JA2&A8E CIRCUIT BREAKER 1 1 2 2 $ 120
JO1HA510 HEINEMANN
</TABLE>
UNIX BASED PRODUCTS (SUN MICRO)
<TABLE>
<CAPTION>
PART
NUMBER
VENDOR DESCRIPTION
<C> <S>
? CARD E NET
N814N TAPE DRIVE 8MM
X546A HARD DRIVE 1.05 GB (INTERNAL)
VARIOUS SMC SERVER
VARIOUS WORKSTATION W/KEYBOARD
X116F EXPANSION MEMORY 16 MB
X132R/13 EXPANSION MEMORY 32 MB
</TABLE>
Contact your local Sun dealer for service and pricing of all Sun products.
**Single point of failure.
COUNTRY SPECIFIC
<TABLE>
<CAPTION>
PART SPARES ASSEMBLY EXPEDITED EMERGENCY
NUMBER INSTALLED SYSTEMS LIST REPAIR REPAIR EXCHANGE
VENDOR DESCRIPTION "1-5" "6-15" "16-30" "30+" PRICE CHARGE PRICE PRICE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MEXICO
881332 PWA I/F CEPT E1 1 1 2 3 $5,000 $1,500 $2,500 $3,250
AUSTRALIA
881332 PWA I/F CEPT E1 1 1 2 3 $5,000 $1,500 $2,500 $3,250
</TABLE>
-26-
<PAGE>
OPTIONS
<TABLE>
<CAPTION>
PART SPARES ASSEMBLY EXPEDITED EMERGENCY
NUMBER INSTALLED SYSTEMS LIST REPAIR REPAIR EXCHANGE
VENDOR DESCRIPTION "1-5" "6-15" "16-30" "30+" PRICE CHARGE PRICE PRICE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TIP & RING
881322 PWA SLAC 1 1 2 3 $2,350 $ 705 $1,175 $ 1,528
881323 PDI BD SLAC 1 1 2 3 $2,020 $ 606 $1,010 $ 1,313`
HEADSET
DIRECT TO
DIALER
881084 DIGITAL SWITCH OPERATOR EE 1 1 2 3 $ 828 $ 248 $ 414 $ 538
881204 PDB BD BDIG SW OPERATOR 1 1 2 3 $ 320 $ 96 $ 160 $ 208
SLAC
881338 PWA ISLAC 1 1 2 3 $1,500 $ 450 $ 750 $ 975
881846 PBD BD ISLAC 1 1 2 3 $3,500 $1,050 $1,750 $ 2,275
</TABLE>
-27-
<PAGE>
SCHEDULE II
ANNUAL SUPPORT AND TIME & MATERIALS PRICING
1. Base Technical Support: Annual Support under the Support Services
Agreement is priced at $[CONFIDENTIAL TREATMENT REQUESTED]/*/ per seat, per
System paid quarterly in advance, for the first year of support, beginning
upon installation. For the second and subsequent years of support, the
price is $[CONFIDENTIAL TREATMENT REQUESTED]/*/ PER SEAT, per System, paid
quarterly in advance.
2. Time and Materials: Time and Materials pricing for W.S.C. International
Support for additional services provided outside the scope of the services
included under the annual service fee is:
LABOR RATES: WORLDWIDE SUPPORT CENTER - LABOR RATES
US $[CONFIDENTIAL TREATMENT REQUESTED]/*/ per hour
During WSC Standard Hours of Operation - Contract Systems
- (7:30 am-midnight weekdays, plus 8:00 am-5:00 p.m.
Saturdays, US EST, Davox Holidays excluded)
US $[CONFIDENTIAL TREATMENT REQUESTED]/*/ per hour
Outside USC Standard Hours of Operation - Contract
Systems - (12:00 am-7:20 am Tuesday through Saturdays,
and 5:01 pm Saturdays through 7:29 am Mondays, Davox
Holidays excluded)
US $[CONFIDENTIAL TREATMENT REQUESTED]/*/ per hour
All Hours - Non-Contract Systems
ON-SITE SUPPORT LABOR RATES
US $[CONFIDENTIAL TREATMENT REQUESTED]/*/ per hour
FOR SUPPORT PROVIDED FROM THE UNITED STATES:
Labor Charges will be billed at the prevailing labor
rate, and are billed for both travel and actual on-site
labor hours, portal to portal. Travel and related
expenses will be billed at actual costs.
UK [CONFIDENTIAL TREATMENT REQUESTED]/*/ per day
FOR SUPPORT PROVIDED FROM THE UNITED KINGDOM: Charges are
per day, or will be pro-rated for a half-day if agreed
and for support local to Davox support personnel. Travel
and related expenses will be billed at actual costs.
BASE TECHNICAL SUPPORT PRICING IS SUBJECT TO CHANGE AT THE CONCLUSION OF YEAR __
OF THIS AGREEMENT UPON 90 DAYS WRITTEN NOTICE, PRIOR TO THE __ ANNIVERSARY DATE
OF THIS AGREEMENT.
LABOR RATES AND RATES FOR TIME AND MATERIALS AND RATES FOR SERVICES OTHER THAN
BASE TECHNICAL SUPPORT ARE SUBJECT TO CHANGE AT ANY TIME UPON 90 DAYS PRIOR
WRITTEN NOTICE.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-28-
<PAGE>
Schedule III
DAVOX EDUCATION COURSE PRICING
Pricing for Davox Courses
<TABLE>
<CAPTION>
===========================================================================
COURSE TITLE COURSE CODE DURATION PRICE
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Unison Supervisor Training UST-101 5 days $ *
Advanced Unison Supervisor AUS-201 3 days *
Unison Overview UO-100 1 day *
Unison Architecture UA-102 3 days *
Physical Layer PL-103 5 days *
Application Development Tools ADT-105 3 days *
Power Script PS-106 2 days *
Smart Button Development SBD-107 3 days *
Client API CAPI-108 1 day *
Davox Call Center Management CCM-202 2 days *
Workshop
</TABLE>
In the event Datapoint requests, and Davox provides, training at the Datapoint
Training Facility, or at the End-User site, the on-site delivery rate is
$[CONFIDENTIAL TREATMENT REQUESTED]/*/ per day plus all reasonable Davox T&E.
This applies to all courses.
PRICING MAY BE CHANGED UPON 90 DAYS WRITTEN NOTICE.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-29-
<PAGE>
COURSEWARE LICENSING PRICING
TRAIN THE TRAINER PROGRAM
This program provides Datapoint with the training materials and information
necessary to enable delivery of Davox Courses. Datapoint Instructors attend
each course once as a student to learn the product content. Student Instructors
attend a second time in a train the trainer role to learn how to deliver the
training. This includes time to work with the Davox Instructor and evaluate how
best to use the Davox training materials. When the Datapoint's Instructor first
begins to deliver the course at the end user site, they will be able to call
Davox Instructors with questions (1 hour of phone support per course).
The program's major components are:
A Unison Lecture/Lab Course attended first in a student role by the Datapoint's
Instructor
A Unison Lecture/Lab Course attended in a Train the Trainer mode by the
Datapoint's Instructor
1 hour of Davox Telephone Trainer Support is provided for each course
A License fee to use Davox Courseware materials
Optional product documentation can be ordered from Davox on a quarterly basis
and purchased at standard prices
The following Davox courses can be completed pursuant to the above requirements.
Please refer to description of each course on the Davox Website at
http://www.davox.com/educational services.
Unison Supervisor Training (the basic course and a prerequisite to other
courses)
Advanced Unison Supervisor
Unison Overview
Unison Architecture
Physical Layer
Smart Button Development
Application Development Tools
Davox Call Center Management Workshop
Client API
Script+
The following non-Davox provided courses or their equivalent are required to
effectively train Datapoint employees or end users.
Sybase SQL
TI "Video"
Network "Video"
Advanced UNIX
Solaris Administration
Shell Scripting
-30-
<PAGE>
LICENSED COURSEWARE PRICING
The Davox Licensed Courseware fee includes one hard copy of Student and
Instructor Guides, an electronic soft copy file for each guide, and one Train-
the-Trainer Program per instructor per course. To train additional instructors,
Datapoint will need to purchase each additional Train-the-Trainer Programs for a
fee of $[CONFIDENTIAL TREATMENT REQUESTED]/*/ US/course per instructors.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Courseware License
Licensed # TTT Fee includes one Yearly Maintenance of
Courseware # Days Days instructor per course Course Curriculum
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unison Supervisor Training 5 5 * *
- -----------------------------------------------------------------------------------------------------
Advanced Unison Supervisor 3 3 * *
- -----------------------------------------------------------------------------------------------------
Call Center Management 2 2 * *
- -----------------------------------------------------------------------------------------------------
Unison Overview 1 1 * *
- -----------------------------------------------------------------------------------------------------
Unison Architecture 3 3 * *
- -----------------------------------------------------------------------------------------------------
Physical Layer 5 5 * *
- -----------------------------------------------------------------------------------------------------
Application Development Tools 3 3 * *
- -----------------------------------------------------------------------------------------------------
Power Script 2 2 * *
- -----------------------------------------------------------------------------------------------------
Smart Button Development 3 3 * *
- -----------------------------------------------------------------------------------------------------
Client API 1 1 * *
- -----------------------------------------------------------------------------------------------------
</TABLE>
COURSEWARE LICENSING PRICING MAY BE CHANGED WITHOUT NOTICE.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-31-
<PAGE>
DAVOX
CORPORATION
WORLDWIDE SUPPORT CENTER
DATAPOINT (B.T.) CALL HANDLING PROCEDURE
SCHEDULE IV
I. INTRODUCTION
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This procedure defines the process for handling and escalating calls from
DATAPOINT for B.T. support within DAVOX. It describes how problem calls are
placed, how problems are prioritized, how problems are escalated, and how
higher levels of technical and management resources are brought to bear on
especially difficult problems.
II. PURPOSE
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To establish the lines of communications and to identify the responsible
DAVOX personnel and/or ensure all calls are managed in a consistent and
expeditious manner to minimize downtime and disruption to the customer
environment.
1) This procedure applies to all service requests on equipment and
software covered by the Davox Support Services Agreement with
Datapoint, subject to any restrictions that may be written into the
specific agreement. Further, it is requested Datapoint cooperate
fully by providing unlimited access to the affected equipment, timely
response to Davox's request for information such as dumps, logs,
configurations, and network access as may be required in order for
Davox to effectively troubleshoot and diagnose the problem.
2) Initial problem escalation is the responsibility of the WSC and is
effected via a predetermined set of timeframes based upon the priority
of the problem (Attachment "B").
3) All call handling will be in accordance with the following procedure:
I. Datapoint contacts the WSC with the nature of the problem and the
pertinent information is entered into the on-line system (Support
Center 0800-898-376).
II. The WSC technical representative in conjunction with Datapoint
assesses the technical and business impact of the problem and
assigns the priority (see Case Priority Definitions "Attachment
A").
<PAGE>
III. After consultation with the Datapoint representative the WSC
will escalate the call based on the following set of conditions:
A. During normal business hours in the United Kingdom the call
will be placed in the EAM Queue and the Mgr. European
Service will be notified and an engineer assigned within 30
min. of receipt of call.
B. If after hours in the U.K., or in the event of
unavailability of the EAM engineer, the call will be placed
in the SES Queue and the Mgr. Escalation Group will be
notified and an engineer assigned within 30 min. of receipt
of call.
C. After Hours support (midnight to 07:30 a.m. EST, US) will be
for critical priority problems only as defined in Attachment
"A".
4) If during the course of problem resolution Datapoint determines Davox
is not meeting the goals established in the attachments escalation will
be as follows: DATAPOINT will contact Doug Wiltz, Mgr. European
Services (0410-850-925 U.K. Cell Phone or 508-864-2054 USA Cell Phone).
If the Mgr. European Services is unavailable escalation will be in the
following order: John Henderson Mgr. Escalation (SES) 508-952-0260
pager 1-888-503-1480, Joe Venskus Dir. Worldwide Support 508-952-0299
pager 1-888-604-2936, Doug Langenberg VP, Customer Service 508-952-
0315.
5) All times in this document are (MAXIMUM TIMES) to be viewed as "Stated
Company Business Hours/Days" management reserves the right to move
calls as required to meet specific business demands.
<PAGE>
ATTACHMENT "A"
- --------------
CASE PRIORITY DEFINITIONS
- -------------------------
"CRITICAL"
--------
Severe Operational Impact (i.e., loss of system productivity)
Down System
Data Corruption
Network Down
MAY REQUIRE DAILY UPDATES TO CUSTOMER
"HIGH"
----
Intermittent System Failure
Loss of Some Functionality
No Workaround Available
Moderate Degradation in Performance or Functionality
REQUIRES WEEKLY UPDATES TO CUSTOMER
"MEDIUM"
------
Minor Operational Impact
Initial RAID Notifications
Workaround Available
Product Feature not Working to Specifications
REQUIRES BI-WEEKLY UPDATES TO CUSTOMER
"LOW"
---
Non-critical issue, Documentation error
REQUIRES MONTHLY UPDATES TO CUSTOMER
<PAGE>
ATTACHMENT "B"
TIME TABLE
PROBLEM ESCALATION
CONTACT HOURS MAXIMUM
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Escalation
Priority (EAM/SES) Product Support Development
- -------------------------------------------------------------------
<S> <C> <C> <C>
CRITICAL 3 Hrs 5 Hrs Continuous Effort
(as required)
- -------------------------------------------------------------------
HIGH 5 Days 10 Days 20 Days
- -------------------------------------------------------------------
MEDIUM 7 Days 14 Days 25 Days
- -------------------------------------------------------------------
LOW 15 Days 20 Days 30 Days
- -------------------------------------------------------------------
</TABLE>
<PAGE>
Schedule V
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Software Agreement
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(Tel: Fax: )
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("Distributor")
END-USER SOFTWARE SUBLICENSE
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("Customer"
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(street)
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- --------------------------------------------------------------------------------
(city) (state) (postal code) (country)
Tel: Fax:
--------------------------------- --------------------------------------
Contact:
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Hardware Platform: Serial Number(s)
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This End-User Software Sublicense Agreement ("Agreement") amends the quotation
issued by ("Distributor") or Customer's purchase order or any
----------------
other agreement with Distributor pursuant to which Customer has agreed to
purchase any Davox Corporation ("Davox") product, including, but not limited to,
the Davox Smart Management Center, Davox UNISON brand call management system,
Davox Prelude call management system, predictive dialer, and/or any other Davox
products ("Quotation") Notwithstanding anything in the Quotation to the
contrary, the Davox software furnished Customer under the Quotation or furnished
with or made part of Davox products (referred to herein as the "Software") is
provided to Customer under the terms and conditions of this Agreement. This
Agreement will control and take precedence over the Quotation.
GENERAL TERMS AND CONDITIONS
1. SOFTWARE
"Software" means (i) the machine-readable object code version of the computer
programs provided to Customer under this Agreement (the "Programs"), (ii) the
published user manuals and documentation that Distributor makes generally
available for the Programs (the "Documentation"), (iii) the updates enhancements
or revisions of the Programs or Documentation that Distributor may provide to
Customer (the "Updates") and (iv) any copy of the Programs, Documentation or
Updates. Nothing in this Agreement will entitle Customer to receive the source
code of the Programs or Updates in whole or in part.
2. USE
Subject to the terms of this Agreement, Distributor hereby grants to Customer a
personal nontransferable, nonexclusive license ("License") to use the Software
for Customer's own use and only on the single Computerized
<PAGE>
Autodial System, automated call system, Davox UNISON brand call management
system, Davox Prelude brand call management system predictive dialer controller
unit, personal computer, workstation, or other item of equipment ("Unit") for
which the Software is first provided or installed except as otherwise herein
provided. The Programs and Updates may be copied in whole or in part subject to
the proper inclusion of any and all copyright and proprietary notices, only as
may be necessary for Customer's use on such single Unit, solely for archival and
back-up purposes or to replace a worn or defective copy. Customer shall not copy
the Documentation or technical information provided with the Software. If
Customer is unable to operate the Software on the single Unit due to an
equipment malfunction, the Software may be transferred temporarily to another
Unit during the period of equipment malfunction. Customer shall not reverse
compile, disassemble or otherwise reverse engineer, embed within any other
software product or modify in any manner, including modifications to source code
with respect thereto, the Software in whole or in part. If an Update replaces a
prior version of a Program, Customer will immediately destroy such prior version
and all copies thereof upon installing the Update.
3. CONFIDENTIALITY
Customer agrees and acknowledges that the Software is confidential and
proprietary information. Customer shall not disclose, provide or otherwise make
available the Software or any part or copies thereof to any person other than
employees of Customer who have a legitimate need therefor, without prior written
consent of Distributor and Davox. Customer shall take all appropriate actions
by instruction, agreement or otherwise with any persons permitted access to the
Software necessary to satisfy Customer's obligations under this Agreement. All
copies of the Software whether provided by Distributor or made by Customer as
permitted by this Agreement, including without limitation, translations,
compilations or partial copies are the property of Davox and its licensors and
may not be used or disclosed except as permitted by this Agreement. Customer
will not allow the removal or defacement of any confidentiality or proprietary
notice placed on the Software. If an unauthorized use or disclosure occurs
Customer will immediately notify Distributor and take, at Customer's expense,
all steps which may be available to recover the Software and to prevent its
subsequent unauthorized use or dissemination. Customer will have no
confidentiality obligation with respect to any portion of the Software that (i)
Customer independently developed before receiving the Software under this
Agreement, (ii) Customer lawfully obtained from a third party under no
confidentiality obligation or (iii) became available to the public other than as
a result of an act or omission by Customer or any of its employees or
consultants.
4. OWNERSHIP
All rights, title and interest to and all applicable rights in patents,
copyrights and trade secrets in the Software or any of its parts shall remain
vested in Davox or in any third party vendor from whom Davox Corporation has
acquired rights to license the Software, notwithstanding the grant of the
License pursuant to the terms of this Agreement. Customer will not take any
action that jeopardizes Davox's or its licensors' proprietary rights or acquire
any right in the Software, except the limited use rights specified in this
Agreement. Davox or its licensors will own all rights in any copy, translation,
modification or adaptation of, or derivative work based on, the Software,
including any improvement or development thereof. Customer will obtain, at
Distributor's request, the execution of any instrument that may be appropriate
to assign these rights to Davox or its licensors or perfect these rights in
Davox's or its licensor's name.
<PAGE>
5. INFRINGEMENT
If an action is brought against Customer claiming that the Software owned by
Davox (the "Davox Software") infringes a patent or copyright within the country
of installation (the "Territory"). Davox will defend Customer and, subject to
this Section and Section 6, pay the damages and costs finally awarded against
Customer in the infringement action, but only if (i) Customer notifies Davox
promptly upon learning that the claim might be asserted, (ii) Davox has sole
control over the defense of the claim and any negotiation for its settlement or
compromise and (iii) Customer takes no action that, in Davox's judgment, is
contrary to Davox's interest. If a claim described in this Section may be or
has been asserted, Customer will permit Davox, at Davox's option, to (i) procure
the right to continue using the Software, (ii) replace or modify the Software to
eliminate the infringement while providing functionally equivalent performance
or (iii) accept the return of the Software and refund to Customer the amount
actually paid to Distributor for such Software, less depreciation based on a 5-
year straight-line depreciation schedule. Davox will have no indemnity
obligation to Customer under this Section if the patent or copyright
infringement claim results from (i) a correction or modification of the Software
not provided by Davox, (ii) the failure to promptly install an Update or (iii)
the combination of the Software with other products not provided by Davox.
6. DISCLAIMER
Customer acknowledges that the warranties, conditions, guarantees or
representations with respect to the Software, if any, are or will be set forth
in a separate agreement executed between Customer and Distributor. NEITHER
DAVOX NOR ITS LICENSORS GRANT CUSTOMER ANY WARRANTY, GUARANTEE, CONDITION OR
REPRESENTATION WITH RESPECT TO THE SOFTWARE OR HARDWARE, AND DAVOX AND ITS
LICENSORS DISCLAIM ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. Any
claim for breach of warranty guarantee condition or representation, whether
express or implied may be brought solely against Distributor except as and to
the extent otherwise specifically permitted under applicable law, despite the
foregoing disclaimer.
7. EXCLUSION AND LIMITATION
UNDER NO CIRCUMSTANCES WILL DAVOX OR ITS LICENSORS BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CUSTOMER'S CLAIMS OR
THOSE OF ITS CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA,
GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, INTERRUPTION IN USE OR
AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS),
ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF
CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE.
IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH DAVOX OR ITS LICENSORS MAY INCUR
IN ANY ACTION OR PROCEEDING EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CUSTOMER
FOR THE SPECIFIC PRODUCT THAT DIRECTLY CAUSED THE DAMAGE. THIS SECTION WILL NOT
APPLY ONLY WHEN AND TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY REQUIRES
LIABILITY, DESPITE THE FOREGOING EXCLUSION AND LIMITATION.
8. TERMINATION
Unless otherwise provided herein, the License shall expire at such time as
Customer discontinues use of the applicable Software on
<PAGE>
the single Unit for which the Software is first provided, but otherwise shall be
without restriction as to time. Customer may terminate this Agreement, without
right to refund, by notifying Distributor of such termination. This Agreement
will terminate automatically if Customer becomes insolvent or enters into
bankruptcy, suspension of payments, moratorium, reorganization or any other
proceeding that relates to insolvency or protection of creditors' rights.
Notwithstanding the foregoing, Distributor shall have the right to terminate the
License if Customer fails to pay any and all required license fees, otherwise
fails to comply with the terms and conditions of the License set forth in this
Agreement and the Quotation, or fails to cure any breach of this Agreement or
the Quotation within ten (10) days after receipt of written notice from
Distributor. Customer agrees that upon expiration of the License or upon notice
of termination thereof, it will immediately return or destroy the Software and
all portions and copies thereof as directed by Distributor and, if requested,
will certify in writing to Distributor as to the destruction or return of the
Software and all copies thereof. The provisions of Sections 5, 6, 8, 9 and 11
will survive the termination of this Agreement.
9. U.S. EXPORT RESTRICTIONS
Customer acknowledges that the Software and all related technical information,
documents and materials are subject to export controls under the U.S. Export
Administration Regulations. Customer will (i) comply strictly with all legal
requirements established under these controls, (ii) cooperate fully with Davox
in any official or unofficial audit or inspection that relates to these controls
and (iii) not export, re-export, divert or transfer directly or indirectly, any
such item or direct products thereof to Cuba, Libya, North Korea or any country
that is embargoed by Executive order, or to any national of the aforementioned
countries, unless Customer has obtained the prior written authorization of Davox
and the U.S. Commerce Department. Upon notice to Customer, Davox may modify
this list to conform to changes in the U.S. Export Administration Regulations.
10. INSPECTION
During the term of this Agreement, Distributor or its designees may, upon prior
notice to Customer, inspect the files, computer processors, equipment and
facilities of Customer during normal working hours to verify Customer's
compliance with this Agreement. While conducting such inspection, Distributor
or its designees will be entitled to copy any item that Customer may posses in
violation of this Agreement.
11. BENEFICIARIES
Davox and any third party from whom Davox has acquired rights to license the
Software or any part thereof is a direct and intended third party beneficiary of
this Agreement and the Quotation to the extent this Agreement or the Quotation
relates to the Software, and may enforce this Agreement and the Quotation
directly against Customer to such extent, provided, however, that no such
licensor shall be liable to the Customer for any general, special, direct,
indirect, consequential, incidental or other damages arising out of or relating
to the Software.
12. ASSIGNMENT
Customer shall not assign, delegate or otherwise transfer this Agreement or any
of its rights or obligations hereunder without Distributor's prior approval. If
Distributor ceases to be Davox's authorized distributor for any reason, this
Agreement may be assigned to Davox or its designee effective immediately upon
notice from Davox, and Customer consents to such assignment in advance.
13. MISCELLANEOUS
All notices or approvals required or permitted under this Agreement must be
given in writing. Any waiver or modification of this Agreement
<PAGE>
will not be effective unless executed in writing and signed by Distributor and
approved by Davox. This Agreement will bind Customer's successors-in-interest.
This Agreement will be governed by and interpreted in accordance with the laws
of the Territory. If any provisions of this Agreement is held to be
unenforceable, in whole or in part, such holding will not affect the validity of
the other provisions of this Agreement, unless Distributor in good faith deems
the unenforceable provision to be essential, in which case Distributor may
terminate this Agreement effective immediately upon notice to Customer. No
failure or delay on the part of Distributor to exercise any right or remedy
specified herein shall be construed as a waiver of such right or remedy. Except
as otherwise expressly set forth herein, all terms of the Quotation shall remain
in full force and effect.
<PAGE>
SCHEDULE
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Terms and Conditions Relating to the Davox Software to be included as an
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Appendix to the agreement to be executed between Datapoint and BT
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1. BT shall have personal, non-transferable, non-exclusive license to use the
Davox Software [in machine readable object form] solely for BT's own
internal business use and only on a single automated call system, Davox
Unison System, controller unit, personal computer or worksession ("Unit")
for which the Davox Software is first provided or installed, except as
otherwise provided in the Appendix (the "Licenses").
2. If BT is unable to operate the Davox Software on a single Unit due to an
equipment malfunction, the Davox Software may be transferred temporarily to
another Unit during the period of such equipment malfunction.
3. The Davox Software may be copied in whole or in part, subject to the proper
inclusion of any and all copyright and proprietary actions, only as may be
necessary for BT's use as a single Unit, solely for archival and back-up
purposed or in replace a worn or defective copy. All such copies shall be
subject to the provisions of this Appendix. BT shall not copy any other
materials or documentation generally made available with the Davox software
(the "Documentation") as any other archival information provided with the
Davox Software.
4. BT shall not reverse compile, disassemble or otherwise reverse engineer,
embed within any other software product, or modify in any manner (including
modifications to source code with respect thereto) the Davox Software in
whole or in part. The information necessary to achieve interoperability of
the Davox Software with independently created program within the meaning of
the Copyright (Computer Programs) Regulations 1992 will be made available
to BT on request and payment of Davox's then current fee for such
information.
5. BT agrees and acknowledges that the Davox Software is the Davox
Corporation's ("Davox") confidential and proprietary information. BT
shall not disclose, provide or otherwise make the Davox Software or the
Documentation, or any part of copies thereof, available to any person other
than employees of BT who have a legitimate need thereafter. BT shall take
all appropriate actions by instruction, agreement or otherwise with any
persons permitted access to the Davox Software necessary to satisfy BT's
obligations in the Appendix.
6. All copies of the Davox Software, whether provided by the Customer or
made by BT under the terms of this Appendix, including, without limitation,
trademarks, compilations or partial copies, are and shall remain the
property of Davox and its Licensors and may not be used or disclosed except
as permitted by the terms of this Appendix.
7. All right, title and license (together with applicable rights in patents,
copyrights, trade secrets or other intellectual property rights) in and to
the Davox Software and the Documentations of any part thereof are and shall
remain the exclusive property of Davox or its licensors (as appropriate)
notwithstanding the grant of the License.
8. Unless otherwise provided in this Appendix, the License shall expire at
such time as BT discontinues use of the Davox Software but otherwise shall
be without restriction as to time. Notwithstanding the foregoing, the
Contractor shall have the right to terminate the License if BT fails to
comply with the terms and conditions thereof. BT agrees that upon
expiration of the License or on notice of termination thereof, it will
immediately return or destroy all copies of the Davox Software and all
portions and copies thereof as directed by the Contractor and shall certify
in writing to the Contractor that such action has been taken.
<PAGE>
Exhibit 10.05
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AMENDMENT NO. 1
TO THE
DAVOX CORPORATION
1991 EMPLOYEE STOCK PURCHASE PLAN
Pursuant to action taken by the Board of Directors of Davox Corporation
(the "Corporation") on December 16, 1996, the Corporation's 1991 Employee Stock
Purchase Plan (the "Plan") is amended effective January 1, 1997 by amending and
restating Article 8 thereof so that said Article 8 shall read in its entirety as
follows:
"Article 8 - Maximum Amount of Payroll Deductions.
------------------------------------------------
An employee may authorize payroll deductions in an amount not less than .5%
but not more than 10% of the employee's total compensation. For purposes
hereof, total compensation will include base wages, overtime, holiday, vacation
and sick pay, shift premiums and bonuses, and commissions. Total compensation
will not include such items as relocation assistance payments, tuition
reimbursement, non-cash prizes and awards, automobile allowances, severance-type
payments, non-qualified deferred executive compensation (including amounts
attributable to the exercise of non-qualified stock options), and such other
items as the Board of Directors may from time to time determine."
Except as modified hereby, the Plan shall remain in full force and effect.
<PAGE>
DAVOX CORPORATION
1991 EMPLOYEE STOCK PURCHASE PLAN
Article 1 - Purpose.
- -------------------
This 1991 Employee Stock Purchase Plan (the "Plan") is intended as an
incentive to, and to encourage stock ownership by, all eligible employees of
Davox Corporation (the "Company") and participating subsidiaries so that they
may share in the growth of the Company by acquiring or increasing their
proprietary interest in the Company. The Plan is designed to encourage eligible
employees to remain in the employ of the Company. It is intended that options
issued pursuant to this Plan will constitute options issued pursuant to an
"employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").
Article 2 - Administration of the Plan.
- --------------------------------------
The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee may select one of its members as Chairman,
and shall hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best,
provided that any such rules and regulations shall be applied on a uniform basis
to all employees under the Plan. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.
In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan. In such event, the word "Committee" wherever
used herein shall be deemed to mean the Board of Directors.
Article 3 - Eligible Employees.
- ------------------------------
All employees of the Company or any of its participating subsidiaries who
have completed six months of employment with the Company or any of its
subsidiaries shall be
<PAGE>
eligible to receive options under this Plan to purchase the Company's Common
Stock, and all eligible employees shall have the same rights and privileges
hereunder. Persons who have been so employed for six months or more on the first
day of any Payment Period shall receive their options as of such day. Persons
who attain the status of employment for six months or more after any date on
which options are granted under this Plan shall be granted options on the next
date of the next succeeding Payment Period on which options are granted to all
eligible employees. Directors who are not also employees of the Company shall
not be eligible to receive options under this Plan. In no event may an employee
be granted an option if such employee, immediately after the option is granted,
owns stock possessing 5 percent or more of the total combined voting power or
value of all classes of stock of the Company or of its parent corporation or
subsidiary corporations, as the terms "parent corporation" and "subsidiary
corporation" are defined in Section 424(e) and (f) of the Code. For purposes of
determining stock ownership under this paragraph, the rules of Section 424(d) of
the Code shall apply, and stock which the employee may purchase under
outstanding options shall be treated as stock owned by the employee.
For purposes of this Article 3, the term "employee" shall not include an
employee whose customary employment is 20 hours or less per week or whose
customary employment is for not more than 5 months in any calendar year.
Article 4 - Stock Subject to the Plan.
- -------------------------------------
The stock subject to the options under the Plan shall be shares of the
Company's authorized but unissued Common Stock, $.10 par value per share, or
shares of such Common Stock reacquired by the Company, including shares
purchased in the open market. The aggregate number of shares which may be
issued pursuant to the Plan is 100,000, subject to adjustment as provided in
Article 12. In the event any option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available under the Plan.
Article 5 - Payment Periods and Stock Options.
- ---------------------------------------------
The six-month periods, July 1 to December 31 and January 1 to June 30, are
Payment Periods during which payroll deductions will be accumulated under the
Plan. Each Payment Period includes only regular pay days falling within it.
The first Payment Period under the Plan may be a shortened Payment Period (i)
commencing on the later to occur of July 1, 1991 or the first day of the first
calendar month following effectiveness of the Form S-8 registration statement
filed with the Securities and Exchange Commission covering the shares to be
issued pursuant to the Plan and (ii) expiring on December 31, 1991.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period, at the Option
Price hereinafter provided for, a maximum of 250
- 2 -
<PAGE>
shares, on condition that such employee remains eligible to participate in the
Plan throughout such Payment Period. The participant shall be entitled to
exercise such option so granted only to the extent of the participant's
accumulated payroll deductions on the last day of such Payment Period. In the
event that the participant's accumulated payroll deductions on the last day of
the Payment Period would enable the participant to purchase more than 250 shares
except for the 250-share limitation, the excess of the amount of the accumulated
payroll deductions over the aggregate purchase price of the 250 shares shall be
promptly refunded to the participant by the Company, without interest. The
Option Price for each Payment Period shall be the lesser of (i) 85% of the
average market price of the Company's Common Stock on the first business day of
the Payment Period or (ii) 85% of the average market price of the Company's
Common Stock on the last business day of the Payment Period, in either event
rounded up to avoid fractions of a dollar other than 1/4, 1/2 and 3/4. The
foregoing limitation on the number of shares which may be granted in any Payment
Period and the Option Price per share shall be subject to adjustment as provided
in Article 12.
For purposes of this Plan, the term "average market price" on any date
means (i) the average (on that date) of the high and low prices of the Company's
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the Common
Stock on the NASDAQ National Market System, if the Common Stock is not then
traded on a national securities exchange; or (iii) the average of the closing
bid and asked prices last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
the NASDAQ National Market System. If the Company's Common Stock is not
publicly traded at the time an option is granted under this Plan, "average
market price" shall mean the fair market value of the Common Stock as determined
by the Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.
For purposes of this Plan the term "business day" means a day on which
there is trading on the NASDAQ National Market System or on the aforementioned
national securities exchange, whichever is applicable pursuant to the preceding
paragraph.
No employee shall be granted an option which permits the employee's right
to purchase Common Stock under the Plan and under all other Section 423(b)
employee stock purchase plans of the Company or any parent or subsidiary
corporations to accrue at a rate which exceeds $25,000 of fair market value of
such stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time. The purpose of the
limitation in the preceding sentence is to comply with Section 423(b)(8) of the
Code.
Article 6 - Exercise of Option.
- ------------------------------
Each eligible employee who continues to be a participant in the Plan on the
last business day of a Payment Period shall be deemed to have exercised his or
her option on such date and
- 3 -
<PAGE>
shall be deemed to have purchased from the Company such number of full shares of
Common Stock reserved for the purpose of the Plan as his or her accumulated
payroll deductions on such date will pay for at the Option Price, subject to the
250-share limit of the option. If a participant is not an employee on the last
business day of a Payment Period, he or she shall not be entitled to exercise
his or her option. Only full shares of Common Stock may be purchased under the
Plan. Unused payroll deductions remaining in an employee's account at the end
of a Payment Period (other than amounts refunded to the employee pursuant to
Article 5) will be carried forward to the succeeding Payment Period.
Article 7 - Authorization for Entering the Plan.
- -----------------------------------------------
An employee may enter the Plan by filling out, signing and delivering to
the Company an authorization:
A. Stating the percentage to be deducted regularly from the employee's pay;
B. Authorizing the purchase of stock for the employee in each Payment
Period in accordance with the terms of the Plan; and
C. Specifying the exact name in which stock purchased for the employee is
to be issued as provided under Article 11 hereof.
Such authorization must be received by the Company at least 10 days before
the beginning date of the next succeeding Payment Period.
Unless an employee files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the employee has on file
under the Plan will continue from one Payment Period to succeeding Payment
Periods as long as the Plan remains in effect.
The Company will accumulate and hold for the employee's account the amounts
from his or her pay. No interest will be paid on these amounts.
Article 8 - Maximum Amount of Payroll Deductions.
- ------------------------------------------------
An employee may authorize payroll deductions in an amount not less than .5%
but not more than 10% of the employee's regular pay.
Article 9 - Change in Payroll Deductions.
- ----------------------------------------
Deductions may not be increased or decreased during a Payment Period.
However, an employee may withdraw in full from the Plan.
Article 10 - Withdrawal from the Plan.
- -------------------------------------
- 4 -
<PAGE>
An employee may withdraw from the Plan in whole but not in part, at any
time prior to the last business day of each Payment Period by delivering a
withdrawal notice to the Company, in which event the Company will promptly
refund the entire balance of the employee's deductions not theretofore used to
purchase stock under the Plan.
To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least 10 days before the beginning date of the next Payment
Period. The employee's re-entry into the Plan cannot, however, become effective
before the beginning of the next Payment Period following his or her withdrawal.
Employees who are subject to Section 16 of the Securities Exchange Act of 1934,
as amended, may not re-enter the Plan earlier than the Payment Period beginning
six months following the date of withdrawal from the Plan by such employee.
Article 11 - Issuance of Stock.
- ------------------------------
Certificates for stock issued to participants will be delivered as soon as
practicable after each Payment Period.
Stock purchased under the Plan will be issued only in the name of the
employee, or if his or her authorization so specifies, in the name of the
employee and another person of legal age as joint tenants with rights of
survivorship.
Article 12 - Adjustments.
- ------------------------
Upon the happening of any of the following described events, an optionee's
rights under options granted hereunder shall be adjusted as hereinafter
provided:
A. In the event shares of Common Stock of the Company shall be subdivided
or combined into a greater or smaller number of shares or if, upon a merger,
consolidation, reorganization, split-up, liquidation, combination,
recapitalization or the like of the Company, the shares of the Company's
Common Stock shall be exchanged for other securities of the Company or of
another corporation, each optionee shall be entitled, subject to the
conditions herein stated, to purchase such number of shares of Common Stock
or amount of other securities of the Company or such other corporation as
were exchangeable for the number of shares of Common Stock of the Company
which such optionee would have been entitled to purchase except for such
action, and appropriate adjustments shall be made in the purchase price per
share to reflect such subdivision, combination, or exchange; and
B. In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which shall
at the time be subject to option hereunder, each optionee upon exercising
such an option shall be entitled to receive (for the purchase price paid upon
such exercise) the shares as to which he or she is exercising his or her
option and, in addition thereto (at no additional cost), such number of
shares of the class
- 5 -
<PAGE>
or classes in which such stock dividend or dividends were declared or paid,
and such amount of cash in lieu of fractional shares, as is equal to the
number of shares thereof and the amount of cash in lieu of fractional shares,
respectively, which he or she would have received if he or she had been the
holder of the shares as to which he or she is exercising his or her option at
all times between the date of the granting of such option and the date of its
exercise.
Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth
in the second paragraph of Article 5 shall also be appropriately adjusted to
reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to subsections A or B shall be made
only to the extent that the Committee, based on advise of counsel for the
Company, determines that such adjustments will not constitute a change requiring
stockholder approval under Section 423(b)(2) of the Code.
If the Company is to be consolidated with or acquired by another entity in
a merger, a sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee shall, with respect to options then
outstanding under this Plan, either (i) make appropriate provision for the
continuation of such options by arranging for the substitution on an equitable
basis for the shares then subject to such options the consideration payable with
respect to the outstanding shares of the Company's Common Stock in connection
with the Acquisition; or (ii) terminate all outstanding options in exchange for
a cash payment equal to the excess of the fair market value of the shares
subject to the options (determined as of the date of the Acquisition) over the
Option Price thereof (determined with reference only to the first business day
of the applicable Payment Period).
The Committee shall determine the adjustments to be made under this Article
12, and its determination shall be conclusive.
Article 13 - No Transfer or Assignment of Employee's Rights.
- -----------------------------------------------------------
An employee's rights under the Plan are the employee's alone and may not be
transferred or assigned to, or availed of by, any other person other than by
will or the laws of descent and distribution. Any option granted to an employee
may be exercised, during the employee's lifetime, only by the employee.
Article 14 - Termination of Employee's Rights,
- ---------------------------------------------
An employee's rights under the Plan will terminate when he or she ceases to
be an employee because of retirement, resignation, lay-off, discharge, death,
change of status or for any other reason, except that if any employee is on a
leave of absence from work during the last three months of any Payment Period,
he or she shall be deemed to be a participant in the Plan on the last day of the
Payment Period. A withdrawal notice will be considered as having been received
- 6 -
<PAGE>
from the employee on the day his or her employment ceases, and all payroll
deductions not used to purchase stock will be refunded.
If an employee's payroll deductions are interrupted by any legal process, a
withdrawal notice will be considered as having been received from the employee
on the day the interruption occurs.
Article 15 - Termination and Amendments to Plan.
- -----------------------------------------------
The Plan may be terminated at any time by the Company's Board of Directors
but such termination shall not affect options then outstanding under the Plan.
It will terminate in any case when all or substantially all of the unissued
shares of stock reserved for the purposes of the Plan have been purchased. If
at any time shares of stock reserved for the purpose of the Plan remain
available for purchase but not in sufficient number to satisfy all then unfilled
purchase requirements, the available shares shall be apportioned among
participants in proportion to their options and the Plan shall terminate. Upon
such termination or any other termination of the Plan, all payroll deductions
not used to purchase stock will be refunded.
The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the shareholders
of the Company, no amendment may increase the number of shares that may be
issued under the Plan or change the class of employees eligible to receive
options under the Plan.
Article 16 - Limitations on Sale of Stock Purchased
- ---------------------------------------------------
Under the Plan.
- --------------
The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. An employee may, therefore,
sell stock purchased under the Plan at any time the employee chooses, subject to
compliance with any applicable Federal or state securities laws; provided,
however, that because of certain Federal tax requirements, each employee agrees
by entering the Plan, promptly to give the Company notice of any such stock
disposed of within two years after the date of grant of the applicable option
showing the number of such shares disposed of. THE EMPLOYEE ASSUMES THE RISK OF
ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.
Article 17 - Participating Subsidiaries.
- ---------------------------------------
The term "participating subsidiaries" shall mean any subsidiary of the
Company, as that term is defined in Section 424(f) of the Code, which is
designated by the Board of Directors to participate in the Plan. The Board of
Directors shall have the power to make such designation before or after the Plan
is approved by the shareholders.
Article 18 - Optionees Not Shareholders.
- ---------------------------------------
- 7 -
<PAGE>
Neither the granting of an option to an employee nor the deductions from
his or her pay shall constitute such employee a shareholder of the shares
covered by an option until such shares have been purchased by and issued to the
employee.
Article 19 - Application of Funds.
- ---------------------------------
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.
Article 20 - Governmental Regulations.
- -------------------------------------
The Company's obligation to sell and deliver shares of the Company's Common
Stock under this Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance or sale of such shares,
including the Securities and Exchange Commission and the Internal Revenue
Service.
The Company intends to apply to the Internal Revenue Service for a ruling
regarding the tax aspects of the Plan. If the Company does not receive a
favorable tax ruling before the last day of the first Payment Period under the
Plan, December 31, 1991, the Company reserves the right to rescind all options
granted to employees on the first day of such Payment Period, in which event all
payroll deductions will be promptly refunded to participating employees without
interest.
Article 21 - Approval of Shareholders.
- -------------------------------------
The Plan shall be subject to approval by the holders of a majority of the
shares of the Common Stock of the Company present or represented by proxy at a
duly called meeting of shareholders, which approval must occur by April 22,
1992. The Plan was adopted by the Board of Directors on April 22, 1991 subject
to approval by the shareholders. In the event that the approval of the
shareholders is not received by April 22, 1992, any and all options granted
prior to April 22, 1992 shall be rescinded, and the Company will promptly refund
the entire balance of each participating employee's deductions. In addition, in
such event the Plan will be deemed terminated as of April 22, 1992.
- 8 -
<PAGE>
Exhibit 10.09
-------------
AMENDMENT NO. 1
TO THE
DAVOX CORPORATION
1996 STOCK PLAN
Pursuant to action taken by the Board of Directors of Davox Corporation
(the "Corporation"), the Corporation's 1996 Stock Plan (the "Plan") is amended
by:
1. Amending and restating Section 6(A) thereof so that said Section 6(A) shall
read in its entirety as follows:
"A. PRICE FOR NON-QUALIFIED OPTIONS, AWARDS AND PURCHASES. Subject to
------------------------------------------------------
Paragraph 2D (relating to compliance with Section 162(m) of the Code), the
exercise price per share specified in the agreement relating to each Non-
Qualified Option granted, and the purchase price per share of stock granted in
any Award or authorized as a Purchase, under the Plan may be less than the fair
market value of the Common Stock of the Company on the date of grant, provided
that (i) in no event shall such exercise price or such purchase price be less
than the minimum legal consideration required therefor under the laws of any
jurisdiction in which the Company or its successors in interest may be
organized, (ii) options representing the right to purchase in the aggregate a
maximum of ten percent (10%) of the number of shares authorized under the Plan
(as set forth in Section 4 hereof) may be granted with exercise prices below
fair market value, and (iii) no option may be granted with an exercise price of
less than eighty-five percent (85%) of fair market value. The Committee may, in
its discretion, subject any Stock Right granted under the Plan to any terms or
conditions necessary for compensation recognized in connection with the exercise
of such Stock Right or the disposition of Common Stock acquired pursuant to such
Stock Right, to constitute qualified performance-based compensation under
Section 162(m) of the Code and applicable regulations promulgated thereunder."
and
2. Amending Section 4 thereof to increase the Plan Share Limit so that the
aggregate number of shares which may be issued pursuant to the Plan is increased
by 450,000 shares, from 900,000 shares to 1,350,000 shares.*
Except as modified hereby, the Plan shall remain in full force and effect.
- ----------------------
* Share numbers have been adjusted to reflect a 3-for-2 stock split effected as
a stock dividend on May 28, 1997.
<PAGE>
Exhibit 10.13
-------------
LEASE BETWEEN
MICHELSON FARM - WESTFORD TECHNOLOGY PARK VI
LIMITED PARTNERSHIP
AND
DAVOX CORPORATION
FOR
WESTFORD TECHNOLOGY PARK
BUILDING SIX
<PAGE>
INDEX
-----
Page No.
--------
ARTICLE I - TERMS DEFINED................................... 1
Paragraph 1.1 Subjects Referred To......................... 1
Paragraph 1.2 Exhibits..................................... 2
ARTICLE II - DESCRIPTION OF PREMISES........................ 2
Paragraph 2.1 Demise of Premises........................... 2
ARTICLE III - TERM.......................................... 4
Paragraph 3.1 Original Term................................ 4
Paragraph 3.2 Extension Term............................... 4
ARTICLE IV - RENT........................................... 5
Paragraph 4.1 Fixed Rent................................... 5
Paragraph 4.2 Payments..................................... 5
Paragraph 4.3 Market Rent.................................. 5
ARTICLE V - OPERATING AND MAINTENANCE COSTS
AND REAL ESTATE TAXES..................................... 8
Paragraph 5.1 Common Area Maintenance...................... 8
Paragraph 5.2 Tax Expense.................................. 15
Paragraph 5.3 Tax Abatement................................ 16
ARTICLE VI - LANDLORD'S COVENANTS........................... 17
Paragraph 6.1 Landlord's Covenants during the Term......... 17
Paragraph 6.2 Interruptions................................ 19
ARTICLE VII - LANDLORD'S WARRANTIES......................... 20
ARTICLE VIII - USE OF PREMISES.............................. 21
ARTICLE IX - CONDITION OF THE PREMISES...................... 22
ARTICLE X - COMPLIANCE WITH LAW............................. 22
Paragraph 10.1 Tenant Compliance........................... 22
Paragraph 10.2 Landlord's Compliance....................... 22
(i)
<PAGE>
Paragraph 10.3 Notice.................................. 15
ARTICLE XI - ALTERATIONS, ADDITIONS AND IMPROVEMENTS..... 23
Paragraph 11.1 Alterations.............................. 23
Paragraph 11.2 Landlord Performance of Alterations...... 25
Paragraph 11.3 Tenant Performance of Alterations........ 25
Paragraph 11.4 Removal of Alterations................... 25
Paragraph 11.5 General Provisions....................... 26
ARTICLE XII - TENANT'S COVENANTS......................... 27
Paragraph 12.1 Maintenance and Repair................... 27
Paragraph 12.2 Signs.................................... 29
Paragraph 12.3 Entry and Inspection..................... 29
Paragraph 12.4 Miscellaneous............................ 30
Paragraph 12.5 Safety Appliances........................ 30
Paragraph 12.6 Loading.................................. 31
Paragraph 12.7 Labor or Materialmen's Liens............. 31
Paragraph 12.8 Rules and Regulations.................... 31
Paragraph 12.9 Tenant's Covenants....................... 31
ARTICLE XIII - CASUALTY AND CONDEMNATION................. 32
Paragraph 13.1 Casualty................................. 32
Paragraph 13.2 Additional Casualty Provisions........... 33
Paragraph 13.3 Condemnation/Eminent Domain.............. 33
Paragraph 13.4 Reservation of Award..................... 35
ARTICLE XIV - RIGHTS OF MORTGAGE......................... 36
Paragraph 14.1 Priority of Lease........................ 38
Paragraph 14.2 Limitation on Mortgagee's Liability...... 38
Paragraph 14.3 No Prepayment or Modification, etc....... 38
Paragraph 14.4 No Release of Termination................ 39
Paragraph 14.5 Continuing Offer......................... 39
ARTICLE XV - INSURANCE................................... 40
Paragraph 15.1 Insurance................................ 40
Paragraph 15.2 Tenant Liability Insurance............... 41
Paragraph 15.3 Landlord Liability Insurance............. 41
Paragraph 15.4 Waiver of Subrogation.................... 41
ARTICLE XVI - INDEMNIFICATION............................ 42
Paragraph 16.1 Tenant's Indemnity....................... 42
(ii)
<PAGE>
INDEX
-----
(cont.)
Paragraph 16.2 Landlord's Indemnity..................... 15
Paragraph 16.3 Hazardous Materials...................... 44
ARTICLE XVII - ASSIGNMENT AND SUBLETTING................. 45
Paragraph 17.1 Tenant Sublet............................ 45
Paragraph 17.2 Consent.................................. 46
Paragraph 17.3 Landlord's Response...................... 46
Paragraph 17.4 Subsidiary Assignment.................... 47
Paragraph 17.5 Sublease and Assignment
Rent Differential..................................... 47
ARTICLE XVIII - TENANT'S PROPERTY........................ 49
Paragraph 18.1 Tenant's Personal Property............... 49
Paragraph 18.2 Removal.................................. 49
Paragraph 18.3 No Lien.................................. 49
ARTICLE XIX - TENANT'S DEFAULT........................... 50
Paragraph 19.1 Events of Default........................ 50
Paragraph 19.2 Repossession............................. 51
Paragraph 19.3 Landlord's Default....................... 51
ARTICLE XX - NOTES....................................... 52
Paragraph 20.1 Notices Generally........................ 52
Paragraph 20.2 Tenant Notices........................... 52
ARTICLE XXI - QUIET ENJOYMENT............................ 53
ARTICLE XXII - HOLDING OVER.............................. 53
ARTICLE XXII - MEMORANDUM OF LEASE....................... 54
ARTICLE XXIV - SURRENDER OF PREMISES..................... 54
ARTICLE XXV - ESTOPPEL CERTIFICATES...................... 54
ARTICLE XXVI - ADDITIONAL PROVISIONS..................... 55
Paragraph 26.1 Broker................................... 55
Paragraph 26.2 Bind and Inure........................... 55
Paragraph 26.3 Provisions Separable..................... 55
(iii)
<PAGE>
INDEX
-----
(cont.)
Paragraph 26.4 Entire Agreement......................... 56
Paragraph 26.5 Governing Law............................ 56
Paragraph 26.6 No Waiver................................ 56
Paragraph 26.7 Rights Separate.......................... 56
Paragraph 26.8 Singular and Plural...................... 57
Paragraph 26.9 Headings................................. 57
Paragraph 26.10 Parking................................. 57
Paragraph 26.11 Non-Recourse............................ 57
Paragraph 26.12 Force Majeure........................... 58
Paragraph 26.13 Confidentiality......................... 58
Paragraph 26.14 Security Deposit........................ 58
(iv)
<PAGE>
ARTICLE I
TERMS DEFINED
-------------
1.1 SUBJECTS REFERRED TO.
--------------------
Each reference in this Lease to any of the following terms shall mean:
Landlord: Michelson Farm - Westford Technology Park VI
Limited Partnership
Managing Agent: The Gutierrez Company
Landlord's and Managing Michelson Farm - Westford Technology Park VI
Agent's Address: Limited Partnership
c/o The Gutierrez Company
One Wall Street
Burlington, Massachusetts 01803
Landlord's Representative: John A. Cataldo
Tenant: Davox Corporation
Tenant's Address: 6 Technology Park Drive
(for Notice and Billing) Westford, Massachusetts 01886
Tenant's Representative: John J. Connolly
Building: Building Six in the Michelson Farm-Westford
Technology Park, Westford, Massachusetts,
containing 62,000 gross square feet on the lot
(the "Lot") shown on Exhibit "A" - "as is."
Term Commencement Date: October 1, 1997
Term Expiration Date: September 30, 2000
Fixed Rent: $480,500/year $40,041.67/month
Special Provisions: Option to Extend - Article III
Estimated Annual Tenant's
Proportional Share of $45,880.00/year
Common Area Maintenance $3,823.33/month
(year ending 12/31/97):
(1)
<PAGE>
Permitted Uses: General office; light manufacturing and assembly;
laboratory; research and development and for any
other ancillary uses.
Premises: The Building and the areas which are the subject of
all appurtenant rights and easements set forth or
referred to in Section 2.1 below.
Security Deposit: $40,041.67
Guarantor: None
----
1.2 EXHIBITS
--------
The Exhibits listed below in this Section are incorporated in this Lease by
reference and are to be construed as part of this Lease:
EXHIBIT A Plan showing the Lot, Building and the Office Park and Plan of
Common Easements of the Office Park
EXHIBIT B Rules and Regulations
EXHIBIT C Office Park Covenants
EXHIBIT D Deed
EXHIBIT E List of Liens, Restrictions and Encumbrances
ARTICLE II
DESCRIPTION OF PREMISES
-----------------------
2.1 Demise of Premises. In consideration of the rents and covenants
------------------
herein stipulated to be paid and performed and upon the terms and conditions
hereinafter specified, Landlord hereby demises and lets to Tenant, and Tenant
hereby leases from Landlord, for the respective terms hereinafter described, the
Premises as described in Article I hereof, which Premises include the
appurtenances described below.
(2)
<PAGE>
Tenant shall have, as appurtenant to the Building, the right to use in
common with others entitled thereto, subject to reasonable rules and regulations
of general applicability to tenants and owners of other lots in Michelson Farm-
Westford Technology Park (the "Office Park") from time to time made by Landlord
of which Tenant is given notice: all common areas (the "Common Areas") shown on
the Plan of Common Easements of the Office Park attached as part of Exhibit "A",
including, without limitation, all rights to access, use of all service areas,
use of all utility fines including those for gas, electricity, water and sewage
disposal, use of all facilities for drainage of surface water runoff, including
storm drainage systems and detention areas, use of all grades, driveways,
sidewalks and footways, lighting systems and traffic flow patterns and, if any,
all parking areas designated as common or visitors parking areas for use of the
entire Office Park, including, without limitation, all rights appurtenant to the
Lot and the Building created in the deed to Landlord attached hereto as
Exhibit D. The Lot is the only lot that the Building and parking lot are
located on.
In addition, the Tenant shall have, as appurtenant to the Building, the
right and easement with respect to the Lot (i) to exclusively use all
improvements thereon including, without limitation, all parking areas, loading
areas, service areas and the like, (ii) to use all means of access to and from
the Building to the Common Areas, including, without limitation, all sidewalks,
and end of the driveways, grades, roads and the like (iii) to use all utility
lines, electricity, water, sewage treatment plant, and (iv) to use all
facilities for drainage of surface water runoff, all of the foregoing rights
being subject to reasonable rules and regulations of general applicability to
Tenant and other tenants and owners of lots in the Office Park from time to time
made by Landlord of which Tenant is given notice.
(3)
<PAGE>
Landlord reserves the right from time to time, without unreasonable
interference with Tenant's use (a) to install, repair, replace, use, maintain
and relocate for service to the Premises and to other parts of the Building or
either, building service fixtures and equipment wherever located in the Building
with the approval of Tenant, which shall not be unreasonably withheld or
delayed, and (b) to alter or relocate any other common facility on the Lot or in
the Office Park, provided that substitutions are substantially equivalent or
better, and Landlord shall provide Tenant with reasonable advance notice of any
such alterations.
ARTICLE III
TERM
----
3.1 Original Term. The term (together with Extended Term as hereinafter
-------------
defined, if applicable, the "Term"), of this Lease shall commence on the Term
Commencement Date and shall expire on the Term Expiration Date, as such date may
be extended pursuant to Section 3.2, except as hereinafter provided otherwise.
3.2. Extension Term. The Tenant has the option to extend this Lease for
--------------
a term of three (3) years ("Extended Term") provided the Tenant shall give to
the Landlord written notice of the exercise of this option no later than the
30th day of September, 1999, and such Extended Term shall be upon the same
terms, covenants and conditions hereof, except that the fixed rent for the
Extended Term shall be the then Market Rent (as hereinafter defined in Section
4.3). Landlord shall, within twenty (20) days of receipt of notice of Tenant's
election to extend the Term of this Lease, provide Tenant with notice of Market
Rent in accordance with the provisions of Article IV. Landlord and Tenant shall
in accordance with the provisions of Section 4.3 hereof, establish the Market
Rent for the Extended Term.
(4)
<PAGE>
ARTICLE IV
RENT
----
4.1 Fixed Rent. The Fixed Rent for the Premises during the Term shall
----------
be as set forth in Article I of this Lease and shall be payable on the first day
of each month during the Term hereof in equal monthly installments also as set
forth in said Article except that the rent for any portion of a calendar month
during the Term hereof shall be apportioned based upon the actual number of days
in such month. Fixed Rent and additional rent payments shall be made at the
Landlord's or Managing Agent's address set forth in Article I of this Lease or
at such other address as Landlord may from time to time designate in writing.
All other payments required by this Lease to be made by Tenant during the Term
thereof as additional rent shall be paid as elsewhere in this Lease set forth.
The term "Annual Rent" shall mean Fixed Rent plus additional rent payable under
the Lease. All rent payable by Tenant pursuant to this Lease shall be paid
without setoff, adjustment, deduction or abatement except as otherwise set forth
in Article XIII hereof.
4.2 Payments. All payments of Annual Rent shall be made to Managing
--------
Agent, or to such other person as Landlord may from time to time designate in
writing. If any installment of Annual Rent is paid more than seven (7) business
days after written notice from Landlord that such rent has not been paid, it
shall bear interest at a rate equal to the prime commercial rate from time to
time established by Fleet Bank, or such other major national bank if Fleet Bank
is not in existence, as Landlord elects, plus 2% per annum from such due date,
which interest shall be immediately due and payable as further additional rent.
4.3 Market Rent. The market rent for the Premises shall be determined
-----------
as follows:
(5)
<PAGE>
(a) The Market Rent shall be proposed by Landlord within twenty (20) days
of receipt of Tenant's notice that it intends to exercise its option to extend
the term (the "Landlord's Proposed Market Rent"). The Landlord's Proposed
Market Rent shall be the Market Rent unless Tenant notifies Landlord, within
thirty (30) days of Tenant's receipt of Landlord's Proposed Market Rent, that
Landlord's Proposed Market Rent is not satisfactory to Tenant ("Tenant's
Rejection Notice).
(b) If the Market Rent is not otherwise agreed upon by Landlord and
Tenant within fifteen (15) days after Landlord's receipt of Tenant's Rejection
Notice, then Tenant shall be deemed to have withdrawn its exercise of the option
unless Tenant shall have given notice to Landlord within ten (10) days after
said fifteen (15) day period that Tenant desires to determine the Market Rent by
the following appraisal procedure, which notice shall specify the name and
address of the appraiser designated by Tenant (the "Tenant's Appraisal Notice"):
1. Landlord shall within five (5) days after receipt of Tenant's
Appraisal Notice, notify Tenant of the name and address of the
appraiser designated by Landlord. Such two appraisers shall, within
twenty (20) days after the designation of the second appraiser, make
their determinations of the Market Rent in writing and give notice
thereof to each other and to Landlord and Tenant. Such two (2)
appraisers shall have twenty (20) days after the receipt of notice of
each other's determination to confer with each other and to attempt to
reach agreement as to the determination of the Market Rent. If such
appraisers shall concur in such determination, they shall give notice
thereof to Landlord and Tenant and such concurrence shall be final and
binding upon Landlord and Tenant. If such
(6)
<PAGE>
appraisers shall fall to concur as to such determination within said
twenty (20) day period, they shall give immediate notice thereof to
Landlord and Tenant and shall immediately designate a third appraiser.
If the two appraisers shall fail to agree upon the designation of such
third appraiser within five (5) days after said twenty (20) day
period, then they or either of them shall give notice of such failure
to agree to Landlord and Tenant and if Landlord and Tenant fail to
agree upon the selection of such third appraiser within five (5) days
after the appraiser(s) appointed by the parties give notice as
aforesaid, then either party on behalf of both may apply to the
American Arbitration Association or any successor thereto, or on his
or her failure, refusal or inability to act, to a court of competent
jurisdiction, for the designation of such third appraiser.
2. All appraisers shall be real estate appraisers or consultants who
shall have had at least seven (7) years continuous experience in the
business of appraising or leasing real estate in the suburban Boston
area.
3. The third appraiser shall conduct such hearings and investigations as
he or she may deem appropriate and shall, within ten (10) days after
the date of his or her designation, make an independent determination
of the Market Rent.
4. If none of the determinations of the appraisers varies from the mean
of the determinations of the other appraisers by more than ten (10%)
percent, the mean of the determinations of the three (3) appraisers
shall be the Market Rent for the Premises. If on the other hand, the
determination of any single appraiser varies from the mean of the
determinations of the other two (2) appraisers by more than
(7)
<PAGE>
ten (10%) percent, the mean of the determination of the two (2)
appraisers whose determinations are closest shall be the Market Rent.
5. The determination of the appraisers, as provided above, shall be
conclusive upon the parties and shall have the same force and effect
as a judgment made in a court of competent jurisdiction.
6. Each party shall pay fees, costs and expenses of the appraiser
selected by it and its own counsel fees and one-half ( 1/2) of all
other expenses and fees of any such third appraisal.
Notwithstanding the foregoing Section 4.3, Annual Rent for the Extended
Term shall not be less than the Annual Rent for the original term.
ARTICLE V
OPERATING AND MAINTENANCE COSTS
-------------------------------
AND REAL ESTATE TAXES
---------------------
5.1 Common Area Maintenance. Tenant shall pay to Landlord as additional
-----------------------
rent an additional payment on the first day of each month occurring during the
Term hereof one-twelfth (1/12) of the amount of Estimated Annual Tenant's
Proportional Share of Common Area Maintenance which amount is set forth in
Section 1.1 ("Tenant's CAM Fund"). Such fund is intended to reimburse Landlord
with Tenant's allocable share of certain costs related to the Premises, the Lot,
and the common areas of the Office Park as hereinafter set forth. The Common
Area Maintenance Costs included within Tenant's CAM Fund with respect to the
Building, Lot and the exterior areas of the Premises and the Common Areas shall
be categorized in one of the following categories and prorated in accordance
with the prorations set forth within each category.
(8)
<PAGE>
1. Building Related Expenses, which shall be allocated 100% to Tenant,
shall include maintenance of water tight integrity of the roof, walls,
windows and skylights of the Building (excluding replacement of the
roof and precast concrete exterior walls); the annual charge (i.e.
Landlord's cost of Capital Items divided by the useful life in years
of such Capital Items) for any capital items purchased by Landlord in
accordance with and subject to the provisions of Section 6.1;
maintenance and repair of septic (if applicable), sewer (if
applicable), utility, fire main and fire hydrant facilities
exclusively serving the Building; maintenance of Building entrance
sign; maintenance, repair and striping of Tenant's parking and loading
area; including snow removal and sanding of driveways and parking lots
used exclusively by Tenant; fertilization, mowing, and watering of
lawns and landscaping and care of shrubbery and general grounds upkeep
exclusively serving the Building; changing of street-lamp lights,
walk-way fights, and parking fights in areas used exclusively by
Tenant, and keeping same in proper working condition, and any other
services, repairs, or subject to Section 6.1 maintenance performed
solely for the benefit of the Building, and insurance premiums
procured by Landlord on Tenant's behalf as specified in Article XV;
2. Traffic Related Expenses, which shall be allocated on the basis of the
ratio of the number of parking spaces within the Lot to the aggregate
total number of parking spaces within the Office Park, shall include
snow removal and sanding of drives and parking lots, maintenance and
repair of the Office Park entrance signs, maintenance and repair of
Office Park fighting, traffic signals, and traffic control
(9)
<PAGE>
personnel required for the Office Park, maintenance and repair of
Office Park walks, and Office Park non-exclusive parking and any other
traffic or common Office Park roadway or walkway related expenses;
3. Landscaping/Drainage/Other General Office Park Related Expenses, which
shall be allocated on the basis of the ratio of the square footage of
the Building to the aggregate square footage of all completed
buildings including the Building in the Office Park, as such buildings
are completed from time to time, shall consist of the maintenance and
repair of sewer, utilities, and drainage facilities, maintenance and
repair of detention and fire main and fire hydrant facilities which
service the Office Park and are not exclusive to any single building
within the Office Park; fertilization, mowing, and watering of lawns
and landscaping, care of shrubbery, snow removal and sanding of common
driveways, and general grounds upkeep of access drives, entrance areas
and other such portions of the Office Park the landscaping of which
actually and substantially benefits the Premises; and liability
insurance costs, other than insurance required to be maintained by
Tenant on the Lot, for the Common Areas of the Office Park;
4. Sewer Treatment Plant Expenses, including real estate taxes associated
with sewer treatment plant land and buildings, shall consist of the
expenses of operating, maintaining and repairing the sewage treatment
plant, which expenses shall be allocated on the basis of the ratio of
the square footage of the Building to the aggregate square footage of
all completed buildings including the Building on all lots in the
Park, as such buildings are completed and connected for service from
(10)
<PAGE>
time to time to the sewer treatment plant. An "annual charge" for
capital replacements or improvements to the plant (computed as set
forth above for payments for capital items purchased by Landlord in
accordance with Section 6.1) are to be allocated on the ratio of the
Building square footage to the aggregate square footage of all
completed buildings in the Office Park.
Notwithstanding anything to the contrary in this Lease contained,
Tenant shall not be required to pay any Common Area Maintenance Costs
or to contribute to Tenant's CAM Fund for:
1. Repairs which are the responsibility of the Landlord, including
structural repairs (including repairs to the precast concrete panels
of the Building and replacement of the roof), as well as repairs or
other work occasioned by fire or other casualty or by the exercise of
eminent domain, or its obligations to have the Premises in compliance
with the laws or compliance necessitated prior to the Term
Commencement Date as set forth in Section 10.2 of this Lease;
2. Leasing commissions, attorneys fees, costs and disbursements and other
expenses incurred in connection with negotiations or disputes with
other tenants, occupants or prospective tenants or occupants of the
Office Park;
3. Interest, principal, ground rent, or other payments under any
mortgage, ground lease or other financing of the Lot or the Office
Park;
4. Any advertising or promotional expenditures;
5. Services or work provided for other tenants and occupants of the
Office Park and not substantially benefiting Tenant on a commensurate
basis and any expense for
(11)
<PAGE>
which Landlord is entitled to be reimbursed directly by any such other
tenant or tenants;
6. Overhead or profit increment paid to subsidiaries or affiliates of
Landlord for services on or to the Premises to the extent that the
costs of such services exceed competitive costs of such services were
they not so rendered by a subsidiary or affiliate;
7. Salaries, wages, benefits or other expenses of administrative
employees or other persons not involved in the daily operations of the
Office Park;
8. Leasehold improvements made in connection with the preparation of any
portion of a building in the Office Park for occupancy by a new or
existing tenant;
9. Any expansion of the rentable area of the Building if not leased to
Tenant;
10. Landlord's general overhead not related directly to the management or
operations of the Building or the Office Park;
11. Depreciation of the Building or any other improvement in the Office
Park,
12. Landlord's breach or violation of a lease, including fines, penalties
and attorneys fees;
13. Compensation paid to employees or other persons in connection with
commercial concessions operated by Landlord in the Office Park.
14. Any item with respect to which Landlord is entitled to receive
reimbursement from insurance proceeds or from a third party.
15. Any Capital Item for which Landlord is solely responsible for in
accordance with Section 6.1 of this Lease; or amortization of any
Capital Items above $15,000.00
(12)
<PAGE>
(as set forth in Section 6.1 of this Lease), except to the extent
Tenant is obligated to pay an annual charge equal to the cost of such
Capital Item as set forth in Sections 5 and 6.1 and Tenant shall pay
for the cost of any Capital Item costing less than $15,000.00 as set
forth in Section 5 and 6.1;
16. Repairs necessary to correct water leak at column line H-6;
17. Compliance by Landlord with laws existing as of the date of this Lease
(excluding Americans with Disabilities Act regulations, which shall be
Tenant's sole responsibility and cost) as outlined in Section 10.2 of
this Lease;
18. Environmental testing, remediation and compliance, unless caused by
Tenant, its agents or contractors as outlined in Section 16.3 of this
Lease.
Tenant shall be solely responsible for paying all utilities including, but
not limited to electricity, water and/or gas consumed in the Building or on the
Lot provided use of same is for the benefit of Tenant, and the electrical and
gas bills shall be placed in the Tenant's name and billed directly by the
utility to Tenant, Landlord reserving the right to pay such bills if unpaid by
Tenant and after 15 days notice by Landlord (except in the case of an
emergency), and to recover such payment from Tenant with any interest and/or
penalties chargeable thereon as additional rent.
Tenant recognizes that Landlord may retain the services of such independent
contractors or affiliates as may be necessary for Landlord to fulfill its
obligations hereunder. Landlord shall provide to Tenant within four months of
the end of each calendar year an annual accounting, in writing, of actual Common
Area Maintenance Costs and Landlord shall maintain complete books and records
sufficient to verify these charges and Tenant, its accountants and agents shall
have
(13)
<PAGE>
access to same and right to copy at reasonable times with prior written notice;
if Tenant's CAM Fund was not fully spent toward Common Area Maintenance Costs,
Landlord shall within fifteen (15) business days after Landlord provides Tenant
such accounting or as applicable after Tenant has provided Landlord with notice
of additional rebate amounts due pursuant to Tenant audit of such accounting,
rebate to Tenant all unspent funds, and if Tenant's CAM Fund was insufficient to
pay such Common Area Maintenance Costs, Tenant shall pay its proportional share
of any deficiency to the Landlord within fifteen (15) business days of billing
by Landlord after the end of each year of the term. Based on reasonable
estimates of increases in Common Area Maintenance Costs covered by this Section,
Landlord reserves the right to adjust Tenant's CAM Fund annually at the time of
such accounting effective on the first day of each calendar year during the Term
hereof upon thirty (30) days' prior written notice to Tenant and upon providing
Tenant with documentation supporting such estimates. Any such change shall be
effective retroactively to the first day of the calendar year during which the
adjustment is made. Notwithstanding anything contained herein, Landlord reserves
the right to separately invoice Tenant for Tenant's proportionate share of any
actual expense for items reasonably beyond Landlord's control contained in the
Tenant's CAM Fund which exceeds the amount for such item in Landlord's estimate
of Tenant's CAM Fund by greater than five percent (5%). Any such change shall be
effective retroactively to the first day of the calendar year during which the
adjustment is made. None of such Common Area Maintenance Costs shall exceed
amounts which are charged for such expenses in the Westford, Massachusetts area
for property of the same general type and size as in the Office Park. Tenant
shall have the right to verify such Common Area Maintenance Costs at Landlord's
office at reasonable times with prior written notice.
(14)
<PAGE>
5.2 Tax Expense. Tenant shall pay directly to Landlord within 15 days
-----------
of receipt by Tenant of invoice from Landlord (including a copy of tax bill),
real estate taxes assessed during the Term hereof (on a pro rata basis at the
beginning or end of the Term) attributable to the Tenant's Lot and the Building
and any assessment, levy, imposition or tax (including any tax which may replace
or be assessed in lieu of any of the foregoing), imposed by any authority and
agency having the direct power to tax against the Tenant's Lot and the Building
(the "Tax Expense"). Landlord will pay the real estate taxes directly to the
relevant taxing authority. Any real estate taxes assessed during each of the
first and last calendar years of the Term of this Lease shall be pro rated based
on the actual number of days in which the Lease Term is in effect during such
year bears to the actual number of days in such calendar year. The term "real
estate taxes" means the real estate taxes, betterment assessments, water, rates
or charges, and such other governmental charges and impositions which are or may
be charged, levied, assessed, imposed or become due and payable with respect to
the Lot, Building, and other improvements comprising the Premises. Landlord
agrees that Tax Expense shall include annually only Tenant's annual share of the
cost of any betterment, based on the useful life of such betterment. All such
payments shall be made to Landlord within 15 days of receipt by Tenant of
invoice from Landlord (including copy of the tax bill). Tenant shall furnish to
Landlord copies of such bills and receipts evidencing payment for Landlord's
records. Notwithstanding the foregoing, Tenant shall have no responsibility for
late payment penalty or interest if Tenant's payment was timely as above
provided.
Tenant shall also pay all personal property taxes for Tenant's personal
property on the Premises or used in connection therewith. To the extent
permitted by law, Tenant shall pay, when
(15)
<PAGE>
due, taxes levied or assessed against Landlord by reason of this Lease on the
rental or any other payment required to be made hereunder whether said taxes are
assessed solely on the rental payment hereunder or jointly with other rentals
collected pursuant to any law or ordinance now existing or hereafter enacted
(other than taxes levied on the net income of Landlord derived therefrom as part
of a state or federal income tax law applicable to Landlord's income, and any
income, franchise, gross receipts, corporation, capital levy, excess profits,
revenue, rent, inheritance, devolution, gift, estate, payroll or stamp tax by
whatsoever authority imposed or howsoever designated or any tax upon the sale,
transfer and/or assignment of Landlord's title or estate which at an fine may be
assessed against or become a lien upon all or any part of the Premises or this
leasehold).
5.3 Tax Abatement. Tenant shall have the right to contest in good faith
-------------
by appropriate proceedings diligently pursued the imposition or amount of any
real estate taxes assessed against the Lot or the Building or such personal
property taxes payable by it hereunder, including the right on behalf of, and in
the name of the Landlord, to seek abatements thereto. The Landlord shall
reasonably cooperate with Tenant, at Tenant's sole expense, in any such contest
or abatement proceedings. In the event that Tenant determines not to contest
such taxes and Landlord desires to file such contest, Landlord shall give
written notice of that fact to Tenant and shall have the sole right as to such
tax bill to contest in good faith by appropriate proceedings diligently pursued
the imposition or amount of any real estate taxes against the Lot or the
Building or such other taxes payable by Tenant hereunder, including the right to
seek abatements thereto. In such event, the Tenant shall reasonably cooperate
with Landlord, at Landlord's sole expense, in any such contest or abatement
proceedings. Any tax abatement or rebate received shall be allocated to the
parties in the same proportion as payment.
(16)
<PAGE>
If Landlord shall receive on behalf of the Lot or the Building a rebate or
abatement on any tax paid by Tenant, then after deducting therefrom any costs
reasonably incurred by Landlord in obtaining such rebate or abatement, all of
such net rebate or abatement relating to the Lot or the Building or to personal
property taxes assessed against the Tenant's personal property shall be returned
to Tenant to the extent that such rebate or abatement relates to payment made by
the Tenant and not reimbursed by Landlord. If Tenant shall receive on behalf of
the Lot or the Building a rebate or abatement on any tax paid by Tenant, then
after deducting therefrom any costs reasonably incurred by Tenant in obtaining
such rebate or abatement, all of such net rebate or abatement related to the
Lot, the Building or to personal property taxes assessed against the Tenant's
property shall be retained by Tenant, as its sole property, to the extent such
rebate or abatement relates to a payment made by Tenant and not reimbursed by
Landlord. The remaining portion of such net rebate or abatement shall promptly
be returned to Landlord.
ARTICLE VI
LANDLORD'S COVENANTS'
--------------------
6.1 Landlord's Covenants during the Term - Landlord shall be
------------------------------------
responsible during the Term, at Landlord's expense and not as a cost allocable
to Tenant under Article 5.1, for the structural integrity of the Building
(including the foundation, precast concrete panels roof structure, but excluding
the water tight integrity of the roof) and damage and destruction due to
casualty or eminent domain (except as set forth in Article XIII or resulting
from Tenant's negligence or misuse. Landlord shall perform, at its sole
expense, necessary repairs to maintain the structural integrity of the Building
(except that such repairs shall not be required in the case of settling or
sagging of the above items within standard engineering tolerance provided that
the settling and sagging does not affect the surface or structural integrity of
the Building or render the
(17)
<PAGE>
Building unsafe or unfit for the Permitted Uses, or for damage or deterioration
resulting from overloading by Tenant breaching the loading provisions of this
Lease, or from misuse or negligence of Tenant). Landlord shall also be
responsible for (i) all exterior maintenance and repair of the Building, (ii)
for such repairs as are required by Article XIII hereof and (iii) for
replacement of all capital items in the Building which need replacement during
the Term so long as such replacement was not caused by negligence or excessive
use of such capital items by Tenant. Landlord shall charge Tenant in accordance
with the provisions of Article V for all costs of exterior maintenance, repairs
and capital, replacements, except for Landlord's structural obligations set
forth in this Section 6.1 and except that individual capital replacement items
costing more than $15,000.00 shall be charged as outlined herein (except for
Landlord's structural obligations set forth in this Section 6.1).
Notwithstanding the foregoing, it is expressly understood and agreed to by both
parties that any individual capital replacement item costing less than
$15,000.00 shall be paid for by Tenant. All other repairs and maintenance,
except as specifically otherwise provided herein, shall be the responsibility of
the Tenant. A capital item for the Building and Lot is considered to be a
replacement item to the Building or Lot that has a useful life of more than one
year and the cost of such capital item is $15,000.00 or more per item to
replace. Such items include replacement of the heating, ventilating and air
conditioning rooftop units, replacement of the roof, replacement of the parking
lot. If a capital item as outlined above (exclusive of the energy management
system, security cameras and other items that are Tenant's sole responsibility)
needs to be replaced in Landlord's discretion and such replacement is not
necessitated because of Tenant's negligence, failure to adequately maintain such
item, or excessive use, and the cost to replace the item is $15,000.00 or more,
then the Landlord will
(18)
<PAGE>
replace the item and amortize such cost over the useful
life of the item and Tenant shall pay its share of the amortization of the
capital item during the Lease Term. Landlord agrees that it will not replace a
capital item unless such capital item is not operable, broken, and/or in need of
repair in Landlord's reasonable discretion.
In the event that Tenant gives notice to Landlord of a condition which
Tenant believes requires Landlord's repairs or a condition which if left
uncorrected, will necessitate Landlord's repair, then, in accordance with the
terms of this Section 6.1, Landlord shall respond promptly to investigate such
condition, and, if such repairs are Landlord's obligation hereunder, Landlord
shall commence promptly to repair same and to diligently complete said repair.
Tenant agrees during the Term to provide Landlord notice as soon as reasonably
possible of any condition known to Tenant which might require, or if left
uncorrected will necessitate, Landlord's repair pursuant to this Section 6.1.
Tenant shall have the right to require, at reasonable times and with reasonable
notice, a representative of Landlord to inspect the Building for repairs which
may be the responsibility of Landlord.
6.2 Interruptions - Landlord shall not be liable to Tenant for any
-------------
compensation or reduction of rent by reason of inconvenience or annoyance or for
loss of business arising from power losses or shortages to the Building or from
the necessity of Landlord's entering the Premises, subject to Section 12.3, for
any of the purposes in this Lease authorized, or for repairing the Premises or
any portion of the Building or improvements or the Lot or Office Park. In case
Landlord is prevented or delayed from making any repairs, alterations or
improvements, or furnishing any service or performing any other covenant or duty
to be performed on Landlord's part, by reason of any cause beyond Landlord's
reasonable control, Landlord shall not be liable to Tenant therefor, nor, except
as expressly otherwise provided in Article XIII hereof, shall Tenant
(19)
<PAGE>
be entitled to any abatement or reduction of rent by reason thereof, nor shall
the same give rise to a claim in Tenant's favor that such failure constitutes
actual or constructive, total or partial, eviction from the Premises. Landlord
agrees to provide Tenant with reasonable advance notice prior to entering the
Premises except in the case of emergency.
Notwithstanding the foregoing, Landlord agrees to use reasonable efforts to
resolve any such condition which has resulted in an inconvenience or annoyance
or loss of business to Tenant and shall exercise such rights of entry in a
manner and at such times, absent an emergency, as to avoid unreasonable
interference with Tenant's use and occupancy of the Premises. In the event of
any loss of power or interruption with Tenant's business operation due solely to
the gross negligence or willful misconduct of Landlord or its agents, employees
or contractors, Tenant shall be entitled to an abatement of all Fixed Rent and
additional rent for the duration of such interruption.
Landlord reserves the right to stop any service or utility system when
necessary by reason of accident or emergency or until necessary repairs have
been completed. Except in case of emergency repairs, Landlord will give Tenant
reasonable advance notice of any contemplated stoppage and will use reasonable
efforts to avoid unnecessary inconvenience to Tenant by reason thereof and to
restore such service or utility system as soon as reasonably possible.
ARTICLE VII
LANDLORD'S WARRANTIES
---------------------
Landlord warrants and represents and covenants and agrees as follows:
(a) Title to the Premises is vested in the Landlord;
(b) Landlord has the power and authority to enter into this Lease and
perform the obligations of Landlord hereunder. This Lease and all other
documents executed and delivered by
(20)
<PAGE>
Landlord constitute legal, valid, binding and enforceable obligations of
Landlord, and there are no claims or defenses, personal or otherwise, or offsets
whatsoever to the enforceability or validity of the lease;
(c) Landlord represents that on the date of execution of this Lease there
are no other liens, restrictions or encumbrances placed on the Building or Lot
other than those shown on Exhibit E. Landlord further represents that none of
the liens, restrictions or encumbrances listed on Exhibit E shall materially
adversely effect Tenant's use and occupancy of the Premises for the Permitted
Uses;
(d) That the Building and Lot comply with applicable zoning ordinances as
of the Term Commencement Date;
(e) Landlord has obtained all necessary or appurtenant easements for access
and utilities in order for Tenant to occupy and operate the Premises for the
Permitted Uses;
(f) Landlord is, to the best of its knowledge, not aware of the generation,
storage or disposal of any hazardous waste or hazardous substance in the Office
Park by any other party in excess of levels permitted under applicable law. For
purposes of this paragraph "hazardous waste" and "hazardous substance" shall
mean any material which may be "hazardous materials" or "hazardous substances"
as defined in any federal, state or local ordinance, law or regulation.
ARTICLE VIII
USE OF PREMISES
---------------
Tenant may use the Premises for the Permitted Uses specified in Section 1.1
of this Lease.
(21)
<PAGE>
ARTICLE IX
CONDITION OF THE PREMISES
-------------------------
9.1 The Premises shall be leased in "as is" condition and specifically
and expressly without any warranties, representations or guarantees, either
express or implied, on behalf of Landlord to Tenant, except as otherwise
expressly set forth herein.
ARTICLE X
COMPLIANCE WITH LAW
-------------------
10.1 Tenant Compliance - Tenant shall comply, at Tenant's sole expense,
-----------------
with all applicable laws, ordinances, regulations and orders of any governmental
authority (collectively "The Laws") if such compliance is necessitated by reason
of Tenant's actual use of the Premises, which such use shall in any event be in
conformity with the Permitted Uses as specified in Section 1.1 of this Lease.
10.2 Landlord's Compliance - Landlord warrants and represents that the
---------------------
Premises shall comply with all applicable federal, state and local laws,
ordinances, regulations and orders existing as of the Term Commencement Date and
Landlord shall maintain the Premises in compliance with such laws as from time
to time may be amended, throughout the Term of this Lease unless such compliance
is necessitated by reason of Tenant's particular use of the Premises.
Notwithstanding the foregoing, (a) any compliance that may be necessitated prior
to or after the Term Commencement Date, which involves the Americans with
Disabilities Act and the regulations and standards thereunder, shall be Tenant's
sole responsibility and cost, and (b) any expense incurred by Landlord
associated with Landlord's compliance as outlined above for any compliance
necessitated after the Term Commencement Date shall be reimbursed to Landlord by
Tenant in accordance with Section 5.1 of this Lease, The Common Area Maintenance
Costs. Tenant shall
(22)
<PAGE>
not be obligated to pay for any fines associated with compliance with code items
which Landlord is responsible for providing and did not comply with.
10.3 Notice - Tenant shall have the right upon giving notice to
------
Landlord to contest any obligation imposed upon Tenant pursuant to the
provisions of this Article and provided the enforcement of such requirement or
law is stayed during such contest and such contest will not subject the Landlord
to penalty or jeopardize the title to the Premises or otherwise affect the
Premises in any adverse way. Landlord and Tenant shall cooperate with the other
in any such contest and shall execute any documents reasonably required in the
furtherance of such purpose.
ARTICLE XI
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
---------------------------------------
11.1 Alterations - Tenant may, from time to time, at its own cost and
-----------
expense and without the consent of Landlord, make non-structural non-roof
alterations, additions or improvements to the interior of the Premises
(collectively herein called "Alterations") whose cost in any one instance is
Twenty-Five Thousand and 00/100 Dollars ($25,000.00) or less, provided Tenant
first notifies Landlord in writing of any such Alterations. If Tenant desires
to make any non-structural non-roof Alterations costing in excess of Twenty-Five
Thousand and 00/100 Dollars ($25,000.00) in any one instance or any other
alteration, Tenant must first obtain the consent of Landlord thereto, which
consent shall not be unreasonably withheld or delayed. If Landlord reasonably
concludes that the Alterations involve any construction, alterations or
additions requiring unusual expense to readapt the Premises to a normal
Permitted Use as defined in Section 1.1 on September 30, 2000, Landlord may
require by notice to Tenant at time of approval that such readaptation will be
made prior to such Expiration Date without expense to Landlord.
(23)
<PAGE>
If Tenant desires to make any structural (excluding the precast concrete
panels) or roof Alterations, Tenant must first obtain the consent of Landlord
thereto, which consent shall not be unreasonably withheld or delayed. If
Landlord consents to Alterations affecting such structural components or the
roof, Landlord shall be relieved of further maintenance and repair
responsibility for the structural components, as the case may be, and Tenant
shall assume such responsibility, with respect to that portion of the structural
components (in its entirety), if any, to which the consent relates, except that
Landlord agrees upon request of Tenant to have such Alteration be performed by
Landlord or a contractor hired by Landlord with Tenant's consent, at Tenant's
expense, in which event Landlord shall not be relieved of any responsibility it
may have to the item so altered.
If Tenant desires to make any alterations to the precast panels, or to the
exterior of the Building or Lot, Tenant must first obtain the prior written
consent of Landlord thereto which may be withheld in Landlord's sole discretion.
Any and all such Alterations may be done by any general contractor chosen
by Tenant provided any such general contractor is reputable, bondable by
reputable bonding companies, carries the kind of insurance and in the amounts
set forth herein, and will work in harmony with Landlord's contractors and
laborers in the Building. Notwithstanding the foregoing, no such bonding is
required for non-structural, non-roof Alterations.
At Landlord's option, upon the expiration of the Lease, Landlord may
require Tenant to remove and readapt the alterations made to the vestibule at
the front of the Building to its original condition at Tenant's expense. Such
alteration was made during Tenant's occupancy when Tenant was subleasing the
Premises from Digital Equipment Corporation under the Sublease
(24)
<PAGE>
Agreement between Digital Equipment Corporation and Davox Corporation dated
October 25, 1993. Landlord and Tenant acknowledge that the vestibule and door
that were installed at the rear of the Building can remain upon expiration of
the Lease.
11.2 Landlord Performance of Alterations - If Landlord's general
-----------------------------------
contractor performs the work of making Alterations for Tenant, such work shall
be performed at actual cost, plus a fee of 12.5% and shall be done in a good and
workmanlike manner using materials equal to or better than those used in the
construction of the Premises and shall comply with or cause compliance with all
laws and with any direction given by any public officer pursuant to law.
11.3 Tenant Performance of Alterations - Tenant in making any
---------------------------------
Alterations shall cause all work to be done in a good and workmanlike manner
using materials equal to or better than those used in the construction of the
Premises and shall comply with or cause compliance with all laws and with any
direction given by any public officer pursuant to law. Tenant shall obtain or
cause to be obtained and maintain in effect, as necessary, all building permits,
licenses, temporary and permanent certificates of occupancy and other
governmental approvals which may be required in connection with the making of
the Alterations. Landlord shall cooperate with Tenant in the obtaining thereof
and shall execute any documents reasonably required in furtherance of such
purpose, provided any such cooperation shall be without expense and/or liability
to Landlord.
11.4 Removal of Alterations - At any time during the Term of this Lease,
----------------------
Tenant may, at its option (subject to Landlord's approval), remove any
Alterations made so long as such removal does not render the Premises non-
functional as an office and research and development facility as defined in
Permitted Uses (Section 1.1). In the event of a removal of any Alterations by
Tenant, Tenant shall, at its sole cost, repair any damage to the Premises caused
by such removal.
(25)
<PAGE>
11.5 General Provisions - At least annually if such Alterations have
------------------
occurred during the past calendar year, Tenant shall furnish to Landlord as-
built sepias and, if applicable, operating manuals, of the work done by Tenant
during such past year and copies of all permits issued in connection therewith.
For all of Tenant's Alterations, whose cost in any one year is in excess of
$25,000.00, all of Tenant's construction drawings must be prepared at Tenant's
expense by an architect or engineer approved by the Landlord and Landlord's
engineer. Landlord and Tenant shall initial the construction drawings after the
same have been submitted by Tenant to Landlord and approved by Landlord. All of
Tenant's alterations whose cost in any instance is in excess of $25,000.00,
shall be constructed by a reputable general contractor, and Landlord may require
that the electrical, heating ventilation and air conditioning, and sprinkler
subcontractors be approved by Landlord, such approval not to be unreasonably
withheld or delayed.
Tenant shall have its contractor procure and maintain in effect during the
term of such Alterations, the following insurance coverages with an insurance
company or companies authorized to do business in the Commonwealth of
Massachusetts.
(a) Worker's Compensation and Occupational Disease Insurance in accordance
with the laws of the Commonwealth of Massachusetts, along with a "All States"
and "Voluntary Compensation" coverage endorsement.
(b) Employer's Liability insurance with a limit of $100,000.00 per person
per accident, $100,000.00 per person by disease, and $500,000.00 per policy by
disease.
(c) Comprehensive General Liability including Personal Injury and Property
Damage in the amount of a combined single limit of $2,000,000.00 each
occurrence. Coverage must include the following:
(26)
<PAGE>
(1) premises - operations;
(2) elevators and hoists;
(3) independent contractor;
(4) contractual liability assumed under this contract.
(d) Comprehensive Auto Liability including Personal Injury and Property
Damage in the amount of a combined single limit of $500,000.00 each occurrence.
Coverage must include the following:
(1) owned vehicles;
(2) leased vehicles;
(3) hired vehicles;
(4) non-owned vehicles.
(e) Owner and Contractor Protective Liability including Personal Injury and
Property Damage in the amount of a combined single limit of $1,000,000.00 each
occurrence.
ARTICLE XII
TENANT'S COVENANTS
------------------
12.1 Maintenance and Repair - Except as provided in Sections 6.1 with
----------------------
respect to maintenance, repair and other such obligations of Landlord and 13.1
with respect to repair and restoration obligations of Landlord arising out of a
fire or other casualty and except as to reasonable wear and tear, Tenant shall:
keep the Premises and all fixtures thereon and therein in good repair, operating
condition and working order; make all structural repairs necessitated by
Tenant's misuse or negligence; make and perform or cause to be made or performed
all interior maintenance, repairs, and replacements necessary to the foregoing
including, without limitation, by their inclusion, interior repainting,
replacement of glass damaged or broken and of floor and
(27)
<PAGE>
wall coverings worn or damaged, keeping of all roof drains clear of blockage by
snow and other obstructions or debris, and shall keep all plumbing, fighting,
elevator, heating, ventilating air conditioning and other utility. and
mechanical systems in the Premises properly maintained and operating in good
operating condition; and properly maintain the plumbing, lighting, elevator,
heating, ventilating, air conditioning and other utility and mechanical systems
in accordance with manufacturers warranty and product standards with fully
licensed contractors and under contracts, each reasonably acceptable to
Landlord, qualified to perform the service. Landlord and its agents reserve the
right to inspect the systems to insure proper maintenance at all reasonable
times and upon reasonable notice to Tenant. If Landlord, in Landlord's
reasonable judgment, determines such systems have not been properly and
adequately maintained, as herein required, then Landlord reserves the right,
upon 15 days notice and Tenant's failure to cure, except in cases of emergency,
to remedy such maintenance deficiency and apportion all reasonable costs of such
inspections and maintenance to Tenant's Common Area Maintenance Costs for the
year incurred specified in Article V. Landlord and Tenant acknowledge that
certain repairs will be made to the Building prior to the Term Commencement
Date, such repairs will be addressed by Landlord and Tenant prior to the Term
Commencement Date and the repairs will put the Building in good repair,
operating condition and working order.
Tenant further covenants to (i) neither commit nor suffer waste and (ii) at
the expiration or termination of this Lease peaceably to yield up the Premises
in such order, repair and condition as Tenant is required to maintain hereunder,
first removing all goods and effects of Tenant which Tenant is required to
remove or which Tenant is permitted to remove and desires to remove and
(28)
<PAGE>
(iii) to repair all damage caused by such removal leaving the Premises clean and
neat and in a tenantable condition.
12.2 Signs. Tenant shall not, without the prior written consent of
-----
Landlord, which consent shall not be unreasonably withheld or delayed, and so
long as the Tenant leases at least seventy-five percent (75%) of the Building,
(a) paint, place or replace, any signs on the Lot or the Premises or anywhere on
the exterior of the Building, or (b) place any curtains, blinds (other than
standard vertical blinds), shades, awnings, or flagpoles, or the like, in the
Premises or anywhere on or in the Building visible from outside the Premises.
Tenant shall pay the expenses involved in the erection of any sign and of
obtaining permits therefor. Tenant warrants that it shall obtain all necessary
permits and approvals in compliance with local codes and ordinances prior to
erecting any such sign (s) and, at Landlord's request, Tenant shall remove said
sign(s) upon the termination of this Lease.
Notwithstanding the foregoing, Landlord hereby consents to Tenant's sign on the
Building and Lot existing as of the date of the execution of this Lease and any
changes to the existing signs must be approved by Landlord.
12.3 Entry and Inspection. - Tenant shall permit Landlord and Landlord's
--------------------
agents and invitees at reasonable times and upon reasonable advance notice
except in emergency in which case notice may be given by telephone or in person,
during Tenant's regular business hours: to examine the Premises; and, if
Landlord shall so elect, to exercise its rights and perform its obligations
under this Lease; to show the Premises to prospective purchasers, prospective or
actual mortgagees, and prospective or actual institutional investors; and, at
any time within twelve (12) months preceding the expiration of the Term, to show
the Premises to prospective tenants, and to affix to any suitable part of the
exterior of the Building and/or the Premises, but not so as
(29)
<PAGE>
to interfere unreasonably with any of the signs or the windows of the Tenant, a
notice to letting or selling the Premises, and to keep the same so affixed
without hindrance. Landlord agrees, in exercising its right of entry granted
under this Section 12.3, to comply with the reasonable security requirements of
Tenant and shall exercise such right of entry in a manner and at such times as
to minimize Landlord's interference with Tenant's use and occupancy of the
Premises, except in cases of emergency.
12.4 Miscellaneous. Tenant agrees during the Term and so long as
-------------
Tenant's occupancy continues:
(a) Not to permit its employees and officers to use any parking spaces
other than those described in Exhibit "A", and to make every reasonable effort
to keep its invitees from using any spaces other than those on the Lot.
(b) Not to injure or deface the Premises, or Lot; and not to permit in the
Building any public auction, nuisance or the emission from the Premises of any
objectionable noise or odor; nor any use thereof which is contrary to law or
ordinances or liable to invalidate or materially increase the premiums for any
insurance on the Building or its contents or liable to render necessary any
alteration or addition to the Premises, unless Tenant is willing to pay for, at
its sole cost and expense, and conduct such alteration or addition, including
obtaining any and all necessary permits and approvals in connection with such
construction thereof.
12.5 Safety Appliances. Tenant agrees to keep the interior of the
-----------------
Building equipped with all safety appliances, required by law or ordinance or
any other regulation of any public authority and to procure all licenses and
permits so required because of the Permitted Uses and, if requested by Landlord,
to do any work so required because of the Permitted Uses, it being
(30)
<PAGE>
understood that the foregoing provisions shall not be construed to broaden in
any way Tenant's Permitted Uses.
12.6 Loading - Tenant covenants and agrees not to place a load upon the
-------
Premises exceeding 100 pound load per square foot of floor area above the first
floor in the Building and 200 pounds live load per square foot of floor area for
at grade slab.
12.7 Labor or Materialmen's Liens - Tenant covenants and agrees not to
----------------------------
cause or permit any liens for labor or materials performed or furnished in
connection therewith to attach to the Premises, or in the event of any such lien
promptly after notice to discharge any such liens which may so attach or to bond
the same. Tenant may contest the foregoing in good faith at Tenant's sole
expense and by appropriate proceedings so long as the Landlord's interest in the
Premises is not jeopardized.
12.8 Rules and Regulations. Tenant agrees to comply with the Rules
---------------------
and Regulations set forth in Exhibit "B" and all other reasonable Rules and
Regulations of general applicability to Tenant and other tenants in the Office
Park hereafter made by Landlord, on which Tenant has been given notice, for the
care and use of the Premises, the Building, the Common Areas and their
facilities and approaches as further described in the Office Park Covenants
attached hereto as Exhibit "C".
12.9 Tenant's Covenants - Tenant has the power and authority to
------------------
enter into this Lease and perform the obligations of Tenant hereunder. This
Lease and all other documents executed and delivered by Tenant constitute legal,
valid, binding and enforceable obligations of Tenant.
(31)
<PAGE>
ARTICLE XIII
CASUALTY AND CONDEMNATION
-------------------------
13.1 Casualty - In case during the Term all or any substantial part
--------
of the Building (i.e. require greater than nine (9) months to rebuild) is
damaged by fire or any other casualty ("Substantial Casualty"), then this Lease
shall, except as hereinafter provided terminate at Landlord or Tenant's
election, which may be made by notice given to the other party within thirty
(30) days after the casualty, which notice of termination shall specify the
effective date of termination which shall not be more than sixty (60), days
after the date of notice of such termination. In such event the Fixed Rent and
additional rent shall be abated as of the date of such casualty. In the event
of any fire or casualty to the Building, unless the Lease is so terminated,
Landlord shall, as promptly as practicable, repair, replace and restore the
Building into substantially the same condition as it was prior to the casualty
for use and occupation to the extent of the proceeds of insurance, less
adjuster's fees and other reasonable expenses of collection, but including the
insurance deductible(s ). In the event of fire or other casualty which does not
damage all or a substantial part of the-Building, the Fixed Rent and additional
rent shall abate on an equitable basis from the date of such casualty until such
area is restored to substantially the same condition as it was prior to the
casualty. In addition, if such damage is not repaired and the Building restored
to substantially the same condition as it was prior to such damage within nine
months from the date of such damage, plus, a reasonable period of time (not
exceeding 90 days after such fire or other casualty) to recover the insurance
proceeds, Tenant, within five days from the expiration of such nine month period
or from the expiration of any extension thereof pursuant to the terms hereof,
may terminate this Lease by notice to Landlord, specifying a date not more than
10 days after the giving of such notice on which the term of this
(32)
<PAGE>
Lease shall terminate. The period within which the required repairs may be
accomplished shall also be extended by the number of days lost as a result of
unavoidable delays, which term shall be defined to include all delays referred
to as Force Majeure in 26.12. Tenant shall, in any fire or other casualty which
creates a Landlord repair obligation in accordance with the terms of this
Article, pay to Landlord upon Landlord commencing construction of such repair
the then applicable insurance deductible(s) up to a maximum of $10,000.00 per
occurrence. Nothing herein shall be construed to limit Landlord's obligation to
the Building for the full replacement cost as specified in Section 15.1 hereof.
13.2 Additional Casualty Provisions
------------------------------
(a) Landlord shall not be required to repair or replace any of
Tenant's business machinery, equipment, cabinet work, furniture, personal
property and no damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Premises.
(b) In the event of any termination. of this Lease pursuant to this
Article XIII, the Term of this Lease shall expire as of the effective
termination date as fully and completely as if such date were the date herein
originally scheduled as the Term Expiration Date. Tenant shall have access to
the Premises at Tenant's sole risk for a period of thirty (30) days after the
date of termination in order to remove Tenant's personal property except as
prohibited by any applicable governmental agency or official.
13.3 Condemnation/Eminent Domain - In the event that the whole or
---------------------------
substantially all of the Building shall be permanently taken or appropriated by
eminent domain or shall be condemned for any public or quasi-public use, then
(and in any such event) this Lease and the Term hereof shall automatically be
terminated as of the date determined as hereinafter set forth.
(33)
<PAGE>
In the event that more than a material part (greater than 35%) of the
floor area of the Building, or any material part of the means of access thereto
or parking ("material" in the case of parking shall mean the reduction of
parking spaces to less than three (3) parking spaces per 1,000 square feet of
Building), so as to substantially interfere with the use of the Building shall
be so taken, appropriated or condemned for a period in excess of one year, then
(and in any such event) this Lease and the term hereof may be terminated at the
election of Tenant by a notice in writing of its election so to terminate which
shall be given by Tenant to Landlord within sixty (60) days following the
effective date of such taking, appropriation or condemnation. Landlord may
suspend the effectiveness of such notice by giving its own notice to Tenant
within five (5) days of receipt of Tenant's notice that Landlord shall either
(i) remove the impairment to Tenant's use of the Building by restoring the
Building as soon as practicable to substantially the same condition and size in
which it existed immediately prior to the taking, appropriation or condemnation
within nine (9) months of such taking or (ii) provide substitute parking spaces
equal to the number taken within reasonable proximity to the Premises within a
reasonable time period, it being agreed that reasonable time includes weather
related delays associated with winter and spring site work and paving.
This Lease and the term hereof shall terminate upon the giving of any
such notice by the Tenant at the Tenant's election, at such later date not later
than the date on which Tenant shall be required to vacate any part of the
Premises or shall be deprived of a substantial part of the means of access
thereto as Tenant may specify by notice to Landlord. In the event of any such
termination, this Lease and the term hereof shall expire as of the effective
termination date as fully and completely as if such date were the date herein
originally scheduled as the Term Expiration
(34)
<PAGE>
Date. If this Lease is not terminated as above set forth, Landlord shall, with
reasonable diligence and up to the amount of the award, restore the remainder of
the Premises, and the remainder of the means of access, as nearly as practicably
may be to the same condition as obtained prior to such taking, appropriation or
condemnation in which event (i) a just proportion of the Fixed Rent and
additional rent, according to the nature and extent of the taking, appropriation
or condemnation and the resulting permanent injury to the Premises and the means
of access thereto and parking shall be permanently abated, and (ii) a just
proportion of the remainder of the Fixed Rent and additional rent, according to
the nature and extent of the taking, appropriation or condemnation and the
resultant injury sustained by the Premises and the means of access thereto and
parking shall be abated until what remains of the Premises and the means of
access thereto and parking, shall have been restored as fully as may be for
permanent use and occupation by Tenant hereunder.
In the event of a taking of the Premises or any part thereof for
temporary use for less than one year, (i) this Lease shall be and remain
unaffected thereby and, (ii) Landlord shall pay Tenant any award made for such
use, provided that if any taking is for a period extending beyond the Term of
this Lease, such award shall be apportioned between Landlord and Tenant as of
the Term Expiration Date.
13.4 Reservation of Award - Except as hereafter set forth, Landlord
--------------------
reserves to itself any and all rights to receive awards made for damages to the
Premises, Building or Lot and the leasehold hereby created, or any one or more
of them accruing by reason of exercise of eminent domain or by reason of
anything lawfully done in pursuance of public or other authority, and Tenant
hereby releases and assigns to Landlord all Tenant's rights to such awards, and
covenants
(35)
<PAGE>
to deliver such further assignments and assurances thereof as Landlord may from
time to time request.
It is agreed and understood that Landlord does not reserve to itself,
and Tenant does not assign to the Landlord any damages payable for (i) trade
fixtures or other leasehold improvements installed by the Tenant, or any body
claiming under Tenant, at its own expense, or (ii) relocation expenses
recoverable by Tenant from such authority in a separate action. Landlord agrees
that Tenant shall be consulted by Landlord during the process of establishing
the amount of the condemnation award from the relevant authority and that
Landlord will not settle any condemnation proceeding with the relative authority
without the prior written consent of Tenant, which consent shall not be
unreasonably withheld or delayed.
ARTICLE XIV
RIGHTS OF MORTGAGEES
--------------------
14.1 Priority of Lease - This Lease shall be subject and
-----------------
subordinate to the lien of any mortgage of the Premises, provided that a
Subordination, Recognition and Non-Disturbance Agreement ("Agreement") is
executed, acknowledged and delivered by such mortgagee to Tenant. Said
Agreement must be in form suitable for recording and must contain substantially
the following provisions:
(a) Mortgage(s)
consents to and approves the Lease.
(b) Tenant shall not, except as required by law, be named or joined
as a party defendant in any suit, action or proceeding for the foreclosure of
the Mortgage (s) or to enforce any rights under the Mortgage (s) or note or
other obligation secured thereby;
(c) The possession by Tenant of the Premises and the Tenant's rights
thereto shall not be disturbed, affected or impaired by, nor will the lease or
the Term be terminated or otherwise
(36)
<PAGE>
affected by (I) any suit, action or proceeding upon the Mortgage(s) or the note
or other obligation secured thereby, or for the foreclosure of the Mortgage(s)
or the enforcement of any rights under the Mortgage(s) or any other documents
held by the Mortgagee(s), or by any judicial sale or execution or other sale of
the Premises, or by any deed given in lieu of foreclosure, or by the exercise of
any other rights given to the Mortgagee(s) by any other documents or as a matter
of law, or (ii) any default under the Mortgage(s) or the note or other
obligation secured hereby;
(d) If the Mortgagee (s) takes possession of the Premises or starts
collecting rent or becomes the owner of the Premises by reason of foreclosure of
the Mortgage(s) or otherwise or if
the Premises shall be sold as a result of any action or proceeding to foreclose
the Mortgage (s) or by a deed given in lieu of foreclosure, the Lease shall
continue in full force and effect, without necessity for executing any new
lease, as a direct lease between Tenant, as tenant thereunder, the Mortgagee(s)
or then owner of the Premises, as landlord thereunder, upon all of the same
terms, covenants, and provisions contained in the Lease, and in such event the
Mortgagee(s) or new owner shall be bound to Tenant under all of the terms,
covenants and provisions of the Lease for the remainder of the Term thereof
which terms, covenants and provisions such Mortgagee(s) or new owner hereby
agrees to assume and perform.
(e) Any agreement between Mortgagee(s) and Tenant shall bind and
inure to the benefit of and be enforceable by the parties thereto and their
respective heirs, personal representatives, successors and assigns. Tenant shall
execute and send to Landlord any such Agreement within fifteen (15) days of
receipt of same if such Agreement contains substantially the provisions set
forth above or within fifteen (15) days after agreement of the parties to said
Agreement of the contents of same .
(37)
<PAGE>
(f) All trade fixtures, equipment and other property owned by Tenant
located or installed in or on the Premises shall be and remain the property of
Tenant and may be removed by Tenant at anytime, subject to the terms of this
Lease. In no event (including default under the Lease or mortgage(s)) shall
mortgagee(s) have any liens, rights of claims in Tenant's property.
(g) Landlord represents that the only mortgages secured by the
Premises as of the date hereby is with the Prudential Insurance Company of
America.
14.2 Limitation on Mortgagee's Liability - Upon entry and taking
-----------------------------------
possession of the Mortgaged Premises for any purpose, the holder of a mortgage
shall have all rights of Landlord and, during the period of such possession or
ownership, the duty to perform all Landlord's obligations hereunder. Except
during such period of possession and from and after foreclosure or deed in lieu
of foreclosure, no such holder shall be liable, either as mortgagee or as holder
of a collateral assignment of this Lease, to perform, or be liable in damages
for failure to perform, any of the obligations of Landlord, unless and until
such holder shall enter and take possession of the Mortgaged Premises for the
purpose of foreclosing a mortgage. Upon entry for the purpose of foreclosing a
mortgage, such holder shall be liable to perform all of the obligations of
Landlord accruing after said entry, provided that a discontinuance of any
foreclosure proceeding shall terminate the liability of the holder as Landlord.
14.3 No Prepayment or Modification, etc - No Fixed Rent, additional
----------------------------------
rent, or any other charge shall be paid more than thirty (30) days prior to the
due dates thereof, and payments made in violation of this provision shall
(except to the extent that such payments are actually received by a mortgagee in
possession or in the process of foreclosing its mortgage) be a nullity as
against such mortgagee, and, Tenant shall be liable to such mortgagee for the
amount of such advance payments made from and after a default under the
applicable Mortgage. No agreement to make
(38)
<PAGE>
or accept any surrender, termination or cancellation of this Lease and no
agreement to modify so as to reduce the rent, change the Term or otherwise
materially change the rights of Landlord under this Lease, or to relieve Tenant
of any obligations or liability under this Lease, shall be binding on mortgagee
unless consented to in writing by Landlord's mortgagees of record, if any, such
consent not to be unreasonably withheld or delayed.
14.4 No Release of Termination - No act or failure to act on the
-------------------------
part of Landlord which would entitle Tenant under the terms of this Lease, or by
law, to be relieved of Tenant's obligations hereunder or to terminate this
Lease, shall result in a release or termination of such obligations or a
termination of this Lease unless (i) Tenant shall have first given written
notice of Landlord's act or failure to act to Landlord's mortgagees of record,
if any, which Landlord shall identify to Tenant, specifying the act or failure
to act on the part of Landlord which could or would give a basis to Tenant's
rights and (ii) such mortgagees, after receipt of such notice, have failed or
refused to correct or cure the condition complained of within a reasonable time
thereafter, but nothing contained in this Section 14.4 shall be deemed to impose
any obligation on any such mortgagee to correct or cure any such condition.
"Reasonable time" as used above means and includes a reasonable time
to obtain possession of the mortgaged premises, if necessary for such cure, and
if the mortgagee elects to do so, and a reasonable time to correct or cure the
condition if such condition is determined to exist.
14.5 Continuing Offer - The covenants and agreements contained in
----------------
this Lease with respect to the rights, powers and benefits of a mortgagee
(particularly without limitation thereby, the covenants and agreements contained
in this Article XIV constitute a continuing offer to any person, corporation or
other entity, which by accepting or requiring an assignment of this Lease
(39)
<PAGE>
or by entry of foreclosure assumes the obligations herein set forth with respect
to such mortgagee; such mortgagee is hereby constituted a party of this Lease
and an obligee hereunder to the same extent as though its name was written
hereon as such; and such mortgagee shall be entitled to enforce such provisions
in its own name.
ARTICLE XV
INSURANCE
---------
15.1 Insurance - Landlord shall procure and continue in force
---------
during the Term and the Extended Term hereof at Tenant's expense under the
provisions of Article V, fire and extended coverage insurance, including
vandalism, sprinkler leakage, and malicious mischief, upon the Building on a
full replacement basis, agreed value endorsement with agreed values for the
Building. The beginning coverage shall be in the amount as is required by
Landlord and its mortgagee up to the full replacement value of the Building.
The policies evidencing such insurance shall provide that loss, if any, payable
thereunder shall be payable to the Landlord and/or the Tenant and/or any
mortgagee of the Premises as their respective interests may appear. A
certificate of insurance evidencing the foregoing shall be delivered to the
Tenant on or before the Term Commencement Date. All such policies shall be
placed with responsible companies authorized to do business in the State wherein
the Premises are located. The coverages required by this Article may be
provided by a single "package" policy.
Tenant shall be responsible for notifying Landlord of additions,
alterations and improvements completed to the interior of the Premises for which
Tenant intends to insure under this section 15.1. Notification shall include the
cost and description of such work and the date on which coverage should
commence.
(40)
<PAGE>
Landlord shall also procure and continue in force during the Term and
Extended Term hereof at Tenant's expense under the provisions of Article V,
rental interruption insurance for twelve (12) months. Landlord agrees that
Tenant's cost for the above-referenced insurance will be capped at $0.06 per
square foot during the initial Lease Term and at $0.08 per square foot during
the extended term, if any.
15.2 Tenant Liability Insurance - The Tenant shall maintain
--------------------------
Commercial General Liability Insurance at Tenant's expense, including
contractual liability endorsement, with respect to the Premises throughout the
Term with combined single limit coverage of Two Million Dollars ($2,000,000).
The Tenant shall deliver to the Landlord within thirty (30) days of Landlord's
request a certificate evidencing the aforesaid coverage issued by insurance
companies authorized to do business in the State wherein the Premises are
located and providing that the insurance indicated therein shall not be canceled
without at least thirty (30) days prior written notice to Landlord. The
Landlord will be named as additional insured on such policy.
15.3 Landlord Liability Insurance - The Landlord shall maintain
----------------------------
comprehensive general liability insurance, including contractual liability
endorsement, with respect to the Premises and the Lot throughout the Term, with
combined single limit coverage of Two Million Dollars ($2,000,000.00) at
Tenant's expense under the provisions of Article V.
15.4 Waiver of Subrogation - The Landlord and Tenant hereby waive
---------------------
all causes and rights of recovery each other, their agents, officers and
employees for any loss occurring to the real or personal property of Landlord or
Tenant, regardless of cause or origin to the extent that said loss or damage is
covered by insurance or would otherwise be required to be covered by insurance.
Since their mutual waiver will preclude the assignment of any such claim by
subrogation to an insurance company (or any other person), Landlord and Tenant
agree to give
(41)
<PAGE>
each insurance company which has issued any policies presently existing or
obtained on or after the date hereof (including renewals of present policies),
with respect to the items covered by this waiver, written notice of the terms of
this mutual waiver, and to have such insurance policies include a clause or
endorsement, if necessary, to the effect that any such release shall not
adversely affect or impair said policies to prevent the invalidation of any of
the coverage provided by such insurance policies by reason of such mutual
waiver, and a clause or endorsement, if necessary, waiving the insurer's right
of subrogation against the other party.
The parties further agree that if said waiver of subrogation shall in
the future become unobtainable or unenforceable or shall void the respective
policies, then the respective insurance policies shall not be invalidated, and
said waiver shall become null and void and of no further force and effect, that
provided the other party is notified that such party shall no longer be able to
obtain a waiver of subrogation in its insurance policy. The Landlord and Tenant
shall deliver to each other within thirty (30) days of the written request by
the other party, a certificate evidencing that the respective party has obtained
a waiver of subrogation in their respective insurance policies.
ARTICLE XVI
INDEMNIFICATION
---------------
16.1 Tenant's Indemnity - The Tenant shall, upon timely receipt of
------------------
notice, defend and save the Landlord harmless from and against any and all
suits, claims, and demands arising out of injury or damage occurring at the
Premises or Lot or Office Park because of the negligence or willful acts of
Tenant, its agents, servants, or employees including any construction activity
undertaken by Tenant pursuant to the terms of this Lease. In no event is Tenant
obligated to
(42)
<PAGE>
defend or save harmless Landlord from any loss, injury, or damage, or part
thereof, not attributable to Tenant's negligence or willful act or those of its
agents, servants, or employees.
In the event the Landlord is notified of a claim, action or proceeding, or
becomes aware of an occurrence, which may result in indemnification by Tenant as
provided above, the Landlord shall give prompt written notice to Tenant and
provide complete particulars known by the Landlord. The Landlord shall
immediately forward to the Tenant every demand, notice, summons or other process
received by Landlord or his representatives.
Tenant has the exclusive right and obligation to defend any claim, action,
or proceeding wherein Landlord is entitled to indemnification under the
provisions of the Article, and Tenant may settle any such claim, action or
proceeding without Landlord's consent or approval.
The Landlord will fully cooperate with the Tenant in the defense or
settlement of any claim, action, or proceeding.
16.2 Landlord's Indemnity. - The Landlord shall, upon prompt
--------------------
receipt of notice, defend and save the Tenant harmless from any and all suits,
claims and demands arising out of injury and damage occurring at the Building,
the Lot and the Office Park because of the negligence or willful acts of
Landlord, its agents, servants, contractors or employees including any
construction activity undertaken by Landlord or Landlord's contractor or arising
out of a breach by Landlord of any applicable hazardous waste laws. In no event
is Landlord obligated to defend or save harmless Tenant from any loss, injury,
damage or part thereof not attributable to Landlord's negligence or willful act
or those of its agents, servants, contractors or employees.
In the event the Tenant is notified of a claim, action or proceeding, or
becomes aware of an occurrence which may result in indemnification of Landlord
as provided above, the Tenant
(43)
<PAGE>
shall give prompt written notice to Landlord and provide complete particulars
known by the Tenant. The Tenant shall immediately forward to the Landlord every
demand, notice, summons or other process received by Tenant or its
representatives.
Landlord has the exclusive right and obligation to defend any claim, action
or proceeding wherein Tenant is entitled to indemnification under the provisions
of this Section 16.2 and Landlord may settle any such claim, action or
proceeding without Tenant's consent or approval.
16.3 Hazardous Materials - Tenant shall not (either with or without
-------------------
negligence) cause or permit the escape, disposal or release of any biologically
or chemically active or other hazardous substances, or materials onto or in the
vicinity of the Premises. Tenant shall not allow the storage or use of such
substances or materials in any manner not sanctioned by law or by the highest
standards prevailing in the industry for the storage and use of such substances
or materials, nor allow to be brought into the Premises any such materials or
substances except to use in the ordinary course of Tenant's business. Tenant
agrees to provide Landlord with an inventory of these certain hazardous
substances and materials, if any, used by Tenant in the ordinary course of
Tenant's business. Without limitation, hazardous substances and materials shall
include those described in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901 et seq., the Massachusetts Hazardous Waste Management Act, as amended,
M.G.L. c.21C, the Massachusetts Oil and Hazardous Material Release Prevention
and Response Act, as amended, M.G.L. c.21E, any applicable local ordinance or
bylaw, and the regulations adopted under these acts (collectively, the
"Hazardous Waste Laws"). If any lender or governmental agency shall, during the
Term hereof, require testing to ascertain whether or not there has been any
release of hazardous materials, then the
(44)
<PAGE>
reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand
as additional charges if such requirement applies to the Premises. If Tenant
receives from any federal, state or local governmental agency any notice of
violation or alleged violation of any Hazardous Waste Law, or if Tenant is
obligated to give any notice under any Hazardous Waste Law, Tenant agrees to
forward to Landlord a copy of any such notice within ten (10) days of Tenant's
receipt or transmittal thereof. In addition, Tenant shall execute affidavits,
representations and the like from time to time at Landlords reasonable request
concerning Tenant's best knowledge or belief regarding the presence of hazardous
substances or materials on the Premises. In all events, Tenant shall indemnify
Landlord as provided in Section 16.1 of this Lease from any release of hazardous
substances or materials on the Premises occurring while Tenant is in possession,
or elsewhere if caused by Tenant or persons acting under Tenant. Landlord
retains the right to inspect the Premises at all reasonable times, upon
reasonable notice to Tenant, to ensure compliance with this paragraph. The
within covenants shall survive the expiration or earlier termination of the
Lease Term.
ARTICLE XVII
ASSIGNMENT AND SUBLETTING
-------------------------
17.1 Tenant Sublet - Landlord hereby grants to Tenant the right to
-------------
assign this Lease or to sublet all or any portion of the Premises throughout the
Term provided Tenant first obtains Landlord's consent to such assignment or
subletting in writing. Landlord's consent shall not be unreasonably withheld or
delayed. Landlord's consent to an assignment or subletting shall be accompanied
by a statement addressed to Tenant and the assignee or subtenant, upon which
statement Tenant and the assignee or subtenant may conclusively rely, stating
that Tenant is not in default under the Lease (or setting forth what respects
Tenant is in default), that this Lease has
(45)
<PAGE>
not been amended or modified (or setting forth such amendments or
modifications), the expiration date of this Lease, and the date to which rent
has been paid to Landlord hereunder. It shall not be unreasonable for Landlord
to withhold its consent or disapprove a sublease or assignment if the proposed
sublessee or assignee conflicts with any provision (s) of Landlord's other
leases in the Office Park. As additional rent, Tenant shall reimburse Landlord
promptly for reasonable legal and other expenses incurred by Landlord in
connection with any request by Tenant for consent to assignment or subletting.
No assignment or subletting shall affect the continuing primary liability of
Tenant (which, following assignment, shall be joint and several with the
assignee).
17.2 Consent - If the Tenant requests Landlord's consent to a
-------
subletting of all or a part of the Premises, Landlord shall have the right to
suspend the Lease as to that portion of the Premises which Tenant proposes to
sublet for the term of the proposed sublease. Landlord shall exercise this
right, if at all, within thirty (30) days of Tenant's request for consent to the
subletting. If Landlord exercises this right, the Lease shall be suspended on
the effective date of the proposed subletting and for the duration of such
suspension:
(i) That portion suspended shall not be a part of the Premises,
(ii) The Fixed Rent and additional rent payable under the Lease shall be
reduced in the proportion that the rentable square feet in the
portion suspended bears to the rentable square feet in the Premises
prior to such suspension,
(iii) Landlord shall at its sole cost and expense do all that is necessary
to separate the remainder of the Premises from the portion suspended
by Landlord.
17.3 Landlord's Response - In the event Landlord does not respond to
-------------------
the written request for such consent or exercise its right of recapture within
thirty (30) days of the date of such request from Tenant, Landlord's consent is
hereby deemed given.
(46)
<PAGE>
17.4 Subsidiary Assignment - Notwithstanding anything to the contrary
---------------------
herein contained Tenant may assign or sublet all or any portion(s) of the
Premises at any time to a subsidiary of Tenant, to the entity with which or into
which Tenant may merge or be consolidated, to any entity with which Tenant is
affiliated, or to a successor to all or substantially all the assets of Tenant
or a division of Tenant without the need for Landlord's consent to such
assignment or subletting, so long as Tenant remains primarily liable, and
without any right on the part of Landlord to suspend this Lease as hereinabove
set forth and without any obligation of Tenant to share Rent Differential as set
forth in Section 17.5.
17.5 Sublease and Assignment Rent Differential - If Landlord consents to
-----------------------------------------
a sublease or assignment, and said sublease or assignment is for a greater rent
than the Fixed Rent or additional rent due from Tenant to Landlord under this
Lease, Tenant shall pay to Landlord on a monthly basis during the term of any
approved sublease or assignment as additional rent hereunder, in addition to the
fixed rent and other payments due under this Lease, an amount equal to 50% of
the difference between all fixed rent and additional rent from the time actually
received by Tenant under the sublease or assignment and the Fixed Rent and
additional rent and other payments due under this Lease, after Tenant has
recouped its out-of-pocket expenses with respect to such sublease or assignment
including without limitation, reasonable real estate brokerage commissions,
reasonable legal fees and the reasonable costs of refurbishment of the Premises
for such sublease or assignment (the "Rent Differential"). In case any Fixed
Rent or additional rent is prepaid to Tenant under the sublease or assignment,
only so much as exceeds the net present value of Tenant's obligations to pay
Fixed Rent and additional rent (reasonably estimated) for the balance of the
Term for the portion of the Premises subject to such sublease or assignment
shall be taken into account in computing the Rent Differential or the amounts
due any foreclosing
(47)
<PAGE>
mortgagee or other successor landlord under the next succeeding sentence. In the
event that a mortgagee or its successors or assigns becomes a mortgagee in
possession or a landlord under this Lease through foreclosure or deed in lieu of
foreclosure by reason of a default under the applicable mortgage and such
successor landlord approves a sublease or assignment which provides for a
greater rent than the Fixed Rent and additional Rent due hereunder, Tenant shall
pay to such successor landlord on a monthly basis during the term of any
approved sublease or assignment as additional rent hereunder, in addition to the
Fixed Rent and other payments due under this Lease, an amount equal to 100% of
the difference between all fixed rent and additional rent due under the sublease
or assignment and the Fixed Rent and other payments due under this Lease. In the
event the sublease is for less than the full Premises hereunder, the above rent
adjustment shall be pro rated on a square foot basis. Anything contained in the
foregoing provisions of this Section to the contrary notwithstanding, neither
Tenant nor any other person having interest in the possession, use, occupancy,
or utilization of the Premises shall enter into any lease, sublease, license,
concession, or other agreement for use, occupancy, or utilization of space in
the Premises which provides for rental or other payment for such use, occupancy,
or utilization based, in whole or in part, on the net income or profits derived
by any person from the Premises leased, used, occupied, or utilized (other than
an amount based on a fixed percentage or percentages of receipts or sales), and
any such purported lease, sublease, license, concession, or other agreement
shall be absolutely void and ineffective as a conveyance of any right or
interest in the possession, use, occupancy, or utilization of any part in the
Premises.
(48)
<PAGE>
ARTICLE XVIII
TENANT'S PROPERTY
-----------------
18.1 Tenant's Personal Property - Tenant's trade fixtures, equipment
--------------------------
and personal property (collectively called "Tenant's Property") however
installed or located on the Premises shall be and remain the property of the
Tenant and may be removed during or prior to the expiration of the Term. Tenant
shall repair any damage caused by such removal or installation, leaving Premises
tenantable. Tenant's Property shall be at the sole risk and hazard of Tenant,
and if the whole or any part thereof shall be destroyed or damaged by fire,
water or otherwise, or by the leakage or bursting of water pipes, steam pipes or
other pipes, by theft or from any other cause, unless caused by the negligence
of Landlord, its employees or agents, no part of said loss or damage is to be
charged to or be borne by Landlord.
18.2 Removal - Upon the expiration or termination of this Lease, the
-------
Tenant will remove Tenant's Property from the Premises; if within ten (10) days
after such expiration or termination, Tenant shall not have removed same it
shall be deemed abandoned by Tenant. Tenant shall pay to Landlord upon demand
the costs and expenses thereafter incurred by Landlord in removing and storing
Tenant's property and repairing any damage caused to the Premises or to the
Building by the removal of same.
18.3 No Lien - In no event (including a default under this Lease) shall
-------
Landlord have any lien or other security interest in any of Tenant's property
located in the Premises or elsewhere and Landlord hereby expressly waives and
releases any such lien or other security interest however created or arising.
(49)
<PAGE>
ARTICLE XIX
TENANT'S DEFAULT
----------------
19.1 Events of Default:
-----------------
(a) If the Tenant shall default in the payment of rent or other payments
required by this Lease and shall fail to cure said default within seven (7)
business days after receipt of written notice of said default from the Landlord;
or
(b) if the Tenant shall default in the performance or observance of any
other agreement or condition on its part to be performed or observed, and if the
Tenant shall fail to cure said default within thirty (30) days after receipt of
written notice of said default from the Landlord (or if said default shall
require longer than thirty (30) days to cure and the Tenant fails to commence
curing said default within thirty (30) days after receipt of written notice
thereof and to prosecute the curing of the same to completion with due diligence
); or
(c) if the Tenant shall file a voluntary petition in bankruptcy or shall
be adjudicated a
bankrupt or insolvent, or shall file any petition or answer seeking any
arrangement, composition, liquidation or dissolution under any present or future
Federal, State, or other statute, law or regulation relating to bankruptcy,
insolvency or other relief for debtors, or shall seek or consent to or acquiesce
in the appointment of any trustee, receiver or liquidator of the Tenant or of
all or any substantial part of its properties, or of the Premises, or shall make
any general assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due; or
(d) if a court shall enter an order, judgment or decree approving a
petition filed against the Tenant seeking any arrangement, composition,
liquidation, dissolution or similar relief under the present or future Federal,
State or other statute, law or regulation relating to bankruptcy,
(50)
<PAGE>
insolvency or other relief for debtors, and such order, judgment or decree shall
remain un-vacated or un-stayed for an aggregate of sixty (60) days (whether or
not consecutive), then, if any Event of Default has occurred, the Landlord at
any time thereafter may give written notice to the Tenant specifying the
occurrence giving rise to such default and stating that this Lease and the Term
hereby demised shall expire and terminate on the date specified in such notice
which shall be at least ten (10) days after the giving of such notice, and upon
the date specified in such notice, this Lease and the Term, estate and interest
hereby demised shall expire and terminate by limitation and all rights of the
Tenant under this Lease shall cease. In the event the Lease is terminated on
account of an Event of Default of Tenant under any of the provisions contained
in this Article or shall be otherwise terminated for breech of any obligations
of Tenant, Tenant shall pay as an additional and cumulative obligation after
such termination punctually to Landlord all of the sums which Tenant covenants
in this Lease to pay and the reasonable costs of performing its obligations
under this Lease in the same manner and to the same extent and at the same time
as if this Lease had not been terminated, including all reasonable and necessary
costs and expenses incurred by or on behalf of the Landlord, including
attorney's fees and expenses of employees, occasioned by any default by the
Tenant under this Lease.
19.2 Repossession - At any time after any such expiration or termination
------------
of this Lease, the Landlord, without further notice, may enter upon and reenter
the Premises to repossess itself of the Premises, by summary proceedings,
ejectment or otherwise, and may remove the Tenant and all other persons and any
and all property from the Premises as hereinabove provided.
19.3 Landlord's Default - If Landlord shall default in the performance
------------------
or observance of any agreement, obligation or condition in this Lease contained
on its part to be performed or observed and shall not cure such default within
30 days after giving of notice thereof from Tenant
(51)
<PAGE>
or within such shorter period as elsewhere herein provided (or shall not within
said period commence to cure and thereafter prosecute the curing of such defect
to completion with due diligence), Tenant may, at its option, after not less
than 20 days prior written notice to Landlord and Landlord's mortgagee(s) (of
whose address Tenant is aware of by notice from Landlord from time to time),
without waiving any claim for damages for breach of the agreement, at any time
thereafter cure such default for the account of Landlord and any amount paid or
contractual liability incurred by Tenant in so doing, shall be deemed paid or
incurred for the account of the Landlord and Landlord agrees to reimburse Tenant
therefor within 30 days of demand.
This Article does not supersede or conflict with the duties, rights and
remedies of the parties which are specifically addressed in other Articles of
this Lease.
ARTICLE XX
NOTICES
-------
20.1 Notices Generally - All notices, demands, requests and other
-----------------
instruments which may or are required to be given by either party to the other
under this Lease shall be given in writing. All notices, demands, requests and
other instruments from the Landlord to the Tenant shall be deemed to have been
given when mailed by United States Registered or Certified Mail, postage
prepaid, return receipt requested, addressed to the Tenant at Tenant's Address
with a copy to Joseph R. Torpy, Testa, Hurwitz & Thibeault, 125 High Street,
Boston, Massachusetts 02110, except that where any period of time commences
under this Lease with notice, such notice shall be deemed given, and such period
shall be deemed to commence, when postal records indicate delivery was first
attempted or rendered for delivery if refused.
20.2 Tenant Notices - All notices, demands, requests and other
--------------
instruments from the Tenant to the Landlord shall be deemed to have been
properly given upon receipt if sent by
(52)
<PAGE>
United States Registered or Certified Mail, postage prepaid, return receipt
requested, addressed to the Landlord at Landlord's Address with a copy to Paul
A. Hedstrom, Esquire, Hinckley, Allen & Snyder, One Financial Center, Suite
4600, Boston, Massachusetts 02111, except that where any period of time
commences under this Lease with notice, such notice shall be deemed given, and
such period shall be deemed to commence, when postal records indicate delivery
was first attempted or rendered for delivery if refused.
ARTICLE XXI
QUIET ENJOYMENT
---------------
Landlord covenants and agrees with Tenant that upon Tenant paying the rent
and additional rent and observing the terms, covenants and conditions on
Tenant's part to be observed and performed, Tenant may peaceably and quietly
enjoy the Premises demised hereby.
ARTICLE XXII
HOLDING OVER
------------
In the event that Tenant occupies any portion of the Premises beyond the
Term Expiration Date, such holding over shall constitute an agreement by Tenant
to pay 175% of the monthly installments of Fixed Rent and additional rent then
applicable for each month or portion thereof in which Tenant shall retain
possession of the premises or any part thereafter termination of this lease,
whether by lapse of time or otherwise due hereunder. In addition, Tenant agrees
to pay all damages (including direct damages, including without limitation, loss
of rent incurred by Landlord as a result of having a lease signed with another
tenant and not being able to deliver the Premises as a result of such holding
over, but excluding consequential damages) sustained by Landlord on account of
such holdover. The provisions of this subsection shall not operate as a waiver
by Landlord of any right of re-entry provided in this Lease.
(53)
<PAGE>
ARTICLE XXIII
MEMORANDUM OF LEASE
-------------------
Within a reasonable time following the execution of this Lease, Landlord
and the Tenant shall execute an instrument recordable in form containing those
provisions including but not limited to the Term, the commencement and
expiration date, and such other information as necessary or appropriate to
protect the interests of Tenant hereunder and to satisfy notice of lease statute
of the State where the Premises are located. The Tenant may record the same.
ARTICLE XXIV
SURRENDER OF PREMISES
---------------------
Upon the expiration of the Term or early termination thereof, Tenant shall
promptly peaceably yield up and surrender the Premises in a good and clean
condition, and in the same condition as Tenant is required to maintain the
Premises hereunder during the Term, damage by fire or other casualty and eminent
domain excepted.
ARTICLE XXV
ESTOPPEL CERTIFICATES
---------------------
Upon the request of either party, at any time and from time to time,
Landlord and Tenant agree to execute and deliver to the other within fifteen
(15) business days after receipt of such request, a written instrument, duly
executed:
(1) Certifying that this Lease has not been modified and is in full force
and effect or, if there has been a modification of this Lease, that
this Lease is in full force and effect as modified, stating such
modifications;
(2) Specifying the date to which the rent has been paid;
(54)
<PAGE>
(3) Stating whether or not to the best knowledge, information and belief
of the party executing such instrument, the other party hereto is in
default and, if such party is in default, stating the nature of such
default;
(4) Stating the commencement date of the Term; and
(5) Stating which options to extend the Term have been exercised, if any.
ARTICLE XXVI
ADDITIONAL PROVISIONS
---------------------
26.1 Broker - Landlord and Tenant warrant to each other that no
------
Broker(s) have been retained in connection with the negotiation and consummation
of this Lease. Each party agrees to defend, indemnify and save the other
harmless from and against any and all claims for a commission arising out of a
breach of the representation made in the first sentence of this Section 26. 1.
The within covenant shall survive the expiration or earlier termination of this
Lease.
26.2 Bind and Inure - The obligations of this Lease shall run with the
--------------
land, and this Lease shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns except that only the
Landlord named herein shall be liable for obligations accruing before the
beginning of the Term and thereafter each successive owner of the Premises shall
be liable only for obligations accruing during the period of its ownership, said
liability terminating as to future liability upon termination of such ownership
and passing to the successor in ownership.
26.3 Provisions Separable - It is agreed that if any provisions of this
--------------------
Lease shall be determined to be void by any court of competent jurisdiction in
the State where the Premises are located, then such determination shall not
affect any other provision of this Lease, all of which other provisions shall
remain in full force and effect; and it is the intention of the parties hereto
(55)
<PAGE>
that if any provision of this Lease is capable of two constructions, one of
which would render the provision void, and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
26.4 Entire Agreement - This instrument contains the entire and only
----------------
agreement between the parties as to the Premises, and no oral statements or
representations or prior written matter not contained in this instrument shall
have any force or effect. This Lease shall not be modified in any way except by
a writing subscribed by both parties.
26.5 Governing Law - This Lease shall be governed by and construed and
-------------
enforced in accordance with the laws of the Commonwealth of Massachusetts.
26.6 No Waiver - Failure of either party to complain of any act or
---------
omission on the part of the other party, no matter how long the same may
continue, shall not be deemed to be a waiver of any rights hereunder. No waiver
by either party at any time, express or implied, or any breach of any provisions
of this Lease shall be deemed a waiver of a breach of any other provision of
this Lease or a consent to any subsequent breach of the same or any other
provision. If any action of any party shall require the consent or approval of
the other party, the consent to or approval of such action on any one occasion
shall not be deemed a consent to or approval of said action on any subsequent
occasion or a consent to or approval of any other action on the same or any
subsequent occasion, and such consent or approval shall not be unreasonably
withheld or delayed.
26.7 Rights Separate - Any and all rights and remedies which either
---------------
party may have under this Lease or by operation of law, either at law or in
equity, upon any breach, shall be distinct, separate and cumulative and shall
not be deemed inconsistent with each other; no one of them whether exercised by
the other party or not, shall be deemed to be exclusive of any other, and any
two or more of all such rights and remedies may be exercised at the same time.
(56)
<PAGE>
26.8 Singular and Plural - Words and phrases used in the singular shall
-------------------
be deemed to include the plural and vice versa, and nouns and pronouns used in
any particular gender shall be deemed to include any other gender.
26.9 Headings - The various terms which are defined in Articles of this
--------
Lease or are defined in Exhibits annexed hereto shall have the meanings
specified in such Articles and such Exhibits for the purposes of this Lease and
all agreements supplemental thereto, unless the context clearly indicates the
contrary.
26.10 Parking - Tenant's occupancy of the Premises shall include the use
-------
of 217 parking spaces as shown on Exhibit A.
26.11 Non-Recourse - Tenant agrees to look solely to Landlord's then
------------
equity interest in the Premises and the proceeds thereof at the time owned for
recovery of any judgment from Landlord; it being agreed that neither Landlord
(original or successor), nor any partner (general or limited), associate,
participant, principal (disclosed or undisclosed), agent, employee, trustee or
other fiduciary, beneficiary, officer, or other person or entity in or of any
partnership, association, joint venture, corporation or other entity, trust, or
estate from time to time owning Landlord's interest in this Lease, shall ever be
personally liable for any such judgment or for the payment of any monetary
obligation to Tenant (it being agreed by Tenant that such exoneration from
personal liability is and shall be absolute and complete with no exception
whatsoever). With respect to any services to be furnished or obligations to be
performed by Landlord to Tenant, except with respect to the negligence of
Landlord, its employees or agents, Landlord shall never be liable for failure to
furnish or perform the same when prevented from doing so by strike, lockout,
breakdown, accident, order or regulation of or by any governmental authority, or
failure of supply, or inability by the exercise of reasonable diligence to
obtain supplies, parts or employees
(57)
<PAGE>
necessary to furnish such services, or because of war or other emergency, or for
any Act of God or other Force Majeure, as defined below, causes beyond
Landlord's reasonable control, or for any cause due to any act or omission of
Tenant, Tenant's invitees, customers, servants, agents, employees, licensees or
any person claiming by, through or under Tenant.
26.12 Force Majeure - As used in this Article and elsewhere in this
-------------
lease, "Force Majeure" shall mean a time extension equal to that of any delays
due to (i) Acts of God, (ii) changes in governmental regulations, (iii)
casualty, (iv) strike or other labor difficulties, (v) unusual weather
conditions, (vi) unusual scarcity of, or inability despite the exercise of
diligence, to obtain supplies, parts or employees to such services, or (vii)
other acts reasonably beyond Landlord's control, but in no event shall the term
include economic or financing difficulties.
26.13 Confidentiality - This Lease document is a confidential document
---------------
by and between Landlord and Tenant and shall not be circulated or delivered to
any persons other than the parties' respective mortgagees, their successors or
assigns, legal counsel or accountant, without the prior written consent of the
Landlord.
26.14 Security Deposit - Landlord acknowledges receipt from Tenant of
----------------
the Security Deposit to be held by Landlord, as security with interest, for and
during the Term, which deposit and interest shall be returned to Tenant, at the
termination of this Lease, provided there exists no breach of any undertaking of
Tenant. If all or any part of the Security Deposit is applied to an obligation
of Tenant hereunder, Tenant shall immediately, upon request by Landlord, restore
the Security Deposit to its original amount. Tenant shall not have the right to
call upon Landlord to apply all or any part of the Security Deposit to cure any
default or fulfill any obligation of Tenant, but such use shall be solely in the
discretion of Landlord. Upon any conveyance by Landlord of
(58)
<PAGE>
its interest under this Lease, the Security Deposit and interest may be
delivered by Landlord to Landlord's grantee or transferee. Upon any such
delivery, Tenant hereby releases Landlord herein named of any and all liability
with respect to the Security Deposit, its application and return, and Tenant
agrees to look solely to such grantee or transferee. It is further understood
that this provision shall also apply to subsequent grantees and transferees.
IN WITNESS WHEREOF, the parties hereto have duly executed this Lease as of
this day of , 1996.
----- ---------------
LANDLORD:
MICHELSONFARM-WESTFORD TECHNOLOGY PARK VI LIMITED
PARTNERSHIP BY THE GUTIERREZ COMPANY, GENERAL
PARTNER
By:
----------------------------------------
Its:
----------------------------------------
TENANT:
DAVOX CORPORATION
By: /s/ John J. Connolly
----------------------------------------
Its: /s/ Vice President and CFO
----------------------------------------
(59)
<PAGE>
EXHIBIT "B"
-----------
RULES AND REGULATIONS
---------------------
1. Tenant must, upon the termination of its tenancy, restore to Landlord all
keys of offices and toilet rooms, either furnished to or otherwise procured
by Tenant; and in the event of the loss of any keys so furnished, Tenant
shall pay to Landlord the cost thereof.
2. Canvassing, soliciting and peddling in the Building or on the Lot or in the
Office Park are prohibited, and Tenant shall cooperate to prevent the same.
3. Tenant shall comply with all security measures from time established by
Landlord for the Lot or Office Park, so long as the same do not breach or
violate the requirements of any governmental regulations to which Tenant is
subject.
4. Tenant shall comply with the Office Park Covenants attached hereto as
Exhibit "C" to which the Lot is subject.
(60)
<PAGE>
EXHIBIT "C"
-----------
MICHELSON FARM - WESTFORD TECHNOLOGY PARK
-----------------------------------------
OFFICE/RESEARCH AND DEVELOPMENT
-------------------------------
PARK COVENANTS
--------------
Landlord agrees with Tenant to enforce, or cause to be enforced, these Park
Covenants with all due diligence to preserve the quality and appearance of the
Office Park.
The Land is located in an approximately 85 acre office/research and
development park (hereinafter, together with any additions thereto, called
the "Park").
All lots of land comprising the Park (which lots are individually called
the "Parcel" and collectively the "Parcels") are subject to the following
restrictions which shall bind Michelson Farm-Westford Technology Park Trust
("Grantor") as owner of the Park and its successors in title.
A. All parcels shall have facilities for parking, loading and unloading
sufficient to serve any uses of the Parcels without using adjacent
streets for such purpose. On-street parking shall be prohibited. All
parking, trucking and vehicular maneuvering areas for a Parcel shall
be contained within such Parcel.
B. No exterior loading platforms shall be visible from any primary way or
proposed primary way serving the Park. Screening and planting may be
used for this purpose.
C. No open or outside storage shall be done on any Parcel.
D. Signs shall conform to the sign ordinances of the Town. Any variance
from such ordinance granted by the Town must also be approved by
Grantor in the manner provided below in Section I.
E. No condition or use of any Parcel win be permitted which is
objectionable by reason of noise, odor, vibration, smoke, radiation,
the hazardous nature of the use, or the violation of environmental
standards adopted by the Town, the Commonwealth, the Federal
Government or any Court.
F. All utilities serving a Parcel shall be placed underground, unless
prohibited by the utility company. Any exterior lighting on a Parcel
shall either be indirect or of
(61)
<PAGE>
such controlled focus and intensity as
not to disturb street traffic or the occupancy of any adjacent Parcel.
G. The exterior appearance of any buildings in the Park, including
landscaping thereon, shall be kept neat and orderly and free from
litter.
H. No building, exterior sign, fence, wall, exterior lighting or other
structure shall be erected or allowed to remain on any portion of the
Park or exterior structural alteration or addition made, except
pursuant to plans approved in writing by Grantor as to landscaping,
parking and architectural conformity with existing buildings in the
Park.
I. The Grantor may from time to time by written instrument in recordable
form grant variances from any one or more of these restrictions
(except Restriction H for which variances may not be granted) where
the Grantor reasonably determines that the variance can be granted
without substantial detriment to the intent and purpose of the
restrictions and without substantial detriment to the Land, and
portions of the Park theretofore built upon.
J. Written approval by the Grantor as to any buildings, signs,
structures, alterations, additions and landscaping approved by Grantor
in good faith shall be conclusive evidence of compliance with these
restrictions. The Grantor agrees to furnish to any grantee such
written instruments in recordable form as may reasonably be requested
by the grantee as evidence of such compliance.
K. The term "Grantor", as herein used, shall mean the Michelson Farm-
Westford Technology Park Trust and any successors in title to whom the
Grantor has expressly granted of record the rights to enforce these
restrictions.
(62)
<PAGE>
WESTFORD TECHNOLOGY PARK
------------------------
QUITCLAIM DEED
--------------
Arturo J. Gutierrez, John A. Cataldo, Class A Trustees, and John Pike and
Thomas E. Legget, Class B Trustees, of the Michelson Farm - Westford Technology
Park, u/d/t October 1, 1984, recorded with the Middlesex North Registry of Deeds
at Book 2863, Page 235 (hereinafter "Grantor"), for consideration paid and in
full consideration of One Hundred Fifty-Five Thousand Dollars ($155,000.00)
grants to Michelson Farm-Westford Technology Park VI Limited Partnership, a
Massachusetts limited partnership, under a Certificate of Limited Partnership
duly filed with the Secretary of State (hereainfter "Grantee"), with QUITCLAIM
COVENANTS, a certain parcel of land in Westford, Middlesex county,
Massachusetts, being shown as Lot 6 on a subdivision plan entitled "Westford
Technology Park, Westford, Massachusetts, index and Abutter Plan Owned By:
Michelson Farm - Westford Technology park Trust, Engineer: The Gutierrez
Company, One Wall Street, Burlington, MA., Scale 1" = 100', dated December 11,
1986" (the "Plan") recorded with said Deeds at Plan Book 158, Plan 112
(hereinafter the "premises"). Said Lot contains 6.53 acres of land, more or
less, according to the Plan. Together with the right and easement to use
Technology Park Drive as shown on said Plan, or as revised, in common with
Grantor, Grantor's successors and assigns and all other persons entitled thereto
for all purposes for which streets and ways may be used in the Town of Westford,
including the installation of utilities. Excluded from this conveyance is the
fee in Technology Park Drive and any other road or way shown on said Plan.
Said Premises are hereby conveyed subject to a certain Covenant between
Grantor and the Planning Board of the Town of Westford dated march 6, 1987 and
recorded with said Deeds as
(63)
<PAGE>
Instrument No. 14415 of March 17, 1987. Said Premises have been released from
the Covenant by Release of Covenant dated March 23, 1987 issued by said Planning
Board and duly recorded with said Deeds herewith.
Said Premises are conveyed subject to certain Orders of Conditions Numbers
334-207, 334-208, 334-209, and 334-210 issued by the Town of Westford
Conservation Commission and recorded with said Deeds at Book 3459, Page 212.
Said Premises are also conveyed subject to and with the benefit of easement
for the benefit of Lot 2 and Lot 4 as shown on said Plan, in common with
Grantor, its successors and assigns, such easement being shown on a certain plan
entitled "Driveway Easement Plan Lot Nos. 2, 4 and 6, Westford Technology Park,
Westford, Massachusetts, property of Michelson Farm - Westford Technology Park
Trust c/o The Gutierrez Company, Scale 1' = 40', June 12, 1987" recorded
herewith (the "Easement Plan") for the purpose of access to the Premises from
Technology Park Drive, and which shall consist of the perpetual right of
Grantee, its successors and assigns, in common with Grantor, its successors or
assigns, to use the area shown on the Easement Plan and designated 40' Driveway
Easement located on Lot 2 and Lot 6 of the Easement Plan, for the installation,
construction, excavation, trenching, backfilling, reconstruction, repair,
maintenance, operation, renewal, removal and use of roadway or driveway with
related slopes, embankments, median areas, fences, gates, pipes, ditches,
swales, channels, ducts, hydrants, headwalls, catch basins, gate valves, valve
boxes, conduits, wires, handholes, poles and all appurtenances thereto for
drainage, sewer, water, telephone, street lighting; electric and other utility
purposes, and to pass and repass over the roadway now or hereafter located
within said easement area with cars, trucks, construction equipment and vehicles
of all kinds and generally to use said easement area
(64)
<PAGE>
for all purposes for which streets and ways are now and may hereafter be used in
the Town of Westford.
Grantor does hereby convey the Premises with the benefit of an appurtenant
easement over Lot 4 as shown on said Plan, in common with the Grantor and its
successors or assigns, such easement being shown on a plan entitled "Easement
Plan, Lot No. 4, Westford Technology Park, Westford, Massachusetts, property of
Michelson Farm - Westford Technology Park Trust c/o The Gutierrez Company, Scale
1" = 40', June 12, 1987" and recorded herewith (the "Sewer Easement Plan"), for
the purpose of installing a sewer line, and such easement shall also consist of
the perpetual right to use the area shown on the Sewer Easement Plan and
designated 20' Sewer Easement, located on Lot 4 of said Plan, for the
installation, construction, excavation, trenching, backfilling, reconstruction,
repair, maintenance, operation, removal and use of one or more sewer lines, or
other utility purposes.
The Premises are also conveyed with the benefit of an appurtenant easement
for the benefit of Lot 6 for the construction of drainage structures and
culverts adjacent to and under Technology Park Drive, as shown on said Plan, for
the purpose of draining surface water through such drainage structures and
culverts and into detention areas on Lot 1 and Lot 2 as said Lots are shown on
said Plan, as required by those certain Orders of Condition referred to herein
or as otherwise required from time to time for proper use and operation of the
Premises and the buildings and improvements constructed thereon.
Grantor, its successors or assigns, shall not permit any act within an
easement area which is inconsistent with the rights hereby granted and no
building or structure will be erected or constructed within the easement areas
herein granted.
(65)
<PAGE>
All of the above easements herein granted, whether exclusive or
nonexclusive, are expressly granted with the obligation on the Grantee, its
successors and assigns, exercising or entitled hereunder to exercise said rights
and easements (i) to repair any damage arising from such exercise; (ii) if such
exercise requires excavation of any such easement area to provide the Grantor,
its successors or assigns, with at least thirty (30) days prior written notice
before beginning such excavation, provided that in case of an emergency such
prior written notice need not be given; (iii) to restore the surface of such
easement area to its original condition immediately prior to excavation of the
extent reasonably practicable, in such a manner as to avoid unreasonable
interruption in the use of said easement and the use of such burdened lot; (iv)
to comply with all applicable laws, statutes, regulations and ordinances now or
hereafter in effect; (v) to hold the owner of the burdened lot, its successors
and assigns, harmless against any liability resulting from any exercise of said
rights and easement; and (vi) to exercise said rights so as not to connect to,
overload, or otherwise interfere with or make use of any utility lines installed
in any easement area by any other lot owner with the prior written consent of
said owner or its successors or assigns.
The undersigned certify (i) that said Michelson Farm-Westford Technology
Park Trust Declaration of Trust has not been altered, amended or terminated and
is in full force and effect, (ii) that we have been duly directed by the sole
beneficiary of said Trust to execute and delivery this Deed and all other
documents executed in connection therewith, and (iii) that we are Class A and
Class B Trustees of the Trust and are authorized to fully bind the Trust.
(66)
<PAGE>
For reference to Grantor's title see: deed of Stock Family Limited
Partnership, a Massachusetts limited partnership, dated October 25, 1984, and
recorded with said Deeds at Book 2901, Page 324.
WITNESS our hands and seals this 18th day of June, 1987.
MICHELSON FARM - WESTFORD TECHNOLOGY PARK TRUST
--------------------------------------------------
Class A Trustee, for himself and for his Co-Class
A trustee but not individually
--------------------------------------------------
Class B Trustee, for himself and for his Co-Class
B trustee but not individually
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. June 18, 1987
Then personally appeared the above-named Arturo J. Gutierrez, Class A
Trustee as aforesaid and acknowledged the foregoing instrument to be his free
act and deed as Trustee as aforesaid, before me.
--------------------------------------------------
Notary Public
My Commission expires:
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. June 18, 1987
(67)
<PAGE>
Then personally appeared the above-named John Pike, Class B Trustee as
aforesaid and acknowledged the foregoing instrument to be his free act and deed
as Trustee as aforesaid, before me.
--------------------------------------------------
Notary Public
My Commission expires:
(68)
<PAGE>
Exhibit 10.14
-------------
DISTRIBUTOR AGREEMENT
---------------------
THIS AGREEMENT ("Agreement") is made as of this 2nd day of May, 1997,
between DAVOX CORPORATION, a Delaware corporation with its principal offices
located at 6 Technology Park Drive, Westford, Massachusetts, USA 01886
("Davox"), and Lucent Technologies Inc., a Delaware corporation, by and through
its Business Communications Systems Division, with its principal offices located
at 211 Mount Airy Road, Basking Ridge, NJ 07920 ("Lucent" or "Distributor").
1. APPOINTMENT
-----------
A. GENERAL. Subject to this Agreement, Davox hereby appoints Distributor,
-------
and Distributor hereby accepts its appointment, as Davox's non-exclusive and
independent distributor for the computer products described in Section l(b) (the
"Products"), within the territory described in Section l(c) (the "Territory"),
in accordance with the exclusivity provision in Section l(d), and based upon
Section 1(e)'s certifications, and pursuant to the grant of Rights under Section
1(f).
The use of the words sell, sale, purchase or similar meaning words in
reference to any software shall mean the licensing thereof. Additionally,
price, fee or similar meaning words with regard to software shall mean license
fees.
B. PRODUCTS. "Product(s)" shall mean, individually, or collectively, (i)
--------
the Digital Communication Server ("DCS") described in Exhibit 1, excluding the
SUN Microsystems Equipment described in Exhibit 1D) (the "Hardware"); (ii) the
machine-readable object code versions of the operating system software
incorporated into the Hardware and the other software in machine-readable object
code version and described as the Unison Call Management Software ("Base
System"), Desktop API Developer License, Seamless Call and Agent Load Equalizer
("SCALE"), and Additional Supervisor License in Exhibit I (collectively referred
to as the "Software"); and (iii) the documents specified in sections "A" and "B"
of Exhibit 6, as may be updated periodically by Davox (the "Documentation").
Upon thirty (30) days notice to Distributor, Davox may add new Products to or
delete existing Products from Exhibit 1, subject to any binding commitments that
Davox has made to Distributor under this Agreement, or in another writing signed
by both parties that references this Agreement.
SERVICES. "Services" shall be defined as maintenance services under
--------
Section 3(g) ("Maintenance Services"), training services defined under Section
4(c) ("Training Services"), implementation services defined under Section 4(c)
("Implementation Services"), and warranty services under Section 7. Services
shall be performed by Davox and each Section referenced above will define the
specifics of the respective Service.
C. TERRITORY. The term "Territory" hereunder shall initially mean the
---------
United States and Canada. Unless otherwise specified, all pricing hereunder is
applicable only for the United States and Canada. Both parties acknowledge and
mutually agree that this Agreement is intended to be worldwide in scope and that
they will negotiate in good faith the terms and conditions,
<PAGE>
including, but not limited to applicable licenses and exclusivity provisions, if
any, for countries other than Canada and the United States, subject to legal
restriction and those commitments already in existence between Davox and other
Distributors.
D. EXCLUSIVITY. Subject to this Section, during the Term (or any mutually
-----------
agreed upon extension thereof) of this Agreement, and provided that Section l(d)
has not been terminated by Davox, both parties mutually agree that neither party
will enter into a distribution or reseller contract/arrangement with any direct
competitors of the other party relating to the Products or products with the
same or similar features or functionality. Unless otherwise mutually agreed
upon at a later date, the following entities shall be deemed direct competitors
("Competitors") of each party:
<TABLE>
<CAPTION>
Davox: Lucent:
--------------------------------------------------------------------------
<S> <C>
Mosaix Industries (formerly DSI) Nortel
Melita International Rockwell International
Versatility, Inc. Aspect Telecommunications, Inc.
Syntellect, Inc.
</TABLE>
This Section 1 shall apply only to Distributor's Business Communications
Systems Division, and notwithstanding the foregoing, this Section shall not
apply to any existing distributor/reseller arrangements, agreements or
relationships of either Davox or Distributor's Business Communications
Systems Division, and both parties agree to provide a detailed listing, at
the commencement of this Agreement, specifying all Competitors that are, at
that time, under the terms and conditions of a distributor/reseller
contract with either party. Nothing herein shall require either party to
terminate said relationship(s) as provided in said listing. Additionally,
any information on the foregoing listing shall be deemed confidential
information under the provisions of Section 10 and shall be maintained as
provided under the provisions of Section 10.
Nothing contained in this Section 1(d) shall be construed to restrict an
independent distributor of either Davox or Distributor from being a distributor
of a named Competitor's products, provided such arrangement is not used by Davox
or Distributor as a vehicle by which to circumvent the intent of this Section's
terms and conditions. Furthermore, notwithstanding anything contained in this
Section l(d) and in Section 3(l) to the contrary, both parties agree that each
party shall have the right to enter into prime-sub relationships with any third
parties, including but not limited to Competitors, or to take any other similar
actions in order to meet individual customer needs or requirements, but neither
party shall use such prime-sub relationships or actions as a means to enter into
a relationship that is, in essence, a distributor/reseller arrangement with the
other party's Competitors.
E. DISTRIBUTOR CERTIFICATIONS. Distributor hereby certifies and agrees
--------------------------
that, in consideration of the benefits of this Agreement, including the prices
granted to Distributor with respect to the Products that it may procure from
Davox:
-2-
<PAGE>
Distributor will market the Product(s) for its own account in the normal
course of its business solely to end-users or Distributor's distributors
("Sub-Distributor(s)). Notwithstanding the foregoing, in the event a Sub-
Distributor will market and distribute the Products, Distributor and Sub-
Distributor will both agree that prior to any marketing of the Products or
sale/licensing of the Products by or through said Sub-Distributor, Davox
must provide its written consent and approval for such appointment of said
Sub-Distributor. Additionally, any Sub-Distributor must agree to comply
with all of the terms and conditions hereunder, with the exception of
Sections l(d) and 3(l). In the event that any of the foregoing
undertakings are not complied with at any time during the term of this
Agreement, Davox shall have the right to terminate this Agreement as to any
or all further shipments to end users and as to any or all further exercise
by Distributor of the rights granted herein with respect to the Products.
F. GRANT OF RIGHTS. Subject to the terms and conditions of this
---------------
Agreement, Distributor is hereby granted a non-exclusive, subject to Section
l(d), nontransferable right and license to take the following actions:
1. Market, distribute, sell, lease, and/or license the Product(s) to end-
users in accordance with one of the programs listed in Section 2
"Distribution Programs", and in accordance with the following:
a. Unless otherwise mutually agreed upon in writing, Distributor
shall have the right and authority to distribute, in accordance
with this Agreement, the Products to any site or location of a
Davox customer, whether or not there is Distributor Equipment
attached directly to the Products, provided:
i. Such distribution will be under the Prime-Sub Program and
shall at all times be handled in accordance with the terms and
provisions of a Prime-Sub transaction, unless otherwise agreed in
writing between the parties hereto;
ii. Nothing contained above shall provide the right or authority
for Distributor to provide or distribute any add on or upgrade
Product(s), or Services thereto, to an existing Davox customer
that has Davox products installed at that site. Notwithstanding
the foregoing, in the event a customer demands in writing that
Distributor distribute the Products to said customer, Davox
hereby consents to such distribution in accordance with this
Agreement;
iii. At all times, Distributor cannot provide or distribute any
Product(s), or Services thereto, to those key accounts as
identified in Exhibit 1, which shall be updated on a quarterly
basis. Beyond the initial listing of key accounts, additions to
the key account list shall be made on a quarterly basis, and key
accounts will be those customers as so designated in Davox's
sales channel as "Key Accounts", provided said Key Account has
Davox equipment or software installed at the time of the Key
Account's addition to the list, but customers listed on the
updated listing
-3-
<PAGE>
that currently have installed Lucent PBX/ACD equipment, shall not
be considered a Key Account, unless both parties mutually agree
in writing. Notwithstanding the foregoing, in the event a Key
Account demands in writing that Distributor distribute the
Products to said Key Account, Davox hereby consents to such
distribution in accordance with this Agreement.
2. Refer potential customers to Davox in accordance with Section 2B's
provisions.
3. Use and display the Demonstration Product (as defined in Section 3c)
for the sole purpose of promoting, marketing, and demonstrating the
Product(s) in connection with the potential sale/licensing of
Products. Distributor has the right to purchase/license a maximum of
fifteen (15) Demonstration Product, all at the prices and costs per
Demonstration Product as described in Exhibit 1. Subject to (i)
Distributor paying to Davox the cost established in Exhibit 1, and
(ii) availability of Demonstration Product and Davox's ability to
provide Demonstration Product, Distributor may elect to increase the
number of Demonstration Product purchased/licensed, but the number of
Demonstration Product shall not exceed 25 Demonstration Product in
total.
4. Within ninety (90) days after the execution of this Agreement, Davox
will place and maintain in escrow with an independent third party
escrow agent (the "Escrow Agent") acceptable to Distributor under the
terms of an agreement with the Escrow Agent that is acceptable to both
Davox and Distributor, a fully documented, current version of the
source code to Davox's proprietary Software and the object code form
of Sybase, which is made a part of the Products) provided hereunder
(the "Escrowed Materials"). Notwithstanding the foregoing, Davox will
provide updated Escrowed Materials to the Escrow Agent within thirty
(30) days from Davox's general release of the machine-readable object
code version of the Product(s) to the public. In the event that Davox
goes out of business or ceases to do business in the normal course as
a going concern, or Davox is unwilling or unable to provide Services
hereunder, or Davox is in material breach of the provisions of Exhibit
4A or Exhibit 4C, or Davox fails materially to meet the Davox approved
warranty obligations to the end user, and said material breach is not
cured within fifteen (15) days of Distributor's notification to Davox
of such breach, Distributor shall be entitled to gain access to the
Escrowed Materials for the purposes of providing Services to its end
user customers and subject to terms set forth herein and in the escrow
agreement, attached hereto as Exhibit 5. Notwithstanding the
foregoing, Distributor shall have the right to make modifications to
the Escrowed Materials to effectuate said maintenance services,
provided that Davox shall retain all intellectual property rights in
and to the Escrowed Materials and any modifications or derivatives
thereto.
-4-
<PAGE>
In the event that Distributor rightfully gains access to the Escrowed
Materials under the terms of this Section, Davox grants to Distributor
a non-exclusive, non-transferable license to use the Escrowed
Materials solely in accordance with the terms and conditions herein
and under the escrow agreement. In the event this Agreement is no
longer in existence, Distributor shall have a limited use right solely
to maintain the Products, provided the non-disclosure and license
terms herein are complied with. Distributor acknowledges that the
Escrowed Materials contain confidential information. Distributor
agrees to take such steps as may be necessary to prevent the Escrowed
Materials from being used by or disclosed to any person or entity
other than its employees or contractors in the course of their
employment for purposes not inconsistent with the terms of this
Section. Anything herein to the contrary notwithstanding, all right,
title and interest in and to the Escrowed Materials shall remain
vested in Davox.
Davox's obligations and Distributor's rights under this Section
l(f)(4) shall terminate upon the earlier to occur of (i) Distributor's
breach which directly leads to termination or cancellation of this
Agreement, or (ii) default by Distributor of its obligations under
this Agreement, which such default continues for thirty (30) days
after written notice thereof from Davox to Distributor. Upon
termination of Davox's obligations under this Section, Distributor
shall immediately discontinue use of all Escrowed Materials and return
Escrowed Materials to Davox.
Davox agrees that the release terms herein shall form a part of the
independent escrow agent's release terms, and Davox agrees that it
will execute the necessary paperwork to effectuate this result.
Distributor shall pay all direct, incremental fees and expenses
related to said escrow account.
G. CANADA. The parties acknowledge that Distributor may distribute
------
Products in Canada through its subsidiary Lucent Technologies Canada
Inc. For purposes of this Agreement, Distributor shall encompass
Lucent Technologies Canada Inc. in every instance where the Agreement
applies to Distributor activities, rights, duties, obligations and
liabilities in or relating to transactions in Canada.
2. DISTRIBUTION PROGRAMS:
---------------------
A. Prime-Sub Contractor (Prime-Sub)
-------------------------------------
Under this Prime/Sub Program, Distributor will have primary
responsibility for selling and closing the customer account and will
contract the Product(s), Implementation Services, and Training Services on
Distributor agreements (both purchase/license). Notwithstanding the
foregoing, Distributor and Davox may mutually agree in writing that
Implementation Services and Training Services should be contracted directly
from the Customer to Davox. At all times under this Program, Maintenance
-5-
<PAGE>
Services shall be contracted directly between Davox and the end user
customer under Davox's standard Continuum Support Services Agreement terms
and conditions (See Exhibit 4A). Distributor may contract for Maintenance
Services with the end user customer, but provision of Maintenance Services
must be subcontracted directly with Davox. The governing terms and
conditions for Davox's provision of Maintenance Services to the end user
customer shall be Davox's standard Continuum Support Services Agreement,
unless otherwise agreed in writing by Davox in its sole discretion. Davox
will assist the Distributor sales organization with the close of the
transaction and, all the Implementation, and Training Services will be sub-
contracted to Davox under a Distributor Purchase Order(s) or the customer
specific Prime-Sub agreements, which shall be negotiated between the
parties in good faith ("Prime-Sub Agreement"). Distributor shall have the
right to approve of or disapprove Davox's use of any subcontractors other
than Grumman System Support Corp., but such approval shall not be
unreasonably withheld. The pricing for the Products that Distributor shall
pay to Davox is as defined in Exhibit 1 and the prices and fees for
Services shall be as defined in Exhibits 2, 4, and 9.
B. Referral Program
--------------------
This program will support those instances in which Distributor in its
sole discretion does not sell, or wishes not to sell directly to the end
user. Davox will pay a finders fee of 5% of the total net sales price of
the Davox proprietary Product(s), excluding any discounts and costs for
service, implementation, training and taxes, shipment, freight, and
insurance to Distributor. Under this Referral Program, the total
transaction will be sold and supported by Davox and will be credited
towards the Minimum Revenue Performance Level as outlined in Section 3(i).
The following procedure shall be followed for this Program:
i) To qualify, the lead must be a minimum configuration of 20 seats
and be qualified to close within 180 days.
ii) Distributor must identify the opportunity through the completion
of a Lead Registration Form to the Manager, Business Partners at
Davox. The Lead Generation Form's appearance and content will be
mutually agreed upon between the parties.
iii) Davox shall review the lead and upon identifying the lead as a
"new" opportunity, will accept the lead and return the signed form to
Distributor. A lead is not considered "new", when the prospect/lead
is being worked directly/indirectly by Davox's sales force or is
currently a Davox customer. Davox must notify Distributor within five
(5) days of receipt of a Lead Registration Form as to acceptance or
non-acceptance of said Lead.
iv) This Lead Registration Form, if accepted and executed by Davox,
will qualify Distributor for the 5% Finders Fee (as described above),
which will be paid, net thirty (30) days from the Davox's shipment
date to the end user customer.
-6-
<PAGE>
v) The Finders Fee will be paid only once per customer on the initial
sale/licensing to a customer only.
3. DISTRIBUTOR'S OBLIGATIONS
-------------------------
A. REASONABLE EFFORTS. Distributor will use such efforts as are
------------------
commercially reasonable to (i) promote, solicit and obtain orders for the
Products for Distributor's account, and (ii) develop the good will and
reputation of Davox. Distributor represents that it possesses the experience,
skills and resources required to carry out these marketing activities.
B. FACILITIES AND STAFF. Davox recommends that Distributor possess and
--------------------
maintain facilities and staff that will allow it to effectively market the
Products throughout the Territory. It is required that Distributor establish
and implement appropriate training programs for its staff
C. DEMONSTRATION PRODUCT. Distributor will order from Davox the Products
---------------------
specified in Exhibit 1, and defined as demonstration product (the "Demonstration
Product") in accordance with the terms contemplated in this Agreement.
Distributor will not sublicense, assign, allow third party use of, or act as a
service bureau, or otherwise transfer the Demonstration Product to any person
without Davox's prior written approval.
At all times, following the initial training as described in Section 4(d),
it shall be Distributor's responsibility to install and maintain all
Demonstration System(s) and updates thereto, itself.
D. PROMOTION. Distributor will, at its expense, actively promote and
---------
advertise the Products and will take some or all of the following actions or
take such other activities which will, in Distributor's good faith belief,
result in comparable market impact: (i) placing the Products in Distributor's
catalogs; (ii) featuring the Products in any applicable trade show that it
attends and (iii) contacting existing and potential customers on a regular basis
to solicit orders for the Products, consistent with good business practice.
E. MARKETING MATERIALS/PRODUCT DOCUMENTATION. Distributor may use the
-----------------------------------------
Marketing Materials and Product Documentation, described in Exhibit 6, which
shall describe the Products in the English language. Distributor may reproduce,
but not modify, only the Collateral Materials as described in Exhibit 6 for
distribution within the Territory. Distributor will affix Davox's copyright and
trademark notices to all such reproductions, and shall not deface or remove such
notices. Distributor will bear all reproduction costs, unless otherwise agreed.
In the event Distributor desires to modify, in any way, or affix its corporate
name and logo (alongside Davox's) to said Collateral Material, Distributor must
provide a sample to Davox and receive Davox's prior written consent, which shall
be in Davox's sole discretion prior to any use.
F. SOFTWARE. Distributor will promote, solicit and accept orders for the
--------
Software subject to the terms and conditions contained herein. In accordance
with Davox's commitments to its third party licensors, Davox may modify the
procedures and terms for licensing herein upon
-7-
<PAGE>
thirty (30) days advance written notice to Distributor, in whole or in part,
subject to any binding commitment that Davox has made to Distributor. Until
further notice, Distributor will utilize the agreements and procedures set forth
below for the respective items of Software. In no event will Distributor license
or deliver to any customer or third person any source code for the Software, in
whole or in part.
(i) Distributor will promote, solicit and accept orders for the DCS
operating system software incorporated into each item of Davox
Hardware subject to the terms and conditions of the "shrink-wrap"
license contained in the respective Hardware package. Distributor
will notify each purchaser of an item of Hardware that the respective
package contains a "shrink-wrap" license.
(ii) Distributor will promote, solicit and accept orders for the Software
identified in Exhibit 1 as the Base System, Desktop API Developer
License, SCALE, software included in the DCS, and Additional
Supervisor Licenses, (hereinafter referred to as: "Davox Licensed
Software") subject to the terms contained in the software license
agreement attached hereto as Exhibit 3 (the "Software License").
Davox may modify or replace the Software License, at any time, in
whole or in part, with thirty (30) day prior written notice to
Distributor and consent to said changes from Distributor, which
consent shall not be unreasonably withheld. Distributor may utilize
its own license agreement to cover use of Product(s) provided its
terms and conditions are substantially similar to those in the
Software License and Davox provides its written consent to such
license prior to Distributor's use, which consent will be contingent
upon Davox receiving consent from its third party licensors ("Approved
License"). Distributor agrees that every time Software is licensed
pursuant to this Agreement (whether by original license, expansion or
upgrade), Distributor shall obtain written agreement from its end user
that the Software License or the Approved License terms and conditions
shall govern the terms of the licensing to said end user. In the
event Distributor fails to secure such written agreement from its end
users and/or Davox approved sub-distributors, Distributor agrees to
indemnify Davox to the full extent for any damages that Davox incurs
solely due to Distributor's failure to obtain said agreement. (BOTH
PARTIES SPECIFICALLY AGREE THAT THIS INDEMNITY SHALL NOT BE SUBJECT TO
OR LIMITED BY SECTION 9'S LIMITATION OF LIABILITY).
G. SERVICES. (i) Maintenance services shall be furnished to end user
---------
customers that purchase/license Products under the terms of this Agreement,
directly from Davox and Davox's hardware support subcontractor, Grumman System
Support Corp. in accordance with the terms, conditions and pricing of Davox's
standard Continuum Support Services Program, or under the terms, conditions and
pricing negotiated between Distributor or Davox and the end user customer,
provided Davox has provided its written consent. Exhibit 4A shall define the
Maintenance Services to be provided to an end user customer, Exhibit 4B shall
define the spare parts pricing for Davox hardware components, Exhibit 4C shall
define the escalation procedure utilized by Davox, and Exhibit 4D shall define
the prices and fees that Davox shall receive for
-8-
<PAGE>
such Maintenance Services. Davox warrants that all Services provided hereunder
will be rendered in a professional and workmanlike manner consistent with
industry practice. Distributor is not authorized, nor does it have the right to
perform any Maintenance Services on Product. (ii) Unless otherwise agreed upon
in writing, provision of Training and Implementation Services shall be
subcontracted from Distributor to Davox, in accordance with the Implementation
Plan attached hereto as Exhibit 9A and the pricing thereto shall be as defined
in Exhibit 9B.
H. PRICES. Distributor will independently establish the prices that it
------
charges to customers within the Territory for the Products and related
Implementation and Training Services, but shall at all times pay to Davox the
fees and prices contained in this Agreement. Distributor will be solely
responsible for obtaining payment of its prices from customers. Delays or
failures in obtaining such payments will not affect Distributor's obligation to
make payments to Davox pursuant to Section 6.
I. MINIMUM REVENUE PERFORMANCE LEVEL. In the event the following Minimum
---------------------------------
Revenue Performance Levels are not attained by Distributor, Davox may terminate
the exclusivity provisions contained under Section 1(d):
<TABLE>
<C> <C> <S>
A. 1997: US $[CONFIDENTIAL TREATMENT REQUESTED]/*/
B. 1998: US $[CONFIDENTIAL TREATMENT REQUESTED]/*/
C. 1999: US $[CONFIDENTIAL TREATMENT REQUESTED]/*/
</TABLE>
J. RECORDS AND REPORTS. Distributor will maintain accurate records of its
-------------------
marketing activities under this Agreement, including (i) a current list of
customers licensed to use the Products and (ii) copies of all Software Licenses
or Approved Licenses executed with customers. Distributor will provide Davox
with a rolling 3-month order forecast commencing on the first day of the next
month including details of prospective orders by Product model, quantity, net
forecasted fees to Davox, intended order submittal dates and desired delivery
dates. Distributor will also provide such other reports that Davox may
periodically request, and agreed upon between the parties.
K. ENFORCEMENT. Distributor will effectively enforce against all of its
-----------
end user customers that obtained the Products from Distributor the Software
License that affects proprietary or confidentiality rights of Davox or its
licensors in the Products. If Distributor learns that any customer has breached
any such provision, Distributor will immediately notify Davox and take, at
Distributor's expense, all steps that may be available to enforce the Software
License, including availing itself of actions for seizure or injunctive relief.
If Distributor fails to take these steps in a timely and adequate manner, Davox
or its licensors may take them in its own or Distributor's name and at
Distributor's expense.
L. NON-COMPETITION. During the Term of this Agreement, and subject to
---------------
Section l(d)'s exclusivity provision being in effect pursuant to Section 3(i),
Distributor and its directors, officers, managers and employees, while employed
by or through Distributor, will not, directly or indirectly through a
Competitor, distribute products that, in Davox's commercially reasonable
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-9-
<PAGE>
judgment, compete with or perform functions similar to the Products that have
been disclosed to Distributor at the time of the execution of this Agreement.
Thereafter, as products are added to the list of Products, both parties will
mutually agree in writing as to whether or not said additional products will be
subject to the terms of this Section 3(l). Davox agrees that, during the term
of this Agreement, it will not distribute an Automatic Call Distributor ("ACD").
4. DAVOX'S OBLIGATIONS
-------------------
A. MARKETING MATERIALS. Davox will provide Distributor with access and
-------------------
the limited right to copy only the Collateral Material as described in paragraph
C of Exhibit 6 for the sole purpose of exercising the rights granted under the
terms of this Agreement.
B. PRODUCT DOCUMENTATION. Davox will provide to the end user a copy of
---------------------
the Product Documentation for each Product. Davox will provide updates thereto
in accordance with its procedure for provision of such updates to all customers.
C. TRAINING/IMPLEMENTATION. Training Services shall be described in
-----------------------
Exhibit 2 and Implementation Services shall be defined and described in Exhibit
9, and both shall be performed by Davox under subcontract from Distributor,
unless otherwise agreed in writing.
D. DEMONSTRATION EQUIPMENT. Subject to this Agreement, Davox grants
-----------------------
Distributor a non-exclusive and non-transferable license to use the
Demonstration Product within the Territory exclusively to conduct customer
demonstrations. Davox shall conduct training classes and provide documentation
to Distributor's employees in order to allow Distributor to install and maintain
the Demonstration Systems. Following said training, it will be the
responsibility for Distributor to install and maintain all Demonstration
Systems. Any Services performed, other than the initial training, shall be on a
time and materials basis. Davox will provide updates to the Demonstration
Product within thirty (30) days from the date that Davox provides said updates
to its own sales force, provided Distributor pays any out of pocket cost that
Davox may reasonably incur relating to installation, maintenance, or shipment.
E. PRODUCT INFORMATIONAL MEETINGS. Subject to Section 10's
------------------------------
confidentiality provisions, Davox will provide to Distributor a summary of its
planned future product releases, no less than two times per year. At that time,
both parties will mutually agree whether Distributor will have the right to
distribute such new products and any terms related thereto. Nothing contained
in any report provided to Distributor shall be construed as a commitment to
provide any products in the time frames specified, nor is Davox committing to
bringing any product listed on such report to market. ANY REPORT IS SOLELY
PROVIDED TO DISTRIBUTOR FOR INFORMATIONAL PURPOSES AND IS NOT MEANT AS A
COMMITMENT OF ANY KIND.
5. ORDERS AND DELIVERY
-------------------
A. PRIME-SUB. Distributor will place orders for the Products under the
---------
Prime - Sub Program directly with Davox in the following manner:
-10-
<PAGE>
(i) Distributor must submit to Davox the Software License or the
Approved License, executed by both Distributor and its end user, along
with a Purchase Order or Prime - Sub Agreement referencing this
Agreement as "LUC-1997", specifying the Products and Services, the
specific Product configuration, customer name, personnel contact
names, and location, anticipated delivery dates, and any and all other
information Davox may reasonably request to effectuate a smooth
implementation of said end user;
(ii) Each order should, but does not necessarily have to, include an
executed standard Davox Continuum Support Services Agreement signed by
the end user customer, and at Davox's standard rates and fees for
Maintenance Services. Distributor will use commercially reasonable
efforts to obtain such agreement. Both parties mutually understand
and agree that in the event any customer has not executed a standard,
or negotiated, Continuum Support Services Agreement with Davox, prior
to the conclusion of said end user's warranty period, Services shall
be provided to the end user customer thereafter on a time and
materials basis. Davox agrees that it will pay to Distributor a 2%
commission on any standard Continuum Support Services Agreement
executed by an end user customer that Davox receives with or prior to
the conclusion of the ninety (90) day warranty period referenced in
Section 7, and for which Davox personnel had no active sales/marketing
involvement. Commissions in the preceding sub-clause (i) shall be
based upon the initial Continuum Support Services fee paid by the end
user to Davox. Said fee shall be paid to Lucent net thirty (30) days
from receipt of the standard Continuum Support Services Agreement;
(iii) Each order must include the minimum statement of work and
software specification information as more particularly described in
Exhibit 9B.
B. INTENTIONALLY OMITTED
C. EXPANSION ORDERS. In addition to the other provisions in this Section
----------------
5, expansion orders of Product under this Agreement for end users shall be
handled in the following manner:
Expansion Orders are those orders that flow from a Distributor initial
customer purchase/license of product (for example, upgrades, add on
orders, etc.). Distributor must receive a binding purchase order
form, or its equivalent ("PO") from the end user customer specifically
referencing the Software License or Approved License between itself
and Distributor ("PO Reference"). In addition to the language
required to effectuate the terms of this Agreement, said PO Reference
must provide that the Products provided under the PO shall be governed
by said Software License or Approved License. Additionally, all
Expansion Orders for Products should, but not necessarily have to,
include a separate PO with regard to Maintenance Services for the
particular Product. Davox will bill the end user customer for the
additional services required. In the event Distributor (or any Davox
approved sub-distributor) does not adhere to the terms herein and
Davox
-11-
<PAGE>
incurs any damage due to such failure to adhere to the terms herein,
Distributor shall indemnify Davox for any and all losses incurred by
Davox due to such failure. (BOTH PARTIES SPECIFICALLY AGREE THAT TIES
INDEMNITY SHALL NOT BE SUBJECT TO OR LIMITED BY SECTION 9'S LIMITATION
OF LIABILITY.)
D. ACCEPTANCE. Davox may accept or reject any order under the Prime - Sub
----------
Program and any lead referral under the Referral Program in its sole discretion,
subject to any binding commitment that Davox has made to Distributor. Davox may,
in its sole discretion, allocate available inventory among its customers in any
manner that Davox deems fair and reasonable. No order under the Prime-Sub or
Referral Programs will be deemed accepted unless Davox confirms its acceptance
in writing. Davox will use its reasonable efforts to respond to each order
within 5 days after its receipt from Distributor. Any order that Davox may
accept will be subject to the terms and conditions of this Agreement.
E. SHIPMENT. Davox will establish a shipment schedule for each order
--------
accepted from Distributor. Notwithstanding the foregoing, and unless otherwise
agreed by Davox, Davox will endeavor to install Products within ninety (90) days
from Davox's receipt and acceptance of the Order. Davox will ship the Products
from its distribution center in accordance with this schedule, subject to delays
beyond Davox's reasonable control.
F. RESCHEDULING. Under the Prime - Sub Program, Distributor may
------------
reschedule a shipment date for the Products by notifying Davox of the proposed
new shipment date, but any such proposed new date cannot extend the original
shipment date by more than thirty (30) days. If Davox receives a rescheduling
notice at least thirty (30) days before the original shipment date, the
rescheduling will not be subject to additional charges. If Davox receives the
rescheduling notice thirty (30) days or less before the original shipment date,
then Distributor will pay to Davox an amount equal to 5% of the price of the
Products included in the rescheduled order. A shipment date may not be
rescheduled more than once.
G. DELIVERY. Any Products that Davox ships to Distributor and has not
--------
indicated that said Product would be delivered free of charge, shall be FOB
Davox's facility in Westford, Massachusetts, freight pre-paid and add, with
freight/shipment charges payable by Distributor to Davox. All shipments to
Distributor's end users shall be FOB Davox's facility in Westford,
Massachusetts, freight pre-paid and add, with freight/shipment charges payable
by Distributor to Davox.
H. TITLE. Title to any Davox provided Hardware will pass to the
-----
Distributor or Distributor's end user at the time it leaves Davox's distribution
center. Notwithstanding the foregoing, Distributor shall provide, upon request
of Davox, a "purchase money security interest" in said Products to secure
payment. Under these circumstances, the Distributor will, at the request of
Davox, execute and register the instruments required to perfect said security
interest. Distributor acknowledges that title to the Software will not, under
any circumstances, pass to Distributor or its end user customers.
-12-
<PAGE>
I. INSPECTION. Distributor, or its end user customer will inspect the
----------
Products upon arrival at the point of Davox delivery and shall immediately
notify Davox of any breakage, tampering, shortage or other discrepancy between
the Products and shipping documents. Distributor, or its end user customer will
retain any broken or tampered Products in their original packaging for
inspection by Davox or the insurer. Any insurable claim not reported to Davox
within 15 days after arrival may be denied.
J. COSTS. Unless otherwise agreed-upon in writing between Davox and
-----
Distributor, Distributor will pay or reimburse Davox for all insurance,
brokerage, handling, transportation, demurrage, customs duties or fees, and
other delivery costs that Davox may incur in delivering the Products to
Distributor or Distributor's end users from Davox's distribution center. Davox
will separately identify all reimbursable costs in its order confirmation or
invoice issued to Distributor.
6. PRICES AND PAYMENT
------------------
A. PRICES AND FEES. For each Product or Service ordered,
---------------
delivered/provided, sold or licensed to Distributor or Distributor's end user,
Distributor will pay to Davox the prices, fees and costs ("Fees") described and
defined in this Agreement and its Exhibits. All prices will be stated in US
Dollars. Distributor will make payment of the fees and reimbursable freight
pre-paid and add delivery costs in accordance with the following:
(i) Under the Prime - Sub Program, full payment of the prices for the
Product(s), Implementation Services, and training Services shall be
due and owing net thirty (30) days from the date of Davox's shipment
of the Product(s). Payment for Maintenance Services shall be paid
directly from the end user to Davox under the terms and conditions of
the Continuum Support Services Agreement between Davox and the end
user. Except as provided above, all payments hereunder will be
reflected by an invoice from Davox and payment shall not exceed thirty
(30) days from said invoice date. Payments in excess of thirty (30)
days from it's due date or the invoice date, shall accrue interest at
the rate of 1 1/2% per month or the maximum amount allowed by law,
whichever is less, until paid in full.
(ii) In the event Distributor fails to furnish payment on the due
date, Davox will provide Distributor with an additional thirty (30)
days, from the date of Davox's notice of delinquent payment.
In the event an end user customer of Distributor's returns Product to
Distributor for any reason, Davox consents to Distributor reselling the Product
to another end user, provided Distributor complies with the terms and conditions
of this Agreement, but Distributor must only pay Davox's out of pocket costs
which relate to additional royalty payments to Davox third party vendors.
Additionally Distributor will pay to Davox any costs for: (i) additional
functionality beyond that in the returned Product; (ii) Implementation Service,
(ii) Training Service costs; and Maintenance Service.
Notwithstanding the foregoing, and except as stated herein, all payments
are due net thirty (30) days from the payment triggering event or invoice date.
All prices and fees under this
-13-
<PAGE>
Agreement may be changed, upon ninety (90) days advance written notice from
Davox, but shall occur only one time each year. Additionally, all price changes
(increases or decreases) will not apply to any end user customers under the
Prime-Sub Program order provided or reported to Davox during a 180 day period
from Davox's notice of said price change.
B. CURRENCY AND PLACE. Distributor will pay all amounts due to Davox
------------------
pursuant to this Agreement in US Dollars at Davox's offices in Westford,
Massachusetts, USA.
C. TAXES. All amounts payable by Distributor to Davox under this
-----
Agreement are exclusive of any tax, levy or similar governmental charge that may
be assessed by any jurisdiction, whether based on gross revenue, the delivery,
possession or use of the Products, the execution or performance of this
Agreement or otherwise, except for net income, net worth or franchise taxes
assessed on Davox outside of the Territory. Subject to these exceptions,
Distributor will pay all taxes, levies or similar governmental charges or
provide Davox with a certificate of exemption acceptable to the taxing
authority. If Distributor is required under the laws of the Territory to deduct
any withholding taxes from payments to Davox, then (i) Distributor will notify
Davox prior to withholding any such taxes, (ii) the price payable by Distributor
for the Products will be increased so that the actual amount received by Davox,
net of all taxes, will be equal to the amount invoiced to Distributor and (iii)
Distributor will promptly furnish Davox with the official receipt of payment of
these taxes to the appropriate taxing authority.
7. LIMITED WARRANTIES
------------------
A. WARRANTY. Davox warrants that the Davox hardware ("Equipment") will be
--------
free from defects in materials and workmanship, and the Davox software
("Software") will operate substantially in accordance with the accompanying
Documentation for a period of ninety (90) days from the Go Live Date. The term
"Go Live Date" shall mean the earlier to occur of either: (i) the date that the
Equipment and Software were installed and operating in conformance with Davox's
Published Technical Specifications; or (ii) when the Product(s) is utilized in
any inbound, outbound, or inbound/outbound productive calling campaign. The
foregoing warranty shall be passed through from Distributor to the end user and
Davox will provide the warranty service. Davox does not warrant that (i) the
Products will satisfy or may be customized to satisfy all of the customers'
requirements or (ii) the use of the Products will be uninterrupted or error-
free. Distributor further acknowledges that (i) the fees to Davox from Lucent
contemplated under this Agreement are based on the limited warranty, disclaimer
and limitation of liability specified in Sections 7, 8 and 9 and (ii) such
charges would be substantially higher if any of these limitations were
unenforceable.
B. REMEDIES. Distributor will pass through to the end user the obligation
--------
that said end user will promptly notify Davox in case of any alleged breach of
the aforementioned warranty of the Products. If the alleged defect is
demonstrated to fall within the express warranty contemplated under Section
7(a), Davox will, at its option, correct, repair or replace the defective
Product. If, after a reasonable period of time, not to exceed thirty (30) Days
from Davox's inspection of the Product(s), Davox determines that any such
defective Product cannot be corrected, repaired, or replaced, so as to comply
Section 7(a)'s express warranty, Distributor, or
-14-
<PAGE>
the end user, may return the defective Product to Davox in exchange for a refund
of the price that Distributor actually paid to Davox for such Product.
C. LIMITATION. The warranties and remedies specified in this Section will
----------
not apply if the Davox Software or Davox Hardware malfunctions due to extrinsic
causes, such as (i) natural disasters, including fire, smoke, water, earthquakes
or lightning, (ii) electrical power fluctuations or failures, (iii) the neglect
or misuse of the Davox Software or Davox Hardware or other failure to comply
with the instructions set forth in the Documentation (including the Davox
Published Technical Specifications), (iv) a correction or modification of the
Davox Software or Davox Hardware not provided or approved in writing by Davox,
(v) a malfunction of the Distributor's hardware equipment or (vi) the
combination of the Davox Software or Davox Hardware with other products not
provided or approved in writing by Davox.
D. YEAR 2000. Davox warrants that the Davox proprietary software provided
---------
hereunder will record, store, process, and present calendar dates falling on or
after January 1, 2000 in substantially the same manner and with substantially
the same functionality as it performed prior to January 1, 2000. The Davox
software can handle data from both the 1900's and the 2000's at the same time in
the same manner as it currently does for the 1900's.
E. ADDITIONAL WARRANTIES. (i) Davox warrants that all Services provided
---------------------
hereunder will be rendered in a professional and workmanlike manner consistent
with industry practice; (ii) in accordance with the terms herein, Davox warrants
that it either has the right or authority to grant the licenses provided
hereunder; and (iii) to the best of Davox's knowledge, as of the date of this
Agreement's execution, there are no known court actions against Davox relating
to patent or copyright infringement, nor has it been informed of any actions.
F. DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION AND SECTION
----------
8, ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH
RESPECT TO THE PRODUCTS, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM,
PRIOR ORAL OR WRITTEN STATEMENTS BY DAVOX OR OTHERWISE (INCLUDING, BUT NOT
LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE)
ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED.
8. INDEMNITY BY DAVOX
------------------
A. INDEMNITY. If an action is brought against Distributor claiming that
---------
any Davox proprietary Hardware or Software and the Documentation thereto, (the
"Davox Hardware and Software") infringes a United States or Canadian patent or
copyright, Davox will defend Distributor at Davox's expense and will pay the
damages and costs finally awarded against Distributor in the infringement
action, but only if (i) the Distributor notifies Davox promptly upon learning
that the claim might be asserted, (ii) Davox has sole control over the defense
or compromise of the claim and any negotiation for its settlement, (Distributor
may participate, at its cost, solely in a consultative role), (iii) Distributor
provide reasonable assistance to Davox, and (iv) the Distributor takes no action
that, in Davox's judgment, is contrary to Davox's interest.
-15-
<PAGE>
Davox also agrees that it will assist Distributor with the resolution of any
threatened infringement claims as said claims relate directly to the Davox
Hardware or Software. Resolution herein shall mean that Davox will, in its sole
discretion, settle such dispute, remove the infringing Davox Hardware or
Software and replace or modify said infringing Davox Hardware or Software with a
non-infringing equivalent, procure the right to continue using the Davox
Hardware or Software, or accept the return of the Davox Hardware or Software in
exchange for a refund of the price that Distributor actually paid to Davox for
such Davox Hardware or Software, less depreciation based on a 5-year straight-
line depreciation schedule.
B. INTENTIONALLY OMITTED
C. LIMITATION. Davox will have no indemnity obligation to Distributor if
----------
the patent or copyright infringement claim results from (i) a correction,
modification, or Derivative of the Davox Software not provided by or approved in
writing by Davox, (ii) the failure to promptly install a Fix, update or
enhancement of the Davox Software that would have eliminated the actual or
alleged infringement or (iii) the combination of the Davox Software with other
products not provided by or approved in writing by Davox.
8.1 ADDITIONAL INDEMNIFICATION BY DAVOX
-----------------------------------
Davox will indemnify Distributor against any damage, loss, liability or
expense (including lawyers' fees) for any third party claims brought against
Distributor by a Distributor end user customer that (i) purchased/licensed
Products from Distributor under the terms herein, where such loss, liability or
damage is incurred as a direct result of the Products not functioning in
substantial accordance with Davox's published technical specifications; or (ii)
due to the willful or negligent acts committed by, and directly attributable to
Davox during Davox's Installation Services, Warranty Services, or Maintenance
Services. Davox's maximum liability exposure under this Section 8(d) shall be
the maximum of the license fees for the particular Product(s) sold/licensed or
$500,000.00, whichever is greater.
9. LIMITATION OF LIABILITY
-----------------------
EXCEPT AS PROVIDED BELOW, UNDER NO CIRCUMSTANCES WILL EITHER PARTY OR
DAVOX'S LICENSORS BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE,
OR INCIDENTAL DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE,
BASED ON CLAIMS OF ANY THIRD PARTY (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR
LOSS OF DATA, GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, INTERRUPTION IN USE
OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS),
ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF
CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE.
IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH EITHER PARTY AND DAVOX'S
LICENSORS MAY INCUR IN ANY ACTION OR PROCEEDING EXCEED A MAXIMUM AMOUNT OF
$500,000.00. THIS SECTION WILL NOT APPLY ONLY WHEN AND TO THE EXTENT THAT
APPLICABLE
-16-
<PAGE>
LAW SPECIFICALLY IMPOSES LIABILITY, DESPITE THE FOREGOING EXCLUSION AND
LIMITATION.
BOTH PARTIES AGREE THAT THE FOREGOING LIMITATION ON LIABILITY SHALL NOT
APPLY TO DISTRIBUTOR'S NEGLIGENT OR INTENTIONAL VIOLATION OR NEGLIGENT OR
INTENTIONAL BREACH OF THE PROVISIONS IN SECTION'S l(f), 3(f), 10, 11, 15, 16,
AND 17; AND DAVOX'S NEGLIGENT OR INTENTIONAL BREACH OR VIOLATION UNDER SECTION'S
8, AND 10.
10. INFORMATION
-----------
A. CONFIDENTIALITY. Distributor acknowledges that the Products
---------------
incorporate confidential and proprietary information developed or acquired by or
licensed to Davox and that during the performance of this Agreement, both
parties, their directors, officers, employees and agents (collectively, the
"Personnel") may have access to information which is marked as confidential or
subsequent to any verbal transmission is reduced to a writing and marked as
confidential within thirty (30) days from said verbal transmission to the other
party ("Information"), neither party's Personnel shall copy or remove from the
other party's facilities, or use, except as provided herein, any Information.
The Receiving Party and its Personnel shall maintain the Information so as not
to allow disclosure to any person, entity or third party, whether prior to or
after the termination of this Agreement. Either party and its Personnel shall
promptly report to the damaged party ("Damaged Party") any unauthorized
disclosure, copying or use of any Information. Information shall not include
information that: (i) is in or subsequently becomes part of the public domain
through no fault of the Recipient; (ii) is lawfully received from a third party
having the right to disclose such information; (iii) is independently developed,
proven by written evidence, by the Recipient without breach of this Agreement;
(iv) is disclosed with the written approval of the Disclosing Party; or (v) is
obligated to be produced by compulsory process or an order of a court of
competent jurisdiction. Under any of these circumstances, the Recipient will
notify the other party at least 30 days before disclosing such portion of the
Information to any other person.
B. OWNERSHIP. All patents, copyrights, trademarks, circuit layouts, trade
---------
secrets and other proprietary rights in or related to the Products are and will
remain the exclusive property of Davox or its licensors, whether or not
specifically recognized or perfected under the laws of the Territory.
Distributor will not take any action that jeopardizes Davox's or its licensors'
proprietary rights or acquire any right in the Products or Information, except
the limited use rights specified in Section 10(c). Unless otherwise agreed upon
in writing, Distributor hereby assigns to Davox or its licensor all rights in
any translation, modification or adaptation of, or derivative work based on, the
Products, Promotional Literature or other items of Information, including any
improvement or development thereof, that may be developed by or for Distributor.
Distributor will obtain, at Davox's request, the execution of any instrument
that may be appropriate to perfect these rights in Davox's or its licensor's
name.
C. USE. Distributor will use the Products and other items of Information
---
exclusively to perform its marketing and distribution activities pursuant to
this Agreement. Except as
-17-
<PAGE>
specifically contemplated in Section 3(e) or 4(a), Distributor will not copy,
translate, modify or adapt the Products, Promotional Literature or other items
of Information without Davox's prior written approval. Distributor will
reproduce Davox's or its licensors' confidentiality and proprietary notices on
all such copies. Distributor will not decompile, disassemble or reverse engineer
the Products, except as and to the extent specifically permitted under
applicable law. Distributor will promptly notify Davox if Distributor intends to
create any shell or supplemental or Derivative software that will be combined
with the Products. At Davox's request, Distributor will provide Davox with the
specifications, flow charts, source and object code and other documentation for
such programs.
D. UNAUTHORIZED USE OR DISCLOSURE. Both party's acknowledge that any
------------------------------
unauthorized use or disclosure of the Information may cause irreparable damage
to the other party or its licensors. If an unauthorized use or disclosure
occurs, the party disclosing the Information ("Breaching Party") will promptly
notify the other party ("Aggrieved Party") and take, at the Breaching Party's
expense, all steps which are necessary to recover the Information and to prevent
its subsequent unauthorized use or dissemination, including availing itself of
actions for seizure and injunctive relief. If the Breaching Party fails to take
these steps in a timely and adequate manner, the Aggrieved Party may take them
in its own or the Breaching Party's name and at the Breaching Party's expense.
E. DISCLOSURE. In the event one of the parties hereto, or an employee or
----------
contractor thereof, violates the terms of this Section 10 and the Aggrieved
Party is injured or damaged thereby, the Breaching Party shall indemnify and
hold the Aggrieved Party harmless from any and all losses incurred as a result
of such violation.
11. MARKS
-----
A. OWNERSHIP. All trademarks, service marks, trade names, logos or other
---------
words, phrases or symbols identifying the Products or Davox's business (the
"Marks") are and will remain the exclusive property of Davox or its licensors,
whether or not specifically recognized or perfected under the laws of the
Territory. Distributor will not take any action that jeopardizes Davox's or its
licensors' proprietary rights or acquire any right in the Marks, except the
limited use rights specified in Section 11(b). Distributor will not register,
directly or indirectly, any trademark, service mark, trade name, copyright,
company name or other proprietary or commercial right which is identical or
confusingly similar to the Marks or which constitute translations thereof into
the language(s) spoken within the Territory. Upon Davox's request, Distributor
will execute the instruments that may be appropriate to register, maintain or
renew the registration of the Marks in Davox's or its licensors name within the
Territory. Notwithstanding the foregoing, all of Distributor's trademarks,
service marks, trade names, logos or other words or symbols ("Distributor
Marks") are and will remain the exclusive property of Distributor or its
licensors, whether or not specifically recognized or perfected under the laws of
the Territory. Davox agrees that it will not take any action that jeopardizes
Distributor's or its licensors' proprietary rights in said Distributor Marks.
-18-
<PAGE>
B. USE. Distributor will use the Marks exclusively to advertise and
---
promote the Products within the Territory and said use shall at all times be for
the sole benefit of Davox. All advertisements and promotional materials will
(i) clearly identify Davox or its licensors as the owner of the Marks, (ii)
conform to Davox's then-current trademark and logo guidelines and (iii)
otherwise comply with any local notice or marking requirement contemplated under
the laws of the Territory. Before publishing or disseminating any advertisement
or promotional materials bearing a Mark, Distributor will deliver a sample of
the advertisement or promotional materials to Davox for prior approval. If
Davox notifies Distributor that the use of the Mark is inappropriate,
Distributor will not publish or otherwise disseminate the advertisement or
promotional materials until they have been modified to Davox's reasonable
satisfaction. Notwithstanding the foregoing, provided Davox has provided its
written consent, Distributor will have the fight to place the Distributor Marks
alongside Davox's Marks, but such consent may not be unreasonably withheld.
C. INFRINGEMENT. Distributor will immediately notify Davox if Distributor
------------
learns (i) of any potential infringement of the Marks by a third party or (ii)
that the use of the Marks within the Territory may infringe the proprietary
rights of a third party. Davox will determine the steps to be taken under these
circumstances. Distributor will (i) provide Davox with the assistance that
Davox may reasonably request and (ii) take no steps on its own without Davox's
prior approval.
12. TERM AND TERMINATION
--------------------
A. TERM. This Agreement will become effective, as of the date first set
----
forth above. This Agreement will remain in effect thereafter for a period of
three (3) years (the "Initial Term"). Notwithstanding the foregoing, and except
for the provisions in Section (b) hereunder, both parties mutually agree to
handle cancellations/extensions in the following manner:
1. Prior to the conclusion of the second year of the Agreement's Initial
Term, both parties will mutually agree in writing whether or not to continue the
Agreement's Initial Term. In the event it is mutually agreed upon in writing to
cancel this Agreement, said cancellation will not become effective until the end
of the Initial Term. In the event both parties mutually agree in writing to
extend this Agreement, said Initial Term shall be extended for one (1)
additional year beyond the Initial Term (the "Initial Extension Term").
2. Within the ninety (90) day period from the conclusion of the Initial
Term (i.e., at the end of the third year), both parties will mutually agree in
writing to either extend the Initial Extension Term or cancel the Agreement at
the conclusion of the Initial Extension Tenn. In the event it is mutually
agreed upon in writing to cancel the Agreement, said cancellation will not
become effective until the conclusion of the Initial Extension Term (end of year
4). In the event both parties mutually agree in writing to continue this
Agreement, said Initial Extension Term shall be extended for one (1) more year
beyond the Initial Extension Term to a fifth year (the Extension Term").
3. For the end of year 4 and beyond, both parties will meet during the
ninety (90) days prior to the Agreement's yearly anniversary date, as defined as
the date fast written above.
-19-
<PAGE>
At that time, in the event it is mutually agreed upon in writing that both
parties will extend the Agreement, an additional year shall be added to the
applicable Extension Term. In the event it is decided to cancel this Agreement,
said termination shall not take effect until one (1) year from the yearly
anniversary date referenced above.
B. TERMINATION BY EITHER PARTY. Subject to Section 12(a), either party
---------------------------
will have just cause to terminate this Agreement immediately, upon thirty (30)
days advance written notice, without the requirement of judicial or
administrative notice or resolution, upon the occurrence of any termination
events specified below or elsewhere in this Agreement.
(1) BREACH. Either party or any of its employees breaches (i) any
------
obligation under Section 10 ("Information") or (ii) any other material
obligation under this Agreement and fails to cure the breach to the
other party's reasonable satisfaction within thirty (30) days after
notice from the non-breaching party.
(2) NORMAL BUSINESS. Either party ceases to conduct business in the
---------------
normal course, becomes insolvent, enters into suspension of payments,
moratorium, reorganization or bankruptcy, makes a general assignment
for the benefit of creditors, admits in writing its inability to pay
debts as they mature, suffers or permits the appointment of a receiver
for its business or assets, or avails itself of or becomes subject to
any other judicial or administrative proceeding that relates to
insolvency or protection of creditors' rights.
(3) OWNERSHIP OR CONTROL. The direct or indirect ownership or control of
--------------------
either party that exists on the effective date of this Agreement
changes in a manner that, in the other party's judgment, may adversely
affect its rights.
13. CONSEQUENCES OF TERMINATION
---------------------------
A. TERMINATION OBLIGATIONS. Upon the expiration or termination of this
-----------------------
Agreement, all rights granted to Distributor hereunder will immediately cease,
except as otherwise provided herein, and Distributor will (i) promptly comply
with the termination obligations specified below and (ii) otherwise cooperate
with Davox to terminate relations in an orderly manner.
(1) PAYMENTS. Distributor will pay Davox all due and outstanding amounts,
--------
as well as any amount that has not become due, the due date of which
will be automatically accelerated to the date of expiration or
termination of this Agreement.
(2) SOFTWARE. Except as otherwise provided herein, Distributor will purge
--------
from its computer systems, storage media and other files and, at
Davox's option, destroy or deliver to Davox or its designee all
Software within Distributor's possession or control.
-20-
<PAGE>
(3) MATERIALS. Distributor will, at Davox's option, destroy or deliver to
---------
Davox or its designee all items within Distributor's possession or
control that contain any Information or bear a Mark. Notwithstanding
the foregoing, Distributor may retain, in compliance with this
Agreement, those materials necessary to fulfill its obligations to its
customers that survive expiration or termination of this Agreement.
(4) SOFTWARE AGREEMENTS. In the event Distributor has intentionally and
-------------------
willfully breached Davox's intellectual property rights, Distributor
will, at Davox's request, assign or perfect the assignment to Davox or
its designee of all Software Agreements executed with customers and
notify these customers of such assignment.
(5) AFFIDAVIT. Distributor will deliver to Davox an affidavit which
---------
certifies that Distributor has complied with all of its termination
obligations contemplated under this Agreement.
(6) SERVICES. Provided Distributor adheres to the terms and conditions of
--------
this Agreement, Davox agrees, upon mutually agreeable terms, to
furnish Distributor Products and Documentation and updates thereto for
a five (5) year period following termination/cancellation hereunder
for the sole purpose of fulfilling Distributor's obligations to its
end users. Davox will provide continuing maintenance services,
provided the end user customer continues to be, in all respects, in
compliance with its Continuum Support Services Agreement.
B. SURVIVAL. Provisions of this Agreement which by their nature survive
--------
the expiration or termination of this Agreement, including but not limited to
Sections l(f)(4), 3(k), 7, 8, 9, 10, 11, 13, 15, 16, 17, and Exhibit 5 will
survive the expiration or termination of this Agreement.
14. INSPECTION
----------
During the term of this Agreement and for 1 year after its expiration or
termination, Davox's independent agent ("Independent Agent"), which is not an
employee may, upon ten (10) days prior written notice to Distributor, inspect
the business/financial records, computer processors, equipment and facilities of
Distributor during normal working hours to verify Distributor's compliance with
this Agreement. Davox agrees that it will utilize the Independent Agent up to a
maximum of two times per year, unless the Independent Agent finds violations of
this Agreement, whereupon the Independent Agent shall have the right to inspect
said records, processes, equipment and facilities one time per quarter until the
violations have been cured to the Independent Agent's reasonable satisfaction.
Prior to conducting the inspection said Independent Agent shall enter into a
non-disclosure agreement with Distributor, but said Independent Agent may
provide Davox any information necessary to verify that this Agreement's terms
and conditions have and are being adhered to. While conducting these
inspections, the Independent Agent will be entitled to copy any item that
Distributor may possess in violation of this
-21-
<PAGE>
Agreement. The Independent Agent shall provide to Davox only that information
necessary for Davox to enforce the provisions of this Agreement.
15. US EXPORT RESTRICTIONS
----------------------
Distributor acknowledges that the Products and all related technical
information, documents and materials are subject to export controls under the US
Export Administration Regulations. Distributor will (i) comply strictly with
all applicable requirement of the Export Administration Regulations and any
corresponding export control requirements within the Territory and (ii)
cooperate fully with Davox in any official or unofficial audit or inspection
that relates to these controls, including, but not limited to, making available
to Davox such of Distributor's records that Davox may reasonably request to
confirm Distributor's compliance with these controls.
16. COMPLIANCE WITH LAWS
--------------------
A. LOCAL COMPLIANCE. Except as otherwise contemplated in Section 16(a),
----------------
Distributor will, at its expense, obtain and maintain the governmental
authorizations, registrations and filings that may be required under the laws of
the Territory to execute or perform this Agreement. Distributor will otherwise
comply with all laws, regulations and other legal requirements within the
Territory that apply to this Agreement, including tax and foreign exchange
legislation.
B. UNLAWFUL PAYMENTS. Distributor will not use any payment or other
-----------------
benefit derived from Davox to offer, promise or pay any money, gift or any other
thing of value to any person for the purpose of influencing official actions or
decisions affecting this Agreement, while knowing or having reason to know that
any portion of this money, gift or thing will, directly or indirectly, be given,
offered or promised to (i) an employee, officer or other person acting in an
official capacity for any government or its instrumentality's or (ii) except as
permitted by state law, any political party, party official or candidate for
political office. Distributor will provide Davox with the assurances and
official documents that Davox periodically may request to verify Distributor's
compliance with this Section.
17. INDEMNITY BY DISTRIBUTOR
------------------------
A. GENERAL INDEMNITY: Distributor will indemnify Davox against any
damage, loss, liability or expense (including lawyers' fees) that Davox may
incur (i) with respect to any of Distributor's trainees contemplated under
Section 4(c) as a result of their acts or omissions while at Davox's training
facilities or (ii) as a proximate cause of (a) any modification or amendment of
the prescribed terms of the Software License that Davox did not specifically
approve, (b) Distributor's failure to comply with Section 3(f), (c) any
warranty, condition, representation, indemnity or guarantee granted by
Distributor with respect to the Products in addition to or in lieu of the
limited warranties specified in Section 7, (d) any omission or inaccuracy in
Distributor's advertisements and promotional materials that relate to the
Products, (e) Distributor's failure to comply with Section 15 or Section 16.
This Section will not be construed to limit or exclude any
-22-
<PAGE>
other claims or remedies which Davox may assert under this Agreement or by law.
Additionally, Distributor will indemnify Davox against any damage, loss,
liability or expense (including lawyers' fees) that Davox may incur with respect
to any actions brought against Davox by EIS International due to any actual or
alleged agreements that Distributor has or had with EIS which EIS claims
Distributor has breached or violated, whether such breach is alleged to have
occurred with or without Davox's assistance.
B. INTELLECTUAL PROPERTY INDEMNITY. If an action is brought against Davox
-------------------------------
claiming that any Distributor proprietary hardware or software and the
documentation thereto, (the "Distributor Hardware and Software") infringes a
United States or Canadian patent or copyright, Distributor will defend Davox at
Distributor's expense and will pay the damages and costs finally awarded against
Davox in the infringement action, but only if (i) Davox notifies Distributor
promptly upon learning that the claim might be asserted, (ii) Distributor has
sole control over the defense or compromise of the claim and any negotiation for
its settlement, (Davox may participate, at its cost, solely in a consultative
role), (iii) Davox provide reasonable assistance to Distributor, and (iv) the
Davox takes no action that, in Distributor's judgment, is contrary to
Distributor's interest. Distributor also agrees that it will assist Davox with
the resolution of any threatened infringement claims as said claims relate
directly to Distributor's products. Resolution herein shall mean that
Distributor will, in its sole discretion, settle such dispute, remove the
infringing products and replace said infringing product with a non-infringing
equivalent, or accept the return of the Distributor products in exchange for a
refund of the price that Davox actually paid to Distributor for such Distributor
products, less depreciation based on a 5-year straight-line depreciation
schedule.
ALTERNATIVE REMEDY. If a claim described in Section 17(b) may be or has
------------------
been asserted, Davox will permit Distributor, at Distributor's option and
expense, to (i) procure the right to continue using the Distributor products,
(ii) replace or modify the Distributor products to eliminate the infringement
while providing functionally equivalent performance or (iii) accept the return
of the Distributor products in exchange for a refund of the price that Davox
actually paid to Distributor for such products, less depreciation based on a 5-
year straight-line depreciation schedule.
LIMITATION. Distributor will have no indemnity obligation to Davox if the
----------
patent or copyright infringement claim results from (i) a correction,
modification, or Derivative of the Distributor products not provided by or
approved in writing by Distributor, (ii) the failure to promptly install a Fix,
update or enhancement of the Distributor products that would have eliminated the
actual or alleged infringement or (iii) the combination of the Distributor
products with other products not provided by or approved in writing by
Distributor.
18. INSURANCE
---------
A. Both parties shall at all times during the Term of this Agreement, at
its sole cost and expense, carry the following insurance coverage's written by
reputable insurance companies admitted to and authorized to do business in the
state in which the insurance policy is written and
-23-
<PAGE>
having a financial rating of VIII and a policyholder's rating of A in the most
recently published A.M. Best's Rating Guide.
1. Workers' Compensation Insurance with a broad form all states
endorsement covering all employees for statutory limits in accordance
with the laws of the states in which in which services will be
provided;
2. Employers' Liability Insurance with a limit of not less than
$1,000,000 for bodily injury for each accident;
3. Commercial General Liability Coverage, written on an occurrence
basis including completed operations, covering claims for bodily
injury including death, personal injury, and property damage
regardless of when such claims are filed, with a combined single limit
of $1,000,000 per occurrence.
B. Upon execution of this Agreement and immediately upon renewal of any
coverage required hereunder, both parties shall provide the other party with
certificates of insurance issued by or on behalf of the appropriate insurance
companies naming the other party as an additional insured on said policies.
Nothing in this Section 18 shall be deemed to expand or modify the rights,
remedies and liabilities of the parties as set forth elsewhere in this
Agreement.
19. INDEPENDENT PARTIES
-------------------
Davox and Distributor are independent parties. Nothing in this Agreement
will be construed to make either party an agent, employee, franchisee, joint
venture, partner or legal representative of the other. Except as otherwise
provided in this Agreement, neither party will represent itself to have any
authority to act on the other's behalf, except that Distributor may represent
itself as an independent distributor of Davox's Products.
20. FORCE MAJEURE
-------------
Neither party will be liable for any failure or delay in performing an
obligation under this Agreement that is due to causes beyond its reasonable
control, such as natural catastrophes, governmental acts or omissions, laws or
regulations, labor strikes or difficulties, transportation stoppages or
slowdowns or the inability to procure parts or materials. These causes will not
excuse Distributor from paying accrued amounts due to Davox through any
available lawful means acceptable to Davox. Each party agrees that it will
notify the other within fifteen (15) days of it being affected by a force major
event. If any of these causes continue to prevent or delay performance for more
than 150 days from the onset of such event either party may terminate this
Agreement, effective immediately upon thirty (30) days advance written notice to
the other.
21. NOTICES
-------
Any notice, approval or other communication required or permitted under
this Agreement will be given in writing and will be sent by telex, telefax,
courier or registered airmail, postage
-24-
<PAGE>
prepaid, to the address specified below or to any other address that may be
designated by prior notice. Any notice or other communication delivered by telex
or telefax will be deemed to have been received the day it is sent. Any notice
or other communication sent by courier will be deemed to have been received on
the 3rd day after its date of posting. Any notice or other communication sent by
registered airmail will be deemed to have been received on the 7th business day
after its date of posting.
If to Davox:
Davox Corporation In the case of termination by Distributor
6 Technology Park Drive due to an alleged breach by Davox of this
Westford, MA 01886 Agreement, to:
USA
Attn: Jim Mazzeo Mr. Paul R. Lucchese, Esq.
Telephone: 508-952-0200 or Legal Department
Telefax: 508-952-0201
If to Distributor:
Lucent Technologies Inc. In the case of termination by Davox due
200 Laurel Ave to an alleged breach by Distributor
Middletown, NJ 07748 of this Agreement, to:
Attn: Martin Askinazi
Telephone: 908-957-2845 Mr. Hal Bretan, Esq.
Telefax: 908-957-2845 219 Mount Airy Road
Basking Ridge, NJ 07920-0612
22. ASSIGNMENT
----------
Distributor may not assign, delegate, sub-contract or otherwise transfer
this Agreement or any of its rights or obligations without Davox's prior
approval, unless to a present or future subsidiary or majority owned affiliate,
provided none are direct competitors of Davox's. Any attempt to do so without
Davox's approval will be void. Davox may assign, delegate, subcontract or
otherwise transfer, in whole or in part, this Agreement or any of its rights or
obligations, upon notice to Distributor, (i) to a related company or (ii) to an
unrelated company pursuant to a sale, merger or other consolidation of Davox or
any of its operating divisions, provided such entity is not a competitor of
Distributors. In the event such assignment, delegation, subcontract, or
transfer materially impacts Distributor's obligations hereunder, Distributor may
terminate this Agreement upon thirty (30) days advance written notice.
Distributor hereby consents in advance to any such subcontract of Services to
Grumman System Support Corporation.
23. WAIVER, AMENDMENT, MODIFICATION
-------------------------------
Except as otherwise provided above, any waiver, amendment or other
modification of this
-25-
<PAGE>
Agreement will not be effective unless in writing and signed by the party
against whom enforcement is sought.
24. SEVERABILITY
------------
If any provision of this Agreement is held to be unenforceable, in whole or
in part, such holding will not affect the validity of the other provisions of
this Agreement, unless either party reasonably deems the unenforceable provision
to be essential to this Agreement, in which case either party may terminate this
Agreement, effective immediately upon thirty (30) day notice to the other party.
25. INTERPRETATION
--------------
The terms that are defined in this Agreement may be used in the singular or
the plural, as the context requires. "Days" means calendar days, unless
otherwise specified. "Person" means an individual, partnership, company,
corporation or other legal entity, as the context requires. "Agreement" means
this Agreement and all of its Exhibits. Headings are intended only for
reference purposes.
26. PUBLICITY
---------
Neither party shall publicize the existence of this Agreement or any other
matter relating thereto without the prior written consent of the other party.
27. PLANT RULES & GOVERNMENT CLEARANCE
----------------------------------
All person's furnished by Davox shall, while on the premises of Distributor
and its customers, comply with all reasonable plant rules and regulations, as
well as, any reasonable security measures, including governmental requirements.
28. GOVERNING LAW
-------------
This Agreement will be governed by and interpreted in accordance with the
laws of the Commonwealth of Massachusetts, USA, excluding its conflict of law
principles. Davox and Distributor hereby consent to the venue and jurisdiction
of the local, state and federal courts of Massachusetts. Davox and Distributor
exclude the United Nations Convention on Contracts for the International Sale of
Goods from this Agreement and any transaction between them that may be
implemented in connection with this Agreement.
29. DISPUTE RESOLUTION
------------------
If a dispute arises out of or relates to this Agreement, or its breach, and
the parties have not been successful in resolving the dispute through direct
negotiation, the parties shall attempt to resolve the dispute through non
binding mediation by submitting the dispute to a sole mediator selected by the
parties or, at any time at the option of a party, to mediation by the American
-26-
<PAGE>
Arbitration Association ("AAA"). If not thus resolved, it shall be referred to
a sole arbitrator selected by the parties within thirty (30) days after the
unsuccessful mediation or, in the absence of such selection, to final and
binding arbitration by a sole arbitrator under the AAA Arbitration Rules
("Rules") in effect at the time of this Agreement. The arbitrator may not
limit, expand or otherwise modify the terms of this Agreement, nor may the
arbitrator award punitive damages. The arbitrator shall apply the substantive
(not the conflicts) law of the Commonwealth of Massachusetts. Judgment upon the
award rendered in the arbitration may be entered in any court having
jurisdiction thereof. Defenses based on the passage of time are suspended upon
submitting the dispute to the mediator or the arbitrator and during the
mediation or arbitration. The time period during the mediation or arbitration
shall be disregarded in calculating such defenses. Nothing in this clause shall
be construed to preclude any party from seeking injunctive relief in order to
protect its rights prior to, during or after the mediation or arbitration. A
request by a party to a court for the injunctive relief shall not be deemed
waiver of the obligation to mediation or arbitration. Each party shall bear its
own expenses and an equal share of the expenses of the mediator and arbitrator
and the fees of the AAA. The parties, their representatives, other participants
and the mediator and arbitrator shall hold the existence, content and result of
the mediation and arbitration in strict confidence.
30. ENTIRE AGREEMENT
----------------
This Agreement and its Exhibits constitute the complete and entire
statement of all terms, conditions and representations of the agreement between
Davox and Distributor with respect to its subject matter.
IN WITNESS WHEREOF, Davox and Distributor cause this Distributor Agreement
to be executed by their duly authorized representatives identified below.
Davox Corporation LUCENT TECHNOLOGIES
("Davox") --------------------------------------
("Distributor")
By: /s/ John J. Connolly By: /s/ L. Marianacci
---------------------------------- --------------------------------
Name: John J. Connolly Name: L. Marianacci
---------------------------------- --------------------------------
Title: VP Finance CFO Title: VP Customer Sales and Service
---------------------------------- --------------------------------
Exhibit 1: Products
Exhibit 2: Training Plan
Exhibit 3: Software License
Exhibit 4: Services Plan
Exhibit 5: Source Code Escrow Agreement
Exhibit 6: Marketing Materials/Product Documentation
Exhibit 7: Intentionally Left Blank
Exhibit 8: Intentionally Left Blank
Exhibit 9: Implementation Plan
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<PAGE>
EXHIBIT I
PRODUCTS
1.A. Product Description
1.B. Unison Product Components
1.C. Unison Product Notes
1.D. Sun Hardware Configurations
1.E. Product Pricing
1.F. Key Accounts
<PAGE>
1. A. PRODUCT DESCRIPTION
The following describes the five (5) components of the Davox Unison Call Center
Management System. Attached hereto Exhibit 1-D is a Sun Hardware listing that
provides the Sun Microsystems's requirements that Lucent shall procure on its
o___ to run the following components of the Davox Unison Call Center Management
System. Only those items listed in paragraph #1 below shall be considered the
base product ("Base Product").
1. Unison Call Management Software (Base System)
--------------------------------------------
Davox's Unison systems include supervisor management tools utilizing Rules-Based
management strategies and a broad range of software-driven features that allow
the real-time control of all call center activities via a user-friendly, point-
ar__ click graphical user interface (GUI).
The Unison Call Center Management System software is comprised of three (3)
modules, each with a distinct set of features designed to enhance calling
operations, resulting in improved supervisor, agent, and overall call center
productivity.
. Unison Strategist(R) -- Allows call center managers to set overall
productivity objectives and campaign strategies for the call center in a
timely fashion. Features of this module support supervisory tasks for
establishing and managing all center activities, including messaging,
scripting, and reporting, all via an easy-to-use graphical user
interface. Most importantly, all user-defined parameters can be modified
at any time to reflect shifts in strategic objectives.
. Unison Tactician(R) -- Provides supervisors the flexibility and
functionality to ensure maximum agent productivity and effectiveness. By
providing real-time "windows" into all call center activity, supervisors
can measure both individual and team performance and when necessary,
quickly and easily spot and support individuals requiring assistance.
With outbound agent skill set matching and transfer capabilities, users
can be assured that customer calls are handled by the appropriately
skilled agent or agent group. Real-time monitors assist supervisors in
tracking and reacting to changing conditions which might adversely affect
operations.
. Unison Precision Dial(R) -- Automates all aspects of the calling process
by streamlining unproductive, time consuming, and redundant tasks,
allowing agents to focus on the customer contact and supervisors to
assist agents in their efforts. Agents are paced seamlessly and
automatically through the calling tasks and jobs, including those
scheduled to occur at a time and date in the future. Inbound calls
received prior to a scheduled outbound placement are eliminated from the
calling job, while newly scheduled customer contacts are automatically
inserted into an appropriate call campaign. By offloading all call
placement activities, agents and supervisors are free to engage in and
focus on productive customer conversations.
<PAGE>
2. Desktop API Developer License
-----------------------------
The agent's desktop application will vary significantly depending upon the
individual end user. Unison provides an Application Programming Interface
("API"), that allows the application provider with the necessary message set in
order to integrate their desktop application with the Unison Base Product to
provide a seamless integration.
3. Seamless Call and Agent Load Equalizer (SCALE)
---------------------------------------------
The SCALE(R) option allows users to create pools of agents which can alternate
between handling incoming and outgoing calls as overall peak and lull patterns
dictate. In so doing, Unison allows call center management to share valuable
agent resources for call handling and call placement functions. SCALE, which
monitors inbound activity via an ASAI CTI link to the AT&T G3, provides the
seamless blending of outbound and inbound calling functions. Based on dynamic
checks of the inbound queue-dependent, user-defined threshold settings or
service level goals, blended agents are Assigned inbound calls as necessary to
maintain the established goal settings.
All inbound activity is reported on in the same manner as outbound calling
activity: agent status displays, agent and campaign call results, agent and
campaign alerts, etc.
Supervisors control outbound and inbound agent assignments as well as set agent
priority assignments for each campaign worked. This provides for ultimate
flexibility in defining which agents Unison should seek first for any campaign,
outbound or inbound. Adjustments can be made as necessary as conditions
dictate, without interrupting campaign activity.
SCALE coupled with the Unison Call Center Management Base software ensures
ultimate productivity in the call center by streamlining and maximizing all call
center resources.
4. Digital Communications Server (DCS)
-----------------------------------
The Unison DCS is a fully digital, non-blocking switch matrix, with direct T1
support for both trunk and agent connections. The DCS places calls via PBX/CO
trunks and performs call signal detection, call progress analysis, and call
routing functions. The DCS, incorporating advanced digital signal processing
(DSP) technology, is based on the industry standard SPOX operating system
developed at Massachusetts Institute of Technology (MIT).
Each physical DCS cabinet supports a total of 288 voice ports. A voice port can
be configured either for support of outbound call processing or as an agent
interface. The non-blocking, digital switch is designed to interconnect with
other Digital Communications Servers to form a scaleable, non-blocking matrix of
up to 200 outbound/blended agents and 300 lines. All components are VME
compatible.
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<PAGE>
Depending upon the customer environment and requirements, the Unison base
software module can interface either to the DCS as described above or to the
AT&T G3 Call Classifier option to perform call signal detection and call
progress analysis.
5. Additional Supervisor License
-----------------------------
Each Unison Base Product comes with one (1) Supervisor License. For larger
Systems, additional Supervisor Licenses may be required to allow a division of
agents into groups where each supervisor can view and mange their individual
groups. Refer to Exhibit 1.D. for workstation options to provide these
additional supervisory positions.
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<PAGE>
1. B. UNISON PRODUCT COMPONENTS
(FOR FURTHER INFORMATION RELATING TO EACH ITEM LISTED BELOW, PLEASE REFER TO
DETAIL PRODUCT NOTES ATTACHED HERETO AS EXHIBIT 1-C)
UNISON BASE SYSTEM
- ------------------
. GENERAL NOTES
. FTP Communications Option
. One Supervisor License
. Full Concurrency
. Backup/Restore Software (Data Files)
. One Application
. CTI Interface to Davox DCS or Lucent Call
. Classifier Option
. STRATEGIST MODULES
. Customized Database Layout
. File Builder
. Term Code Editor
. Screen Builder (with QuickScript)
. Number/Extended Number Dial
. Filter Manager
. Campaign Edit
. Call Guide
. Basic Report Package (11)
. Message Manager
. SelectView / ODBC Interface
. TACTICIAN MODULES
. Outbound Agent Monitor
. Outbound Agent Coaching
. Supervisor Consult
. Supervisor Conference
. Real-Time Views
. Alerts Manager
. Start/End Day Script Package
. Agent Messaging
. Agent Performance Statistics
. Applications Grouping
. Work Grouping
-32-
<PAGE>
. Outbound Skill Set Manager
. Verification Agent
. PRECISION DIAL MODULES
. Auto Wrap
. Manual Pass
. Preview Dial
. Answer Machine Detection with Auto Messaging
. Agent / Time Scheduled Recalls
. Campaign and Recall Flow
. Manual Record Excluder
. Dial Rescheduler
. Overflow Manager
. Dynamic Agent Campaign Assignment
. Dynamic Campaign Generation
. Automatic Record Excluder
. Dynamic Record Excluder
. Automatic Route Selection
ADDITIONAL FEATURES
- -------------------
. DESKTOP API DEVELOPMENT LICENSE
. SCALE (SEAMLESS CALL AND AGENT LOAD EQUALIZER)
. CTI Link via ASAI Call Visor PC for Call Blending
. Call Blending License for up to 100% of Agent Positions
. DCS (DIGITAL COMMUNICATIONS SERVER)
. 1.5 Outbound Lines for each Agent
. T1 Line Interface
. Digital ONEStation Interface
. ADDITION SUPERVISOR LICENSE
-33-
<PAGE>
1.C UNISON PRODUCT NOTES
REVISION 3.1
JANUARY, 1997
[CONFIDENTIAL TREATMENT REQUESTED]/*/
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-34-
<PAGE>
EXHIBIT 1D
UNISON SUN LISTING
------------------
BASE SYSTEM CONFIGURATIONS
--------------------------
8 AGENTS
QUANTITY PART NUMBER DESCRIPTION
1 S5TX1-170-32-P17 SPARC 5 Wkstn, 20" Monitor,
32 MB Mem, 110 Mhz, 2.1 GB Drive
1 X132M 32 MB Memory
1 X6002A Floppy Disk Drive
1 X981A Cable
1 X985A Cable
1 X1053A ENET Board
1 X6202A 8 MM Tape Drive
9-32 AGENTS
QUANTITY PART NUMBER DESCRIPTION
1 S20TX1-712-64-P17 SPARC 20/712 Wkstn, 20" Monitor,
64 MB Mem, 2.1 GB Drive
1 X164P 64 MB Mem
1 X6002A Floppy Disk Drive
1 X981A Cable
1 X985A Cable
1 X1053A ENET Board
1 X6202A 8 MM Tape Drive
33-64 AGENTS
QUANTITY
1 S20TX1-712-64-P17 SPARC 20/712 Wkstn, 20" Monitor,
64 MB Mem, 2.1 GB Drive
1 X164P 64 MB Mem
1 X6002A Floppy Disk Drive
1 X981A Cable
1 X985A Cable
1 X1053A ENET Board
1 X6202A 8 MM Tape Drive
1 S5TX1-170-32-P17 SPARC 5 Wkstn, 20" Monitor,
32 MB Mem, 2.1 GB Drive
1 X132M 32 MB Memory
-35-
<PAGE>
65-128 AGENTS
QUANTITY PART NUMBER DESCRIPTION
2 S20TX1-712-64-P17 SPARC 20/712 Wkstn, 20" Monitor,
64 MB Mem, 2.1 GB Drive
1 X164P 64 MB Mem
2 X6002A Floppy Disk Drive
2 X981A Cable
2 X985A Cable
1 X1053A ENET Board
1 X6202A 8MM Tape Drive
1 S5TX1-170-32-P17 SPARC 5 Wkstn, 20" Monitor,
32 MB Mem, 2.1 GB Drive
1 X132M 32 MB Memory
Note: All Telemarketing systems require a 2.1 GB external disk drive.
-36-
<PAGE>
UNISON SUN LISTING
------------------
BASE SYSTEM CONFIGURATIONS
--------------------------
129-150 AGENTS
QUANTITY PART NUMBER DESCRIPTION
3 S20TX1-712-64-P17 SPARC 20/712 Wkstn, 20" Monitor,
64 MB Mem, 2.1 GB Drive
1 X164P 64 MB Mem
3 X6002A Floppy Disk Drive
3 X981A Cable
3 X985A Cable
1 X1053A ENET Board
1 X6202A 8MM Tape Drive
1 S5TX1-170-32-P17 SPARC 5 Wkstn, 20" Monitor,
32 MB Mem, 2.1 GB Drive
1 X132M 32 MB Memory
151-200 AGENTS
QUANTITY PART NUMBER DESCRIPTION
4 S20TX1-712-64-P17 SPARC 20/712 Wkstn, 20" Monitor,
64 MB Mem, 2.1 GB Drive
2 X164P 64 MB Mem
4 X6002A Floppy Disk Drive
4 X981A Cable
4 X985A Cable
1 X1053A ENET Board
1 X6202A 8MM Tape Drive
1 S5TX1-170-32-P17 SPARC 5 Wkstn, 20" Monitor,
32 MB Mem, 2.1 GB Drive
1 X132M 32 MB Memory
Note: All Telemarketing systems require an additional 2.1 GB external disk
drive.
-37-
<PAGE>
UNISON SUN LISTING
------------------
OPTIONS
-------
SCALE, PC &
SUN
SUPERVISOR
QUANTITY PART NUMBER DESCRIPTION
1 S50TX1-110-32-P17 SPARC 5 Wkstn, 20" Monitor,
32 MB Mem, 2.1 GB Drive
2 X108m 8 MB Memory
TOKEN RING
QUANTITY PART NUMBER DESCRIPTION
1 X1014A Token Ring Board
DISK STORAGE
CCR/SELECTVIEW PART NUMBER DESCRIPTION
1 X5204A 4.0 GB External Disk Drive
1 X5152A 2.1 GB External Disk Drive
-38-
<PAGE>
EXHIBIT 1.E
PRODUCT PRICE SCHEDULE
LUCENT TECHNOLOGIES INC.
FOR
US & CANADA DISTRIBUTION AGREEMENT
PRODUCT(S) LICENSE FEES
A. BASE SYSTEM - These prices are based solely on the Base Product as defined
on Exhibit 1.A. Anything beyond the Base Product shall be dealt with in
paragraphs B-D below.
1. Prime/Subcontractor Schedule
<TABLE>
<CAPTION>
SEATS PRICE/SEAT SEATS PRICE/SEAT SEATS PRICE/SEAT SEATS PRICE/SEAT
(LUCENT) (LUCENT) (LUCENT) (LUCENT)
<S> <C> <C> <C> <C> <C> <C> <C>
8 $ * 40 $ * 72 $ * 104 $ *
9 $ * 41 $ * 73 $ * 105 $ *
10 $ * 42 $ * 74 $ * 106 $ *
11 $ * 43 $ * 75 $ * 107 $ *
12 $ * 44 $ * 76 $ * 108 $ *
13 $ * 45 $ * 77 $ * 109 $ *
14 $ * 46 $ * 78 $ * 110 $ *
15 $ * 47 $ * 79 $ * 111 $ *
16 $ * 48 $ * 80 $ * 112 $ *
17 $ * 49 $ * 81 $ * 113 $ *
18 $ * 50 $ * 82 $ * 114 $ *
19 $ * 51 $ * 83 $ * 115 $ *
20 $ * 52 $ * 84 $ * 116 $ *
21 $ * 53 $ * 85 $ * 117 $ *
22 $ * 54 $ * 86 $ * 118 $ *
23 $ * 55 $ * 87 $ * 119 $ *
24 $ * 56 $ * 88 $ * 120 $ *
25 $ * 57 $ * 89 $ * 121 $ *
26 $ * 58 $ * 90 $ * 122 $ *
27 $ * 59 $ * 91 $ * 123 $ *
28 $ * 60 $ * 92 $ * 124 $ *
29 $ * 61 $ * 93 $ * 125 $ *
30 $ * 62 $ * 94 $ * 126 $ *
31 $ * 63 $ * 95 $ * 127 $ *
32 $ * 64 $ * 96 $ * 128 $ *
33 $ * 65 $ * 97 $ * 129 $ *
34 $ * 66 $ * 98 $ * 130 $ *
35 $ * 67 $ * 99 $ * 131 $ *
36 $ * 68 $ * 100 $ * 132 $ *
37 $ * 69 $ * 101 $ * 133 $ *
38 $ * 70 $ * 102 $ * 134 $ *
39 $ * 71 $ * 103 $ * 135 $ *
</TABLE>
/*/ INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
-39-
<PAGE>
<TABLE>
<CAPTION>
SEATS PRICE/SEAT SEATS PRICE/SEAT SEATS PRICE/SEAT SEATS PRICE/SEAT
(LUCENT) (LUCENT) (LUCENT) (LUCENT)
<S> <C> <C> <C> <C> <C> <C> <C>
136 $ * 156 $ * 176 $ * 196 $ *
137 $ * 157 $ * 177 $ * 197 $ *
138 $ * 158 $ * 178 $ * 198 $ *
139 $ * 159 $ * 179 $ * 199 $ *
140 $ * 160 $ * 180 $ * 200 $ *
141 $ * 161 $ * 181 $ *
142 $ * 162 $ * 182 $ *
143 $ * 163 $ * 183 $ *
144 $ * 164 $ * 184 $ *
145 $ * 165 $ * 185 $ *
146 $ * 166 $ * 186 $ *
147 $ * 167 $ * 187 $ *
148 $ * 168 $ * 188 $ *
149 $ * 169 $ * 189 $ *
150 $ * 170 $ * 190 $ *
151 $ * 171 $ * 191 $ *
152 $ * 172 $ * 192 $ *
153 $ * 173 $ * 193 $ *
154 $ * 174 $ * 194 $ *
155 $ * 175 $ * 195 $ *
</TABLE>
/*/ INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
-40-
<PAGE>
All prices referenced in the above matrix are in United States Dollars.
2. Referral Schedule
See Program Definition under Section 2 of the agreement
B. DESKTOP API DEVELOPMENT SOFTWARE SYSTEM
1. Prime/Subcontractor Schedule
Price to Davox
--------------
US $[CONFIDENTIAL TREATMENT REQUESTED]/*/ /System
2. Referral Schedule
See Program Definition under Section 2 of the agreement
C. ADDITIONAL SUPERVISORY LICENSES
1. Prime/Subcontractor Schedule
Price to Davox
--------------
US $[CONFIDENTIAL TREATMENT REQUESTED]/*/ /Supervisor License
2. Referral Schedule
See Program Definition under Section 2 of this agreement
Notes: 1. Supervisor Licenses execute on p.c. (minimum of 486) and
has all of the functions and capability of the supervisor
License on the Smart Management Center.
2. P.C. Supervisor Licenses can be clustered up to four (4)
per Sun SPARC 5 (see Sun Components).
D. DEMONSTRATION SOFTWARE
An effective pre-sales tool that highlights the UNISON architecture. This demo
highlights the campaign management, campaigning and agent results, alters,
skill set management, reporting, tools and inbound/outbound functionality.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-41-
<PAGE>
Hardware- Lucent shall provide, at its cost, the following hardware
requirement:
Sun Sparc 5 S5TX1-110-32-P46 or equiv.
8MB Memory X108M or equiv.
Floppy Disk Drive X560A or equiv.
1.05 GB Drive Internal (2) X649A or equiv.
Software- Provided by Davox at a price of $[CONFIDENTIAL TREATMENT
REQUESTED]/*/ /copy.
/*/ [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS
BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
-42-
<PAGE>
EXHIBIT 1F
----------
DAVOX KEY ACCOUNTS
------------------
1. [CONFIDENTIAL TREATMENT REQUESTED]/*/
2. [CONFIDENTIAL TREATMENT REQUESTED]/*/
3. [CONFIDENTIAL TREATMENT REQUESTED]/*/
4. [CONFIDENTIAL TREATMENT REQUESTED]/*/
5. [CONFIDENTIAL TREATMENT REQUESTED]/*/
6. [CONFIDENTIAL TREATMENT REQUESTED]/*/
7. [CONFIDENTIAL TREATMENT REQUESTED]/*/
8. [CONFIDENTIAL TREATMENT REQUESTED]/*/
9. [CONFIDENTIAL TREATMENT REQUESTED]/*/
10. [CONFIDENTIAL TREATMENT REQUESTED]/*/
11. [CONFIDENTIAL TREATMENT REQUESTED]/*/
12. [CONFIDENTIAL TREATMENT REQUESTED]/*/
13. [CONFIDENTIAL TREATMENT REQUESTED]/*/
THE FOREGOING LIST IS ONLY FOR THE UNITED STATES AND CANADA. WHEN, AND IF, THIS
AGREEMENT IS EXPANDED, ADDITIONAL COMPANIES MAY BE ADDED IN ACCORDANCE WITH
SECTION 1(F)(1)(A)(III) OF THE MAIN AGREEMENT.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-43-
<PAGE>
EXHIBIT 2 - TRAINING
This Exhibit shall define the training plan ("Training Plan") for Lucent
employees so as to allow them to sell/license the Davox Unison Call Center
Management System. Additionally, this Training Plan will describe the Training
Services that Davox will provide to the end user customer and pricing thereto.
The following individuals will need to complete the curriculum that corresponds
to their job function, as described below and in accordance with this Training
Plan, and at the costs provided in Section B.
A. TRAINING AUDIENCES:
1. SALESCURRICULUM
---------------
ACCOUNT EXECUTIVES
Davox and Lucent will initially train up to 500 Account Executives on how to
identify and qualify Call Blending opportunities.
INTRODUCTORY SALES TRAINING - will be delivered to Call Center Specialists at
Lucent regional offices by the Davox sales organization. Each training session
will have a qualified Lucent representative in attendance, in a Train the
Trainer role to learn the course for delivery by September to Lucent. Davox
will commit to provide six sessions of this training at no charge.
ADVANCED SALES TRAINING- will be held at Davox corporate headquarters in
Westford, MA. This course will be delivered by the Davox Sales Organization and
will enable Lucent sales personnel to successfully market the UNISON product.
This course is designed for Call Center Specialists who will focus on UNISON
opportunities. The combination of this course and the initial sales training
will allow a Lucent employee to become self sufficient in identifying and
selling a UNISON system.
This course will be held quarterly beginning Q3 1997 and delivered to
approximately 25 individuals each quarter, for a total of 75 individuals being
trained by June 1997.
TECHNICAL CONSULTANTS
The responsibility of the Call Center Specialist is to act as a technical voice
during technical pre-sales support and product demonstrations. Each Call Center
Specialist shall have, at a minimum: technical knowledge of data and voice
communications, the ability to operate in a Windows environment, understand
basic UNIX commands, and perform pre-sales technical support.
-44-
<PAGE>
Davox Training Courses:
- -----------------------
Davox Advanced Sales Training
UNISON Overview
UNISON Architecture
Technical Consultant Training (held at a Lucent facility).
2. END USER CURRICULUM:
--------------------
Davox Corporation provides training for Call Center Supervisors, Management,
Systems Administrators and Designer/Developers. There is a standard curriculum
for each functional group. Optional courses are available to each group,
depending on individual roles and responsibilities within the organization, or
product features that have been purchased.
SUPERVISOR TRAINING PATH
Supervisors are call center managers or team leaders responsible for using the
features of the Unison system to assign agents to calling campaigns and checking
system status to ensure that agents are being utilized at maximum efficiency.
They exercise strategic corporate decisions, and provide tactical vision for
day-to-day operations of the call center. They may also be required to generate
and evaluate reports.
STANDARD DAVOX COURSES - Unison Supervisor Training, Advanced Unison Supervisor
OPTIONAL DAVOX COURSES - Call Center Management
MANAGEMENT TRAINING PATH
Call Center Managers are individuals responsible for determining the most
effective strategy for call center operations, managing the interaction of
technology, staff and customers, and measuring call center performance against
business objectives. In addition, they may be required to use Unison reports to
track and increase productivity.
STANDARD DAVOX COURSES - Call Center Management
OPTIONAL DAVOX COURSES - Unison Overview or Unison Supervisor Training, Advanced
Unison Supervisor
SYSTEMS ADMINISTRATOR TRAINING PATH
Individuals responsible for supporting and troubleshooting the Unison system.
Duties may include the responsibility for installation and verification of
configurations, uploads/downloads, and communication between all hardware
devices.
STANDARD DAVOX COURSES - Unison Overview, Unison Architecture, Physical Layer
-45-
<PAGE>
OPTIONAL DAVOX COURSES - Unison Supervisor Training, Application Development
Tools, Power Script
DESIGNER/DEVELOPER TRAINING PATH
Davox offers both standard and customized Unison applications and GUI
interfaces. Designers/Developers have a range of responsibilities depending on
the organization. We accommodate both tracks. These individuals are
responsible for basic or advanced design and development of applications,
scripts, reports, or graphical user interfaces. Developers should have a basic
knowledge of file structures, download/upload transfer methods, and general
concepts of a predictive dialer. In addition, they should be developers of
Windows applications.
TRACK I - Designer
STANDARD DAVOX COURSES - Application Development Tools
OPTIONAL DAVOX COURSES - Unison Overview, Unison Architecture, Power Script
TRACK II - Developer
STANDARD DAVOX COURSES - Unison Overview, Application Development Tools
OPTIONAL DAVOX COURSES - Unison Overview or UST, Unison Architecture,
Application Development Tools, Power Script, Smart Button Development, Client
API
3. LUCENT INSTRUCTOR CURRICULUM
----------------------------
LUCENT INSTRUCTORS/TRAINING PERSONNEL
NOTE: This training is optional, although would be required in the event
Lucent decides to become self sufficient.
This role requires an experienced training professional, responsible for
strengthening end user technical expertise in Davox Products through the
development and delivery of advanced technical training programs. It requires
technical knowledge with emphasis in UNIX, RDBM, Networks and MS windows and
familiarity with C Shell scripting or applications programming. Bachelors of
Science in Computer Science with five years of directly related training
experience in a high tech environment.
TRAIN THE TRAINER PROGRAM
This program provides Lucent with the training materials and information
necessary to enable them to deliver Davox Courses. Lucent Instructors attend
each course once as a student to learn the product content. Student Instructors
attend a second time in a train the trainer role to learn how to deliver the
training. This includes time to work with the Davox Instructor and evaluate how
best to use the Davox training- materials. When the Lucent Instructors first
begin to deliver the course at their site, they will be able to call Davox
Instructors with questions (1 hour of phone support per course).
-46-
<PAGE>
The program's major components are:
. A Unison Lecture/Lab Course attended first in a student role by the Lucent
Instructor
. A Unison Lecture/Lab Course attended in a Train the Trainer mode by the
-----------------
Lucent Instructor
. hour of Davox Telephone Trainer Support is provided for each course
. A License fee to use Davox Courseware materials
. Optional product documentation can be ordered from Davox on a quarterly
basis and purchased at standard prices (Exhibit 6)
The following Davox courses must be satisfactorily completed in addition to the
above requirements. Please refer to description of each course at the end of
this Exhibit F.
Unison Supervisor Training
Advanced Unison Supervisor
Unison Overview
Unison Architecture
Physical Layer
Smart Button Development
Application Development Tools
Custom Application Development
Client API
Script+
The following non-Davox provided courses or their equivalent are required to
effectively train Lucent employees or end users.
Sybase/SQL
T1 "Video"
Network "Video"
Advanced UNIX
Solaris Administration
Shell Scripting
LICENSED COURSEWARE PRICING
. The Davox Licensed Courseware fee includes one hard copy of Student and
Instructor Guides, an electronic soft copy file for each guide, and one Train-
the-Trainer Program per instructor per course. To train additional instructors,
Lucent will need to purchase each additional Train-the-Trainer Programs for a
fee of $[CONFIDENTIAL TREATMENT REQUESTED]/*/ US/course per instructors.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-47-
<PAGE>
<TABLE>
<CAPTION>
Licensed # Days #TTT Courseware License Yearly Maintenance
Courseware Days Fee includes one of Course
instructor per course Curriculum
<S> <C> <C> <C> <C>
Unison Supervisor 4 4 * *
Training
Advanced Unison 3 3 * *
Supervisor
Call Center Management 2 2 * *
Unison Overview 1 1 * *
Unison Architecture 3 3 * *
Physical Layer 5 5 * *
Application 3 3 * *
Development
Tools/Custom ADT
Power Script 2 2 * *
Smart Button 3 3 * *
Development
Client API 1 1 * *
</TABLE>
4. TECHNICAL CURRICULUM
--------------------
LUCENT FRONT LINE SUPPORT ENGINEERS. (FLS)
NOTE: This training is optional, although would be required in the event Lucent
decides to become self sufficient.
The role of Lucent FLS requires an Associates degree with 1-3 years experience
within a first line software support environment requiring extensive systems
integration and customization. Additional requirements are the ability to
maintain a fundamental working, knowledge of at least two or more technologies
to include: Networking, PBX, UNIX, Sybase, DDE and compliant software. The FLS
role will require the FLS engineer to (i) Enter in the case header information,
(ii) work with customers to determine the priority of cases, (iii) attain an
accurate description of an issue with the product problem, (iv) collect data
necessary to troubleshoot the problem, and (v) gather logs and dumps and enter
location of data in case logs.
FLS TRAINING PATH
Davox provided Training Courses
-------------------------------
Unison Supervisor Training
Unison Architecture
Physical Layer
Smart Button Development
Application Development Tools
/*/INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
-48-
<PAGE>
Non Davox provided Training
---------------------------
Basic UNIX
Sybase/SQL
T1 "Video"
Network "Video"
Advanced UNIX
Solaris Administration
Shell Scripting
Notwithstanding the foregoing, Lucent will need to have on the job training
("OJT") to fulfill the requirements above. OJT shall consist of a minimum of:
(i) four weeks, (ii) one week with a mentor working in FLS three weeks working
calls under supervisor, and Davox will provide this OJT at its Westford location
at no additional charge for 3 FLS people.
APPLICATION SPECIALISTS (Minimum 3 to be trained)
NOTE: This training is optional, although would be required in the event
Lucent decides to become self sufficient.
The role of an Application Specialist requires a minimum of an Associates
Degree, with 3-5 years within a software support environment. Additional
requirements are: (i) extensive systems integration and customization, (ii)
ability to maintains expertise within several technologies to include:
Networking, PBX, Sybase, DDE and compliant Software, and (iii) ability to
consistently demonstrates effective leadership through effective
internal/external communications, customer relational skills and commitment to
team objectives. Specific responsibilities shall be at a minimum: (i) Identify
Defects, (ii) resolve a minimum of 85% of all cases (unless otherwise mutually
agreed between the parties in an amendment defining a program leading to
Distributor's technical self sufficiency with the Products), (iii) provide
Training for FLS, (iv) write Scripts for Application Tools, (v) create
procedures on Service.
Davox Provided Training Courses
-------------------------------
Unison Overview
Unison Architecture
Physical Layer
Smart Button Development
Custom Application Development
Non Davox Provided Training
---------------------------
Basic UNIX
Sybase/SQL
T1 "Video"
Network "Video"
Advanced UNIX
Solaris Administration
Shell Scripting
UNIX Core Analysis
-49-
<PAGE>
Notwithstanding the foregoing, Lucent will need to have on the job training
("OJT") to fulfill the requirements above. OJT a shall consist of a minimum of:
(i) five weeks, (ii) one week with a mentor who is an Applications Specialist (
Level 2 Davox engineer) (iii) three weeks working cases and performing problem
analysis under supervision and (iv) one week working with a System
Implementation Manager in the field. Davox will provide this OJT at its
facility in Westford, MA at no additional charge for 3 Application Specialists.
SYSTEM IMPLEMENTATION MANAGERS (SIMS) (equivalent responsibilities to Davox SIM,
SIS, SAE)
NOTE: This training is optional, although would be required in the event Lucent
decides to become self sufficient.
The responsibility of the SIM shall be to configure, verify, test, build
applications, stage systems, write custom scripts, conduct system
implementation, on-site installation and project management.
Davox Training Courses
----------------------
Unison Supervisor Training/FreeView
Unison Architecture
Physical Layer
Smart Button Development
Custom Application Development
Script+
Client API
Non Davox Training
------------------
Basic UNIX
Sybase/SQL
Tl "Video"
Network "Video"
Advanced UNIX
Solaris Administration
Shell Scripting
Notwithstanding the foregoing, Lucent will need to have on the job training
("OJT') to fulfill the requirements above. OJT shall mean, at a minimum: six
months of on the job training, comprised of: two weeks for custom script
development, for ninety days plus, observing the implementation process,
planning meetings, co-creating planning documents, assisting with spec
development, pre-stage, and on-site installation. Thereafter for one hundred
twenty days plus in assisting the implementation process; managing planning
meetings, creating planning documents, developing specs, managing on-site
installations, managing turnover to customer. One hundred eighty days plus,
manage the implementation process with consultants.
-50-
<PAGE>
B. PRICING
SALES TRAINING - Expense for training facilities, if applicable, are the
responsibility of Lucent. The intent is to hold these sessions in Lucent
regional offices, which should limit the expense. Each company is responsible
for T & E for their employees.
END USER TRAINING: During this Training Plan, Davox will provide the following
level of training:
(For Prime/Sub transaction ONLY) Training will be delivered at the Davox
Training Facility by a Davox Instructor. For all new systems installed by
Davox under a Prime/Sub relationship between Davox and Lucent. Davox will
provide three no-cost training seats to the Lucent end user for the Unison
Supervisor Training course, UST-101.
Note: At all times, all other courses (see pricing for Davox Courses) will
be delivered at standard pricing. Lucent may direct their end-user customers
to Davox for training other than as described above, and Davox will provide
its standard training at the prices indicated below, subject to seat
availability at customer registration request.
PRICING FOR DAVOX COURSES
<TABLE>
<CAPTION>
- ------------------------------------------------------------
COURSE TITLE COURSE DURATION PRICE
CODE
- ------------------------------------------------------------
<S> <C> <C> <C>
Unison Supervisor Training UST-101 4 days $ *
Advanced Unison Supervisor AUS-201 3 days $ *
Unison Overview UO-100 1 day $ *
Unison Architecture UA-102 3 days $ *
Physical Layer PL-103 5 days $ *
Application Development Tools ADT-105 3 days $ *
Power Script PS-106 2 days $ *
Smart Button Development SBD-107 3 days $ *
Client API CAPI-108 1 day $ *
Custom Application Development CAD-109 3 days $ *
</TABLE>
1. In the event Lucent requests, and Davox provides, training at the Lucent
Training Facility, the on-site delivery rate is $[CONFIDENTIAL TREATMENT
REQUESTED]/*/ per day plus all reasonable Davox T&E. This applies to all
courses.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-51-
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C. TRAINING PLANS
1. SALES
DAVOX
Introductory Sales Training (See below for Davox course descriptions) for
Lucent's AE's will occur on April 30, 1997 in Denver, Colorado
2. ADVANCED SALES TRAINING
Davox will deliver the Training (See below for Davox course descriptions) at our
Corporate headquarters in Westford, MA beginning quarterly in Q3 of 1997.
Approximately 25 people will be trained per quarter with 75 being trained by
June, 1997.
3. END USER TRAINING
DAVOX
Training of Lucent end user customers shall begin as required at the Davox
Training Facility with Davox Instructors, at prices per Section B above.
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D. DAVOX COURSE DESCRIPTIONS
UNISON SUPERVISOR TRAINING
OVERVIEW
Unison Supervisor Training provides call center managers and supervisors the
necessary training to become familiar with the operation and features of the
Unison system. The course is divided into four modules: the basics, getting
your agents up and running, advanced features and FreeView.
WHO SHOULD ATTEND
This course should be taken by call center managers who are responsible for:
. Verifying downloaded call records from the host
. Organizing call records into campaigns
. Assigning agents to campaigns
. Tracking status of campaigns, agents, trunk lines, and systems
Generating call center reports
PREREQUISITES
Ability to use a mouse and operate a PC in a Windows environment.
BEFORE YOU ATTEND, you should know:
. What are your site's typical applications, what information is displayed on
your agent's screen
. How are call tables typically organized at your site (i.e., by client,
product offering, collection amount, length of time a payment is overdue,
etc.)
. What call tables are downloaded to or uploaded from your host database
. What additional features and reports are installed at your site
OBJECTIVES
This course provides the basics of Unison system management. As a result of
attending this class, you will be able to:
. Identify call center terms, conventions, and concepts
. Identify Unison hardware
. Operate Unison workstation basics
. Download call tables
. Create, manage, and modify campaigns
. Create and modify filters
. Create and modify exclusion lists
. View and monitor agent statistics
. View and monitor trunk statistics
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. Perform functions as Agent Manager
. Perform end of day procedures
GETTING YOUR AGENTS UP AND RUNNING
This module is designed to help you implement your new Unison system. We
provide a guide that you can customize for your environment and use to train
your agents.
ADVANCED FEATURES
This module provides the information needed to understand the advanced features
of the Unison System that are standard and optional (Alert Manager, Message
Manager, Skill Set Manager, Sending Messages to Agents, Agent Assignment to
Multiple Campaigns, Call Table Operations, Utilities). As a result of this
module and using the Unison Advanced Features Tutorial you will be able to:
. Manage alerts
. Utilize agent messaging
. Assign agents to multiple campaigns
. Manage application grouping and work groups
. Utilize skill set manager
. Utilize call table operations
. Utilize Unison tools
4 DAY COURSE
DAVOX COURSE NUMBER 101 (UST)
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ADVANCED UNISON SUPERVISOR
OVERVIEW
This course is intended for supervisors and managers who have been using the
Unison system for 3 to 6 months. We provide a refresher of the Unison features
and tools, and then describe strategies to make best use of these features and
tools. Through case studies and call center scenarios, suggestions and
solutions are presented to optimize use of the Unison system.
WHO SHOULD ATTEND
Call Center supervisors and/or managers who manage agents and create and manage
calling campaigns. Candidates have attended the Unison Supervisor Training
course and have used the Unison system to perform the day-to-day tasks of a call
center supervisor. While understanding the basic features and tools of the
Unison system, attendees are interested in learning how to use the system to its
best possible advantage.
PREREQUISITES
Unison Supervisor Training (UST-101)
OBJECTIVES
This course will cover a review of basic and advanced features. As a result you
will be able to develop efficient strategies and participate in problem solving
exercises in the following areas:
. Downloads
. Campaign attributes
. Filters
. Exclusion lists
. Campaign pacing
. System reports
. System messages
. Utilities
. Alerts
. Additional Features
. Inbound calling options
. Skill Set Manager
. Additional options
3 DAY COURSE
DAVOX COURSE NUMBER 201 (AUS)
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UNISON OVERVIEW
OVERVIEW
This course is a basic overview of the Unison system, and provides an
introduction to critical supervisor related activities.
WHO SHOULD ATTEND
Individuals who require an overview of the supervisory functions of the Unison
system. This course is intended as a prerequisite to Unison Architecture and
Davox Call Center Management Workshop.
PREREQUISITES
Ability to use a mouse and operate in a windows environment.
OBJECTIVES
This course covers the basic Unison functions from a supervisory perspective.
As a result you will be able to:
. Identify call center terms, conventions, and concepts
. Operate the critical range of Unison supervisory features
. Simulate an agent on a call
. Describe the download and upload procedures
. Create, manage, and modify campaigns
. Create a filter
. Create an exclusion list
. Describe the functions of Agent Manager
. Perform end of day procedures
1 DAY COURSE
DAVOX COURSE NUMBER 100 (UO)
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UNISON ARCHITECTURE
OVERVIEW
The Unison system is a total call management solution able to handle both
predictive outbound calling, and inbound/outbound call blending. This course is
a basic overview of the hardware and software architecture of the Unison system.
It will include basic use, an introduction to the internal processing of the
system, and supervisor related activities as they are related to the system
servers and databases.
WHO SHOULD ATTEND
Individuals responsible for supporting and troubleshooting the Unison system.
PREREQUISITES
Ability to use a mouse and operate in a Windows environment, and understand
basic UNIX commands. Unison Supervisor Training (UST 101) or Unison Overview
(UO 100).
OBJECTIVES
This course covers the basic hardware and software architecture and operations
of the Unison system. As a result you will be able to:
. Explain how customers use the Unison system
. Explain basic hardware set-up of the system
. Explain the differences between SmartACD(TM) and SCALE(TM) (CTI)
. Identify and explain the major software servers
. Identify all major databases in the system
. Explain the process flow for downloads and uploads
. Write a simple filter and explain filter logic and benefits
. Manipulate agent and supervisor log-ons and explain the associated
attributes
. Access system messages and system logs
. Explain a logical path for gathering information in a troubleshooting
process via diagnostic tools
. Access on-line help
3 DAY COURSE
DAVOX COURSE NUMBER 102 (UA)
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APPLICATION DEVELOPMENT TOOLS
OVERVIEW
Application Development Tools allow you to build new applications or modify
existing ones. This course will cover the full use of the four basic tools:
File Builder, Screen Builder, Term Code Editor, Call Guide
WHO SHOULD ATTEND
IS personnel responsible for design /development of applications. Attendees
should have a basic knowledge of file structures, download/upload transfer
methods, and general concepts of a predictive dialer.
PREREQUISITES
Basic understanding of file structure. The Unison Overview course (UO 100) is
optional.
OBJECTIVES
Four tools will be presented in this course. As a result of learning these
tools, you will be able to design and develop your own applications. The goal
for each tool is outlined below.
FILE BUILDER (IMPORT/EXPORT MANAGER)
. Identify the function of file import/export
. Identify the supported file types, record types, and field types
. Customize an import file layout using a generic record map
. Customize an export file layout
SCREEN BUILDER
. Identify the function of Screen Builder
. Identify the form components: database fields, user-created fields, field
size, field types, data field types, field attributes, script text, logical
branch scripting, field ordering
. Create a form, Create screen branches
CALL GUIDE
. Identify the function of Call Guide
. Create a call script profile
. Define application default parameters
. Create a call script
TERM CODE EDITOR
. Identify the function of Term Code Editor
. Define agent and system initiated termination codes and their associated
components: contact, user input, color, category
3 DAY COURSE
DAVOX COURSE NUMBER 105 (ADT)
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SCRIPT+(TM)
OVERVIEW
Script+ allows you to create the forms, or agent hit screens, that will provide
the necessary information to ensure your agents' successful calling activities.
PREREQUISITES
. Knowledge of SQL +
. Application Development Tools (ADT 105) is recommended
. The Unison Overview course (UO 100) is optional
WHO SHOULD ATTEND
Application Developers.
OBJECTIVES
To design/develop your own applications. Upon completion of the course, you
will be able to:
. Identify the function of Script+
. Create screens using text, database fields, user-defined fields, and
dataset fields
. Create an application using the main Script+ components: forms,
subforms, scripts, branching, script connections
. Create subforms
. Write scripts using the power script language (symbols, variables and
verbs)
. Define screen branches, set branching conditions to move between
screens
. Connect scripts to screens
. Use the debug tools to troubleshoot scripts and branches
2 DAY COURSE
DAVOX COURSE NUMBER 106 (PS)
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PHYSICAL LAYER INSTALLATION
OVERVIEW
Networks operate at many layers, the physical layer allows the hardware
platforms to communicate with one another. In this class, you will learn the
necessary skills to install the Unison hardware in a network environment.
WHO SHOULD ATTEND
Individuals responsible for installation and verification of configurations and
communication between all hardware devices.
PRE-REQUISITES
. Unison Overview (100 UO)
. Unison Architecture (106 UA) or equivalent knowledge
. Basic LAN/Wan, Basic T1 and Basic UNIX and SQL
OBJECTIVES
As a result of attending this course, you will be able to install and verify
hardware configurations. Upon completion of this course, you will be able to:
. Identify the function and hardware components of the Unison system and site
requirements
. Identify and describe the function, hardware and software of the SMC(R)
. Identify and describe the function, hardware and software of the TRS
. Connect all Unison components and test network connection between hardware
. Perform a logical shutdown/reboot procedure
. Identify the function of, install, test and troubleshoot the Unidisk
. Identify the function of, remove, install, test and troubleshoot the NIS
. Identify the function of, configure ports, and identify logical and
physical connections made through a terminal server
. Identify the function of, configure PCs, test and troubleshoot the XDM
. Identify the function of, describe how to install, test and troubleshoot
SmartAccess(TM)
. Identify the function of, remove, install, back-up/restore FreeView
. Identify the function and components of, install, test and troubleshoot the
DCS
. Identify the function of, describe how to install, test and troubleshoot
the Large Matrix Dialer
. Identify, customize and modify databases
. Identify the function, requirements and installation of SmartACD(TM) and
SCALE(TM)
5 Day Course Davox
COURSE NUMBER 103 (PL)
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PC SMART BUTTON(TM) DEVELOPMENT
OVERVIEW
The PC Smart Button Development course allows users of PC Connect(TM) to program
basic macro functions. You will learn to create useful and practical PC Smart
Buttons(TM) for a more efficient and productive environment.
WHO SHOULD ATTEND
This course is designed for individuals responsible for developing and
supporting agent smart buttons in their Unison PC Connect environment.
PREREQUISITES
. PURCHASE PC CONNECT USER LICENSE
. PURCHASE AND MAINTAIN THE SMART BUTTON DEVELOPER LICENSE
. Familiarity with MS Windows 3.1 or higher
. Understanding of the agent's call processing functions
. Familiarity with agent/Unison interface
. Batch file programming experience and or Bridge Programming Language
OBJECTIVES
This course provides the basics of Davox PC Smart Button programming and covers
session initiation, keystroke automation, copy and paste, building and
programming end-user pop-up windows, program diagnostics and distribution
methods. Participants program using the language (Bridge) utilized by the Davox
Smart Buttons.
As a result you will be able to:
. Create and test basic smart buttons utilizing keystrokes, and copying and
pasting information between sessions
. Create complex smart buttons containing: dialog boxes, push buttons, radio
buttons, edit boxes and scroll boxes
. Create data integrity checks that are built into your smart button routines
. Use available diagnostic tools to troubleshoot problems
3 DAY COURSE
DAVOX COURSE NUMBER 107 (SBD)
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CLIENT API
OVERVIEW
Client API is a Windows application that provides a "pipeline" between the
dialer and host. It allows a developer to build Windows-based applications,
utilizing tools such as Visual Basic(TM) or PowerBuilder(TM), to create a Unison
agent and host session window. This course covers the command protocol of the
Unison API(TM). However this course does not address developing a GUI.
WHO SHOULD ATTEND
Windows, Visual Basic, or PowerBuilder(R) & application developers.
PREREQUISITES
Demonstrated ability to develop applications using Visual Basic, PowerBuilder(R)
or other Windows, applications.
OBJECTIVES
This course discusses the fundamentals of the Client API Interface. Upon
completion of this course, you will be able to:
. Explain Unison call processing
. Identify all software servers used for agent screens
. Explain flow in the creation of an API on the PC
. Identify Davox API calls in an existing API program
. Explain troubleshooting techniques used when errors occur
1 DAY COURSE
DAVOX COURSE NUMBER 108 (CAPI)
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CUSTOM APPLICATION DEVELOPMENT
OVERVIEW:
Custom Application development allows you to build a Unison(R) application.
Covered are the four application tools: Import/Export, Call Guide, Screen
Builder and Termcode Editor, and the skills and information needed to complete
an application.
PRE-REQUISITES:
. Unison Architecture (106 UA) and Physical Layer Installation (17 PL), Or
equivalent knowledge of a windows environment, and SQL +
WHO SHOULD ATTEND:
Application Developers.
GOALS:
Seven tools will be presented in this course. As a result of learning these
tools, you will be able to design and develop your own applications. The goal
of each tool is outlined below. The course also identifies the tables that are
customized for billable configurations.
GENERIC MAP (INSTALLDB)
. Create the GENERIC map and its five associated applications
. Identify the tables and directories created and used by GENERIC
FILE IMPORT/EXPORT
. Identify the supported File Types, Record Types, and Field Types
. Customize a Import File Layout using a Generic Record Map
. Customize a Export File Layout
SCREEN BUILDER
. Use the form components: Database Fields, User-Created Fields, Field Size,
Field Types, Data Field Types, Field Attributes, Script Text, Logical
Branch Scripting, Field Ordering to create a Form
. Create Screen Branches
Call Guide
. Create a Call Script and Profile
. Define Application Default Parameters
TERM CODE EDITOR
. Define Agent and System Initiated Termination Codes and their associated
components: Contact, User Input, Color, Category
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APPLICATION EDITOR (APPEDIT)
. Use the Application-Editor components (Define Maps, Applications, Spec
Formats and Field Definitions) to create Application, Download, and Upload
Maps
. Identify the tables and directories created and used by the Application
editor
3 DAY COURSE
DAVOX COURSE NUMBER 108 (CAD)
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INTRODUCTORY SALES TRAINING
OVERVIEW
This course is designed to enable A/E's to identify and qualify sales
opportunities for the Unison Solution. This course is the initial course is
taken by all sales professionals who will support initial sales opportunities.
In order for Lucent to be proficient in the sale of UNISON without Davox
support, the Advanced Sales Course must also be taken following completion of
this course.
PRE-REQUISITE- Sales experience in High tech environments
WHO SHOULD ATTEND
Lucent Account Executives, Call Center Consultants, and individuals who will be
supporting the UNISON and do not have a predictive dialing background.
OBJECTIVES:
This course is designed to enable Lucent A/E to identify and qualify sales
opportunities and will cover:
Vertical/Horizontal Market Opportunities -the specific industries and
applications that utilize a Call Blending technology
. Qualification of Prospects - the specific questions to ask a prospect in
qualifying a Call Blending opportunity.
. Predictive Dialing 101 an introduction to predictive dialing technology
. UNISON Overview - features and functionality
1 DAY COURSE
DAVOX COURSE NUMBER 300 (IST)
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ADVANCED SALES TRAINING
OVERVIEW
This course provides the information required to enable Lucent sales personnel
to successfully market the UNISON product. Held quarterly at the Davox
Corporate Office his course covers the following material:
PRE-REQUISITE- Completion of the Introductory Sales Training, sales experience
WHO SHOULD ATTEND
Lucent Account Executives or Call Center Specialists who will be focusing on
UNISON opportunities. The combination of this course and the Introductory Sales
course will enable Lucent personnel to become self sufficient in identifying and
selling a UNISON system
OBJECTIVES:
This course is designed to enable Lucent sales personnel to successfully sell
the UNISON product
. Call Center Evolution - a brief overview of the Call Center Market
. Horizontal & Vertical Markets -industries that utilize this technology and
their applications
. Predictive Dialer 101 basics of predictive dialing
. UNISON Architecture hardware, software and technical requirements
. UNISON Sales Presentation by a Davox Sales Representative
. Customer Service - the Davox support organization and the relation to our
joint customers
. Development Focus - our Development organization's projects both Lucent and
non-Lucent
. UNISON Feature Set - details of the UNISON features
. Telemarketing Options
. Competition - our specific competitors
. Inbound/Outbound Implementation - Call Blending capabilities
5 DAY COURSE
DAVOX COURSE NUMBER 301(AST)
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TECHNICAL CONSULTANT TRAINING
OVERVIEW
The course is designed to enable Lucent technical sales personnel to
successfully market the UNISON product. It provides the foundation for
technical pre-sales training personnel to effectively support the A/E's. The
technical consultant training is a similar role to the Call Center Specialists
within Lucent. They will give technical sales presentations and demo's of the
UNISON system.
PRE-REQUISITE:
Technical knowledge of data and voice communications, attendance at Davox
Advanced Sales Training and UNISON Architecture course. In addition, the
ability to operate in a Windows environment and an understanding of basic UNIX
commands.
WHO SHOULD ATTEND
Individuals who will perform pre-sales technical support.
OBJECTIVES:
. To be able to Demonstration the UNISON System and applications
. Integration Training
. Hand-Off File Training- involves technical elements of the sales cycle that
allow us to support the product more effectively.
. Mentoring by Davox Technical Consultants
4 DAY COURSE
DAVOX COURSE NUMBER 302(TCT)
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EXHIBIT 3
____________________________
____________________________
____________________________
(Tel: _______________ Fax: ____________)
("Distributor")
END-USER SOFTWARE SUBLICENSE
----------------------------
("Customer"_______________________________________________________________
__________________________________________________________________(street)
__________________________________________________________________________
(city) (state) (postal code) (country)
Tel:________________________ Fax:________________________________
Contact:__________________________________________________________________
Hardware Platform_________________ Serial Number(s)____________________
This End-User Software Sublicense Agreement ("Agreement") amends the quotation
issued by ________________, ("Distributor") or Customer's purchase order or any
other agreement with Distributor pursuant to which Customer has agreed to
purchase any Davox Corporation ("Davox") product, including, but not limited to,
the Davox Smart Management Center, Davox UNISON brand call management system,
Davox Prelude call management system, predictive dialer, and/or any other Davox
products ("Quotation"). Notwithstanding anything in the Quotation to the
contrary, the Davox software furnished Customer under the Quotation or furnished
with or made part of Davox products (referred to herein as the "Software") is
provided to Customer under the terms and conditions of this Agreement. This
Agreement will control and take precedence over the Quotation.
GENERAL TERMS AND CONDITIONS
1. SOFTWARE
"Software" means (i) the machine-readable object code version of the computer
programs provided to Customer under this Agreement (the "Programs"), (ii) the
published user manuals and documentation that Distributor makes generally
available for the Programs (the "Documentation"), (iii) the updates,
enhancements or revisions of the Programs or Documentation that Distributor may
provide to Customer (the "Updates") and (iv) any copy of the Programs,
Documentation or Updates. Nothing in this Agreement will entitle Customer to
receive the source code of the Programs or Updates in whole or in part.
2. USE
Subject to the terms of this Agreement, Distributor hereby grants to Customer a
personal, nontransferable, nonexclusive license ("License") to use the Software
for Customer's own use and only on the single Computerized Autodial System,
automated call system, Davox UNISON brand call management system, Davox Prelude
brand call management system, predictive dialer, controller unit, personal
computer, workstation, or other item of
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equipment ("Unit"), for which the Software is first provided or installed,
except as otherwise herein provided. The Programs and Updates may be copied, in
whole or in part, subject to the proper inclusion of any and all copyright and
proprietary notices, only as may be necessary for Customer's use on such single
Unit, solely for archival and back-up purposes or to replace a worn or defective
copy. Customer shall not copy the Documentation or technical information
provided with the Software. If Customer is unable to operate the Software on the
single Unit due to an equipment malfunction, the Software may be transferred
temporarily to another Unit during the period of equipment malfunction. Customer
shall not reverse compile, disassemble or otherwise reverse engineer, embed
within any other software product or modify in any manner, including
modifications to source code with respect thereto, the Software in whole or in
part. If an Update replaces a prior version of a Program, Customer will
immediately destroy such prior version and all copies thereof upon installing
the Update.
3. CONFIDENTIALITY
Customer agrees and acknowledges that the Software is confidential and
proprietary information. Customer shall not disclose, provide or otherwise make
available the Software or any part or copies thereof to any person other than
employees of Customer who have a legitimate need therefor, without prior written
consent of Distributor and Davox. Customer shall take all appropriate actions
by instruction, agreement or otherwise, with any persons permitted access to the
Software necessary to satisfy Customer's obligations under this Agreement. All
copies of the Software, whether provided by Distributor or made by Customer as
permitted by this Agreement, including without limitation, translations,
compilations or partial copies are the property of Davox and its licensors and
may not be used or disclosed except as permitted by this Agreement. Customer
will not allow the removal or defacement of any confidentiality or proprietary
notice placed on the Software. If an unauthorized use or disclosure occurs,
Customer will immediately notify Distributor and take, at Customer's expense,
all steps which may be available to recover the Software and to prevent its
subsequent unauthorized use or dissemination. Customer will have no
confidentiality obligation with respect to any portion of the Software that (i)
Customer independently developed before receiving the Software under this
Agreement, (ii) Customer lawfully obtained from a third party under no
confidentiality obligation or (iii) became available to the public other than as
a result of an act or omission by Customer or any of its employees or
consultants.
4. OWNERSHIP
All rights, title and interest to and all applicable rights in patents,
copyrights and trade secrets in the Software or any of its parts shall remain
vested in Davox or in any third party vendor from whom Davox Corporation has
acquired rights to license the Software, notwithstanding the grant of the
License pursuant to the terms of this Agreement. Customer will not take any
action that jeopardizes Davox's or its licensors' proprietary rights or acquire
any right in the Software, except the limited use rights specified in this
Agreement. Davox or its Licensors will own all rights in any copy, translation,
modification or adaptation of, or derivative work based on, the Software,
including any improvement or development thereof. Customer will obtain, at
Distributor's request, the execution of any instrument that may be appropriate
to assign these rights to Davox or its licensors or perfect these rights in
Davox's or its licensor's name.
5. DISCLAIMER
Customer acknowledges that the warranties, conditions, guarantees or
representations with respect to the Software, if any, are or will be set forth
in a separate agreement executed between Customer and Distributor. NEITHER
DAVOX NOR ITS LICENSORS GRANT CUSTOMER ANY WARRANTY, GUARANTEE, CONDITION OR
REPRESENTATION WITH
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RESPECT TO THE SOFTWARE OR HARDWARE, AND DAVOX AND ITS LICENSORS DISCLAIM ALL
IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED, TO ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. Any claim for breach of
warranty, guarantee, condition or representation, whether express or implied,
may be brought solely against Distributor, except as and to the extent otherwise
specifically permitted under applicable law, despite the foregoing disclaimer.
6. EXCLUSION AND LIMITATION
UNDER NO CIRCUMSTANCES WILL DAVOX OR ITS LICENSORS BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOTS
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CUSTOMER'S CLAIMS OR
THOSE OF ITS CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA,
GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, INTERRUPTION IN USE OR
AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS),
ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF
CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE.
IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH DAVOX OR ITS LICENSORS MAY INCUR
IN ANY ACTION OR PROCEEDING EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CUSTOMER
FOR THE SPECIFIC PRODUCT THAT DIRECTLY CAUSED THE DAMAGE. THIS SECTION WILL NOT
APPLY ONLY WHEN AND TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY REQUIRES
LIABILITY, DESPITE THE FOREGOING EXCLUSION AND LIMITATION.
7. TERMINATION
Unless otherwise provided herein, the License shall expire at such time as
Customer discontinues use of the applicable Software on the single Unit for
which the Software is first provided, but otherwise shall be without restriction
as to time. Notwithstanding the foregoing, Distributor shall have the right to
terminate the License if Customer fails to pay any and all required license
fees, otherwise fails to comply with the terms and conditions of the License set
forth in this Agreement and the Quotation, or fails to cure any breach of this
Agreement or the Quotation within ten (10) days after receipt of written notice
from Distributor. Customer agrees that upon expiration of the License or upon
notice of termination thereof, it will immediately return or destroy the
Software and all portions and copies thereof as directed by Distributor and, if
requested, will certify in writing to Distributor as to the destruction or
return of the Software and all copies thereof. The provisions of Sections 5, 6,
8, and 9 will survive the termination of this Agreement.
8. U.S. EXPORT RESTRICTIONS
Customer acknowledges that the Software and all related technical information,
documents and materials are subject to export controls under the U.S. Export
Administration Regulations. Customer will (i) comply strictly with all legal
requirements established under these controls, (ii) cooperate fully with Davox
in any official or unofficial audit or inspection that relates to these controls
and (iii) not export, re-export, divert or transfer, directly or indirectly, any
such item or direct products thereof to Cuba, Libya, North Korea or any country
that is embargoed by Executive order, or to any national of the aforementioned
countries, unless Customer has obtained the prior written authorization of Davox
and the U.S. Commerce Department. Upon notice to Customer, Davox may modify
this list to conform to changes in the U.S. Export Administration Regulations.
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9. BENEFICIARIES
Davox and any third party from whom Davox has acquired rights to license the
Software or any part thereof is a direct and intended third party beneficiary of
this Agreement and the Quotation to the extent this Agreement or the Quotation
relates to the Software, and may enforce this Agreement and the Quotation
directly against Customer to such extent, provided, however, that no such
licensor shall be liable to the Customer for any general, special, direct,
indirect, consequential, incidental or other damages arising out of or relating
to the Software.
THIS AGREEMENT IS NOT EFFECTIVE UNTIL SIGNED ON BEHALF OF BOTH PARTIES.
_______________________________("Customer")
__________________________("Distributor")
By:____________________________(Signature)
By:_____________________(Signature)
Name:__________________________
Name:___________________
Title:__________________________
Title:___________________
Date:__________________________
Date:__________________________
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EXHIBIT 4
SUPPORT SERVICES
4A Continuum Support Services Agreement
4B Spare / Replaceable Part List
4C Problem Escalation Procedure
4D Service Pricing
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DAVOX
CORPORATION
EXHIBIT 4A
CONTINUUM(R)
SUPPORT SERVICES AGREEMENT
This Agreement is made as of this ___ day of __________, 199__, by and between
Davox Corporation, a Delaware corporation with its principal place of business
at 6 Technology Park Drive, Westford, Massachusetts 01886 ("Davox") and
__________ ("Customer").
1. CONTRACT COVERAGE
Davox agrees to provide Customer and Customer agrees to accept from Davox
support services under the terms and conditions set forth in this Agreement
and in accordance with the support services option selected by Customer
(the "Support Option") for the Davox computer hardware and peripheral
equipment (the "Equipment") and Davox computer software (the "Software")
which collectively comprise a UNISON(R) brand call management system (a
"UNISON System") as specified on the Support Services quotation(s) (each a
"Quotation") as may from time to time amend and be incorporated herein by
reference. Additionally, Davox agrees to adhere to the then current Davox
Problem Escalation Procedure.
2. SERVICE HOURS
Customer Support Programs are managed from the Davox World-wide Support
Center (the "W.S.C.").
Telephone support from the Worldwide Support Center shall be 24 hours
per day, 7 days per week, excluding Davox - observed holidays.
Telephone support service not within the hours of 7:30am to midnight
weekdays, and 8:00am to 8:00 pm Saturdays, U.S. Eastern time, is for
Critical and High severity calls only. On-site support coverage shall
be provided 9 hours per day from 8:30 am through 5:30 pm, local time,
excluding locally observed Davox holidays.
3. EXTENDED SERVICE HOUR CONTRACT
Several extended service hour options are available to Customer ("Extended
Service Hour Options") for on-site support. Customer shall specify on the
Quotation the Extended Service Hour Option(s), if any, elected. IN THE
EVENT NO EXTENDED SERVICE HOUR OPTION IS DESIGNATED ON THE QUOTATION,
NORMAL SERVICE HOURS SHALL APPLY. The days and hours of extended service
hour coverage shall be
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specified on the Quotation. Notwithstanding anything herein to the
contrary, Davox shall have no requirement to furnish support services
either remotely through the W.S.C. or on-site outside the service coverage
hours expressly contracted for.
4. COMPREHENSIVE MAINTENANCE SUPPORT COVERAGE (COMP)
Comprehensive Support Services Coverage ("COMP") consists of on-site
Equipment support; remote and on-site Software support and access to remote
technical assistance, all as set forth in this Section.
SUPPORT
Customer is responsible for contacting the W.S.C. in the event of problems
with the UNISON System. Telephone support and remote diagnosis of problems
is available to Customer during W.S.C. Standard Hours. Upon notification
to the W.S.C. that the UNISON System has malfunctioned or is inoperative,
Davox shall take such steps as are necessary, in Davox opinion, to correct
the malfunction or inoperation. These steps may consist, as Davox deems
appropriate, of the following: remote diagnosis of Equipment and Software
malfunctions; on-site diagnosis of Equipment malfunctions and repair or
replacement of Equipment components; on-site diagnosis of Software
malfunctions and correction of defects; or remote correction of Software
defects and downloading of corrected Software.
On-site support, when necessary, will be performed during Normal Service
Hours. Work performed outside Normal Service Hours shall be performed at
Davox then prevailing rates with a minimum of two (2) hours invoiced.
Davox will install updates and engineering changes to the Software as may
from time to time be released pursuant to Section 8 of this Agreement.
TECHNICAL ASSISTANCE
The W.S.C. shall be available to Customer during W.S.C. Standard Hours.
Customer shall use the W.S.C. to report malfunctions with the Equipment or
Software and shall also be permitted to use the W.S.C. as a technical
resource relating to questions pertaining to the use, operation or
performance of the Equipment and Software. In the event Customer requests
remote support from the W.S.C. after W.S.C. Standard Hours, and support is
made available, such support shall be billable at Davox's then prevailing
rates.
LIMITATIONS ON EQUIPMENT AND SOFTWARE COVERED
Only Davox manufactured and supplied Equipment and Software and any Davox
authorized third party equipment set forth on the Quotation accepted by
Davox will be serviced under Comprehensive Support Service Coverage. A
list of Davox then current authorized third party equipment will be
furnished upon request.
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5. ELIGIBILITY
Davox reserves the right, at Customer's expense, to inspect and qualify for
support services any Equipment or Software which was not subject to Davox
warranty coverage or a Davox Support Option immediately prior to the date
of the Quotation.
6. TERM
The initial period of coverage shall commence on the date specified on the
Quotation or if no date is specified the date the Equipment and/or Software
is installed and ready for live dialing (the "Go Live Date") and shall
continue for a period of one (1) year (the "Initial Term"). Coverage under
additional Quotations incorporated hereunder shall commence on the date
specified on the Quotation or if no date is specified, the Go Live Date of
the Equipment and/or Software and shall expire on a coterminous basis with
the term then in effect. Thereafter, the Agreement shall automatically
renew for subsequent additional one (1) year terms, unless either party
shall have given the other written notification of its intention not to
renew coverage at least sixty (60) days prior to the anniversary date of
the Agreement.
Davox reserves the right, at any time, to evaluate any Equipment or
Software, including its use and environment, and qualify continuance of
support services based upon changes, which, in Davox's sole opinion, are
reasonably required for the proper operation of any Equipment, Software and
the continuance of the Support Option in effect hereunder.
7. PAYMENT
In return for the Services under the Support Option(s) or other coverage to
be provided, Customer agrees to pay to Davox the fees stated on the
Quotation or such fees as Davox may, from time to time, establish in
accordance with this Section prior to the commencement date of each term or
as otherwise provided in this Agreement. Davox may change the prices for
Support Options by providing Customer written notification of such changes
ninety (90) days prior to the end of a current term. The fees stated are
annual charges, quoted and to be paid in United States dollars, and shall
be paid one (1) year in advance. Davox shall invoice Customer annually,
not more than sixty (60) days prior to the commencement of the Initial Term
or the expiration of the then current Term and such invoice will be due
upon receipt. Support services furnished on a "time and material" basis
will be invoiced as rendered and shall be due thirty (30) days from the
date of invoice.
Davox may suspend or terminate, at its sole option, this Agreement in the
event Customer fails to make prompt payment on or before the invoice due
date or if Customer otherwise materially breaches this Agreement.
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With the exception of United States income taxes which Davox may be
obligated to pay as the result of payment made by Customer, Customer agrees
to pay or reimburse Davox for all other taxes, duties, fees, and all other
charges which may be levied by any governmental body as a result of this
Agreement. All amounts payable by Customer to Davox under this Agreement
are exclusive of any tax, levy, or similar governmental charge that may be
assessed by any jurisdiction, whether based on gross revenue, the delivery,
use or possession of the Products, the execution or performance of this
Agreement or otherwise, except for net income taxes assessed on Davox in
the United States, by taxing authorities within the United States. Subject
to this exception, Customer shall pay all taxes, levies or similar
governmental charges or provide Davox with a certificate of exemption
acceptable to the taxing authority. If Customer is required under the law
of any applicable jurisdiction to deduct any withholding taxes from
payments to Davox, then (i) Customer shall notify Davox prior to
withholding any such taxes, (ii) the price payable by Customer for the
products shall be increased so that the actual amount received by Davox,
net of all taxes, will be equal to the prices set forth in the Agreement
and invoiced Customer and (iii) Customer will promptly furnish Davox with
the official receipt of payment of these taxes to the appropriate taxing
authority.
In the event Customer requests support services under a Support Option and
the UNISON System is located at a site other than that shown as the Install
Location in the Quotation, Davox shall have the right to charge Customer
for travel time and reasonable travel expenses incurred as the result of
such request to perform support hereunder at another site.
8. UPDATES AND ENGINEERING CHANGES
Updates and engineering changes will be made to the Equipment or Software
when in Davox opinion such updates and changes are necessary to correct
mechanical or operational errors or deficiencies in order to conform the
Equipment or Software to Davox published specifications at the time of
shipment.
Davox may from time to time elect to make changes to the Equipment or
Software to enhance performance, reliability, or serviceability and make
such changes available to Customer.
All updates and changes released by Davox under this subsection shall be
deemed `Revisions". Davox shall provide Customer with general Revisions of
the Software upon release by Davox. Davox will be relieved of any
liability arising out of any errors or defects in any prior version or
Revision of the Software ten (10) days following delivery of the latest
Revision. Customer may elect to install or not install a Revision. In the
event Customer elects not to install the latest Revision, Davox will
continue to support the immediate prior Revision until the next new
Revision is released. In no event shall Davox be obligated to support a
Revision other than the then latest Revision or, the immediate prior
Revision.
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9. CUSTOMER RESPONSIBILITIES
To the extent applicable under the Support Option(s) selected, Customer is
obligated under this Agreement and agrees to:
A. Provide Davox free and full access to the Equipment or Software for the
purpose of performing support.
B. Provide a safe working environment for Davox personnel and provide, at
no charge to Davox, adequate and safe storage space for spare equipment as
may be necessary.
C. At all times maintain complete responsibility for all controls and
files in the UNISON System.
D. Provide Davox, at no charge, access to and use of any machines,
attachments, and/or communications facilities which in Davox's opinion, are
necessary to facilitate support.
E. Maintain and control proper site environmental conditions.
F. Make available such time as may be requested by Davox for installation
of any engineering change order or Revision during the term of this
Agreement.
G. Notify Davox thirty-five (35) days prior to moving the UNISON System
from the Install Location specified on the Quotation.
10. RELOCATION OF EQUIPMENT
Upon request by Customer, Davox will provide a price quotation for the
relocation of any UNISON System to a new site.
In the event any UNISON System is moved or relocated by other than Davox
personnel, Davox shall have the right to evaluate the UNISON System and its
new site and environmental conditions as a condition for continuing Support
on the UNISON System and to bill Customer at its then prevailing rates for
such inspection and any labor, material and adjustments which, in Davox's
opinion, are necessary to restore the UNISON System to good operating
condition.
Davox responsibility in the event Customer requests that Davox relocate a
UNISON System shall be to deinstall the UNISON System at Customer's then
current location and re-install the UNISON System at Customers new
location. In the absence of prior shipping instructions, Davox will select
a carrier on behalf of Customer, but in no event shall such carrier be
construed to be an agent of Davox. Risk of loss to the UNISON System shall
at all times reside solely with Customer. IN NO EVENT SHALL DAVOX
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HAVE ANY LIABILITY FOR LOSS OR DAMAGES TO PROPERTY OR INJURY OR DEATH TO
PERSONS ARISING OUT OF TRANSPORTATION OF THE UNISON SYSTEM.
11. ADDITIONAL EQUIPMENT
Equipment and Software acquired by Customer during the term of this
Agreement and placed into service at the Install Location shall be added to
the Agreement on a co-terminus basis. Davox shall issue the Customer a
Supplement to Maintenance Quotation notice (the "Supplement") which shall
specify the Equipment and Software to be added to the Agreement and the
additional charges for the balance of the current term to be invoiced to
the Customer.
12. EXCLUDED SUPPORT
Support to be provided under this Agreement does not include repair of
damage, replacement of parts or increase of service time attributable to
reasons other than normal wear and tear, including but not limited to the
combination or operation or use of Equipment or Software with materials not
supplied by Davox or for purposes for which the Equipment or Software was
not designed, unusual physical or electrical stress, accident, neglect,
acts of God, or misuse, abuse, or modification of the Equipment or Software
by persons other than Davox. When support service is required for reasons
other than normal wear and tear, services will be performed at Davox's then
prevailing time and materials rate and an invoice issued to the Customer.
If Customer modifies the Equipment or Software or adds foreign devices to
the UNISON System, then Davox may at its option, (i) terminate this
Agreement or (ii) support and service such modifications and foreign
devices at its then prevailing rates. Provisions or replacement of
operational supplies or media items are specifically excluded from support
services hereunder.
13. LIMITATION OF LIABILITY
DAVOX MAKES NO REPRESENTATIONS OR CONDITIONS OR WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR INFRINGEMENT, EXCEPT AS PROVIDED IN
THIS AGREEMENT. DAVOX DOES NOT WARRANT THAT THE SYSTEM WILL MEET THE
REQUIREMENTS OF THE CUSTOMER OR THAT THE OPERATION OF ANY SOFTWARE WILL BE
UNINTERRUPTED OR ERROR FREE. IN NO EVENT SHALL DAVOX BE LIABLE FOR ANY
LOSS OF PROFITS, LOSS OF DATA, LOSS OF USE OF ANY COMPONENT OF THE SYSTEM,
OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR SUPPORT SERVICES
PROVIDED HEREUNDER.
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Davox's maximum liability regardless of the form of action taken shall not
in any event exceed the annual charges actually paid by Customer to Davox
for support hereunder for the then current term. Davox shall not be liable
to Customer or any other third party for any injury to any person or
property where said injury arises out of Customers use or application of
the Equipment or Software, except for injuries arising out of Davox's
intentional wrong-doing or gross negligence. Customer shall indemnify and
hold harmless Davox from any and all damages, costs, and expenses incurred
by Davox in connection with any claim, suit or proceeding relating to or
arising out of the Customer's use or application of the Equipment or
Software unless occasioned by such gross negligence or intentional wrong-
doing of Davox. The sole and exclusive remedy of Customer hereunder with
respect to a defective or inoperative UNISON System is to request Support
as provided herein.
14. GOVERNING LAW
This Agreement and any transaction pursuant thereto shall be governed by
the laws of the Commonwealth of Massachusetts.
15. NOTICES
All notices provided for in this Agreement shall be given in writing and
shall be effective (i) when served by personal delivery or (ii) five (5)
days after being deposited, postage prepaid, in the mail and addressed to
the parties at their respective addresses as set forth in this Agreement or
as either party may later specify by written notice to the other.
16. ACTS OF GOD
Davox shall not be liable for damages or any delay or failure to deliver
arising out of causes beyond its reasonable control and without its fault
or gross negligence, including, but not limited to, acts of civil or
military authority, fires, riots, wars, embargoes, revolutions,
insurrections, rebellions, national emergencies, strikes, floods, acts of
God, earthquakes, explosions, storms, epidemics, quarantine restrictions,
labor disputes, transportation embargoes or delays in transportation, or
inability to obtain equipment or parts due to delays or backlog of
suppliers.
17. REPLACEMENT OF COMPONENTS
When in the course of furnishing support services hereunder, Davox
determines it necessary to remove a defective or non-operating component to
the Equipment and replace it with a functioning component, the replacement
component shall become the property of Customer and the removed component
shall become the property of Davox.
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18. GENERAL
This Agreement constitutes the entire Agreement between the parties
relative to the subject matter hereof, and supersedes all proposals,
written or oral, and all other communications between the parties relating
to the subject matter of this Agreement.
No waiver, amendment, or modification of this Agreement shall be effective
unless it is in writing and signed by the parties hereto.
Davox reserves the right to subcontract for the performance of support and
other services to be provided under this Agreement. In such event,
however, the rights and obligations of Davox and Customer hereunder will
not be diminished.
Customer may not assign any of its obligations, rights, or remedies under
this Agreement and any such attempted assignment shall be null and void.
All Software furnished hereunder including, without limitation, all
Revisions thereto are furnished under license to Customer. The terms of
such license are as set forth in a certain and separate agreement between
the parties under which the Software was originally furnished to Customer,
or if no such agreement is in effect between the parties, the terms of
Davox standard software license shall apply, and Customer agrees to execute
such standard license terms upon request of Davox.
The term "Customer" shall mean the entity as described in the Quotation and
on the cover sheet attached hereto.
The invalidity, illegality, or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality, or enforceability
of any other provision.
Titles or captions in this Agreement are inserted only as a matter of
convenience and for reference, and in no way define, limit, extend, or
describe the scope of this Agreement or the intent of any provision hereof.
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This Agreement shall be binding upon and inure to the benefits of the parties
and their respective successors, heirs, and assigns.
AGREED BY: AGREED BY:
Davox Corporation Customer
__________________________ __________________________
Signature Signature
__________________________ __________________________
Name and Title Name and Title
__________________________ __________________________
Date Date
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EXHIBIT 4B
----------
Spare/Replaceable Part List
Unison DCS-01
PART NUMBER DESCRIPTION QTY PRICE
881210 Digital Switch 1 US $ *
881197 TI Line Interface 1 US $ *
881194 DSP Line Board 1 US $ *
905822 HUB 1 US $ *
881207 DSP Paddle Board 1 US $ *
881202 DSP Paddle Board 1 US $ *
881200 TI Paddle Board 1 US $ *
-------------
TOTAL US $ *
DAVOX
CORPORATION
EXHIBIT 4C
WORLDWIDE SUPPORT CENTER
PROBLEM ESCALATION PROCEDURE
I. INTRODUCTION
------------
This procedure defines the process for handling and escalating problems on
released products for customers with support contracts within DAVOX. It
describes how problem calls are placed, how problems are prioritized, how
problems are escalated, and how higher levels of technical and management
resources are brought to bear on especially difficult problems.
/*/ INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
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II. PURPOSE
-------
To establish the lines of communications and to identify the responsible
DAVOX personnel and/or ensure all calls are managed in a consistent and
expeditious manner to minimize downtime and disruption to the customer
environment.
III GENERAL GUIDELINES
------------------
1) All escalation begins within the Worldwide Support Center (WSC).
2) The WSC representative who initiates a Case is responsible for ensuring
problem resolution and communicating status and/or resolution to the
customer.
3) The WSC representative in conjunction with the customer assesses the
technical and business impact of the problem and assigns the priority (see
Case Priority Definitions "Attachment "A"). The priority of the escalated
problem will be reviewed by WSC management.
4) The status/resolution of an escalated problem is reported by the action
owning department to the WSC, via the on-line system, for customer
communication/verification and Case closure.
5) Initial problem escalation is the responsibility of the WSC and is effected
via a predetermined set of timeframes based upon the priority of the
problem (Attachment "B").
6) All problems escalated to Development will be accompanied by a Case/Defect
with problem duplication (or agreed best effort performed).
7) Problem escalation's to Development is from the Installation Support and
SES organizations ONLY.
8) Customer and/or field retrieval of required additional information,
installation of available fix, and follow up remain the responsibility of
SES/SIS department. In circumstances where problem reproduction is not
possible, the escalating department should be prepared to participate in
the problem resolution activities as required to ensure a timely solution.
9) ALL Customer system problems should be escalated through the established
paths of the Installation Support and/or SES organizations regardless of
priority and should be accompanied by the appropriate Defect/Case database
information. It is understood that any escalation's outside this process
will occur when the time attributed to following these guidelines would, in
and of itself, impose a significant delay or overall reduction in the
service quality provided to the customer.
10) If a patch or workaround supplied by Development does not solve the
customers problem; SES/SIS is to escalate the problem back to Development
where continuous effort (as required) will be applied to correct the
problem.
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11) All times in this document are (MAXIMUM TIMES) to be viewed as "Stated
Company Business Hours/Days" management reserves the right to move calls as
required to meet specific business demands.
12) If a Case is determined to be outside of the intended specified
functionality of the product. The Case will be escalated to Marketing for
resolution with the customer in accordance with the priorities and time
frames as stated herein.
IV PROCEDURE
---------
1.0 INITIAL CUSTOMER CONTACT
------------------------
The customer contacts the WSC with the nature of the problem and the
pertinent information is entered into the on-line system (Support Center
1-800-999-4455, International 508-952-0669).
. The WSC performs the necessary troubleshooting or diagnostics to
establish corrective action and implementation.
. Upon the successful diagnosis of a problem and implementation of
corrective action, the WSC representative closes the Case after customer
confirmation in the on-line system.
V. CASE ESCALATION
---------------
CRITICAL
. If the Case is classified as CRITICAL, DAVOX Support Management, and the
sales account rep are notified via the priority notification message of the
on-line system.
. Front-line Support (FLS) will work on the problem, if the troubleshooting
information is available, until the problem is fixed, identified as a Defect,
or a customer acceptable workaround is in place for a MAXIMUM time period of
two (2) hours. If a resolution is not available at that time, the Case will
be escalated to System Engineering Services (SES)/Software Integration
Services (SIS).
. SES/SIS will have six (6) hours (MAXIMUM) to effect a resolution or customer
acceptable workaround to the problem.
. If a resolution or workaround is not available after a total of eight (8)
hours (MAXIMUM) it will be escalated to the Director of Development where a
continuous effort by development and the escalating department will be
applied (as required) until the problem is resolved or a customer acceptable
workaround is in place.
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. A decision to dispatch will be made after eight (8) hours.
. If a problem has not been resolved within twenty-four (24) hours a review and
assessment will be made jointly with the customer to determine the need for
on-site technical support.
HIGH
. If the Case is classified as HIGH, DAVOX Support Management, and the sales
account rep are notified via the priority notification message of the on-line
system.
. Front-line Support (FLS) will work on the problem, if the troubleshooting
information is available, until the problem is fixed, identified as a Defect,
or a customer acceptable workaround is in place for a MAXIMUM time period of
sixteen (16) hours. If a resolution is not available at that time, the Case
will be escalated to SES/SIS.
. SES/SIS will have ten (10) days (MAXIMUM) to effect a resolution or customer
acceptable workaround to the problem.
. If a resolution or workaround is not available after a total of twelve (12)
days (MAXIMUM) it will be escalated to the Director of Development.
Development will have twenty (20) days to resolve the problem or have a
customer acceptable workaround is in place.
. A decision to dispatch will be made after twenty-four (24) hours.
. If a problem has not been resolved within forty (40) hours a review and
assessment will be made jointly with the customer to determine the need for
on-site technical support.
MEDIUM
. If the Case is classified as MEDIUM, Front-line Support (FLS) will work on
the problem, if the troubleshooting information is available, until the
problem is fixed, identified as a Defect, or a customer acceptable workaround
is in place for a MAXIMUM time period of twenty-four (24) hours. If a
resolution is not available at that time, the Case will be escalated to
SES/SIS.
. SES/SIS will have fifteen (15) days (MAXIMUM) to effect a resolution or
customer acceptable workaround to the problem.
. If a resolution or workaround is not available after a total of eighteen (18)
days (MAXIMUM) it will be escalated to the Director of Development.
Development will have twenty-five (25) days to resolve the problem or have a
customer acceptable workaround is in place and time frame for final
resolution.
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LOW
. If the Case is classified as LOW, Front-line Support (FLS) will work on the
problem, if the troubleshooting information is available, until the problem
is fixed, identified as a Defect, or a customer acceptable workaround is in
place for a MAXIMUM time period of thirty-two (32) hours. If a resolution is
not available at that time, the Case will be escalated to SES/SIS.
. SES/SIS will have twenty (20) days (MAXIMUM) to effect a resolution or
customer acceptable workaround to the problem.
. If a resolution or workaround is not available after a total of twenty-four
(24) days (MAXIMUM) it will be escalated to the Director of Development.
Development will have thirty (30) days to resolve the problem or have a
customer acceptable workaround is in place and time frame for final
resolution.
NOTE:
. Reclassification of priority is only to occur if a problem has worsened,
thereby increasing the impact on the customer or as directed by management.
Within priority categories, Cases will be worked in order of decreasing age,
unless different priorities are assigned by Management.
VI. ENHANCEMENTS
------------
. If a reported problem has been determined to be a product improvement or
enhancement, then the Case will be forwarded by the WSC to the Marketing
Department for evaluation.
. The Marketing Department will then:
1. Determine if it is to become a product improvement. If so, the
specification will be forwarded to Development. If not, the issue
will be closed through the WSC.
2. Determine if it is to be treated as a special and quoted to the
customer as a "RFA" by Sales. If so, this would be communicated to
Sales by Marketing, and to the WSC for updating the Case. If not, the
issue will be closed by the WSC.
VII. PROBLEM DOCUMENTATION AND FOLLOW-UP
-----------------------------------
. All corrective action will be documented in the on-line system.
. The nature of the problem, summary of action, and resolution will be
communicated to the customer for any problem that exceeds twenty-four (24)
hours in the case of Critical or High priority problems.
. If resolution of a problem requires a code alteration or new application
after a workaround is supplied, SES/SIS will notify the customer and the
original Case owner, then negotiate delivery of the solution.
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. If resolution of a problem involves operation, training, or released patch
deployment, the Case status is changed to reflect the resolution, and SES/SIS
communicates with the customer providing the information and informs the
original Case owner, so they may negotiate closure of the Case.
. All Down System calls that have been closed should be monitored for a one (1)
week timeframe for reoccurrence.
VIII. DOCUMENTATION
-------------
. If the Case is concerning documentation errors, a Low priority is assigned, a
Defect generated, and the issue is communicated to Documentation. The Defect
will be closed when the fix is confirmed in the next release of the
documentation.
IX. APPROVALS:
---------
V. P. CUSTOMER SERVICE: DATE:
--------------------------------------------------------
V.P. Development: Date:
--------------------------------------------------------
V.P. Operations: Date:
--------------------------------------------------------
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ATTACHMENT "A"
- --------------
CASE PRIORITY DEFINITIONS
- -------------------------
"CRITICAL"
- ----------
Severe Operational Impact (i.e., loss of
System productivity)
Down System
Data Corruption
Network Down
MAY REQUIRE DAILY UPDATES TO CUSTOMER
"HIGH"
- ------
Intermittent System Failure
Loss of Some Functionality
No Workaround Available
Moderate Degradation in Performance or
Functionality
REQUIRES WEEKLY UPDATES TO CUSTOMER
"MEDIUM"
- --------
Minor Operational Impact
Initial RAID Notifications
Workaround Available
Product Feature not Working to Specifications
REQUIRES BI-WEEKLY UPDATES TO CUSTOMER
"LOW"
- -----
Non-critical issue, Documentation error
REQUIRES MONTHLY UPDATES TO CUSTOMER
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ATTACHMENT "B"
TIME TABLE
PROBLEM ESCALATION
CONTACT HOURS MAXIMUM
<TABLE>
<CAPTION>
DISPATCH
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIORITY WSC SES/SIS DEVELOPMENT MARKETING GSSC/DAVOX
- ------------------------------------------------------------------------------------------------------------
CRITICAL 2 Hrs 6 Hrs 8 Hrs 8 Hrs
- ------------------------------------------------------------------------------------------------------------
HIGH 16 Hrs 10 Days 12 Days 24 Hrs
- ------------------------------------------------------------------------------------------------------------
MEDIUM 24 Hrs 15 Days 18 Days N/A
- ------------------------------------------------------------------------------------------------------------
LOW 32 Hrs 20 Days 24 Days N/A
- ------------------------------------------------------------------------------------------------------------
</TABLE>
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EXHIBIT 4D
DAVOX CORPORATION
LUCENT MAINTENANCE PRICING UNDER PRIME/SUB RELATIONSHIP
4/4/97
The maintenance pricing is based upon service delivery directly from Davox to
the end user customer under Davox's standard Continuum Support Services
Agreement. The prices indicated cover Davox-provided hardware and software,
plus SUN hardware required for the Unison system. The prices are inclusive for
the base Unison software, SCALE (blend) software if licensed, API development
software if licensed, additional supervisor seats if licensed, and DAVOX DCS
hardware and software if sold/licensed. In other words, the prices provided are
system-level, total annual charges for the specified coverage.
Pricing is as follows:
Telephone support from the Worldwide Support Center shall be 24 hours per day, 7
days per week, excluding Davox - observed holidays. Telephone support service
not within the hours of 7:30 am to midnight weekdays, and 8:00 am to 8:00 pm
Saturdays, U.S. Eastern time, is for Critical and High severity calls only. On-
site support coverage shall be provided 9 hours per day from 8:30 am through
5:30 pm, local time, excluding locally observed Davox holidays. Pricing for the
aforementioned service, which shall be provided in accordance with the standard
Davox Continuum Support Services Agreement (Exhibit 4A) and the Problem
Escalation Procedure (Exhibit 4C), is:
US$$[CONFIDENTIAL TREATMENT REQUESTED]/*/ PLUS $[CONFIDENTIAL TREATMENT
REQUESTED]/*/ PER SEAT, PAID ANNUALLY IN ADVANCE.
Pricing for additional on-site hours of coverage, and for guaranteed on-site
response time (available in selected locations) is available upon request and
quotation by Davox.
Davox shall contract directly with the end user for the provision of Maintenance
Services and all such prices and fees shall be paid directly from the end user
customer to Davox.
Pricing hereunder may be changed by Davox upon ninety (90) days advanced written
notice.
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-90-
<PAGE>
EXHIBIT 5
SOURCEFLEX
SOFTWARE SOURCE CODE ESCROW AGREEMENT
SOURCEFILE NUMBER:___________
This Software Source Code Escrow Agreement, dated as of May 25, 1995,
------------
by and between FileSafe, Inc., a California corporation, doing business as
SourceFile ("SourceFile") located at 50 Crisp Plaza, Suite 700, San Francisco,
CA 94124-2924 and Davox Corporation, located at 6 Technology Park Drive,
----------------- ------------------------
Westford, Massachusetts 01876, ("Depositor"), and each Beneficiary identified by
- ------------------------------
Depositor to SourceFile as provided for in Paragraph 3 hereof (each a
"Beneficiary", collectively the "Beneficiaries").
RECITALS:
A. Pursuant to certain software license agreements (each a "License
Agreement", collectively the "License Agreements"), Depositor licenses to
certain licensees certain software in object code form (the "Software"). A
description of each Software effective as of the date hereof, is attached hereto
as EXHIBIT "A".
B. The Software is the proprietary and confidential information of
Depositor, and Depositor desires to protect such ownership and confidentiality.
C. Depositor desires to ensure the availability to its Beneficiaries
of the source code and all necessary proprietary information related to the
Software (the "Source Material") in the event certain conditions set forth in
Paragraph 4 of this Agreement should occur.
AGREEMENT:
1. DELIVERY OF SOURCE CODE TO SOURCEFILE. Depositor shall deliver to
-------------------------------------
SourceFile a parcel (the "Parcel") sealed by Depositor, which Depositor
represents and warrants is two copies of the Source Material. SourceFile has no
knowledge of, and makes no representations with respect to, the contents or
substance of the Parcel, the Software or the Source Material.
2. ACKNOWLEDGMENT OF RECEIPT BY SOURCEFILE. Promptly after receipt
------------------------------------------
of the Parcel and of any supplements to the Source Material, SourceFile shall
notify in writing such Beneficiaries for which either Depositor or Beneficiary
has paid SourceFile the fee for such notice. Depositor shall provide
supplements to the Source Material for each version of the Software. Depositor
shall send to SourceFile a duplicate of the Source Material within three (3)
days after receiving written notice from SourceFile that the Source Material has
been destroyed or damaged. All supplements shall be subject to the terms and
provisions of this Agreement. SourceFile will notify Beneficiary and Depositor
of each update to the Source Material. Such notification will be sent via
certified mail, return receipt required.
-91-
<PAGE>
3. ACKNOWLEDGEMENT BY BENEFICIARIES. For purposes of this Agreement,
---------------------------------
a licensee of the Software shall be a Beneficiary hereunder with such rights of
a Beneficiary as set forth herein, only if (i) such licensee is identified on
---- --
the current schedule of Software licensees delivered to SourceFile by Depositor
from time to time and (ii) such licensee has sent to SourceFile a fully executed
---
copy of the form of Acknowledgement attached hereto as EXHIBIT "B", in which
such licensee accepts the terms of this Agreement. The name and addresses of
the Beneficiaries shall be described in one or more schedules of Beneficiaries
to be presented to SourceFile from time to time by Depositor. A schedule of
Beneficiaries effective as of the date of this Agreement is attached hereto as
EXHIBIT "C". All other licensees of the Software shall have no rights hereunder
and SourceFile shall have no duties to such licensees.
4. TERMS AND CONDITIONS OF THE SOURCE MATERIAL ESCROW. The Parcel
--------------------------------------------------
shall be held by SourceFile upon the following terms and conditions:
(i) In the event that Davox fails to fulfill in any material
respect, any of its warranty obligations as set forth in the Equipment
Purchase and Software Licensing Agreement by and between Depositor and
Beneficiary or fails to perform or is incapable of performing its
maintenance obligations under the parties Maintenance Agreement, between
the parties if in effect between Depositor and Beneficiary with respect to
Software and such failure continues for thirty (30) days after written
notice thereof from Beneficiary to Depositor or Depositor goes out of
business or ceases to do business in the normal course as a going concern,
and is unable to meet its obligations hereunder, Beneficiary shall be
entitled to gain access to the Escrowed Materials for the purposes and
subject to terms set forth herein. In the event that Depositor has ceased
as a going concern and a Bankruptcy Trustee or other legal representative
has been appointed to wind up the Depositor's business affairs, and
Depositor is unable to meet its obligations hereunder, said Trustee or
legal representative shall have the right to authorize the disbursement and
licensing of the Escrowed Materials to Beneficiary under the terms herein
and previously agreed to in the Parties Equipment Purchase and Software
Licensing Agreement..
(ii) SourceFile shall promptly notify Depositor of the occurrence
of the Release Condition and shall provide to Depositor a copy of
Beneficiary's notice to SourceFile. Said notice shall conform to the
Notice requirements of Section 14 herein.
(iii) If SourceFile does not receive Contrary Instructions, as
defined below, from Depositor within thirty (30) days following
SourceFile's delivery of a copy of such notice to Depositor, SourceFile
shall deliver a copy of the Source Material to Beneficiary. "Contrary
Instructions" for the purposes of this Section (iii) shall mean the filing
of written notice with SourceFile by Depositor, with a copy to the
Beneficiary demanding delivery, stating that the Release Condition has not
occurred or has been cured.
(iv) If SourceFile receives Contrary Instructions from Depositor
within thirty (30) days of the giving of such notice to Depositor,
SourceFile shall not deliver a copy of the Source Material to the
Beneficiary, but shall continue to store the Parcel until: (1)
-92-
<PAGE>
otherwise directed by the Depositor and Beneficiary jointly; (2) SourceFile
has received a copy of an order of a court of competent jurisdiction
directing SourceFile as to the disposition of the Source Material; or (3)
SourceFile has deposited the Parcel with a court of competent jurisdiction
or a Trustee or receiver selected by such court pursuant to this Section 4,
part (v) below.
(v) Upon receipt of Contrary Instructions from Depositor,
SourceFile shall have the absolute right, at SourceFile's election to file
an action in interpleader requiring the Depositor and Beneficiary to answer
and litigate their several claims and rights amongst themselves.
SourceFile is hereby authorized to comply with the applicable interpleader
statutes of the State of California in this regard.
5. TERM OF AGREEMENT. This Agreement shall have an initial term of
-----------------
three (3) years. The term shall be automatically renewed on a yearly basis
thereafter, unless Depositor or SourceFile notifies the other party in writing
at least forty-five (45) days prior to the end of the then current term of its
intention to terminate this Agreement.
6. COMPENSATION OF SOURCEFILE. Depositor or Beneficiary, as
--------------------------
determined between the two, agree to pay SourceFile reasonable compensation for
the services to be rendered hereunder in accordance with SourceFile's then
current schedule of fees, except that any fees associated with Escrow Release
Requests and Technical Review/Verification Requests initiated by a Beneficiary
must be paid by that Beneficiary in accordance with SourceFile's then current
schedule of fees. Depositor will pay or reimburse SourceFile upon request for
all reasonable expenses, disbursements and advances, including software
duplication charges and reasonable attorneys' fees, incurred or made by it in
connection with carrying out its duties hereunder. SourceFile's schedule of
fees for the initial term of this Agreement is attached to this Agreement as
EXHIBIT "D".
7. LIMITATION OF DUTIES OF SOURCEFILE. SourceFile undertakes to
----------------------------------
perform only such duties as are expressly set forth herein.
8. LIMITATION OF LIABILITY OF SOURCEFILE. SourceFile may rely on and
-------------------------------------
shall suffer no liability as a result of acting or refraining from acting upon
any written notice, instruction or request furnished to SourceFile hereunder
which is reasonably believed by SourceFile to be genuine and to have been signed
or presented by a person reasonably believed by SourceFile to be authorized to
act on behalf of the parties hereto. SourceFile shall not be liable for any
action taken by it in good faith and believed by it to be authorized or within
the rights or powers conferred upon it by this Agreement. SourceFile may
consult with counsel of its own choice, and shall have full and complete
authorization and protection for any action taken or suffered by it hereunder in
good faith and in accordance with the opinion of such counsel. SourceFile shall
be liable to Depositor in the event that Depositor is damaged due to
SourceFile's willful or grossly negligent act or omission.
9. INDEMNIFICATION OF SOURCEFILE. Depositor and Beneficiary jointly
-----------------------------
agree to indemnify and defend SourceFile and to hold it harmless from and
against, any loss, liability or
-93-
<PAGE>
expense incurred by SourceFile, arising out of or in connection with this
Agreement, carrying out its duties hereunder, any other claim of liability with
respect to the Source Material. In the event suit is brought by any party to
this Agreement, or any other party, as against any other party, including
SourceFile, claiming any right they may have as against each other or against
SourceFile, then in that event the parties hereto, agree to pay to SourceFile
any attorney's fees and cost incurred by SourceFile in connection therewith.
10. RECORD KEEPING AND INSPECTION OF SOFTWARE. SourceFile shall
-----------------------------------------
maintain complete written records of all materials deposited by Depositor
pursuant to this Agreement. During the term of this Agreement, Depositor shall
be entitled at reasonable times during normal business hours and upon reasonable
notice to SourceFile to inspect the records of SourceFile maintained pursuant to
this Agreement and to inspect the facilities of SourceFile and the physical
condition of the Source Material.
11. TECHNICAL VERIFICATION. Beneficiary reserves the option to
----------------------
request SourceFile to verify the Source Material for completeness and accuracy.
SourceFile may elect to perform the verification at its site or at the
developers site. Depositor agrees to cooperate with SourceFile in the
verification process by providing its facilities and computer systems and by
permitting SourceFile and at least one employee of Beneficiary to be present
during the verification of Source Material.
12. RESTRICTION ON ACCESS TO SOFTWARE. Except as required to carry
---------------------------------
out its duties hereunder, SourceFile shall not permit any SourceFile employee,
Beneficiary or any other person access to the Software except as provided
herein, unless consented to in writing by Depositor. SourceFile shall use its
best efforts to avoid unauthorized access to the Source Material by its
employees or any other person.
13. BANKRUPTCY. Depositor and Beneficiary acknowledge that this
----------
Agreement is an "agreement supplementary to" the License Agreement as provided
in Section 365 (n) of Title 11, United State Code (the "Bankruptcy Code").
Depositor acknowledges that if Depositor, as a debtor in possession or a trustee
in Bankruptcy in a case under the Bankruptcy Code, rejects the License Agreement
or this Agreement, Beneficiary may elect to retain its rights under the License
Agreement and this Agreement as provided in Section 365 (n) of the Bankruptcy
Code. Upon written request of Beneficiary to Depositor or the Bankruptcy
Trustee, Depositor or such Bankruptcy Trustee shall not interfere with the
rights of Beneficiary as provided in the License Agreement and this Agreement,
including the right to obtain the Source Material from SourceFile.
14. NOTICES. Any notice or other communication required or permitted
-------
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date service is served personally, received from an overnight
courier, or on the date received when the mailing is sent registered mail,
postage prepaid, return receipt required, and addressed as follows or to such
other address or confirmed facsimile number as either party may, from time to
time, designate in a written notice given in like manner:
-94-
<PAGE>
TO DEPOSITOR: Legal Department
----------------
Davox Corporation
-----------------
6 Technology Park Drive
-----------------------
Westford, MA 01876
------------------
Telephone: 508-952-0200
Facsimile: 508-952-0201
TO SOURCEFILE: SourceFile
50 Crisp Plaza
Suite 700
San Francisco, California 94124-2924
Attn: Director
Telephone: (415) 715-2733
Facsimile: (415) 822-4302
TO BENEFICIARY: As set forth in Exhibit "C" Schedule of Beneficiaries.
15. MISCELLANEOUS PROVISIONS.
-------------------------
(a) WAIVER. Any term of this Agreement may be waived by the party
------
entitled to the benefits thereof, provided that any such waiver must be in
writing and signed by the party against whom the enforcement of the waiver is
sought. No waiver of any condition, or of the breach of any provision of this
Agreement, in any one or more instances, shall be deemed to be a further or
continuing waiver of such condition or breach. Delay or failure to exercise any
right or remedy shall not be deemed the waiver of that right or remedy.
(b) MODIFICATION OR AMENDMENT. Any modification or amendment of any
-------------------------
provision of this Agreement must be in writing, signed by the parties hereto and
dated subsequent to the date hereof.
(c) GOVERNING LAW. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California.
(d) HEADINGS; SEVERABILITY. The headings appearing at the beginning
----------------------
of the sections contained in this Agreement have been inserted for
identification and reference purposes only and shall not be used to determine
the construction or interpretation of this Agreement. If any provision of this
Agreement is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(e) FURTHER ASSURANCES. The parties agree to perform all acts and
------------------
execute all supplementary instruments or documents which may be reasonably
necessary to carry out the provisions of this Agreement.
-95-
<PAGE>
(f) ENTIRE AGREEMENT. This Agreement, including the attachments
----------------
hereto, contains the entire understanding between the parties' and supersedes
all previous communications, representations and contracts, oral or written,
between the parties, with respect to the subject matter thereof. It is agreed
and understood that this document and agreement shall be the whole and only
agreement between the parties hereto with regard to these escrow instructions
and the obligations of SourceFile herein in connection with this Agreement, and
shall supersede and cancel any prior instructions. SourceFile is specifically
directed to follow these instructions only and SourceFile shall have no
responsibility to follow the terms of any prior agreements or oral
understandings.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SIGNATURE BLOCKS DELETED
-96-
<PAGE>
EXHIBIT "A"
DESCRIPTION OF SOURCE MATERIAL
SOURCE MATERIAL DEPOSIT A:_____________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
SOURCE MATERIAL DEPOSIT B:_____________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
SOURCE MATERIAL DEPOSIT C:_____________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
SOURCE MATERIAL DEPOSIT D:_____________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
-97-
<PAGE>
EXHIBIT "B"
FORM OF ACKNOWLEDGEMENT BY BENEFICIARY
The undersigned hereby acknowledge, accepts and agrees to be bound by
the terms of the attached SourceFlex Software Source Code Escrow Agreement by
and between SourceFile, Inc., a California corporation, as Escrow Agent and as
Licensor, dated 199-.
BENEFICIARY:
_____________________________
_____________________________
Signature:___________________
Name:________________________
Title:_______________________
Address:_____________________
_____________________________
_____________________________
Telephone:___________________
Facsimile:___________________
DEPOSITOR: Legal Department
----------------
Davox Corporation
-----------------
6 Technology Park Drive
-----------------------
Westford, MA 01876
------------------
Telephone: 508-952-0200
Facsimile: 508-952-0201
Please send CERTIFIED OR REGISTERED MAIL to:
SOURCEFILE: SOURCEFILE
50 Crisp Plaza
Suite 700
San Francisco, California 94124-2924
Attn: Director
Telephone (415) 715-2733
Facsimile (415) 822-4302
The following is a list of the Source Material Deposits placed in escrow with
SourceFile for Beneficiary:__________________________________________________
__________________________________________________
-98-
<PAGE>
EXHIBIT "C"
SCHEDULE OF BENEFICIARIES OF THE SOFTWARE
-99-
<PAGE>
EXHIBIT "D"
SOURCEFILE COMPENSATION SCHEDULE
CALL FOR DETAILS
-100-
<PAGE>
Exhibit 6
MARKETING MATERIALS/PRODUCT DOCUMENTATION
A. CUSTOMER DOCUMENTATION
----------------------
<TABLE>
<CAPTION>
Document Document Version
Number -------- -------
------
<S> <C> <C>
902417 Unison System Supervisor's Guide 1.0
902401 Unison Pre-Installation Guide 1.7
902405 Unison SmartACD Hardware & Software Installation Guide Including: 2.2
Pre-Site Survey & Customizing ACD Screen Interface
902406 Unison Programmer's Guide to the Unison Event Database 1.3
902407 Unison Development System - Installation & Operation 1.0
902408 Unison Diagnostics Tools 1.3
902409 Unison Programmed Workstation Control (Workstation API) 1.5
902410 Unison Programmer's Guide for Client Application Programming 1.1.
Inter-face (ClientAPI) for DOS/Windows 3.1
902411 Unison Programmer's Guide for Client Application Programming 1.0.
Inter-face (ClientAPI) for OS/2
902426 Unison (Reactive) CTI Requirements for AT&T P1.0
902414 Unison - Using the Application Tools 1.0
902522 Unison System Advanced Features Tutorial 1.0.
B. DISTRIBUTOR ONLY DOCUMENTATION
------------------------------
Document Document Version
Number -------- -------
------
902402 Unison Software Installation Manual1 1.4(book)
902403 Unison Hardware/Software Maintenance Manual2 1.5(book)
902427 Unison (Reactive) CTI Installation for AT&T P10
902416 Unison System SelectView Reference Guide 1.0
902418 Unison System SeleDView Installation Guide 1.0
Note: These 2 manuals are bundled with the disk into one package.
</TABLE>
C. COLLATERAL DESCRIPTION
----------------------
Unison Brochure
Unison for Telemarketing
-101-
<PAGE>
Intelligent Computer Telephony Datasheet
Call Center Management Tri-Fold Brochure
Call Center Glue White Paper
Intelligent Computer Telephony Integration White Paper
Productivity Enhancements Brochure
Unison Two-Pocket Sales Folder
AT&T Customer Profile
Chase Bank Customer Profile
Detroit Edison Customer Profile
Dreyfus Customer Profile
Key Bank Customer Profile
Superstar Satellite Customer Profile
Telus Customer Profile
VW Credit Customer Profile
Educational Services Course Catalog
-102-
<PAGE>
EXHIBIT 9
IMPLEMENTATION PLAN
9A: Installation and Implementation Price Schedule
9B: Hand-off Document
-103-
<PAGE>
EXHIBIT 9A
SYSTEM IMPLEMENTATION PLAN (US & CANADA ONLY)
Davox will provide the following implementation services ("Implementation
Services") to an end user customer, consisting of (i) end user project
management, (ii) application specification, (iii) application building &
staging, (iv) on-site system integration, and (v) turn over to on-going support
service group.
1. PHASE 1: Function: Lucent sells/licenses Product to a Lucent
-------
end user and subcontracts Davox to perform the Implementation.
A. Davox shall manage and perform all of the implementation
services listed below, provided it has received the Implementation Plan
Requirements, as detailed in Exhibit 9B.
i. Project Planning/Documentation
ii. Management of end-user deliverable
iii. Gathering of specification data elements/creation of
application specification
iv. Management of/assistance in development of end-user's
application
v. System Build/Configuration & Staging at Westford, MA
vi. Application development, Product installation and testing
at Westford, MA
vii. Management of on-site integration/testing effort at end-
user facility
viii. Follow-on management for 90 days after end-user system
production start date
ix. Summary documentation creation for turn over to Davox
Customer Support
B. Davox shall bill Lucent the installation and implementation
pricing as described on Exhibit 9A.
2. PHASE 2: Function: Davox Implementation with Lucent Assisting/
-------
Observing. Lucent may utilize this phase if it so elects.
A. Davox shall perform the lead role in all implementation
services as outlined in paragraph 1 above. Lucent shall perform an
observation/training role for application development and implementation
management.
B. Lucent will complete all facets of physical layer system
installation upon completion of appropriate training, as defined under
Exhibit 2.
C. Pricing for Phase 2 shall be as mutually agreed upon if Lucent
elects to perform these functions.
-104-
<PAGE>
EXHIBIT 9A
INSTALLATION AND IMPLEMENTATION PRICE SCHEDULE
A. Basic UNISON System.
1. INITIAL SYSTEM INSTALLATION
<TABLE>
<CAPTION>
SEAT RANGE INSTALLATION COST
---------- -----------------
<S> <C>
8-11 *
12-23 *
24-32 *
33-40 *
41-50 *
51-58 *
59-64 *
65-75 *
76-87 *
88-96 *
97-107 *
108-115 *
116-128 *
129-139 *
140-151 *
152-163 *
164-175 *
176-185 *
186-200 *
</TABLE>
2. SEAT UPGRADE INSTALLATION SERVICES AFTER INITIAL SYSTEM INSTALLATION
<TABLE>
<CAPTION>
SEAT RANGE INSTALLATION COST
---------- -----------------
<S> <C>
0-8 *
9-32 *
33-64 *
65-100 *
</TABLE>
/*/ INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
-105-
<PAGE>
3. ADDITIONAL APPLICATION
At time of initial sale of UNISON System: $[CONFIDENTIAL TREATMENT
REQUESTED]/*//each
After sale of initial UNISON System: $[CONFIDENTIAL TREATMENT REQUESTED]/*/ /
each
*Note: One (1) application is included in the price of installation for the
initial system.
B. SCALE - BLENDED CALL
Additional to Base UNISON License
<TABLE>
<CAPTION>
SEAT RANGE INSTALLATION COST
---------- -----------------
<S> <C>
8-11 *
25-50 *
51-75 *
76-100 *
101-125 *
126-150 *
151-175 *
175-200 *
</TABLE>
C. ADDITIONAL SUPERVISOR LICENSES
Installation Fee under the Prime/Subcontractor schedule will be:
$[CONFIDENTIAL TREATMENT REQUESTED]/*/ /each
D. DESKTOP API DEVELOPMENT LICENSE
Installation Cost: $[CONFIDENTIAL TREATMENT REQUESTED]/*/ /each
/*/[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-106-
<PAGE>
EXHIBIT 9B
IMPLEMENTATION PLAN REQUIREMENTS (US & CANADA ONLY)
Every member of the team (Sales Representative, Technical Consultant, Project
Manager, and Systems Application Engineer) is responsible for the successful
implementation of the system and achieving a high level of customer
satisfaction. Upon submission of an Order with Davox, Davox requires of
Distributor the following items.
The customer file should contain the following documents:
* A copy of the system proposal.
* System Acceptance Criteria (If Applicable).
* Copy of any correspondence.
* Diagram of the proposed system integration.
* Copy of the operation review.
* List of all pertinent customer names and telephone numbers.
* Copy of all Request for Assistance (RFAs).
* Copy of the Sales order.
* Stated System(s) Requirements.
* Date Commitments.
* Overview of the system configuration.
* Number of Channels.
* Number of Agents.
* Line-to-Agent Ratio
* Answer/Dial %
* Agent Talk/Wrap Time Average
* Number of Supervisor Stations.
* Number of Transfer Ports.
* Number of Printers.
* Types of Supervisor Stations.
* Personal Computers.
* Sparc Workstations.
* Number of Applications
* Types of Agent Stations
* Types of Application(s)
* Proposed system integration
* Telephony Interfaces
* ACD
* Outbound-T1s
* Agent Audio
* PBX
* Data Interfaces
* Download
-107-
<PAGE>
* Upload
* Agent Workstations
* Supervisor Workstations
* ACD
* 3rd Party Software (if applicable)
Davox believes the information outlined above is the minimum necessary to begin
the implementation process.
Davox is continually looking for methods of increasing the amount, quality, and
speed in which the sales information is provided to the implementation team.
This document is a step in that direction.
-108-
<PAGE>
EXHIBIT 21
DAVOX CORPORATION
List of Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation
- ------------------ -----------------------------
Davox Securities Corporation Massachusetts
Davox (Europe) Limited United Kingdom
Davox Corporation Hong Kong Limited Hong Kong
Davox Sales Corporation Barbados
Davox International Holdings, Incorporated Massachusetts
Davox Mexico S.R.L. Mexico
<PAGE>
EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports in this Form 10-K, into the Company's previously filed Registration
Statements on Form S-8 (file Nos. 33-89582, 333-07003, 333-16209 and 333-30727).
It should be noted that we have not audited any financial statements of the
Company subsequent to December 31, 1997 or performed any audit procedures
subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
March 3, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 25,366
<SECURITIES> 23,802
<RECEIVABLES> 11,407
<ALLOWANCES> 1,048
<INVENTORY> 789
<CURRENT-ASSETS> 69,815
<PP&E> 4,585
<DEPRECIATION> 0
<TOTAL-ASSETS> 75,168
<CURRENT-LIABILITIES> 21,011
<BONDS> 0
0
0
<COMMON> 1,186
<OTHER-SE> 52,995
<TOTAL-LIABILITY-AND-EQUITY> 75,168
<SALES> 52,993
<TOTAL-REVENUES> 76,815
<CGS> 11,874
<TOTAL-COSTS> 26,550
<OTHER-EXPENSES> 8,479
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,952
<INCOME-PRETAX> 20,886
<INCOME-TAX> 2,506
<INCOME-CONTINUING> 18,380
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,380
<EPS-PRIMARY> $1.45
<EPS-DILUTED> $1.45
</TABLE>
