<PAGE> 1
============================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 10-Q/A
Amendment No. 1 to Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
-----------------------------------------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For the transition period from
--------------------------
Commission File Number 0-22210
-------------------------------------------
SUMMA FOUR, INC.
(Exact name of registrant as specified in its charter)
Delaware 02-0329497
(State of Incorporation) (IRS Employer Identification Number)
25 Sundial Avenue, Manchester, New Hampshire 03103
(Address of registrant's principal executive office)
(603) 625-4050
(Registrant's telephone number)
------------------------------
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practical date.
Common Stock, $.01 par value 5,734,001
Outstanding as of July 25, 1997
============================================================
<PAGE> 2
FORM 10-Q
PART II
PAGE 12
SUMMA FOUR, INC.
INDEX TO FORM 10-Q/A
Page(s)
-------
Item 6 - Exhibits and Reports on Form 8-K 12
Signature(s) 13
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.1 +Employment Agreement, dated April 15, 1997, by and between the
Registrant and Richard S. Swee. (originally filed as Exhibit
10.36)(1)
10.2 Joint Development Agreement, dated June 11, 1997, by and between
the Registrant and Junction, Inc. (originally filed as Exhibit
10.37)(1)
10.3 Customer Agreement, dated June 30, 1997, by and between the
Registrant and Mentor Graphics Corporation.
10.4 Lease Agreement, dated June 2, 1997, by and between the
Registrant and Atrium Executive Center, Inc.
10.5 Employment Agreement, dated June 26, 1997, by and between the
Registrant and Jeffrey A. Weber
10.6 +Amendment, dated June 12, 1997, to Agreement dated November 16,
1996 by and between the Registrant and Barry R. Gorsun.
11 Statement Re: Computation of per Share Earnings (1)
27 Financial Data Schedule (1)
</TABLE>
* Confidential treatment requested as to certain portions which have
been filed separately with the Securities and Exchange Commission
(the "Commission").
+ Management contract or compensatory plan or arrangement filed as an
exhibit pursuant to Item 6(a) of this report.
(1) Incorporation herein by reference to the Registrant's Form 10-Q for
the Quarter Ended June 30, 1997 filed with the Commission on August
12, 1997.
<PAGE> 3
FORM 10-Q
PART II
PAGE 13
SIGNATURES
----------
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this amendment to the report to be signed on its behalf by the
undersigned thereunto duly authorized.
Summa Four, Inc.
Date: June 19, 1998 /s/ Jeffrey A. Weber
------------------------------------------
Jeffrey A. Weber
Vice President and Chief Financial Officer
<PAGE> 1
EXHIBIT 10.3
Mentor Graphics Corporation
8005 SW Boeckman Road
Wilsonville, Oregon 97070-7777
CUSTOMER AGREEMENT
Agreement No. MA4159 Effective Date: June 30, 1997
------
Customer: SUMMA FOUR, INC.
25 Sundial Avenue
Manchester, NH 03103-7251
This Customer Agreement (Agreement) governs the sale and licensing of products
and services to Customer by Mentor Graphics Corporation (Mentor Graphics).
The parties agree as follows:
1. SCOPE OF AGREEMENT. Mentor Graphics will license Software and provide
documentation and services to Customer as described in this Agreement, which
includes the attachments agreed upon by the parties (Attachments). References to
"Software" shall include Mentor Graphics' standard software products and any
other software that Mentor Graphics licenses to Customer.
2. ORDERS. If Customer elects to order products or services on an ongoing
basis, Customer will issue written purchase orders that refer to this Agreement
by number. Customer is not obligated to order products or services, and Mentor
Graphics is not obligated to accept purchase orders. If Customer issues a
purchase order that Mentor Graphics accepts (Order), the Order will constitute a
contract between the parties, which shall be governed solely and exclusively by
the terms and conditions of this Agreement even if Customer does not refer to
this Agreement on the Order. Any terms or conditions appearing on an Order that
add to or conflict with this Agreement will not be effective unless an
authorized representative of Mentor Graphics specifically agrees to them in
writing.
3. PRICES AND TERMS. Customer will pay amounts invoiced under this
Agreement, for products compliant with a quotation under which an Order is
placed, in U.S. dollars within 30 days after the date of invoice. The prices
that apply to any transaction will be those on a valid quotation that Mentor
Graphics has given to Customer, or, if no valid quotation exists, those on
Mentor Graphics' applicable price list in effect when Customer places the Order.
Prices do not include freight, insurance, customs duties, or other similar
charges, which Mentor Graphics will invoice separately. Unless Customer provides
Mentor Graphics with a certificate of exemption from the applicable taxing
authority, Mentor Graphics will invoice all applicable taxes separately.
<PAGE> 2
4. SHIPPING AND DELIVERY. All Orders shall request shipment within six
months of the date of the Order. All products are delivered FOB point of
shipment. Mentor Graphics will use reasonable efforts to ship on or before the
shipping dates requested on the Order, provided that the requested dates conform
to the estimated lead times quoted by Mentor Graphics.
5. RESCHEDULING AND CANCELLATION. Customer may request that shipments be
rescheduled or canceled by sending a written notice that is received by Mentor
Graphics at least ten business days prior to shipment. Customer will not
reschedule a shipment to a date more than six months after the date of the
original Order. If Customer cancels a shipment, Customer will pay a cancellation
charge of 5% of the price of each product canceled.
6. SOFTWARE LICENSE.
6.1 Each license that Mentor Graphics grants to Customer is a
fully-paid perpetual nonexclusive, nontransferable license to use the Software
solely: (a) in machine-readable, object-code form; (b) for Customer's internal
business purposes; and (c) on the computer hardware equipment and at the site(s)
that Mentor Graphics designates. Customer will use floating-licensed Software
only within a single site. As used in this Agreement, "site" means a logically
connected network of computer work stations located within a one-half mile
radius on which Software may be used and to which Mentor Graphics assigns a site
number. Customer is not entitled to receipt or use of the source code for any
Software. Mentor Graphics or its licensors will continue to own all Software
that Mentor Graphics licenses to Customer.
6.2 Customer may copy Software only as reasonably necessary to support
an authorized use. Customer will include on each copy that it makes all notices
and legends embedded in Software and affixed to its medium and container as
received from Mentor Graphics. All copies of Software, whether provided by
Mentor Graphics or made by Customer, shall remain the property of Mentor
Graphics or its licensors. Customer will maintain a record of the number and
location of all copies of Software that it makes, including Software that has
been merged with other software, and will make those records available to Mentor
Graphics upon request.
6.3 All Software constitutes or contains trade secrets and confidential
information of Mentor Graphics or its licensors. Customer shall not make
Software available in any form to any person other than Customer's employees or
contractors, excluding Mentor Graphics' competitors, whose job performance
requires such access. Customer shall take appropriate action to protect the
confidentiality of Software and insure that any person permitted access to
Software does not disclose it or use it except as permitted by this Agreement.
Customer shall not reverse assemble, reverse compile, or otherwise reverse
engineer Software, in whole or in part.
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6.4 Any Software that Mentor Graphics provides to Customer shall be
subject to the above license restrictions. The provisions of this section 6
shall survive termination of this Agreement.
7. LIMITED WARRANTY.
7.1 Mentor Graphics warrants that during the warranty period its
standard, generally supported Software products, when properly installed, will
substantially conform to the functional specifications set forth in the
applicable user manual. Mentor Graphics does not warrant that Software will meet
Customer's requirements or that operation of the Software will be uninterrupted
or error free. The warranty period is 90 days starting on the 15th day after
delivery or upon installation, whichever first occurs. Customer must notify
Mentor Graphics in writing of any nonconformity within the warranty period.
MENTOR GRAPHICS' ENTIRE LIABILITY AND CUSTOMER'S EXCLUSIVE REMEDY SHALL BE FOR
MENTOR GRAPHICS TO USE COMMERCIALLY REASONABLE EFFORTS TO CORRECT ANY
NONCONFORMITY REPORTED BY CUSTOMER DURING THE WARRANTY PERIOD. MENTOR GRAPHICS
DOES NOT WARRANT THAT THESE EFFORTS WILL CORRECT THE NONCONFORMITY.
7.2 This warranty shall not be valid if the Software has been subject
to abuse, misuse, accident, alteration, neglect, or unauthorized modification or
installation.
7.3 MENTOR GRAPHICS MAKES NO WARRANTY WITH RESPECT TO SERVICES. ALL
SERVICES ARE PROVIDED "AS IS."
7.4 MENTOR GRAPHICS MAKES NO WARRANTY WITH RESPECT TO ANY PRODUCT THAT
MENTOR GRAPHICS PROVIDES TO CUSTOMER EXCEPT MENTOR GRAPHICS' STANDARD, GENERALLY
SUPPORTED SOFTWARE PRODUCTS. For third party products, however, Mentor Graphics
will transfer to Customer any warranty from the original manufacturer or
licensor that Mentor Graphics is allowed to transfer.
7.5 THE WARRANTIES SET FORTH IN THIS SECTION 7 ARE EXCLUSIVE AND MENTOR
GRAPHICS MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT TO THE
SOFTWARE, SERVICES OR OTHER MATERIAL PROVIDED UNDER THIS AGREEMENT. MENTOR
GRAPHICS SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
8. LIMITED SUPPORT. Mentor Graphics has no obligation, other than the
above limited warranty obligations, to support any products except as may be
specifically agreed in writing by Mentor Graphics in a separate agreement or in
an Attachment to this Agreement.
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9. INFRINGEMENT.
9.1 Subject to sections 9.2 and 9.3 below, Mentor Graphics will defend
or settle, at its option and expense, any action brought against Customer
alleging that any Software product furnished by Mentor Graphics under this
Agreement infringes a United States patent or copyright. Mentor Graphics will
pay any costs and damages finally awarded against Customer that are attributable
to the claim, provided that Customer (a) notifies Mentor Graphics promptly in
writing of the action; (b) provides Mentor Graphics all reasonable information
and assistance to settle or defend the claim; and (c) grants Mentor Graphics
sole authority and control of the defense or settlement of the claim.
9.2 In lieu of the provisions of section 9.1, if an infringement claim
is made, Mentor Graphics may, at its option and expense, either (a) replace or
modify the Software product so that it becomes noninfringing or (b) procure for
Customer the right to continue using the Software product. If Mentor Graphics
determines that neither of those alternatives is financially practical or
otherwise reasonably available, Mentor Graphics may require the return of the
Software product and refund to Customer the license fee paid, less a reasonable
allowance for use.
9.3 Mentor Graphics has no liability to Customer if the alleged
infringement is based upon: (a) the combination of the Software product with any
product not furnished by Mentor Graphics; (b) the modification of the Software
product other than by Mentor Graphics; (c) the use of other than a current
unaltered release of a Software product; (d) the use of the Software product as
part of an infringing process; or (e) a product that Customer designs or
markets. Mentor Graphics has no liability for the alleged infringement by any
product that is not generally available from and supported by Mentor Graphics at
the time Customer acquires the product.
9.4 THIS SECTION 9 STATES MENTOR GRAPHICS' ENTIRE LIABILITY AND
CUSTOMER'S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO ANY ALLEGED PATENT OR
COPYRIGHT INFRINGEMENT BY ANY PRODUCT.
10. LIMITATION OF LIABILITY. IN NO EVENT SHALL MENTOR GRAPHICS BE LIABLE
FOR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF
PROFITS) WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY, REGARDLESS
OF WHETHER IT HAS BEEN ADVISED OF SUCH DAMAGES. IN NO EVENT SHALL MENTOR
GRAPHICS' LIABILITY UNDER THIS AGREEMENT EXCEED THE PRICE OF THE PRODUCT OR
SERVICE GIVING RISE TO THE CLAIM.
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<PAGE> 5
11. LIFE ENDANGERING APPLICATIONS. The products provided under this
Agreement are not designed, made, or intended for use in any application where
the failure or inaccuracy of the products might cause death or personal injury.
Customer agrees that neither Mentor Graphics nor its suppliers or licensors
shall be liable, in whole or in part, for any claims or damages arising out of
or in connection with the use and performance of products in such applications.
If Customer uses products for such applications, Customer will indemnify and
hold harmless Mentor Graphics, its suppliers and its licensors from any claims,
loss, cost, damage, expense, or liability, including attorneys' fees, arising
out of or in connection with the use and performance of products in such
applications.
12. SUBSIDIARIES. For purposes of this section 12, a "Subsidiary" shall
mean any corporation more than 50% owned by Customer listed in Attachment A. Any
Subsidiary may place purchase orders under this Agreement, provided that the
Subsidiary agrees to be bound by all the terms and conditions of this Agreement.
A foreign Subsidiary shall place purchase orders with the Mentor Graphics
affiliate responsible for that Subsidiary. The Mentor Graphics affiliate may
alter the terms and conditions of this Agreement for a particular transaction as
necessary to reflect its local laws, business practices and customs. The
affiliate may also, at its option, refer a foreign Subsidiary to an independent
distributor. This Agreement does not apply to transactions with Mentor Graphics'
distributors.
13. TERM AND TERMINATION. This Agreement shall remain in effect until
terminated as described below.
13.1 Customer acknowledges that this Agreement may not apply to future
business products and models.
13.2 Either party may terminate this Agreement at any time upon 30 days
written notice if the other party is in material breach of this Agreement and
fails to cure the breach within the 30 day notice period.
13.3 Except as described below, termination of this Agreement or any
Attachment will not affect (a) any licenses Mentor Graphics grants before the
termination, (b) Customer's obligation to pay for products shipped and services
provided before the termination, (c) Customer's obligation to comply with the
provisions under section 6 above, and (d) any Mentor Graphics obligation which
Customer has paid for in accordance with an Attachment.
13.4 Mentor Graphics may terminate any Software license granted under
this Agreement immediately upon written notice if Customer exceeds the scope of
the license granted under section 6 or otherwise fails to comply with the
provisions under Section 6. Otherwise, Mentor Graphics may terminate the license
only if Customer fails to pay for the license when due and such failure
continues for a period of 30 days after written
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notice from Mentor Graphics. Upon termination of any license under this
Agreement, Customer shall cease all use of the Software covered by the license
and return to Mentor Graphics or certify deletion and destruction of the
Software covered by the license, including all copies.
14. SOFTWARE LOANS. Mentor Graphics may from time to time, at its sole
discretion, lend Software to Customer. Mentor Graphics will not require an Order
for loans that are at no charge. Mentor Graphics is not obligated to lend any
Software to Customer. All loans will be subject to the terms and conditions of
this section 14.
14.1 For each loan Mentor Graphics will identify in writing to Customer
the Software loaned and the term of the loan. The writing may be in the form of
an electronic communication.
14.2 Mentor Graphics will grant Customer a nonexclusive,
nontransferable, temporary license to use loaned Software for the term of the
loan. The temporary license shall be subject to the restrictions of section 6.
14.3 Customer shall return to Mentor Graphics or delete and destroy
loaned Software on or before the expiration of the loan.
14.4 REGARDLESS OF ANY OTHER PROVISION OF THIS AGREEMENT, CUSTOMER
AGREES THAT LOANED SOFTWARE IS PROVIDED "AS IS" AND MENTOR GRAPHICS MAKES NO
WARRANTIES WITH RESPECT TO LOANED SOFTWARE, EITHER EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
15. ADMINISTRATION. Each party assigns a person to administer this
Agreement. The administrators are:
For Mentor Graphics:
Director of Contracts
Mentor Graphics Corporation
8005 SW Boeckman Road
Wilsonville, Oregon 97070-7777
For Customer:
------------------------------
Summa Four, Inc.
25 Sundial Avenue
Manchester, New Hampshire 03103-7251
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If no administrator is listed for Customer, Customer's administrator shall be
the person who signs this Agreement, at the address specified above. Each party
may change its administrator upon written notice.
16. NONDISCLOSURE. In addition to Mentor Graphics' rights under section 6,
the parties shall sign a confidentiality agreement if any additional
confidential information will be disclosed by either party pursuant to this
Agreement. Neither party will disclose the content of this Agreement to any
third party.
17. DOCUMENTS INCLUDED. The following Attachments are included as part of
this Agreement from the effective date of this Agreement, if the Attachments are
signed by authorized representatives of the parties:
(Check all that apply)
[ ] Attachment A Subsidiaries
[X] Attachment B Software Support
[X] Attachment C Professional Services
The parties may add or delete Attachments at any time by mutual written
agreement.
18. GENERAL PROVISIONS.
18.1 ENTIRE AGREEMENT; AMENDMENT. This document, including the
Attachments, contains the entire understanding between the parties relating to
its subject matter and supersedes all prior or contemporaneous agreements
between the parties relating to the subject matter, written or oral. This
Agreement may not be changed except by a written document signed by an
authorized representative of each party.
18.2 EXPORT. Customer understands that Mentor Graphics is subject to
regulation by United States government agencies, which prohibit export or
diversion of products, information about the products, and direct products of
the products to certain countries and certain persons. Regardless of any
disclosure Customer makes to Mentor Graphics of an ultimate destination of the
products or direct products of the products, Customer warrants that it will not
export in any manner, either directly or indirectly, any product or direct
product of a product, without first obtaining all necessary approval from
appropriate United States government agencies. Customer acknowledges that the
regulation of product export is in continuous modification by the United States
Congress and administrative agencies. Customer agrees to complete all documents
and to meet all requirements arising out of such modifications.
18.3 NOTICE. All notices required or authorized under this Agreement
must be in writing and shall refer to this Agreement by number. Notices shall be
effective upon delivery if delivered in person or upon mailing if mailed at a
U.S. post office, first class
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mail, postage prepaid, addressed or delivered to the other party's administrator
at the address stated above, or at such other address as either party provides
by advance written notice to the other party.
18.4 WAIVER. No term of this Agreement shall be considered waived and
no breach excused by either party unless made in writing. No consent, waiver, or
excuse by either party, express or implied, shall constitute a subsequent
consent, waiver or excuse.
18.5 DELAY. Neither party shall be responsible for failure to perform
or deliver or for a delay in performance or delivery where the failure or delay
results from causes beyond a party's reasonable control.
18.6 SEVERABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be void, invalid, unenforceable or illegal,
such provision shall be severed from this Agreement and the remaining provisions
will remain in force and effect.
18.7 ASSIGNMENT OF THE AGREEMENT. Mentor Graphics may delegate,
subcontract or assign any of its duties under this Agreement to third parties,
but no such delegation, subcontract or assignment shall relieve Mentor Graphics
of its obligations under this Agreement without Customer's prior written
consent. This Agreement and the rights and duties under it may not be
sublicensed, assigned or otherwise transferred by Customer without Mentor
Graphics' prior written consent, except for an assignment by operation of law as
a result of a merger or other corporate reorganization of Customer for which
Customer shall provide written notification.
18.8 TRANSFER OF SOFTWARE LICENSES. Within the United States the fee,
for each approved transfer subject to section 18.7 above, is $1,500 per
transaction.
18.9 CONTROLLING LAW. This Agreement shall be governed by and construed
under the laws of the state of Oregon.
CUSTOMER MENTOR GRAPHICS CORPORATION
By /s/ Dick Swee By /s/ Kristine Gardner
------------------------------- --------------------------------
(Authorized Representative) (Authorized Representative)
Name Dick Swee Name Kristine Gardner
------------------------------ ------------------------------
(Type or Print) (Type or Print)
Title VP Engineering Title Corporate Contracts Manager
----------------------------- -----------------------------
Date 6/27/97 Date 6-26-97
------------------------------ ------------------------------
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ATTACHMENT B
SOFTWARE SUPPORT
This Attachment B is attached to and made a part of Mentor Graphics Customer
Agreement No. MA4159 (Agreement) between Mentor Graphics and the following
Customer and is effective as of the date it is signed below by authorized
representatives of both parties:
Customer: SUMMA FOUR, INC.
25 Sundial Avenue
Manchester, NH 03103-7251
CUSTOMER MENTOR GRAPHICS CORPORATION
By /s/ Dick Swee By /s/ Kristine Gardner
------------------------------- --------------------------------
(Authorized Representative) (Authorized Representative)
Name Dick Swee Name Kristine Gardner
------------------------------ ------------------------------
(Type or Print) (Type or Print)
Title VP Engineering Title Corporate Contracts Manager
----------------------------- -----------------------------
Date 6/27/97 Date 6-26-97
------------------------------ ------------------------------
The parties agree as follows:
1. SUPPORT. Pursuant to the terms of the Agreement and this Attachment B
Mentor Graphics will provide the Software support services identified in an
Order. All Orders for support shall be issued for a minimum term of one year.
2. TECHNICAL COORDINATOR. Customer will provide Mentor Graphics with the
name, address and telephone number of a technical coordinator and alternate for
each site covered by the Order. The technical coordinator and alternate must
have a working knowledge of the Software products. Customer will immediately
notify Mentor Graphics of any changes in the name, address or telephone number
of the technical coordinator or alternate.
3. TECHNICAL SUPPORT. To the extent Customer has ordered Software support
services that include technical support, Mentor Graphics will provide technical
support described in this section 3 after Customer reports a Software problem to
Mentor Graphics' support center.
3.1 Mentor Graphics' obligations to provide technical support are to
use reasonable efforts to correct any Software errors or provide work-around
solutions. As
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needed and applicable, Mentor Graphics' technical support will consist of
providing Customer with technical advice or shipping Customer any replacement or
modified Software. Specific support levels, hours of support availability, any
response options, and any technical support options or guidelines are described
in Mentor Graphics' current price list or other published support documentation.
3.2 "Technical Support Location" or "TSL" means the combination of all
groups within Customer that share licenses as authorized under the licensing
terms of section 6 of the Agreement or routinely share internal support
mechanisms such as Customer-operated help desks. Customer-operated help desks
are considered part of the TSL they support. Customer will properly identify all
licenses within each TSL designated. The combination of groups and licenses that
form a TSL is subject to Mentor Graphics' approval.
3.3 Customer may order only one configuration of offerings per TSL and
such configuration will apply to all Software within the applicable TSL. Only
Customer's employees or contractors who use Software licenses that are covered
by an Order for technical support may contact Mentor Graphics for support
services. Such employees or contractors must provide the applicable site number
to Mentor Graphics when placing a support call. If Customer is notified by
Mentor Graphics or otherwise learns of non-compliance with this section 3.3,
Customer will immediately instruct its employees or contractors who are not in
compliance to cease contacting Mentor Graphics for technical support unless or
until the appropriate Order is placed. Customer represents that it understands
and will comply with Mentor Graphics' then current published technical support
guidelines.
4. SOFTWARE UPDATES. To the extent Customer has ordered Software support
services that include Software updates, Customer shall receive for each
supported site one copy of each applicable Software update, if any, that Mentor
Graphics releases during the support term. All Software updates are subject to
the licensing terms of section 6 of the Agreement. Third party operating system
software may require upgrading in order to execute the new Software update.
Mentor Graphics is not required to alter or upgrade third party operating system
software to support new Software updates.
5. LIMITATIONS.
5.1 Mentor Graphics reserves the right to decline to support any
Software product that has not been on continuous support or has been modified by
Customer or a third party without Mentor Graphics' prior written consent. If
Mentor Graphics decides to support such a Software product, Customer will be
responsible for paying Mentor Graphics' current standard charges to restore the
product to a condition or version acceptable to Mentor Graphics prior to Mentor
Graphics starting support service.
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5.2 To enable Mentor Graphics to respond to certain Software problems,
Mentor Graphics may need Customer to furnish Mentor Graphics with a test case
and sufficient documentation to allow recreation of the Software problem. At
Customer's request, Mentor Graphics will sign a mutually acceptable
confidentiality agreement regarding the test case and documentation.
5.3 Software support service does not include: (a) services connected
with the installation, configuration, relocation or reconfiguration of Software;
(b) supplies, accessories or media; (c) maintenance or support of operating
system software; (d) service resulting from: (i) neglect, misuse or accidental
damage of the Software; (ii) modifications, corrections or workarounds performed
by a person not authorized by Mentor Graphics; and (iii) the use of the Software
with computer hardware, supplies or materials which do not meet Mentor Graphics'
specifications; (e) the support of software developed by Customer, developed by
Mentor Graphics at Customer's request or obtained from third parties; or (f) the
support of third party or other products not regularly provided or supported by
Mentor Graphics.
5.4 Mentor Graphics' software support obligations apply only to the
current and immediately prior Software release.
6. RELOCATION. Customer will provide Mentor Graphics with advance written
notice of the relocation of any Software product covered by support service. If
a proposed relocation includes a transfer of the license to another party or to
a computer or site not previously designated by Mentor Graphics for that
particular Software product, the relocation and transfer will be subject to
Mentor Graphics' prior approval which shall not be unreasonably withheld and its
current policies and charges regarding license transfers. However, in no event
shall the charges for such transfer exceed $1,500 per transaction.
7. CANCELLATION. Customer may cancel Software support services only upon
60 days prior written notice. Mentor Graphics may cancel Software support
services if Customer fails to comply with the terms and conditions of this
Attachment B or to pay for the services when due and such failure continues for
a period of 30 days after written notice from Mentor Graphics.
8. INITIAL SUPPORT ORDER. Customer's initial order is for the "BaseLine"
and "OpenLine" support offerings, a description of which is attached as Exhibit
A to this Attachment B.
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ATTACHMENT C
PROFESSIONAL SERVICES
This Attachment C is attached to and made a part of Mentor Graphics Customer
Agreement No. MA4159 (Agreement) between Mentor Graphics and the following
Customer and is effective as of the date it is signed below by authorized
representatives of both parties:
Customer: SUMMA FOUR, INC.
25 Sundial Avenue
Manchester, NH 03103-7251
CUSTOMER MENTOR GRAPHICS CORPORATION
By /s/ Dick Swee By /s/ Kristine Gardner
------------------------------- --------------------------------
(Authorized Representative) (Authorized Representative)
Name Dick Swee Name Kristine Gardner
------------------------------ ------------------------------
(Type or Print) (Type or Print)
Title VP Engineering Title Corporate Contracts Manager
----------------------------- -----------------------------
Date 6/27/97 Date 6-26-97
------------------------------ ------------------------------
The parties agree as follows:
1. PROJECT OBJECTIVE AND PAYMENT. Pursuant to the terms set forth in the
Agreement and this Attachment C Mentor Graphics will perform services for
Customer as described in a statement of work (SOW) referenced in an Order.
Project objectives and the individual tasks of the parties will be described in
the SOW. For each new project, the parties will execute a new SOW. Customer will
pay Mentor Graphics all fees associated with the services that Mentor Graphics
performs.
2. OWNERSHIP.
2.1 "Intellectual Property" means all custom software and any other
ideas, inventions, whether or not patentable, U.S. and foreign patent and
related rights, U.S. and foreign copyrights, discoveries, improvements, trade
secrets, and/or know-how that Mentor Graphics develops or provides to Customer
as part of the services covered by this Attachment, whether the Intellectual
Property is developed solely by Mentor Graphics or with Customer's assistance or
resources.
2.2 Customer will own all Intellectual Property to the extent it (a)
pertains exclusively to and is physically implemented in Customer's products or
design
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environment, and (b) does not include any of Mentor Graphics' pre-existing code
or other pre-existing intellectual property, modifications or enhancements to
such pre-existing code or intellectual property, or ideas, concepts or know-how
with applicability outside Customer's design environment (Customer Intellectual
Property). Mentor Graphics will assign to Customer all of Mentor Graphics'
right, title and interest in and to Customer Intellectual Property that Customer
will own. Customer shall be the sole owner of all domestic and foreign patents,
copyright rights and other rights pertaining to such Customer Intellectual
Property, and Mentor Graphics agrees to sign all documents that Customer
reasonably determines to be necessary or convenient for use in applying for,
perfecting or enforcing patents or other rights in such Customer Intellectual
Property.
2.3 Mentor Graphics will own all Intellectual Property except for
Intellectual Property which is owned by Customer pursuant to section 2.2 above
(Mentor Graphics Intellectual Property). Customer will assign to Mentor Graphics
all of Customer's right, title and interest in and to the Mentor Graphics
Intellectual Property that Mentor Graphics will own. Mentor Graphics shall be
the sole owner of all domestic and foreign patents, copyright rights and other
rights pertaining to such Mentor Graphics Intellectual Property, and Customer
agrees to sign all documents that Mentor Graphics reasonably determines to be
necessary or convenient for use in applying for, perfecting or enforcing patents
or other rights in such Mentor Graphics Intellectual Property.
3. LICENSE.
3.1 Mentor Graphics grants to Customer a fully-paid perpetual,
royalty-free, non-exclusive, nontransferable license to any Mentor Graphics
Intellectual Property that Mentor Graphics provides to Customer pursuant to this
Attachment. The license will be subject to the provisions of section 6 of the
Agreement. If as part of such Mentor Graphics Intellectual Property Mentor
Graphics provides the source code, Customer's license to the source code will be
subject to the following additional provisions (except, however, that these
additional provisions do not apply to any code written in the AMPLE language):
Customer will use the source code only to correct software errors and enhance or
modify the Mentor Graphics Intellectual Property for Customer's internal use.
Customer shall not disclose or permit disclosure of source code, in whole or in
part, including any of its methods or concepts, to anyone except Customer's
employees with a need to know. Customer shall not copy or compile source code in
any manner except to support this authorized use. Customer shall not sell,
sublicense or otherwise transfer source code in any form or any modification or
compilation of source code, in whole or in part. If Customer attempts to use,
copy, transfer, compile or disclose source code in any manner contrary to the
provisions of this section 3.1, or in derogation of Mentor Graphics' proprietary
rights, Mentor Graphics shall have, in addition to any other remedies available
to it, the right to injunctive relief enjoining such action.
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<PAGE> 14
3.2 Mentor Graphics grants to Customer a royalty-free, non-exclusive,
nontransferable license to use for Customer's internal business purposes only
any of Mentor Graphics' other Intellectual Property that Mentor Graphics
provides to Customer pursuant to this Attachment.
4. REPORTS. Any report that Mentor Graphics prepares for Customer under
this Attachment will be based on information that Mentor Graphics obtains from
Customer. Accordingly, Mentor Graphics makes no representations as to the
accuracy or completeness of such reports. Any proposals Mentor Graphics makes in
such reports are recommendations only. Statements made in such reports regarding
the results of implementation of any recommendations are guidelines and
estimates only.
5. NO SUPPORT. Unless otherwise specifically agreed in an SOW, Mentor
Graphics will have no obligation to support or maintain any Software or other
material that Mentor Graphics develops or provides pursuant to this Attachment.
6. INDEPENDENT DEVELOPMENT. Customer understands that Mentor Graphics may
have already developed or received from other parties information or material
similar to that provided by or to Customer under this Attachment or may
currently or in the future be developing information and material similar to
that provided by or to Customer. Accordingly, nothing in this Attachment shall
be construed as a representation or inference that Mentor Graphics has not or
will not develop products, for itself or for others, that compete with the
products, information, or material supplied by or to Customer under this
Attachment. Notwithstanding the above, Mentor Graphics warrants that it shall
not use any Customer Intellectual Property in any such developments described
above.
7. HIRING. During Mentor Graphics' performance of services under an SOW
and for a period of one year following completion of the project, neither party
will intentionally solicit for hire any of the other party's employees or
contractors who have performed such services for the project unless otherwise
agreed to, in writing, by the party.
8. THIRD PARTY SOFTWARE. If the work contemplated in an SOW would require
that Mentor Graphics use software licensed to Customer by a third party,
Customer shall ensure that Mentor Graphics has the right to use the third party
software on Customer's behalf. Mentor Graphics shall limit its use of such third
party software to work performed for Customer under the applicable SOW.
9. STATUS AS INDEPENDENT CONTRACTORS. The parties are independent
contractors. Neither has the authority to bind the other to any third person or
act in any way as the representative of the other, unless otherwise expressly
agreed to in writing by authorized representatives of both parties. This
Attachment in no way prohibits Mentor Graphics from performing identical or
similar services for other parties.
-14-
<PAGE> 15
10. TERMINATION. Either party may terminate the performance of any services
upon material breach of this Agreement by the other party and failure to cure
the breach within 30 days after written notice specifying the breach. Customer
will remain liable to pay Mentor Graphics for any services performed prior to
the termination. Customer shall have the right to continue using any Software
and other material previously furnished to it, subject to the terms set forth in
this Attachment and elsewhere in this Agreement.
11. DISCLOSURES. The parties have executed a Non-Disclosure Agreement
effective June 30, 1997 which is incorporated into this Attachment C by
reference.
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<PAGE> 16
EFFECTIVE DATE: JUNE 30, 1997
NON-DISCLOSURE AGREEMENT
THIS AGREEMENT is between Summa Four, Inc., a Delaware Corporation, with its
principal place of business at 25 Sundial Avenue, Manchester, New Hampshire,
03103-7251 (hereinafter "Summa Four") and the Company whose name and address is
set forth below (hereinafter "Company").
Company: Mentor Graphics Corporation
Street: 8005 SW Boeckman Road
City: Wilsonville
State: Oregon Zip: 97070-7777
WHEREAS, Summa Four may from time to time furnish certain confidential
information to Company, and
WHEREAS, the Parties acknowledge that said confidential information is a
valuable and proprietary asset of Summa Four, and
WHEREAS, the Parties mutually agree this Agreement shall apply to any and all
disclosures made by Summa Four to Company for the period starting on the
effective date above and ending on the anniversary date three (3) years
thereafter.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the Parties agree as follows:
1. CONFIDENTIAL INFORMATION
For the purposes hereunder, Confidential Information shall include information
disclosed to or which becomes known by Company as a result of disclosure by
Summa Four. Confidential Information may include information about Summa Four,
its products, processes and services including, but not limited to, information
relating to physical working models and samples of the products, research,
development, patentable and unpatentable inventions, manufacturing, purchasing,
accounting, engineering, marketing, merchandising, selling, customer lists,
customer prospects, software programs, software codes, blueprints, technical
information, trade secrets or know-how or other related proprietary business
information or data, in tangible or intangible form, including observations made
by Company while on Summa Four's premises ("Confidential Information").
Confidential Information that is presented in written or other tangible form
shall be clearly and conspicuously marked as confidential. If the Confidential
Information is disclosed in an oral, visual or other intangible manner, it shall
be identified as confidential before, during or after the oral, visual or other
intangible disclosure and confirmed in writing as confidential within thirty
(30) days thereafter.
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<PAGE> 17
2. NON-DISCLOSURE
Company will (a) hold all Confidential Information in confidence and, (b)
restrict dissemination of the Confidential Information only to those of its
employees on a need-to-know basis and, (c) shall not publish, disclose or
divulge any Confidential Information to any other person, firm, corporation,
association or other entity and, (d) not use the Confidential Information,
directly or indirectly, for its own benefit or for the benefit of any person,
firm, corporation, association or other entity, without Summa Four's prior
written consent. All Confidential Information disclosed in intangible form shall
be kept confidential to the same extent as if such Confidential Information were
in tangible form. Company agrees to receive and protect the Confidential
Information in accordance with the same standard of care which is applied to its
own confidential, proprietary information for a period of not less than two (2)
years from the date of Disclosure.
3. EXCLUSIONS
For the purposes of this Agreement, Confidential Information shall not be deemed
to include information which: (a) is, or becomes, public knowledge through no
wrongful act of Company, or (b) was previously or independently developed by or
known to Company without the use of Confidential Information obtained under this
Agreement, or (c) is, or becomes, lawfully available to Company from a source
other than Summa Four, or (d) is approved for release by written authorization
from Summa Four, or (e) was communicated in response to a valid order by a court
or other governmental body, was otherwise required by law, or was necessary to
establish the rights of either party under this Agreement.
4. REMEDIES
Summa Four is entitled to enforce the provisions of this Agreement by any means
allowed by law including seeking to obtain injunctive relief and/or specific
performance.
5. NO RIGHT OR LICENSE GRANTED
No rights or obligations other than those expressed herein are to be implied
from this Agreement. No license or other right is hereby granted directly or
indirectly to Company hereunder, to use in any way the Confidential Information
disclosed by Summa Four under this Agreement. Upon the expiration or termination
of this Agreement, or upon written request by Summa Four, Company shall return
or destroy, at Summa Four's option, all Confidential Information in its
possession or control.
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<PAGE> 18
6. LAW AND JURISDICTION
The validity, construction, and interpretation of this Agreement and the rights
and duties of Company hereto shall be governed by and construed in accordance
with the laws of the State of New Hampshire.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by its
duly authorized representatives,
COMPANY SUMMA FOUR, INC.
Authorized Signature Authorized Signature
/s/ Kristine Gardner /s/ Dick Swee
Name (Print or Type) Name (Print or Type)
Kristine Gardner Dick Swee
Title Title
Corporate Contracts Manager VP Engineering
Date Date
3-31-97 6/29/97
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<PAGE> 1
EXHIBIT 10.4
ATRIUM EXECUTIVE CENTER
LEASE AND SERVICE AGREEMENT
This Lease is made on June 2, 1997, between ATRIUM EXECUTIVE CENTER, INC.,
LESSOR, hereinafter called ATRIUM, and SUMMA FOUR, INC., a Delaware corporation,
LESSEE, hereinafter called TENANT.
1. LEASED PREMISES: Subject to the terms and conditions set forth in this
Agreement, ATRIUM agrees to lease, furnish, or make available to
TENANT:
Suite number 115, on an exclusive basis.
Use of the reception area, conference rooms, kitchens, fitness room (at
its own risk) and shower facilities, restrooms, and other designated
common areas within the Executive Center, on a non-exclusive, shared
basis.
The services described in Exhibits A-I and A-2, on a non-exclusive,
shared basis.
2. USE: The leased premises shall be used by TENANT as an office, and for
no other purpose. TENANT agrees to comply with all rules and
regulations established by ATRIUM with respect to use of the premises,
including hours of use, and with all requirements of the building
management or of public authorities. ATRIUM reserves the right to add,
amend or rescind any rule or regulation at any time when, in ATRIUM'S
judgement, it is necessary for the best interests of its tenants.
TENANT shall not interfere with the rights of other tenants, nor allow
the premises to be used for any unlawful or objectionable purpose.
TENANT shall not offer any of the services or facilities which ATRIUM
offers to other tenants at the Executive Center, including, but not
limited to those services and facilities described in Exhibits A-I and
A-2, attached hereto. TENANT shall not offer, solicit, accept, nor
enter into any agreement with other tenants within the executive center
to relocate to other shared office or traditional office space. Any
attempt to do so will be considered a default of this Lease, and ATRIUM
shall be entitled to evoke the remedies provided under DEFAULT.
3. TERM: The term of this Lease shall be twenty-two months beginning on
June 1, 1997 (commencement date) and ending on March 31, 1999
(termination).
Obligations under lease agreement dated February 1, 1995, and addenda
dated August 1, 1995 and May 1, 1996 shall cease concurrent with
signature of this lease agreement and payment of all incurred expenses.
Either ATRIUM or TENANT may terminate this Lease at expiration of the
term stated herein, or any renewal thereof, by giving to the other
ninety (90) days prior
<PAGE> 2
written notification rendered on the first day of the month. In the
absence of such notice, this Lease shall automatically renew on an
annual basis, and under the same terms and conditions, except the
rental rate shall be the current rate being charged new tenants for
comparable office space. Subsequent renewals shall continue on the same
basis until terminated by either party as provided above.
In the event ATRIUM notifies TENANT of any change in terms or
conditions ninety (90) days prior to expiration of this Lease or any
addendum hereto, and TENANT holds over after such expiration date, such
action shall constitute TENANT's acceptance.
4. RENT: TENANT agrees to pay ATRIUM, in consideration of the facilities
and services provided:
AS BASIC RENT FOR THE LEASED PREMISES, THE SUM OF THIRTY-EIGHT HUNDRED
DOLLARS ($3800) PER MONTH FOR THE MONTHS OF JUNE 1997 THROUGH MARCH
1998; AND FORTY-TWO HUNDRED DOLLARS ($4200) PER MONTH FOR THE MONTHS OF
APRIL 1998 THROUGH MARCH 1999.
AS ADDITIONAL RENT, MONTHLY TELEPHONE EQUIPMENT AND LINE CHARGES AT
STANDARD RATES. (SEE EXHIBIT A-1.)
TENANT AGREES TO PAY BASIC RENTAL, PLUS MONTHLY TELEPHONE EQUIPMENT AND
LINE CHARGES, IN ADVANCE, ON OR BEFORE THE FIRST DAY OF EACH CALENDAR
MONTH, FOLLOWING BILLING,
AS ADDITIONAL RENT, TENANT AGREES TO PAY FOR ALL TELEPHONE MESSAGE
UNITS AND TOLL CALL CHARGES INCURRED BY TENANT'S TELEPHONE
EXTENSION(S), WITHIN FIVE (5) DAYS AFTER BILLING. TENANT will pay for
all telephone installation, service, connect and disconnect charges
incurred for its extension(s).
Payment shall be made to ATRIUM EXECUTIVE CENTER, INC. at its office,
Suite 200, Atrium II, 3000 Atrium Way, Mt. Laurel, NJ 08054-3911, or
such other office as ATRIUM may designate.
In the event TENANT fails to pay rent, telephone and service charges
within five (5) days of the due date, ATRIUM may, at its option:
(a) charge TENANT a $50.00 late fee per month, per office, on
unpaid rental, until the balance is paid, and/or
(b) notify TENANT, in writing, that TENANT is in default, under
paragraph 9. hereunder, and/or
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<PAGE> 3
(c) terminate telephone service to TENANT, until payment is
received; and, if ATRIUM deems necessary, require additional
telephone security deposit; and/or
(d) terminate any or all other Exhibit A-1 services to TENANT.
ATRIUM will disconnect telephone service, or discontinue other
services, for non-payment, only upon twenty-four hours prior notice to
TENANT.
ATRIUM shall also make available certain other services, as described
on Exhibit A-2, for which TENANT will pay standard rates. TENANT agrees
to pay any and all amounts incurred for Exhibit A-2 services, within
five (5) days of the due date. ATRIUM reserves the right to discontinue
any Exhibit A-2 services for non-payment, upon twenty-four hours prior
notice to TENANT.
TENANT agrees to compensate ATRIUM in the amount of $50.00 for each
occurrence if, for any reason, TENANT'S check for rent, security
deposit, or any service, is returned by TENANT'S bank unpaid.
5. SECURITY DEPOSIT: TENANT'S current security deposit with ATRIUM shall
be held as security for the full performance by TENANT of its
obligations under this Lease, payment of phone expense incurred,
payment of all other services provided under Exhibits A-1 and A-2, and
for the cost of any repairs in excess of normal wear and tear. If
ATRIUM applies any part of said deposit to cure any default of TENANT,
or for additional rent or service charges which may become due, TENANT
shall, upon demand, deposit with ATRIUM the amount applied so that
ATRIUM shall have the full deposit on hand at all times during the term
of this Lease. The security deposit balance will be returned within
thirty (30) days after TENANT has vacated and left the leased premises
in original condition, less an amount sufficient to pay TENANT'S
average monthly phone expense, which will be held until final phone
charges can be determined. Any loss or damage to the premises shall be
applied against the security deposit and, if such damages exceed the
security deposit, TENANT agrees to pay to ATRIUM any additional costs
required to restore the premises to original condition. If TENANT
vacates prior to the termination date of the LEASE FOR ANY REASON OTHER
THAN BREACH OF LEASE BY ATRIUM, the security deposit will be kept as
liquidated damages to cover costs of re-leasing.
TENANT AGREES THAT THE SECURITY DEPOSIT IS NOT TO BE CONSIDERED A
RENTAL PAYMENT UNDER THIS LEASE. The security deposit shall not bear
interest to TENANT, and may be commingled with other funds of ATRIUM.
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<PAGE> 4
6. INSURANCE: TENANT shall maintain its own insurance coverage. ATRIUM
shall not be liable to TENANT, or to any other person, for any injury,
or for damages on account of loss, damage or theft to any personal or
business property of TENANT, its employees, agents or invitees.
If the premises are damaged by fire or other casualty, repairs to
restore premises to prior condition shall be made without cost to
TENANT, and rent shall be abated from the date of such casualty until
premises are usable by TENANT. Damage shall be repaired within a
reasonable period of time, subject to any delays caused by Acts of God,
labor disputes, or other acts beyond its control. ATRIUM shall not be
liable for any inconvenience or loss of business of TENANT resulting
from such damage or repair thereof. TENANT shall be solely responsible
for any damage or loss to furnishings, equipment, or any other property
of TENANT. In the event fire or casualty substantially destroys the
entire premises occupied by ATRIUM EXECUTIVE SUITE, OR RENDERS THE
PREMISES UNUSABLE FOR A PERIOD OF NINETY (90) DAYS, EITHER ATRIUM OR
TENANT may terminate this Lease in which event the tenancy created
herein will cease and rent will be adjusted to date of termination.
7. HIRING OF ATRIUM'S EMPLOYEES: During the term of this Lease, or any
extension or renewal hereof, or within one hundred eighty (180) days
after TENANT vacates the leased premises, TENANT agrees not to offer,
nor accept for employment in any capacity, any person who is then or
who within one hundred eighty (180) days prior thereto, has been an
employee of ATRIUM. In the event of any such action, TENANT agrees to
pay ATRIUM $5,000 for each breach of this provision. Further, ATRIUM
may, at its option, terminate this lease.
8. SURRENDER OF LEASED PREMISES: TENANT agrees to vacate the leased
premises promptly upon expiration or termination of this Lease, or any
extension hereof.
9. DEFAULT: Any of the following will constitute a material default by
TENANT:
(a) Failure to pay, or any withholding, deducting, or offsetting
against, any amount due for rent, facilities, telephone
charges, or any service charges, within five (5) days after
due;
(b) Failure to observe or perform any provision of this Lease for
a period of five (5) days after written notice of such
failure;
(c) Removal, or any attempt by TENANT to remove, any of TENANT'S
property from the leased premises, other than in the ordinary
course of business, or to vacate the leased premises, without
having first paid all rent
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<PAGE> 5
due or to become due until expiration of the Lease term, or
any extension thereof, and all charges incurred for telephone
and other services.
If TENANT does not correct any material default of this Lease within
ten (10) days after written notification of said default, ATRIUM may,
without further notice:
(a) Terminate this lease.
(b) Re-enter and take possession of the leased premises, remove
all persons and property, and disconnect any telephone lines
installed for benefit of TENANT, without being deemed to have
committed any trespass.
(c) Impound TENANT'S property and sell it at auction or private
sale, applying the proceeds thereof to any unpaid rent or
other charges due to ATRIUM for services rendered, including
any interest, late charges, storage charges, or any other
amounts due, and holding TENANT responsible for any deficiency
in the proceeds. ATRIUM may recover, in addition to any rent
and other charges already due and payable, all rent for the
entire unexpired balance of the stated term of this Lease, or
any extension hereof, and all costs incurred by ATRIUM to
recover such sums, including reasonable attorneys' or
collection fees, and/or ATRIUM may recover damages from
TENANT.
All rights and remedies of ATRIUM under his Lease shall be cumulative
and in addition to any other rights or remedies available at law or in
equity. No failure by ATRIUM to exercise any right or remedy, or to
insist upon strict performance following a default, shall constitute a
waiver of such default by ATRIUM, nor will acceptance of full or
partial payment during continuance of any breach constitute a waiver of
any such breach, term, or condition.
10. MISCELLANEOUS:
ATRIUM shall have the right to show the leased premises to prospective
tenants, WITH PRIOR NOTICE, if the term of this Lease is
month-to-month, or if either party has given notice to the other of
termination of this Lease, or if TENANT is in default under this Lease.
ATRIUM has the right to inspect the leased premises at all reasonable
times.
Unless another address is stipulated in writing, written notices from
ATRIUM to TENANT shall be deemed sufficient if delivered to the leased
premises.
ATRIUM shall not be responsible for any temporary breakdown of
electricity, heat or air conditioning services, janitorial services,
snow removal, or any other
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<PAGE> 6
services provided by building owner; however, ATRIUM shall make all
reasonable efforts and exert all possible pressure to correct any
problem which may occur. ATRIUM shall not be responsible for any
temporary breakdown of telephone services caused by or occurring in the
systems of local or long distance telephone carriers providing services
to the center.
Notwithstanding any provision to the contrary, ATRIUM is responsible
only for the provision of services specified hereunder. TENANT
acknowledges and agrees that ATRIUM shall not be liable to TENANT, in
damages or otherwise, by reason of any injury to or interference with
TENANT'S business arising out of ATRIUM providing, temporarily failing
to provide, or the manner in which it provides, telephone, secretarial
or any other services which it provides hereunder, irrespective of
whether or its employees may be deemed negligent. In any such event,
ATRIUM'S liability shall be limited to the actual cost charged by
ATRIUM for the particular service alleged to have caused the injury or
interference, or the prorated cost for the service during the period
such service was not provided.
TENANT may not assign or sublet the leased premises, or any part
thereof, without the prior written consent of ATRIUM.
This Lease and all covenants, provisions and conditions herein
contained, shall inure to the benefit of and be binding upon the heirs,
legal representatives, successors and assigns of both parties.
This Lease contains the entire agreement between ATRIUM and TENANT.
Any provision of this Lease which proves to be invalid, void or illegal
will in no way affect, impair, or invalidate any other provision
hereof, and all other provisions will remain in full force and effect.
If TENANT is a corporation, each individual executing this Lease on
behalf of said corporation represents and warrants that s/he is duly
authorized to execute and deliver this Lease, and that this Lease is
binding upon said corporation. If TENANT is a partnership or sole
proprietorship, each individual executing this Lease understands that
s/he is personally responsible for performance.
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<PAGE> 7
IN WITNESS WHEREOF, ATRIUM and TENANT have executed this Lease as of
the 5th day of June, 1997.
ATRIUM EXECUTIVE CENTER, INC.
ATTEST: LESSOR
/s/ L. Johnson By: /s/ Marilyn F. DelDuca
- ------------------------------- -----------------------------------
SUMMA FOUR, INC.
ATTEST: TENANT
/s/ Pamela J. Carter By: /s/ Thomas A. St. Germain
- ------------------------------- -----------------------------------
SVP & CFO
-----------------------------------
Printed Name & Title
Home Office Address:
25 Sundial Avenue
Manchester, NH 03103
Telephone: 800-537-8662
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<PAGE> 8
EXHIBIT A-1
The following amenities and services are provided to TENANT under this Lease and
Service Agreement:
- - Cluster office suite, consisting of four exterior offices and
reception/work/storage area.
- - Executive set of office furnishings, including wood desk and credenza,
executive swivel chair and two upholstered guest chairs for each
private office. Secretarial desk and chair for reception area. Four 7'
bookshelves and three 4' bookshelves will also be provided.
- - Shared use of ATRIUM's spacious reception area. Our personable
receptionists will greet your clients.
- - Experienced Executive Center Manager to ensure efficient handling of
your business requirements.
- - Full-feature telephone instruments @ $35 each per month; full feature
speaker phones @ $50 each per month; telephone, FAX and modem lines @
$25 each per month; directory mailbox @ $35 per month; individual voice
mail boxes @ $15 each per month; directory listing @ $2 per month
(optional). Tenant is responsible for all installation and monthly
service charges for its dedicated phone lines, connection to the
message center, plus all message units and toll calls incurred by
Tenant. In consideration of this lease, LONG DISTANCE CALL CHARGES
SHALL BE BILLED AT 18 CENTS PER MINUTE; LOCAL CALL CHARGES SHALL BE
BILLED AT 8 CENTS PER MINUTE.
- - Automated attendant service.
- - Luxurious conference rooms - TENANT may use a conference room or
part-time office on a reservation basis (or without prior reservation
if not in use), up to ten (10) hours per month (non-cumulative).
Additional hours billed at $25 each. Larger training/meeting facility
available at $50 per hour.
- - Twenty-four hour access to office. Honeywell security system for your
protection.
- - Access to support service facilities from 8:30 a.m. to 5:00 p.m.,
Monday through Friday, except legal holidays.
- - Executive Center business address may be listed on TENANT's stationery
and other printed materials.
- - Executive Center FAX number may be listed on TENANT's stationery.
<PAGE> 9
- - Your Company Listing on Executive Center directory. Additional or
changed directory listings available at $25 each.
- - Utilities - HVAC and electric service.
- - Daily janitorial service.
- - Complimentary coffee and tea - shared use of kitchen facilities.
- - Shared use of fitness facility and equipment, at TENANT's own risk.
- - Use of shower facilities.
- - Package receipt.
<PAGE> 10
EXHIBIT A-2
The following services are available to TENANT at prevailing rates. ATRIUM
reserves the right to add to, delete, or make comparable substitutions for, the
services described herein, without being deemed in default of this Lease. Rates
for support services are subject to revision from time to time, but not more
frequently than once annually.
PHONE SERVICES:
- - 24-Hour Voice Mail Coverage; individual boxes or directories with
various options and multiple mailboxes; voice mail paging.
- - Personalized call screening. Operators announce each caller's name and
company to you.
- - Personalized message taking and relaying of messages to you or your
voice mail.
- - Telephone answering/screening of additional lines answered with
different company identification.
- - Patching calls to you at your home, car, or other location, or paging
you.
- - Outside phone directory line for convenient alter hours client access.
- - VIDEOCONFERENCING (384 and 128)
- - E-mail accounts.
- - INTERNET access and research.
WORD PROCESSING/SECRETARIAL SUPPORT SERVICES:
- - Word processing, spreadsheets, and desktop publishing by qualified
professionals, utilizing various software packages and sophisticated
network system.
- - Sales presentation materials, including graphics, full color or black
and white, hard copy or transparencies.
- - Executive secretarial services, including administrative assistance,
telephone sales support, order taking, customer contact, etc.
- - General secretarial services, including filing, processing mailings,
deliveries to your office by our staff, errands, checking your mail,
etc.
- - Database/mailing list compilation and maintenance. Merge letters,
envelopes, labels.
<PAGE> 11
- - Meeting arrangements and coordination.
- - Travel arrangements, car rentals, hotel and restaurant reservations,
ticket procurement.
OFFICE SERVICES:
- - Photocopy services: full color and black and white.
- - FAX services: plain paper.
- - Laser printing: full color and black and white.
- - Color scanner.
- - 24-hour phone-in dictation.
- - Binding services.
- - Mail metering. U.S. Postal, UPS, Federal Express & courier services.
- - Office supplies.
- - Notary service.
- - Floral arrangements, gift baskets, gift selection.
- - Catering services for your office functions.
<PAGE> 12
EXHIBIT A-3
RULES & REGULATIONS
ACCESS: TENANT shall have access to the premises 24 hours a day, seven days a
week. Hallways, entrances, lobbies and any common areas of the building or
center may not be obstructed by TENANT or used by TENANT for any purpose other
than access to the building and TENANT's office. Shared use of executive center
facilities shall be as provided in the lease.
USE: TENANT is entitled to quiet enjoyment of the leased premises. TENANT will
conduct its affairs in a businesslike manner, dress appropriately, and not do
any act or thing or make any noise which would obstruct or interfere with the
rights of other tenants, or which would cause injury or annoyance to other
tenants, or cause damage to the center or the building. No holes shall be
drilled or nails, screws, bolts or tape of any kind fastened to the wails or
partitions, except that standard picture hooks may be used. TENANT will not prop
open any corridor doors or exit doors during or after business hours. TENANT
will not remove any of ATRIUM's furniture, fixtures, equipment or decorative
materials from the offices. The use of rooms as sleeping quarters is prohibited.
LOCKS/KEYS: TENANT will be provided one set of keys to the office; additional
copies may be made by TENANT as required. TENANT may not place additional locks
upon any doors. Upon surrendering possession of the premises, TENANT shall
return to ATRIUM all existing keys for the premises and security cards issued.
SIGNS: Signs, lettering insignia, advertisements, or notices may not be
inscribed, painted, installed or placed on or in any window or door or any other
part of the building. Names on suite entrance doors shall be provided for TENANT
by ATRIUM. Networking boards are provided in the kitchen areas where TENANTS are
welcome to post notices or advertisements.
UTILITIES: Normal utilities (HVAC and electrical service) for executive suite
clients are provided. TENANTS are not restricted from bringing in their own
computers, laser printers, photocopiers, or FAX machines, if desired. TENANT
will be billed for additional utility costs for this equipment (other than
personal or laptop computers) predicated on usage estimates provided by PSE&G.
No refrigerators, cooking or coffee equipment shall be utilized in the offices.
Coffee service, microwaves and refrigerators are provided free of charge in the
kitchen areas. Fire Codes prohibit extension cords. Dedicated lines or
additional outlets required to handle TENANT's equipment needs will be provided
by ATRIUM'S licensed contractors at TENANT's expense.
EXERCISE ROOM: An exercise room is provided for the sole use of executive center
tenants and their employees. TENANT assumes all risk and liability in connection
with use of this facility, and shall indemnify and hold ATRIUM harmless from all
liabilities, obligations, damages, penalties, claims, costs charges and
expenses, including legal fees,
<PAGE> 13
by reason of loss of life, personal injury and/or loss or damage to property
arising out of use of this facility, regardless of cause. TENANT acknowledges
that ATRIUM is providing this facility as an extra service and may terminate
same at any time.
SMOKING: The ATRIUM II building is an officially designated non-smoking
facility. Smoking is prohibited in all areas of the building and the ATRIUM
EXECUTIVE CENTER including offices, conference rooms, hallways, stairwells,
lobbies, vestibules and restrooms.
CHILDREN/PETS: Children are welcome to visit the center with their parents
provided they do not cause disturbances to other tenants. Pets (cats, dogs,
birds, fish, reptiles or animals of any kind) may not be brought into the
building at any time.
RECYCLING: Mt. Laurel Township requires offices to recycle white paper and
computer printouts (laser and impact printers). Recycling containers are
provided throughout the center for your convenience.
FIRE INSPECTION: Mt. Laurel Township conducts an annual fire inspection of each
office within the center, for which it assesses an inspection fee (currently
$25). TENANT is responsible for payment of this fee directly to Mt. Laurel
Township.
ATRIUM shall have the right to enter the premises at all reasonable hours for
the purpose of making any repairs, alterations or additions which it shall deem
necessary. Once TENANT gives notice of intent to vacate, ATRIUM shall have
immediate access and TENANT shall in no way hinder ATRIUM from showing premises.
ATRIUM reserves the right to modify or add any rules or regulations necessary
for the safety, maintenance, operation and cleanliness of the executive center,
upon thirty days' notification to TENANT. New rules and regulations will not be
unreasonably inconsistent with the proper use and enjoyment of the premises by
TENANT under the lease.
<PAGE> 1
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 26th day of June,
1997, is entered into by Summa Four, Inc., a Delaware corporation, with its
principal place of business at Manchester, New Hampshire (the "Company"), and
Jeffrey A. Weber (the "Employee").
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company. In consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. EMPLOYMENT AT WILL. The Company hereby agrees to employ the Employee
as an employee at will, and the Employee hereby accepts such employment with the
Company, upon the terms set forth in this Agreement, for the period commencing
on July 24, 1997 (the "Commencement Date") and ending on the date the Employee's
employment is terminated in accordance with the provisions of Section 4 (such
period, the "Employment Period").
2. TITLE, CAPACITY. The Employee shall serve as the Company's Vice
President and Chief Financial Officer, currently reporting to the President and
CEO, or in such other more senior or responsible position as the Company or its
Board of Directors (the "Board") may determine from time to time. The Employee
shall be based at the Company's headquarters in Manchester, New Hampshire, or
such place or places in the continental United States as the Board shall
reasonably determine and the Employee shall agree. The Employee shall be subject
to the supervision of, and shall have such authority as is delegated to him by,
the Board or such officer of the Company as may be designated by the Board.
<PAGE> 2
The Employee hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and such other duties and
responsibilities as the Board or its designee shall from time to time reasonably
assign to him. The Employee agrees to devote his entire business time, attention
and energies to the business and interests of the Company during the Employment
Period. The Employee agrees to abide by rules, regulations, instructions,
personnel practices and policies of the Company and any changes therein which
may be adopted from time to time by the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall pay the Employee, in bi-weekly
installments, an annual base salary of $150,000 (less applicable state and
federal taxes) for the period commencing on the Commencement Date and ending
March 31, 1998, subject to adjustment thereafter as determined annually by the
Board at its first regular meeting following its receipt of the Company's
audited financial results for its preceding fiscal year.
3.2 BONUS. For such period ending March 31, 1998, the Employee shall
be eligible for a bonus of up to 25% of his current base salary (pro-rated for
eight months of FY'98) based on the achievement of certain goals and the
Company's financial performance. In order for the Employee to be entitled to
payment of his bonus, he must be actively employed by the Company on the date
the bonus is paid. For periods thereafter, the Employee shall be entitled to
participate in such bonus programs, if any, as may be established from time to
time by its Board of Directors.
3.3 FRINGE BENEFITS. The Employee shall be entitled to participate in
all benefit programs that the Company establishes and makes available to its
employees, if any, to the extent that Employee's position, tenure, salary, age,
health and other qualifications make him eligible to participate, and to
vacations in accordance with the Company's vacation policy.
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<PAGE> 3
3.4 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all gasoline used by the Employee in one automobile owned or leased
by him and for reasonable travel, entertainment and other expenses incurred, per
the Company's Travel and Entertainment Policy, or paid by the Employee in
connection with, or related to, the performance of his duties, responsibilities
or services under this Agreement, as more fully described in section 12.5.3,
upon presentation by the Employee of documentation, expense statements, vouchers
and/or such other supporting information as the Company may request, PROVIDED,
HOWEVER, that (i) the amount available for such travel, entertainment and other
expenses may be fixed in advance by senior management or the Board and (ii)
amounts so reimbursed for gasoline will be included in Employee's taxable income
except as so documented as a business expense.
3.5 STOCK OPTION. Subject to Board of Director approval, the Employee
shall be granted the option to purchase 30,000 shares of the Company's common
stock under its 1993 Stock Incentive Plan (the "Plan"). The option price shall
be the closing price on the first Monday of the month following the employment
start date month. The option to purchase 30,000 shares shall vest over three
years at 33% per year. If, in the future, the Board votes to shorten the vesting
schedule for Officers generally, then any of the Employee's unvested shares
would fall under the new, more favorable vesting schedule. Stock options granted
may be exercised by the Employee, to the extent vested in accordance with the
terms of the Plan. If, after completing six months of service, Employee's
employment is involuntarily terminated by the Company for any reason other than
"Cause", any unvested shares, which would have otherwise vested within 12 months
of such involuntary termination, shall vest immediately.
3.6 SIGNING BONUS. The "Employee" will receive a one-time signing
bonus of $20,000, payable in the first regular pay cycle following completion of
90 days of employment.
-3-
<PAGE> 4
3.7 TEMPORARY LIVING EXPENSES. The "Employee" will be reimbursed for
temporary living expenses (not to exceed $5,000) incurred as a result of
establishing a residence closer to the Manchester, New Hampshire area.
4. EMPLOYMENT TERMINATION WITHOUT CAUSE. The Employee shall have the
status of an employee at will. The Company may terminate the Employee's
employment at any time without cause. The Employee has no obligation to remain
employed by the Company and may terminate his employment at any time.
4.1 TERMINATION FOR CAUSE. In the event the Employee's employment is
terminated for cause the Company shall pay to the Employee the compensation and
benefits otherwise payable to him under Section 3 through the last day of his
actual employment by the Company. For purposes of this Agreement, "cause" for
termination shall be deemed to exist upon (a) alcohol or drug abuse affecting
the performance of your duties, theft, embezzlement, fraud, absenteeism,
dishonesty, gross negligence or misconduct, or (b) the conviction of the
Employee of, or the entry of a pleading of guilty or nolo contendere by the
Employee to, any crime involving moral turpitude or any felony.
4.2 TERMINATION FOR DEATH OR DISABILITY. If the Employee's employment
is terminated by death or because of disability, the Company shall pay to the
estate of the Employee or to the Employee, as the case may be, the compensation
which would otherwise be payable to the Employee up to the end of the month in
which the termination of his employment because of death or disability occurs,
as well as any benefits due Employee under the benefits programs, e.g., life
insurance. For purposes of this Agreement, the term "disability" shall mean the
inability of the Employee, due to a physical or mental disability, for a period
of 90 days, whether or not consecutive, during any 360-day period to perform the
services contemplated under this Agreement. A determination of disability shall
be made by a physician satisfactory to both the
-4-
<PAGE> 5
Employee and the Company, PROVIDED THAT if the Employee and the Company do not
agree on a physician, the Employee and the Company shall each select a physician
and these two together shall select a third physician, whose determination as to
disability shall be binding on all parties.
4.3 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE. If the
Employee's employment is terminated by the Company for any reason other than for
cause, the Company shall continue paying the Employee's current base salary and
insurance benefits, after the Employee's termination of employment, for up to
six (6) months (the "Severance Benefit"). Payment of the Severance Benefit shall
cease upon the earlier of (a) the six month anniversary of the Employee's date
of termination, or (b) the date the Employee begins employment with another
employer (or is re-employed by the Company).
4.4 TERMINATION FOLLOWING CHANGE IN CONTROL. If the Employee's
employment is terminated by the Company for any reason other than cause within
one year after a change in control, or the Employee experiences a substantial
diminution in the nature or status of his responsibilities from those set forth
in his job description, and the Employee chooses to terminate employment, the
Company shall continue paying the Employee's current base salary and benefits,
after the Employee's termination of employment, for up to twelve (12) months
(the "Severance Benefit"). Payment of the Severance Benefit shall cease upon the
earlier of (a) the first anniversary of the Employee's date of termination, or
(b) the date the Employee begins employment with another employer (or is
re-employed by the Company). In the event of change of control, the Employee's
unvested shares shall vest immediately, in accordance with section 16 of the
Company's 1995 stock plan. For the purposes of this paragraph, a change in
control is defined as provided for in Attachment "A".
-5-
<PAGE> 6
5. NON-COMPETE
(a) During the Employment Period and for a period of twelve (12)
months after the Employee's termination of employment for any reason, the
Employee will not knowingly directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, consultant or in any other
capacity whatsoever (other than as the holder of not more than one percent (1%)
of the total outstanding stock of a publicly held company), render any services
to any business engaged in the design, manufacture or sale of programmable
switches (including, without limitation, Excel) or to any non-legacy switch
manufacturer (including, without limitation, Sattel) or any major original
equipment manufacturer customer of Excel (including, without limitation, Boston
Technology, Glenayre or Access Line); or
(ii) recruit, solicit or induce, or attempt to induce, any employee or
employees of the Company to terminate their employment with, or otherwise cease
their relationship with, the Company; or
(iii) solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the clients, customers or accounts, or
prospective clients, customers or accounts, of the Company which were contacted,
solicited or served by the Employee while employed by the Company.
(b) If any restriction set forth in this Section 5 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or too broad a
geographic area, it shall be interpreted to
-6-
<PAGE> 7
extend only over the maximum period of time, range of activities or geographic
area as to which it may be enforceable.
(c) The restrictions contained in this Section 5 are necessary for
the protection of the business and goodwill of the Company and are considered by
the Employee reasonable for such purpose. The Employee agrees that any breach of
this Section 5 will cause the Company substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies
which may be available, the Company shall have the right to seek specific
performance and injunctive relief.
6. NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 6.
7. PRONOUNS. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
9. AMENDMENT. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
10. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New Hampshire.
-7-
<PAGE> 8
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of the Employee are personal and shall not be assigned by him.
12. MISCELLANEOUS.
12.1 No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
12.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
12.3 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
12.4 The Employee shall be entitled to indemnification as an Officer
of the Company under the Company's by-laws and charter.
-8-
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.
SUMMA FOUR, INC.
By: /s/ Robert A. Degan
------------------------------------
Title: President & CEO
----------------------------------
JEFFREY A. WEBER
/s/ J A Weber
----------------------------------------
-9-
<PAGE> 10
ATTACHMENT "A"
For the purposes of this Agreement, a change of control shall be deemed to
have occurred if at any shareholders meeting fifty percent (50%) of the total
shares voting of the shares of the Company's common stock outstanding are voted
either directly or by proxy for a person or persons other than those nominated
by the Company's Board of Directors or if the individuals who, as of the date
hereof, constitute the Board of Directors of the Company, cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof whose election or nomination
for election by the Company's shareholders was approved of by a vote of at least
a majority of the Directors then comprising the Board, shall be, for the
purposes of this Agreement, considered as though such person was a member of the
Board as of the date hereof.
-10-
<PAGE> 1
AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------
NOW COME Barry R. Gorsun ("Executive") and Summa Four, Inc. ("Company"),
parties to an Employment Agreement dated November 16, 1996, and in consideration
of the mutual covenants and conditions contained herein, amend said Agreement as
follows:
1. By deleting from the first sentence of Section 4 the following . . .
"and will extend the exercise period for the options to one year from the
Retirement Date."
2. By adding a new paragraph to the end of Section 7 as follows:
"Additionally the Company will make available to Executive prior to
his Retirement Date, loan(s) not to exceed a total of $500,000 to assist
the Executive in exercising his options. The loan(s) will be for (a) the
amount of his increased tax obligations incurred as a result of exercising
his non-qualified stock options due to expire July 22, 1997 and (b) the
amount of the purchase price plus any alternative minimum tax occassioned
by exercising his incentive stock options priced at $2.57 per share. Also
the Company extends to July 25, 1996 the time period for Executive to
exercise employee stock options issued July 22, 1994 and August 23, 1994."
3. In all other respects, said Employment Agreement shall remain in full
force and effect.
SUMMA FOUR, INC.
DATED: June 12, 1997 By: /s/ E. L. Brown
------------------------------------
/s/ Barry R. Gorsun
----------------------------------------
BARRY R. GORSUN
<PAGE> 2
AMENDMENT TO OPTION AGREEMENTS
------------------------------
NOW COME Summa Four, Inc. (the "Company") and Barry R. Gorsun ("Gorsun"),
parties to certain Incentive Stock Option Agreements dated July 22, 1994 and
August 23, 1994 (the "Agreements") and agree as follows:
WHEREAS pursuant to the terms of an Employment Agreement between Gorsun,
the Company agreed to accelerate the vesting of unvested employee stock options
upon Gorsun's retirement.
WHEREAS pursuant to a vote at the Board of Directors Meeting on June 12,
1997, the Company agreed to extend the period of time for Gorsun to exercise his
options pursuant to the Agreements to July 25, 1998.
NOW THEREFORE the Company and Gorsun agree as follows:
1. The Agreements are amended to accelerate the vesting schedules and all
unvested options are fully vested as of July 25, 1997.
2. The period for Gorsun to exercise the options under the Agreements is
hereby extended to July 25, 1998.
3. In all other respects, the Agreements remain in full force and effect.
WITNESS the signatures of the parties or their authorized agents this 12th
day of June, 1997.
SUMMA FOUR, INC.
DATED: June 12, 1997 By: /s/ E. L. Brown
------------------------------------
/s/ Barry R. Gorsun
----------------------------------------
BARRY R. GORSUN
