-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wg4FGI/VxNYAwA7Kko8V/x+Lofs6+HlofyG97jX5meK8qZsinpWUOss4Aang+pHK GpQG6Zws/13zextJEMZQ5Q== 0000950109-95-004295.txt : 19951027 0000950109-95-004295.hdr.sgml : 19951027 ACCESSION NUMBER: 0000950109-95-004295 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19951026 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEQUOIA SYSTEMS INC CENTRAL INDEX KEY: 0000724621 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 042738973 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-18238 FILM NUMBER: 95584477 BUSINESS ADDRESS: STREET 1: 400 NICKERSON RD CITY: MARLBORO STATE: MA ZIP: 01752 BUSINESS PHONE: 5084800800 MAIL ADDRESS: STREET 1: 400 NICKERSON ROAD CITY: MARLBORO STATE: MA ZIP: 01752 10-K/A 1 AMENDMENT 1 TO 10K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A Amendment No. 1 to Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended June 30, 1995 Commission File Number 0-18238 SEQUOIA SYSTEMS, INC. --------------------- (Exact Name of Registrant as Specified in its Charter) DELAWARE 04-2738973 - -------- ---------- (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 400 Nickerson Road, Marlborough, Massachusetts 01752 - ---------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (508) 480-0800 -------------- Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $0.40 per share --------------------------------------- Indicate by check mark whether 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 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 ] The approximate aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the closing sales price of such stock quoted on the Nasdaq National Market on September 29, 1995, was $80,230,265. The number of shares outstanding of the Registrant's common stock, $.40 par value per share, as of September 29, 1995 was approximately 15,311,770. Page 1 of 16 pages Exhibit Index appears on p. 11. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Directors - --------- Sequoia System, Inc. ("Sequoia" or the "Company") has a classified Board of Directors consisting of two Class I Directors, three Class II Directors and two Class III Directors. Pursuant to Sequoia's bylaws, directors are elected for terms ending on the date of the third annual meeting following the annual meeting at which any given director is elected. Class II Directors Francis J. Hughes, Jr., A. Theodore Engkvist and Dennis M. Malloy must stand for re- election at the next Annual Meeting of Stockholders. There are no family relationships between or among any officers or directors of Sequoia. The following table sets forth the name, age, length of service as a director of each member of the Board of Directors, including the Nominees, information given by each concerning all positions he has held with the Company, his principal occupation and business experience for the past five years and the names of other publicly held companies of which he serves as a director: Class II Directors - ------------------ Francis J. Hughes, Jr. Mr. Hughes, age 45, has been a director of the Company since 1987. He is President of American Research & Development Corporation, a venture capital firm. Mr. Hughes is also a director of Ceramics Process Systems Corporation and R. F. Monolithics, Inc. A. Theodore Engkvist Mr. Engkvist, age 60, has been a director of the Company since 1994. He is President of ENJO Consulting, a management consulting company. Mr. Engkvist is also a director of Cycare Systems, Inc. Dennis M. Malloy Mr. Malloy, age 47, first became a director of the Company effective March 31, 1995. He is President of Malloy's Cash Register Company. Class III Directors - ------------------- Cornelius P. McMullan Mr. McMullan, age 55, has been a director of the Company since 1993. He is President and Chief Executive of the Company. J. Michael Stewart Mr. Stewart, age 48, became a director of the Company on March 31, 1995. He is Executive Vice President of the Company and President and Chief Operating Officer of Texas Microsystems, Inc., a wholly-owned subsidiary of the Company. 2 Class I Directors - ----------------- Dean C. Campbell Mr. Campbell, age 45, has been a director of the Company since 1989. He is General Partner of Campbell Venture Management, L.P. Mr. Campbell is also a director of Telco Systems Corp. and R. F. Monolithics, Inc. John F. Smith Mr. Smith, age 60, has been a director of the Company since 1993. He is President of Mycos International, Inc., a real estate development company, and retired Senior Vice President and Chief Operating Officer of Digital Equipment Corporation. Mr. Smith is also a director of Instron Corporation and PerSeptive Biosystems, Inc. Executive Officers Executive officers are elected by the Board of Directors annually at its meeting immediately following the Annual Meeting of Stockholders and hold office until the next annual meeting unless they sooner resign or are removed from office. The following table lists the name, age and position of the current executive officers of Sequoia.
Name Age Position - -------------------------------------------------------------------------- Cornelius P. McMullan...... 55 President and Chief Executive Officer Richard B. Goldman......... 49 Executive Vice President and Chief Financial Officer William C. Gould........... 57 Executive Vice President, General Manager, Enterprise Systems J. Michael Stewart......... 48 Executive Vice President, President and Chief Operating Officer, Texas Microsystems, Inc. Jack J. Stiffler........... 61 Executive Vice President, Chief Technical Officer and General Manager, Technology Business Unit David A. Butler............ 51 Vice President and Treasurer Jeremy F. Swett............ 52 Vice President, General Counsel and Secretary
3 Mr. McMullan joined Sequoia in November 1992 as Vice President, Worldwide Sales and Strategic Accounts and was elected President and Chief Executive Officer in December 1992. From November 1980 to October 1992, Mr. McMullan held various management positions at Prime Computer, Inc. ("Prime"), most recently as President, Commercial Systems. Mr. Goldman joined Sequoia in October 1992 as Vice President, Finance, and Chief Financial Officer and was elected to his present office in August 1995. He also served as Co-Chief Executive Officer from October 1992 until December 1992 and Secretary from March 1993 until December 1994. Mr. Goldman was Senior Vice President and Chief Financial Officer of Connell Limited Partnership, a diversified manufacturing group of companies, from May 1991 until he joined Sequoia and was Vice President of Finance, Treasurer and Chief Financial Officer of Alliant Computer Systems, Inc. from May 1990 until May 1991. On May 26, 1992, Alliant filed for protection under Federal bankruptcy laws. Before his association with Alliant, Mr. Goldman was employed for more than ten years by Prime, most recently as Vice President of Finance, Administration and Planning and Chief Financial Officer from January 1988 to October 1989. Mr. Gould joined Sequoia in July 1991 as Vice President of Software Engineering and served as Vice President, Customer Service from April 1993 to July 1995 when he assumed his current position. Prior to joining Sequoia, Mr. Gould was Vice President, Software Engineering at Apollo Computer, Inc. from 1988 to 1991. Mr. Stewart is a co-founder of Texas Microsystems, Inc. and has served as President and Chief Operating Officer of that Company since its founding in 1989. Dr. Stiffler, a co-founder of Sequoia, has served as Chief Technical Officer since Sequoia's formation in 1981 and has served as Executive Vice President since October 1987 and General Manager, Technology Business Unit since July 1993. Dr. Stiffler is an inventor under ten patents for error-control coding and computer technology. Mr. Butler joined Sequoia in January 1988 as Vice President, Finance, Chief Financial Officer and Treasurer and has served as Vice President and Treasurer since August 1990. Mr. Swett joined Sequoia as General Counsel in June 1994 and was elected Vice President, General Counsel and Secretary in December 1994. Prior to joining Sequoia, Mr. Swett was employed by Wyman-Gordon Company, a manufacturer of aerospace components, as Associate General Counsel from 1992 to 1994 and as Corporate Counsel from 1980 to 1992. ITEM 11. EXECUTIVE COMPENSATION Directors' Compensation Sequoia's non-employee directors are paid a fee of $1,750 for each meeting attended (up to a maximum of six meetings per year) and are reimbursed for out- of-pocket expenses incurred in attending Board and Committee meetings. Directors who are officers or employees of Sequoia do not receive any additional compensation for their services as directors. Each non-employee 4 director also received an option to purchase 2,500 shares of Sequoia Common Stock on July 1, 1994 at an exercise price of $3.6875 per share under Sequoia's 1990 Outside Directors' Stock Option Plan (the "1990 Directors' Plan"). The 1990 Directors' Plan has expired and was replaced by the 1995 Outside Directors' Stock Option Plan which is substantially identical. Under a consulting agreement with the Company, Francis J. Hughes, Jr., Chairman of the Board, is eligible to receive $1,000 per day for consulting services (up to a maximum of $7,500 per month). Mr. Hughes did not provide any consulting services or receive any payments under this agreement during fiscal 1995. Under a consulting agreement with the Company, John F. Smith, a director of the Company, is eligible to receive $2,500 per day for consulting services. Mr. Smith did not provide any consulting services or receive any payments under this agreement during fiscal 1995. Named Executive Officers' Compensation The following table sets forth all cash and non-cash compensation for each of the last three fiscal years awarded to or earned by the President and Chief Executive Officer, the four other most highly compensated executive officers of Sequoia whose cash compensation exceeded $100,000 during the fiscal year ended June 30, 1995 and J. Michael Stewart as Executive Vice President and President and Chief Operating Officer of Texas Microsystems, Inc. (such six executive officers are collectively referred to herein as the "named executive officers"): SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation ------------------- ----------------------- Awards Payouts ----------------------- Other Restricted Name and Annual Stock LTIP All Other Principal Position Year Salary Bonus Compensation Awards Options Payout Compensation - ------------------------------------------------------------------------------------------------------------------------------------ Cornelius P. McMullan 1995 $ 216,922 $ 90,828 N/A N/A 50,000 N/A $3,048(1) President and Chief 1994 $ 206,511 $ 84,000 N/A N/A 120,000 N/A $2,690(2) Executive Officer 1993 $ 123,076(3) $ 36,000 N/A N/A 60,000 N/A $1,345(2) Richard B. Goldman 1995 $ 190,438 $ 51,156 N/A N/A 15,000 N/A $1,343(2) Executive Vice President 1994 $ 177,384 $ 93,875 N/A N/A 20,000 N/A $2,391(2) and Chief Financial Officer 1993 $ 128,776(4) $ 37,500 $ 1,128(5) N/A 100,000 N/A $ 712(2) William C. Gould 1995 $ 136,892 $ 38,141 N/A N/A 15,000 N/A $2,466(2) Executive Vice President, 1994 $ 130,210 $ 65,000 N/A N/A 15,000 N/A $1,232(2) and General Manager, 1993 $ 113,586 N/A $ 1,773(5) N/A 24,700 N/A $1,232(2) Enterprise Systems J.Michael Stewart Executive Vice President; 1995 $ 43,269(7) $ 22,156 N/A N/A 50,000 N/A N/A President and Chief Operating 1994 N/A (7) 0 N/A N/A N/A N/A N/A Officer, Texas Microsystems 1993 N/A (7) 0 N/A N/A N/A N/A N/A Jack J. Stiffler Executive Vice President, 1995 $ 183,749 $ 42,715 N/A N/A 0 N/A $5,167(2) General Manager, Technology 1994 $ 177,384 $ 78,750 N/A N/A 25,000 N/A $1,043(2) Business Unit and Chief 1993 $ 168,942 N/A $13,426(5) N/A 16,000 N/A $3,589(6) Technical Officer Ronald J. Gellert (9) Vice President, 1995 $ 159,692 $ 76,786 N/A N/A N/A $1,914(8) General Manager 1994 $ 139,326 $103,302 N/A N/A 15,000 N/A $1,352(2) Systems Business 1993 $ 105,000 $ 55,500 N/A N/A 35,700 N/A $1,092(2)
5 (1) Represents $2,419, the value of group term life insurance paid by the Company, and $629 for tax services. (2) Represents the value of group term life insurance paid by the Company. (3) Mr. McMullan's salary figure includes $28,461 earned as Vice President, Worldwide Sales and Strategic Accounts from November 16, 1992 through January 8, 1993. Mr. McMullan's 1993 annual salary as President and Chief Executive Officer was $200,000. (4) Mr. Goldman's 1993 annual salary was $175,000. (5) Represents vacation buy-out amount. (6) Represents $3,089, the value of group term life insurance paid by the Company, and $500 for tax services. (7) Represents salary paid to Mr. Stewart by the Company subsequent to the Merger with Texas Microsystems, Inc. during the period March 31, 1995 through June 30, 1995, based on an annual salary of $187,500. Prior to such Merger, Mr. Stewart was compensated in the form of a fee paid pursuant to an Operating and Management Agreement with Texas Microsystems Inc. which terminated on the effective date of the Merger. (8) Represents $1,114, the value of group term life insurance paid by the Company, and $800 for tax services. (9) Mr. Gellert has resigned from the Company effective September 29, 1995. Option Grants and Exercises The following tables summarize (i) option grants and exercises during fiscal 1995 to or by the named executive officers, and (ii) the value of the options held by such persons at the end of fiscal 1995. No SARs were granted during fiscal 1995.
OPTION GRANTS IN LAST FISCAL YEAR --------------------------------- Individual Grants ----------------- Potential Realizable Value Percent of at Assumed Annual Rate of Total Options Stock Price Granted to Exercise or Appreciation for Options Employees Base Price Expiration Option Term(3) Name Granted(1) in Fiscal Year Per Share (2) Date 5% 10% - -------------------------------------------------------------------------------------------- Cornelius P. 50,000 10% $3.8125 10/24/04 $119,883 $303,807 McMullan Richard B. 15,000 3% $ 3.625 11/08/04 $ 34,196 $ 86,660 Goldman J. Michael 50,000 10% $ 4.00 03/31/05 $125,779 $318,748 Stewart William C. 15,000 3% $3.6875 7/01/04 $ 34,786 $ 88,154 Gould Jack J. - - - - - - Stiffler Ronald J. 15,000 3% $3.6875 07/01/04 $ 34,786 $ 88,154 Gellert
6 (1) Options generally become exercisable at the rate of 1/48th of the shares subject to the option commencing on the first day of the first month immediately following the month of grant and the first of each month thereafter. (2) The exercise price of each option grant was equal to the fair market value of the Common Stock on the date of grant. (3) Amounts represent hypothetical gains that could be achieved for the options if exercised at the end of the option terms. These gains are based on assumed rates of stock appreciation of 5% and 10% compounded annually from the date the respective options were granted and are not intended to forecast future appreciation of the price of the Sequoia Common Stock. The named executive officers will realize no gain upon the exercise of these options without an increase in the price of the Company's Common Stock, which increase will benefit all Sequoia stockholders proportionately. AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES ---------------------------------
Number of Value of Unexercised Shares Unexercised Options In-The-Money Options Acquired Value at Fiscal Year End at Fiscal Year End Name on Exercise Realized Exercisable / Unexercisable Exercisable / Unexercisable - ---- ----------- -------- --------------------------- --------------------------- Cornelius P. - - 107,790 / 122,210 $194,917 / $165,708 McMullan Richard B. - - 37,202 / 53,155 $58,103 / $69,486 Goldman J. Michael - - 4165 / 45,835 $1,041 / $11,459 Stewart William C - - 34,880 / 19820 $65,716 / $24,934 Gould Jack J - - 90,280 / 19489 $229,662 / $27,683 Stiffler Ronald J. - - 43,999 / 27,826 $86,735 / $40,946 Gellert
(1) On September 29, 1995 the last reported sales price of Sequoia Common Stock on the Nasdaq National Market was $7.375 per share. 7 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information as of August 15, 1995 with respect to the beneficial ownership of Sequoia Common Stock by (i) each person known by the Company to own beneficially more than 5% of the outstanding shares of Common Stock; (ii) each director; (iii) each executive officer named in the Summary Compensation Table under the heading "Executive Compensation;" and (iv) all directors and executive officers as a group:
Name and Address of 5% Number of Shares Percentage of Common Beneficial Owner Beneficially Owned(1)(2) Stock Outstanding(2) - ---------------- ------------------------ -------------------- W. Wayne Patterson 2,018,000(3) 12.8% 3324 Ella Lee Lane Houston, Texas 77019 Directors and Executive Officers - -------------------------------- Francis J. Hughes, Jr...... 308,071(4) 2.0 Dean C. Campbell........... 50,504(5) * A. Theodore Engkvist....... 22,000(6) * Dennis M. Malloy........... 18,500(7) * John F. Smith.............. 17,000(8) * Cornelius P. McMullan...... 125,452(9) * Richard B. Goldman......... 47,262(10) * William C. Gould........... 40,715(11) * J. Michael Stewart......... 2,138,950(12) 13.5 Jack J. Stiffler........... 135,984(13) * Ronald J. Gellert 4,391(14) * All Directors and Executive Officers as a group (13 persons)... 2,923,688(15) 18.5
* Less than 1% (1) The inclusion herein of any shares of Common Stock deemed beneficially owned does not constitute an admission of beneficial ownership of those shares by the respective stockholders. Unless otherwise indicated, each stockholder referred to above has sole voting and investment power with respect to the shares listed. (2) For purposes of this table, the number of shares of Common Stock of the Company owned by each director or executive officer is determined under the rules of the Commission and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares of Common Stock as to which each director or executive officer has sole or shared voting or investment power and also any shares of Common Stock with respect to which any options held by such director or executive officer are exercisable within 60 days after August 15, 1995. 8 (3) Includes 1,790,680 shares owned directly or indirectly by Mr. Patterson and 227,320 shares belonging to Mr. Patterson's children under the Texas Uniform Gift to Minors Act, as to which he disclaims beneficial ownership. (4) Includes (i) 178,571 shares owned by American Research and Development II, L.P. ("ARD") of which Mr. Hughes is a general partner (or a general partner of a general partner), and (ii) 37,500 shares issuable pursuant to stock options which are exercisable by ARD within 60 days after August 15, 1995, as to each of which Mr. Hughes disclaims beneficial ownership. Also includes 1,500 shares held by Mr. Hughes and 90,500 shares issuable pursuant to stock options which are exercisable by Mr. Hughes within 60 days after August 15, 1995. (5) Comprised of 25,504 shares owned by Mr. Campbell and 25,000 shares issuable pursuant to stock options which are exercisable by Mr. Campbell within 60 days after August 15, 1995. (6) Comprised of 5,000 shares owned by Mr. Engkvist and 17,000 shares issuable pursuant to stock options which are exercisable by Mr. Engkvist within 60 days after August 15, 1995. (7) Comprised of 4,000 shares owned by Mr. Malloy and 14,500 shares issuable pursuant to stock options which are exercisable by Mr. Malloy within 60 days after August 15, 1995. (8) Comprised of 17,000 shares issuable pursuant to stock options which are exercisable by Mr. Smith within 60 days after August 15, 1995. (9) Comprised of 1,537 shares owned by Mr. McMullan and 123,915 shares issuable pursuant to stock options which are exercisable by Mr. McMullan within 60 days after August 15, 1995. (10) Comprised of 47,262 shares issuable pursuant to stock options which are exercisable by Mr. Goldman within 60 days after August 15, 1995. (11) Comprised of 3,000 shares owned by Mr. Gould and 37,715 shares issuable pursuant to stock options which are exercisable by Mr. Gould within 60 days after August 15, 1995. (12) Includes 1,009,043 shares owned by his wife and 113,575 shares owned by his children under the Texas Uniform Gift to Minors Act (as to all of which he disclaims beneficial ownership) and 7,290 shares issuable pursuant to stock options which are exercisable by Mr. Stewart within 60 days after August 15, 1995. (13) Comprised of 51,952 shares held by Mr. Stiffler, 390 shares owned by Mr. Stiffler's wife (as to which Mr. Stiffler disclaims beneficial ownership) and 84,032 shares issuable pursuant to stock options which are exercisable by Mr. Stiffler within 60 days after August 15, 1995. (14) Comprised of 4,391 shares issuable pursuant to stock options which are exercisable by Mr. Gellert within 60 days after August 15, 1995. (15) Includes an aggregate of 519,964 shares which all executive officers and directors have the right to acquire under outstanding stock options exercisable within 60 days after August 15, 1995. Also includes those shares listed above the beneficial ownership of which is disclaimed. 9 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In connection with the Company's grant of certain distribution rights to Hewlett-Packard Company ("Hewlett-Packard") in December 1989, the Company and Hewlett-Packard entered into a patent and technology licensing agreement, and Hewlett-Packard purchased 688,836 shares of Sequoia's Series F Convertible Preferred Stock for an aggregate purchase price of $5,800,000. These shares automatically converted into an equal number of shares of Sequoia Common Stock upon the closing of the Company's initial public offering in March 1990. During fiscal 1995, Hewlett-Packard held up to 5.8% of Sequoia's Common Stock. However, at August 15, 1995, Hewlett-Packard no longer held any Sequoia Common Stock. Sequoia received approximately $243,000 from Hewlett-Packard for the purchase of products and services in fiscal 1995. 10 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) Exhibits Exhibit Number Description - ------ ----------- 2.1 Merger and Stock Purchase Agreement dated as of November 9, 1995 by and among the Company, Sequoia Acquisition Corporation, SPCO, Inc. and Keystone International, Inc., as amended (incorporated by reference from Exhibit 2.1 to the Company's Registration Statement on Form S-4 (File No. 33-54777), filed on February 21, 1995). 2.2 Amendment No. 1 to the Merger Agreement, dated as of February 7, 1995 (incorporated by reference from Exhibit 2.2 to the Company's Registration Statement on Form S-4 (File No. 33-54777), filed on February 21, 1995). 2.3 Amendment No. 2 to the Merger Agreement, dated as of February 23, 1995 (incorporated by reference from Exhibit 2.3 to the Company's Registration Statement on Form S-4/A (File No. 33-54777), filed on February 24, 1995). 3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to the Company's Amendment No. 2 to the Annual Report on Form 10-K filed on February 21, 1995. 3.2 Certificate of Amendment of Restated Certificate of Incorporation of the Company. (incorporated by reference to Exhibit 3.2 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 3.3 Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-1 (File No. 33-33024)). 10.1 1986 Incentive Stock Option Plan and 1986 Supplemental Incentive Stock Option Plan (collectively the "Option Plans") and related form of stock option agreements (incorporated by reference to Exhibit 10.10 and Exhibit 10.11, respectively, to the Company's Registration Statement on Form S-1 (File No. 33-33024)).+ 10.2 Amendment to the Option Plans (incorporated by reference to Exhibit 10.42 to the Company's 1990 Annual Report on Form 10-K (File No. 0- 18238)).+ 11 10.3 Amendment to the Option Plans adopted December 13, 1994. (incorporated by reference to Exhibit 10.3 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)).+ 10.4 1990 Outside Director's Stock Option Plan (incorporated by reference to Exhibit 10.45 to the Company's 1990 Annual Report on Form 10-K (File No. 0-18238)). 10.5 1993 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.5 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)).+ 10.6 Amendment to the 1993 Employee Stock Purchase Plan, adopted December 13, 1994. (incorporated by reference to Exhibit 10.6 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)).+ 10.7 1995 Outside Directors' Stock Option Plan. (incorporated by reference to Exhibit 10.7 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 10.8 401(k) Plan of the Company (incorporated by reference to Exhibit 10.37 to the Company's Registration Statement on Form S-1 (File No. 33-33024)).+ 10.9 Lease dated November 23, 1983 between the Company and Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.12 to the Company's Registration Statement on Form S-1 (File No. 33-33024)). 10.10 Third Amendment dated April 2, 1990 to Lease of November 23, 1983, between the Company and Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.38 to the Company's 1990 Annual Report on Form 10-K (File No. 0-18238)). 10.11 Lease dated March 20, 1992 between the Company and Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.14 to the Company's 1992 Annual Report on Form 10-K, Amendment No. 1 (File No. 0-18238)). 10.12 Employment Agreement dated October 20, 1987 between the Company and Jack J. Stiffler (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form S-1 (File No. 33-33024)). 12 10.13 Pick Systems - Open Architecture License Agreement dated October 10, 1986 among the Company, Concurrent Operating Systems Technology and Pick Systems, and assigned to the Company on February 24, 1988 (incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on Form S-1 (File No. 33-33024)). 10.14 Product Development and Technology License Agreement dated July 24, 1990 between the Company and Samsung Electronics Company Ltd. (incorporated by reference to Exhibit 10.40 to the Company's 1990 Annual Report on Form 10-K (File No. 0-18238)).** 10.15 OEM Agreement dated July 24, 1990 between the Company and Samsung Electronics Company Ltd. (incorporated by reference to Exhibit 10.41 to the Company's 1990 Annual Report on Form 10-K (File No. 0-18238)).** 10.16 Service Provider II Maintenance Agreement dated January 1, 1992 between the Company and Samsung Electronics Company Ltd. (incorporated by reference to Exhibit 10.45 to the Company's 1992 Annual Report on Form 10-K, Amendment No. 1 (File No. 0-18238)). 10.17 OEM Agreement dated September 7, 1993 between the Company and Samsung Electronics Co., Ltd. (incorporated by reference to Exhibit 10.43 to the Company's 1993 Annual Report on Form 10-K (File No. 0-18238)). 10.18 Master Agreement dated September 7, 1993 between the Company and Samsung Electronics Co., Ltd. (incorporated by reference to Exhibit 10.44 to the Company's 1993 Annual Report on Form 10-K (File No. 0-18238)). 10.19 Development, Manufacturing, and Distribution Agreement dated as of December 26, 1991 between the Company and Toshiba Corporation (incorporated by reference to Exhibit 10.48 to the Company's 1992 Annual Report on Form 10-K, Amendment No. 1 (File No. 0-18238)). ** 10.20 Revised Development, Manufacturing, and Distribution Agreement executed as of May 13, 1994 between the Company and Toshiba Corporation.* 10.21 Software Cooperation Agreement executed April 5, 1994 between the Company and UNIX System Laboratories, Inc. ** 13 10.22 Purchase of Business Agreement dated June 17, 1994 by and among the Company, SEQ (Aust.) Pty. Ltd., Sequoia Systems (Australia) Pty. Ltd., Tricom Group Pty. Ltd. , Samuel Seabury and William A. Cruthers. (incorporated by reference to Exhibit 10.26 to the Company's 1994 Annual Report on Form 10-K (File No. 0-18238)). 10.23 Employment Agreement dated November 5, 1992, as amended January 22, 1993 between the Company and Cornelius P. McMullan. (incorporated by reference to Exhibit 10.56 to Amendment No. 1 to the Company's 1993 Annual Report on Form 10-K/A. (File No. 0-18238)). + 10.24 Employment Agreement dated October 2, 1992, as amended November 7, 1992 between the Company and Richard B. Goldman. (incorporated by reference to Exhibit 10.57 to Amendment No. 1 to the Company's 1993 Annual Report on Form 10-K/A (File No. 0-18238)). + 10.25 Credit Agreement dated March 31, 1995 by and between State Street Bank and Trust Company, Texas Commerce Bank, National Association and the Company (incorporated by reference to Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q for the quarter ended April 2, 1995 (File No. 0-18238)). 10.26 Pick 64 Purchase Agreement dated March 24, 1995 between Alpha Microsystems, Inc. and the Company. (incorporated by reference to Exhibit 10.26 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 10.27 Amendment dated August 11, 1995 to Pick Systems - Open Architecture License Agreement dated October 10, 1986 among the Company, Concurrent Operating Systems Technology and Pick Systems, and assigned to the Company on February 24, 1988. (incorporated by reference to Exhibit 10.27 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 10.28 Amendment dated February 2, 1995 to Pick Systems - Open Architecture License Agreement dated October 10, 1986 among the Company, Concurrent Operating Systems Technology and Pick Systems, and assigned to the Company on February 24, 1988. (incorporated by reference to Exhibit 10.28 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 10.29 Asset Sale Agreement by and between Intel Corporation and Texas Microsystems, Inc. dated November 30, 1994. (incorporated by reference to Exhibit 10.29 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 10.30 Consent and Undertakings of the Company filed February 24, 1995 in Securities and Exchange Commission v. Sequoia Systems, Inc. et al., ------------------------------------------------------------------- U.S. District Court , District of Columbia. (incorporated by reference to Exhibit 10.30 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 14 10.31 Lease by and between Chevron U.S.A. Inc. and Texas Microsystems, Inc. dated December 11, 1992, as amended. (incorporated by reference to Exhibit 10.31 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 10.32 Letter of Employment between the Company and J. Michael Stewart dated March 31, 1995. (incorporated by reference to Exhibit 10.32 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)).+ 11 Statement re: Computation of Earnings (incorporated by reference to Exhibit 11 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 21 Subsidiaries of the Company (incorporated by reference to Exhibit 21 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 23.1 Consent of Coopers & Lybrand L.L.P. (incorporated by reference to Exhibit 23.1 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 23.2 Consent of Arthur Andersen LLP (incorporated by reference to Exhibit 23.2 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). 27 Financial Data Schedule (incorporated by reference to Exhibit 27 to the Company's 1995 Annual Report on Form 10-K (File 0-18238)). - -------------------- * Filed herewith ** Confidential treatment previously granted to certain portions thereof. *** Previously filed subject to request for confidential treatment as to certain portions thereof. + Management Contract or Compensatory Plan or Arrangement required to be filed by Item 14C of this Annual Report on Form 10-K (b) Financial Statement Schedule The Financial Statement Schedules are listed on page 26 of the Annual Report on Form 10-K as originally filed. (c) Reports on Form 8-K None. 15 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. SEQUOIA SYSTEMS, INC. Dated October 25, 1995 By: /s/ Richard B. Goldman -------------------------- Name: Richard B. Goldman Title: Executive Vice President and Chief Financial Officer 16 EX-10.20 2 DISTRIBUTION AGREEMENT EXHIBIT 10.20 REVISED DEVELOPMENT, MANUFACTURING, AND DISTRIBUTION AGREEMENT This Revised Agreement (the "Agreement") is made this day of , 1994 by and between Sequoia Systems, Inc., a Delaware corporation with principal offices at 400 Nickerson Road, Marlborough, Massachusetts 01752, U.S.A. ("Sequoia"), and Toshiba Corporation, a Japanese corporation with principal offices at 1-1 Shibaura 1-chome, Minato-ku, Tokyo 105-01, Japan ("Toshiba"). RECITALS WHEREAS, Sequoia and Toshiba entered into the Development, Manufacturing, and Distribution Agreement on December 26, 1991 (the "Original Agreement"); WHEREAS, Sequoia's original plan to develop and market a symmetrical, mutli-processing, fault-tolerant computer system designated as the S/1000 System (the "S/1000") was canceled in 1993, and such cancellation has made it necessary to change the joint program between the parties to develop the symmetrical, multi-processing, fault-tolerant computer system as contemplated in the Original Agreement; and WHEREAS, Toshiba desires to continue to develop, manufacture and distribute the S/1100 as defined herein below and other symmetrical, multi- processing, fault-tolerant computer system product mainly for the Japanese market; and WHEREAS, in accordance with the said changes in the joint development program, the parties desire to amend the license fees and other terms and conditions set forth in the Original Agreement; NOW THEREFORE, in consideration of the mutual benefits to be derived herefrom and other valuable consideration, the parties agree to supersede the Original Agreement with this Agreement which shall provide all the rights and obligations between the parties hereto with regard to the subject matter hereof: 1. DEFINITIONS ----------- As used in this Agreement, the following terms shall have the following meanings: 1.1 "S/1100" shall mean the symmetrical, multi-processing, fault-tolerant computer system, known to the parties by the designated product name as S/1100, to be developed by Toshiba whose hardware design is based on Sequoia's S/1000. 1.2 "Toshiba SMP" shall mean any symmetrical, multi-processing, fault-tolerant computer system other than the S/1100 to be developed by Toshiba which incorporates the Sequoia Technology. - 1 - 1.3 "Jointly Developed Products" shall mean the S/1100 and any Toshiba SMP. 1.4 "Sequoia Product" shall mean any symmetrical, multi-processing, fault-tolerant computer system to be developed by Sequoia which incorporates the Toshiba Technology. 1.5 "S/1000" shall mean Sequoia's symmetrical, multi-processing, fault-tolerant computer system the development of which was canceled by Sequoia in 1993. 1.6 "Sequoia Technology" shall mean (a) all proprietary technology of Sequoia relating to the S/1000 and which was supplied to Toshiba under the Original Agreement; and (b) any and all patentable and unpatentable improvements, modifications or variations in or to the technology described in subsection 1.6 (a) above or to the Toshiba Technology which are created, invented, developed, discovered or made solely by Sequoia during the term of this Agreement as to which Sequoia acquires exclusive rights during the term of this Agreement and is able to license or sublicense such rights to Toshiba for use in connection with the Jointly Developed Products. 1.7 "Sequoia Intellectual Property Rights" shall mean all patents and patent applications whose filing dates are on or prior to the expiration or termination date of this Agreement, copyrights, trade secrets, know-how, mask works and other intellectual property rights covering or otherwise related to the Sequoia Technology. 1.8 "Technical Data" shall mean data and documentation, including, without limitation, manuals, drawings, diagrams, schematics, source program listings, flow charts and other items, whether in printed form or stored on magnetic or other media. 1.9 "Toshiba Technology" shall mean (a) all existing proprietary technology owned or licensable by Toshiba and incorporated into Jointly Developed Products; (b) all proprietary technology of Toshiba relating to the Jointly Developed Products and which are created, invented, discovered or made solely by Toshiba during the term of this Agreement; and (c) any and all patentable and unpatentable improvements, modifications or variations in or to the technology described in subsection 1.9 (a) or (b) above or to the Sequoia Technology which are created, invented, discovered or made solely by Toshiba during the term of this Agreement as to which Toshiba acquires exclusive rights during the term of this Agreement and is able to license or sublicense such rights to Sequoia for use in connection with the Jointly Developed Products. 1.10 "Toshiba Intellectual Property Rights" shall mean all patents and patent applications whose filing dates are on or prior to the expiration or termination date of this Agreement, copyrights, trade secrets, know-how, mask works and other intellectual property rights covering or otherwise related to the Toshiba Technology. - 2 - 2. Product Specification --------------------- The product specifications for Jointly Developed Products shall be determined by Toshiba, provided that Toshiba may consult with Sequoia in developing such specifications. The parties acknowledge that Jointly Developed Products shall be developed by Toshiba. Toshiba shall test the Jointly Developed Products it develops or manufactures for safety, environmental, reliability and other requirements for Japan and, at its discretion, for the United States and Germany. 3. OWNERSHIP AND LICENSE --------------------- 3.1 Ownership. Sequoia shall remain the owner of all Sequoia Intellectual --------- Property Rights, and Toshiba shall remain the owner of all Toshiba Intellectual Property Rights. If any technology is jointly developed by Sequoia and Toshiba during the term of this Agreement, Sequoia and Toshiba shall jointly own all rights in such technology ("Jointly Developed Technology"), and neither party shall be required to account for profits to the other party for use of any such Jointly Developed Technology in any products. 3.2 License Grant to Toshiba. ------------------------ 3.2.1 Development and Manufacturing License. Sequoia hereby grants to Toshiba, ------------------------------------- and Toshiba accepts, a non-exclusive and paid-up license under the Sequoia Intellectual Property Rights: a. to use the Sequoia Technology for the development of the Jointly Developed Products; b. to use, manufacture and have manufactured the Jointly Developed Products; and c. to reproduce, modify and prepare derivative works in the case of copyrighted materials for the purpose of licenses granted hereunder. 3.2.2 Distribution License. -------------------- (a) Sequoia hereby grants to Toshiba, and Toshiba accepts the exclusive and paid-up license under the Sequoia Intellectual Property Rights to sell, lease or otherwise distribute the Jointly Developed Products in Japan. The terms and conditions for the dale of the Jointly Developed Products by, or on behalf of, Toshiba outside Japan shall be negotiated by Sequoia and Toshiba. Toshiba bay sell freely a symmetrical multi-processor system that does not use Sequoia Technology. (b) To the extent that a Jointly Developed Product includes Sequoia's computer software, Sequoia hereby agrees to grant Toshiba the right to sublicense such software to Toshiba's customers in accordance with an end-user license agreement the terms and conditions of which are substantially similar to Sequoia's standard terms and conditions for such software. - 3 - (c) Toshiba may distribute any Sequoia Products in Japan pursuant to an OEM or Supply Agreement to be mutually agreed to by the parties. 3.3 License Grant to Sequoia. ------------------------ 3.3.1 Development and Manufacturing License. Toshiba hereby grants to Sequoia, ------------------------------------- and Sequoia accepts, a non-exclusive and paid-up license under the Toshiba Intellectual Property Rights: a. to use, manufacture and have manufactured the Jointly Developed Products; and b. to reproduce, modify and prepare derivative works in the case of copyrighted materials for the purpose of licenses granted hereunder. 3.3.2 Distribution License. Toshiba hereby grants to Sequoia the license under -------------------- the Toshiba Intellectual Property Rights to sell, lease or otherwise distribute the Jointly Developed Products in all countries except Japan. Such license shall be exclusive for S/1100 and be non-exclusive for any Toshiba SMP. To the extent that a Jointly Developed Product includes Toshiba's computer software in any form, Toshiba agrees to grant Sequoia the right to sublicense such software to Sequoia's customers in accordance with an end-user license agreement the terms and conditions of which are substantially similar to Toshiba's standard terms and conditions for such software. Sequoia shall have the right to grant its OEM partners the right to sell, lease or otherwise distribute the Jointly Developed Products in all countries except Japan. 3.3.3 Sequoia Products. Toshiba hereby grants to Sequoia a non-exclusive license ---------------- to use Toshiba Technology furnished to Sequoia under this Agreement to develop, manufacture, have manufactured, sell, lease and otherwise distribute the Sequoia Products, provided that in the event that such Sequoia Products are covered by Toshiba Intellectual Property Rights, Sequoia shall pay the mutually agreed upon license fee and/or royalty. If, however, this Agreement is assigned by Toshiba, pursuant to Section 11.7 of this Agreement or if Toshiba shall become insolvent to go into liquidation or receivership or be declared bankrupt, no such license fee or royalty shall be due Toshiba and assignee for such license under the Toshiba Intellectual Property Rights. 4. TRANSFER OF TECHNOLOGY ---------------------- 4.1 Delivery of Technical Data. During the term of this Agreement, Sequoia and -------------------------- Toshiba shall deliver to the other party, promptly after it becomes available, Technical Data related to the Sequoia Technology and the Toshiba Technology, respectively, as the parties determine is reasonably necessary or desirable for the other party to exercise the license granted in Sections 3.2 and 3.3 above. - 4 - 4.2 Training and Technical Assistance. During the term of this Agreement, --------------------------------- each party shall provide the other party, upon request by the other party, with reasonable levels of development support at no charge to such other party in accordance with a separate agreement to be agreed upon between Sequoia and Toshiba. 4.3 Ported Software. Toshiba may port certain third party software not owned --------------- by either Toshiba or Sequoia to the Jointly Developed Products (the "Third Party Software"). Toshiba may also port its own software ("Toshiba Software") to the Jointly Developed Products. If Toshiba ports any Third Party Software or Toshiba Software to the Jointly Developed Products, Toshiba shall notify Sequoia of such decision, together with a description of the Third Party Software of Toshiba Software. If the Third Party Software is ported, Toshiba shall also provide Sequoia with the name and address of the person or entity from which Toshiba obtained the right to port the Third Party Software (the "Third Party"). After each port is completed, Toshiba will deliver to Sequoia a copy of Toshiba Software or Third Party Software and related Technical Data (the "Software Deliverables") as provided in Section 4.1 above; provided that: (a) Sequoia agrees to pay to Toshiba: (i) incremental expenses including without limitation media expenses, shipping fees which are required in making such a Software Deliverable available to Sequoia; and (ii) for each Software Deliverable other than system software, an amount to be separately negotiated; and (b) in case of the ported Third Party Software, Toshiba will deliver its Software Deliverables only if Sequoia has obtained any requisite consent or license from the Third Party at its expense and responsibility. 4.4. Exception. Nothing in this Section 4 shall require either party (a) to --------- deliver any computer system to the other party without charge; or (b) to provide the other party with internal manufacturing instructions for semiconductors or with any information or materials which such party is prevented from disclosing under any agreement with a third party. 5. CONFIDENTIAL INFORMATION ------------------------ 5.1 Protection of Confidential Information. -------------------------------------- (a) During the term of this Agreement, Toshiba and Sequoia shall have access to proprietary or confidential information of each other. Each party shall protect such proprietary or confidential information of the other party in the same manner in which it would protect its own proprietary or confidential information of like importance and in any event shall use its most reasonable efforts to maintain the confidentiality of such information, and shall not disclose or use proprietary or confidential information of the other party for its own benefit or the benefit of any other person or entity, except as may be specifically permitted under this Agreement or other agreements between the parties. - 5 - (b) The obligations of confidentiality and non-use provided by subsection (a) above shall not apply to any confidential or proprietary information of one party which: (i) is generally known to the public at the time of disclosure or becomes generally known through no wrongful act on the part of the recipient; (ii) is in the recipient's possession at the time of disclosure otherwise than as a result of recipient's breach of any legal obligation; (iii) becomes known to the recipient through disclosure by sources, other than the disclosing party, having the legal right to disclose such information; (iv) is independently developed by the recipient without reference to or reliance upon such information; or (v) is required to be disclosed by the recipient to comply with applicable laws or governmental regulations, provided that the recipient provides prior written notice of such disclosure to the disclosing party and takes reasonable and lawful actions to avoid and/or minimize the extent of such disclosure. (c) The obligations of confidentiality and non-use under this Section 5 shall continue throughout the term of this Agreement and for a period of five years thereafter. 6. LICENSE FEES AND TAXES ---------------------- 6.1 License Fees. In consideration of the rights and licenses granted in this ------------ Agreement, Toshiba agrees to pay to Sequoia a non-refundable license fee of U.S. $5,875,000 in four (4) installments as specified below, it being hereby confirmed by the parties hereto that the first and second installments had been paid by Toshiba under the Original Agreement: $ 1,687,500 paid in January, 1992 $ 1,687,500 paid in April, 1992 $ 1,500,000 on or before May 31, 1994 $ 1,000,000 on or before April 30, 1995 6.2 Taxes. Toshiba shall pay all taxes, including sales and use taxes, however ----- designated, imposed by the Japanese government or by a government of a country in which Toshiba is distributing products covered by this Agreement as a result of the existence or operation of this Agreement, except any income tax imposed on Sequoia by any governmental entity. - 6 - 7. SUPPLY OF JOINTLY DEVELOPED PRODUCTS ------------------------------------ Sequoia may purchase from Toshiba under a separate agreement the Jointly Developed Products at the most favorable price at which Toshiba sells to third parties. Both parties also agree to make available to the other party, on commercially reasonable terms, all components and parts that are not publicly available and are necessary to manufacture the Jointly Developed Products or the Sequoia Products. 8. EXPIRATION AND TERMINATION -------------------------- 8.1 Term. This Agreement shall become effective as of January 22, 1992 and ---- shall continue to be in effect for five years thereafter. 8.2 Termination For Breach. Each party shall have the right to terminate this ---------------------- Agreement in the event of a material breach by the other party of any of its obligations hereunder. In the event a party materially breaches any of its obligations hereunder, the non-breaching party may terminate this Agreement by giving the breaching party written notice of its intent to terminate this Agreement, which notice shall specify, in reasonable detail, the nature of such breach. Such termination shall occur thirty (30) days following such notice, unless the breaching party cures such breach prior to the expiration of such 30-day period. 8.3 Effect of Termination. Upon expiration or termination of this Agreement --------------------- under Sections 8.1 and 8.2 above, all rights and obligations of either party as contained herein shall terminate, except that Sections 3, 5, 10 and 11.1 shall survive any expiration or termination of this Agreement. Notwithstanding any provisions to the contrary, in the event that this Agreement is terminated pursuant to Section 8.2, the licenses of the breaching party shall terminate forthwith and the licenses of the non-breaching party shall survive such termination. 9. FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHTS ---------------------------------------------------- 9.1 Respective Responsibilities. Sequoia shall be solely responsible for the --------------------------- preparation, filing, prosecution and maintenance of all patent applications and patents included in the Sequoia Intellectual Property Rights. Toshiba shall be solely responsible for the preparation, filing, prosecution, and maintenance of all patent applications and patents included in the Toshiba Intellectual Property Rights. Sequoia shall have the initial right to file, prosecute and maintain any patent applications and patents relating to Jointly Developed Technology except that Toshiba shall have the initial right to file, prosecute and maintain patent applications and patents for Jointly Developed Technology in Japan. Such patent applications relating to Jointly Developed Technology shall be filed in the - 7 - joint names of Sequoia and Toshiba, and Sequoia and Toshiba shall each own an undivided one-half (1/2) interest in each such patent application and any and all patents resulting therefrom. Each party shall have the royalty-free right to manufacture, have manufactured, use, sell, lease and otherwise dispose of products covered by the claims of such patents, including the right to grant non-exclusive licenses under such patent applications or patents. Neither party shall be required to account to the other party with respect to royalties, payments or value received as a result of such patent applications or patents. In the event that either party decides not to prepare, file, prosecute, or maintain a patent application or patent related to Jointly Developed Technology that such party has the initial right to file, prosecute or maintain, then the other party shall have the right, at its own expense, to continue such preparation, filing, prosecution, or maintenance in the joint names of Sequoia and Toshiba. 9.2 Sharing of Expenses. Sequoia shall pay all expenses incurred in connection ------------------- with the filing, prosecution and maintenance of patent applications and patents related to Jointly Developed Technology in the United States, and Toshiba shall pay all expenses incurred in connection with the filing, prosecution and maintenance of patent applications and patents related to Jointly Developed Technology in Japan. For all other patent applications and patents related to the Jointly Developed Technology, the party which files an application under this Section 9 shall, prior to filing, request the other party to indicate whether it will agree to pay one-half of all costs associated with the pending application and the issued patent. If within sixty (60) days of receiving such request, the non-filing party fails to assume in writing the obligation to pay its share of such costs, or if the non-filing party subsequently fails to continue such payments within sixty (60) days of demand by the filing party, the non-filing party shall relinquish to the filing party its share of the title to said patent application and patent. Notwithstanding the above, the relinquishing party shall retain the right to manufacture, use, lease, sell and otherwise dispose of products under said patent application and patent. The filing party shall be under no further obligation to consult with the non-filing party as required under Section 9.3. 9.3 Jointly Developed Technology. Both parties shall use reasonable efforts to ---------------------------- obtain the issuance of the broadest claims in all patent applications. The parties also agree to consult with each other as to the preparation, filing, prosecution, and maintenance of any patent applications and patents covering Jointly Developed Technology. Each party agrees to furnish to the other party copies of documents related to such preparation, filing, prosecution, or maintenance of patent applications and patents covering Jointly Developed Technology sufficiently prior to a response or payment due date to allow for review and comment by the other party and the parties agree to cooperate with each other in connection with the activities described in this Section 9. - 8 - 10. WARRANTIES, REPRESENTATIONS AND LIMITATION OF LIABILITY ------------------------------------------------------- 10.1 Sequoia's Representation. Sequoia represents and warrants to Toshiba that ------------------------ it has all the necessary rights, power and authority to enter into and perform this Agreement and to grant the licenses granted to Toshiba herein. Sequoia also represents and warrants to Toshiba that this Agreement has been duly authorized, executed and delivered by Sequoia and constitutes a legal, valid and binding obligation of Sequoia. 10.2 Toshiba Representation. Toshiba represents and warrants to Sequoia that ---------------------- it has all the necessary rights, power and authority to enter into and perform this Agreement and to grant the licenses granted to Sequoia herein. Toshiba also represents and warrants to Sequoia that this Agreement had been duly authorized, executed and delivered by Toshiba and constitutes a legal, valid and binding obligation of Toshiba. 10.3 Disclaimer of Warranty and Limitation of liability. THE TECHNOLOGY OF ONE -------------------------------------------------- PARTY SHALL BE FURNISHED TO THE OTHER PARTY ON AN "AS-IS" BASIS AND NEITHER SEQUOIA NOR TOSHIBA MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED. BY WAY OF EXAMPLE, BUT NOT OF LIMITATION, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ITS TECHNOLOGY FURNISHED TO THE OTHER PARTY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES, INCLUDING DAMAGES FOR LOST PROFITS, LOST SAVINGS, OR LOST DATA, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT OR IN TORT, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 11. MISCELLANEOUS ------------- 11.1 Compliance With Applicable Law. Sequoia and Toshiba shall each comply ------------------------------ with all applicable laws and regulations, whether foreign, federal, state or local, relating to the use, importation and exportation of the Sequoia Technology, and the Toshiba Technology and the manufacture, sale, or other distribution of the Jointly Developed Products or Sequoia Products. Sequoia and Toshiba shall each obtain and maintain in effect all licenses, permits and authorizations required for the performance of their obligations hereunder. Sequoia and Toshiba also acknowledge that the Sequoia Technology and Toshiba Technology, and any direct products thereof are subject to the export control laws and regulations in the United States and Japan, including and United States Export Administration Regulations. Both parties further acknowledge that the Sequoia Technology and Toshiba Technology and any direct product thereof, may not be sold, transferred, or otherwise released to any country restricted by such laws and regulations which include the following countries: Afghanistan, People's Republic of China, or Country Groups Q, W, Y, S and Z without the specific prior written permission of the U.S. and/or Japanese Government. This restriction on transfer includes release of the Sequoia Technology and Toshiba Technology and any direct products thereof to nationals of the above-named countries. Both parties agree - 9 - to obtain any such required permission in the event that such a transfer should be made. This provision shall be in effect for as long as each party distributes products incorporating the Sequoia Technology or Toshiba Technology. 11.2 Relationship of Sequoia and Toshiba. Nothing in this Agreement shall ----------------------------------- create a joint venture, partnership or principal-agent relationship between Sequoia and Toshiba. 11.3 Notices. Whenever any matter herein provides for notice or other written ------- communication to be given to a party hereto, such notice shall be given at the address of such party set forth below, or such other address as such party shall provide, in writing, to the other party. All notices may be given by being personally delivered, sent by telecopier and confirmed by first class (or its equivalent) mail, postage prepaid, or sent by overnight, prepaid air freight, addressed to the party hereto to whom notice is to be given at the address listed below. Each such notice shall be deemed to be effective upon receipt. (a) If to Toshiba: 1-1, Shibaura 1-Chome Minato-Ku, Tokyo 105-01 Japan Attention: General Manager, Computer Division Telecopier: (03) 3457-2958 With a copy to: 1-1, Shibaura 1-Chome Minato-Ku, Tokyo 105-01 Japan Attention: Manager, Licensing and Alliance Agreements, International Cooperation Agreement and Legal Division Telecopier: (03) 5444-9214 (b) If to Sequoia: 400 Nickerson Road Marlborough, Massachusetts 01752 Attention: President Telecopier: (508) 485-4996 With a copy to: Mark G. Borden, Esq. Hale and Dorr 60 State Street Boston, Massachusetts 02109 U.S.A. Telecopier: (617) 742-9108 11.4 Disputes and Governing Law. The parties agree to attempt to settle -------------------------- amicably all disputes arising out of or in connection with this Agreement. Any proceeding to enforce or to resolve disputes relating to this Agreement shall be brought before a court of competent jurisdiction in the commonwealth of Massachusetts. The validity, performance and construction of this Agreement shall be governed by the laws of the State of Massachusetts and the United States of America. - 10 - 11.5 Freedom of Development. Each party acknowledges that this Agreement does ---------------------- not restrict or affect the other party's right to develop, market, sell, license, manufacture or distribute products by itself or with any third party that do not incorporate and are not based upon the intellectual property or technology of the other party. 11.6 Japanese Government Approval. Toshiba shall be responsible for obtaining ---------------------------- any necessary Japanese governmental approval for this Agreement, including but not limited to approval by MITI. 11.7 Successors and Assigns. Neither this Agreement nor any rights granted ---------------------- hereunder shall be assigned or transferred except to a successor which acquires substantially all of such party's business. This Agreement shall be binding upon, and inure to the benefit of, the respective legal representatives, successors and permitted assigns of the parties. 11.8 Cumulative Remedies. Except as expressly provided to the contrary, no ------------------- remedy or election hereunder shall be deemed exclusive, but shall, wherever possible, be cumulative with all other remedies at law or in equity. 11.9 Severability. Should any portion or provision of this Agreement be ------------ declared invalid or unenforceable in any jurisdiction, then such portion or provision shall be deemed to be severable from this Agreement as to such jurisdiction (but, to the extent permitted by law, not elsewhere) and shall not affect the remainder hereof. 11.10 Waiver. No waiver of any obligation of either party hereto under this ------ Agreement shall be effective unless in a writing, specifying such waiver, executed by the waiving party. A waiver by either party hereto of any of its rights or remedies under this Agreement on any occasion shall not be bar to the exercise of the same right or remedy on any subsequent occasion or of any other right of remedy at any time. 11.11 Headings and Titles. The designation of a title, caption or heading, for ------------------- each section of this Agreement is for the purpose of convenience only and shall not be used to limit, interpret or modify the provisions of this Agreement. 11.12 Amendment or Modification. This Agreement may be amended, altered, or ------------------------- modified only by a writing, specifying such amendment, alteration or modification, executed by both parties. 11.13 Trademarks. No right is granted herein to use any trademark, service ---------- mark, trade name, or other identifying mark owned by, or used to identify any product or service of Sequoia or Toshiba in connection with the sale, leasing or other distribution of any Jointly Developed Products and Sequoia Products. Both parties also agree not to use a trademark, service mark, trade name or other identifying mark that is confusingly similar to a trademark, service mark, trade name, or other identifying mark used by the other party. Toshiba acknowledges that it is its intention to sell the Jointly Developed Products under the Toshiba private label or the label - 11 - of Toshiba OEMs. 11.14 Counterparts. This Agreement may be executed in counterparts, each of ------------ which shall be deemed an original, out all of which shall constitute one and the same instrument. 11.15 Complete Agreement. This Agreement constitutes the complete understanding ------------------ of the parties regarding the subject matter hereof and supersedes all prior or contemporaneous agreements of the parties. Each of the parties has caused this Agreement to be executed and delivered by its duly authorized representative as of the date first written above. TOSHIBA CORPORATION SEQUOIA SYSTEMS, INC. By: [Signature appears here] By: /s/ Richard B. Goldman -------------------------------------- ---------------------------- Title: General Manager Title: Vice President Finance International Cooperation Agreement and Chief Finance Officer and Legal Division ----------------------- ----------------------------------- Date: 5/13/94 Date: 4/21/94 ----------------------------------- ----------------------- - 12 - -----END PRIVACY-ENHANCED MESSAGE-----