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EXHIBIT 10.47




                              TELCO SYSTEMS, INC.
                               63 NAHATAN STREET
                          NORWOOD, MASSACHUSETTS 02062




                                      February 2, 1995




Dr. William Smith
Boulder, Colorado

Dear Will:

      This letter will set forth the agreed terms of your employment by the
Company:

POSITION                President and Chief Operating Officer.

EFFECTIVE DATE          February 2, 1995

EMPLOYMENT
COMMENCEMENT DATE       March 6, 1995.

SALARY RATE             $230,000 per annum.

MIPS                    60% of salary, with a guaranteed minimum of $50,000 for
                        FY '95.

STOCK OPTIONS           100,000 shares, exercise price equal to market value at
                        date of issue, four-year vesting.

FRINGE BENEFITS         Standard benefits presently available to the current
                        president, including health, dental and life insurance.

CHANGE OF CONTROL       Separate contract providing for lump sum payment equal 
                        to 1.5X annual salary plus latest bonus if change of
                        control is followed by termination or demotion;
                        form of contract substantially the same as that of the
                        current president with changes to reflect changes in
                        the law since 1989.

RELOCATION              Standard relocation allowance and home sale/purchase
                        assistance (or special terms as agreed between you and 
                        the Company).
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Dr. William Smith
February 2, 1995
Page 2



SEVERANCE         If you are not appointed CEO by 3/1/96 and voluntarily
                  terminate by 5/31/96, total severance payments equal to
                  $345,000 payable in equal monthly installments over two years
                  from termination date.

                  If you are not appointed CEO by 3/1/96 and have not tendered
                  your resignation prior to 5/31/96, no contractual severance
                  payment.

                  If you are appointed CEO by 3/1/96 or are terminated at any
                  time for cause, no contractual severance payment.

                  If you terminate your employment voluntarily at any time
                  (except during the three-month period referred to above), no
                  contractual severance payment.

                  If you become employed during a severance payment period, you
                  will receive a lump-sum payment equal to one-half of the
                  Company's remaining severance obligations in full discharge
                  of all such remaining obligations.

      We are all delighted that you have accepted this offer.  If the above
accurately describes your understanding of your employment terms, please sign
and return the enclosed copy of this letter.

                                      Very truly yours,

                                      TELCO SYSTEMS, INC.



                                      By /S/ John A. Ruggiero 
                                         -----------------------
                                         John A. Ruggiero, CEO

Accepted and agreed to:



/S/ William B. Smith
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William Smith