<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 1999
REGISTRATION NO. 333-76681
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
JUNIPER NETWORKS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3661 77-042528
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
385 RAVENDALE DRIVE
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 526-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SCOTT KRIENS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
JUNIPER NETWORKS, INC.
385 RAVENDALE DRIVE
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 526-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
LARRY W. SONSINI NORA L. GIBSON
JUDITH MAYER O'BRIEN TAMARA L. TOMPKINS
BRUCE MCNAMARA ELISA S. LEE
W. BRIAN KINARD BROBECK PHLEGER & HARRISON LLP
WILSON SONSINI GOODRICH & ROSATI ONE MARKET
PROFESSIONAL CORPORATION SPEAR STREET TOWER
650 PAGE MILL ROAD SAN FRANCISCO, CALIFORNIA 94105
PALO ALTO, CALIFORNIA 94304-1050 (415) 442-0900
(650) 493-9300
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by us in connection with the
sale of common stock being registered. All amounts are estimates except the SEC
registration fee and the NASD filing fee and the Nasdaq National Market listing
fee. None of such expenses will be borne by selling stockholders.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
SEC registration fee........................................ $19,460
NASD filing fee............................................. 7,500
Nasdaq National Market listing fee.......................... 5,000
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Blue Sky qualification fees and expenses.................... 3,000
Transfer Agent and Registrar fees........................... *
Miscellaneous fees and expenses............................. *
-------
Total.............................................. $ *
=======
</TABLE>
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* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a corporation
to include in its charter documents, and in agreements between the corporation
and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law.
Article Eighth of our Amended and Restated Certificate of Incorporation
provides for the indemnification of directors and officers to the fullest extent
permissible under Delaware law.
Article VI of our Bylaws provides for the indemnification of officers,
directors and third parties acting on behalf of Juniper Networks if such person
acted in good faith and in a manner reasonably believed to be in and not opposed
to our best interest, and, with respect to any criminal action or proceeding,
the indemnified party had no reason to believe his or her conduct was unlawful.
We have entered into indemnification agreements with our directors and
executive officers, in addition to indemnification provided for in our Bylaws,
and intend to enter into indemnification agreements with any new directors and
executive officers in the future. The indemnification agreements may require us,
among other things, to indemnify our directors and officers against certain
liabilities that may arise by reason of their status or service as directors and
officers (other than liabilities arising from willful misconduct of culpable
nature), to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified, and to obtain directors and
officers' insurance, if available on reasonable terms.
Reference is also made to Section 8 of the Underwriting Agreement contained in
Exhibit 1.1 hereto, indemnifying officers and directors of Juniper Networks
against certain liabilities.
II-1
<PAGE> 3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since inception, we have issued unregistered securities to a limited number
of persons as described below:
1. On February 6, 1996, we sold 4,050,000 shares of our common stock for
an aggregate purchase price of $8,910.00.
2. On April 15, 1996 we sold 225,000 shares of our common stock for an
aggregate purchase price of $2,002.50.
3. On June 12, 1996 we sold 450,000 shares of our common stock for an
aggregate purchase price of $20,025.00.
4. From inception through March 31, 1999 (the most recent practicable
date), we granted stock options and restricted stock purchase rights to
purchase an aggregate of 14,966,447 shares of our common stock at
prices ranging from $0.11 to $14.00 per share to employees, consultants
and directors pursuant to our 1996 Stock Plan.
5. From inception through March 31, 1999 (the most recent practicable
date), we issued and sold an aggregate of 10,367,409 shares of our
common stock to employees, consultants and directors for aggregate
consideration of $2,022,816.00 pursuant to exercise of options granted
under our 1996 Stock Plan.
6. From inception through March 31, 1999, we issued an aggregate of
111,283 shares of our common stock under our 1996 Stock Plan to
consultants in consideration for past services rendered for an
aggregate value of $74,365.00.
7. On June 11, 1996 and September 23, 1997, we sold 1,578,418 and 165,333
shares of Series A Preferred Stock, respectively, for $1.00 per share
to a group of private investors for an aggregate purchase price of
$1,743,751.
8. On June 11, 1996, we sold 6,328,123 shares of Common Stock for $0.44
per share to a group of private investors for an aggregate purchase
price of $281,249.90.
9. On August 5, 1996 and November 8, 1996, we sold 3,818,017 shares of our
Series B Preferred Stock for $2.40 per share to a group of private
investors for an aggregate purchase price of $9,163,240.80.
10. On December 16, 1996, in connection with an equipment lease, we issued
a warrant to purchase 83,333 shares of our Series B Preferred Stock at
an exercise price of $2.40 per share.
11. On December 30, 1996, we issued 3,958 shares of Series B Preferred
Stock at $2.40 per share to two consultants of Juniper as consideration
for past services rendered.
12. On June 18, 1997, in connection with a lease agreement, we issued a
warrant to a lessor of real property to purchase 10,000 shares of our
Series B Preferred Stock at an exercise price of $2.40 per share.
13. On July 1, 1997 and September 30, 1997, we sold 5,151,178 shares of our
Series C Preferred Stock at $8.93 per share to a group of private
investors for an aggregate purchase price of $46,000,020.
14. On September 30, 1997, in connection with an equipment lease, we issued
a warrant to purchase 23,516 shares of our Series C Preferred Stock at
an exercise price of $8.93 per share.
15. On March 3, 1999, we issued 130,000 shares of common stock to an
employee at an exercise price of $9.90 per share pursuant to a
restricted stock purchase agreement.
II-2
<PAGE> 4
16. On March 16, 1999, we sold 500,000 shares of our Series D Preferred
Stock and 2,580,000 shares of Series D1 Preferred Stock both for $11.03
per share to a private investor for an aggregate purchase price of
$33,972,400.
For additional information concerning these equity investment transactions,
reference is made to the information contained under the caption "Certain
Transactions" in the form of prospectus included herein.
Except as indicated above, none of the foregoing transactions involved any
underwriters, underwriting discounts or commissions, or any public offering, and
we believe that each transaction was exempt from the registration requirements
of the Securities Act by virtue of Section 4(2) thereof, Regulation D
promulgated thereunder or Rule 701 pursuant to compensatory benefit plans and
contracts relating to compensation as provided under such Rule 701. The
recipients in such transactions represented their intention to acquire the
securities for investment only and not with a view to or for sale in connection
with any distribution thereof, and appropriate legends were affixed to the share
certificates and instruments issued in such transactions. All recipients had
adequate access, through their relationships with us, to information about us.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 Amended and Restated Certificate of Incorporation of the
Registrant.
3.2 Form of Amended and Restated Certificate of Incorporation of
the Registrant to be effective upon the closing of the
offering made pursuant to this Registration Statement.
3.3 Amended and Restated Bylaws of the Registrant.
4.1* Form of Registrant's Common Stock certificate.
4.2 Warrant to purchase shares of Series B Preferred Stock of
the Registrant issued to Venture Lending & Leasing, Inc.
4.3 Warrant to purchase shares of Series B Preferred Stock of
the Registrant issued to At Home Corporation.
4.4 Warrant to purchase shares of Series C Preferred Stock of
the Registrant issued to Venture Lending & Lending, Inc.
4.5 Warrant to purchase shares of Series C Preferred Stock of
the Registrant issued to Venture Lending & Lending, Inc.
4.6 Third Amended and Restated Registration Rights Agreement
dated March 9, 1999.
5.1* Opinion of Wilson Sonsini Goodrich & Rosati Professional
Corporation.
10.1 Form of Indemnification Agreement entered into by the
Registrant with each of its directors and executive
officers.
10.2 Amended and Restated 1996 Stock Plan.
10.3 1999 Employee Stock Purchase Plan.
10.4 Sublease between Trident Microsystems, Inc. and the
Registrant dated July 1, 1998.
10.5 Sublease between At Home Corporation and the Registrant
dated June 4, 1998.
10.6 Severance Agreement between Scott Kriens and the Registrant
dated October 1, 1996.
10.7 Change of Control Agreement between Marcel Gani and the
Registrant dated February 18, 1997.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<C> <S>
10.8+ Agreement for ASIC Design and Purchase of Products by and
between IBM Microelectronics and the Registrant dated August
26, 1997.
10.8.1+ Amendment One to Agreement for ASIC Design and Purchase of
Products by and between IBM Microelectronics and the
Registrant dated January 5, 1998.
10.8.2+ Amendment Two to Agreement for ASIC Design and Purchase of
Products by and between IBM Microelectronics and the
Registrant dated March 2, 1998.
10.9+ Standard Manufacturing Agreement by and among Solectron
California Corporation, Fine Pitch Technology Inc. and the
Registrant dated June 10, 1998.
21.1* Subsidiaries of Registrant
23.1** Consent of Ernst & Young LLP, independent auditors (see page
II-6 of the Registration Statement).
23.2* Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** Power of Attorney (see page II-5).
27.1** Financial Data Schedule.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment requested as to certain portions of this exhibit.
(B) FINANCIAL STATEMENT SCHEDULES
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
We hereby undertake to provide to the Underwriters at the closing specified
in the Underwriting Agreement certificates in such denominations and registered
in such names as required by the Underwriters to permit prompt delivery to each
purchaser.
Insofar as indemnification by us for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the provisions referenced in Item 14 of this Registration
Statement or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by a director, officer, or
controlling person of Juniper Networks in the successful defense of any action,
suit or proceeding) is asserted by a director, officer or controlling person in
connection with the securities being registered hereunder, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
We hereby undertake that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by us pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
II-4
<PAGE> 6
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 7
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1993, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MOUNTAIN
VIEW, STATE OF CALIFORNIA, ON THE 23RD DAY OF APRIL, 1999.
JUNIPER NETWORKS, INC.
By *
------------------------------------
Scott Kriens
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Chief Executive April 23, 1999
- --------------------------------------------------- Officer and Chairman of the
Scott Kriens Board (Principal Executive
Officer)
* Chief Technical Officer and Vice April 23, 1999
- --------------------------------------------------- Chairman of the Board
Pradeep Sindhu
/s/ MARCEL GANI Chief Financial Officer April 23, 1999
- --------------------------------------------------- (Principal Financial and
Marcel Gani Accounting Officer)
* Director April 23, 1999
- ---------------------------------------------------
William R. Hearst III
* Director April 23, 1999
- ---------------------------------------------------
Vinod Khosla
* Director April 23, 1999
- ---------------------------------------------------
C. Richard Kramlich
* Director April 23, 1999
- ---------------------------------------------------
William Stensrud
*By: /s/ MARCEL GANI Attorney-in-fact April 23, 1999
----------------------------------------------
Marcel Gani
</TABLE>
II-6
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 Amended and Restated Certificate of Incorporation of the
Registrant.
3.2 Form of Amended and Restated Certificate of Incorporation of
the Registrant to be effective upon the closing of the
offering made pursuant to this Registration Statement.
3.3 Amended and Restated Bylaws of the Registrant.
4.1* Form of Registrant's Common Stock certificate.
4.2 Warrant to purchase shares of Series B Preferred Stock of
the Registrant issued to Venture Lending & Leasing, Inc.
4.3 Warrant to purchase shares of Series B Preferred Stock of
the Registrant issued to At Home Corporation.
4.4 Warrant to purchase shares of Series C Preferred Stock of
the Registrant issued to Venture Lending & Lending, Inc.
4.5 Warrant to purchase shares of Series C Preferred Stock of
the Registrant issued to Venture Lending & Lending, Inc.
4.6 Third Amended and Restated Registration Rights Agreement
dated March 9, 1999.
5.1* Opinion of Wilson Sonsini Goodrich & Rosati Professional
Corporation.
10.1 Form of Indemnification Agreement entered into by the
Registrant with each of its directors and executive
officers.
10.2 Amended and Restated 1996 Stock Plan.
10.3 1999 Employee Stock Purchase Plan.
10.4 Sublease between Trident Microsystems, Inc. and the
Registrant dated July 1, 1998.
10.5 Sublease between At Home Corporation and the Registrant
dated June 4, 1998.
10.6 Severance Agreement between Scott Kriens and the Registrant
dated October 1, 1996.
10.7 Change of Control Agreement between Marcel Gani and the
Registrant dated February 18, 1997.
10.8+ Agreement for ASIC Design and Purchase of Products by and
between IBM Microelectronics and the Registrant dated August
26, 1997.
10.8.1+ Amendment One to Agreement for ASIC Design and Purchase of
Products by and between IBM Microelectronics and the
Registrant dated January 5, 1998.
10.8.2+ Amendment Two to Agreement for ASIC Design and Purchase of
Products by and between IBM Microelectronics and the
Registrant dated March 2, 1998.
10.9+ Standard Manufacturing Agreement by and among Solectron
California Corporation, Fine Pitch Technology Inc. and the
Registrant dated June 10, 1998.
21.1* Subsidiaries of Registrant
23.1** Consent of Ernst & Young LLP, independent auditors (see page
II-6 of the Registration Statement).
23.2* Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** Power of Attorney (see page II-5).
27.1** Financial Data Schedule.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment requested as to certain portions of this exhibit.
<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
JUNIPER NETWORKS, INC.
FIRST. The name of this corporation is Juniper Networks, Inc.
SECOND. The address of the corporation's registered office in the State
of Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such address is The Corporation Trust
Company.
THIRD. The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH. This corporation is authorized to issue two classes of shares,
to be designated "Common Stock" and "Preferred Stock," respectively. The total
number of shares which this corporation authorized to issue is 85,039,059
shares. The number of shares of Common Stock this corporation is authorized to
issue is 71,000,000 shares, with the par value of $.00001, and the number of
shares of Preferred Stock this corporation is authorized to issue is 14,039,059
shares, with the par value of $.00001.
1. Designation of Series.
There are hereby provided five series of Preferred Stock;
one series designated Series A Preferred Stock (the "Series A Preferred"), one
series designated Series B Preferred (the "Series B Preferred"), one series
designated Series C Preferred Stock (the "Series C Preferred"), one Series
designated Series D Preferred Stock (the "Series D Preferred") and one
designated Series D1 Preferred Stock (the "Series D1 Preferred").
2. Number of Shares.
The number of shares constituting the Series A Preferred
is fixed at 1,743,751 shares, the number of shares constituting the Series B
Preferred is fixed at 3,915,308 shares, the number of shares constituting the
Series C Preferred is fixed at 5,200,000 shares, the number of shares
constituting the Series D Preferred is fixed at 600,000 and the number of shares
constituting the Series D1 Preferred is fixed at 2,580,000.
3. Dividend Provisions.
The holders of shares of the Preferred Stock shall be
entitled to receive non-cumulative dividends, out of any assets legally
available therefor, prior and in preference to any declaration or payment of any
dividend (payable other than in Common Stock of this corporation) on the Common
Stock of this corporation. The dividend rate for the Series A Preferred is $0.05
per annum on
<PAGE> 2
each outstanding share of Series A Preferred whenever funds are legally
available therefor, payable annually when and as declared by the Board of
Directors. The dividend rate for the Series B Preferred is $0.12 per annum on
each outstanding share of Series B Preferred whenever funds are legally
available therefor, payable annually when and as declared by the Board of
Directors. The dividend rate for the Series C Preferred is $0.45 per annum on
each outstanding share of Series C Preferred whenever funds are legally
available therefor, payable annually when and as declared by the Board of
Directors. The dividend rate for the Series D Preferred is $0.55 per annum on
each outstanding share of Series D Preferred whenever funds are legally
available therefore, payable annually when and as declared by the Board of
Directors. The dividend rate for the Series D1 Preferred is $0.55 per annum on
each outstanding share of Series D1 Preferred whenever funds are legally
available therefore, payable annually when and as declared by the Board of
Directors. Dividends, if paid must be paid on, or, if declared and set apart for
payment on, must be declared and set apart for payment on all outstanding series
of Preferred Stock contemporaneously, and if less than full dividends are paid
on or declared and set apart for payment on all outstanding series, then the
same percentage of the respective dividend rate on each outstanding series of
Preferred Stock shall be paid on or declared and set apart. In the event that
the Board of Directors shall declare dividends in excess of such amount, any
such dividends shall be paid on a pro rata basis on the outstanding Common Stock
and the Preferred Stock (with the outstanding Preferred Stock sharing in such
dividend on an as converted into Common Stock basis).
4. Liquidation Preference.
a. In the event of any liquidation, dissolution or winding
up of this corporation, either voluntary or involuntary, the holders of shares
of Preferred Stock shall be entitled to receive, prior and in preference to any
distribution of any of the assets of this corporation to the holders of the
Common Stock, by reason of their ownership thereof, an amount per share equal to
the sum of
(i)$1.00 for each outstanding share of Series A
Preferred, $2.40 for each outstanding share of Series B Preferred, $8.93 for
each outstanding share of Series C Preferred, $11.03 for each outstanding share
of Series D Preferred and $11.03 for each outstanding share of Series D1
Preferred (each, the "Original Issue Price" for the applicable Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and Series
D1 Preferred); and
(ii) all declared and unpaid dividends with respect to
such shares.
b. If upon the occurrence of such event, the assets and
the funds thus distributed among the holders of the Preferred Stock shall be
insufficient to permit the payment to such holders of the full preferential
amount, then the entire assets of this corporation legally available for
distribution shall be distributed ratably to the holders of all series of the
Preferred Stock in proportion to the Original Issue Price of the respective
series of Preferred Stock held by such holders.
c. Upon the completion of a distribution required by
paragraph (b) of this Section 4, if assets remain in this corporation, the
holders of Common Stock shall be entitled to receive all the remaining assets of
the corporation.
-2-
<PAGE> 3
d. A consolidation or merger of this corporation with or
into any other corporation or corporations, or the conveyance of all or
substantially all of the assets of this corporation, shall be deemed to be a
liquidation, dissolution or winding up within the meaning of this Section 4.
(i)Any of such transactions shall not be deemed to be
a liquidation, dissolution or winding up within the meaning of this Section 4 if
the holders of the voting equity securities of the corporation immediately prior
to any of such transactions hold more than 50% of the outstanding voting equity
securities of the entity surviving such merger or consolidation or the entity
purchasing such assets.
(ii) In any of such events, if the consideration
received by the corporation is other than cash, its value will be deemed its
fair market value. Any securities shall be valued as follows:
(A) Securities not subject to investment letter or
other similar restrictions on free marketability:
(1) If traded on a securities exchange or
through the Nasdaq National Market, the value shall be deemed to be the average
of the closing prices of the securities on such exchange over the thirty-day
period ending three (3) days prior to the closing;
(2) If actively traded over-the-counter, the
value shall be deemed to be the average of the closing bid or sale prices
(whichever is applicable) over the thirty-day period ending three (3) days prior
to the closing; and
(3) If there is no active public market, the
value shall be the fair market value thereof, as mutually determined by the
corporation and the holders of at least a majority of the voting power of all
then outstanding shares of Preferred Stock.
(B) The method of valuation of securities subject
to investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a stockholder's status as an affiliate
or former affiliate) shall be to make an appropriate discount from the market
value determined as above in (A)(1), (2) or (3) to reflect the approximate fair
market value thereof, as mutually determined by the corporation and the holders
of at least a majority of the voting power of all then outstanding shares of
such Preferred Stock.
(iii) In the event the requirements of this
Section 4(d) are not complied with, this corporation shall forthwith either:
(A) cause such closing to be postponed until such
time as the requirements of this Section 4 have been complied with; or
(B) cancel such transaction, in which event the
rights, preferences and privileges of the holders of the Preferred Stock shall
revert to and be the same as such rights, preferences and privileges existing
immediately prior to the date of the first notice referred to in Section
4(d)(iv) hereof.
-3-
<PAGE> 4
(iv) The corporation shall give each holder of record
of Preferred Stock written notice of such impending transaction not later than
ten (10) days prior to the stockholders' meeting called to approve such
transaction, or ten (10) days prior to the closing of such transaction,
whichever is earlier, and shall notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction and the provisions of
this Section 4, and the corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than ten (10) days after the corporation has given the first notice
provided for herein or sooner than two (2) days after the corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of Preferred
Stock that are entitled to such notice rights or similar notice rights and that
represent at least a majority of the voting power of all then outstanding shares
of such Preferred Stock.
e. As authorized by Section 402.5(c) of the California
Corporations Code, the provisions of Sections 502 and 503 of the California
Corporations Code shall not apply with respect to repurchase by the corporation
of shares of Common Stock issued to or held by employees, officers, directors or
consultants of the corporation or its subsidiaries upon termination of their
employment or services pursuant to an agreement providing for the right of such
repurchase.
5. Redemption.
The Preferred Stock shall not be redeemable.
6. Conversion.
The holders of the Preferred Stock shall have conversion
rights as follows (the "Conversion Rights"):
a. Right to Convert.
(i)Subject to subparagraph (c) of this Section 6, each
share of Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the office of
this corporation or any transfer agent for the Preferred Stock, into such number
of fully paid and nonassessable shares of Common Stock as is determined by
dividing the Original Issue Price (as defined in Section 4(a) hereof) of the
Preferred Stock by the then effective conversion price, as last adjusted and
then currently in effect. The initial conversion price per share at which shares
of Common Stock shall be issuable upon conversion of shares of Series A
Preferred after the date hereof shall be $0.44 (the "Series A Conversion
Price"). The initial conversion price per share at which shares of Common Stock
shall be issuable upon conversion of shares of Series B Preferred after the date
hereof shall be $1.07 (the "Series B Conversion Price"). The initial conversion
price per share at which shares of Common Stock shall be issuable upon
conversion of shares of Series C Preferred after the date hereof shall be $3.97
(the "Series C Conversion Price"). The initial conversion price per share at
which shares of Common Stock shall be issuable upon conversion of shares of
Series D Preferred after the date hereof shall be $11.03 (the "Series D
Conversion Price"). The initial conversion price per share at which shares of
Common Stock shall be issuable upon conversion of shares
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of Series D1 after the date hereof shall be $11.03 (the "Series D1 Conversion
Price"). Notwithstanding the foregoing, Series A Conversion Price, Series B
Conversion Price , Series C Conversion Price, Series D Conversion Price and
Series D1 Conversion Price shall be subject to adjustment as set forth in
subparagraph (d) of this Section 6 and in addition, the Series D1 Conversion
Price shall be subject to adjustment as set forth in subparagraph (c) of this
Section 6.
(ii) Each share of Preferred Stock shall automatically
be converted into shares of Common Stock at the then effective Conversion Price
of the applicable series immediately upon (a) the closing of the issuance of
shares following the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), (other than a
registration statement relating solely to the sale of securities to employees of
the corporation or a registration relating solely to a transaction pursuant to
Rule 145 promulgated by the Securities and Exchange Commission under the
Securities Act), pursuant to a firm commitment underwriting and covering the
offer and sale of this corporation's Common Stock at a price per share not less
than three times the Series A Conversion Price or the Series B Conversion Price
or at a price per share of not less than one and a half times the Series C
Conversion Price or at a price per share of not less than one times the Series D
Conversion Price or the Series D1 Conversion Price (subject to appropriate
adjustment in the event of stock splits, stock dividends or similar events), as
the case may be, the aggregate proceeds to this corporation of which would, at
the public offering price, exceed $10,000,000, or (b) the affirmative vote of
the holders of sixty-six and two thirds (66 2/3) of the shares of Preferred
Stock outstanding at the time of such vote.
b. Mechanics of Conversion.
Before any holder of Preferred Stock shall be entitled
to receive shares of Common Stock issuable upon conversion of such Preferred
Stock, such holder shall surrender the certificate or certificates therefor,
duly endorsed, at the office of this corporation or of any transfer agent for
the Preferred Stock. In the case of a voluntary conversion, such holder shall
give written notice by mail, postage prepaid, to this corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. In the case of an automatic conversion,
certificates of Common Stock shall be issuable upon surrender of the Preferred
Stock in the name of the holder of such Preferred Stock, unless the holder
provides this corporation with prior written instructions to issue such shares
in one or more different names. This corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Preferred Stock,
or to the nominee or nominees of such holder, a certificate or certificates for
the number of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made (i) in the case of
voluntary conversion, immediately prior to the close of business on the date of
such surrender of the shares of Preferred Stock to be converted, and (ii) in the
case of automatic conversion, such conversion shall occur on the consummation of
the event causing the conversion; and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date.
c. Adjustment to Series D1 Conversion Price. If within one
hundred eighty (180) days after the Original Issue Date the corporation files a
registration statement with the Securities and Exchange Commission ("SEC")
covering an underwritten initial public offering (a "Qualifying
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Registration Statement"), the Series D1 Conversion Price (as set forth in
Section 6a(i) hereof) shall be modified to equal eighty-five percent (85%) of
the initial public offering price. If the corporation files a Qualifying
Registration Statement with the SEC between 180 days and one year of the
Original Issue Date, the Series D1 Conversion Price (as set forth in Section
6a(i) hereof) shall be modified to equal seventy-five percent (75%) of the
initial public offering price. If the corporation files its Registration
Statement with the SEC between one year and fifteen (15) months from the
Original Issue Date, the Series D1 Conversion Price (as set forth in Section
6a(i) hereof) shall be modified to equal sixty-five (65%) of the initial public
offering price. If the corporation files its Registration Statement with the SEC
after fifteen (15) months from the Original Issue Date, there shall be no
adjustment to the Series D1 Conversion Price under this subparagraph (c).
d. Adjustments to Conversion Price for Diluting Issues.
(i)Special Definitions. For purposes of this
Section 6(c), the following definitions shall apply:
(A) 'Options' shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(B) 'Original Issue Date' shall mean the date on
which the first share of the Series D1 Preferred Stock was first issued.
(C) 'Convertible Securities' shall mean any
evidences of indebtedness, shares (other than the Preferred Stock) or other
securities convertible into or exchangeable for Common Stock.
(D) 'Additional Shares of Common Stock' shall
mean all shares of Common Stock issued (or, pursuant to Section 6(c)(ii), deemed
to be issued) by the corporation after the Original Issue Date, other than
shares of Common Stock issued or issuable at any time:
(1) upon conversion of the Preferred Stock
into Common Stock;
(2) to officers, directors, and employees
of, and consultants to, the corporation pursuant to plans, arrangements or
agreements approved by the Board of Directors;
(3) as a dividend or distribution on
Preferred Stock or any event for which adjustment is made pursuant to Section
6(d) hereof;
(4) by way of dividend or other distribution
on shares of Common Stock excluded from the definition Additional Shares of
Common Stock by the foregoing clauses (1), (3) or this clause (4) or on shares
of Common Stock so excluded; or
(5) the issuance of shares of Common Stock or
Preferred Stock or warrants to purchase shares of Common Stock or Preferred
Stock convertible into
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<PAGE> 7
shares of Common Stock in conjunction with equipment leases or other commercial
financing transactions approved by the Board of Directors, and the issuance of
stock upon exercise of such warrants.
(ii) No Adjustment of Conversion Price.. No adjustment
in the then applicable Conversion Price of a share of Preferred Stock shall be
made in respect of the issuance of Additional Shares of Common Stock unless the
consideration per share for an Additional Share of Common Stock issued or deemed
to be issued by the corporation is less then the respective Conversion Price in
effect on the date of, and immediately prior to such issue, for such share of
Preferred Stock.
(iii) Deemed Issue of Additional Shares of Common
Stock. Except as otherwise provided in Section 6C(ii), in the event the
corporation at any time or from time to time after the Original Issue Date shall
issue any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been fixed, as
of the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued with respect to the
Preferred Stock unless the consideration per share (determined pursuant to
Section 6C(iv) hereof) of such Additional Shares of Common Stock would be less
than the then applicable Conversion Price of Preferred Stock in effect on the
date of and immediately prior to such issue, or such record date, as the case
may be, and provided further that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(A) no further adjustment in the Conversion Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the corporation, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price computed upon the original issue thereof (or upon
the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) upon the expiration of any such Options or
any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon such expiration, be
recomputed as if:
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(1) in the case of Convertible Securities or
Options for Common Stock, the only Additional Shares of Common Stock issued were
shares of Common Stock, if any, actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
corporation for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the corporation upon such exercise, or
for the issue of all such Convertible Securities which were actually converted
or exchanged, plus the additional consideration, if any, actually received by
the corporation upon such conversion or exchange, and
(2) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the corporation for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation upon the
issue of the Convertible Securities with respect to which such Options were
actually exercised;
(D) no readjustment pursuant to Sections 5(c)(ii)
(B) or 5(c)(ii)(C) above shall have the effect of increasing the Conversion
Price to an amount which exceeds the lower of (i) the Conversion Price on the
original adjustment date or (ii) the Conversion Price that would have resulted
from any issuance of Additional Shares of Common Stock between the original
adjustment date and such readjustment date; and
(E) in the case of any Options which expire by
their terms not more than 30 days after the date of issue thereof, no adjustment
of the Conversion Price shall be made until the expiration or exercise of all
such Options.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event this corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 6(c)(ii)) without consideration or for a
consideration per share less than the Conversion Price in effect on the date of
and immediately prior to such issue, but excluding shares for which an
adjustment is made pursuant to paragraph (d) below, then and in such event, the
then applicable Conversion Price, as the case may be, shall be reduced,
concurrently with such issue, to a price (calculated to the nearest cent)
determined by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of shares of Common Stock which the
aggregate consideration received by the corporation for the total number of
Additional Shares of Common Stock so issued would purchase at such Conversion
Price; and the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issue plus the number of such
Additional Shares of Common Stock so issued; and provided further that, for the
purposes of this Section 6(c)(iv), all shares of Common Stock issuable upon
conversion of outstanding Options, Convertible Securities and the Preferred
Stock shall be deemed to be outstanding, and immediately after any Additional
Shares of Common Stock are deemed issued pursuant to Section 6(c)(iii), such
Additional Shares of Common Stock shall be deemed to be outstanding.
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<PAGE> 9
(v)Determination of Consideration. For purposes of this
Section 6(c), the consideration received by the corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(1) insofar as it consists of cash, be
computed at the aggregate amount of cash received by the corporation excluding
amounts paid or payable for accrued interest or accrued dividends;
(2) insofar as it consists of property other
than cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board; and
(3) in the event Additional Shares of Common
Stock are issued together with other shares or securities or other assets of the
corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (1) and (2) above, as
determined in good faith by the Board.
(B) Options and Convertible Securities. The
consideration per share received by the corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section 6(c)(ii), relating
to Options and Convertible Securities, shall be determined by dividing
(1) the total amount, if any, received or
receivable by the corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities by
(2) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
e. Adjustments to Conversion Price for Certain Other
Events.
(i) Adjustments for Subdivisions, Combinations or
Consolidation of Common Stock.
In the event the outstanding shares of Common
Stock shall be subdivided (by stock split, stock dividend, or otherwise), into a
greater number of shares of Common Stock, the Conversion Price then in effect
shall, concurrently with the effectiveness of such subdivision, be
proportionately decreased. In the event the outstanding shares of Common Stock
shall be combined
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<PAGE> 10
or consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, the Conversion Price then in effect shall, concurrently
with the effectiveness of such combination or consolidation, be proportionately
increased.
(ii) Adjustments for Other Distributions.
In the event the corporation at any time or from
time to time makes, or fixes a record date for the determination of holders of
Common Stock entitled to receive any distribution payable in securities of the
corporation other than shares of Common Stock and other than as otherwise
adjusted in this Section 6, then and in each such event provision shall be made
so that the holders of Preferred Stock shall receive upon conversion thereof, in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities of the corporation which they would have received had their
respective Preferred Stock been converted into Common Stock on the date of such
event and had they thereafter, during the period from the date of such event to
and including the date of conversion, retained such securities receivable by
them as aforesaid during such period, subject to all other adjustments called
for during such period under this Section 6 with respect to the rights of the
holders of the Preferred Stock.
(iii) Adjustments for Reclassification, Exchange and
Substitution.
If the Common Stock issuable upon conversion of
any series of the Preferred Stock shall be changed into the same or a different
number of shares of any other class or classes of stock, whether by capital
reorganization, recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares provided for above), the Conversion Price
then in effect shall, concurrently with the effectiveness of such reorganization
or reclassification, be proportionately adjusted such that the respective
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders would otherwise have been entitled to receive, a
number of shares of such other class or classes of stock equivalent to the
number of shares of Common Stock that would have been subject to receipt by the
holders upon conversion of the respective series of Preferred Stock immediately
before that change.
f. No Impairment.
This corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by this corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Preferred Stock against impairment.
g. No Fractional Shares and Certificate as to Adjustments.
(i) No fractional shares shall be issuable upon
conversion of any shares(s) of Preferred Stock; and the number of shares of
Common Stock to be issued shall be rounded down to the nearest whole share. If
any fractional interest in a share of Common Stock would, except
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<PAGE> 11
for the provisions of this subparagraph (f), be deliverable upon conversion of
the Preferred Stock then being converted by a stockholder, this corporation
shall pay to the holders of such converted stock an amount in cash equal to the
current market value of such fractional interest, as determined by the Board of
Directors.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 6, this
corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Preferred Stock a certificate of its Chief Financial Officer setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. This corporation shall, upon the
written request at any time of any holder of Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth (A) such
adjustment and readjustment, (B) the Conversion Price at the time in effect, and
(C) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of Preferred
Stock.
h. Notices of Record Date.
In the event of any taking by this corporation of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, this corporation shall mail to each
holder of Preferred Stock, at least 10 days prior to the date specified therein,
a notice specifying the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
i. Reservation of Stock Issuable Upon Conversion.
This corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock solely for
the purpose of effecting the conversion of the shares of the Preferred Stock
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Preferred
Stock; and if at any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of all then outstanding
shares of the Preferred Stock, this corporation will take such corporate action
as may, in the opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
j. Notices.
Any notice required by the provisions of this
Section 6 to be given to the holders of shares of Preferred Stock shall be
deemed given three (3) days after deposit in the United States first class,
certified or registered mail, postage prepaid, and addressed to each holder of
record at his address appearing on the books of this corporation.
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<PAGE> 12
7. Voting Rights.
a. Except as otherwise required by law or Section 8
hereof, the holder of each share of Common Stock issued and outstanding shall
have one vote and the holder of each share of Preferred Stock shall be entitled
to the number of votes equal to the number of shares of Common Stock into which
such respective share of Preferred Stock could be converted at the record date
for determination of the stockholders entitled to vote on such matters, or, if
no such record date is established, at the date such vote is taken or any
written consent of stockholders is solicited, such votes to be counted together
with all other shares of stock of the corporation having general voting power
and not separately as a class. Holders of Common Stock and Preferred Stock shall
be entitled to notice of any stockholders' meeting in accordance with the
By-laws of the corporation. All holders of Preferred Stock shall be entitled to
vote on all matters upon which the holders of Common Stock are entitled to vote.
Fractional votes by the holders of Preferred Stock shall not, however, be
permitted and any fractional voting rights shall (after aggregating all shares
into which shares of Preferred Stock held by each holder could be converted) be
rounded to the nearest whole number.
8. Covenants.
a. In addition to any other rights provided by law, this
corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a majority of the outstanding shares of
all series of Preferred Stock, voting together as a class:
(i)amend or repeal any provision of, or add any
provision to, this corporation's Certificate of Incorporation if such action
would materially and adversely alter or change the preferences, rights,
privileges or powers of, or the restrictions provided for the benefit of, any
Preferred Stock or;
(ii) effect a merger or consolidation of the
corporation with or into any other corporation or corporations or a sale of all
or substantially all of the assets of the corporation unless then stockholders
of the corporation immediately prior to such transaction hold more than 50% of
the outstanding equity securities (assuming conversion of any shares of
Preferred Stock) of the entity surviving such merger or consolidation or the
entity purchasing such assets.
b. In addition to any other rights provided by law, this
corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a sixty-six and two-thirds (66 2/3) of
such outstanding shares of all series of Preferred Stock, voting together as a
class:
(i) authorize, issue or obligate itself to issue
shares of any equity security, including securities exercisable or exchangeable
for or convertible into equity securities, having any preference or priority
superior to or on a parity with any preference or priority of the Preferred
Stock.
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9. Status of Converted Stock.
In case any shares of Preferred Stock shall be converted
pursuant to Section 6 hereof, the shares so converted shall be canceled and
shall not be reissuable.
FIFTH. The Board of Directors, by vote of a majority of the whole Board,
shall have the power to adopt, amend or repeal the bylaws of the corporation,
but any bylaw adopted by the Board may be amended or repealed by the
stockholders.
SIXTH. Meetings of stockholders may be held within or without the State
of Delaware, as the bylaws may provide. The books of the corporation may be kept
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the bylaws of the corporation.
Elections of directors need not be by written ballot except and to the extent
provided in the bylaws of the corporation.
SEVENTH. At all elections of directors of the corporation, each holder
of stock or of any class or series of stock shall be entitled to as many votes
as shall equal the number of votes which such stockholder would be entitled to
cast for the election of directors with respect to his or her shares of stock
multiplied by the number of directors to be elected, and may cast all of such
votes for, or for any two or more of them as such stockholder may see fit.
EIGHTH. A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the Delaware General Corporation Law
as the same exists or may hereafter be amended. If the Delaware General
Corporation Law is amended after approval by the stockholders of this Article
EIGHTH to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended. Any repeal or modification
of this Article EIGHTH shall not adversely affect any right or protection of a
director of the corporation existing hereunder with respect to any act or
omission occurring prior to such repeal or modification.
NINTH. The Corporation is to have perpetual existence.
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EXHIBIT 3.2
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
JUNIPER NETWORKS, INC.
Juniper Networks, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies that:
A. The name of this Corporation is Juniper Networks, Inc.
B. The date of filing of this Corporation's original Certificate of
Incorporation with the Secretary of State of Delaware was April __, 1999.
C. Pursuant to Sections 241 and 245 of the Delaware General Corporation
law, this Restated Certificate of Incorporation restates, integrates and amends
the provisions of the Corporation's Amended and Restated Certificate of
Incorporation as follows:
FIRST: The name of this Corporation is Juniper Networks, Inc.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such address is The Corporation Trust
Company.
THIRD: The purpose of this Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: This Corporation is authorized to issue two classes of shares
to be designated, respectively, Common Stock and Preferred Stock. The total
number of shares of Common Stock which this corporation is authorized to issue
is 200,000,000, with a par value of $0.00001, and the total number of shares of
Preferred Stock which this corporation is authorized to issue is 10,000,000,
with a par value of $0.00001.
The Preferred Stock may be issued from time to time in one or more
series pursuant to a resolution or resolutions providing for such issue duly
adopted by the Board of Directors (authority to do so being hereby expressly
vested in the Board). The Board of Directors is further authorized to determine
or alter the rights, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock and, to fix the
number of shares of any such series of Preferred Stock and the designation of
any such series of Preferred Stock. The Board of Directors is authorized, within
the limits and restrictions stated in any resolution or resolutions of the Board
of Directors originally fixing the number of shares constituting any series, to
increase or decrease (but not below the number of shares thereof then
outstanding) the number of shares of any such series subsequent to the issue of
shares of that series, to determine the designation of any series, and to fix
the number of shares of any series.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: Elections of directors need not be by written ballot unless a
stockholder demands election by written ballot at the meeting and before voting
begins or unless the Bylaws of the Corporation shall so provide.
<PAGE> 2
SEVENTH: The management of the business and the conduct of the affairs
of the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be
designated in the Bylaws of the Corporation.
The Board of Directors shall be divided into three classes
designated as Class I, Class II, and Class III, respectively. Directors shall be
assigned to each class in accordance with a resolution or resolutions adopted by
the Board of Directors. At the first annual meeting of stockholders following
the date hereof, the term of office of the Class I directors shall expire, and
Class I directors shall be elected for a full term of three years. At the second
annual meeting of stockholders following the date hereof, the term of office of
the Class II directors shall expire, and Class II directors shall be elected for
a full term of three years. At the third annual meeting of stockholders
following the date hereof, the term of office of the Class III directors shall
expire, and Class III directors shall be elected for a full term of three years.
At each succeeding annual meeting of stockholders, directors shall be elected
for a full term of three years to succeed the directors of the class whose terms
expire at such annual meeting.
Notwithstanding the foregoing provisions of this Article, each
director shall serve until his or her successor is duly elected and qualified or
until his or her death, resignation, or removal. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
Any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal, or other causes shall be filled by
either (i) the affirmative vote of the holders of a majority of the voting power
of the then-outstanding shares of voting stock of the Corporation entitled to
vote generally in the election of directors (the "Voting Stock") voting together
as a single class; or (ii) by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the Board
of Directors. Newly created directorships resulting from any increase in the
number of directors shall, unless the Board of Directors determines by
resolution that any such newly created directorship shall be filled by the
stockholders, be filled only by the affirmative vote of the directors then in
office, even though less than a quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been elected and qualified.
The affirmative vote of sixty-six and two-thirds percent
(66-2/3%) of the voting power of the then outstanding shares of Voting Stock,
voting together as a single class, shall be required for the adoption, amendment
or repeal of the following sections of the Corporation's Bylaws by the
stockholders of the Corporation: 2.2 (Annual Meeting) and 2.3 (Special Meeting).
No action shall be taken by the stockholders of the
Corporation except at an annual or special meeting of the stockholders called in
accordance with the Bylaws.
Any director, or the entire Board of Directors, may be removed
from office at any time (i) with cause by the affirmative vote of the holders of
at least a majority of the voting power of all of the then-outstanding shares of
the Voting Stock, voting together as a single class; or (ii) without cause by
the affirmative vote of the holders of at least sixty-six and two-thirds percent
(66-2/3%) of the voting power of all of the then-outstanding shares of the
Voting Stock.
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<PAGE> 3
EIGHTH: A. To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or as may hereafter be amended, a director of
the Corporation or any subsidiary of the Corporation shall not be personally
liable to the Corporation or its stockholders and shall otherwise be indemnified
by the Corporation for monetary damages for breach of fiduciary duty as a
director of the Corporation, any predecessor of the Corporation or any
subsidiary of the Corporation.
B. The Corporation shall indemnify to the fullest extent
permitted by law any person made or threatened to be made a party to an action
or proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that he, his testator or intestate is or was a director or
officer of the Corporation, any predecessor of the Corporation or any subsidiary
of the Corporation or serves or served at any other enterprise as a director or
officer at the request of the Corporation, any predecessor to the Corporation or
any subsidiary of the Corporation.
C. Neither any amendment nor repeal of this Article EIGHTH,
nor the adoption of any provision of the Corporation's Certificate of
Incorporation inconsistent with this Article EIGHTH, shall eliminate or reduce
the effect of this Article EIGHTH, in respect of any matter occurring, or any
action or proceeding accruing or arising or that, but for this Article EIGHTH,
would accrue or arise, prior to such amendment, repeal, or adoption of an
inconsistent provision.
NINTH: Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any rights of designation of Preferred Stock conferred on
the Board of Directors pursuant to Article FOURTH, the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the Voting Stock, voting together
as a single class, shall be required to alter, amend or repeal Article SEVENTH
or this Article NINTH.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, except as provided in Article
NINTH of this Certificate, and all rights conferred upon the stockholders herein
are granted subject to this right.
ELEVENTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter, amend
or repeal the Bylaws of the Corporation.
TWELFTH: Meetings of stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. The books of the Corporation may
be kept (subject to any provision contained in the statutes) outside of the
State of Delaware at such place or places as may be designated from time to time
by the Board of Directors or in the Bylaws of the Corporation.
THIRTEENTH: Advance written notice of new business and stockholder
nominations for the election of directors shall be given in the manner and to
the extent provided in the Bylaws of the Corporation.
FOURTEENTH: Stockholders shall not be entitled to cumulative voting
rights for the election of directors.
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This Amended and Restated Certificate of Incorporation has been duly
adopted by the stockholders of the Corporation in accordance with the provisions
of Sections 242 and 245 of the General Corporation Law of the State of Delaware,
as amended.
IN WITNESS WHEREOF, Juniper Networks, Inc. has caused this Amended and
Restated Certificate of Incorporation to be signed by Scott Kriens, its
President, and attested by Judith M. O'Brien, its Secretary, this ____ day of
__________, 1999.
JUNIPER NETWORKS, INC.
_______________________________________
Scott Kriens, President
Attested:
_______________________________________
Judith M. O'Brien, Secretary
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<PAGE> 1
EXHIBIT 3.3
BYLAWS
OF
JUNIPER NETWORKS, INC.
A DELAWARE CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I CORPORATE OFFICES......................................................................1
1.1 REGISTERED OFFICE.................................................................1
1.2 OTHER OFFICES.....................................................................1
ARTICLE II MEETINGS OF STOCKHOLDERS..............................................................1
2.1 PLACE OF MEETINGS.................................................................1
2.2 ANNUAL MEETING....................................................................1
2.3 SPECIAL MEETING...................................................................1
2.4 NOTICE OF STOCKHOLDERS' MEETINGS..................................................2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS...................2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE......................................3
2.7 QUORUM............................................................................3
2.8 ADJOURNED MEETING; NOTICE.........................................................4
2.9 VOTING............................................................................4
2.10 WAIVER OF NOTICE..................................................................4
2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING...........................4
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.......................5
2.13 PROXIES...........................................................................5
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE.............................................6
2.15 CONDUCT OF BUSINESS...............................................................6
ARTICLE III DIRECTORS............................................................................6
3.1 POWERS............................................................................6
3.2 NUMBER............................................................................7
3.3 CLASSES OF DIRECTORS..............................................................7
3.4 RESIGNATION AND VACANCIES.........................................................7
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE..........................................8
3.6 REGULAR MEETINGS..................................................................8
3.7 SPECIAL MEETINGS; NOTICE..........................................................8
3.8 QUORUM............................................................................9
3.9 WAIVER OF NOTICE..................................................................9
3.10 ADJOURNED MEETING; NOTICE.........................................................9
3.11 CONDUCT OF BUSINESS...............................................................9
3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING................................10
3.13 FEES AND COMPENSATION OF DIRECTORS...............................................10
3.14 REMOVAL OF DIRECTORS.............................................................10
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE IV COMMITTEES...........................................................................10
4.1 COMMITTEES OF DIRECTORS..........................................................10
4.2 COMMITTEE MINUTES................................................................11
4.3 MEETINGS AND ACTION OF COMMITTEES................................................11
ARTICLE V OFFICERS..............................................................................12
5.1 OFFICERS.........................................................................12
5.2 APPOINTMENT OF OFFICERS..........................................................12
5.3 REMOVAL AND RESIGNATION OF OFFICERS..............................................12
5.4 CHAIRMAN OF THE BOARD............................................................12
5.5 CHIEF EXECUTIVE OFFICER..........................................................13
5.6 PRESIDENT........................................................................13
5.7 VICE PRESIDENT...................................................................13
5.8 SECRETARY........................................................................13
5.9 CHIEF FINANCIAL OFFICER..........................................................14
5.10 ASSISTANT SECRETARY..............................................................14
5.11 AUTHORITY AND DUTIES OF OFFICERS.................................................15
ARTICLE VI INDEMNITY............................................................................15
6.1 THIRD PARTY ACTIONS..............................................................15
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION....................................15
6.3 SUCCESSFUL DEFENSE...............................................................16
6.4 DETERMINATION OF CONDUCT.........................................................16
6.5 PAYMENT OF EXPENSES IN ADVANCE...................................................16
6.6 INDEMNITY NOT EXCLUSIVE..........................................................16
6.7 INSURANCE INDEMNIFICATION........................................................17
6.8 THE CORPORATION..................................................................17
6.9 EMPLOYEE BENEFIT PLANS...........................................................17
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES......................17
ARTICLE VII RECORDS AND REPORTS.................................................................18
7.1 MAINTENANCE AND INSPECTION OF RECORDS............................................18
7.2 INSPECTION BY DIRECTORS..........................................................18
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS...................................18
ARTICLE VIII GENERAL MATTERS....................................................................19
8.1 CHECKS...........................................................................19
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.................................19
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
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<S> <C>
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES...........................................19
8.4 SPECIAL DESIGNATION ON CERTIFICATES..............................................20
8.5 LOST CERTIFICATES................................................................20
8.6 CONSTRUCTION; DEFINITIONS........................................................20
8.7 DIVIDENDS........................................................................20
8.8 FISCAL YEAR......................................................................21
8.9 SEAL.............................................................................21
8.10 TRANSFER OF STOCK................................................................21
8.11 STOCK TRANSFER AGREEMENTS........................................................21
8.12 REGISTERED STOCKHOLDERS..........................................................21
ARTICLE IX AMENDMENTS...........................................................................22
ARTICLE X DISSOLUTION...........................................................................22
ARTICLE XI CUSTODIAN............................................................................22
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES......................................22
11.2 DUTIES OF CUSTODIAN..............................................................23
ARTICLE XII LOANS TO OFFICERS...................................................................23
</TABLE>
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<PAGE> 5
BYLAWS
OF
JUNIPER NETWORKS, INC.
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the Corporation shall be 1209 Orange Street, in
the City of Wilmington, County of New Castle, State of Delaware, 19801. The name
of the registered agent of the Corporation at such location is The Corporation
Trust Company.
1.2 OTHER OFFICES
The board of directors may at any time establish other offices at any
place or places where the Corporation is qualified to do business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at any place, within or outside
the State of Delaware, designated by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the registered
office of the Corporation.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date and
at a time designated by the board of directors. At the meeting, directors shall
be elected and any other proper business may be transacted.
2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
(i) board of directors, (ii) the chairman of the board, (iii) the president, or
(iv) the chief executive officer.
Prior to such time as a Registration Statement regarding the sale of
the Corporation's Common Stock to the public is declared effective by the
Securities and Exchange Commission, a special meeting of the stockholders may be
called at any time by one or more stockholders holding a majority of the
outstanding voting shares.
If a special meeting is called by any person other than the
board of directors, the request shall be in writing, specifying the time of such
meeting and the general nature of the business proposed to
<PAGE> 6
be transacted, and shall be delivered personally or sent by registered mail or
by telegraphic or other facsimile transmission to the chairman of the board, the
president, any vice president, or the secretary of the corporation. No business
may be transacted at such special meeting otherwise than specified in such
notice. The officer receiving the request shall cause notice to be promptly
given to the stockholders entitled to vote, in accordance with the provisions of
Sections 2.4 and 2.5 of this Article II, that a meeting will be held at the time
requested by the person or persons who called the meeting, not less than
thirty-five (35) nor more than sixty (60) days after the receipt of the request.
If the notice is not given within twenty (20) days after the receipt of the
request, the person or persons requesting the meeting may give the notice.
Nothing contained in this paragraph of this Section 2.3 shall be construed as
limiting, fixing, or affecting the time when a meeting of stockholders called by
action of the board of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings with stockholders shall be in writing and shall
be sent or otherwise given in accordance with Section 2.6 of these Bylaws not
less than ten (10) nor more than sixty (60) days before the date of the meeting
to each stockholder entitled to vote at such meeting. The notice shall specify
the place, date and hour of the meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER
BUSINESS
To be properly brought before an annual meeting or special meeting,
nominations for the election of director or other business must be (a) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the board of directors, (b) otherwise properly brought before the
meeting by or at the direction of the board of directors, or (c) otherwise
properly brought before the meeting by a stockholder. For such nominations or
other business to be considered properly brought before the meeting by a
stockholder, such stockholder must have given timely written notice and in
proper form of his intent to bring such business before such meeting. To be
timely, such stockholder's notice must be delivered to or mailed and received by
the secretary of the Corporation not less than one hundred twenty (120) days
prior to the date of the Corporation's proxy statement released to stockholders
in connection with the Corporation's previous year's annual meeting of
stockholders. To be in proper form, a stockholder's notice to the secretary
shall set forth:
(i) the name and address of the stockholder who intends to
make the nominations, propose the business, and, as the
case may be, the name and address of the person or
persons to be nominated or the nature of the business
to be proposed;
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<PAGE> 7
(ii) a representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote at
such meeting and, if applicable, intends to appear in
person or by proxy at the meeting to nominate the
person or persons specified in the notice or introduce
the business specified in the notice;
(iii) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee
and any other person or persons (naming such person or
persons) pursuant to which the nomination or
nominations are to be made by the stockholder;
(iv) such other information regarding each nominee or each
matter of business to be proposed by such stockholder
as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, or the matter
been proposed, or intended to be proposed by the board
of directors; and
(v) if applicable, the consent of each nominee to serve as
director of the Corporation if so elected.
The chairman of the meeting may refuse to acknowledge the nomination of
any person or the proposal of any business not made in compliance with the
foregoing procedure.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the Corporation. An
affidavit of the secretary or an assistant secretary or of the transfer agent of
the Corporation that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.
2.7 QUORUM
The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the Certificate of
Incorporation. If, however, such quorum is not present or represented at any
meeting of the stockholders, then either (i) the chairman of the meeting, or
(ii) the stockholders entitled to vote thereat, present in person or represented
by proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present or
represented. At such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed.
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<PAGE> 8
When a quorum is present or represented at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which, by express provisions of the statutes or
of the Certificate of Incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of the question.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these
Bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting the Corporation may transact any business
that might have been transacted at the original meeting. If the adjournment is
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Sections 2.12 and 2.14 of
these Bylaws, subject to the provisions of Sections 217 and 218 of the General
Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors
and joint owners of stock and to voting trusts and other voting agreements).
Except as may be otherwise provided in the Certificate of Incorporation,
each stockholder shall be entitled to one vote for each share of capital stock
held by such stockholder.
2.10 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the Certificate of Incorporation or
these Bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice unless so
required by the Certificate of Incorporation or these Bylaws.
2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Notwithstanding the following provisions of this Section 2.11, effective
upon the listing of the Common Stock of the Corporation on the Nasdaq Stock
Market and the registration of any class of securities of the Corporation
pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the stockholders of the Corporation may not take action by written consent
without a meeting but must take any such actions at a duly called annual or
special meeting.
Except as otherwise provided in this Section 2.11, any action required
by this chapter to be taken at any annual or special meeting of stockholders of
a Corporation, or any action that may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice, and
without a vote if a consent in writing, setting forth the action so taken, is
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<PAGE> 9
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the General
Corporation Law of Delaware if such action had been voted on by stockholders at
a meeting thereof, then the certificate filed under such section shall state, in
lieu of any statement required by such section concerning any vote of
stockholders, that written notice and written consent have been given as
provided in Section 228 of the General Corporation Law of Delaware.
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than 60 nor less than 10 days before the date of such meeting, nor
more than 60 days prior to any other action.
If the board of directors does not so fix a record date, the fixing of
such record date shall be governed by the provisions of Section 213 of the
General Corporation Law of Delaware.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
2.13 PROXIES
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by a written proxy, signed by
the stockholder and filed with the secretary of the Corporation, but no such
proxy shall be voted or acted upon after 3 years from its date, unless the proxy
provides for a longer period. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the stockholder
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<PAGE> 10
or the stockholder's attorney-in-fact. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of
Section 212(c) of the General Corporation Law of Delaware.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of a Corporation shall
prepare and make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The stock ledger shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present. The stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list of stockholders or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders and
of the number of shares held by each such stockholder.
2.15 CONDUCT OF BUSINESS
Meetings of stockholders shall be presided over by the chairman of the
board, if any, or in his absence by the president, or in his absence by a vice
president, or in the absence of the foregoing persons by a chairman designated
by the board of directors, or in the absence of such designation by a chairman
chosen at the meeting. The secretary shall act as secretary of the meeting, but
in his absence the chairman of the meeting may appoint any person to act as
secretary of the meeting. The chairman of any meeting of stockholders shall
determine the order of business and the procedures at the meeting, including
such matters as the regulation of the manner of voting and conduct of business.
ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware and
any limitations in the Certificate of Incorporation or these Bylaws relating to
action required to be approved by the stockholders or by the outstanding shares,
the business and affairs of the Corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the board of directors.
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<PAGE> 11
3.2 NUMBER
The authorized number of directors of the Corporation shall be seven
(7). No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.
3.3 CLASSES OF DIRECTORS
At such time as a Registration Statement regarding the sale of the
Corporation's Common Stock to the public is declared effective by the Securities
and Exchange Commission, the Directors shall be divided into three classes
designated as Class I, Class II and Class III, respectively. Directors shall be
assigned to each class in accordance with a resolution or resolutions adopted by
the Board of Directors. At the first annual meeting of stockholders following
the closing of the Initial Public Offering, the term of office of the Class I
Directors shall expire and Class I Directors shall be elected for a full term of
three years. At the second annual meeting of stockholders following the closing
of the Initial Public Offering, the term of office of the Class II Directors
shall expire and Class II Directors shall be elected for a full term of three
years. At the third annual meeting of stockholders following the closing of the
Initial Public Offering, the term of office of the Class III Directors shall
expire and Class III Directors shall be elected for a full term of three years.
At each succeeding annual meeting of stockholders, Directors shall be elected
for a full term of three years to succeed the Directors of the class whose terms
expire at such annual meeting.
Notwithstanding the foregoing provisions of this Article, each Director
shall serve until his successor is duly elected and qualified or until his
earlier death, resignation or removal. No decrease in the number of Directors
constituting the Board of Directors shall shorten the term of any incumbent
Director.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon written notice to the
Corporation. Stockholders may remove directors with or without cause. Any
vacancy occurring in the board of directors with or without cause may be filled
by a majority of the remaining members of the board of directors, although such
majority is less than a quorum, or by a plurality of the votes cast at a meeting
of stockholders, and each director so elected shall hold office until the
expiration of the term of office of the director whom he has replaced.
Unless otherwise provided in the Certificate of Incorporation or these
Bylaws:
(i) Vacancies and newly created directorships resulting
from any increase in the authorized number of directors
elected by all of the stockholders having the right to
vote as a single class may be filled by a majority of
the directors then in office, although less than a
quorum, or by a sole remaining director.
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<PAGE> 12
(ii) Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more
directors by the provisions of the Certificate of
Incorporation, vacancies and newly created
directorships of such class or classes or series may be
filled by a majority of the directors elected by such
class or classes or series thereof then in office, or
by a sole remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
Corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may apply to the Court of Chancery for a decree summarily
ordering an election as provided in Section 211 of the General Corporation Law
of Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least 10% of the total number of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office as aforesaid, which
election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The board of directors of the Corporation may hold meetings, both
regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, members of the board of directors, or any committee designated by the
board of directors, may participate in a meeting of the board of directors, or
any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
3.6 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice at
such time and at such place as shall from time to time be determined by the
board.
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two directors.
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Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the Corporation. If the notice is mailed, it
shall be deposited in the United States mail at least 4 days before the time of
the holding of the meeting. If the notice is delivered personally or by
telephone or by telegram, it shall be delivered personally or by telephone or to
the telegraph company at least 48 hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated
either to the director or to a person at the office of the director who the
person giving the notice has reason to believe will promptly communicate it to
the director. The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive office of the
Corporation.
3.8 QUORUM
At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the Certificate of
Incorporation.
3.9 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the Certificate of Incorporation or
these Bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the directors, or members of a committee of directors, need be specified in
any written waiver of notice unless so required by the Certificate of
Incorporation or these Bylaws.
3.10 ADJOURNED MEETING; NOTICE
If a quorum is not present at any meeting of the board of directors,
then the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum is
present.
3.11 CONDUCT OF BUSINESS
Meetings of the board of directors shall be presided over by the
chairman of the board, if any, or in his absence by the chief executive officer,
or in their absence by a chairman chosen at the meeting. The secretary shall act
as secretary of the meeting, but in his absence the chairman of the
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meeting may appoint any person to act as secretary of the meeting. The chairman
of any meeting shall determine the order of business and the procedures at the
meeting.
3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, any action required or permitted to be taken at any meeting of the board
of directors, or of any committee thereof, may be taken without a meeting if all
members of the board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the board or committee.
3.13 FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, the board of directors shall have the authority to fix the compensation
of directors. The directors may be paid their expenses, if any, of attendance at
each meeting of the board of directors and may be paid a fixed sum for
attendance at each meeting of the board of directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
3.14 REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the Certificate of
Incorporation or by these Bylaws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors. If at any time a class
or series of shares is entitled to elect one or more directors, the provisions
of this Article 3.14 shall apply to the vote of that class or series and not to
the vote of the outstanding shares as a whole.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution passed by a majority of the
whole board, designate one or more committees, with each committee to consist of
one or more of the directors of the Corporation. The board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of the
board of directors or in the Bylaws of the Corporation, shall have and may
exercise
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all the powers and authority of the board of directors in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers that may require it; but no such
committee shall have the power or authority to (i) amend the Certificate of
Incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the board of directors as provided in Section 151(a) of the General
Corporation Law of Delaware, fix any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of
the Corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Corporation), (ii) adopt an agreement of
merger or consolidation under Sections 251 or 252 of the General Corporation Law
of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, (iv)
recommend to the stockholders a dissolution of the Corporation or a revocation
of a dissolution, or (v) amend the Bylaws of the Corporation; and, unless the
board resolution establishing the committee, the Bylaws or the Certificate of
Incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report the
same to the board of directors when required.
4.3 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these Bylaws, Section
3.5 (place of meetings and meetings by telephone), Section 3.6 (regular
meetings), Section 3.7 (special meetings and notice), Section 3.8 (quorum),
Section 3.9 (waiver of notice), Section 3.10 (adjournment and notice of
adjournment), Section 3.11 (conduct of business) and 3.12 (action without a
meeting), with such changes in the context of those Bylaws as are necessary to
substitute the committee and its members for the board of directors and its
members; provided, however, that the time of regular meetings of committees may
also be called by resolution of the board of directors and that notice of
special meetings of committees shall also be given to all alternate members, who
shall have the right to attend all meetings of the committee. The board of
directors may adopt rules for the government of any committee not inconsistent
with the provisions of these Bylaws.
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ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the Corporation shall be a chief executive officer, one
or more vice presidents, a secretary and a chief financial officer. The
Corporation may also have, at the discretion of the board of directors, a
chairman of the board, a president, a chief operating officer, one or more
executive, senior or assistant vice presidents, assistant secretaries and any
such other officers as may be appointed in accordance with the provisions of
Section 5.2 of these Bylaws. Any number of offices may be held by the same
person.
5.2 APPOINTMENT OF OFFICERS
Except as otherwise provided in this Section 5.2, the officers of the
Corporation shall be appointed by the board of directors, subject to the rights,
if any, of an officer under any contract of employment. The board of directors
may appoint, or empower an officer to appoint, such officers and agents of the
business as the Corporation may require (whether or not such officer or agent is
described in this Article V), each of whom shall hold office for such period,
have such authority, and perform such duties as are provided in these Bylaws or
as the board of directors may from time to time determine. Any vacancy occurring
in any office of the Corporation shall be filled by the board of directors or
may be filled by the officer, if any, who appointed such officer.
5.3 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors or, in the case of an officer appointed by
another officer, by such other officer.
Any officer may resign at any time by giving written notice to the
Corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Corporation under any contract to which the officer is a
party.
5.4 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these Bylaws. If there
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is no chief executive officer, then the chairman of the board shall also be the
chief executive officer of the Corporation and shall have the powers and duties
prescribed in Section 5.5 of these Bylaws.
5.5 CHIEF EXECUTIVE OFFICER
The Chief Executive Officer of the Corporation shall, subject to the
control of the Board of Directors, have general supervision, direction and
control of the business and the officers of the Corporation. He or she shall
preside at all meetings of the stockholders and, in the absence or nonexistence
of a Chairman of the Board at all meetings of the Board of Directors. He or she
shall have the general powers and duties of management usually vested in the
chief executive officer of a Corporation, including general supervision,
direction and control of the business and supervision of other officers of the
Corporation, and shall have such other powers and duties as may be prescribed by
the Board of Directors or these Bylaws.
The Chief Executive Officer shall, without limitation, have the
authority to execute bonds, mortgages and other contracts requiring a seal,
under the seal of the Corporation, except where required or permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the Corporation.
5.6 PRESIDENT
Subject to such supervisory powers as may be given by these Bylaws or
the Board of Directors to the Chairman of the Board or the Chief Executive
Officer, if there be such officers, the president shall have general
supervision, direction and control of the business and supervision of other
officers of the Corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or these Bylaws. In the event a Chief
Executive Officer shall not be appointed, the President shall have the duties of
such office.
5.7 VICE PRESIDENT
In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or, if not
ranked, a vice president designated by the board of directors, shall perform all
the duties of the chief executive officer and when so acting shall have all the
powers of, and be subject to all the restrictions upon, the chief executive
officer. The vice presidents shall have such other powers and perform such other
duties as from time to time may be prescribed for them respectively by the board
of directors, these Bylaws, the chief executive officer or the chairman of the
board.
5.8 SECRETARY
The secretary shall keep or cause to be kept, at the principal executive
office of the Corporation or such other place as the board of directors may
direct, a book of minutes of all meetings and actions of directors, committees
of directors, and stockholders. The minutes shall
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show the time and place of each meeting, whether regular or special (and, if
special, how authorized and the notice given), the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at stockholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the Corporation or at the office of the Corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares, and the number
and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law or
by these Bylaws. He shall keep the seal of the Corporation, if one be adopted,
in safe custody and shall have such other powers and perform such other duties
as may be prescribed by the board of directors or by these Bylaws.
5.9 CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be kept
and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the Corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable times
be open to inspection by any director.
The chief financial officer shall deposit all money and other valuables
in the name and to the credit of the Corporation with such depositaries as may
be designated by the board of directors. He shall disburse the funds of the
Corporation as may be ordered by the board of directors, shall render to the
chief executive officer and directors, whenever they request it, an account of
all of his transactions as treasurer and of the financial condition of the
Corporation, and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or these Bylaws.
5.10 ASSISTANT SECRETARY
The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.
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5.11 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing authority and duties, all officers of the
Corporation shall respectively have such authority and perform such duties in
the management of the business of the Corporation as may be designated from time
to time by the board of directors or the stockholders.
ARTICLE VI
INDEMNITY
6.1 THIRD PARTY ACTIONS
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by an agent of the Corporation), or is or was serving at
the request of the Corporation, any predecessor of the Corporation, or any
subsidiary of the Corporation, as a director or officer of another corporation,
partnership, joint venture trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, any predecessor
of the Corporation, or any subsidiary of the Corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interest of the Corporation, any predecessor of the
Corporation, or any subsidiary of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
The Corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by an agent of the Corporation), or is or was serving at
the request of the Corporation, any predecessor of the Corporation, or any
subsidiary of the Corporation, as an employee or agent of another corporation,
partnership, joint venture trust or other enterprise, against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, any predecessor
of the Corporation, or any subsidiary of the Corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interest of the Corporation, any predecessor of the
Corporation, or any subsidiary of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation, any predecessor of the Corporation,
or any subsidiary of the Corporation, to procure a judgment in its favor by
reason of the fact that he is or was a director or officer of Corporation, any
predecessor of the Corporation, or any subsidiary of the Corporation, or is or
was serving at the request of the Corporation, any predecessor of the
Corporation, or any subsidiary of the Corporation, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, any predecessor
of the Corporation, or any subsidiary of the Corporation, and except
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that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
Corporation, any predecessor of the Corporation, or any subsidiary of the
Corporation, unless and only to the extent that the Delaware Court of Chancery
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
The Corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation, any predecessor of the Corporation,
or any subsidiary of the Corporation, to procure a judgment in its favor by
reason of the fact that he is or was an employee or agent of the Corporation,
any predecessor of the Corporation, or any subsidiary of the Corporation, or is
or was serving at the request of the Corporation, any predecessor of the
Corporation, or any subsidiary of the Corporation, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorney's fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, any predecessor
of the Corporation, or any subsidiary of the Corporation, and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation, any
predecessor of the Corporation, or any subsidiary of the Corporation, unless and
only to the extent that the Delaware Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Court of Chancery or such other court shall deem proper.
6.3 SUCCESSFUL DEFENSE
To the extent that a director, officer, employee or agent of the
Corporation, any predecessor of the Corporation, or any subsidiary of the
Corporation, has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
6.4 DETERMINATION OF CONDUCT
Any indemnification under Sections 6.1 and 6.2 (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific case
upon a determination that the indemnification of the director, officer, employee
or agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in Sections 6.1 and 6.2. Such determination shall
be made (1) by the board of Directors or the Executive Committee by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) or if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the stockholders.
6.5 PAYMENT OF EXPENSES IN ADVANCE
Expenses incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article VI.
6.6 INDEMNITY NOT EXCLUSIVE
The indemnification and advancement of expenses provided or granted
pursuant to the other subsections of this section shall not be deemed exclusive
of any other rights or limiting any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any by-law,
certificate of incorporation, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another while holding such office.
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6.7 INSURANCE INDEMNIFICATION
The Corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, any predecessor of the Corporation, or any subsidiary of the
Corporation, or is or was serving at the request of the Corporation, as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article VI.
6.8 THE CORPORATION
For purposes of this Article VI, references to "the Corporation" shall
include, in addition to the resulting Corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
and subject to the provisions of this Article VI (including, without limitation
the provisions of Section 6.4) with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
6.9 EMPLOYEE BENEFIT PLANS
For purposes of this Article VI, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably deemed to have acted in a manner "not opposed to the best interests
of the Corporation" as referred to in this Article VI.
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES
The indemnification and advanced of expenses provided by, or granted
pursuant to, this Article VI shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
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ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The Corporation shall, either at its principal executive office or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these Bylaws as amended to date,
accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
Corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
Corporation at its registered office in Delaware or at its principal place of
business.
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine the Corporation's stock
ledger, a list of its stockholders and its other books and records for a purpose
reasonably related to his position as a director. The Court of Chancery is
hereby vested with the exclusive jurisdiction to determine whether a director is
entitled to the inspection sought. The Court may summarily order the Corporation
to permit the director to inspect any and all books and records, the stock
ledger, and the stock list and to make copies or extracts therefrom. The Court
may, in its discretion, prescribe any limitations or conditions with reference
to the inspection, or award such other and further relief as the Court may deem
just and proper.
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, the chief executive officer, any vice
president, the chief financial officer, the secretary or assistant secretary of
this Corporation, or any other person authorized by the board of directors or
the chief executive officer or a vice president, is authorized to vote,
represent, and exercise on behalf of this Corporation all rights incident to any
and all shares of any other corporation or corporations standing in the name of
this Corporation. The authority granted herein may be exercised either by such
person directly or by any other person authorized to do so by proxy or power of
attorney duly executed by such person having the authority.
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ARTICLE VIII
GENERAL MATTERS
8.1 CHECKS
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the Corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
The board of directors, except as otherwise provided in these Bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
Corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the Corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of a corporation shall be represented by certificates,
provided that the board of directors of the Corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
Corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the Corporation by the chairman or vice-chairman of
the board of directors, or the president or vice-president, and by the treasurer
or an assistant treasurer, or the secretary or an assistant secretary of such
Corporation representing the number of shares registered in certificate form.
Any or all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate has to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he were such officer, transfer agent or registrar at
the date of issue.
The Corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the Corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend
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on fully paid shares, the Corporation shall declare a dividend upon partly paid
shares of the same class, but only upon the basis of the percentage of the
consideration actually paid thereon.
8.4 SPECIAL DESIGNATION ON CERTIFICATES
If the Corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and"or rights shall be set forth in full or
summarized on the face or back of the certificate that the Corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the Corporation shall issue to represent
such class or series of stock a statement that the Corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and"or rights.
8.5 LOST CERTIFICATES
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the Corporation and cancelled at the same time. The Corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the Corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the Corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate or uncertificated shares.
8.6 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these Bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a Corporation and a natural
person.
8.7 DIVIDENDS
The directors of the Corporation, subject to any restrictions contained
in the Certificate of Incorporation, may declare and pay dividends upon the
shares of its capital stock pursuant to the General Corporation Law of Delaware.
Dividends may be paid in cash, in property, or in shares of the Corporation's
capital stock.
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The directors of the Corporation may set apart out of any of the funds
of the Corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
Corporation, and meeting contingencies.
8.8 FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.
8.9 SEAL
The Corporation may adopt a corporate seal, which may be altered at
pleasure, and may use the same by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
8.10 TRANSFER OF STOCK
Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction in its books.
8.11 STOCK TRANSFER AGREEMENTS
The Corporation shall have power to enter into and perform any agreement
with any number of stockholders of any one or more classes of stock of the
Corporation to restrict the transfer of shares of stock of the Corporation of
any one or more classes owned by such stockholders in any manner not prohibited
by the General Corporation Law of Delaware.
8.12 REGISTERED STOCKHOLDERS
The Corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
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ARTICLE IX
AMENDMENTS
The original or other Bylaws of the Corporation may be adopted, amended
or repealed by the stockholders entitled to vote; provided, however, that the
Corporation may, in its Certificate of Incorporation, confer the power to adopt,
amend or repeal Bylaws upon the directors. The fact that such power has been so
conferred upon the directors shall not divest the stockholders of the power, nor
limit their power to adopt, amend or repeal Bylaws.
ARTICLE X
DISSOLUTION
If it should be deemed advisable in the judgment of the board of
directors of the Corporation that the Corporation should be dissolved, the
board, after the adoption of a resolution to that effect by a majority of the
whole board at any meeting called for that purpose, shall cause notice to be
mailed to each stockholder entitled to vote thereon of the adoption of the
resolution and of a meeting of stockholders to take action upon the resolution.
At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the outstanding stock of the Corporation entitled
to vote thereon votes for the proposed dissolution, then a certificate stating
that the dissolution has been authorized in accordance with the provisions of
Section 275 of the General Corporation Law of Delaware and setting forth the
names and residences of the directors and officers shall be executed,
acknowledged, and filed and shall become effective in accordance with Section
103 of the General Corporation Law of Delaware. Upon such certificate's becoming
effective in accordance with Section 103 of the General Corporation Law of
Delaware, the Corporation shall be dissolved.
ARTICLE XI
CUSTODIAN
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
The Court of Chancery, upon application of any stockholder, may appoint
one or more persons to be custodians and, if the Corporation is insolvent, to be
receivers, of and for the Corporation when:
(i) at any meeting held for the election of directors the
stockholders are so divided that they have failed to
elect successors to directors whose terms have expired
or would have expired upon qualification of their
successors; or
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(ii) the business of the Corporation is suffering or is
threatened with irreparable injury because the
directors are so divided respecting the management of
the affairs of the Corporation that the required vote
for action by the board of directors cannot be obtained
and the stockholders are unable to terminate this
division; or
(iii) the Corporation has abandoned its business and has
failed within a reasonable time to take steps to
dissolve, liquidate or distribute its assets.
11.2 DUTIES OF CUSTODIAN
The custodian shall have all the powers and title of a receiver
appointed under Section 291 of the General Corporation Law of Delaware, but the
authority of the custodian shall be to continue the business of the Corporation
and not to liquidate its affairs and distribute its assets, except when the
Court of Chancery otherwise orders and except in cases arising under Sections
226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware.
ARTICLE XII
LOANS TO OFFICERS
The Corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the Corporation or of its
subsidiaries, including any officer or employee who is a Director of the
Corporation or its subsidiaries, whenever, in the judgment of the Board of
Directors, such loan, guarantee or assistance may reasonably be expected to
benefit the Corporation. The loan, guarantee or other assistance may be with or
without interest and may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of shares of
stock of the Corporation. Nothing in this Bylaw shall be deemed to deny, limit
or restrict the powers of guaranty or warranty of the Corporation at common law
or under any statute.
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EXHIBIT 4.2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ARE "RESTRICTED
SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (i) IN
CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR (iii) PURSUANT TO AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR COMPLIANCE IS
NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.
WARRANT TO PURCHASE A MAXIMUM OF
83,333 SHARES OF SERIES B PREFERRED STOCK OF
JUNIPER NETWORKS, INC.
(Void after December 15, 2003)
This certifies that VENTURE LENDING & LEASING, INC., a Maryland
corporation, or assigns (the "Holder"), for value received, is entitled to
purchase from Juniper Networks, Inc. a California corporation (the "Company"),
Eighty Three Thousand Three Hundred Thirty-Three (83,333) fully paid and
nonassessable shares of the Company's Series B Preferred Stock ("Preferred
Stock") for cash at a price of Two and 40/100 Dollars ($2.40) per share (the
"Stock Purchase Price") at any time or from time to time up to and including
5:00 p.m. (Pacific time) on December 15, 2003 (the "Expiration Date"), upon
surrender to the Company at its principal office at 3260 Jay Street, Santa
Clara, California 95054 (or at such other location as the Company may advise
Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and upon payment in cash
or by check of the aggregate Stock Purchase Price for the number of shares for
which this Warrant is being exercised determined in accordance with the
provisions hereof. The Stock Purchase Price and the number of shares
purchasable hereunder are subject to adjustment as provided in Section 4 of
this Warrant.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
(a) Unless an election is made pursuant to clause (b) of this
Section 1, this Warrant shall be exercisable at the option of the Holder, at
any time or from time to time, on or before the Expiration Date for all or any
portion of the shares of Preferred Stock (but not for a fraction of a share)
which may be purchased hereunder for the Stock Purchase Price multiplied by the
number of shares to be purchased. In the event, however, that pursuant to the
Company's Articles of Incorporation, as amended, an event causing automatic
conversion of the Company's Preferred Stock shall have occurred prior to the
exercise of this Warrant, in whole or in part, then this Warrant shall be
exercisable for the number of shares of Common Stock of the Company
<PAGE> 2
into which the Preferred Stock not purchased upon any prior exercise of the
Warrant would have been so converted (and, where the context requires,
reference to "Preferred Stock" shall be deemed to include such Common Stock).
The Company agrees that the shares of Preferred Stock purchased under this
Warrant shall be and are deemed to be issued to the holder hereof as the record
owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such shares. Subject
to the provisions of Section 2, certificates for the shares of Preferred Stock
so purchased, together with any other securities or property to which the
Holder hereof is entitled upon such exercise, shall be delivered to the Holder
hereof by the Company at the Company's expense within a reasonable time after
the rights represented by this Warrant have been so exercised. Except as
provided in clause (b) of this Section 1, in case of a purchase of less than
all the shares which may be purchased under this Warrant, the Company shall
cancel this Warrant and execute and deliver a new Warrant or Warrants of like
tenor for the balance of the shares purchasable under the Warrant surrendered
upon such purchase to the Holder hereof within a reasonable time. Each stock
certificate so delivered shall be in such denominations of Preferred Stock as
may be requested by the Holder hereof and shall be registered in the name of
such Holder or such other name as shall be designated by such Holder, subject
to the limitations contained in Section 2.
(b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to the clause (a) of this Section 1, may
elect, at any time on or before the Expiration Date, to receive that number of
shares of Preferred Stock equal to the quotient of: (i) the difference between
(A) the Per Share Price (as hereinafter defined) of the Preferred Stock, less
(B) the Stock Purchase Price then in effect, multiplied by the number of shares
of Preferred Stock the Holder would otherwise have been entitled to purchase
hereunder pursuant to clause (a) of this Section 1 (or such lesser number of
shares as the Holder may designate in the case of a partial exercise of this
Warrant); over (ii) the Per Share Price.
(c) For purposes of clause (b) of this Section 1, "Per Shares Price"
means: (i) if the Company's Common Stock is then listed or admitted to trading
on any national securities exchange or traded on any national market system, the
average of the closing bid and asked prices of the Company's Common Stock as
reported on such exchange or market system for the ten (10) consecutive trading
days prior to the date of the Holder's election to convert hereunder; (ii) if
this Warrant is being converted in conjunction with a public offering of stock,
the price to the public per share pursuant to the offering; or (iii) if no
shares of the Company's Common Stock are listed or admitted to trading on any
national securities exchange or traded on any national market system, the price
per share which the Company would obtain from a willing buyer for shares sold by
the Company from authorized but unissued shares as such price shall be
determined in good faith by the Company's Board of Directors.
2. Limitation on Transfer.
(a) The Warrant and the Preferred Stock shall not be transferable
except upon the conditions specified in this Section 2, which conditions are
intended to insure compliance with the provisions of the
2
<PAGE> 3
Securities Act. Each holder of this Warrant or the Preferred Stock issuable
hereunder will cause any proposed transferee of the Warrant or Preferred Stock
to agree to take and hold such securities subject to the provisions and upon
the conditions specified in this Section 2.
(b) Each certificate representing (i) this Warrant, (ii) the Preferred
Stock, (iii) shares of the Company's Common Stock issued upon conversion of the
Preferred Stock and (iv) any other securities issued in respect of the Preferred
Stock or Common Stock issued upon conversion of the Preferred Stock upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of this Section 2 or
unless such securities have been registered under the Securities Act or sold
under Rule 144) be stamped or otherwise imprinted with a legend substantially in
the following form set forth on the first page of this Warrant.
(c) The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer the Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the
Securities Act relating to the disposition of securities), or (iii) an opinion
of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available.
3. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all shares of Preferred Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Preferred Stock, or other securities and property, when and as
required to provide for the exercise of the rights represented by this Warrant.
The Company will take all such action as may be necessary to assure that such
shares of Preferred Stock may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the Preferred Stock may be listed. The Company
will not take any action which would result in any adjustment of the Stock
Purchase Price (as defined in Section 4 hereof) (i) if the total number of
shares of Preferred Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Preferred Stock then
outstanding and all shares of Preferred Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Preferred Stock then
authorized by the Company's Articles of Incorporation, or (ii) if the total
number of shares of Common Stock issuable after such action upon the conversion
of all such shares of
3
<PAGE> 4
Preferred Stock together with all shares of Common Stock then outstanding and
then issuable upon exercise of all options and upon the conversion of all
convertible securities then outstanding would exceed the total number of shares
of Common Stock then authorized by the Company's Articles of Incorporation.
4. Adjustment of Stock Purchase Price Number of Shares. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
4.1 Subdivision or Combination of Stock. In case the Company shall
at any time subdivide its outstanding shares of Preferred Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Preferred Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
4.2 Dividends in Preferred Stock, Other Stock, Property,
Reclassification. If at any time or from time to time the holders of Preferred
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Preferred Stock, or any shares of stock or other
securities whether or not such securities are at any time directly or indirectly
convertible into or exchangeable for Preferred Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution, or
(b) any cash paid or payable otherwise than as a cash
dividend, or
(c) Preferred Stock or other or additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than shares of Preferred Stock issued as a stock split, adjustments in
respect of which shall be covered by the terms of Section 4.1 above), then and
in each such case, the Holder hereof shall, upon the exercise of this Warrant,
be entitled to receive, in addition to the number of shares of Preferred Stock
receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such
Preferred Stock as of the date on which holders of Preferred Stock
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<PAGE> 5
received or became entitled to receive such shares and/or all other additional
stock and other securities and property.
4.3 Reorganization, Reclassification, Consolidation, Merger or Sale.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Preferred Stock shall be entitled to receive
stock, securities or assets with respect to or in exchange for Preferred Stock,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provisions shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive (in lieu of the
shares of the Preferred Stock of the Company immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby) such shares
of stock, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Preferred Stock equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby. In any such case,
appropriate provision shall be made with respect to the rights and interests of
the holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Stock Purchase Price and
of the number of shares purchasable and receivable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be possible, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company will not effect any such consolidation,
merger or sale unless, prior to the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or the
corporation purchasing such assets shall assume by written instrument, executed
and mailed or delivered to the registered Holder hereof at the last address of
such Holder appearing on the books of the Company, the obligation to deliver to
such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to purchase.
4.4 Sale or Issuance Below Purchase Price. If the Company shall at
any time or from time to time issue or sell any of its Common Stock, Preferred
Stock, options to acquire (or rights to acquire such options), or any other
securities convertible into or exercisable for Common Stock, for a consideration
per share less than the Stock Purchase Price in effect immediately prior to the
time of such issue or sale, the Stock Purchase Price then in effect and then
applicable for any subsequent period or periods shall be adjusted to a price
determined by dividing (i) an amount equal to the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issue or sale
multiplied by the Stock Purchase Price then in effect and (y) the consideration,
if any, received by the Company upon such issue or sale, by (ii) the total
number of shares of Common Stock outstanding immediately after such issue or
sale. For purposes of this Section 4.4, all shares of Common Stock issuable upon
the exercise and/or conversion of all outstanding warrants (including this
Warrant), options and convertible securities shall be deemed to be outstanding.
The foregoing notwithstanding, no adjustment shall be made pursuant to this
Section 4.4 on account of a given sale to the extent that (a) the Stock Purchase
Price is adjusted pursuant to
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<PAGE> 6
any other Section of this Warrant or (b) the conversion price of the Preferred
Stock is decreased pursuant to the terms thereof.
4.5 Notice of Adjustment. Upon any adjustment of the Stock Purchase
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company. The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4.6 Other Notices. If at any time:
(a) the Company shall declare any cash dividend upon its Preferred
Stock;
(b) the Company shall declare any dividend upon its Preferred Stock
payable in stock or make any special dividend or other distribution to the
holders of its Preferred Stock;
(c) the Company shall offer for subscription pro rata to the holders
of its Preferred Stock any additional shares of stock of any class or other
rights;
(d) there shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(f) the Company shall take or propose to take any other action,
notice of which is actually provided to holders of the Preferred Stock;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company, (i) at least 20 day's
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action, at least 20 day's written notice of the date when
the same shall take place. Any notice given in accordance with the foregoing
clause (i) shall also specify, in the case of any such dividend, distribution
or subscription rights, the date on which the holders
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<PAGE> 7
of Preferred Stock shall be entitled thereto. Any notice given in accordance
with the foregoing clause (ii) shall also specify the date on which the holders
of Preferred Stock shall be entitled to exchange their Preferred Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action as the case may be.
4.7 Certain Events. If any change in the outstanding Preferred Stock of
the Company or any other event occurs as to which the other provisions of this
Section 4 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
of the Company shall make an adjustment in the number and class of shares
available under the Warrant, the Stock Purchase Price and/or the application of
such provisions, in accordance with such essential intent and principles, so as
to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of the Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as he would have
owned had the Warrant been exercised prior to the event and had he continued to
hold such shares until after the event requiring adjustment.
5. Issue Tax. The issuance of certificates for shares of Preferred Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and deliver of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Preferred Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a shareholder in respect of meetings
of shareholders for the election of directors of the Company or any other
matters or any rights whatsoever as a shareholder of the Company. No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the holder to purchase shares
of Preferred Stock, and no mere enumeration herein of the rights or privileges
of the Holder hereof, shall give rise of any liability of such Holder for the
Stock Purchase Price or as a shareholder of the Company, whether such liability
is asserted by the Company or by its creditors.
8. Amendment of Articles of Incorporation. Unless the holder of this
Warrant consents thereto in writing, the Company shall not amend its Articles
of Incorporation prior to the exercise of this Warrant if the Preferred Stock
would be adversely affected by such amendment.
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<PAGE> 8
9. Registration Rights. The Holder hereof shall be entitled, with respect
to the shares of Preferred Stock issued upon exercise hereof or the shares of
Common Stock or other securities issued upon conversion of such Preferred Stock
as the case may be, to all of the registration rights set forth in the First
Amended Registration Rights Agreement dated as of August 5, 1996 to the same
extent and on the same terms and conditions as possessed by the Series B Holders
thereunder. The Company shall take such action as may be reasonably necessary to
assure that the granting of such registration rights to the Holder does not
violate the provisions of such agreement or any of the Company's charter
documents or rights of prior grantees of registration rights.
10. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Preferred Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
11. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
12. Notices. Any notice, request or other document required or permitted to
be given or delivered to the holder hereof or the Company shall be deemed to
have been given (i) upon receipt if delivered personally or by courier (ii) upon
confirmation of receipt if by telecopy or (iii) three business days after
deposit in the United States mail, with postage prepaid and certified or
registered, to each such holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor in the first
paragraph of this Warrant.
13. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Preferred Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assign of the holder hereof. The Company will, at the time of the
exercise of this Warrant, in whole or in part, upon request of the Holder hereof
but at the Company's expense, acknowledge in writing its continuing obligation
to the Holder hereof in respect of any rights (including, without limitation,
any right to registration of the shares of Common Stock) to which the holder
hereof shall continue to be entitled after such exercise in accordance with this
Warrant; provided, that the failure of the holder hereof to make any such
request shall not affect the continuing obligation of the Company to the Holder
hereof in respect of such rights.
14. Descriptive Headings and Governing Law. The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
8
<PAGE> 9
15. Lost Warrants or Stock Certificates. The Company represents and
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
16. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
17. Representations of Holder. With respect to this Warrant, Holder
represents and warrants to the Company as follows:
17.1 Experience. It is experienced in evaluating and investing in
companies engaged in businesses similar to that of the Company; it understands
that investment in the Warrant involves substantial risks; it has made detailed
inquiries concerning the Company, its business and services, its officers and
its personnel; the officers of the Company have made available to Holder any and
all written information it has requested; the officers of the Company have
answered to Holder's satisfaction all inquiries made by it; in making this
investment it has relied upon information made available to it by the Company;
and it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of investment in the Company
and it is able to bear the economic risk of that investment.
17.2 Investment. It is acquiring the Warrant for investment for its
own account and not with a view to, or for resale in connection with, any
distribution thereof. It understands that the Warrant, the shares of Preferred
Stock issuable upon exercise thereof and the shares of Common Stock issuable
upon conversion of the Preferred Stock, have not been registered under the
Securities Act of 1933, as amended, nor qualified under applicable state
securities laws.
17.3 Rule 144. It acknowledges that the Warrant, the Preferred Stock
and the Common Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. It has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act.
17.4 Access to Data. It has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and has had the opportunity to inspect the Company's facilities.
18. Additional Representations and Covenants of the Company. The Company
hereby represents, warrants and agrees as follows:
9
<PAGE> 10
18.1 Corporate Power. The Company has all requisite corporate power
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
18.2 Authorization. All corporate action on the part of the Company,
its directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken. This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.
18.3 Offering. Subject in part to the truth and accuracy of Holder's
representations set forth in Section 17 hereof, the offer, issuance and sale of
the Warrant is, and the issuance of Preferred Stock upon exercise of the Warrant
and the issuance of Common Stock upon conversion of the Preferred Stock will be
exempt from the registration requirements of the Securities Act, and are exempt
from the qualification requirements of any applicable state securities laws; and
neither the Company nor anyone acting on its behalf will take any action
hereafter that would cause the loss of such exemptions.
18.4 Stock Issuance. Upon exercise of the Warrant, the Company will
use its best efforts to cause stock certificates representing the shares of
Preferred Stock purchased pursuant to the exercise to be issued in the
individual names of Holder, its nominees or assignees, as appropriate at the
time of such exercise. Upon conversion of the shares of Preferred Stock to
shares of Common Stock, the Company will issue the Common Stock in the
individual names of Holder, its nominees or assignees, as appropriate.
18.5 Articles and By-Laws. The Company has provided Holder with true
and complete copies of the Company's Articles or Certificate of Incorporation,
By-Laws, and each Certificate of Determination or other charter document
setting forth any rights, preferences and privileges of Company's capital
stock, each as amended and in effect on the date of issuance of this Warrant.
18.6 Conversion of Preferred Stock. As of the date hereof, each share
of the Preferred Stock is convertible into one share of the Common Stock.
18.7 Financial and Other Reports. From time to time up to the earlier
of the Expiration Date or the complete exercise of this Warrant, the Company
shall furnish to Holder (i) within 120 days after the close of each fiscal year
of the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; (ii) within 45 days after the close
of each fiscal quarter of the Company, an unaudited balance sheet and statement
of cash flows at and as of the end of such quarter, together with an unaudited
statement of income for such quarter; and (iii) promptly after sending, making
available, or filing, copies of all reports, proxy statements, and financial
statements that the Company sends or makes available
10
<PAGE> 11
to its shareholders and all registration statements and reports that the
Company files with the SEC or any other governmental or regulatory authority.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this 16 day of December.
JUNIPER NETWORKS, INC.
By: [illegible]
--------------------------
Title: COO
-----------------------
11
<PAGE> 1
EXHIBIT 4.3
THIS WARRANT AND THE SECURITIES SUBJECT TO THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR
TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
THESE SECURITIES OR (II) THERE IS AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, THAT AN EXEMPTION THEREFROM IS AVAILABLE. THIS WARRANT MUST BE
SURRENDERED TO THE COMPANY PRIOR TO ANY TRANSFER OF ANY INTEREST IN SUCH
WARRANT.
WARRANT TO PURCHASE SERIES B PREFERRED STOCK OF
JUNIPER NETWORKS, INC.
ISSUANCE DATE: June 23, 1997
EXPIRATION DATE: June 23, 2002
This certifies that @Home Network or its permitted assigns (the
"Warrantholder"), is entitled, subject to the terms set forth below, to purchase
from Juniper Networks, Inc., a California corporation, (the "Company") up to
10,000 shares (which number is subject to adjustment as provided herein) of
fully paid and nonassessable Series B Preferred Stock of the Company at the
purchase price of $2.40 per share, subject to adjustment as provided herein,
(the "Purchase Price") at any time or from time to time through the earlier of
June 23, 2002 or the effective date of the Company's initial underwritten public
offering of the Company's equity securities pursuant to a registration statement
under the Act. Such price and number of shares are subject to adjustment as
provided in Section 2 of this Warrant. This Warrant is issued pursuant to the
Warrantholder's sublease of certain office space to the Company.
1. Definitions.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
a. "Company" includes any entity which shall succeed to or assume
obligations of the Company under this Warrant.
b. "Stock," when used with reference to shares of stock of the
Company, means shares of Series B Preferred Stock of the Company, as presently
defined in the Company's Amended
<PAGE> 2
and Restated Articles of Incorporation, and stock of any other class into which
those shares may hereafter be changed.
c. "Shares" shall mean the shares of Stock purchasable hereunder
and shall include all shares of securities into which the Shares purchasable
hereunder may be converted or changed.
d. "Warrantholder," "holder of Warrant," "holder," or similar
terms when the context refers to a holder of this Warrant, mean any person who
shall at the time be the registered holder of this Warrant.
2. Adjustment of Purchase Price and Number of Shares.
The number and kind of securities purchasable upon the exercise
of this Warrant and the Purchase Price shall be subject to adjustment from time
to time upon the occurrence of certain events, as follows:
a. Reclassification. In case of any reclassification or change of
outstanding securities of the class issuable upon exercise of this Warrant
(other than upon any consolidation or merger of the Company with or into another
corporation unless the Company is the surviving corporation, or upon the sale of
all or substantially all of the assets of the Company) then, and in any such
case, the holder of this Warrant, upon the exercise hereof at any time after the
consummation of such reclassification or change shall be entitled to receive in
lieu of each share of Stock theretofore issuable upon exercise of this Warrant,
the kind and amount of shares of stock, other securities, money and property
received upon such reclassification or change by a holder of one share of Stock.
The provisions of this subsection (a) shall similarly apply to successive
reclassifications or changes.
b. Subdivision or Combination of Stock. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Stock, the Purchase Price shall be proportionately decreased in the
case of a subdivision or increased in the case of a combination or the
conversion ratio adjusted.
c. Stock Dividends. If the Company at any time while this Warrant
is outstanding shall pay a dividend with respect to Stock payable in Stock, or
make any other distribution of Stock with respect to Stock (except any
distribution specifically provided for in the foregoing subsections (a) or (b)),
then the Purchase Price shall be adjusted, effective from and after the date of
determination of shareholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Purchase Price in effect immediately
prior to such date of determination by a fraction, (a) the numerator of which
shall be the total number of shares of Stock outstanding immediately prior to
such dividend or distribution, and (b) the denominator of which shall be the
total number of shares of Stock outstanding immediately after such dividend or
distribution.
d. Non-Cash Dividends. If the Company at any time while this
Warrant is outstanding shall pay a dividend with respect to Stock payable in
securities other than Stock or other
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<PAGE> 3
non-cash property, or make any other distribution of such securities or property
with respect to Stock (except any distribution specifically provided for in the
foregoing subsections (a) or (b)), then this Warrant shall represent the right
to acquire upon exercise of this Warrant such securities or property which a
holder of Stock would have been entitled to receive upon such dividend or
distribution, without the payment by the holder of this Warrant of any
additional consideration for such securities or property.
e. Adjustment of Number of Shares. Upon each adjustment in the
Purchase Price, the number of Shares shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Purchase Price by a fraction, the
numerator of which shall be the Purchase Price immediately prior to such
adjustment and the denominator of which shall be the Purchase Price immediately
thereafter.
f. Series B Preferred Stock. In the event shares of Series B
Preferred Stock are no longer outstanding, whether by repurchase of such shares
by the Company, conversion of such shares into the Company's common stock
("Common Stock"), or otherwise (each a "Terminal Event"), this Warrant shall be
exercisable into that number of shares of Common Stock into which the Stock
would have been convertible immediately prior to the Terminal Event.
(g) Notice of Adjustments. Whenever the Purchase Price shall be
adjusted pursuant to Section 2 hereof, the Company shall issue a certificate
signed by its chief financial officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Purchase Price or Prices after
giving effect to such adjustment, and the securities or other property for which
this Warrant may then be exercised, and shall cause a copy of such certificate
to be mailed (by first class mail, postage prepaid) to the holder of this
Warrant.
3. Exercise Provisions.
a. Manner of Exercise. This Warrant may be exercised in part or
in whole only by the holder of this Warrant surrendering to the Company at its
principal office in California, this Warrant, together with the exercise form
attached to this Warrant duly executed by the holder together with payment to
the Company in the amount obtained by multiplying the Purchase Price by the
number of shares of Stock designated in the exercise form. Payment may be in
cash or by cashier's or certified bank check payable to the order of the
Company.
b. Partial Exercise. On any partial exercise, the Company shall
promptly issue and deliver to the holder of this Warrant a new Warrant or
Warrants of like tenor in the name of that holder providing for the right to
purchase that number of shares of Stock as to which this Warrant has not been
exercised.
c. Net Exercise Rights. Notwithstanding the payment provisions
set forth in this Section 3, the holder may elect to receive shares of Warrant
Stock equal to the value (as determined below) of this Warrant by surrender of
this Warrant at the principal office of the Company together
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<PAGE> 4
with notice of such election, in which event the Company shall issue to the
holder the number of shares of Series B Preferred Stock determined by use of the
following formula:
X = Y(A-B)
------
A
Where: X = the number of shares of Series B Preferred Stock to be issued to the
holder.
Y = the number of shares of Series B Preferred Stock subject to this
Warrant.
A = the Fair Market Value (as defined below) of one (1) share of Series
B Preferred Stock.
B = the per share Purchase Price pursuant to this Warrant.
For purposes of this Section 3, fair market value of a share as of a
particular date shall mean:
1) If the Company's registration statement under the
Act, covering its initial underwritten public offering of stock, has been
declared effective by the Securities and Exchange Commission, then the fair
market value of a share shall be the closing price (the last reported sales
price, if not so reported, the average of the last reported bid and asked
prices) of the Company's stock as of the last business day immediately prior to
the exercise of this Warrant.
2) If such a registration statement has not been
declared effective, or if it has been declared effective but the offering is not
consummated in accordance with the terms of the underwriting agreement between
the Company and its underwriters relating to such registration statement, then
as determined in good faith by the Company's Board of Directors upon a review of
relevant factors.
4. Delivery of Stock Certificates.
Within a reasonable time after full or partial exercise of this
Warrant, the Company at its expense will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate or certificates for the
number of fully paid and nonassessable shares of Stock to which that holder
shall be entitled upon such exercise, together with any other securities and
property to which that holder is entitled upon such exercise under the terms of
this Warrant. No fractional shares will be issued upon exercise of rights to
purchase under this Warrant. If upon any exercise of this Warrant a fraction of
a share results, the Company will pay the cash value of that fractional
share, calculated on the basis of the closing market price (last trade regular
way if the Stock is traded on the New York or American Stock Exchange, and if
not so traded, the last sale price or mean of the bid and asked prices as
reported by NASDAQ) as of the date of exercise, or, if the Stock is not publicly
traded, then on the basis of the Company's good faith determination of the fair
market value of the Stock.
5. Compliance with Securities Act; Disposition of Shares of Common
Stock.
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<PAGE> 5
a. Compliance with Securities Act. The holder of this Warrant, by
acceptance hereof, agrees that this Warrant and the Shares to be issued upon
exercise hereof are being acquired for investment and that he will not offer,
sell or otherwise dispose of this Warrant or any Shares to be issued upon
exercise hereof except under circumstances which will not result in a violation
of the Act. Upon exercise of this Warrant, the holder hereof shall confirm in
writing, in a form satisfactory to the Company, that the Shares are being
acquired for investment and not with a view toward distribution or resale
(unless sale of the Shares has been registered under the Act). Any proposed
transferee of this Warrant or the Shares (except a transferee of the Shares in a
registered public offering) will be required to agree to the provisions of this
Section 5. Certifi cates representing all Shares (unless registered under the
Act) shall be stamped or imprinted with a legend in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
IN CONNECTION WITH, THE DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT
BE OFFERED, SOLD, PLEDGED, OR TRANSFERRED UNLESS (I) A REGISTRATION
STATEMENT UNDER THE ACT IS IN EFFECT AS TO THESE SECURITIES OR (II)
THERE IS AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT AN
EXEMPTION THEREFROM IS AVAILABLE. THIS CERTIFICATE MUST BE SURRENDERED
TO THE COMPANY PRIOR TO ANY TRANSFER OF ANY INTEREST IN THE SECURITIES
REPRESENTED BY THIS CERTIFICATE.
b. Notice of Proposed Transfers. Prior to any proposed transfer
of this Warrant or any of the Shares, unless there is in effect a registration
statement under the Act covering the proposed transfer, the holder thereof shall
give written notice (the "Notice") to the Company of such holder's intention to
make such transfer. The Notice shall describe the manner and circumstances of
the proposed transfer in sufficient detail. If requested by the Company prior to
the transfer being effected, the holder shall provide to the Company a written
opinion of legal counsel who shall be reasonably satisfactory to the Company,
addressed to the Company and reasonably satisfactory in form and substance to
the Company's counsel, to the effect that the proposed transfer of the Warrant
or the Shares may be effected without registration under the Act. The holder of
such securities shall be entitled to transfer such securities in accordance with
the terms of the Notice only after the Company has consented in writing to such
transfer. Each warrant or stock certificate evidencing the securities so
transferred shall bear the appropriate restrictive legend set forth above,
except that such certificate shall not bear such restrictive legend if in the
opinion of counsel for the Company such legend is not required in order to
establish compliance with any provisions of the securities laws. Transfer of the
Warrant is further restricted by Section 6(e) hereof.
6. Miscellaneous Provisions.
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<PAGE> 6
a. Reservation of Stock. The Company covenants that it will at
all times reserve and keep available, solely for issuance upon exercise of this
Warrant, all shares of Stock or other securities from time to time issuable upon
exercise of this Warrant.
b. Modification. This Warrant and any of its terms may be
changed, waived, or terminated by a written instrument signed by the Company and
the holders of the Warrants representing the right to acquire a majority of the
shares of Stock then subject to issuance upon the exercise of the Warrants.
c. Replacement. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of loss, theft, or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the Company or,
in the case of mutilation, on surrender and cancellation of this Warrant, the
Company at its expense will execute and deliver, in lieu of this Warrant, a new
Warrant of like tenor.
d. Warrant Agent. The Company may, on written notice to the
holder of this Warrant, appoint an agent having an office in California for the
purposes of issuing Stock or other securities upon the exercise of this Warrant
and of replacing or exchanging this Warrant, and after that appointment any such
issuance, replacement, or exchange shall be made at that office by that agent.
e. Nontransferability. This Warrant may not be transferred or
assigned without the prior written consent of the Company except, subject to
Section 5(a) and (b), in its entirety to one or more purchasers who agrees to be
bound by all the terms hereof including this paragraph.
f. Notices. Notices hereunder to the holder of this Warrant shall
be sent by facsimile, certified or registered mail to the address and facsimile
number given to the Company by such holder and shall be deemed given when so
mailed or so transmitted.
g. Governing Law. This Warrant shall be governed by the laws of
the State of California as applied to contracts entered into in California
between California residents.
Dated: June 23, 1997 JUNIPER NETWORKS, INC.
By: /s/ Scott Kriens
----------------------
Scott Kriens, President and Chief
Executive Officer
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<PAGE> 7
FORM OF EXERCISE
(To be signed only upon exercise of Warrant)
To: Juniper Networks, Inc.
The undersigned Holder of the attached Warrant, hereby irrevocably
elects to exercise the purchase right represented by this Warrant as follows:
[ ] The undersigned elects to purchase for cash or check _______ full
shares of Common Stock of SpectraNet International Corporation and
herewith makes payment of $_____ for those shares;
[ ] The undersigned elects to effect a net exercise of this Warrant,
exercising this Warrant [ ] in full or [ ] as to the following gross
number of shares: _________. The undersigned understands that the actual
number of shares issuable will be determined in accordance with Sections
1.1 and 2 of this Warrant.
The undersigned requests that the certificates for the shares be issued
in the name of, and delivered to,
____________________________________________________*, whose address is
______________________________________________________________________________.
Dated: ___________________
(Signature must conform in all respects to
name of holder as specified on the face of
the attached Warrant).
------------------------------------
Signature
------------------------------------
Address
------------------------------------
- --------
* If the stock is to be issued to anyone other than the registered
Holder of this Warrant, this Notice of Exercise must be accompanied by an
opinion of counsel to the effect that such transfer may be effected without
compliance with the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended.
<PAGE> 1
EXHIBIT 4.4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ARE "RESTRICTED
SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (i) IN
CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR (iii) PURSUANT TO AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR COMPLIANCE IS
NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.
WARRANT TO PURCHASE A MAXIMUM OF
20,381 SHARES OF SERIES C PREFERRED STOCK OF
JUNIPER NETWORKS, INC.
(Void after December 15, 2003)
This certifies that VENTURE LENDING & LEASING II, INC., a Maryland
corporation, or assigns (the "Holder"), for value received, is entitled to
purchase from Juniper Networks, Inc. a California corporation (the "Company"),
Twenty Thousand Three Hundred Eighty-one (20,381) fully paid and nonassessable
shares of the Company's Series C Preferred Stock ("Preferred Stock") for cash
at a price of Eight and 93/100 Dollars ($8.93) per share (the "Stock Purchase
Price") at any time or from time to time up to and including 5:00 p.m. (Pacific
time) on December 15, 2003 (the "Expiration Date"), upon surrender to the
Company at its principal office at 385 Ravendale Drive, Mountain View,
California 94043 (or at such other location as the Company may advise Holder in
writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and upon payment in cash or by check
of the aggregate Stock Purchase Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions hereof.
The Stock Purchase Price and the number of shares purchasable hereunder are
subject to adjustment as provided in Section 4 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
(a) Unless an election is made pursuant to clause (b) of this
Section 1, this Warrant shall be exercisable at the option of the Holder, at
any time or from time to time, on or before the Expiration Date for all or any
portion of the shares of Preferred Stock (but not for a fraction of a share)
which may be purchased hereunder for the Stock Purchase Price multiplied by the
number of shares to be purchased. In the event, however, that pursuant to the
Company's Articles of Incorporation, as amended, an event causing automatic
conversion of the Company's Preferred Stock shall have occurred prior to the
exercise of this Warrant, in whole or in part, then this Warrant shall be
exercisable for the number of shares of Common Stock of the Company into which
the Preferred Stock not purchased upon any prior exercise of the Warrant would
have been so converted (and, where the context requires, reference to
"Preferred Stock" shall be deemed to include such Common Stock). The Company
agrees that the shares of Preferred Stock purchased under this Warrant shall be
and are deemed to be issued to the holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares. Subject to the provisions of
Section 2, certificates for the shares of
<PAGE> 2
Preferred Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. Except
as provided in clause (b) of this Section 1, in case of a purchase of less than
all the shares which may be purchased under this Warrant, the Company shall
cancel this Warrant and execute and deliver a new Warrant or Warrants of like
tenor for the balance of the shares purchasable under the Warrant surrendered
upon such purchase to the Holder hereof within a reasonable time. Each stock
certificate so delivered shall be in such denominations of Preferred Stock as
may be requested by the Holder hereof and shall be registered in the name of
such Holder or such other name as shall be designated by such Holder, subject to
the limitations contained in Section 2.
(b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect,
at any time on or before the Expiration Date, to receive that number of shares
of Preferred Stock equal to the quotient of: (i) the difference between (A) the
Per Share Price (as hereinafter defined) of the Preferred stock, less (B) the
Stock Purchase Price then in effect, multiplied by the number of shares of
Preferred Stock the Holder would otherwise have been entitled to purchase
hereunder pursuant to clause (a) of this Section 1 (or such lesser number of
shares as the Holder may designate in the case of a partial exercise of this
Warrant); over (ii) the Per Share Price.
(c) For purposes of clause (b) of this Section 1, "Per Share Price"
means: (i) if the Company's Common Stock is then listed or admitted to trading
on any national securities exchange or traded on any national market system,
the average of the closing bid and asked prices of the Company's Common Stock
as reported on such exchange or market system for the ten (10) consecutive
trading days prior to the date of the Holder's election to convert hereunder;
(ii) if this Warrant is being converted in conjunction with a public offering
of stock, the price to the public per share pursuant to the offering; or (iii)
if no shares of the Company's Common Stock are listed or admitted to trading on
any national securities exchange or traded on any national market system,
the price per share which the Company would obtain from a willing buyer for
shares sold by the Company from authorized but unissued shares as such price
shall be determined in good faith by the Company's Board of Directors.
2. Limitation on Transfer.
(a) The Warrant and the Preferred Stock shall not be transferable
except upon the conditions specified in this Section 2 , which conditions are
intended to insure compliance with the provisions of the Securities Act. Each
holder of this Warrant or the Preferred Stock issuable hereunder will cause any
proposed transferee of the Warrant or Preferred Stock to agree to take and hold
such securities subject to the provisions and upon the conditions specified in
this Section 2.
(b) Each certificate representing (i) this Warrant, (ii) the
Preferred Stock, (iii) shares of the Company's Common Stock issued upon
conversion of the Preferred Stock and (iv) any other securities issued in
respect of the Preferred Stock or Common Stock issued upon conversion of the
Preferred Stock upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of this Section 2 or unless such securities have been registered
under the Securities Act or sold under Rule 144) be stamped or otherwise
imprinted with a legend substantially in the following form set forth on the
first page of this Warrant.
2
<PAGE> 3
(c) The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer the Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the
Securities Act relating to the disposition of securities), or (iii) an opinion
of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available.
3. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all shares of Preferred Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Preferred Stock, or other securities and property, when and as
required to provide for the exercise of the rights represented by this Warrant.
The Company will take all such action as may be necessary to assure that such
shares of Preferred Stock may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the Preferred Stock may be listed. The Company
will not take any action which would result in any adjustment of the Stock
Purchase Price (as defined in Section 4 hereof) (i) if the total number of
shares of Preferred Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Preferred Stock then
outstanding and all shares of Preferred Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Preferred Stock then
authorized by the Company's Articles of Incorporation, or (ii) if the total
number of shares of Common Stock issuable after such action upon the conversion
of all such shares of Preferred Stock together with all shares of Common Stock
then outstanding and then issuable upon exercise of all options and upon the
conversion of all convertible securities then outstanding would exceed the
total number of shares of Common Stock then authorized by the Company's
Articles of Incorporation.
4. Adjustment of Stock Purchase Price Number of Shares. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the
number of shares obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Stock Purchase Price resulting from such adjustment.
4.1 Subdivision or Combination of Stock. In case the Company shall
at any time subdivide its outstanding shares of Preferred Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Preferred Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
3
<PAGE> 4
4.2 Dividends in Preferred Stock, Other Stock, Property,
Reclassification. If at any time or from time to time the holders of Preferred
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Preferred Stock, or any shares of stock or other securities
whether or not such securities are at any time directly or indirectly
convertible into or exchangeable for Preferred Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution, or
(b) any cash paid or payable otherwise than as a cash dividend,
or
(c) Preferred Stock or other additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than shares of preferred Stock issued as a stock split, adjustments in
respect of which shall be covered by the terms of Section 4.1 above), then and
in each such case, the Holder hereof shall, upon the exercise of this Warrant,
be entitled to receive, in addition to the number of shares of Preferred Stock
receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such
Preferred Stock as of the date on which holders of Preferred Stock received or
became entitled to receive such shares and/or all other additional stock and
other securities and property.
4.3 Reorganization, Reclassification, Consolidation, Merger or Sale.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Preferred Stock shall be entitled to receive
stock, securities or assets with respect to or in exchange for Preferred Stock,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provisions shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive (in lieu of the
shares of the Preferred Stock of the Company immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby) such shares
of stock, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Preferred Stock equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby. In any such case,
appropriate provision shall be made with respect to the rights and interests of
the holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Stock Purchase Price and
of the number of shares purchasable and receivable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be possible, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company will not effect any such consolidation,
merger or sale unless, prior to the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or the
corporation purchasing such assets shall assume by written instrument, executed
and mailed or delivered to the registered Holder hereof at the last address of
such Holder appearing on the books of the Company, the obligation to deliver to
such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder maybe entitled to purchase.
<PAGE> 5
4.4 Sale or Issuance Below Purchase Price. If the Company shall at any
time or from time to time issue or sell any of its Common Stock, Preferred
Stock, options to acquire (or rights to acquire such options), or any other
securities convertible into or exercisable for Common Stock, for a
consideration per share less than the Stock Purchase Price in effect
immediately prior to the time of such issue or sale, the Stock Purchase Price
then in effect and then applicable for any subsequent period or periods shall
be adjusted to a price determined by dividing (i) an amount equal to the sum of
(x) the number of shares of Common Stock outstanding immediately prior to such
issue or sale multiplied by the Stock Purchase Price then in effect and (y) the
consideration, if any, received by the Company upon such issue or sale, by (ii)
the total number of shares of Common Stock outstanding immediately after such
issue or sale. For purposes of this Section 4.4, all shares of Common stock
issued or issuable (i) upon conversion of the Preferred Stock into Common
Stock; (ii) upon exercise of options to officers, directors and employees of
and consultants to, the corporation pursuant to plans, arrangements or
agreements approved by the Board; (iii) as a dividend or distribution on
Preferred Stock or Common Stock or any event for which adjustment is made; or
(iv) upon exercise of any warrants to purchase shares of Common Stock or
Preferred Stock convertible into shares of Common Stock in conjunction with
equipment leases or other commercial financing transactions approved by the
Board, shall be deemed to be outstanding. The foregoing notwithstanding, no
adjustment shall be made pursuant to this Section 4.4 on account of a given
sale to the extent that (a) the Stock Purchase Price is adjusted pursuant to
any other section of this Warrant or (b) the conversion price of the Preferred
Stock is decreased pursuant to the terms thereof.
4.5 Notice of Adjustment. Upon any adjustment of the Stock Purchase
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company. The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4.6 Other Notices. If at any time:
(a) the Company shall declare any cash dividend upon its Preferred
Stock;
(b) the Company shall declare any dividend upon its Preferred Stock
payable in stock or make any special dividend or other distribution to the
holders of its Preferred Stock;
(c) the Company shall offer for subscription pro rata to the holders
of its Preferred Stock any additional shares of stock of any class or other
rights;
(d) there shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
5
<PAGE> 6
(f) the Company shall take or propose to take any other action, notice of
which is actually provided to holders of the Preferred Stock;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address of
such holder as shown on the books of the Company, (i) at least 20 day's prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action, at least 20 day's written notice of the date when
the same shall take place. Any notice given in accordance with the foregoing
clause (i) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Preferred Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (ii)
shall also specify the date on which the holders of Preferred Stock shall be
entitled to exchange their Preferred Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, or other action as the case may
be.
4.7 Certain Events. If any change in the outstanding Preferred Stock of
the Company or any other event occurs as to which the other provisions of this
Section 4 are not strictly applicable or if strictly applicable would not
fairly protect the purchase rights of the Holder of the Warrant in accordance
with the essential intent and principles of such provisions, then the Board of
Directors of the Company shall make an adjustment in the number and class of
shares available under the Warrant, the Stock Purchase Price and/or the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights as aforesaid. The adjustment
shall be such as will give the Holder of the Warrant upon exercise for the same
aggregate Stock Purchase Price the total number, class and kind of shares as
he would have owned had the Warrant been exercised prior to the event and had
he continued to hold such shares until after the event requiring adjustment.
5. Issue Tax. The issuance of certificates for shares of Preferred Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificates in a
name other than that of the then Holder of the Warrant being exercised.
6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Preferred Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a shareholder in respect of
meetings of shareholders for the election of directors of the Company or any
other matters or any rights whatsoever as a shareholder of the Company. No
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder, until, and
only to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the holder to purchase shares
of Preferred Stock, and no more enumeration herein of the
6
<PAGE> 7
rights or privileges of the Holder hereof, shall give rise to any liability of
such Holder for the Stock Purchase Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.
8. [Intentionally omitted]
9. Registration Rights. The Holder hereof shall be entitled, with
respect to the shares of Preferred Stock issued upon exercise hereof or the
shares of Common Stock or other securities issued upon conversion of such
Preferred Stock as the case may be, to all of the registration rights set forth
in the First Amended Registration Rights Agreement dated as of August 5, 1996
to the same extent and on the same terms and conditions as possessed by the
Series C Holders thereunder. The Company shall take such action as may be
reasonably necessary to assure that the granting of such registration rights to
the Holder does not violate the provisions of such agreement or any of the
Company's charter documents or rights of prior grantees of registration rights.
10. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Preferred Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
11. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
12. Notices. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be deemed to
have been given (1) upon receipt if delivered personally or by courier (ii)
upon confirmation of receipt if by telecopy or (iii) three business days after
deposit in the United States mail, with postage prepaid and certified or
registered, to each such holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor in the first
paragraph of this Warrant.
13. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Preferred Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assign of the holder hereof. The Company will, at the time of
the exercise of this Warrant, in whole or in part, upon request of the Holder
hereof but at the Company's expense, acknowledge in writing its continuing
obligation to the Holder hereof in respect of any rights (including, without
limitation, any right to registration of the shares of Common Stock) to which
the holder hereof shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the holder hereof
to make any such request shall not affect the continuing obligation of the
Company to the Holder hereof in respect of such rights.
14. Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California.
15. Lost Warrants or Stock Certificates. The Company represents and
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
7
<PAGE> 8
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at it expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
16. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
17. Representing of Holder. With respect to this Warrant, Holder
represents and warrants to the Company as follows:
17.1 Experience. It is experienced in evaluating and investing in
companies engaged in businesses similar to that of the Company; it understands
that investment in the Warrant involves substantial risks; it has made detailed
inquiries concerning the Company, its business and services, its officers and
its personnel; the officers of the Company have made available to Holder any and
all written information it has requested; the officers of the Company have
answered to Holder's satisfaction all inquiries made by it; in making this
investment it has relied upon information made available to it by the Company;
and it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of investment in the Company
and it is able to bear the economic risk of that investment.
17.2 Investment. It is acquiring the Warrant for investment for its
own account and not with a view to, or for resale in connection with, any
distribution thereof. It understands that the Warrant, the shares of Preferred
Stock issuable upon exercise thereof and the shares of Common Stock issuable
upon conversion of the Preferred Stock, have not been registered under the
Securities Act of 1933, as amended, nor qualified under applicable state
securities laws.
17.3 Rule 144. It acknowledges that the Warrant, the Preferred Stock
and the Common Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. It has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act.
17.4 Access to Data. It has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and has had the opportunity to inspect the Company's facilities.
18. Additional Representations and Covenants of the Company. The Company
hereby represents, warrants and agrees as follows:
18.1 Corporate Power. The Company has all requisite corporate power
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
18.2 Authorization. All corporate action on the part of the Company,
its directors and shareholder necessary for the authorization, execution,
delivery and performance by the Company of this has been taken. This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.
18.3 Offering. Subject in part to the truth and accuracy of Holder's
representations set forth in Section 17 hereof, the offer, issuance and sale of
the Warrant is, and the issuance of Preferred Stock upon exercise
8
<PAGE> 9
of the Warrant and the issuance of Common Stock upon conversion of the
Preferred Stock will be exempt from the registration requirements of the
Securities Act, and are exempt from the qualification requirements of any
applicable state securities laws; and neither the Company nor anyone acting on
its behalf will take any action hereafter that would cause the loss of such
exemptions.
18.4 Stock Issuance. Upon exercise of the Warrant, the Company will use
its best efforts to cause stock certificates representing the shares of
Preferred Stock purchased pursuant to the exercise to be issued in the
individual names of Holder, its nominees or assignees, as appropriate at the
time of such exercise. Upon conversion of the shares of Preferred Stock to
shares of Common Stock, the Company will issue the Common Stock in the
individual names of Holder, its nominees or assignees, as appropriate.
18.5 Articles and By-Laws. The Company has provided Holder with true and
complete copies of the Company's Articles or Certificate of Incorporation,
By-Laws, and each Certificate of Determination or other charter document
setting, forth any rights, preferences and privileges of Company's capital
stock, each as amended and in effect on the date of issuance of this Warrant.
18.6 Conversion of Preferred Stock. As of the date hereof, each share of
the Preferred Stock is convertible into one and one-half (1.50) shares of the
Common Stock.
18.7 Financial and Other Reports. From time to time up to the earlier of
the Expiration Date or the complete exercise of this Warrant, the Company shall
furnish to Holder (i) within 120 days after the close of each fiscal year of
the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; (ii) within 45 days after the close
of each fiscal quarter of the Company, an unaudited balance sheet and statement
of cash flows at and as of the end of such quarter, together with an unaudited
statement of income for such quarter; and (iii) promptly after sending, making
available, or filing, copies of all reports, proxy statements, and financial
statements that the Company sends or makes available to its shareholders and
all registration statements and reports that the Company files with the SEC or
any other governmental or regulatory authority.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this 30 day of September,
1997.
JUNIPER NETWORKS, INC.
By: /s/ Marcel Gani
--------------------------
Title: CFO
-----------------------
9
<PAGE> 1
EXHIBIT 4.5
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ARE "RESTRICTED
SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (i) IN
CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR (iii) PURSUANT TO AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR COMPLIANCE IS
NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.
WARRANT TO PURCHASE A MAXIMUM OF
3,135 SHARES OF SERIES C PREFERRED STOCK OF
JUNIPER NETWORKS, INC.
(Void after December 15, 2003)
This certifies that VENTURE LENDING & LEASING, INC., a Maryland
corporation, or assigns (the "Holder"), for value received, is entitled to
purchase from Juniper Networks, Inc. a California corporation (the "Company"),
Three Thousand One Hundred Thirty-five (3,135) fully paid and nonassessable
shares of the Company's Series C Preferred Stock ("Preferred Stock") for cash
at a price of Eight and 93/100 Dollars ($8.93) per share (the "Stock Purchase
Price") at any time or from time to time up to and including 5:00 p.m. (Pacific
time) on December 15, 2003 (the "Expiration Date"), upon surrender to the
Company at its principal office at 385 Ravendale Drive, Mountain View,
California 94043 (or at such other location as the Company may advise Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and upon payment in cash or by check
of the aggregate Stock Purchase Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions hereof.
The Stock Purchase Price and the number of shares purchasable hereunder are
subject to adjustment as provided in Section 4 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
(a) Unless an election is made pursuant to clause (b) of this Section
1, this Warrant shall be exercisable at the option of the Holder, at any time or
from time to time, on or before the Expiration Date for all or any portion of
the shares of Preferred Stock (but not for a fraction of a share) which may be
purchased hereunder for the Stock Purchase Price multiplied by the number of
shares to be purchased. In the event, however, that pursuant to the Company's
Articles of Incorporation, as amended, an event causing automatic conversion of
the Company's Preferred Stock shall have occurred prior to the exercise of this
Warrant, in whole or in part, then this Warrant shall be exercisable for the
number of shares of Common Stock of the Company into which the Preferred Stock
not purchased upon any prior exercise of the Warrant would have been so
converted (and, where the context requires, reference to "Preferred Stock" shall
be deemed to include such Common Stock). The Company agrees that the shares of
Preferred Stock purchased under this Warrant shall be and are deemed to be
issued to the holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for such shares. Subject to the provisions of Section 2,
certificates for the shares of
<PAGE> 2
Preferred Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised.
Except as provided in clause (b) of this Section 1, in case of a purchase of
less than all the shares which may be purchased under this Warrant, the Company
shall cancel this Warrant and execute and deliver a new Warrant or Warrants of
like tenor for the balance of the shares purchasable under the Warrant
surrendered upon such purchase to the Holder hereof within a reasonable time.
Each stock certificate so delivered shall be in such denominations of Preferred
Stock as may be requested by the Holder hereof and shall be registered in the
name of such Holder or such other name as shall be designated by such Holder,
subject to the limitations contained in Section 2.
(b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect,
at any time on or before the Expiration Date, to receive that number of shares
of Preferred Stock equal to the quotient of: (i) the difference between (A) the
Per Share Price (as hereinafter defined) of the Preferred Stock, less (B) the
Stock Purchase Price then in effect, multiplied by the number of shares of
Preferred Stock the Holder would otherwise have been entitled to purchase
hereunder pursuant to clause (a) of this Section 1 (or such lesser number of
shares as the Holder may designate in the case of a partial exercise of this
Warrant); over (ii) the Per Share Price.
(c) For purposes of clause (b) of this Section 1, "Per Share Price"
means: (i) if the Company's Common Stock is then listed or admitted to trading
on any national securities exchange or traded on any national market system,
the average of the closing bid and asked prices of the Company's Common Stock
as reported on such exchange or market system for the ten (10) consecutive
trading days prior to the date of the Holder's election to convert hereunder;
(ii) if this Warrant is being converted in conjunction with a public offering
of stock, the price to the public per share pursuant to the offering; or (iii)
if no shares of the Company's Common Stock are listed or admitted to trading on
any national securities exchange or traded on any national market system, the
price per share which the Company would obtain from a willing buyer for shares
sold by the Company from authorized but unissued shares as such price shall be
determined in good faith by the Company's Board of Directors.
2. Limitation on Transfer.
(a) The Warrant and the Preferred Stock shall not be transferable
except upon the conditions specified in this Section 2, which conditions are
intended to insure compliance with the provisions of the Securities Act. Each
holder of this Warrant or the Preferred Stock issuable hereunder will cause any
proposed transferee of the Warrant or Preferred Stock to agree to take and hold
such securities subject to the provisions and upon the conditions specified in
this Section 2.
(b) Each certificate representing (i) this Warrant, (ii) the
Preferred Stock, (iii) shares of the Company's Common Stock issued upon
conversion of the Preferred Stock and (iv) any other securities issued in
respect of the Preferred Stock or Common Stock issued upon conversion of the
Preferred Stock upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of this Section 2 or unless such securities have been registered
under the Securities Act or sold under Rule 144) be stamped or otherwise
imprinted with a legend substantially in the following form set forth on the
first page of this Warrant.
2
<PAGE> 3
(c) The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer the Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the
Securities Act relating to the disposition of securities), or (iii) an opinion
of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available.
3. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all shares of Preferred Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Preferred Stock, or other securities and property, when and as
required to provide for the exercise of the rights represented by this Warrant.
The Company will take all such action as may be necessary to assure that such
shares of Preferred Stock may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the Preferred Stock may be listed. The Company
will not take any action which would result in any adjustment of the Stock
Purchase Price (as defined in Section 4 hereof) (i) if the total number of
shares of Preferred Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Preferred Stock then
outstanding and all shares of Preferred Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Preferred Stock then
authorized by the Company's Articles of Incorporation, or (ii) if the total
number of shares of Common Stock issuable after such action upon the conversion
of all such shares of Preferred Stock together with all shares of Common Stock
then outstanding and then issuable upon exercise of all options and upon the
conversion of all convertible securities then outstanding would exceed the
total number of shares of Common Stock then authorized by the Company's
Articles of Incorporation.
4. Adjustment of Stock Purchase Price Number of Shares. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the
number of shares obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Stock Purchase Price resulting from such adjustment.
4.1 Subdivision or Combination of Stock. In case the Company shall
at any time subdivide its outstanding shares of Preferred Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Preferred Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
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<PAGE> 4
4.2 Dividends in Preferred Stock, Other Stock, Property,
Reclassification. If at any time or from time to time the holders of Preferred
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to
receive, without payment therefor,
(a) Preferred Stock, or any shares of stock or other securities
whether or not such securities are at any time directly or indirectly
convertible into or exchangeable for Preferred Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution, or
(b) any cash paid or payable otherwise than as a cash dividend,
or
(c) Preferred Stock or other additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than shares of Preferred Stock issued as a stock split, adjustments in
respect of which shall be covered by the terms of Section 4.1 above), then and
in each such case, the Holder hereof shall, upon the exercise of this Warrant,
be entitled to receive, in addition to the number of shares of Preferred Stock
receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property (including
cash in the cases referred to in clauses (b) and (c) above) which such Holder
would hold on the date of such exercise had he been the holder of record of
such Preferred Stock as of the date on which holders of Preferred Stock
received or became entitled to receive such shares and/or all other additional
stock and other securities and property.
4.3 Reorganization, Reclassification, Consolidation, Merger or Sale.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, shall be
effected in such a way that holders of Preferred Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Preferred
Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions shall be made
whereby the holder hereof shall thereafter have the right to purchase and
receive (in lieu of the shares of the Preferred Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby) such shares of stock, securities or assets as may be issued
or payable with respect to or in exchange for a number of outstanding shares of
such Preferred Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby. In any such case, appropriate provision shall be made with
respect to the rights and interests of the holder of this Warrant to the end
that the provisions hereof (including, without limitation, provision for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be possible, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof. The
Company will not effect any such consolidation, merger or sale unless, prior to
the consummation thereof, the successor corporation (if other than the Company)
resulting from such consolidation or the corporation purchasing such assets
shall assume by written instrument, executed and mailed or delivered to the
registered Holder hereof at the last address of such Holder appearing on the
books of the Company, the obligation to deliver to such Holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to purchase.
4
<PAGE> 5
4.4 Sale or Issuance Below Purchase Price. If the Company shall at
any time or from time to time issue or sell any of its Common Stock, Preferred
Stock, options to acquire (or rights to acquire such options), or any other
securities convertible into or exercisable for Common Stock, for a consideration
per share less than the Stock Purchase Price in effect immediately prior to the
time of such issue or sale, the Stock Purchase Price then in effect and then
applicable for any subsequent period or periods shall be adjusted to a price
determined by dividing (i) an amount equal to the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issue or sale
multiplied by the Stock Purchase Price then in effect and (y) the consideration,
if any, received by the Company upon such issue or sale, by (ii) the total
number of shares of Common Stock outstanding immediately after such issue or
sale. For purposes of this Section 4.4, all shares of Common Stock issued or
issuable (i) upon conversion of the Preferred Stock into Common Stock; (ii) upon
exercise of options to officers, directors and employees of and consultants to,
the corporation pursuant to plans, arrangements or agreements approved by the
Board; (iii) as a dividend or distribution on Preferred Stock or Common Stock or
any event for which adjustment is made; or (iv) upon exercise of any warrants to
purchase shares of Common Stock or Preferred Stock convertible into shares of
Common Stock in conjunction with equipment leases or other commercial financing
transactions approved by the Board, shall be deemed to be outstanding. The
foregoing notwithstanding, no adjustment shall be made pursuant to this Section
4.4 on account of a given sale to the extent that (a) the Stock Purchase Price
is adjusted pursuant to any other Section of this Warrant or (b) the conversion
price of the Preferred Stock is decreased pursuant to the terms thereof.
4.5 Notice of Adjustment. Upon any adjustment of the stock Purchase
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company. The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4.6 Other Notices. If at any time:
(a) the Company shall declare any cash dividend upon its
Preferred Stock;
(b) the Company shall declare any dividend upon its Preferred
Stock payable in stock or make any special dividend or other distribution to
the holders of its Preferred Stock;
(c) the Company shall offer for subscription pro rata to the
holders of its Preferred Stock any additional shares of stock of any class or
other rights;
(d) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with, or sale of all or substantially all of its assets
to, another corporation;
(e) there will be a voluntary dissolution, liquidation or
winding-up of the Company; or
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<PAGE> 6
(f) the Company shall take or propose to take any other action,
notice of which is actually provided to holders of the Preferred Stock;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company, (i) at least 20 day's
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action, at least 20 day's written notice of the date when
the same shall take place. Any notice given in accordance with the foregoing
clause (i) shall also specify, in the case of any such dividend, distribution
or subscription rights, the date on which the holders of Preferred Stock shall
be entitled thereto. Any notice given in accordance with the foregoing clause
(ii) shall also specify the date on which the holders of Preferred Stock shall
be entitled to exchange their Preferred Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, or other action as the case may
be.
4.7 Certain Events. If any change in the outstanding Preferred Stock
of the Company or any other event occurs as to which the other provisions of
this Section 4 are not strictly applicable or if strictly applicable would not
fairly protect the purchase rights of the Holder of the Warrant in accordance
with the essential intent and principles of such provisions, then the Board of
Directors of the Company shall make an adjustment in the number and class of
shares available under the Warrant, the Stock Purchase Price and/or the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights as aforesaid. The adjustment
shall be such as will give the Holder of the Warrant upon exercise for the same
aggregate Stock Purchase Price the total number, class and kind of shares as he
would have owned had the Warrant been exercised prior to the event and had he
continued to hold such shares until after the event requiring adjustment.
5. Issue Tax. The issuance of certificates for shares of Preferred Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
6. Closing of Books. The Company will at no time close its transfer books
against the transfer of any Warrant or of any shares of Preferred Stock issued
or issuable upon the exercise of any warrant in any manner which interferes
with the timely exercise of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a shareholder in respect of meetings
of shareholders for the election of directors of the Company or any other
matters or any rights whatsoever as a shareholder of the Company. No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised,. No provisions
hereof, in the absence of affirmative action by the holder to purchase shares
of Preferred Stock, and no mere enumeration herein of the
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<PAGE> 7
rights or privileges of the Holder hereof, shall give rise to any liability of
such Holder for the Stock Purchase Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.
8. [Intentionally omitted]
9. Registration Rights. The Holder hereof shall be entitled, with respect
to the shares of Preferred Stock issued upon exercise hereof or the shares of
Common Stock or other securities issued upon conversion of such Preferred Stock
as the case may be, to all of the registration rights set forth in the First
Amended Registration Rights Agreement dated as of August 5, 1996 to the same
extent and or the same terms and conditions as possessed by the Series C
Holders thereunder. The Company shall take such action as may be reasonably
necessary to assure that the granting of such registration rights to the Holder
does not violate the provisions of such agreement or any of the Company's
charter documents or rights of prior grantees of registration rights.
10. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Preferred Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
11. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
12. Notices. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be deemed to
have been given (i) upon receipt if delivered personally or by courier (ii)
upon confirmation of receipt if by telecopy or (iii) three business days after
deposit in the United States mail, with postage prepaid and certified or
registered, to each such holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor in the first
paragraph of this Warrant.
13. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Preferred Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assign of the holder hereof. The Company will, at the time of the
exercise of this Warrant, in whole or in part, upon request of the Holder hereof
but at the Company's expense, acknowledge in writing its continuing obligation
to the Holder hereof in respect of any rights (including, without limitation,
any right to registration of the shares of Common Stock) to which the holder
hereof shall continue to be entitled after such exercise in accordance with this
Warrant; provided, that the failure of the holder hereof to make any such
request shall not affect the continuing obligation of the Company to the Holder
hereof in respect of such rights.
14. Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California.
15. Lost Warrants or Stock Certificates. The Company represents and
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
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<PAGE> 8
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
16. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
17. Representations of Holder. With respect to this Warrant, Holder
represents and warrants to the Company as follows:
17.1 Experience. It is experienced in evaluating and investing in
companies engaged in businesses similar to that of the Company; it understands
that investment in the Warrant involves substantial risks; it has made detailed
inquiries concerning the Company, its business and services, its officers and
its personnel; the officers of the Company have made available to Holder any and
all written information it has requested; the officers of the Company have
answered to Holder's satisfaction all inquiries made by it; in making this
investment it has relied upon information made available to it by the Company;
and it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of investment in the Company
and it is able to bear the economic risk of that investment.
17.2 Investment. It is acquiring the Warrant for investment for its
own account and not with a view to, or for resale in connection with, any
distribution thereof. It understands that the Warrant, the shares of Preferred
Stock issuable upon exercise thereof and the shares of Common Stock issuable
upon conversion of the Preferred Stock, have not been registered under the
Securities Act of 1933, as amended, nor qualified under applicable state
securities laws.
17.3 Rule 144. It acknowledges that the Warrant, the Preferred Stock
and the Common Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. It has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act.
17.4 Access to Data. It has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and has had the opportunity to inspect the Company's facilities.
18. Additional Representations and Covenants of the Company. The Company
hereby represents, warrants and agrees as follows:
18.1 Corporate Power. The Company has all requisite corporate power
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
18.2 Authorization. All corporate action on the part of the Company,
its directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken. This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.
18.3 Offering. Subject in part to the truth and accuracy of Holder's
representations set forth in Section 17 hereof, the offer, issuance and sale of
the Warrant is, and the issuance of Preferred Stock upon exercise
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<PAGE> 9
of the Warrant and the issuance of Common Stock upon conversion of the
Preferred Stock will be exempt from the registration requirements of the
Securities Act, and are exempt from the qualification requirements of any
applicable state securities laws; and neither the Company nor anyone acting on
its behalf will take any action hereafter that would cause the loss of such
exemptions.
18.4 Stock Issuance. Upon exercise of the Warrant, the Company will use
its best efforts to cause stock certificates representing the shares of
Preferred Stock purchased pursuant to the exercise to be issued in the
individual names of Holder, its nominees or assignees, as appropriate at the
time of such exercise. Upon conversion of the shares of Preferred Stock to
shares of Common Stock, the Company will issue the Common Stock in the
individual names of Holder, its nominees or assignees, as appropriate.
18.5 Articles and By-Laws. The Company has provided Holder with true and
complete copies of the Company's Articles or Certificate of Incorporation,
By-Laws, and each Certificate of Determination or other charter document
setting forth any rights, preferences and privileges of Company's capital
stock, each as amended and in effect on the date of issuance of this Warrant.
18.6 Conversion of Preferred Stock. As of the date hereof, each share of
the Preferred Stock is convertible into one and one-half (1.50) shares of the
Common Stock.
18.7 Financial and Other Reports. From time to time up to the earlier of
the Expiration Date or the complete exercise of this Warrant, the Company shall
furnish to Holder (i) within 120 days after the close of each fiscal year of
the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; (ii) within 45 days after the close
of each fiscal quarter of the Company, an unaudited balance sheet and statement
of cash flows at and as of the end of such quarter, together with an unaudited
statement of income for such quarter; and (iii) promptly after sending, making
available, or filing, copies of all reports, proxy statements, and financial
statements that the Company sends or makes available to its shareholders and
all registration statements and reports that the Company files with the SEC or
any other governmental or regulatory authority.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this 30 day of September,
1997.
JUNIPER NETWORKS, INC.
By: /s/ Marcel Gani
------------------------------------
TITLE: CFO
---------------------------------
9
<PAGE> 1
EXHIBIT 4.6
JUNIPER NETWORKS, INC.
THIRD AMENDED REGISTRATION RIGHTS AGREEMENT
This Third Amended Registration Rights Agreement is made as of MARCH 9,
1999 (the "Agreement") by and between Juniper Networks, Inc., a Delaware
corporation having its principal executive offices at 385 Ravendale Drive,
Mountain View, CA 94043 (the "Company") and the persons and entities (the
"Series A Holders") listed on Exhibit A to that certain Series A Preferred and
Common Stock Purchase Agreement dated June 11, 1996 (the "Series A Agreement"),
the persons and entities ("Series B Holders") listed on Exhibit A to that
certain Series B Preferred Stock Purchase Agreement dated August 5, 1996 and
November 8, 1996, and the holder of the Warrant issued in connection with an
equipment lease (the "Series B Agreements") and the persons and entities (the
"Series C Holders") listed on Exhibit A to that certain Series C Preferred Stock
Purchase Agreement dated July 1,1997 and September 30, 1997, and the persons and
entities (the "Series D and Series D1 Holders") listed on Exhibit A to that
certain Series D and Series D1 Preferred Stock Purchase Agreement dated as of
the date hereof (the "Series D and Series D1 Agreement" and together with the
Series A Agreement, Series B Agreement and Series C Agreement, the "Purchase
Agreements") (collectively the "Holders"), all such Holders being listed on
Exhibit A attached hereto with the number of shares of the Company owned by each
set forth opposite their name thereon. This Agreement amends in its entirety and
supersedes in all respects the Second Amended Registration Rights Agreement
dated July 1, 1997 between the Company and the Series A Holders, Series B
Holders and Series C Holders (the "Second Amended Registration Rights
Agreement").
WHEREAS, the Company granted the Series A Holders, Series B Holders and
Series C Holders certain registration rights pursuant to the Second Amended
Registration Rights Agreement which superseded and replaced in its entirety the
First Amended Registration Rights Agreement dated July 1, 1997; and
WHEREAS, the Company has agreed to grant the Series D and Series D1
Holder certain registration rights on a pari passu basis with the rights granted
to the Series A Holders, Series B Holders and Series C Holders under the Second
Amended Registration Rights Agreement which rights are being granted pursuant to
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
SECTION 1
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
<PAGE> 2
"Conversion Stock" shall mean the Common Stock issued or issuable
pursuant to conversion of the Series A Preferred (as defined in this Section
1.1), Series B Preferred (as defined in this Section 1.1), Series C Preferred
(as defined in this Section 1.1) or Series D and Series D1 Preferred (as defined
in this Section 1.1).
"Holders" shall mean any person who purchased shares of the
Company's Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred or Series D1 Preferred or any person holding Registrable Securities to
whom the rights under this Section 1 have been transferred in accordance with
Section 1.11 hereof.
"Initiating Holders" shall mean the Holders or transferees of the
Holders under Section 1.11 hereof who, in the aggregate, are Holders of at least
40% of the Registrable Securities.
"Registrable Securities" means (i) the Conversion Stock, (ii) the
Common Stock issued to the Holders pursuant to the Series A Agreement (the
"Purchased Common Stock") and (iii) any Common Stock of the Company issued or
issuable in respect of the Purchased Common Stock or the Conversion Stock or
other securities issued or issuable pursuant to the conversion of the Series A
Preferred, the Series B Preferred, the Series C Preferred, the Series D
Preferred or Series D1 Preferred or upon any stock split, stock dividend,
recapitalization or similar event, or any Common Stock otherwise issued or
issuable with respect to the Purchased Common Stock or the Series A Preferred or
Series B Preferred or Series C Preferred or Series D Preferred or Series D1
Preferred; provided, however, that shares of Common Stock or other securities
shall no longer be treated as Registrable Securities if (A) they have been sold
to or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, (B) they have been sold in a transaction exempt
from the registration and prospectus delivery requirements of the Securities Act
so that all transfer restrictions and restrictive legends with respect thereto
are removed upon consummation of such sale, (C) in the case of a Holder who then
holds less than one percent (1%) of the then outstanding Common Stock
(determined on the basis of assumed conversion of all securities convertible
into Common Stock), the shares are available for sale, in the opinion of counsel
to the Company, without compliance with the registration and prospectus delivery
requirements of the Securities Act so that all transfer restrictions and
restrictive legends with respect thereto may be removed upon the consummation of
such sale, or (D) they may be sold under Rule 144 (excluding 144A) of the
Securities Act (as defined below) within a three month period.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Sections 1.2, 1.3 and 1.4 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, normal audit expenses (but not including the expense of any
special audits incident to or required by any such registration where the
Company is not registering any of its securities, excluding the compensation of
regular employees of the Company which shall be paid in any event by the
Company) and the reasonable fees and disbursements of one counsel for all
Holders.
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<PAGE> 3
"Restricted Securities" shall mean the securities of the Company
required to bear the legends set forth in Section 8.2 of the Series A Agreement
and Series B Agreement, and Section 9.2 of the Series C Agreement and Series D
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders.
"Series A Preferred" shall mean the Series A Preferred Stock
issued pursuant to the Series A Agreement.
"Series B Preferred" shall mean the Series B Preferred Stock
issued pursuant to the Series B Agreement and the Series B Preferred Stock
issued pursuant to the exercise of the Warrant.
"Series C Preferred" shall mean the Series C Preferred Stock
issued pursuant to the Series C Agreement.
"Series D Preferred" shall mean the Series D Preferred Stock
issued pursuant to the Series D and Series D1 Agreement.
"Series D1 Preferred" shall mean the Series D1 Preferred Stock
issued pursuant to the Series D and Series D1 Agreement.
"Warrants" shall mean the warrant to purchase 93,333 shares of
Series B Preferred Stock and the warrant to purchase 23,516 shares of Series C
Preferred Stock.
1.2 REQUESTED REGISTRATION.
(a) Request for Registration. In case the Company shall receive
from Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to not less than 20% of
the shares of Registrable Securities then held by such Initiating Holders (or
any lesser percentage if the reasonably anticipated aggregate price to the
public of such shares, net of underwriting discounts and commissions, would
exceed $10,000,000), the Company will:
(i)promptly give written notice of the proposed
registration, qualification or compliance to all other Holders and
(ii) as soon as practicable, use its best efforts to
effect such registration, qualification or compliance (including, without
limitation, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental requirements or regulations)
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
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<PAGE> 4
Registrable Securities of any Holder or Holders joining in such request as are
specified in a written request received by the Company within 20 days after
receipt of such written notice from the Company;
Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 1.2:
(A) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(B) (x) Prior to the earlier of June 30, 2002 or
within twelve months after the effective date of the Company's initial
registration statement relating to an underwritten public offering of the
Company's securities filed under the Securities Act; or (y) Within six months
after the effective date of any other registration statement relating to an
underwritten public offering of the Company's securities filed under the
Securities Act;
(C) After the Company has effected one such
registration pursuant to this subparagraph 1.2(a), and such registration has
been declared or ordered effective; or
(D) If the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its shareholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 1.2 shall be deferred for a period not to
exceed 180 days from the date of receipt of written request from the Initiating
Holders; provided, however, that the Company shall not exercise such right more
than once in any twelve month period.
Subject to the foregoing clauses (A) through (D), the Company shall file
a registration statement covering the Registrable Securities so requested to be
registered as soon as practicable, after receipt of the request or requests of
the Initiating Holders.
(b) Underwriting. If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as part of their request made pursuant to
Section 1.2 hereof and the Company shall include such information in the written
notice referred to in Section 1.2(a)(i) above. In such event, the right of any
Holder to registration pursuant to Section 1.2 shall be conditioned upon such
Holder's participation in the underwriting arrangements required by this Section
1.2, and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent requested shall be limited to the extent provided
herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by a majority in interest of the Initiating Holders, but subject to the
Company's reasonable approval. Notwithstanding any other provision of this
Section
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<PAGE> 5
1.2, if the managing underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable Securities to
be included in such offering. The Company shall so advise all Holders of
Registrable Securities and the number of shares of Registrable Securities that
may be included in the registration and underwriting shall be allocated among
all Holders thereof in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities held by such Holders at the time of filing the
registration statement. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to 180 days after the effective date
of such registration, or such other shorter period of time as the underwriters
may reasonably require.
If the underwriter has not limited the number of Registrable Securities
to be underwritten, the Company may include securities for its own account or
the account of others in such registration if the underwriter so agrees and the
number of Registrable Securities which would otherwise have been included in
such registration and underwriting will not thereby be limited.
1.3 COMPANY REGISTRATION.
(a) Notice of Registration. If at any time or from time to time
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, (ii) a registration
relating solely to a Commission Rule 145 transaction, and (iii) the Company's
initial registration statement filed in connection with a firm commitment
underwritten public offering filed with the Commission pursuant to the
Securities Act, the Company will:
(i) promptly give to each Holder written notice
thereof, and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 20 days after receipt of such written notice from the
Company by any Holder.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.3(a)(i). In such event the right of any Holder to
registration pursuant to Section 1.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein.
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<PAGE> 6
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this Section 1.3, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities to be included in such registration. In such event, the
managing underwriter shall first limit or exclude up to all of the securities of
holders (other than Holders) proposing to distribute their securities through
such underwriting to be included in such registration and may thereafter limit
or exclude up to all of the Registrable Securities to be included in such
registration. The foregoing sentence notwithstanding, following the first such
registration, the managing underwriter may limit the number of shares to be
underwritten to not less than thirty (30%) of the shares included in the
registration even if as a result the numbers of shares of securities offered by
the Company is reduced. The Company shall so advise all Holders and other
holders distributing their securities through such underwriting and the number
of shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated first among all Holders and thereafter to other
holders, all such allocations being made in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities and Common
Stock held by such Holders and other holders at the time of filing the
registration statement. To facilitate the allocation of shares in accordance
with the above provisions, the Company may round the number of shares allocated
to any Holder or holder to the nearest 100 shares.
If any Holder or holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 180 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
1.4 REGISTRATION ON FORM S-3.
(a) If any Holder or Holders request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of shares of the Registrable Securities, the reasonably
anticipated aggregate price to the public of which would exceed $5,000,000, and
the Company is a registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall use its best efforts to cause
such Registrable Securities to be registered for the offering on such form;
provided, however, that the Company shall not be required to effect more than
one registration pursuant to this Section 1.4 in any 12-month period and not
more than a total of three such registrations. The Company will (i) promptly
give written notice of the proposed registration to all other Holders and (ii)
as soon as practicable, use its best efforts to effect such registration
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue
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<PAGE> 7
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder of Holders joining in such request
as are specified in a written request received by the Company within 20 days
after receipt of such written notice from the Company. The substantive
provisions of Section 1.2(b) shall be applicable to each registration initiated
under this Section 1.4.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 1.4 (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act; (ii) if the Company, within
ten days of the receipt of the request of the Initiating Holders, gives notice
of its bona fide intention to effect the filing of a registration statement with
the Commission within 90 days of receipt of such request (other than with
respect to a registration statement relating to a Rule 145 transaction or an
offering solely to employees); (iii) within twelve months after the effective
date of a registration statement relating to an underwritten public offering of
the Company's securities filed under the Securities Act or (iv) if the Company
shall furnish to such Holder a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors it
would be seriously detrimental to the Company or its shareholders for
registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall be
deferred for a period not to exceed 180 days from the receipt of the request to
file such registration by such Holder; provided, however, that the Company will
not exercise such right more than once in any twelve month period.
1.5 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
Closing Date, the Company shall not enter into any agreement granting any holder
or prospective holder of any securities of the Company registration rights with
respect to such securities unless (i) such new registration rights, including
standoff obligations, are on a pari passu basis with those rights of the Holders
hereunder or (ii) such new registration rights, including standoff obligations,
are subordinate to the registration rights granted Holders hereunder.
1.6 EXPENSES OF REGISTRATION.
(a) All Registration Expenses incurred in connection with (i) the
registration pursuant to Section 1.2, and (ii) all registrations pursuant to
Section 1.3, shall be borne by the Company. Unless otherwise stated, all Selling
Expenses relating to securities registered on behalf of the Holders and all
other Registration Expenses shall be borne by the Holders of such securities pro
rata on the basis of the number of shares so registered.
(b) All Registration Expenses and Selling Expenses incurred in
connection with registrations pursuant to Section 1.4 shall be borne pro rata by
the Holder or Holders requesting the registration on Form S-3 according to the
number of Registrable Securities included in such registration.
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<PAGE> 8
(c) The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Section 1.2, the request for which is
subsequently withdrawn by the Initiating Holders for reasons other than a
material adverse change in the business or financial condition of the Company
occurring prior to the effectiveness of such registration statement, in which
case, such expenses shall be borne by the Holders of Registrable Securities
requesting such withdrawal, pro rata on the basis of the number of shares of
Registrable Securities so included in the registration request unless the
Holders of a majority of Registrable Securities agree to forfeit their right to
one requested registration pursuant to Section 1.2 in which event such right
shall be forfeited by all Holders.
1.7 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its diligent best efforts to
cause such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for up to 90 days or until the Holder
or Holders have completed the distribution relating thereto provided however,
that such ninety (90) day period shall be extended for a period of time equal to
the period the Holder refrains from selling any securities included in such
registration at the request of an underwriter.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
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<PAGE> 9
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Section 1, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as it customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
1.8 INDEMNIFICATION.
(a) To the extent permitted by law, the Company will indemnify
each Holder, each of its officers and directors and partners, and each person
controlling such Holder, within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company in connection
with any such registration, qualification or compliance, and the Company will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, as such expenses are incurred, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the
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<PAGE> 10
Company by an instrument duly executed by such Holder, controlling person or
underwriter and stated to be specifically for use therein.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of its
officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, as such expenses are incurred, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
each Holder under this subsection (b) shall be limited in an amount equal to the
public offering price of the shares sold by such Holder, unless such liability
arises out of or is based on willful misconduct by such Holder.
(c) Each party entitled to indemnification under this Section 1.8
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnified Party shall consent to entry of any judgment or enter
into any settlement without the consent of each Indemnifying Party, which
consent shall not be unreasonably withheld.
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<PAGE> 11
(d) If the indemnification provided for in this Section 1.8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other on
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
1.9 INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this Section
1.
1.10 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, after such
time as a public market exists for the Common Stock of the Company, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended.
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended (at any time after it has become
subject to such reporting requirements).
(c) So long as a Holder owns any Restricted Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the Securities Exchange Act of 1934 (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the
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<PAGE> 12
possession of or reasonably obtainable by the Company as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
a Holder to sell any such securities without registration.
1.11 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company to
register securities granted Holders under Sections 1.2, 1.3 and 1.4 may be
assigned to a transferee or assignee reasonably acceptable to the Company in
connection with any transfer or assignment of Registrable Securities by a Holder
provided that: (i) such transfer may otherwise be effected in accordance with
applicable securities laws and (ii) such assignee or transferee acquires at
least 1,125,000 shares of Registrable Securities (appropriately adjusted for
stock splits, combinations, recapitalizations and the like effected after the
date hereof). Notwithstanding the foregoing, the rights to cause the Company to
register securities may be assigned to (A) any constituent partner, or retired
partner, or to the estate of any of its partners or retired partners of a Holder
or (B) to any wholly-owned (direct or indirect) subsidiary of the ultimate
parent company of a Holder that is a corporation, without compliance with item
(ii) above, provided written notice thereof is promptly given to the Company.
1.12 STANDOFF AGREEMENT. Each Holder agrees in connection with a public
offering of the Company's securities that, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be reasonably
requested by the underwriters, provided that the executive officers and
directors of the Company and any of their Affiliates (within the meaning of Rule
405 under the Securities Act) who own securities of the Company also agree to
such restrictions. The shares held by all constituent partners of any entity
holding registration rights hereunder shall be bound by this standoff agreement.
1.13 HOLDERS WHO MAY SELL. The rights to cause the Company to register
securities granted to Holders under Sections 1.2, 1.3 and 1.4 shall terminate
with regard to any Holders who can sell shares under Rule 144 (excluding 144A)
within a three month period.
SECTION 2
RIGHTS OF FIRST REFUSAL
2.1 COMPANY RIGHT OF FIRST REFUSAL. In the event that any Holder (a
"Selling Shareholder") proposes to sell, transfer or otherwise dispose of or
pledge, grant a security interest in or otherwise encumber (a "Transfer") any
Registrable Securities (the "Transfer Shares"), owned as of the date hereof or
hereafter acquired by such Selling Shareholder, to any proposed purchaser or
transferee (each a "Transferee"), the Selling Shareholder shall first offer to
the Company and the Company or its designee shall have a right to purchase up to
all of such Transfer Shares (the "Company Right of First Refusal") on the terms
and conditions described below, subject to the provision of Section 202 of the
Delaware General Corporation Law. In the event that the Company's Board of
Directors determines, in its sole discretion, that the Company is prohibited by
law or by
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<PAGE> 13
contract from exercising the Company Right of First Refusal, the Company may
specify in the Company Election Notice (as defined below) another individual or
entity as its designee to purchase such Transfer Shares upon the exercise of the
Company Right of First Refusal; provided, however, that the designation of
another person or entity to purchase such Transfer Shares pursuant to this
Section 2.2(d) shall constitute a legally binding obligation of the Company to
complete such purchase if its designee shall fail to do so.
2.2 PROCEDURE.
(a) Each Selling Shareholder shall deliver a notice (the
"Transfer Notice") to the Company, stating (i) such Selling Shareholder's bona
fide intention to Transfer the Transfer Shares, (ii) the number of Transfer
Shares to be transferred, (iii) the price and material terms and conditions upon
which the proposed Transfer is to be made, and (iv) the identity of the
Transferee. The Transfer Notice shall include a copy of any written proposal or
letter of intent or other agreement relating to the proposed Transfer.
(b) The Company or its designee shall indicate to the Selling
Shareholder in writing (the "Company Election Notice") whether it elects to
purchase any or all of the Shares to which the Transfer Notice refers at the
price per share and on the terms and conditions specified in the Transfer Notice
(i) within thirty (30) days after delivery of the Transfer Notice to the Company
if such Transfer Notice is delivered prior to the closing of the Initial Public
Offering or (ii) within ten (10) days after delivery of the Transfer Notice to
the Company if such Transfer Notice is delivered after the closing of the
Initial Public Offering.
(c) In the event the Company or its designee elects to acquire
Transfer Shares, out of funds legally available therefor, settlement thereof
shall be made in cash within sixty (60) days after receipt of the Transfer
Notice; provided, however, that if the terms of payment set forth in the
Transfer Notice were other than cash against delivery or promissory notes
payable over time, the Company or its designee shall pay in cash the fair market
value of such consideration as determined by an investment banking firm mutually
acceptable to the Selling Shareholder and the Company, which appraisal shall be
final and binding upon the parties.
2.3 TRANSFER OF SHARES UPON FAILURE TO EXERCISE RIGHTS OF FIRST REFUSAL.
In the event the Company or its assignee do not elect to acquire any of the
Transfer Shares, the Selling Shareholder may, not later than ninety (90) days
following expiration of the Company's time period within which to deliver the
Company Election Notice, conclude a Transfer of any or all of the Transfer
Shares covered by the Transfer Notice not purchased by the Company or its
assignee on terms and conditions not materially more favorable to the Transferee
than those described in the Transfer Notice. Any proposed Transfer on terms and
conditions materially more favorable to the Transferee than those described in
the Transfer Notice, as well as any subsequent proposed Transfer of any of the
Transfer Shares by the Selling Shareholder, shall again be subject to the
Company Right of First Refusal, and shall require compliance by the Selling
Shareholder with the procedures described in this Article 2.
2.4 EFFECT ON TRANSFEREE. The Company Right of First Refusal shall not
be binding upon any Transferee of Transfer Shares in a transaction which
complies with this Article 2 other
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<PAGE> 14
than (i) upon any other Holder acquiring Registrable Securities and (ii) any
securities acquired pursuant to Section 2.7(v)(B) .
2.5 TRANSFER NULL AND VOID. Any sale or transfer, or purported sale or
transfer, of securities of the Company shall be null and void unless the terms,
conditions, and provisions hereof are strictly observed and followed.
2.6 LEGENDS. The certificates representing shares of stock of the
Company owned by Holders shall bear on their face the following legend so long
as the foregoing right of first refusal remains in effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL IN FAVOR OF THE COMPANY AND/OR ITS
ASSIGNEE(S), AS PROVIDED IN AN AGREEMENT BETWEEN THE COMPANY AND
THE HOLDER OF THIS CERTIFICATE, WHICH IS AVAILABLE FOR REVIEW AT
THE COMPANY."
2.7 EXEMPTION FROM RIGHT OF FIRST REFUSAL. The following Transfers shall
be exempt from the provisions of this Right of First Refusal: (i) any Transfer
approved by the Company; (ii) any sale pursuant to a bonafide underwritten
public offering registered under the Securities Act; (iii) a transfer pursuant
to and in accordance with the terms of any merger or consolidation or pursuant
to a sale of all or substantially all of the stock or assets of the Company in
each case where the Company is acquired by another corporation; (iv) a sale into
any tender or exchange offer (A) which is made by or on behalf of the Company or
(B) which is made by another person or group and is not opposed by the Company's
Board of Directors; (v) transfers to (A) a general partner or limited partner of
a Holder or (B) any wholly-owned (direct or indirect) subsidiary of the ultimate
parent company of a Holder that is a corporation and which agrees in writing to
be bound by the provisions hereof, provided that in each case, the Company is
given written notice by the Holder promptly following such transfer of the name
and address of such transferee; or (vi) provided that the Holder first notifies
the Company in writing of such proposed sale, and the number of shares sold to
any one purchaser does not constitute a "block" within the meaning of Rule
10b-18(a)(14), any sale made in compliance with Rule 144 in a broker's
transaction within the meaning of Section 4(4) of the Act.
SECTION 3
MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the internal laws of the State of Delaware.
3.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
-14-
<PAGE> 15
3.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof, and no party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided, however, that holders of a majority of the Registrable Securities may,
with the Company's prior written consent, waive, modify or amend on behalf of
all holders, any provisions hereof.
3.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to any holder of any Registrable Securities, at such address as
such holder shall have furnished the Company in writing, or, until any such
holder so furnishes an address to the Company, then to and at the address of the
last holder of such shares who has so furnished an address to the Company or (b)
if to the Company, one copy should be sent to its address set forth above and
addressed to the attention of the Corporate Secretary, or at such other address
as the Company shall have furnished to the holders.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally or by messenger, or, if sent by mail, at the earlier of its
receipt or 144 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid.
3.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all parties to this
Agreement, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
3.6 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
3.7 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
-15-
<PAGE> 16
The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY"
JUNIPER NETWORKS, INC.
a Delaware corporation
By:
------------------------------------------
Scott Kriens, President
"HOLDERS"
Kleiner Perkins Caufield & Byers VII
By:
------------------------------------------
Title:
----------------------------------------
KPCB VII Founders Fund
By:
------------------------------------------
Title:
----------------------------------------
KPCB Information Sciences Zaibatsu Fund II
By:
------------------------------------------
Title:
----------------------------------------
WS Investments Company 96A
By:
------------------------------------------
Judith M. O'Brien, General Partner
[Signature Page Registration Rights Agreement]
<PAGE> 17
Benchmark Capital Partners, L.P.
By: Benchmark Capital Management Co., L.L.C.
By:
------------------------------------------
Member
Benchmark Founders' Fund, L.P.
By: Benchmark Capital Management Co., L.L.C.
By:
------------------------------------------
Member
New Enterprise Associates VI,
Limited Partnership
By: NEA Partners, VI, Limited Partnership
its General Partner
By:
------------------------------------------
General Partner
NEA Presidents Fund, L.P.
By: NEA General Partners, L.P
its General Partner
By:
------------------------------------------
General Partner
NEA Ventures 1996, L.P.
By:
------------------------------------------
Vice President
[Signature Page Registration Rights Agreement]
<PAGE> 18
Crosspoint Venture Partners 1996
By:
------------------------------------------
Title:
-----------------------------------------
Institutional Venture Partners VII, L.P.
By: its General Partner, Institutional
Venture Management VII
By:
------------------------------------------
General Partner
Institutional Venture Management VII, L.P.
By:
------------------------------------------
General Partner
IVP Founders Fund I, L.P.
By: its General Partner, Institutional
Venture Management VI
By:
------------------------------------------
General Partner
WS Investments Company 96B
By:
------------------------------------------
Judith M. O'Brien, General Partner
Larry W. Sonsini
By:
------------------------------------------
Larry W. Sonsini
[Signature Page Registration Rights Agreement]
<PAGE> 19
Bradford C. O'Brien and Judith Mayer
O'Brien, Trustees of the O'Brien Family
Trust
U/D/T dtd July 1, 1992
By:
------------------------------------------
Judith M. O'Brien, Trustee
McQuillan Consulting Self-Employed
Profit Sharing Plan
By:
------------------------------------------
John McQuillan, Trustee
Scott Kriens
By:
------------------------------------------
Scott Kriens
William Stensrud
By:
------------------------------------------
William Stensrud
Venture Lending & Leasing
By:
------------------------------------------
By:
------------------------------------------
----------------------------------------------
(print name of signatory)
----------------------------------------------
(title)
[Signature Page Registration Rights Agreement]
<PAGE> 20
3 Com Corporation
By:
------------------------------------------
----------------------------------------------
(print name of signatory)
----------------------------------------------
(title)
ERICSSON BUSINESS NETWORKS AB
By:
------------------------------------------
----------------------------------------------
(print name of signatory)
----------------------------------------------
(title)
Lucent Technologies, Inc.
By:
------------------------------------------
----------------------------------------------
(print name of signatory)
----------------------------------------------
(title)
[Signature Page Registration Rights Agreement]
<PAGE> 21
Newbridge Networks Corporation
By:
------------------------------------------
----------------------------------------------
(print name of signatory)
----------------------------------------------
(title)
NORTHERN TELECOM LIMITED
By:
------------------------------------------
Klaus M. Buechner
Senior Vice President, Corporate
Strategy
& Alliances
By:
------------------------------------------
Gordon Davis
Assistant Secretary
UUNET TECHNOLOGIES, INC.
By:
------------------------------------------
----------------------------------------------
(print name of signatory)
----------------------------------------------
(title)
AT&T VENTURE FUND II, L.P.
By:
------------------------------------------
Title:
-----------------------------------------
[Signature Page Registration Rights Agreement]
<PAGE> 22
ANSCHUTZ FAMILY INVESTMENT
COMPANY LLC
By:
------------------------------------------
Title:
-----------------------------------------
"SERIES D AND SERIES D1 HOLDER"
ERICSSON BUSINESS NETWORKS AB
By:
------------------------------------------
----------------------------------------------
(print name of signatory)
----------------------------------------------
(title)
[Signature Page Registration Rights Agreement]
<PAGE> 23
EXHIBIT A
<TABLE>
<CAPTION>
COMMON SERIES A SERIES B SERIES C SERIES D SERIES D1
NAME STOCK PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED
---- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Kleiner Perkins Caufield & Byers VII 2,441,666 1,513,834 304,688
KPCB Founders Fund VII 266,667 165,333
KPCB Information Sciences Zaibatsu Fund II 69,444 43,056 7,812
New Enterprise Associates VI, Limited
Partnership 1,214,583
NEA Presidents Fund, L.P. 31,250
NEA Ventures 1996, L.P. 4,167
Benchmark Capital Partners, L.P. 549,876
Benchmark Founders' Fund, L.P. 75,124
Crosspoint Venture Partners 1996 625,000
Institutional Venture Partners VII, L.P. 494,792
Institutional Venture Management VII, L.P. 18,229
IVP Founders Fund II, L.P. 7,813
WS Investments Company 96A 34,722 21,528
WS Investments Company 96B 8,334
Bradford C. O'Brien and 3,125
Judith Mayer O'Brien,
Trustees of the O'Brien Family Trust, U/T/A
dtd. 7/1/92
Larry W. Sonsini 3,125
McQuillan Consulting Self-Employed Profit 6,250
Sharing Plan
Scott Kriens 364,683
William Stensrud 120,000
Venture Lending and Leasing 83,333 23,516
3Com Corporation 783,875
Ericsson 783,875 500,000 2,580,000
Lucent Technologies Inc. 783,875
Newbridge Networks Corporation 783,875
Northern Telecom Limited 783,875
UUNET Technologies Inc. 559,911
Anschutz Family Investment Company LLC 279,955
Crosspoint Venture Partners 1996 279,955
AT&T Venture Fund II, L.P. 111,982
@Home 10,000
</TABLE>
<PAGE> 1
EXHIBIT 10.1
JUNIPER NETWORKS, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("AGREEMENT") is entered into effective
as of the ____ day of ____________, 1999 by and between Juniper Networks, Inc.,
a Delaware corporation (the "COMPANY") and Michael Thurk ("INDEMNITEE").
RECITALS
A. The Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for its directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited.
C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employees, agents and fiduciaries of the Company may not be willing to
continue to serve in such capacities without additional protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part, in
order to induce Indemnitee to continue to provide services to the Company,
wishes to provide for the indemnification and advancing of expenses to
Indemnitees to the maximum extent permitted by law.
E. In view of the considerations set forth above, the Company desires
that Indemnitee be indemnified by the Company as set forth herein.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Indemnification of Expenses. The Company shall indemnify
to the fullest extent permitted by law if Indemnitee was or is or becomes a
party to or witness or other participant in, or are threatened to be made a
party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believe
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "CLAIM") by reason of (or
arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was serving at the request
of the Company
<PAGE> 2
as a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action or inaction on the part of Indemnitee while serving in such capacity
(hereinafter an "INDEMNIFIABLE EVENT") against any and all expenses (including
attorneys' fees and all other costs, expenses and obligations incurred in
connection with investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or participate
in, any such action, suit, proceeding, alternative dispute resolution mechanism,
hearing, inquiry or investigation), judgments, fines, penalties and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of such Claim and any federal,
state, local or foreign taxes imposed on Indemnitees as a result of the actual
or deemed receipt of any payments under this Agreement (collectively,
hereinafter "EXPENSES"), including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses. Such payment
of Expenses shall be made by the Company as soon as practicable but in any event
no later than twenty days after written demand by Indemnitees therefor is
presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
obligations of the Company under Section 1(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) the obligation
of the Company to make an advance payment of Expenses to Indemnitee pursuant to
Section 2(a) (an "EXPENSE ADVANCE") shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agree to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commence legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). The Indemnitee's obligation to reimburse the Company for
any Expense Advance shall be unsecured and no interest shall be charged thereon.
If there has not been a Change in Control (as defined in Section 10(c) hereof),
the Reviewing Party shall be selected by the Board of Directors, and if there
has been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 1(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
-2-
<PAGE> 3
(c) Change in Control. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then, with respect to all matters
thereafter arising concerning the rights of Indemnitees to payments of Expenses
and Expense Advances under this Agreement or any other agreement or under the
Company's Certificate of Incorporation or Bylaws as now or hereafter in effect,
Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected
by Indemnitees and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
Indemnitee would be permitted to be indemnified under applicable law and the
Company agrees to abide by such opinion. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys' fees),
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
(d) Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement other than Section 9 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.
2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all
Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid
by the Company to Indemnitee as soon as practicable but in any event no later
than twenty days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitee). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) No Presumptions; Burden of Proof. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement
-3-
<PAGE> 4
of legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under applicable law, shall be a defense to
Indemnitee's claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief. In
connection with any determination by the Reviewing Party or otherwise as to
whether Indemnitee is entitled to be indemnified hereunder, the burden of proof
shall be on the Company to establish that Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such action, suit,
proceeding, inquiry or investigation in accordance with the terms of such
policies.
(e) Selection of Counsel. In the event the Company shall be
obligated hereunder to pay the Expenses of any Claim, the Company shall be
entitled to assume the defense of such Claim with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld, upon the delivery
to Indemnitee of written notice of its election so to do. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Claim; provided that, (i) Indemnitee shall have the right to
employ Indemnitee's counsel in any such Claim at Indemnitee's expense and (ii)
if (A) the employment of counsel by Indemnitee has been previously authorized by
the Company, (B) Indemnitee shall have reasonably concluded that there is a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (C) the Company shall not continue to retain such counsel to
defend such Claim, then the fees and expenses of Indemnitee's counsel shall be
at the expense of the Company. The Company shall have the right to conduct such
defense as it sees fit in its sole discretion, including the right to settle any
claim against Indemnitee without the consent of the Indemnitee.
3. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. The Company hereby agrees to indemnify Indemnitee
to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company's Certificate of Incorporation, the Company's Bylaws or
by statute. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer,
employee, agent or fiduciary, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits afforded by such
change. In the event of any change in any applicable law, statute or rule which
narrows the right of a Delaware corporation to indemnify a member of its Board
of Directors or an officer, employee, agent or fiduciary, such change, to the
extent not otherwise required by such law, statute or rule to be applied to this
Agreement, shall have no effect on this Agreement or the parties' rights and
obligations hereunder except as set forth in Section 8(a) hereof.
-4-
<PAGE> 5
(b) Nonexclusivity. The indemnification provided by this
Agreement shall be in addition to any rights to which Indemnitee may be entitled
under the Company's Certificate of Incorporation, its Bylaws, any agreement,
any vote of stockholders or disinterested directors, the General Corporation Law
of the State of Delaware, or otherwise. The indemnification provided under this
Agreement shall continue as to Indemnitee for any action Indemnitee took or did
not take while serving in an indemnified capacity even though Indemnitee may
have ceased to serve in such capacity.
4. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, Bylaw or otherwise)
of the amounts otherwise indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
6. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
7. Liability Insurance. The Company shall, from time to time, make the
good faith determination whether or not it is practicable for the Company to
obtain and maintain a policy or policies of insurance with reputable insurance
companies providing the officers and directors of the Company with coverage for
losses from wrongful acts, or to ensure the Company's performance of its
indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against
the protection afforded by such coverage. In all policies of directors' and
officers' liability insurance, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits as are accorded to
the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of the
Company but is an officer; or of the Company's key employees, if Indemnitee is
not an officer or director but is a key employee. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or if Indemnitee
is covered by similar insurance maintained by a subsidiary or parent of the
Company.
-5-
<PAGE> 6
8. Exceptions. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for
Expenses resulting from acts, omissions or transactions for which Indemnitee is
prohibited from receiving indemnification under this Agreement or applicable
law;
(b) Claims Initiated by Indemnitee. To indemnify or advance
expenses to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, except (i) with respect to actions or
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Certificate of Incorporation or Bylaws now or hereafter in effect relating to
Claims for Indemnifiable Events, (ii) in specific cases if the Board of
Directors has approved the initiation or bringing of such Claim, or (iii) as
otherwise required under Section 145 of the Delaware General Corporation Law,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be;
(c) Lack of Good Faith. To indemnify Indemnitee for any
expenses incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
9. Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
10. Construction of Certain Phrases.
(a) For purposes of this Agreement, references to the
"Company" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a consti tuent) absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
employees, agents or fiduciaries, so that if Indemnitee is or was a director,
officer, employee, agent or fiduciary of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee, agent or fiduciary of another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise, Indemnitee shall
stand in the same position under the provisions of this Agreement with
-6-
<PAGE> 7
respect to the resulting or surviving corporation as Indemnitee would have with
respect to such constituent corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or its beneficiaries; and if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Agreement.
(c) For purposes of this Agreement a "Change in Control" shall
be deemed to have occurred if, on or after the date of this Agreement, (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company acting in such
capacity or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing more
than 50% of the total voting power represented by the Company's then outstanding
Voting Securities, (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the Company's assets.
(d) For purposes of this Agreement, "Independent Legal
Counsel" shall mean an attorney or firm of attorneys, selected in accordance
with the provisions of Section 1(c) hereof, who shall not have otherwise
performed services for the Company or Indemnitees within the last three years
(other than with respect to matters concerning the rights of Indemnitees under
this Agreement, or of other indemnitees under similar indemnity agreements).
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<PAGE> 8
(e) For purposes of this Agreement, a "Reviewing Party" shall
mean any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to the particular Claim for which Indemnitee are
seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities" shall
mean any securities of the Company that vote generally in the election of
directors.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect with respect to Claims relating to Indemnifiable Events
regardless of whether Indemnitee continues to serve as a director, officer,
employee, agent or fiduciary of the Company or of any other enterprise at the
Company's request.
13. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless, as a part of such action, a
court of competent jurisdiction over such action determines that each of the
material assertions made by Indemnitee as a basis for such action was not made
in good faith or was frivolous. In the event of an action instituted by or in
the name of the Company under this Agreement to enforce or interpret any of the
terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee in defense of such action (including costs and expenses
incurred with respect to Indemnitee's counterclaims and cross-claims made in
such action), and shall be entitled to the advancement of Expenses with respect
to such action, unless, as a part of such action, a court having jurisdiction
over such action determines that each of Indemnitee's material defenses to such
action was made in bad faith or was frivolous.
14. Notice. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given (a) five (5) days after deposit with the U.S. Postal
Service or other applicable postal service, if delivered by first class mail,
postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day
after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid, or (d) one day after the
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<PAGE> 9
business day of delivery by facsimile transmission, if delivered by facsimile
transmission, with copy by first class mail, postage prepaid, and shall be
addressed if to Indemnitee, at the Indemnitee's address as set forth beneath
Indemnitee's signature to this Agreement and if to the Company at the address of
its principal corporate offices (attention: Secretary) or at such other address
as such party may designate by ten days' advance written notice to the other
party hereto.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. Choice of Law. This Agreement shall be governed by and its
provisions construed and enforced in accordance with the laws of the State of
Delaware, as applied to contracts between Delaware residents, entered into and
to be performed entirely within the State of Delaware, without regard to the
conflict of laws principles thereof.
18. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
19. Amendment and Termination. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
20. Integration and Entire Agreement. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
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<PAGE> 10
21. No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
JUNIPER NETWORKS, INC.
a Delaware corporation
By: ________________________________
(signature)
Name: ______________________________
Title:______________________________
Address: 385 Ravendale Drive
Mountain View, CA 94043
AGREED TO AND ACCEPTED BY:
______________________________
Address: ______________________________
______________________________
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<PAGE> 1
EXHIBIT 10.2
JUNIPER NETWORKS, INC.
AMENDED AND RESTATED
1996 STOCK PLAN
(As amended through April 19, 1999)
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant of an Option and subject to the applicable provisions of Section 422 of
the Code and the regulations promulgated thereunder. Stock Purchase Rights may
also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options or Stock Purchase Rights are, or
will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Juniper Networks, Inc., a Delaware
corporation.
(h) "Consultant" means any person who is engaged by the Company
or any Parent or Subsidiary to render consulting or advisory services to such
entities.
(i) "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, any Parent or
Subsidiary is not interrupted or terminated. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of (i) any leave of
absence approved by the Company (provided, however, that the Administrator shall
be permitted to stop vesting on any leave of absence, on an individual,
aggregate or policy basis, even if such leave of absence is approved by the
Company) or (ii) transfers between locations of the Company
<PAGE> 2
or between the Company, its Parent, any Subsidiary, or any successor. A leave
of absence approved by the Company shall include sick leave, military leave, or
any other personal leave approved by an authorized representative of the
Company. For purposes of Incentive Stock Options, no such leave may exceed 90
days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract, including Company policies. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, on the 181st day
of such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.
(j) "Director" means a member of the Board of Directors of the
Company.
(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination;
or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
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<PAGE> 3
(r) "Optioned Stock" means the Common Stock subject to an
Option or a Stock Purchase Right.
(s) "Optionee" means an Employee or Consultant who receives an
Option or Stock Purchase Right.
(t) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(u) "Plan" means this 1996 Stock Plan.
(v) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(w) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.
(x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(y) "Stock Purchase Right" means a right to purchase Common
Stock pursuant to Section 11 below.
(z) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares which may be subject to
option and sold under the Plan is 19,187,500 Shares, plus an annual increase to
be added on the first day of the Company's fiscal year beginning in 2000 equal
to the lesser of (i) 3,000,000 shares, (ii) 5% of the outstanding shares on such
date or (iii) a lesser amount determined by the Board. The Shares may be
authorized but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an option exchange program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated). However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, and the original purchaser of such Shares did
not receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.
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<PAGE> 4
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any stock exchange upon
which the Common Stock is listed, the Administrator shall have the authority in
its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(m) of the Plan;
(ii) to select the Consultants and Employees to whom
Options and Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof are granted hereunder;
(iv) to determine the number of Shares to be covered by
each such award granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions of any award
granted hereunder;
(vii) to determine whether and under what circumstances
an Option may be settled in cash under subsection 9(f) instead of Common Stock;
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<PAGE> 5
(viii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted; and
(ix) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options or Stock Purchase
Rights.
5. Eligibility.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees, Consultants and Directors. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has been granted an
Option or Stock Purchase Right may, if otherwise eligible, be granted additional
Options or Stock Purchase Rights.
(b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon any Optionee any right with respect to continuation of his or
her employment or consulting relationship with the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
his or her employment or consulting relationship at any time, with or without
cause.
(d) The following limitations shall apply to grants of Options
to Employees:
(i) No Employee shall be granted, in any fiscal year of
the Company, Options to purchase more than 1,000,000 Shares.
(ii) In connection with his or her initial employment,
an Employee may be granted Options to purchase up to an additional 2,000,000
Shares which shall not count against the limit set forth in subsection (i)
above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.
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<PAGE> 6
(iv) If an Option is cancelled in the same fiscal year
of the Company in which it was granted (other than in connection with a
transaction described in Section 12), the cancelled Option shall be counted
against the limit set forth in subsection (i) above. For this purpose, if the
exercise price of an Option is reduced, such reduction will be treated as a
cancellation of the Option and the grant of a new Option.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company, as described in Section 18 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued
upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of grant.
(B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator. In the case
of a Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of sur render, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price
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<PAGE> 7
of the Shares as to which such Option shall be exercised, (5) delivery of a
properly executed exercise notice together with such other documentation as the
Administrator and a broker, if applicable, shall require to effect an exercise
of the Option and delivery to the Company of the sale or loan proceeds required
to pay the exercise price, (6) any other consideration permitted by applicable
law, or (7) any combination of the foregoing methods of payment. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may, as authorized by the Administrator, consist of
any consideration and method of payment allowable under Section 8(b) hereof.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote, receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment shall be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 12 hereof.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment or Consulting Relationship. In
the event of termination of an Optionee's Continuous Status as an Employee or
Consultant (but not in the event of an Optionee's change of status from Employee
to Consultant (in which case an Employee's Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the date three (3)
months and one day following such change of status) or from Consultant to
Employee), such Optionee may, but only within such period of time as is
determined by the Administrator, with such determination in the case of an
Incentive Stock Option not exceeding thirty (30) days after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his or her Option to the
extent that the Optionee was entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise the
Option at the date of such
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<PAGE> 8
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of his or
her disability, the Optionee may, but only within ninety (90) days from the date
of such termination (and in no event later than the expiration date of the term
of such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination. If
such disability is not a "disability" as such term is defined in Section
22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive
Stock Option shall automatically cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option on
the day three months and one day following such termination. To the extent that
the Optionee was not entitled to exercise the Option at the date of termination,
or if the Optionee does not exercise such Option to the extent so entitled
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised at any time within ninety (90) days
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant) by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option on the date of death. If, at the time of death, the Optionee
was not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If,
after the Optionee's death, the Optionee's estate or a person who acquires the
right to exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted, based
on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
10. Non-Transferability of Options and Stock Purchase Rights. Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that such person shall be entitled
to purchase, the price to be paid, and the time within which such person must
accept such offer, which shall in no event exceed thirty (30) days from the date
upon
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<PAGE> 9
which the Administrator makes the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock purchase
agreement in the form determined by the Administrator. Shares purchased pursuant
to the grant of a Stock Purchase Right shall be referred to herein as
"Restricted Stock."
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
(c) Other Provisions. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.
12. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclas sification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
-9-
<PAGE> 10
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the extent
it has not been previously exercised, the Option or Stock Purchase Right shall
terminate immediately prior to the consummation of such proposed action.
(c) Merger. In the event of a merger of the Company with or
into another corporation, each outstanding Option or Stock Purchase Right may be
assumed or an equivalent option or right may be substituted by such successor
corporation or a parent or subsidiary of such successor corporation. If, in such
event, an Option or Stock Purchase Right is not assumed or substituted, the
Option or Stock Purchase Right shall terminate as of the date of the closing of
the merger. For the purposes of this paragraph, the Option or Stock Purchase
Right shall be considered assumed if, following the merger, the Option or Stock
Purchase Right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger, the consideration (whether stock, cash, or other securities or
property) received in the merger by holders of Common Stock for each Share held
on the effective date of the transaction (and if the holders are offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares). If such consideration received in the
merger is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger.
13. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
-10-
<PAGE> 11
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option or Stock Purchase
Right, the Company may require the person exercising such Option or Stock
Purchase Right to represent and warrant at the time of any such exercise that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
17. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Administrator shall approve from time to
time.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws and the rules of any
stock exchange upon which the Common Stock is listed.
* * * * *
-11-
<PAGE> 12
PLAN HISTORY
<TABLE>
<S> <C> <C>
Initial Shares Granted 3,600,000 06/12/96
Additional Shares 1,150,000 01/16/97
Three for Two Stock Split 2,375,000 06/27/97
Additional Shares 2,000,000 11/19/97
Three for Two Stock Split 4,562,500 10/02/98
Additional Shares 3,000,000 11/12/98
Additional Shares 3,000,000 04/19/99
Annual Increase See Section 3 04/19/99
</TABLE>
<PAGE> 13
JUNIPER NETWORKS, INC.
1996 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
<<M_1>>
<<M_2>>
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
<TABLE>
<S> <C>
Date of Grant: <<M_3>>
------------------------------------------
Vesting Commencement Date: <<M_4>>
------------------------------------------
Exercise Price Per Share <<M_5>>
------------------------------------------
Total Number of Shares Granted: <<M_6>>
------------------------------------------
Type of Option: __X__ Incentive Stock Option
Nonstatutory Option _____ Nonstatutory Stock Option
Term/Expiration Date: <<M_7>>
------------------------------------------
Vesting Schedule:
</TABLE>
You may exercise this Option, in whole or in part, according to the
following vesting schedule:
Twenty-five percent (25%) of the Shares subject to the Option shall vest
twelve months after the Vesting Commencement Date, and 1/48th of the Shares
subject to the Option shall vest thereafter on the monthly anniversary of the
Vesting Commencement Date.
II. AGREEMENT
1. Grant of Option. Juniper Networks, Inc., a Delaware corporation (the
"Company"), hereby grants to the Optionee named in the Notice of Grant (the
"Optionee"), an option (the "Option") to purchase the total number of shares of
Common Stock (the "Shares") set forth in the
<PAGE> 14
Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the "Exercise Price") subject to the terms, definitions and
provisions of the 1996 Stock Option Plan (the "Plan") adopted by the Company,
which is incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Option
Agreement.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Grant
and with the applicable provisions of the Plan and this Option Agreement. In the
event of Optionee's death, disability or other termination of the employment or
consulting relationship, this Option shall be exercisable in accordance with the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by
written notice (in the form attached as Exhibit A) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised, and such other representations and agreements as to
the holder's investment intent with respect to such shares of Common Stock as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the Exercise Price. This Option shall be deemed to
be exercised upon receipt by the Company of such written notice accompanied by
the Exercise Price.
No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
3. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.
4. Lock-Up Period. Optionee hereby agrees that if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
longer period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration
-2-
<PAGE> 15
statement of the Company filed under the Securities Act; provided, however, that
such restriction shall apply only to the first registration statement of the
Company to become effective under the Securities Act that includes securities to
be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.
5. Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
(a) cash;
(b) check;
(c) surrender of other shares of Common Stock of the Company
which (A) in the case of Shares acquired pursuant to the exercise of a Company
option, have been owned by the Optionee for more than six (6) months on the date
of surrender, and (B) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Shares as to which the Option is being exercised; or
(d) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the Exercise Price.
6. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board.
7. Termination of Relationship. In the event an Optionee's Continuous
Status as an Employee or Consultant terminates, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option for a period of thirty (30) days after Optionee's
employment or consulting relationship with the Company terminates. To the extent
that Optionee was not entitled to exercise this Option at the date of such
termination, or if Optionee does not exercise this Option within the time
specified herein, the Option shall terminate. If your status changes from
Employee to Consultant or Consultant to Employee, this Option Agreement shall
remain in effect. In no case may you exercise this Option after the
Term/Expiration Date as provided above.
8. Disability of Optionee. Notwithstanding the provisions of Section 7
above, in the event of termination of an Optionee's consulting relationship or
Continuous Status as an Employee as a result of his or her disability, Optionee
may, but only within twelve (12) months from the date of such termination (and
in no event later than the expiration date of the term of such Option as set
-3-
<PAGE> 16
forth in this Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at the date of such termination; provided, however, that
if such disability is not a "disability" as such term is defined in Section
22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive
Stock Option shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option on the day three months
and one day following such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
9. Death of Optionee. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant as a result of the death of
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the date of expiration
of the term of this Option as set forth in Section 11 below), by Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee could exercise the Option at
the date of death.
10. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
11. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to more than ten percent (10%) shareholders shall apply to
this Option.
12. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.
(b) Exercise of ISO Following Disability. If the Optionee's
Continuous Status as an Employee or Consultant terminates as a result of
disability that is not total and permanent disability as defined in Section
22(e)(3) of the Code, to the extent permitted on the date of termination, the
Optionee must exercise an ISO within three months of such termination for the
ISO to be qualified as an ISO.
-4-
<PAGE> 17
(c) Exercise of Nonstatutory Stock Option. There may be a regular
federal income tax liability upon the exercise of a Nonstatutory Stock Option.
The Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If Optionee is an
Employee or a former Employee, the Company will be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.
(d) Disposition of Shares. In the case of an NSO, if Shares are
held for at least one year, any gain realized on disposition of the Shares will
be treated as long-term capital gain for federal income tax purposes. In the
case of an ISO, if Shares transferred pursuant to the Option are held for at
least one year after exercise and are disposed of at least two years after the
Date of Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal income tax purposes. If Shares
purchased under an ISO are disposed of within such one-year period or within two
years after the Date of Grant, any gain realized on such disposition will be
treated as compensation income (taxable at ordinary income rates) to the extent
of the difference between the Exercise Price and the lesser of (1) the Fair
Market Value of the Shares on the date of exercise, or (2) the sale price of the
Shares. Any additional gain will be taxed as capital gain, short-term or
long-term depending on the period that the ISO Shares were held.
(e) Notice of Disqualifying Disposition of ISO Shares. If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.
13. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by Delaware law except for that body of law
pertaining to conflict of laws.
JUNIPER NETWORKS, INC.
a Delaware corporation
By:
---------------------------------------
Marcel Gani, Chief Financial Officer
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING
-5-
<PAGE> 18
CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF
BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY'S STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL
CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR
CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S
RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY
AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and represents that
he is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.
Dated:
------------------------ ------------------------------------
<<M_1>>
-6-
<PAGE> 19
EXHIBIT A
1996 STOCK OPTION PLAN
EXERCISE NOTICE
Juniper Networks, Inc.
385 Ravendale Drive
Mountain View, CA 94043
Attention: Secretary
RE: <<M_1>>
1. Exercise of Option. Effective as of today, ___________, ____, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_________ shares of the Common Stock (the "Shares") of Juniper Networks, Inc.
(the "Company") under and pursuant to the 1996 Stock Option Plan (the "Plan")
and the [ ] Incentive [ ] Nonstatutory Stock Option Agreement dated <<M_3>> (the
"Option Agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
3. Rights as Shareholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 12 of the Plan.
Optionee shall enjoy rights as a shareholder until such time as Optionee
disposes of the Shares or the Company and/or its assignee(s) exercises the Right
of First Refusal hereunder. Upon such exercise, Optionee shall have no further
rights as a holder of the Shares so purchased except the right to receive
payment for the Shares so purchased in accordance with the provisions of this
Agreement, and Optionee shall forthwith cause the certificate(s) evidencing the
Shares so purchased to be surrendered to the Company for transfer or
cancellation.
4. Right of First Refusal. Before any Shares may be sold or transferred
(including transfer by operation of law), such Shares shall first be offered to
the Company (the "Right of First Refusal").
(a) In the event the Purchaser wishes to sell the Shares,
Purchaser shall deliver a notice ("Notice") to the Company stating (A) his bona
fide intention to sell or transfer such Shares,
-7-
<PAGE> 20
(B) the number of such Shares to be sold or transferred, (C) the price for which
he proposes to sell or transfer such Shares, and (D) the name of the proposed
purchaser or transferee.
(b) Within thirty (30) days after receipt of the Notice, the
Company or its assignee may elect to purchase all or none of the Shares to which
the Notice refers, at the price per Share specified in the Notice. The purchase
of the Shares in either such event shall occur at a closing held at the
Company's principal office at a mutually agreed upon time which in no event
shall be more than thirty (30) days following the end of the time period in
which the Company had to elect to purchase such Shares.
(c) If all of the Shares to which the Notice refers are not
elected to be purchased, as provided in Section 3(b) hereof, Purchaser may sell
the Shares to any person named in the Notice at the price specified in the
Notice or at a higher price, provided that such sale or transfer is consummated
within sixty (60) days of the date of said Notice to the Company, and provided,
further, that any such sale is in accordance with all the terms and conditions
hereof.
(d) Termination of Restrictions. Notwithstanding the provisions
of Section 3(b) above, the Company's Right of First Refusal shall terminate
immediately as to all Shares upon the occurrence of the first to occur of the
following events:
(i)the acquisition of the Company by another entity by
means of the merger or consolidation of the Company with or into another
corporation in which the stockholders of the Company own less that 50% of the
voting securities of the surviving entity,
(ii) the sale of all or substantially all of the assets
of the Company, or
(iii) the date upon which a public market exists for the
Company's capital stock (or any other stock issued to purchasers in exchange for
the Shares purchased under this Agreement). For the purpose of this Agreement, a
"Public Market" shall be deemed to exist if (i) such stock is listed on a
national securities exchange (as that term is used in the Securities Exchange
Act of 1934) or (ii) such stock is traded on the over-the-counter market and
prices are published daily on business days in a recognized financial journal.
(e) Assignment. Whenever the Company shall have the right to
purchase Shares under this Section 3, the Company may designate and assign one
or more employees, officers, directors or shareholders of the Company or other
persons or organizations to exercise all of the Company's purchase rights under
this Agreement and purchase all of such Shares; provided that if the fair market
value of the Shares to be purchased on the date of such designation or
assignment (the "Repurchase FMV") exceeds the purchase price of the Shares
(determined as described hereinabove) to be purchased, then each such designee
or assignee shall pay the Company cash equal to the difference between the
Repurchase FMV and the purchase price of the Shares which such designee or
assignee shall have the right to purchase.
(f) Exempt Transfers. The provisions of this Section 3 shall not
apply to a transfer of any Shares by Purchaser, either during his lifetime or on
death by will or intestacy to his ancestors, descendants or spouse, or any
custodian or trustee for the account of Purchaser or
-8-
<PAGE> 21
Purchaser's ancestors, descendants or spouse; provided, in each such case that
the transferee shall receive and hold such Shares subject to all of the
provisions of this Section 3 and there shall be no further transfer of such
Shares except in accordance herewith.
5. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
6. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER
OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE
ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES.
(b) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
7. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the
-9-
<PAGE> 22
successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth, this Agreement shall be binding upon Optionee and his or her
heirs, executors, administrators, successors and assigns.
8. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.
9. Governing Law; Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
10. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
11. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
12. Delivery of Payment. Optionee herewith delivers to the Company the
full Exercise Price for the Shares.
13. Entire Agreement. The Plan and Notice of Grant/Option Agreement are
incorporated herein by reference. This Agreement, the Plan, the Option Agreement
and the Investment Representation Statement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee.
Submitted by: Accepted by:
OPTIONEE: Juniper Networks, Inc.
- ----------------------------- ------------------------------------------
<<M_1>> Marcel Gani, Chief Financial Officer
Address:
385 Ravendale Drive
Mountain View, CA 94043
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<PAGE> 23
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE : <<1>>
COMPANY : JUNIPER NETWORKS, INC.
SECURITY : COMMON STOCK
AMOUNT : ____________ SHARES
In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities. Optionee
is acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company and any other legend required
under applicable state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the Optionee,
the exercise will be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of
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<PAGE> 24
Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days
thereafter (or such longer period as any market stand-off agreement may require)
the Securities exempt under Rule 701 may be resold, subject to the satisfaction
of certain of the conditions specified by Rule 144, including: (1) the resale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the
availability of certain public information about the Company, (3) the amount of
Securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), and (4) the timely filing of a Form 144,
if applicable.
In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(d) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
-----------------------------
<<M_1>>
Date:
-----------------------
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<PAGE> 1
EXHIBIT 10.3
JUNIPER NETWORKS, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Juniper Networks, Inc., and any
Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross
earnings and commissions, exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses, sales commission, and other
compensation.
(f) "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "Employee" shall mean any individual who is an Employee of
the Company for tax purposes whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any calendar
year. For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.
(h) "Enrollment Date" shall mean the first day of each Offering
Period.
(i) "Exercise Date" shall mean the last day of each Offering
Period.
(j) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
<PAGE> 2
(1)If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day on the date of such determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable; or
(2)If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable; or
(3)In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.
(k) "Offering Period" shall mean a period of approximately six
(6) months during which an option granted pursuant to the Plan may be exercised,
commencing on the first Trading Day on or after February 1 and terminating on
the last Trading Day in the period ending the following July 31, or commencing
on the first Trading Day on or after August 1 and terminating on the last
Trading Day in the period ending the following March 31; provided, however,
that the first Offering Period under the Plan shall commence with the first
Trading Day on or after the date on which the Securities and Exchange Commission
declares the Company's Registration Statement effective and ending on the last
Trading Day on or before July 31, 2000 and the second Offering Period shall
commence with the first Trading Day on or after February 1, 2000 and ending on
the last Trading Day on or before July 31, 2000. The duration of Offering
Periods may be changed pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower; provided, however, that the Purchase Price
may be adjusted by the Board pursuant to Section 20.
(n) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
(o) "Subsidiary" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(p) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.
3. Eligibility.
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
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<PAGE> 3
(b) Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.
4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after February 1 and August 1 each year, or on such other date as the
Board shall determine, and continuing thereafter until terminated in accordance
with Section 20 hereof; provided, however, that the first Offering Period under
the Plan shall commence with the first Trading Day on or after the date on which
the Securities and Exchange Commission declares the Company's Registration
Statement effective and ending on the last Trading Day on or before July 31,
2000 and the second Offering Period shall commence with the first Trading Day on
or after February 1, 2000 and ending on the last Trading Day on or before July
31, 2000. The Board shall have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future
offerings without stockholder approval if such change is announced at least five
(5) days prior to the scheduled beginning of the first Offering Period to be
affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office on or
prior to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he or she receives on each pay day during the Offering
Period.
(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.
(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the
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<PAGE> 4
Offering Period by completing or filing with the Company a new subscription
agreement authorizing a change in payroll deduction rate. The Board may, in its
discretion, limit the number of participation rate changes during any Offering
Period. The change in rate shall be effective with the first full payroll period
following five (5) business days after the Company's receipt of the new
subscription agreement. A participant's subscription agreement shall remain in
effect for successive Offering Periods unless terminated as provided in Section
10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at any
time during an Offering Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Offering Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during any twelve (12) month period more
than one thousand (1,000) shares (subject to any adjustment pursuant to Section
19), and provided further that such purchase shall be subject to the limitations
set forth in Sections 3(b) and 12 hereof. Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn pursuant to
Section 10 hereof. The Option shall expire on the last day of the Offering
Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. Any other monies left over in a participant's account after
the Exercise Date shall be returned to the participant. During a participant's
lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.
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<PAGE> 5
9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, the shares purchased upon exercise of his or
her option.
10. Withdrawal.
(a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering Periods
which commence after the termination of the Offering Period from which the
participant withdraws.
11. Termination of Employment. Upon a participant's ceasing to be an
Employee for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15 hereof, and such participant's
option shall be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
(a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be five hundred thousand (500,000) shares, plus an annual increase to be
added on the first day of the Company's fiscal year beginning in 2000 equal to
the lesser of (i) 500,000 shares, (ii) 1% of the outstanding shares on such date
or (iii) a lesser amount determined by the Board. If, on a given Exercise Date,
the number of shares with respect to which options are to be exercised exceeds
the number of shares then available under the Plan, the Company shall make a pro
rata allocation of the shares remaining available for purchase in as uniform a
manner as shall be practicable and as it shall determine to be equitable.
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<PAGE> 6
(b) The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall
be registered in the name of the participant or in the name of the participant
and his or her spouse.
14. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements
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<PAGE> 7
shall set forth the amounts of payroll deductions, the Purchase Price, the
number of shares purchased and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the Reserves, the maximum number of shares each
participant may purchase per Offering Period (pursuant to Section 7), as well as
the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration". Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, the Offering Period
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date"). The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
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<PAGE> 8
20. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 19 hereof,
no such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its stockholders. Except as provided
in Section 19 and Section 20 hereof, no amendment may make any change in any
option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Section 423 of the Code (or
any other applicable law, regulation or stock exchange rule), the Company shall
obtain shareholder approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.
(c) In the event the Board determines that the ongoing operation
of the Plan may result in unfavorable financial accounting consequences, the
Board may, in its discretion and, to the extent necessary or desirable, modify
or amend the Plan to reduce or eliminate such accounting consequence including,
but not limited to:
(1) altering the Purchase Price for any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price;
(2) shortening any Offering Period so that Offering
Period ends on a new Exercise Date, including an Offering Period underway at the
time of the Board action; and
(3) allocating shares.
Such modifications or amendments shall not require
stockholder approval or the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant
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<PAGE> 9
thereto shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.
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<PAGE> 10
EXHIBIT A
JUNIPER NETWORKS, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: _____________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. _____________________________________ hereby elects to participate in
the Juniper Networks, Inc., 1999 Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribes to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement
and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (from 1 to 10%) during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is
in all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is
subject to stockholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse
only):____________________________.
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares), I will be treated
for federal income tax purposes as having received ordinary income at
the time of such disposition in an amount equal to the excess of the
fair market value of the shares at the time such shares were purchased
by me over the price which I paid for the shares. I hereby agree to
notify the Company in writing within 30 days after the date of any
disposition of shares and I will make adequate provision for Federal,
state or other tax withholding obligations, if any, which arise upon the
disposition of the Common Stock. The Company may, but will not be
obligated to, withhold from my compensation the amount
A-1
<PAGE> 11
necessary to meet any applicable withholding obligation including any
withholding necessary to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common Stock by me. If I
dispose of such shares at any time after the expiration of the 2-year holding
period, I understand that I will be treated for federal income tax purposes as
having received income only at the time of such disposition, and that such
income will be taxed as ordinary income only to the extent of an amount equal to
the lesser of (1) the excess of the fair market value of the shares at the time
of such disposition over the purchase price which I paid for the shares, or (2)
15% of the fair market value of the shares on the first day of the Offering
Period. The remainder of the gain, if any, recognized on such disposition will
be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)__________________________________________________________
(First) (Middle) (Last)
__________________________ _______________________________________
Relationship
_______________________________________
(Address)
Employee's Social
Security Number: _______________________________________
Employee's Address: _______________________________________
_______________________________________
_______________________________________
A-2
<PAGE> 12
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:_______________ _______________________________________
Signature of Employee
_______________________________________
Spouse's Signature (If beneficiary
other than spouse)
A-3
<PAGE> 13
EXHIBIT B
JUNIPER NETWORKS, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Juniper
Networks, Inc., 1999 Employee Stock Purchase Plan which began on ___________,
______ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.
Name and Address of Participant:
_______________________________________
_______________________________________
_______________________________________
Signature:
_______________________________________
Date:__________________________________
B-1
<PAGE> 1
EXHIBIT 10.4
SUB-SUBLEASE
THIS SUB-SUBLEASE (this "Sub-Sublease") is entered into as of the 1st day of
July, 1998, by and between (i) Trident Microsystems, Inc., a California
Corporation ("Trident"), and (ii) Juniper Networks, Inc. a California
Corporation ("Juniper").
A. Pursuant to that certain Lease dated September 21, 1989 (the "Master
Lease"), by and between Spieker Properties, L.P., a California limited
partnership, Successor-in-Interest to Mountain View Industrial Associates, a
California Partnership ("Master Landlord"), as landlord, and Network Computing
Devices, Inc., a California corporation ("NCD"), as tenant, and the First
Addendum to Lease dated December 2, 1991 between Mountain View Industrial
Associates, a California Partnership ("Master Landlord"), as landlord, and
Network Computing Devices, Inc., a California corporation ("NCD"), as tenant
and the Second Addendum to Lease Dated August 20, 1993 between Mountain View
Industrial Associates, a California Partnership ("Master Landlord"), as
landlord, and Network Computing Devices, Inc., a California corporation
("NCD"), as tenant and the Third Addendum to Lease Dated October 22, 1993
between Mountain View Industrial Associates, a California Partnership ("Master
Landlord"), as landlord, and Network Computing Devices, Inc., a California
corporation ("NCD"), as tenant NCD is leasing from Master Landlord a building
located at 370/380 Bernardo Avenue, Mountain View, California. A copy of the
Master Lease and Addendums 1, 2, and 3 is attached hereto as "Exhibit A" and
incorporated herein by this reference.
B. Pursuant to that certain Sublease Agreement dated October 24, 1995
(the "Sublease"), NCD subleased to Trident the premises covered by the Master
Lease consisting of approximately 27,444 rentable square feet as more
particularly described in the Sublease (the "Subleased Premises"). A copy of
the Sublease is attached hereto as "Exhibit B".
C. Juniper desires to sub-sublease the 27,444 rentable square foot
Premises beginning with a portion of the Subleased premises consisting of
approximately 17,950 rentable square feet from Trident and Trident desires to
sub-sublease a portion of the Subleased Premises to Juniper, on the terms,
covenants and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises of
the parties contained herein, the parties hereto agree as follows:
1. SUB-SUBLEASE. Trident subleases to Juniper and Juniper hires from
Trident a portion of the Subleased Premises, outlined on "Exhibit C" hereto as
the "Initial Premises". The Initial Premises shall be delivered to Juniper on
the Commencement Date and Juniper by acceptance and delivery thereof,
acknowledges the same to be in good order and repair and in a tenantable
condition, subject to Juniper's rights and Trident's obligations per Paragraph
7 herein.
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<PAGE> 2
2. EXPANSION SPACE. On January 1, 1999 and continuing through June 30, 2000,
Trident subleases to Juniper and Juniper hires from Trident the balance of the
Subleased Premises consisting of approximately 9,494 square feet bringing the
total square footage sub-subleased to 27,444 rentable square feet described on
Exhibit C hereto as the "Expansion Space". Trident may, by giving Juniper sixty
(60) days prior written notice to January 1, 1999, delay delivery of the
Expansion Space up to April 1, 1999. Juniper shall not be liable for rent on
the Expansion Premises until such time as Trident delivers possession of the
Expansion Premises.
3. TERM. The term of this Sub-Sublease shall commence on September 1, 1998
(the "Commencement Date") and shall expire on June 20, 2000, unless sooner
terminated as hereafter provided or as provided in the Master Lease (the
"Term"). Trident may, by giving Juniper written notice by August 1, 1998, delay
delivery of the Initial Premises up to October 1, 1998. Notwithstanding the
foregoing, Juniper agrees that in the event of the failure or inability of
Trident for any reason to deliver possession of the Initial Premises on or
before the Commencement Date:
(i) Trident shall not be liable for any damage caused thereby, (ii) this
Sub-Sublease shall not be void or voidable provided, however, that if Trident
fails to deliver the Initial Premises to Juniper by November 1, 1998 then
Juniper shall have the right, exercisable by written notice to Trident, to
terminate this Sub-Sublease; (iii) Juniper shall not be liable for rent until
such time as Trident delivers possession of the Initial Premises to Juniper;
and (iv) the Term shall not be extended by any such delay. Notwithstanding
anything to the contrary contained herein, if for any reason. Trident fails to
deliver possession of the Expansion Space by April 1, 1999 then the amount of
Base Rent payable under this Sub-Sublease shall be decreased by twenty five
percent (25%). The Term of this Sub-Sublease shall earlier terminate in the
event of the earlier termination for any cause whatsoever of the Sublease or of
the Master Lease.
4. EARLY ACCESS. Provided Juniper does not interfere with Trident's occupancy
of the Subleased Premises, Trident grants Juniper the right to access the
Initial Premises prior to the commencement date in order to prepare the Initial
Premises for Juniper's occupancy. During this early access period Juniper shall
not be obligated to pay base rent or triple net expenses. This same early
access to be granted at a later appropriate date for the Expansion Space.
5. RENT.
(a) BASE RENT. Juniper shall pay to Trident during the Term as base rent for
the Initial Premises the sum of Forty Thousand Three Hundred Eighty Seven
Dollars ($40,387.00) per month, which amount shall be prorated for each
fractional month during the Term. Beginning with the commencement of Expansion
Premises the base rent shall increase to Sixty One Thousand Seven Hundred Forth
Nine Dollars ($61,749.00). The amounts payable pursuant to this Paragraph 5(a)
are hereinafter referred to as "Base Rent". Juniper shall pay to Trident upon
execution of this Sub-Sublease, in addition to the Deposit set forth in Section
5(e) below, the first month's Base Rent in the amount of $40,387.00.
2
<PAGE> 3
(b) OTHER EXPENSES. In addition to the above rent Juniper shall be
responsible for its pro-rata share for the Subleased Premises triple net
expenses applicable to the term of this Sub-Sublease, including but not limited
to, real property taxes, fire and extended insurance and common area maintenance
expenses and other expenses set forth in the Master Lease. It is also agreed
that Juniper shall reimburse Trident, on a pro-rata per square foot basis, for
all utility costs from Sub-Sublease commencement until Juniper takes occupancy
of the entire Premises; provided that unless and until the Expansion Space is
delivered to Juniper, Trident shall be responsible for its pro-rata share of
the triple net expenses of the Expansion Space.
(c) PAYMENT. Base Rent and any other charges payable by Juniper to
Trident under this Sub-Sublease shall be paid to Trident at the place set forth
as Trident's address for notices hereunder, or at such other place as Trident
may from time to time designate by notice to Juniper. All such payments shall
be made (i) with respect to Base Rent, on the first day of each calendar month
during the Term of this Sub-Sublease (except that the Base Rent for the first
month of the Term shall be due upon execution of this Sub-Sublease), without
prior notice or demand thereof and without any deductions or offsets
whatsoever; and (ii) with respect to all other payments, five (5) days prior to
the date such payments are due to NCD under the Sublease, or if no regular due
date is specified under the Sublease, as specified in Trident's written notice
to Juniper. All such amounts shall be prorated as appropriate.
(d) LATE PAYMENTS. If any installment of Base Rent or any other amount
due from Juniper under this Sub-Sublease shall not be received by Trident
within five (5) days after the date the same is due and payable, Juniper shall
pay to Trident a late charge equal to six percent (6%) of such unpaid amounts.
Acceptance of such late charges by Trident shall in no event constitute a
waiver of Juniper's default with respect to such overdue amount nor shall such
acceptance prevent Trident from exercising any of the other rights and remedies
granted to Trident hereunder.
(e) DEPOSIT. Upon the execution of this Sub-Sublease, Juniper shall pay
to Trident the sum of Forty Thousand Three Hundred Eighty Seven Dollars
($40,387.00) (the "Deposit") to be held as a non-interest bearing security
deposit for the full and faithful performance of each of Juniper's obligations
under this Sub-Sublease. Upon commencement of the Expansion Premises Juniper
shall pay to Trident Twenty One Thousand Three Hundred Sixty Two Dollars
($21,362.00) bringing the total Deposit to Sixty One Thousand Seven Hundred
Forty Nine Dollars ($61,749.00). In the event Juniper fails to perform or
observe any of the provisions of the Sub-Sublease to be performed or observed
by Juniper, then, at the option of Trident, Trident may apply the Deposit or
any portion thereof as may be necessary to remedy any default in the payment of
rent or otherwise remedy any nonperformance by Juniper, and Juniper shall
forthwith upon demand restore the Deposit to the original amount specified. Any
remaining portion of the Deposit shall be returned to Juniper within thirty
(30) days of the date of termination of this Sub-Sublease, provided that
Juniper shall have vacated the Sub-Subleased Premises in accordance with each
and every term and condition of this Sub-Sublease.
3
<PAGE> 4
6. USE. Juniper shall use the Sub-Subleased Premises only for purposes
allowed under the Master Lease and the Sublease and for no other purpose.
Juniper shall not do or suffer anything to be done upon the Sub-Subleased
Premises which will cause injury to the Sub-Subleased Premises. Juniper shall
comply with all federal, state, and local laws, ordinances, regulations and
standards relating to its use of the Sub-Subleased Premises and its use,
storage, sale and disposal of hazardous or toxic substances, as such terms are
defined in any such federal, state, or local law, ordinance, regulation or
standard. Juniper shall not use or bring onto the Sub-Subleased Premises any
hazardous or toxic substance. Juniper shall provide immediate notice to Trident
if a release of any hazardous or toxic substance occurs or will occur within,
on or under the Sub-Subleased Premises (whether by air, water, or other means
of transmission) during Juniper's tenancy of the Sub-Subleased Premises.
Failure to so provide such notice to Trident shall, at Trident's election,
constitute a default under this Sub-Sublease. The Parties hereto shall
indemnify, defend and hold harmless each other from and against any and all
cost, expense (including attorneys' or consultants' fees), damage, liability or
loss incurred in connection with the release, use, storage or disposal of a
hazardous or toxic substance on or about the Sub-Subleased Premises by them, or
their employees, agents, contractors, or invitees.
7. CONDITION OF PREMISES. Prior to the Sub-Sublease commencements,
Trident, at Trident's sole cost and expense, shall deliver the Initial Premises
and the Expansion Premises to Juniper in good condition and repair, including
but not limited to, roof, plumbing, sprinklers, electrical, mechanical systems
and parking lot. If during the initial one hundred twenty (120) days of
Juniper's occupancy of either phase, a problem relative to the condition of the
above mentioned items is discovered, Juniper shall provide Trident with written
notification of said problem and Trident, at Trident's sole cost, shall repair
said problem.
8. TRIDENT'S TENANT IMPROVEMENT WORK.
(a) Prior to Initial Premises commencement, Trident, at Trident's sole
cost and expense, shall perform the following work:
1. Demise the Initial Premises from the Expansion Space;
2. Replace stained or damaged ceiling tiles;
3. Shampoo carpets and clean and wax tile floors; and
4. Remove all items belonging to Trident from the Initial Premises.
(b) Prior to Expansion Space commencement Trident, at Trident's sole cost
and expense, shall perform the following work:
1. Replace stained of damaged ceiling tiles;
2. Shampoo carpets and clean and wax tile floors;
3. Remove all items belonging to Trident from the Expansion Space; and
4. Remove the demising structures that separate the Initial Premises and
the Expansion Space at the time Juniper takes the Expansion Space.
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<PAGE> 5
9. SUB-SUBLEASE SUBJECT TO MASTER LEASE/SUBLEASE. This Sub-Sublease shall
be subject to all of the terms and conditions of the Sublease with the
exception of those items excluded pursuant to Paragraph 10(a) below, and from
and after the Commencement Date Juniper covenants to perform all of the
obligations of "Sublessee" with regard to the Sub-Subleased Premises under the
Sublease accruing or required to be performed from and after the Commencement
Date, to the extent said terms and conditions are consistent with the
provisions of this Sub-Sublease, and only except as otherwise limited by
Paragraph 10(a) below. Trident shall be responsible for all of the obligations
of "Sublessee" under the Sublease accruing or required to be performed prior to
the Commencement Date. This Sub-Sublease shall be subject to all the terms and
conditions of the Master Lease with the exception of those items excluded
pursuant to Paragraph 10(a). By agreeing to perform the duties of "Sublessee"
with regard to the Sub-Subleased Premises, Jupiter also is agreeing for the
benefit of Trident, during the term of this Sub-Sublease to perform all the
obligations of Trident with regard to the Sub-Subleased Premises under the
Master Lease (which obligations Trident has assumed pursuant to Paragraph 2.1
of the Sublease).
10. INCORPORATION OF SUBLEASE.
(a) EXCLUSIONS. Except as otherwise provided in this Sub-Sublease, all of
the terms and conditions of the Sublease are incorporated herein as terms and
conditions of this Sub-Sublease, with references therein to "Sublessor" and
"Sublessee" to be deemed to mean and refer to, respectively, Trident and
Juniper herein, and with references therein to "Sublease" to mean this
Sub-Sublease, and along with the sections and paragraphs set out in this
Sub-Sublease, shall be the complete terms and conditions of this Sub-Sublease;
provided, however, (i) the following paragraphs of the Sublease are not
incorporated herein: 3.1, 3.2, 3.4, 5 & 7 for the purposes of incorporation the
terms and provisions of the Master Lease and the Sublease into this
Sub-Sublease, the following Master Lease provisions are hereby amended as
follows (references are to paragraphs in the Master Lease):
Master Lessor, NCD and Trident shall be named as additional insured on
the liability insurance.
The three day cure period provided for any monetary default is reduced
to two (2) days. The thirty (30) day cure period provided for any
non-monetary default is reduced to twenty-five (25) days.
The addresses for notices shall be set out on the signature page
hereto.
(b) RECOURSE TO MASTER LANDLORD. Notwithstanding Paragraph 8(a) & 8(b)
hereof, it is understood and agreed that Trident shall have no obligation or
responsibility to provide or perform any service, maintenance utility, repair,
alteration or other similar obligation which is the obligation of Master
Landlord or NCD to provide or perform pursuant to the terms of the Master Lease
or Sublease. If Juniper shall notify Trident that Master Landlord or NCD is not
supplying services to the Subleased Premises as required under the Master Lease
or Sublease, Trident will promptly request Master Landlord or NCD, as
appropriate, to perform such services. Trident shall in no event be liable to
Juniper nor shall Juniper's obligations under this Sub-Sublease be impaired or
reduced or the performance thereof excused because of any failure or delay on
Master Landlord's or
5
<PAGE> 6
NCD's part in providing any such services or in making any repairs or
alterations, or in performing or observing any similar obligation Master
Landlord under the Master Lease or NCD under the Sublease. IF NCD shall default
in its obligation to provide services or make repairs as required under the
Sublease to the Subleased Premises, Trident at Juniper's request shall exercise
reasonable efforts to enforce Trident's rights against NCD (or to cause NCD to
enforce its rights against Master Landlord with respect to such service or
repairs) but Trident shall have no obligation to bring any legal action or
proceeding against NCD. Notwithstanding the foregoing, (i) if as a result of
NCD's or Master Landlord's failure to provide services or make repairs as
required under the Sublease Juniper's use of the Subleased Premises is
materially and adversely affected for a period of thirty (30) or more days, and
(ii) if Trident fails to bring a legal action against NCD for such failure
within ten (10) days after Juniper's written request to do so; then Juniper may
elect to terminate this Sub-Sublease provided it provides Trident with written
notice of such termination within thirty (30) days after the later to occur of
(i) and (ii) above.
(c) JUNIPER HAS READ MASTER LEASE AND SUBLEASE. Juniper hereby
acknowledges that it has read and is familiar with the terms of the Master
Lease and Sublease, and agrees that this Sub-Sublease is subordinate and subject
to the Master Lease and Sublease.
11. ASSIGNMENT AND SUBLETTING. Juniper shall not sublet the Sub-Subleased
Premises or assign this Sub-Sublease without the prior written consent of Master
Landlord and NCD, to the extent such consent is required under the Master Lease
or Sublease. Juniper shall not sublet the Subleased Premises or assign this
Sub-Sublease without the prior written consent of Trident, which shall not be
unreasonably withheld. In the event of sublease profit, the profit would first
go to cover all costs (including, but not limited to, tenant improvement work,
legal fees, real estate commissions and advertising fees) then shall be split
50/50 between Trident and Juniper, or per the terms of the Master Lease.
12. REAL ESTATE BROKERS. Upon execution of this Sub-Sublease, Trident
shall pay Colliers Parrish International, Inc. a licensed Real Estate broker,
fees set forth in a separate agreement.
13. MISCELLANEOUS.
(a) Notices. All notices or demands of any kind required or desired to be
given by Trident to Juniper or Juniper to Trident hereunder shall be in writing
and shall be sent by hand delivery or by a nationally recognized courier
service, in which event they shall be deemed given when the same are received,
or by depositing such notices or demands in the United States mail, certified
or registered, postage prepaid, return receipt requested (unless return receipt
indicates not delivered), in which event it shall be deemed give seventy-two
(72) hours after such deposit. All notices or demands shall be addressed to
Trident or Juniper, as the case may be, at the address set forth after the
signatures to this Sub-Sublease.
6
<PAGE> 7
(b) ENTIRE AGREEMENT. This Sub-Sublease represents the entire agreement
between the parties to this Sub-Sublease and supersedes all prior agreements
between the parties, whether written or oral. There are no representations
between Trident and Juniper other than those contained in this Sub-Sublease. Any
agreement hereafter made shall be ineffective to change, modify, waive or
discharge this Sub-Sublease in whole or in part unless such agreement is in
writing and signed by the party against whom enforcement of the change,
modification, waiver or discharge is sought.
(c) SUCCESSORS AND ASSIGNS. The terms, covenants and conditions contained
in this Sub-Sublease shall, subject to the provisions of this Sub-Sublease
relating to assignment and subletting, apply to, be binding upon and inure to
the benefit of the heirs, successors and assigns of the parties hereto.
(d) WAIVERS. No delay or omission in the exercise of any right or remedy of
Trident upon any default by Juniper shall impair such right or remedy or be
construed as a waiver of such default. The receipt and acceptance by Trident of
delinquent rents or charges, or the acceptance of partial payments of such rents
or charges, shall not constitute a waiver of any other default. No act or
conduct of Trident, including, without limitation, the acceptance of keys to the
Subleased Premises, shall constitute an acceptance of the surrender of the
Subleased Premises by Juniper before the expiration of or sooner termination of
the Term. Only a written notice from Trident to Juniper shall constitute
acceptance of the surrender of the Subleased Premises and accomplish a
termination of this Sub-Sublease.
(e) TIME OF ESSENCE. Time is of the essence of this Sub-Sublease.
(f) ATTORNEY'S FEES. If any party commences an action against the other
party arising out of or in connection with this Sub-Sublease, the prevailing
party shall be entitled to recover from the nonprevailing party the cost and
expenses of such action, including reasonable attorneys' fees and court costs.
The "prevailing party" will be determined by the court before whom the action
was brought based upon the assessment of which party's major arguments or
positions taken in the suit or proceeding could fairly be said to have prevailed
over the other party's major arguments or positions on major disputed issues in
the court's decision.
(g) COUNTERPARTS. This Sub-Sublease may be executed in counterparts, each
of which shall constitute an original and shall be binding upon all parties,
their successors and permitted assigns.
14. SURRENDER. Juniper's obligation with regard to the surrender of the
Sub-Subleased Premises shall be deemed satisfied so long as Juniper surrenders
possession of the Sub-Subleased Premises in the same condition as it receives
them, reasonable wear and tear and damage caused by casualty excepted.
7
<PAGE> 8
================================================================================
15. SIGNAGE. Juniper may replace all of Trident's existing signage with its
own signage, the design of which shall be subject to prior approval of Trident
and Spieker Properties.
16. CONDITION PRECEDENT. Notwithstanding Paragraph 3 hereof, the
Commencement Date of this Sub-Sublease shall not occur until the Master Landlord
and NCD have consented to this Sub-Sublease in writing. In the event that such
consents are not obtained within sixty (60) days after the execution of this
Sub-Sublease, Juniper, at Juniper's sole volition, may terminate this
Sub-Sublease, and this Sub-Sublease shall have no further force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Sub-Sublease as of the
date first above written.
JUNIPER NETWORKS, INC. TRIDENT MICROSYSTEMS, INC.
BY: /s/ Marcel Gani By: /s/ [SIGNATURE ILLEGIBLE]
------------------------- -------------------------
Title: CFO Title: CEO
---------------------- ----------------------
Date: July 1, 1998 Date: 7/10/98
---------------------- ----------------------
BY: /s/ Scott Kriens By: /s/ [SIGNATURE ILLEGIBLE]
------------------------------- ------------------------------
Title: CEO Title: CEO
---------------------------- ---------------------------
Date: 7/1/98 Date: 7-10-98
---------------------------- ---------------------------
Address For Notices: Address For Notices:
385 Ravendale Avenue 189 North Bernardo Avenue
Mountain View, CA 94043 Mountain View, CA 94043
Attn.: Chief Financial Officer Attn.: Chief Financial Officer
8
<PAGE> 9
[SPALLINO REID LETTERHEAD]
SUBLEASE
Sublandlord: Subject Property:
Network Computing Devices, Inc. 370 and 380 North Bernardo Avenue,
a California corporation Mountain View, CA 94043
Subtenant:
Trident Microsystems, Inc. Date: October 24, 1995
a California corporation
1. PARTIES
This Sublease is made and entered into as of October 24, 1995, by and
between Network Computing Devices, Inc. a California corporation
("Sublandlord"), and Trident Microsystems, Inc., a California corporation
("Subtenant"), under the Master Lease dated September 21, 1989, between
Mountain View Industrial Associates, a California Partnership, as
"Landlord", and Network Computing Devices, Inc. a California corporation
"Tenant," and the First Addendum to the Lease dated December 2, 1991
between Mountain View Industrial Associates, a California Partnership
"Landlord," and Network Computing Devices, Inc. a California corporation
"Tenant," and the Second Addendum to the Lease dated August 20, 1993
between Mountain View Industrial Associates, a California Partnership
"Landlord," and Network Computing Devices, Inc. a California corporation
"Tenant," and the Third Addendum to the Lease dated October 22, 1993
between Mountain View Industrial Associates, a California Partnership
"Landlord," and Network Computing Devices, Inc. a California corporation
"Tenant". A copy of the Master Lease and Addendums 1, 2 and 3 are attached
hereto as Attachment I and incorporated herein by this reference.
2. PROVISIONS CONSTITUTING SUBLEASE:
2.1 This Sublease is subject to all of the terms and conditions of the
Master Lease. Subtenant hereby assumes and agrees to perform all of the
obligations of "Tenant" under the Master Lease to the extent said
obligations apply to the sublicensed premises and any Direct Operating
Expenses relating to the sublicensed premises. Sublandlord hereby agrees to
cause Landlord under the Master Lease to perform all of the obligations of
Landlord thereunder to the extent said obligations apply to the subleased
premises and Subtenant's use of the common areas and Outside Areas.
Subtenant shall not commit or permit to be committed on the subleased
premises or on any other portion of the Project any act or omission which
violates any term or conditions of the Master Lease. Except to the extent
waived or consented to in writing by the other party or parties hereto who
are affected thereby, neither of the parties hereto will, by renegotiation
of the Master Lease, assignment, subletting, default or any other voluntary
action, avoid or seek to avoid the observance or performance of the terms
to be observed or performed hereunder by such party, but will at all times
in good faith assist in carrying out all the terms of this Sublease and in
taking all such action as may be necessary or appropriate to protect the
rights of the other party or parties hereto who are affected thereby
against impairment. Nothing contained in this Section 2.1 or elsewhere in
this Sublease shall prevent or prohibit Sublandlord (a) from exercising its
right to terminate the Master Lease pursuant to the terms thereof or (b)
from assigning its interest in this Sublease.
2.2 All of the terms and conditions contained in the Master Lease are
incorporated herein and the terms and conditions specifically set forth in
this Sublease shall constitute the complete terms and conditions of this
Sublease.
2.3 The parties agree that the terms of Addendum Number 2 and Addendum
Number 3 shall not apply to this transaction. Further, the parties agree
that Section 33.1 of the Master Lease is hereby deleted.
3. SUBLEASED PREMISES AND RENT:
3.1 Subleased premises:
<PAGE> 10
6. NOTICES:
All notices, demands, consents and approvals which may or are required to
be given by Subtenant to the Landlord shall be given in the manner provided
in the Master Lease, and at the addresses shown on the signature page
hereof. Sublandlord shall notify Subtenant of any Event of Default under
the Master Lease, or of any other event of which Sublandlord has actual
knowledge which will impair Subtenant's ability to conduct its normal
business at the subleased premises, as soon as reasonably practicable
following Sublandlord's receipt of notice from the Landlord of an Event of
Default or actual knowledge of such impairment. If Sublandlord elects to
terminate the Master Lease, Sublandlord shall so notify Subtenant by giving
at least 30 days notice prior to the effective date of such termination.
7. BROKER FEE:
Upon execution of the Sublease, Sublandlord shall pay Spallino Reid
Corporate Real Estate Services, a licensed real estate broker, fees set
forth in a separate agreement between Sublandlord and Broker.
8. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT:
Subtenant shall be responsible for the installation and cost of any and all
improvements, alterations or other work required on or to the subleased
premises or to any other portion of the property and/or building of which
the subleased premises are a part, required or reasonably necessary because
of: (1) Subtenant's use of the subleased premises or any portion thereof:
(2) the use by a Subtenant by reason of assignment or sublease; or (3)
both, including any improvements, alterations or other work required under
the Americans With Disabilities Act of 1990 ("ADA"). Any pre-existing
conditions of non-compliance with respect to ADA shall not be the
responsibility of Subtenant during the Sublease term. However, Subtenant
shall be responsible for any required ADA improvements required as a result
of tenant improvements to the subleased premises made or installed by
Subtenant. Compliance with the provisions of this Section 8 shall be a
condition of Sublandlord granting its consent to any assignment or Sublease
of all or a portion of this Sublease and the subleased premises described
in this Sublease.
9. HAZARDOUS MATERIALS:
Subtenant shall not cause or permit any Hazardous Materials to be released
from or about the subleased premises, including, without limitation,
releases into the groundwater, soils, or air underlying, adjacent to or in
the vicinity of the Project. Subtenant shall provide Sublandlord with at
least five (5) days prior written notice before bringing, using or storing
any Hazardous Materials on the subleased premises.
Subtenant, at its sole expense shall comply with all applicable
governmental rules, regulations, codes, ordinances, statutes, directives
and other requirements (collectively, "Laws") respecting Hazardous
materials in connection with Sublessee's activities and the activities of
its agents, employees, contractors and invitees on or about the subleased
premises. Subtenant at its sole cost, shall perform all investigations,
clean-up and other response actions which may be required of Subtenant by
any governmental authority in, on, or about the Project in connection with
Subtenant's use of the subleased premises and the activities of Subtenant,
and Subtenant's agents, employees, contractors and invitees on or about the
subleased premises.
Sublandlord shall indemnify, protect, defend and hold harmless Subtenant
from and against all costs (including, but not limited to, environmental
response costs), expenses, claims, judgements, losses, demands,
liabilities, causes of action, governmental directives, proceedings or
hearings, including Subtenant's attorneys and experts fees and costs,
relating to or arising in connection with any Hazardous Materials present
on or about the premises prior to Subtenant's occupation of the subleased
premises.
To the extent any of the other provisions stated herein or in the
definitive lease agreement conflict with the provisions of this Section 9,
the provisions pursuant to "Toxic Materials" contained in the "Master
Lease" shall be controlling.
<PAGE> 11
10. RENT ABATEMENT AND DAMAGES TO PERSONAL PROPERTY
In the event Sublandlord, pursuant to the terms of the Master Lease, is
entitled to and receives rent abatement, then to the extent such rent abatement
affects the subleased premises, Subtenant shall be entitled to rent abatement
in an amount that the net rentable area of the subleased premises bears to the
total net rentable area of the Master Lease, and only to the extent any such
abatement applies to the sublease term. In addition, any amounts paid or
credited to Sublandlord under the terms of the Master Lease for damage to
personal property shall be credited to Subtenant, subject to the same
limitations set forth above.
THE TERMS OF THE MASTER LEASE SHALL APPLY TO AND CONTROL THE TRANSACTION.
Sublandlord: NETWORK COMPUTING DEVICES, INC. a California corporation.
By: /s/ [illegible] Date: 12-6-95
---------------------- -------------------
Subtenant: TRIDENT MICROSYSTEMS, INC., a California corporation.
By: /s/ [illegible] Date: 12-6-95
---------------------- -------------------
<PAGE> 12
ATTACHMENT I MASTER LEASE AND ADDENDUM 1, 2 AND 3
MASTER LANDLORD CONSENT
The undersigned, Master Landlord under the Master Lease attached as Attachment
I, hereby consents to the subletting of the subleased premises described herein
on the terms and conditions contained in this Sublease. This Consent shall
apply only to this Sublease and shall not be deemed to be a consent to any
other Sublease.
Master Landlord: MOUNTAIN VIEW INDUSTRIAL ASSOCIATES, a California Partnership.
By: Date:
-------------------------- ---------------------------
ATTORNMENT AGREEMENT
Subtenant shall attorn to Master Landlord and perform all of this Subtenant's
obligations under the Sublease directly to Master Landlord as if Master
Landlord were the Sublandlord under the Sublease. If Subtenant is not, at the
time of the notice, in default, Master Landlord shall continue to recognize the
estate of Subtenant created under the Sublease. If Subtenant is not in default,
the Sublease shall continue with the same force and effect as if Master
Landlord and Sublandlord had entered into a lease on the same provisions as
those contained in the Sublease.
Subtenant: TRIDENT MICROSYSTEMS, INC., a California Corporation.
By: Date:
-------------------------- ---------------------------
<PAGE> 13
[SPIEKER LOGO}
December 12, 1995
Mr. Jack Bradley
Network Computing Devices, Inc.
350 North Bernardo Avenue
Mountain View, CA 94043
Re: Lease Agreement for Premises located at 370 North Bernardo Avenue,
Mountain View
Dear Mr. Bradley
In response to your request to sublease, pursuant to Paragraph 17 or your Lease
Agreement, Spieker Properties (Landlord) hereby consents to the subleasing of
your Premises located at 370 North Bernardo Avenue, Mountain View, which
contains approximately 27,444 rentable square feet of space by NETWORK
COMPUTING DEVICES, INC. (Tenant) to TRIDENT MICROSYSTEMS, INC. (Subtenant).
This consent in no way obligates Landlord to Subtenant with regard to this
Sublease Agreement, and in no way releases Tenant from their obligations under
the Lease. The Lease shall remain in full force and effect, and Landlord shall
not be obligated to recognize or be bound by any terms or conditions of the
sublease. The Lease shall, at all times, supersede any and all terms and
conditions of the Sublease Agreement.
Please remember that if the Subtenant should wish to make any alterations or
tenant improvements to the Premises, Landlord reserves the right under
Paragraph 9 - Alterations, of the Lease Agreement, to require Network Computing
Devices, as Tenant, to remove said alterations upon the expiration or sooner
termination of the Term and to restore the Premises to their original condition.
Please signify your agreement and understanding of the above terms and
conditions by signing below on all three (3) copies. Also, please have your
subtenant indicate its agreement and understanding of the above terms and
conditions by signing below. Please return one signed letter to Spieker
Properties at 2180 Sand Hill Road, Suite #200, Menlo Park, California 94025.
Very truly yours,
/s/ Patricia A. Messer
Patricia A. Messer
Project Director
"TENANT" "SUBTENANT"
NETWORK COMPUTING DEVICES, INC. TRIDENT MICROSYSTEMS, INC.
By: /s/ [SIGNATURE ILLEGIBLE] By: /s/ [SIGNATURE ILLEGIBLE]
------------------------------- -------------------------------
CFO CFO
Its: ------------------------------ Its: ------------------------------
12/13/95 12/13/95
Date: ----------------------------- Date: -----------------------------
<PAGE> 1
EXHIBIT 10.5
SUBLEASE
THIS SUBLEASE ("Sublease") is dated as of June 5, 1997, and is made by
and between AT HOME CORPORATION, a Delaware corporation ("Sublessor"), and
JUNIPER NETWORKS, INC., a California corporation ("Sublessee"). Sublessor and
Sublessee hereby agree as follows:
1. Recitals: This Sublease is made with reference to the fact that
Spieker Properties, L.P., a California limited partnership ("Master Lessor"), as
Landlord, and Sublessor, as Tenant, entered that certain Lease, dated as of
December 13, 1995 ("Master Lease"), with respect to that certain real property
commonly known as 385 Ravendale Drive, Mountain View, California ("Premises"),
as more particularly described in the Master Lease. A copy of the Master Lease
is attached hereto as Exhibit "A" and incorporated by reference herein.
2. Premises: Sublessor hereby subleases to Sublessee, and Sublessee
hereby subleases from Sublessor, the entire Premises, consisting of
approximately thirty-two thousand nine hundred eight (32,908) square feet
("Subleased Premises"), being a portion of that certain two (2)- building
project comprised of approximately sixty-six thousand eight hundred forty
(66,840) square feet and more commonly known as 355-385 Ravendale Drive,
Mountain View, California ("Property"). The Subleased Premises and the Property
are more particularly described on Exhibit "B" attached hereto and incorporated
by reference herein.
3. Term:
A. Term. The term of this Sublease ("Term") shall be commence on
the later of (i) July 1, 1997; or (ii) the date that Sublessor delivers
possession of the Subleased Premises (excluding, if necessary, the Retained
Space, as defined in Paragraph 3.B. below) in the condition required by this
Sublease ("Commencement Date") and terminate on December 31, 2001 ("Termination
Date"), unless this Sublease is sooner terminated pursuant to its terms or the
Master Lease is sooner terminated pursuant to its terms. If Sublessor fails to
deliver the Subleased Premises (excluding the Retained Space) in the condition
required by this Sublease by September 1, 1997, Sublessee shall have the right
to terminate this Sublease, and Sublessor shall return to Sublessee all sums
paid by Sublessee to Sublessor in connection with its execution of this
Sublease.
B. Retained Space. Sublessor and Sublessee acknowledge that,
while Sublessor intends to vacate the Subleased Premises by June 30, 1997, it
may be necessary for Sublessor to retain possession of a portion of the
Subleased Premises after that date for the purpose of storing workstations and
similar personal property (collectively, "Personal Property"). Sublessor and
Sublessee agree that the following conditions shall govern any occupancy of the
Subleased Premises by Sublessor after June 30, 1997:
(i) Portion of Subleased Premises to be Retained.
Commencing on the Commencement Date, Sublessor shall be entitled to retain
possession of a portion of the Subleased
<PAGE> 2
Premises for the purpose of storing the Personal Property ("Retained Space").
Sublessor shall have the right to designate a reasonable amount of contiguous
square footage comprising the Retained Space, and Sublessee shall have the right
to designate the location of the Retained Space, which designation shall be
reasonable. During the period that Sublessor stores the Personal Property in the
Retained Space, Sublessor shall (i) keep the Retained Space in good condition
and repair, and surrender the Retained Space to Sublessee in "broom clean"
condition; and (ii) use reasonable good faith efforts to minimize any disruption
to or interference with Sublessee's use of or access to the remainder of the
Subleased Premises. Also during such period, Sublessee shall use reasonable good
faith efforts to minimize any disruption to or interference with Sublessor's use
of or access to the Retained Space. Sublessor shall vacate the Retained Space by
July 31, 1997.
(ii) Security Precautions. Sublessor and Sublessee
acknowledge that neither party will be responsible for erecting demising walls
separating the Retained Space from the remainder of the Subleased Premises, and
that neither the Retained Space nor the remainder of the Subleased Premises will
be securely demised. Sublessor and Sublessee shall abide by the reasonable
security precautions established by the other party, and neither party shall
enter the space of the other unless accompanied by an employee of the other.
Sublessor shall have the right to enter the Subleased Premises during normal
business hours to the extent necessary for access to and from the Retained
Space.
C. No Option to Extend. The parties acknowledge that Sublessee
has no option to extend the Term of this Sublease.
D. Early Access. Provided that Sublessee does not materially
interfere with the conduct of Sublessor's business on the Subleased Premises,
Sublessee shall have the right to enter the Subleased Premises for the two (2)-
week period immediately prior to the Commencement Date for the purpose of
preparing the Subleased Premises for Sublessee's occupancy. Sublessee shall not
be liable for the payment of Monthly Base Rent or Additional Rent during the
early access period, but all other terms and conditions of this Sublease shall
apply.
4. Rent:
A. Monthly Base Rent. Except as otherwise provided herein,
Sublessee shall pay to Sublessor as monthly base rent ("Monthly Base Rent") for
the Subleased Premises equal monthly installments as follows:
<TABLE>
<CAPTION>
Months Rent/S.F./Month Rent/Month
------ --------------- ----------
<S> <C> <C> <C>
01 - 12 $1.65 $54,298.20
13 - 24 $1.70 $55,943.60
</TABLE>
-2-
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
25 - 36 $1.75 $57,589.00
37 - 48 $1.80 $59,234.40
49 - ex- $1.85 $60,879.80
piration
</TABLE>
As used herein, the word "month" shall mean a period beginning on the first
(1st) day of a month and ending on the last day of that month. Monthly Base Rent
shall be paid on or before the first (1st) day of each month. Rent (as defined
in Paragraph 4.B. below) for any period during the term hereof which is for less
than one month of the Term shall be a prorata portion of the monthly installment
based on a thirty (30)-day month. Except as otherwise provided herein, Rent
shall be payable without notice or demand and without any deduction, offset, or
abatement, in lawful money of the United States of America. Rent shall be paid
directly to Sublessor at 425 Broadway, Redwood City, California 94063, or such
other address as may be designated in writing by Sublessor.
B. Additional Rent. All monies required to be paid by Sublessee
under this Sublease (excluding Monthly Base Rent pursuant to Paragraph 4.A),
including any amounts payable by Sublessor to Master Lessor under the Master
Lease (including, without limitation, Basic Operating Costs, as defined in
Section 7 of the Master Lease), shall be deemed additional rent ("Additional
Rent"). Monthly Base Rent and Additional Rent hereinafter collectively shall be
referred to as "Rent." Sublessee and Sublessor agree, as a material part of the
consideration given by Sublessee to Sublessor for this Sublease, that, with
respect to the period arising from and after the Commencement Date, Sublessee
shall pay all costs, expenses, taxes, insurance, maintenance and other charges
of every kind and nature arising in connection with the Sublease, the Master
Lease or the Subleased Premises, such that Sublessor shall receive, as a net
consideration for this Sublease, the Monthly Base Rent payable under Paragraph
4. A. hereof; provided, however, that all such costs, expenses, taxes,
insurance, maintenance and other charges shall be equitably prorated to reflect
the Commencement Date and the Termination Date of this Sublease. In no event
shall Sublessee's obligation to pay for the foregoing charges exceed the amount
attributable to the Subleased Premises, subject, however, to Sublessor's
obligations hereunder with respect to the Retained Space. Sublessee shall be
entitled to all credits, if any, given by Master Lessor to Sublessor for
Sublessor's overpayment of any of the foregoing charges.
C. Payment of First Month's Rent. Upon execution hereof by
Sublessee, Sublessee shall pay to Sublessor the sum of Fifty-Four Thousand Two
Hundred Ninety-Eight and 20/100 Dollars ($54,298.20), which shall constitute
Monthly Base Rent for the first month of the Term. If the Commencement Date
falls on a day other than the first day of a calendar month, any excess
attributable to the first month of the Term shall be credited to Monthly Base
Rent for the second month of the Term.
-3-
<PAGE> 4
5. Security Deposit: Upon execution hereof, Sublessee shall deposit with
Sublessor, in cash, the sum of Sixty Thousand Eight Hundred Eighty and No/100
Dollars ($60,880.00), as security for the performance by Sublessee of the terms
and conditions of this Sublease. If Sublessee fails to pay Rent or other charges
due hereunder (beyond applicable notice and cure periods) or otherwise defaults
(beyond applicable notice and cure periods) with respect to any provision of
this Sublease, then Sublessor may draw upon, use, apply or retain all or any
portion of the security deposit for the payment of any Rent or other charge in
default, for the payment of any other sum which Sublessor has become obligated
to pay by reason of Sublessee's default, or to compensate Sublessor for any loss
or damage which Sublessor has suffered thereby. If Sublessor so uses or applies
all or any portion of the security deposit, then Sublessee shall, within ten
(10) days after demand therefor, deposit cash with Sublessor in the amount
required to restore the deposit to the full amount stated above. Upon the
expiration or earlier termination of this Sublease, Sublessor shall return to
Sublessee (without interest) so much of the security deposit as has not been
applied by Sublessor pursuant to this Paragraph, or which is not otherwise
required to cure Sublessee's defaults.
6. Late Charge: If Sublessee fails to pay Sublessor any amount due
hereunder on or before the date when such payment is due, Sublessee shall pay to
Sublessor upon demand a late charge equal to five percent (5%) of the delinquent
amount, pursuant to the provisions of Section 26.D of the Master Lease. The
parties agree that the foregoing late charge represents a reasonable estimate of
the cost and expense which Sublessor will incur in processing each delinquent
payment. Sublessor's acceptance of any interest or late charge shall not waive
Sublessee's default in failing to pay the delinquent amount. Sublessor and
Sublessee acknowledge that Rent is due and payable to Sublessor not later than
three (3) days prior to the first day of each calendar month during the Term,
and that Sublessee's failure to pay Rent by such date shall subject Sublessee to
payment of the aforementioned late charge.
7. Repairs: Sublessor shall deliver the Subleased Premises to Sublessee
in "broom clean" condition. Except as set forth in this Paragraph and in
Paragraph 14 below, Sublessor shall have no obligation whatsoever to make or pay
the cost of any alterations, improvements or repairs to the Subleased Premises,
including, without limitation. any improvement or repair required to comply with
any law, regulation, building code or ordinance (including, without limitation,
the Americans With Disabilities Act of 1990 ("ADA"), except as provided in
Addendum Paragraph 4 of the Master Lease for the period commencing with the
Commencement Date of the Master Lease and ending with the day prior to the
Commencement Date of this Sublease, any violation of which shall be Sublessor's
obligation, which violation Sublessor shall cure at Sublessor's expense within a
reasonable period after receipt of written notice of same from Sublessee. Except
to the extent caused by the negligence or willful misconduct of Sublessor, its
agents, employees, contractors or invitees, for which Sublessor shall be
responsible, at no cost to Sublessee, for the performance of any repairs
required as a result thereof, Sublessee shall look solely to Master Lessor for
performance of any repairs required to be performed by Master Lessor under the
terms of the Master Lease; provided, however, that if Master Lessor shall fail
to perform any of its obligations
-4-
<PAGE> 5
in accordance with the terms of the Master Lease (including, without limitation,
the failure to make required repairs), Sublessor, upon receipt of written notice
from Sublessee, shall diligently attempt to enforce all obligations of Master
Lessor under the Master Lease (without requiring Sublessor to spend more than a
nominal sum, which nominal sum shall be limited to all costs associated with the
preparation of and transmittal to Master Lessor of documentation from Sublessor
or Sublessor's attorneys detailing the obligations to be performed by Master
Lessor under the Master Lease). If, after receipt of written request from
Sublessee, Sublessor shall fail or refuse to take action for the enforcement of
Sublessor's rights against Master Lessor with respect to the Subleased Premises
("Action"), Sublessee shall have the right to take such Action in its own name,
and for that purpose and only to such extent, all of the rights of Sublessor as
Tenant under the Master Lease hereby are conferred upon and assigned to
Sublessee, and Sublessee hereby is subrogated to such rights to the extent that
the same shall apply to the Subleased Premises. If any such Action against
Master Lessor in Sublessee's name shall be barred by reason of lack of privity,
nonassignability or otherwise, Sublessee may take such Action in Sublessor's
name; provided that Sublessee has obtained the prior written consent of
Sublessor, which consent shall not be unreasonably withheld, and, provided
further, that Sublessee shall indemnify, protect, defend by counsel reasonably
satisfactory to Sublessor and hold Sublessor harmless from and against any and
all liability, loss, claims, demands, suits, penalties or damage (including,
without being limited to, reasonable attorneys' fees and expenses) which
Sublessor may incur or suffer by reason of such Action, except for any such
liability, loss, claims, demands, suits, penalties or damage which Sublessor may
incur or suffer by reason of Sublessor's negligent acts or omissions.
8. Indemnity:
A. Sublessee's Indemnity. Except to the extent caused by
Sublessor's negligence or willful misconduct during the period that Sublessor
occupies the Retained Space, and except to the extent caused by Sublessor's sole
active negligence or willful misconduct at any time after Sublessor has vacated
the Retained Space, Sublessee shall indemnify, protect, defend with counsel
reasonably acceptable to Sublessor and hold Sublessor harmless against any and
all claims, liabilities, judgments, causes of action, damages, costs, and
expenses (including reasonable attorneys' and experts' fees), caused by or
arising in connection with: (i) the use, occupancy or condition of the Subleased
Premises; (ii) the negligence or willful misconduct of Sublessee or its
employees, contractors, agents or invitees; (iii) a breach of Sublessee's
obligations under this Sublease; or (iv) a breach of Sublessee's obligations
under the Master Lease to the extent incorporated herein by this Sublease.
B. Sublessor's Indemnity. Except to the extent caused by
Sublessee's negligence or willful misconduct, Sublessor shall indemnify,
protect, defend with counsel reasonably acceptable to Sublessor and hold
Sublessor harmless against any and all claims, liabilities, judgments, causes of
action, damages, costs, and expenses (including reasonable attorneys' and
experts' fees), caused by or arising in connection with: (i) a breach of
Sublessor's obligations under this Sublease; or (ii) a breach of Sublessor's
obligations as Tenant under the Master Lease to the
-5-
<PAGE> 6
extent those obligations are not the obligations of Sublessee under this
Sublease; or (iii) the sole active negligence or willful misconduct of
Sublessor, its employees, contractors, agents or invitees occurring on or about
the Subleased Premises.
9. Right to Cure Defaults:
A. Sublessor's Right. If Sublessee fails to pay any sum of money
to Sublessor (beyond applicable notice and cure periods), or fails to perform
(beyond applicable notice and cure periods) any other act on its part to be
performed hereunder, then Sublessor may, but shall not be obligated to, make
such payment or perform such act. All such sums paid, and all costs and expenses
of performing any such act, shall be deemed Additional Rent payable by Sublessee
to Sublessor upon demand. In addition, Sublessee shall pay to Sublessor interest
on all amounts due, at the rate of twelve percent (12%) per annum or the maximum
rate allowed by law, whichever is less (the "Interest Rate"), from the due date
to and including the date of the payment, from the date of the expenditure until
repaid.
B. Sublessee's Right. If Sublessor fails to perform any act on
its part to be performed hereunder within a reasonable time after its receipt of
written request from Sublessee, but in no event longer than thirty (30) days
after Sublessor's receipt of such request (except that if such default cannot be
cured within said thirty (30)-day period, this period shall be extended for an
additional reasonable time, provided that Sublessor commences to cure such
default within such thirty (30)-day period and proceeds diligently thereafter to
effect such cure as quickly as possible), then Sublessee shall be entitled, at
Sublessee's sole option, to cure such default. Nothing in the foregoing sentence
shall be deemed to waive any rights Sublessee may have at law or in equity in
the event of such default by Sublessor.
10. Assignment and Subletting: Except in accordance with the terms of
Section 21 of the Master Lease, Sublessee may not assign this Sublease, sublet
the Subleased Premises, transfer any interest of Sublessee therein, or permit
any use of the Subleased Premises by another parry ("Transfer"), without the
prior written consent of Sublessor, which shall not be unreasonably withheld,
and Master Lessor. A consent to one Transfer shall not be deemed to be a consent
to any subsequent Transfer. Any Transfer without such consent shall be void and
shall, at the option of Sublessor, terminate this Sublease. As a condition of
granting its consent to any assignment or subletting, Sublessor may require that
Sublessee pay to Sublessor, as Additional Rent, fifty percent (50%) of all
Excess Rents received by Sublessee. As used herein, the term "Excess Rents"
shall mean all Rents and other consideration payable by a subtenant or assignee
to Sublessee in connection with the Transfer, less the cost incurred by
Sublessee as set forth in Addendum Paragraph 14 of the Master Lease. Sublessor's
waiver or consent to any assignment or subletting shall be ineffective unless
set forth in writing, and Sublessee shall not be relieved from any of its
obligations under this Sublease, unless the consent expressly so provides.
Notwithstanding anything to the contrary contained in this Sublease or in the
Master Lease, at Sublessor's sole option, Sublessor shall have the right to
terminate this Sublease if Sublessee requests Sublessor's
-6-
<PAGE> 7
consent to an assignment of this Sublease or a sublet of fifty percent (50%) or
more of the square footage comprising the Subleased Premises.
11. Use: Sublessee may use the Subleased Premises only for the uses set
forth in the Basic Lease Information and in Section 4 of the Master Lease and
for no other purpose. With respect to Hazardous Materials as defined in the
Master Lease, Sublessee shall comply with the provisions of Section 4.B and
Addendum Paragraph 6.A of the Master Lease. Within twenty (20) days after
receipt of demand from Sublessor, Sublessee shall pay to Sublessor all taxes or
charges imposed by applicable governmental authorities against the Subleased
Premises or Sublessor (including, without limitation, assessments imposed as a
consequence of the storage, use, release or disposal of Hazardous Materials by
Sublessee in or about the Subleased Premises). Sublessee shall not do or permit
anything to be done in or about the Subleased Premises which would (i) injure
the Subleased Premises, or (ii) impair the efficient operation of the Subleased
Premises or the sprinkler systems, heating ventilating or air conditioning
equipment, or utilities systems located therein. Sublessee shall not store any
materials, supplies, finished or unfinished products, or articles of any nature
outside of the Subleased Premises. For purposes of this Sublease and Sections 4
and 5 of the Master Lease, Sublessee shall comply with all reasonable rules and
regulations promulgated from time to time by Master Lessor. Sublessor shall have
no right to promulgate any such rules and regulations.
12. Effect of Conveyance: As used in this Sublease, the term "Sublessor"
means the holder of the lessee's interest under the Master Lease. In the event
of any transfer of said lessee's interest, Sublessor shall be and hereby is
entirely relieved of all covenants and obligations of Sublessor hereunder first
accruing from and after the date of such transfer, and it shall be deemed and
construed, without further agreement between the parties, that the transferee
has assumed and shall carry out all covenants and obligations thereafter to be
performed by Sublessor hereunder. Sublessor shall transfer and deliver any
security of Sublessee to the transferee of said lessee's interest in the Master
Lease, and only thereupon shall Sublessor be discharged from any further
liability with respect thereto.
13. Acceptance: By taking possession of the Subleased Premises,
Sublessee shall conclusively be deemed to have accepted the Subleased Premises
in their as-is, then-existing condition, except as otherwise set forth in
Paragraphs 3 and 14 hereof.
14. Improvements: No alterations or improvements shall be made to the
Subleased Premises, except in accordance with this Sublease and the Master
Lease, and with the prior written consent, when required, of both Master Lessor
and Sublessor. Sublessor shall not be required to provide a tenant improvement
allowance to Sublessee in connection with Sublessee's construction of any
improvements to the Subleased Premises. Sublessor shall use reasonable efforts,
however, to cooperate with Sublessee to obtain Master Lessor's consent to
Sublessee's proposed alterations to the Subleased Premises, including the
removal of certain perimeter offices and creation of an assembly area.
-7-
<PAGE> 8
15. Limitation of Liability: Except to the extent of the negligence or
willful misconduct of Sublessor, its agents, employees, contractors or invitees
during the period that Sublessor occupies the Retained Space, and except to the
extent of the sole active negligence or willful misconduct of Sublessor, its
agents, employees, contractors or invitees at any time after Sublessor has
vacated the Retained Space, Sublessor shall not be liable to Sublessee for: (i)
failure or interruption of any utility system or service, or (ii) failure of
Master Lessor to maintain the Subleased Premises as may be required under the
Master Lease. In no event shall Sublessee be entitled to terminate this Sublease
except as otherwise expressly provided in this Sublease. In the event that
Sublessor is entitled to an abatement of rent under the terms of the Master
Lease, Sublessee shall be entitled to a proportionate share of abatement of Rent
under this Sublease. Sublessor and Sublessee are corporations, and the
obligations of Sublessor and Sublessee hereunder shall not constitute the
personal obligations of the officers, directors, trustees, partners, joint
venturers, members, owners, stockholders or other principals or representatives
of the corporations.
16. Default: Sublessee shall be in material default of its obligations
under this Sublease if Sublessee is responsible for the occurrence of any of the
events of default set forth in Section 26.A of the Master Lease.
17. Remedies: In the event of any default by Sublessee under this
Sublease (including, without limitation, a default pursuant to Section 26.A of
the Master Lease), Sublessor shall have all remedies provided by applicable law,
including, without limitation, all rights pursuant to Section 26.B of the Master
Lease and under California Civil Code Sections 1951.2 and 1951.4. Sublessor may
resort to its remedies cumulatively or in the alternative.
18. Surrender: On or before the expiration of this Sublease, Sublessee
shall remove all of its trade fixtures and shall surrender the Subleased
Premises to Sublessor in the condition received from Sublessor, casualty,
condemnation, Hazardous Materials not stored, used released or disposed of by
Sublessee or its agents, employees, contractors or invitees, alterations with
respect to which Sublessor or Master Lessor have not required removal and
reasonable wear and tear excepted. If the Subleased Premises are not so
surrendered, then Sublessee shall be liable to Sublessor for all costs incurred
by Sublessor in returning the Subleased Premises to the required condition, plus
interest thereon at the Interest Rate. Sublessee shall indemnify, defend with
counsel reasonably acceptable to Sublessor, protect and hold harmless Sublessor
against any and all claims, liabilities, judgments, causes of action, damages,
costs, and expenses (including attorneys' and experts' fees) resulting from
Sublessee's delay in surrendering the Subleased Premises in the condition
required.
19. Estoppel Certificates: Within ten (10) days after demand by
Sublessor, Sublessee shall execute and deliver to Sublessor an estoppel
certificate (i) certifying that this Sublease is unmodified and in full force
and effect or, if modified, the nature of such modification; (ii) stating the
date to which Rent and other charges are paid in advance; (iii) acknowledging
that there are no
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<PAGE> 9
uncured defaults, or the nature of any such uncured defaults, on the part of the
Sublessor; and (iv) certifying such other information as may be required by
Sublessor.
20. Broker: Sublessor and Sublessee each represent to the other that
they have dealt with no real estate brokers, finders, agents or salesmen other
than Colliers Parrish International, Inc., representing both Sublessor and
Sublessee in connection with this transaction. Each party agrees to hold the
other party harmless from and against all claims for brokerage commissions,
finder's fees, or other compensation made by any other agent, broker, salesman
or finder as a consequence of said party's actions or dealings with such agent,
broker, salesman, or finder.
21. Notices: Unless five (5) days' prior written notice is given in the
manner set forth in this Paragraph, the address of each party for all purposes
connected with this Sublease shall be that address set forth below their
signatures at the end of this Sublease. The address for Master Lessor shall be
as set forth in the Master Lease. All notices, demands, or communications in
connection with this Sublease shall be considered received when (i) personally
delivered; or (ii) if properly addressed and either sent by nationally
recognized overnight courier or deposited in the mail (registered or certified,
return receipt requested, and, postage prepaid), on the date shown on the return
receipt for acceptance or rejection. All notices given to the Master Lessor
under the Master Lease shall be considered received only when delivered in
accordance with the Master Lease to all parties hereto at the address set forth
below their signatures at the end of this Sublease.
22. Severability: If any term of this Sublease is held to be invalid or
unenforceable by any court of competent jurisdiction, then the remainder of this
Sublease shall remain in full force and effect to the fullest extent possible
under the law, and shall not be affected or impaired.
23. Amendment: This Sublease may not be amended except by the written
agreement of all parties hereto.
24. Attorneys' Fees: If either party brings any action or legal
proceeding with respect to this Sublease, the prevailing party shall be entitled
to recover reasonable attorneys' fees, experts' fees, and court costs.
Notwithstanding the foregoing and in addition thereto, Sublessor, upon written
request to Sublessee, shall be entitled to prompt receipt from Sublessee, for
each breach hereof, of such reasonable attorneys' fees (but not less than Fifty
Dollars ($50.00)), as may be incurred in connection with each notice or demand
delivered to Sublessee. Sublessee agrees that such sum constitutes reimbursement
to Sublessor of the reasonable cost of the preparation and delivery of each
notice caused by Sublessee's breach.
25. Other Sublease Terms:
A. Incorporation By Reference. The terms and conditions of this
Sublease shall include various Sections of the Master Lease, which, except to
the extent such terms are in conflict
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<PAGE> 10
with any of the other terms of this Sublease (in which event the other terms of
this Sublease shall control), are incorporated into this Sublease as if fully
set forth, except that: (i) each reference in such incorporated Sections to
"Lease" shall be deemed a reference to "Sublease"; (ii) each reference to the
"Premises" shall be deemed a reference to the "Subleased Premises"; (iii) each
reference to "Landlord" and "Tenant" shall be deemed a reference to "Sublessor"
and "Sublessee", respectively (except as otherwise expressly set forth below);
(iv) with respect to work, services, repairs, restoration, provision of
insurance or the performance of any other obligation of Master Lessor under the
Master Lease, the sole obligation of Sublessor shall be as set forth in
Paragraph 7 hereof; (v) with respect to any obligation of Sublessee to be
performed under this Sublease, wherever the Master Lease grants to Sublessor a
specified number of days to perform its obligations under the Lease, Sublessee
shall have three (3) fewer days to perform the obligation, including, without
limitation, curing any defaults, except as otherwise expressly set forth in this
Sublease; and (vi) with respect to any approval required to be obtained from the
"Landlord" under the Master Lease, such consent must be obtained from both the
Master Lessor and the Sublessor, and the approval of Sublessor may be withheld
if, despite Sublessor's reasonable efforts, the Master Lessor's consent is not
obtained.
The following Sections of the Master Lease are hereby incorporated into
this Sublease:
Basic Lease Information Sections Project Description, Building
Description, Premises, Permitted Use, Occupancy Density and Tenant's
Proportionate Share;
Section 2.A, except that the first and second sentences of Section 2.A
hereby are deleted;
Sections 4 and 5;
Section 7, except that all references to "Landlord" in Sections 7.A.,
B., D., E. and in the last full paragraph of Section 7 shall mean only Master
Lessor;
Sections 8.A and 8.B., except that references to "Landlord" in Section
8.A shall mean only Master Lessor;
Section 9;
Section 10, except that references to "Landlord" in Section 10 shall
mean only Master Lessor;
Sections 12 through 18;
Sections 21 through 23;
Section 24, except that (i) references to "Landlord" in the second
sentence of Section 24.A
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<PAGE> 11
and in Sections 24.B through E shall mean only Master Lessor; and (ii) with
respect to "Tenant's" right to terminate under Section 24.C, Sublessee shall not
exercise such right without the prior written consent of Sublessor, which shall
not be unreasonably withheld or delayed;
Sections 25 through 31;
Sections 32, except that the addresses for notices to Sublessor and
Sublessee shall be as set forth beneath the signature lines in this Sublease;
Sections 33 and 34;
Section 35, except that this provision shall not be applicable to
Sublessee's obligation to pay Rent hereunder;
Sections 36 and 37;
Additional Paragraphs 39 and 40;
Addendum Paragraphs 2, 4, 6, 7, 8 and 9 (except that references to
"Landlord" in Sections 2, 4. 6.B., 7, 8 and 9 shall mean only Master Lessor), 10
(except that references to "Landlord" shall mean only Master Lessor), 11 (except
that the reference to "Landlord's property insurance policy" in line 4 of this
paragraph shall mean only Master Lessor), 12, 14, 15, and 16; and
Exhibits A, B and C.
B. Sublessee's Obligations: This Sublease is and all times shall
be subject and subordinate to the Master Lease and the rights of Master Lessor
thereunder. Sublessee hereby expressly agrees: (i) to comply with all provisions
of the Master Lease incorporated by reference herein, except to the extent
inconsistent with the terms of this Sublease; (ii) to perform all the
obligations on the part of the "Tenant" to be performed under the terms of the
Master Lease during the term of this Sublease incorporated by reference herein.
except to the extent inconsistent with the terms of this Sublease; and (iii) to
hold Sublessor free and harmless of and from all liability, judgments, costs,
damages, claims, demands, and expenses (including reasonable attorneys' and
experts' fees) arising out of Sublessee's failure to comply with or to perform
Sublessee's obligations hereunder or the obligations of the "Tenant" under the
Master Lease as herein provided or to act or omit to act in any manner which
will constitute a breach of the Master Lease.
26. Condition Precedent: This Sublease and Sublessor's and Sublessee's
obligations hereunder are conditioned upon having obtained the written consent
of the Master Lessor. If Sublessor has not obtained Master Lessor's consent
within forty-five (45) days after the date of Sublessor's execution of this
Sublease, either party may terminate this Sublease, and Sublessor
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<PAGE> 12
shall return to Sublessee all sums paid by Sublessee to Sublessor in connection
with its execution of this Sublease. Sublessor shall use reasonable efforts to
obtain Master Lessor's consent within the time period set forth herein.
27. Parking: Sublessee shall have the right to the non-exclusive use of
one hundred thirty-eight (138) Property parking spaces in the common area
surrounding the Subleased Premises; provided, however, that during any period of
shared occupancy pursuant to Paragraph 3.B, Sublessor and Sublessee shall share
such parking on the basis that is proportionate to the square footage of the
Subleased Premises that each party then is occupying.
28. Signage: Sublessee may erect signs on the Subleased Premises
conforming to all legal requirements with the prior written approval of
Sublessor, which approval shall not be unreasonably withheld, subject to the
provisions of Section 13 of the Master Lease. Upon termination of the Sublease,
Sublessee shall remove all signage and repair all damage caused by the removal.
29. Board Approval: Sublessee represents and warrants to Sublessor that
Sublessee's Board of Directors has reviewed and approved the Master Lease and
this Sublease, and has authorized Sublessee's execution hereof.
30. Sublessor's Representations and Warranties: To the best of
Sublessor's knowledge, Sublessor represents and warrants with respect to the
Subleased Premises that:
A. The copy of the Master Lease attached hereto is a true and
correct copy thereof.
B. Sublessor has not previously subleased or otherwise
transferred any interest in the Subleased Premises.
C. Sublessor has not previously provided the Master Lessor with
any notice of default
D. The Master Lease is in full force and effect, and there exists
under the Master Lease no default or event of default by either Master Lessor or
Sublessor, nor has there occurred any event which, with the giving of notice or
passage of time or both, could constitute such a default or event of default.
E. There are no pending or threatened actions, suits or
proceedings before any court or administrative agency against Sublessor or
against Master Lessor or third parties which could, in the aggregate, adversely
affect the Subleased Premises or any part thereof or the ability of Master
Lessor to perform its obligations under the Master Lease or of Sublessor to
perform its obligations under this Sublease, and Sublessor is not aware of any
facts which might result in any such actions, suits or proceedings.
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<PAGE> 13
31. Sublessor's Obligations. Sublessor shall perform all of its
obligations under the Master Lease to the extent that Sublessee has not agreed
to perform such obligations under this Sublease.
32. Amendment or Modification of Master Lease: This Sublease shall be
subject to, and Sublessee accepts this Sublease subject to, any amendments,
modifications or supplements to the Master Lease hereafter made, provided that
Sublessor shall not enter any amendment, modification or supplement that would
materially adversely affect the use by Sublessee of the Subleased Premises in
accordance with the terms hereof, increase the obligations of Sublessee or
decrease its rights hereunder, lengthen the Term or increase the Rent required
to be paid by Sublessee hereunder. Sublessor shall provide written notice to
Sublessee of any permitted amendment, modification or supplement to the Master
Lease.
33. Notice Received from Master Lessor. Sublessor shall promptly deliver
to Sublessee by facsimile, if possible, copies of any notices of default
received from Master Lessor.
34. Termination: Sublessor shall not voluntarily terminate the Master
Lease during the Term unless and until the Master Lessor has agreed in writing
to (i) release Sublessor from all obligations and liabilities under the Master
Lease; and (ii) continue this Sublease in full force and effect as a direct
lease between Master Lessor and Sublessee upon and subject to all of the terms,
covenants and conditions of this Sublease for the balance of the Term hereof. If
Master Lessor so consents, Sublessee shall attorn to Master Lessor in connection
with any such voluntary termination and shall execute an attornment agreement in
such form as may reasonably be requested by Master Lessor.
35. Assignment of Indemnities: To the extent assignable, Sublessor shall
assign to Sublessee any warranties given and indemnities made by Master Lessor
under the Master Lease.
36. Insurance: With respect to the insurance Sublessee will carry for
the Subleased Premises, Sublessee shall have the option to (i) increase the fire
legal liability coverage it otherwise is required to carry hereunder, and (ii)
increase its overall liability limits coverage from One Million Dollars
($1,000,000.00) to Two Million Dollars ($2,000,000.00), and Sublessor shall
reimburse Sublessee for the cost thereof on a yearly basis, in an amount not to
exceed Two Thousand Five Hundred Dollars ($2,500.00) per year, within thirty
(30) days after receipt of the insurance company's invoice therefor.
37. Surrender Obligation:
A. Mater Lease Restoration Obligation. Notwithstanding anything to the
contrary contained in this Sublease or the Master Lease, if, upon the expiration
or earlier termination of this Sublease, Master Lessor requires that the
Subleased Premises be restored to its condition as of the Commencement Date of
the Master Lease, Sublessee shall be responsible for the performance
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<PAGE> 14
of and payment of the costs of such restoration, unless it is determined by the
parties that Sublessor has not fully disclosed to Sublessee all of the
alterations constructed by Sublessor in the Subleased Premises prior to the
Commencement Date of this Sublease, in which case Sublessor shall be responsible
for reimbursing Sublessee for the cost of the restoration related to such
undisclosed alterations (unless Master Lessor does not require their
restoration). For purposes of establishing the foregoing exception to
Sublessee's performance and payment obligations upon surrender, attached hereto
and incorporated by reference herein are Exhibit C, a floor plan showing the
interior of the Subleased Premises as of the date that Sublessor executed the
Master Lease, and Exhibit D, showing the interior layout of the Subleased
Premises as of the date of execution by Sublessor and Sublessee of this
Sublease. These Exhibits shall be used as a historical reference for purposes of
demonstrating the alterations that Sublessor constructed within the Subleased
Premises prior to the Commencement Date of this Sublease. Sublessee's
performance and payment obligations with respect to the restoration and the
exception thereto hereinafter shall be referred to as the "Master Lease
Restoration Obligations".
B. Obligation if Sublease Extended. Notwithstanding the foregoing, if
Sublessor properly exercises its option to extend the term of the Master Lease
for an additional three (3) years, and Sublessee and Sublessor concurrently
enter an agreement permitting Sublessee to sublease the Subleased Premises for
the additional three (3)- year period (notwithstanding the provisions of
Paragraph 3.C. above), upon the expiration or earlier termination of the
extended Sublease term, Sublessee shall be responsible for the Master Lease
Restoration Obligations.
C. Obligation if Sublease Not Extended. Notwithstanding the foregoing,
if Sublessor properly exercises its option to extend the term of the Master
Lease for an additional three (3)- year period, and, upon the expiration of the
Term of this Sublease, either Sublessor will reoccupy the Subleased Premises or
Sublessor will sublease the Subleased Premises to any person or entity other
than Sublessee, Sublessee shall not be responsible for the Master Lease
Restoration Obligations, but Sublessee shall be responsible for the performance
of and the payment of the cost of restoring the Subleased Premises to the
condition required by Paragraph 18 of this Sublease, as evidenced by Exhibit D.
D. Notice. If Master Lessor notifies Sublessor, rather than notifying
Sublessee directly, regarding the work constituting the Master Lease Restoration
Obligations, Sublessor promptly shall notify Sublessee of such obligations, and
Sublessee promptly shall comply with Master Lessor's directive.
[SIGNATURES ON NEXT PAGE)
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<PAGE> 15
IN WITNESS WHEREOF, the parties have executed this Sublease as of the
day and year first above written.
SUBLESSEE: SUBLESSOR:
JUNIPER NETWORKS, INC., AT HOME CORPORATION,
a California corporation a Delaware corporation
By: /s/ MARCEL GANI By: /s/ DAVID PINE
-------------------------------- ----------------------------------
Printed Printed
Name: MARCEL GANI Name: DAVID PINE
------------------------------ --------------------------------
Its: CFO Its: VICE PRESIDENT, GENERAL COUNSEL
------------------------------- ---------------------------------
Address: 385 Ravendale Drive Address: 425 Broadway
Mountain View, CA 94043 Redwood City, CA 94063
Telephone: 408 327-9827 Telephone: 415 569-5218
------------------------- ---------------------------
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<PAGE> 16
CONSENT TO SUBLEASE
Master Lessor, hereby acknowledges receipt of a copy of this Sublease,
and consents to this Sublease. By this consent, Master Lessor shall not be
deemed in any way to have entered into the Sublease or to have consented to
any further assignment or sublease.
MASTER LESSOR:
SPIEKER PROPERTIES, L.P.,
a California limited partnership
By:
------------------------------
Its:
-----------------------------
Address: 2180 Sand Hill Road, Ste. 200
Menlo Park, CA 94025
Telephone:
----------------------------------
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<PAGE> 17
[@HOME NETWORK LETTERHEAD]
June 3, 1997
Mr. Marcel Gani
Vice President, Finance & CFO
Juniper Networks, Inc.
3260 Jay Street
Santa Clara, California 95054
RE: LETTER AGREEMENT REGARDING FURNITURE AND OTHER PERSONAL
PROPERTY
Dear Mr. Gani:
This letter agreement ("Agreement") will set forth our mutual
understanding with respect to certain personal property currently located at 385
Ravendale Drive, Mountain View, California ("Subleased Premises"), which
Subleased Premises is the subject of that certain sublease ("Sublease") entered
between At Home Corporation ("At Home") and Juniper Networks, Inc. ("Juniper")
as of today's date. Capitalized terms not defined herein shall have the meaning
set forth in the Sublease.
On the Commencement Date of the Sublease, there shall be present on the
Subleased Premises fifty-two (52) cubicles, the existing wiring and security
system for the Subleased Premises (collectively, "Cubes and Wiring") and certain
office furniture located in the Premises and more particularly described on
Schedule 1, attached hereto and incorporated by reference herein ("Office
Furniture"). The cost of the Cubes and Wiring and the Office Furniture
(collectively, "Personal Property") shall be One Hundred Eighty Thousand and
No/100 Dollars ($180,000.00). The cost of the Personal Property shall be paid by
Juniper on an amortized basis over the first twelve (12) months of the Term, so
that on the Commencement Date and on the first day of each of the eleven (11)
months thereafter, Juniper shall pay to At Home, with each installment of Rent,
the sum of Fifteen Thousand and No/100 Dollars ($15,000.00). Notwithstanding the
foregoing, Sublessor shall credit against the foregoing monthly obligation due
from Sublessee, commencing with the first month of the Term until recovered in
full, the sum of Twenty Thousand and No/100 Dollars ($20,000.00, which sum
<PAGE> 18
Mr. Marcel Gani
June 3, 1997
Page 2
shall serve as reimbursement to Sublessee for restoring the NOC room to its
condition existing as of the Commencement Date of the Master Lease.
Effective as of the Commencement Date, At Home conveys to Juniper all of
its right, title and interest in and to the Personal Property. At Home
represents and warrants to Juniper, to the best of At Home's knowledge, that it
is conveying title to the Personal Property to Juniper free and clear of any
liens or encumbrances. Juniper shall take delivery of the Personal Property in
its "as-is, where-is" condition. At Home shall have no obligation to repair or
replace any item of Personal Property, and At Home makes no representation or
warranty of any kind with respect to the Personal Property, including, without
limitation, the condition or fitness of the Personal Property for Juniper's
proposed or actual use thereof.
Juniper shall indemnify, defend with counsel reasonably acceptable to At
Home, protect and hold harmless At Home from and against any and all
liabilities, judgments, causes of action, damages, costs and expenses
(including, without limitation, reasonable attorneys' and experts' fees), caused
by or arising in connection with the condition or use by Juniper of the Personal
Property from and after the date of delivery of the Personal Property by At Home
to Juniper, Juniper shall have the both the right and obligation to remove the
Personal Property from the Subleased Premises upon the expiration or earlier
termination of the Sublease.
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any waiver by either party of any breach of any
term or condition of this Agreement shall not operate as a waiver of any other
breach of such term or condition or of any other term or condition nor shall any
failure to enforce such provision hereof operate as a waiver of such provision
or of any other provision hereof, nor constitute nor be deemed as a waiver or
release of any other party for anything arising out of, connected with or based
upon this Agreement. The parties each agree to execute and deliver such other
documents, certificates and agreements, and to take such other actions, as may
be reasonably necessary or appropriate to carry out and further the purposes of
this Agreement. In the event of any litigation involving the parties to this
Agreement to enforce any provision of this Agreement, to enforce any remedy
available upon default under this Agreement, or seeking a declaration of the
rights
<PAGE> 19
Mr. Marcel Gani
June 3, 1997
Page 3
of either party under this Agreement, the prevailing party shall be entitled to
recover from the other party such attorneys' fees and costs as may reasonably be
incurred, as awarded by the court hearing the matter. If any term, covenant,
condition or provision of this Agreement, or the application thereof to any
person or circumstance, shall to any extent be held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
covenants, conditions or provisions of this Agreement, or the application
thereof to any person or circumstance, shall remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby. This Agreement
constitutes the entire agreement of the parties with respect to the Personal
Property, and supersedes all prior or contemporaneous agreements, oral or
written, concerning the subject matter hereof.
If the terms and conditions of this Agreement are satisfactory, please
indicate your acknowledgment and agreement by executing a copy of this Agreement
where indicated below.
Very truly yours,
AT HOME CORPORATION,
a Delaware corporation
By: /s/ David Pine
-------------------------------------
David Pine
Vice President and General Counsel
ACKNOWLEDGED AND AGREED:
JUNIPER NETWORKS, INC.,
a California corporation
By: /s/ Marcel Gani
-----------------------------
Its: CFO
----------------------------
Date: 06/05/97
---------------------------
<PAGE> 20
LEASE DATE: December 13, 1995
TENANT: At Home Corporation, a Delaware corporation
ADDRESS OF TENANT: 385 Ravendale Drive
Mountain View, California
LANDLORD: Spieker Properties, L.P., a California limited
partnership
ADDRESS OF LANDLORD: 2180 Sand Hill Road, #200, Menlo Park, CA 94025
Project Description: That two (2) building project totaling 66,840 square
feet commonly known as 355 - 385 Ravendale Drive,
Mountain View, California. The project is outlined in
green on Exhibit A.
Building Description: That 32,908 square foot, one-story building known as
385 Ravendale Drive, Mountain View, California. The
building is outlined in blue on Exhibit A.
Premises: That approximately 32,908 square feet of rentable area
commonly known as 385 Ravendale Drive, Mountain View,
California. The demised premises is outlined in red on
exhibit A.
Permitted Use: Tenant's use of the Premises shall include general
office, marketing, sales, research and development,
storage and all other legally related uses.
Occupancy Density: 3.3 per 1,000 square feet.
Scheduled Term
Commencement Date: January 1, 1996
Length of Term: Seventy-Two (72) months
Rent:
Base Rent: see addendum 1 $__________________
Estimated First Year Basic Operating Costs $4,228.68 per month
Security Deposit: Thirty-Nine Thousand Four Hundred Eighty Nine Dollars
and Sixty Cents ($39,489.60).
Tenant's Proportionate Share:
Of Building: 100%
Of Project: 49.23%
The foregoing Basic Lease information is incorporated into and made part of
this Lease. Each reference in this lease to any Basic Lease information shall
mean the respective information above and shall be construed to incorporate all
of the terms provided under the particular Lease paragraph pertaining to such
information. In the event of any conflict between the Basic Lease Information
and the lease, the latter shall control.
EXHIBIT "A"
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<PAGE> 21
TABLE OF CONTENTS
Page
Basic Lease Information.............................................. 1
Table of Contents.................................................... 2
1. Premises............................................................. 3
2. Possession and Lease Commencement.................................... 3
3. Term................................................................. 3
4. Use.................................................................. 3
5. Rules and Regulations................................................ 4
6. Rent................................................................. 4
7. Basic Operating Cost................................................. 4
8. Insurance and Indemnification........................................ 5
9. Waiver of Subrogation................................................ 6
10. Landlord's Repairs and Services...................................... 6
11. Tenant's Repairs..................................................... 6
12. Alterations.......................................................... 6
13. Signs................................................................ 7
14. Inspection/Posting Notices........................................... 7
15. Utilities............................................................ 7
16. Subordination........................................................ 7
17. Financial Statements................................................. 8
18. Estoppel Certificate................................................. 8
19. Security Deposit..................................................... 8
20. Tenant's Remedies.................................................... 8
21. Assignment and Subletting............................................ 8
22. Quiet Enjoyment...................................................... 9
23. Condemnation......................................................... 9
24. Casualty Damage...................................................... 9
25. Holding Over......................................................... 10
26. Default.............................................................. 10
27. Liens................................................................ 11
29. Transfers by Landlord................................................ 11
30. Right of Landlord to Perform Tenant's Covenants...................... 12
31. Waiver............................................................... 12
32. Notices.............................................................. 12
33. Attorney's Fees...................................................... 12
34. Successors and Assigns............................................... 12
35. Force Majeure........................................................ 12
36. Miscellaneous........................................................ 12
37. Additional Provisions................................................ 13
EXHIBIT "A" Site Plan
EXHIBIT "B" Floor Plan
EXHIBIT "C" Legal Description
Page 2
<PAGE> 22
LEASE
THIS LEASE is made as of the 12th day of December, 1995, between
Spieker Properties L.P., a California limited partnership (hereinafter called
"Landlord") and At Home Corporation, a Delaware corporation (hereinafter called
"Tenant").
PREMISES 1. Landlord leases to Tenant and tenant leases from Landlord,
upon the terms and conditions hereafter set forth, those
premises (the "Premises") outlined in red on Exhibit "A" and
described in the Basic Lease information. The Premises may be
all or part of the building (the "Building") or of the project
(the "project") which may consist of more than one building.
The Building and Project are outlined in blue and green
respectively on Exhibit "A".
POSSESSION
AND LEASE
COMMENCEMENT 2. A. In the event this Lease pertains to a Premises in which the
interior improvements have already been constructed (existing
improvements), the provisions of this subparagraph 2.A. shall
apply and the Term Commencement Date shall be the later of (1)
the earlier of the date on which (a) Tenant takes possession
of some or all of the Premises, or (b) Landlord delivers the
Premises to Tenant, (2) or one day after Landlord delivers to
Tenant a fully executed Lease Termination Agreement from
Network Computing Devices whereby Network Computing Devices
relinquishes all rights, title, and interest to Premises, (3)
if for any reason Landlord cannot deliver possession of the
Premises to Tenant on the Scheduled Term Commencement Date,
Landlord shall not be subject to any liability therefor, nor
shall Landlord be in default hereunder, and Tenant agrees to
accept possession of the Premises at such time as Landlord is
able to deliver the same, which date shall then be deemed the
Term Commencement Date. Tenant shall not be liable for any
Rent for any period prior to delivery of the Premises. Tenant
acknowledges that it has inspected and accepts the Premises in
their present condition as suitable for the purpose for which
the Premises are leased. Tenant agrees that said Premises and
other improvements are in good and satisfactory condition as
of when possession was taken. Tenant further acknowledges that
no representations as to the condition or repair of the
Premises, nor promises to alter, remodel, or improve the
Premises have been made by Landlord, unless such are expressly
set forth in this Lease or the Addendum hereto. Tenant shall,
upon demand, execute and deliver to Landlord a letter of
acceptance of delivery of the Premises. Premises shall be
delivered to Tenant in broom clean condition.
TERM 3. The Term of this Lease shall commence on the Term Commencement
Date and continue in full force and effect for the number of
months specified as the Length and Term in the Basic Lease
Information or until this Lease is terminated as otherwise
provided herein. If the Term Commencement Date is a date other
than the first day of the calendar month, the Term shall be
the number of months of the Length of Term in addition to the
remainder of the calendar month following the Term
Commencement Date.
USE 4. A. Tenant shall use the Premises for the Permitted Use and for
no other use or purpose without prior written consent of
Landlord. No increase in the Occupant Density of the Premises
shall be made without the prior written consent of Landlord.
Tenant and its employees, customers, visitors, and licensees
shall have the non-exclusive right to use, in common with other
parties occupying the Buildings or Project, the parking areas
and driveways of the Project, subject to such reasonable rules
and regulations as Landlord may from time to time prescribe and
deliver to Tenant.
B. Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises,
nor take any action which would constitute a nuisance or would
unreasonably disturb, obstruct or endanger any other tenants of
the Building or Project in which the Premises are situated or
unreasonably interfere with their use of their respective
premises. Tenant shall not receive, store or otherwise handle
any product, material or merchandise which is toxic, harmful,
explosive, highly inflammable or combustible other than
customary amounts of office and janitorial supplies used in
accordance with all applicable laws. Storage outside the
Premises of materials, vehicles or any other items Landlord
deems objectionable is prohibited without Landlord's prior
written consent. Tenant shall not use or allow the Premises to
be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause or maintain or permit any
nuisance in, on or about the Premises. Tenant shall not commit
or suffer the commission of any waste in, on or about the
Premises. Tenant shall not allow any sale by auction upon the
Premises, or place any loads upon the floors, walls or ceilings
which endanger the structure, or place any harmful liquids in
the drainage system of the Building or Project. No waste,
materials or refuse shall be dumped upon or permitted to remain
outside the Premises except in trash containers placed inside
exterior enclosures designated for that purpose by Landlord.
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C. Tenant shall not use the Premises or permit anything
to be done in or about the Premises which will in any way
conflict with any law, statute, ordinance or governmental
rule or regulation now in force or which may hereafter be
enacted or promulgated. Tenant shall at its sole cost and
expense obtain any and all licenses or permits necessary
for Tenant's use of the Premises. Tenant shall promptly
comply with the requirements of any board of five
underwriters or other similar body now or hereafter
constituted relating to or affecting the use or
occupancy of the Premises. The judgment of any court of
competent jurisdiction or the admission of Tenant in any
actions against Tenant, whether Landlord be a party
thereto or not, that Tenant has so violated any such law,
statute, ordinance, rule, regulation or requirement,
shall be conclusive of such violation as between Landlord
and Tenant. Tenant shall not do or permit anything to be
done in, on or about the Premises or bring or keep
anything which will in any way increase the rate of any
insurance upon the Premises, Building or Project, or upon
any contents therein or cause a cancellation of said
insurance or otherwise affect said insurance in any
manner. Tenant shall indemnify Landlord and hold Landlord
harmless against any loss, expense, damage, attorneys'
fees or liability arising out of the failure of Tenant to
comply with any applicable law or comply with the
requirements as set forth herein.
RULES AND 5. Tenant and Tenant's agents, employees, and invitees
REGULATIONS shall faithfully observe and comply with any rules and
regulations Landlord may from time to time prescribe in
writing and delivered to Tenant for the purpose of
maintaining the proper care, cleanliness, safety, traffic
flow and general order of the Premises or Project.
Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the
Building or Project with any of the rules and
regulations.
RENT 6. Tenant shall pay to Landlord, without demand throughout
the term, Rent as specified in the Basic Lease
information, payable in monthly installments in advance
on or before the first day of each calendar month, in
lawful money of the United States, without deduction or
offset whatsoever to Landlord at the address specified in
the Basic Lease Information or to such other firm or to
such other place as Landlord may from time to time
designate in writing. Rent for the first full month of
the Term shall be paid by Tenant upon Tenant's execution
of this Lease. If the obligation for payment of Rent
commences on other than the first day of a month, then
Rent shall be prorated and the prorated installment
shall be paid on the first day of the calendar month next
succeeding the Term Commencement Date. See Addendum #1.
BASIC 7. A. BASIC OPERATING COST. In addition to the Base Rent
OPERATING required to be paid hereunder, Tenant shall pay as
COSTS additional Rent, Tenant's Proportionate Share, as defined
in the Basic Lease Information, of Basic Operating Cost
in the manner set forth below. Basic Operating Cost shall
mean all expenses and costs of every kind and nature
which Landlord shall pay or become obligated to pay, or
would be required to pay if the Project were fully
occupied, because of or in connection with the
management, maintenance, preservation and operation of
the Project and its supporting facilities servicing the
Project (determined in accordance with generally accepted
accounting principles, consistently applied) including,
but not limited to, the following:
(1) All real estate taxes, possessory interest
taxes, business or license taxes or fees, service payment
in lieu of such taxes or fees, annual or periodic license
or use fees, excises, transit charges, housing fund
assessments, open space charge, assessments, levies, fees
or charges, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, of any
kind (including fees "in-lieu" of any such tax or
assessment) which are assessed, levied, charged,
confirmed, or imposed by any public authority upon the
Project, its operations or the rent (or any portion or
component thereof), except (a) inheritance or estate
taxes imposed upon or assessed against the Project, or
any part thereof or interest therein, and (b) taxes
computed on the basis of the net income of Landlord or
the owner of any interest therein. See Addendum #7.
(2) All insurance premiums and costs, including,
but not limited to, any deductible amounts, premiums and
cost of fire, casualty and liability coverage, rental
abatement and special hazard insurance applicable to the
Project and Landlord's personal property used in
connection therewith; provided, however, that Landlord
may, but shall not be obligated to, carry special
landlord insurance covering losses caused by casualty
not insured under standard fire and extended coverage
insurance.
(3) Repairs, replacements and general maintenance
for the Premises, Building and Project (except for those
repairs expressly the responsibility of Landlord, those
repairs paid for by proceeds of insurance or by Tenant or
other third parties and alterations attributable solely
to tenants of the Project other than Tenant).
(4) All maintenance, janitorial and service
agreements and costs of supplies and equipment used in
maintaining the Premises, Building and Project and the
equipment therein and the adjacent sidewalks, driveways,
parking and service areas, including, without limitation,
alarm service, window cleaning, elevator maintenance,
Building exterior maintenance and landscaping.
(5) Utilities which benefit all or a portion of the
Premises.
(6) A management and accounting cost recovery equal
to three percent (3%) of Base Rent. See Addendum #8.
In the event that the Project is not fully occupied
during any fiscal year of the Term as determined by
Landlord, an adjustment shall be made in computing the
Basic Operating Cost for such year so that Basic
Operating Cost shall be computed as though the building
had been one hundred percent (100%) occupied; provided,
however, that in no event shall Landlord be entitled to
collect in excess of one hundred percent (100%) of the
total Basic Operating Cost from all of the tenants in the
Project including Tenant.
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All costs and expenses shall be determined in accordance
with generally accepted accounting principles which shall
be consistently applied. Basic Operating Cost shall not
include specific costs incurred for the account of,
separately billed to and paid by specific tenants.
Notwithstanding anything herein to the contrary, any
instance wherein Landlord, at Landlord's sole but
reasonable discretion, deems Tenant to be responsible for
any amounts greater than its Proportionate Share.
Landlord shall have the right to allocate costs in any
manner Landlord deems appropriate.
B. PAYMENT OF ESTIMATED BASIC OPERATING COST.
"Estimated Basic Operating Cost" for any particular year
shall mean Landlord's estimate of the Basic Operating
Cost for such fiscal year made prior to commencement of
such fiscal year as hereinafter provided. Landlord shall
have the right from time to time to revise its fiscal
year and interim accounting periods so long as the
periods as so revised are reconciled with prior periods
in accordance with generally accepted accounting
principles applied in a consistent manner. During the
last month of each fiscal year during the Term, or as
soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Basic Operating
Cost for ensuing fiscal year. Tenant shall pay Tenant's
Proportionate Share of the Estimated Basic Operating
Costs with installments of Base Rent for the fiscal year
to which the Estimated Basic Operating costs applies in
monthly installments on the first day of each calendar
month during such year, in advance. If at any time during
the course of the fiscal year, Landlord determines that
Basic Operating Cost will apparently vary from the then
Estimated Basic Operating Cost by more than ten percent
(10%), Landlord may, by written notice to Tenant, revise
the Estimated Basic Operating Cost for the balance of
such fiscal year and Tenant shall pay Tenant's
Proportionate Share of the Estimated Basic Operating Cost
as to revised for the balance of the then current fiscal
year on the first of each calendar month thereafter.
C. COMPUTATION OF BASIC OPERATING COST ADJUSTMENT.
"Basic Operating Cost Adjustment" shall mean the
difference between Estimated Basic Operating Cost and
Basic Operating Cost for any fiscal year determined as
hereinafter provided. Within one hundred twenty (120)
days after the end of each fiscal year, as determined by
Landlord, or as soon thereafter as practicable, Landlord
shall deliver to Tenant a statement of Basic Operating
Cost for the fiscal year just ended accompanied by a
computation of Basic Operating Cost Adjustment. If such
statement shows that Tenant's payment based upon
Estimated Basic Operating Cost is less than Tenant's
Proportionate Share of Basic Operating Cost, then Tenant
shall pay to Landlord the difference within twenty (20)
days after receipt of such statement. If such statement
shows that Tenant's payments of Estimated Basic Operating
Cost exceed Tenant's Proportionate Share of Basic
Operating Costs, then (provided that Tenant is not in
default under this Lease), Landlord shall pay to Tenant
the difference within twenty (20) days of such statement.
If this Lease has been terminated or the Term hereof has
expired prior to the date of such statement, then the
Basic Operating Cost Adjustment shall be paid by the
appropriate party within twenty (20) days after the date
of delivery of the statement. Should this Lease commence
or terminate at any time other than the first day of the
fiscal year, Tenant's Proportionate Share of the Basic
Operating Cost adjustment shall be prorated by reference
to the exact number of calendar days during such fiscal
year for which Tenant is obligated to pay Base Rent.
D. NET LEASE. This shall be a net Lease and Base Rent
shall be paid to Landlord absolutely net of all costs and
expenses except as herein provided. The provisions for
payment of Basic Operating Cost and the Basic Operating
Cost Adjustment are intended to pass on to tenant and
reimburse Landlord for all costs and expenses of the
nature described in Paragraph 7.A. incurred in connection
with ownership and operation of the Building or Project
and such additional facilities now and in subsequent
years as may be determined by Landlord to be necessary to
the Building or Project.
E. TENANT AUDIT. Tenant shall have the right, at
Tenant's expense and upon not less than five (5) days
prior written notice to Landlord, to review at reasonable
times, in Landlord's office, Landlord's books and records
applicable to Tenant's Lease for purposes of verifying
Landlord's calculation of the Basic Operating Cost and
Basic Operating Cost Adjustment.
In the event that Tenant shall dispute the amount set
forth in any statement provided by Landlord under
Paragraph 7.B. or 7.C. above, Tenant shall have the
right, not later than twenty (20) days following the
receipt of such statement to cause Landlord's books and
records with respect to such fiscal year to be audited by
an accountant selected by Tenant and subject to
Landlord's reasonable right of approval. The Basic
Operating Cost Adjustment shall be appropriately adjusted
on the basis of such audit. If such audit discloses a
liability for a refund in excess of ten percent (10%) of
Tenant's Proportionate Share of the Basic Operating Cost
Adjustment previously reported, the cost of such audit
shall be borne by Landlord; otherwise, the cost of such
audit shall be paid by Tenant. If Tenant shall not
request an audit in accordance with the provisions of
this Paragraph 7.E. within forty-five (45) days of
receipt of Landlord's statement provided pursuant to
Paragraph 7.B. or 7.C., such statement shall be final and
binding for all purposes hereof.
INSURANCE AND 8. A. CASUALTY INSURANCE. Landlord agrees to maintain
INDEMNIFICATION insurance insuring the Buildings of the Project of which
the Premises are a part, against fire, lightning,
extended coverage, vandalism and malicious mischief in an
amount not less than the full replacement cost thereof.
Such insurance shall be for the sole benefit of Landlord
and under its sole control. Landlord shall not be
obligated to insure any furniture, equipment, machinery,
goods or supplies not covered by this Lease which Tenant
may keep or maintain in the Premises or any leasehold
improvements, additions or alterations which Tenant may
make upon the Premises.
B. LIABILITY INSURANCE. Tenant shall purchase at its
own expense and keep in force during this Lease a policy
or policies of comprehensive liability insurance,
including personal injury and property damage, in the
amount of not less than Five Hundred Thousand Dollars
($500,000.00) for property damage and Two Million Dollars
($2,000,000.00) per occurrence for personal injuries or
deaths of persons occurring in or
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about the Premises and Project. Said policies shall (1) name
Landlord and, if applicable, its agent, and any party
holding an interest to which this Lease may be subordinated
as additional insureds, (2) be issued by an insurance
company acceptable to Landlord and licensed to do business
in the State of California, and (3) provide that said
insurance shall not be canceled unless thirty (30) days
prior written notice shall have been given to Landlord. Said
policy or policies or certificates thereof shall be
delivered to Landlord by Tenant upon commencement of the
Lease and upon each renewal of said insurance.
C. INDEMNIFICATION. Landlord shall not be liable to Tenant
for any loss or damage to person or property caused by
theft, fire, act of God, acts of a public enemy, riot,
strike, insurrection, war, court order, requisition or order
of governmental body or authority or for any damage or
inconvenience which may arise through repair or alteration
of any part of the Building or Project or failure to make
any such repair except as expressly otherwise provided in
Paragraphs 10 and 12. Tenant shall indemnify Landlord and
hold Landlord harmless from any and all loss, cost, damage,
injury or expense arising out of or related to (1) claims of
injury to or death of persons or damage to property
occurring or resulting directly or indirectly from the use
or occupancy of the Premises or from activities of Tenant
its agents, servants, employees or invitees in or about the
Premises or Project (2) claims for work or labor performed
or for materials or supplies furnished to or at the request
of Tenant or in connection with performance of any work done
for the account of Tenant within the Premises or Project and
(3) claims arising from any breach or default on the part of
Tenant in the performance of any covenant contained in this
Lease. Such indemnity shall include without limitation the
obligation to provide all reasonable costs of defense
against any such claims including any action or proceeding
brought against Landlord. The foregoing indemnity shall not
be applicable to claims arising from the sole negligence or
willful misconduct of Landlord, or Landlord's agent,
employees or contractors. The provisions of this paragraph
shall survive the expiration or termination of this Lease
with respect to any claims or liability occurring prior to
such expiration or termination. See Addendum #9.
WAIVER OF
SUBROGATION 9. To the extent permitted by law and without affecting the
coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to
recover against the other (a) damages for injury to or death
of persons, (b) damages to property, (c) damages to the
Premises or any part thereof, or (d) claims arising by
reason of the foregoing, except to the extent the claims
in (a), (b), (c), or (d) are caused by the negligence or
willful misconduct of Landlord or Tenant as applicable.
This provision is intended to waive fully, and for the
benefit of each party, any rights and/or claims which might
give rise to a right of subrogation on any insurance
carrier. The coverage obtained by each party pursuant to
this Lease shall include, without limitation, a waiver of
subrogation by the carrier which conforms to the revisions
of this paragraph.
LANDLORD'S
REPAIRS AND
SERVICES 10. Landlord shall at Landlord's expense maintain the
structural soundness of the roof, foundations and exterior
walls of the Building in good repair, reasonable wear and
tear excepted. The term "walls" as used herein shall not
include windows, glass or plate glass, doors, special store
fronts or office entries. The term "roof" as used herein
shall not include skylights, smoke hatches or roof vents.
Landlord shall perform on behalf of Tenant and other
tenants of the Project the maintenance of the public and
common areas of the Project including, but not limited to,
the landscaped areas, parking areas, driveways, the truck
staging areas, rail spur areas, fire sprinkler systems,
sanitary and storm sewer lines, utility services, electric
and telephone equipment servicing the Building(s), exterior
lighting, and anything which affects the operation and
exterior appearance of the Project, which determination
shall be at Landlord's sole but reasonable discretion.
Tenant shall reimburse Landlord for all such costs
described in the preceding sentence in accordance with
Paragraph 7. Any damage caused by or repairs necessitated
by any act of Tenant may be repaired by Landlord at
Landlord's option and at Tenant's expense. Tenant shall
immediately give Landlord written notice of any defect or
need of repairs after which Landlord shall have reasonable
opportunity to repair same. Landlord shall commence to
proceed with repairs within ten (10) days after receiving
notice. Landlord's liability with respect to any defects,
repairs or maintenance for which Landlord is responsible
under any of the provisions of this Lease shall be limited
to the cost of such repairs of maintenance. See Addendum
#10.
TENANT'S
REPAIRS 11. Tenant shall, at Tenant's expense, maintain all parts of
the Premises in a good clean and secure condition promptly
making all necessary repairs and replacements including,
but not limited to, all windows, glass, doors, and any
special office entries, walls and wall finishes, floor
covering, heating, ventilating and air conditioning
systems, truck doors, dock bumpers, dock plates and
levelers, roofing except for structural aspects thereof,
plumbing work and fixtures, down spouts, skylights, smoke
hatches and roof vents. Tenant shall at Tenant's expense
also perform necessary pest extermination and regular
removal of trash and debris. Tenant shall, at its own
expense, enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor
for servicing all hot water, heating and air conditioning
systems and equipment within or serving the Premises. The
maintenance contractor and the contract must be approved by
Landlord. The service contract must include all services as
often as is necessary to maintain the equipment in good
working order, and must become effective and a copy
thereof delivered to Landlord within thirty (30) days of
the Term Commencement Date. Tenant shall not damage any
demising wall or disturb the integrity and support provided
by any demising wall and shall, at its sole expense,
immediately repair any damage to any demising wall caused
by Tenant or its employees, agents or invitees. See
Addendum #11.
ALTERATIONS 12. Tenant shall not make, or allow to be made, any alterations
or physical additions in, about or to the Premises without
obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld with respect to
proposed alterations and additions which (a) comply with
all applicable laws, ordinances, rules and regulations,
(b) are in Landlord's option compatible with the Project
and its
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<PAGE> 26
mechanical, plumbing, electrical, and heating/ventilation/
air conditioning systems, and (c) in Landlord's opinion will
not interfere with the use and occupancy of any other
portion of the Building or Project by any other tenant or
its invitees. Specifically, but without limiting the
generality of the foregoing, Landlord shall have the right
of consent for all plans and specifications for the
proposed alterations or additions, construction means and
methods, any contractor or subcontractor to be employed on
the work of alterations or additions, and the time for
performance of such work. Tenant shall also supply to
Landlord any documents and information reasonably requested
by Landlord in connection with its consideration of a
request for approval hereunder. Tenant must have Landlord's
written approval and all appropriate permits and licenses
prior to the commencement of said alterations and
additions. All alterations and additions permitted
hereunder shall be made and performed by Tenant without
cost or expense to Landlord including any costs or expenses
which Landlord may incur in electing to have an outside
agency review said plans and specifications. Landlord shall
have the right to require Tenant to remove any or all
alterations, additions, improvements and partitions made by
Tenant and restore the Premises to their original condition
by the termination of this Lease, by lapse of time or
otherwise, all at Tenant's expense. All such removals and
restoration shall be accomplished in a good workmanlike
manner so as not to cause any damage to the Premises or
Project whatsoever. If Landlord so elects, such
alterations, physical additions or improvements shall
become the property of Landlord and surrendered to Landlord
upon the termination of this Lease by lapse of time or
otherwise; provided, however, that this clause shall not
apply to trade fixtures or furniture owned by Tenant. In
addition to and wholly apart from its obligation to pay
Tenant's Proportionate Share of Basic Operating Costs,
tenant shall be responsible for and shall pay prior to
delinquency any taxes or governmental service fees,
possessory interest taxes, fees or charges in lieu of any
such taxes, capital levies, or other charges imposed upon,
levied with respect to or assessed against its personal
property, on the value of its alterations, additions or
improvements and on its interest pursuant to this Lease. To
the extent that any such taxes are not separately assessed
or billed to Tenant, Tenant shall pay the amount thereof as
invoiced to Tenant by Landlord. See Addendum #2.
SIGNS 13. All signs, notices and graphics of every kind or character,
visible in or from public view or corridors, the common
areas or the exterior of the Premises, shall be subject to
Landlord's prior written approval, which Landlord shall
have the right to withhold in its absolute and sole
discretion. Tenant shall not place or maintain any banners
whatsoever or any window decor in or on any exterior window
or window fronting upon any common areas or service area or
upon any truck doors or main doors without Landlord's prior
written approval which Landlord shall have the right to
grant or withhold in its absolute and sole discretion. Any
installation of signs or graphics on or about the Premises
and Project shall be subject to any applicable governmental
laws, ordinances, regulations and to any other requirements
imposed by Landlord. Tenant shall remove all such signs and
graphics by the termination of this Lease. Such
installations and removals shall be made in such manner as
to avoid injury to or defacement of the Premises, Building
or Project and any other improvements contained therein,
and Tenant shall repair any injury or defacement including,
without limitation, discoloration caused by such
installation or removal.
INSPECTION/
POSTING
NOTICES 14. After reasonable prior written notice, except in
emergencies where no such notice shall be required,
Landlord, its agents and representatives, shall have the
right to enter the Premises to inspect the same, to clean,
to perform such work as may be permitted or required
hereunder, to make repairs or alterations to the Premises
or Project or to other tenant spaces therein, to deal with
emergencies, to post such notices as may be permitted or
required by law to prevent the perfection of liens against
Landlord's interest in the Project or to exhibit the
Premises to prospective tenants (during the last six (6)
months of the term only), purchasers, encumbrances or
others, or for any other purpose as Landlord may deem
necessary or desirable; provided, however, that Landlord
shall not unreasonably interfere with Tenant's business
operations. Tenant shall not be entitled to any abatement
of Rent by reason of the exercise of any such right of
entry. Six months prior to the end of the Lease, Landlord
shall have the right to erect on the Premises and/or
Project a suitable sign indicating that the Premises are
available for lease. Tenant shall meet with Landlord for a
joint inspection of the Premises at the time of vacating. In
the event of Tenant's failure to give such notice or
participate in such joint inspection, Landlord's inspection
at or after Tenant's vacating the Premises shall
conclusively be deemed correct for purposes of determining
Tenant's responsibility for repairs and restoration.
UTILITIES 15. Tenant shall pay for all water, gas, heat, air
conditioning, light, power, telephone, sewer, sprinkler
charges and other utilities and services used on or from the
Premises, together with any taxes, penalties, surcharges or
the like pertaining thereto, and maintenance charges for
utilities and shall furnish all electric light bulbs,
ballasts and tubes. If any such services are not separately
metered to Tenant, Tenant shall pay a reasonable
proportion, as determined by Landlord, of all charges
jointly serving other premises. Landlord shall not be liable
for any damages directly or indirectly resulting from nor
shall the Rent or any monies owed Landlord under this Lease
herein reserved be abated by reason of (a) the
installation, use or interruption of use of any equipment
used in connection with the furnishing of any of the
foregoing utilities and services, (b) failure to furnish or
delay in furnishing any such utilities or services when
such failure or delay is caused by acts of God or the
elements, labor disturbances of any character, any other
accidents or other conditions beyond the reasonable control
of Landlord, or (c) the limitation, curtailment, rationing
or restriction on use of water, electricity, gas or any
other form of energy or any other service or utility
whatsoever serving the Premises or Project. Landlord shall
be entitled to cooperate voluntarily and in a reasonable
manner in the efforts of national, state or local
governmental agencies or utility suppliers in reducing
energy or other resource consumption. The obligations to
make services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program.
SUBORDINATION 16. This Lease shall be subject and subordinate at all times to
(a) all ground leases or underlying leases which may now
exist or hereafter be executed affecting the Premises
and/or the land upon which the Premises and Project are
situated, or both, and (b) any mortgage or deed of trust
which may now exist or be placed upon said Project, land,
ground leases or underlying leases, or Landlord's interest
or estate in any of
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said items, which is specified as security. Notwithstanding
the foregoing, Landlord shall have the right to subordinate
or cause to be subordinated any such ground leases or
underlying leases or any such liens to this Lease. In the
event that any ground lease or underlying lease terminates
for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made
for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the
successor in interest to Landlord at the option of such
successor in interest. Tenant shall execute and deliver,
upon demand by Landlord and in the form requested by
Landlord, any additional documents evidencing the priority
of subordination of this Lease with respect to any such
ground leases or underlying leases or any such mortgage or
deed of trust. SEE ADDENDUM # 12.
FINANCIAL
STATEMENTS 17. At the request of Landlord, Tenant shall provide to
Landlord its current financial statements or other
information discussing financial worth which Landlord shall
use solely for purposes of this Lease and in connection
with the ownership, management and disposition of the
property subject hereto.
ESTOPPEL
CERTIFICATES 18. Tenant agrees from time to time within ten business (10)
days after request of Landlord, to deliver to Landlord, or
Landlord's designee, and estoppel certificate stating that
this Lease is in full force and effect, the date to which
rent has been paid, the unexpired portion of this Lease and
such other matters pertaining to this Lease as may be
reasonably requested by Landlord. Failure by Tenant to
execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant
that the statements included are true and correct without
exception. Landlord and Tenant intend that any statement
delivered pursuant to this paragraph may be relied upon by
any mortgagee, beneficiary, purchaser or prospective
purchaser of the Project or any interest therein. The
parties agree that Tenant's obligation to furnish such
estoppel certificates in a timely fashion is a material
inducement for Landlord's execution of the Lease.
SECURITY
DEPOSIT 19. Tenant agrees to deposit with Landlord upon execution of
this Lease, a Security Deposit as stated in the Basic Lease
Information which sum shall be held by Landlord, without
obligation for interest, as security for the performance of
Tenant's covenants and obligations under this Lease, it
being expressly understood and agreed that such deposit is
not an advance rental deposit or a measure of damages
incurred by Landlord in case of Tenant's default. Upon the
occurrence of any event of default by Tenant beyond the
applicable notice and cure period, Landlord may, from time
to time, without prejudice to any other remedy provided
herein or provided by law, use such funds to the extent
necessary to make good any arrears of Rent or other
payments due to Landlord hereunder, and any other damage,
injury, expense or liability caused by such event of
default, and Tenant shall pay to Landlord, on demand, the
amount so applied in order to restore the Security Deposit
to its original amount. SEE ADDENDUM #3 AND #13.
TENANT'S
REMEDIES 20. Tenant shall look solely to Landlord's interest in the
Project for recovery of any judgment from Landlord.
Landlord, or if Landlord is a partnership, its partners
whether general or limited, or if it is a corporation, its
directors, officers or shareholders, shall never be
personally liable for any such judgment. Any lien obtained
to enforce any such judgment and any levy of execution
thereon shall be subject and subordinate to any lien,
mortgage or deed of trust on the Project.
ASSIGNMENT
AND
SUBLETTING 21. A. Tenant shall not assign or sublet the Premises or any
part thereof without Landlord's prior written approval
except as provided herein. If Tenant desires to assign this
Lease or sublet any or all of the Premises, Tenant shall
give Landlord written notice forty-five (45) days prior to
the anticipated effective date of the assignment or
sublease. Landlord shall then have a period of twenty (20)
days following receipt of such notice to notify Tenant in
writing that Landlord elects either (1) to terminate this
Lease as to the space so affected as of the date so
requested by Tenant, or (2) to permit Tenant to assign this
Lease or sublet such space, subject, however, to Landlord's
prior written approval of the proposed assignee or
subtenant and of any related documents or agreements
associated with the assignment or sublease, such consent
not to be unreasonably withheld so long as the use of the
Premises by such proposed assignee or subtenant would be a
Permitted Use and would not in Landlord's opinion increase
Occupant Density of the Project, the proposed assignee or
subtenant is of sound financial condition. If Landlord
should fail to notify Tenant in writing of such election
within said period, Landlord shall be deemed to have waived
option (1) above, but written approval by Landlord of the
proposed assignee or subtenant shall be required. Failure
by Landlord to approve a proposed assignee or subtenant
shall not cause a termination of this Lease.
D. If Tenant is a corporation, a transfer of corporate
shares by sale, assignment, bequest, inheritance, operation
of law or other disposition (including such a transfer to or
by a receiver or trustee in federal or state bankruptcy,
insolvency or other proceedings), so as to result in a
change in the present control of such corporation or any of
its parent corporations by the person or persons owning a
majority of said corporate shares, shall constitute an
assignment for purposes of this paragraph. SEE ADDENDUM #15.
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E. If Tenant is a partnership, joint venture or other
unincorporated business form, a transfer of the interest of
persons, firms or entities responsible for managerial
control of Tenant by sale, assignment, bequest, inheritance,
or operation of law or other disposition, so as to result in
a change in the present control of said entity and/or a
change in the identity of the persons responsible for the
general credit obligations of said entity shall constitute
an assignment for all purposes of this paragraph.
F. No assignment or subletting by Tenant shall relieve
Tenant of any obligations under this Lease. Any assignment
or subletting which conflicts with the provisions hereof
shall be void. SEE ADDENDUM #16.
QUIET
ENJOYMENT 22. Landlord represents that it has full right and authority to
enter into this Lease and that Tenant, upon paying the Rent
and performing its other covenants and agreements herein set
forth, shall peaceably and quietly have, hold and enjoy the
Premises for the Term hereof without hindrance or
molestation from Landlord, subject to the terms and
provisions of this Lease.
CONDEMNATION 23. A. If the whole, or any substantial portion of the Project
of which the Premises are a part, should be taken or
condemned for any public use under governmental law,
ordinance, or regulation, or by right of eminent domain, or
by private purchase in lieu thereof, and the taking would
prevent or materially interfere with the Permitted Use of
the Premises, this Lease shall terminate and the Rent shall
be abated during the unexpired portion of this lease,
effective when the physical taking of said Premises shall
have occurred.
B. If a portion of the Project of which the Premises are a
part should be taken or condemned for any public use under
any governmental law, ordinance, or regulation, or by right
of eminent domain, or by private purchase in lieu thereof,
and this Lease is not terminated as provided in subparagraph
23.A. above, this Lease shall not terminate, but the Rent
payable hereunder during the unexpired portion of the Lease
shall be reduced to such extent as may be fair and
reasonable under all of the circumstances.
C. Landlord shall be entitled to any and all payment,
income, rent, award, or any interest therein whatsoever
which may be paid or made in connection with such taking or
conveyance and Tenant shall have no claim against Landlord
or otherwise for the value of any unexpired portion of this
Lease. Notwithstanding the foregoing paragraph, any
compensation specifically awarded Tenant for loss of
business. Tenant's personal property, moving cost or loss of
goodwill, shall be and remain the property of Tenant.
CASUALTY
DAMAGE 24. A. If the Premises should be damaged or destroyed by fire,
tornado or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days
of such notice, Landlord shall notify Tenant whether in
Landlord's opinion such repairs can be made either (1)
within ninety (90) days, (2) in more than ninety (90) days,
but in less than one hundred eighty (180) days, or (3) in
more than one hundred eighty (180) days from the date of
such notice; Landlord's determination shall be binding on
Tenant.
B. If the Premises should be damaged by fire, tornado or
other casualty but only to such extent that rebuilding or
repairs can in Landlord's estimation be completed within
ninety (90) days after the date upon which Landlord is
notified by Tenant of such damage, this Lease shall not
terminate, and Landlord shall at its sole cost and expense
thereupon proceed with reasonable diligence to rebuild and
repair the Premises to substantially the condition in which
they existed prior to such damage, except that Landlord
shall not be required to rebuild, repair or replace any part
of the partitions, fixtures, additions and other
improvements which may have been placed in, on or about the
Premises by Tenant. If the Premises are untenantable in
whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable
shall be reduced to such extent as may be fair and
reasonable under all of the circumstances.
C. If the Premises should be damaged by fire, tornado or
other casualty but only to such extent that rebuilding or
repairs can in Landlord's estimation be completed in more
than ninety (90) days but in less than one hundred eighty
(180) days, then Landlord shall have the option of either
(1) terminating the Lease effective upon the date of the
occurrence of such damage in which the Rent shall be abated
during the unexpired portion of the Lease or (2) electing to
rebuild or repair the Premises to substantially the
condition in which they existed prior to such damage except
that Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, additions and
other improvements which may have been placed in, on or
about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the
Rent payable hereunder during the period in which they are
untenantable shall be reduced to such extent as may be fair
and reasonable under all of the circumstances. In the event
that Landlord should fail to complete such repairs and
rebuilding within one hundred eighty (180) days after the
date upon which Landlord is notified by Tenant of such
damage, such period of time to be extended for delays caused
by the fault or neglect of Tenant or because of acts of God,
acts of public agencies, labor disputes, strikes, fires,
freight embargoes, rainy or stormy weather, inability to
obtain materials, supplies or fuels, or delay of the
contractors or subcontractors due to such causes or other
contingencies beyond the reasonable control of Landlord,
Tenant may at its option terminate this Lease by delivering
thirty (30) days prior written notice of termination to
Landlord as Tenant's exclusive remedy, whereupon all rights
and obligations hereunder shall cease and terminate.
D. If the Premises should be so damaged by fire, tornado or
other casualty that rebuilding or repairs cannot in
Landlord's estimation be completed within one hundred eighty
(180) days after the date upon which Landlord is notified by
Tenant of such damage, this Lease shall terminate, and the
Rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such
damage.
E. Notwithstanding anything therein to the contrary, in the
event that holder of any indebtedness secured by a mortgage
or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by
delivering written notice of
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<PAGE> 29
termination to Tenant within fifteen (15) days after such
requirement is made by any such holder, whereupon all
rights and obligations hereunder shall cease and terminate.
F. The provision of Section 1942, Subdivision 2, and
Section 1933, Subdivision 4, of the Civil Code of
California is superseded by the foregoing.
HOLDING OVER 25. If Tenant shall retain possession of the Premises or any
portion thereof without Landlord's consent following the
expiration of the Lease or sooner termination for any
reason, then Tenant shall pay to Landlord for each day of
such retention ONE HUNDRED FIFTY PERCENT (150%) the amount
of the daily rental for the first month prior to the date
of expiration or termination. Tenant shall also indemnify
and hold Landlord harmless from any loss or liability
resulting from delay by Tenant in surrendering the
Premises, including, without limitation, any claims made by
any succeeding tenant founded on such delay. Acceptance of
Rent by Landlord following expiration or termination shall
not constitute a renewal of this Lease, and nothing
contained in this paragraph shall waive Landlord's right of
reentry or any other right. Tenant shall be only a tenant
at sufference, whether or not Landlord accepts any Rent
from Tenant while Tenant is holding over without Landlord's
written consent. Additionally, in the event that upon
termination of the Lease. Tenant has not fulfilled its
obligation with respect to repairs and cleanup of the
Premises or any other Tenant obligations as set forth in
this Lease, then Landlord shall have the right to perform
any such obligations as it deems necessary at Tenant's sole
cost and expense, and any time required by Landlord to
complete such obligations shall be considered a period of
holding over and the terms of this paragraph shall apply.
DEFAULT 26. A. EVENTS OF DEFAULT. The occurrence of any of the
following shall constitute an event of default on the part
of Tenant:
(1) ABANDONMENT. Vacation or abandonment of the
Premises for a continuous period in excess of TWENTY (20)
DAYS. Tenant waives any right of notice Tenant may have
under section 1951.3 of the Civil Code of the State of
California, the terms of this subparagraph 26A being deemed
such notice to Tenant as required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment
of Rent or any other amount due and payable hereunder upon
the date when said payment is due, such failure continuing
without cure by payment of the delinquent Rent and late
charge or other obligations for a period of five (5) days
after written notice and demand; provided, however, that
except as expressly otherwise provided herein. Landlord
shall not be required to provide such notice more than
twice during any calendar year of the Term, the third such
nonpayment constituting default for all purposes hereof
without requirements of notice.
(3) OTHER OBLIGATIONS. Failure to perform any
obligations, agreement or covenant under this Lease other
than those matters specified in subparagraphs (1) and (2)
of this subparagraph 26A, such failure continuing for
fifteen (15) days after written notice of such failure, or
such longer period as necessary to remedy such default,
provided that Tenant shall continuously and diligently
pursue such remedy at all times until such default is
cured.
(4) GENERAL ASSIGNMENT. A general assignment by
Tenant for the benefit of creditors.
(5) BANKRUPTCY. The filing of any voluntary petition
in bankruptcy by Tenant, or the filing of an involuntary
petition by Tenant's creditors, which involuntary petition
remains undischarged for a period of thirty (30) days. In
the event that under applicable law, the trustee in
bankruptcy or Tenant has the right to affirm this Lease and
continue to perform the obligations of tenant hereunder,
such trustee or Tenant shall, in such time period as may be
permitted by the bankruptcy court having jurisdiction, cure
all defaults of Tenant hereunder outstanding as of the date
of the affirmance of this Lease and provide to Landlord
such adequate assurances as may be necessary to ensure
Landlord of the continued performance of Tenant's
obligations under this Lease.
(6) RECEIVERSHIP. The employment of a receiver to take
possession of substantially all of Tenant's assets of the
Premises, if such attachment or other seizure remains
undismissed or undischarged for a period of ten (10) days
after the levy thereof.
(7) ATTACHMENT. The attachment, execution or other
judicial seizure of all or substantially all of Tenant's
assets of the Premises, if such attachment or other seizure
remains undismissed or undischarged for a period of ten
(10) days after the levy thereof.
B. REMEDIES UPON DEFAULT.
(1) RENT. All failures to pay any monetary obligation
to be paid by Tenant under this Lease shall be construed as
obligations for payment of Rent.
(2) TERMINATION. In the event of the occurrence of any
event of default, Landlord shall have the right, with or
without notice or demand, to immediately terminate this
Lease, and at any time thereafter recover possession of the
Premises or any part thereof and expel and remove therefrom
Tenant and any other person occupying the same, by any
lawful means, and again repossess and enjoy the Premises
without prejudice to any of the remedies that Landlord may
have under this Lease, or at law or equity by reason of
Tenant's default or of such termination.
(3) CONTINUATION AFTER DEFAULT. Even though Tenant has
breached this Lease and/or abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession under Paragraph
26.B.(2) hereof, and Landlord may enforce all its rights
and remedies under this
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<PAGE> 30
Lease, including, but without limitation, the right to recover
Rent as it becomes due, and Landlord, without terminating this
Lease, may exercise all of the rights and remedies of a
Landlord under Section 1951.4 of the Civil Code of the State of
California or any successor code section. Acts of maintenance
preservation or efforts to lease the Premises or the
appointment of a receiver upon application of Landlord to
protect Landlord's interest under this Lease shall not
constitute an election to terminate Tenant's right to
possession.
C. DAMAGES UPON TERMINATION. Should Landlord terminate this
Lease pursuant to the provisions of Paragraph 26.B.(2) hereof,
Landlord shall have all the rights and remedies of a Landlord
provided by Section 1951.2 of the Civil Code of the State of
California, or successor code sections. Upon such termination,
in addition to any other rights and remedies to which Landlord
may be entitled under applicable law, Landlord shall be
entitled to recover from Tenant: (1) the worth at the time of
award of the unpaid Rent and other amounts which had been
earned at the time of termination, (2) the worth at the time of
award of the amount by which the unpaid Rent which would have
been earned after termination until the time of award exceeds
the amount of such Rent loss that the Tenant proves could have
been reasonably avoided, (3) the worth at the time of award of
the amount by which the unpaid Rent for the balance of the term
after the time of award exceeds the amount of such Rent loss
that the Tenant proves could be reasonably avoided, and (4) any
other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its
obligations under the lease or which, in the ordinary course of
things, would be likely to result therefrom. The "worth at the
time of award" of the amounts referred to in (1) and (2) above
shall be computed with interest at the maximum rate allowed by
law. The "worth at the time of award" of the amount referred to
in (3) above shall be computed by discounting such amount at
the Federal Discount Rate of the Federal Reserve Bank of San
Francisco at the time of the award plus one percent (1%).
D. LATE CHARGE. In addition to its other remedies, Landlord
shall have the right without notice or demand to add to the
amount of any payment required to be made by Tenant hereunder,
and which is not paid on or before the date the same is due, an
amount equal to five percent (5%) of the delinquency for each
month or portion thereof that the delinquency remains
outstanding to compensate Landlord for the loss of the use of
the amount not paid and the administrative costs caused by the
delinquency, the parties agreeing that Landlord's damage by
virtue of such delinquencies would be difficult to compute and
the amount stated herein represents a reasonable estimate
thereof.
E. REMEDIES CUMULATIVE. All rights, privileges and elections or
remedies of the parties are cumulative and not alternative to
the extent permitted by law and except as otherwise provided
herein.
LIENS 27. Tenant shall keep the premises free from liens arising out of
or related to work performed, materials or supplies furnished
or obligations incurred by Tenant or in connection with work
made, suffered or done by Tenant in or on the Premises or
Project. In the event that Tenant shall not, within ten (10)
days following the imposition of any such lien, cause the same
to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but not the obligation,
to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such
lien. All sums paid by Landlord on behalf of Tenant and all
expenses incurred by Landlord in connection therefore shall be
payable to Landlord by Tenant on demand with interest at the
rate of 12%. Landlord shall have the right at all times to post
and keep posted on the Premises any notices permitted or
required by law, or which Landlord shall deem proper, for the
protection of Landlord, the Premises, the Project and any other
party having an interest herein, from mechanics' and
materialmen's liens, and Tenant shall give Landlord not less
than ten (10) business days prior written notice of the
commencement of any work in the Premises or Project which could
lawfully give rise to a claim for mechanics' or materialmen's
lien.
TRANSFERS BY
LANDLORD 29. In the event of a sale or conveyance by Landlord of the
Project, and the express assumption in writing of the
obligations of Landlord hereunder by such succeeding owner, the
same shall operate to release Landlord from any future
liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, and in such event
Tenant agrees to look solely to the responsibility of the
successor in interests of Landlord in and to this Lease. This
Lease shall not be affected by any such sale and Tenant agrees
to attorn to the purchaser or assignee.
RIGHT OF
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LANDLORD TO 30. All covenants and agreements to be performed by
PERFORM Tenant under any of the terms of this Lease shall
TENANT'S be performed by Tenant, at Tenant's sole cost and
COVENANTS expense, and without any abatement of Rent. If
Tenant shall fail to pay any sum of money other than
Rent, required to be paid by it hereunder, or shall
fail to perform any other act on its part to be
performed hereunder, and such failure shall continue
for ten (10) days after notice thereof by Landlord.
Landlord may, but shall not be obligated to do so,
and without waiving or releasing Tenant from any
obligations of the Tenant, make any such payment or
perform any such act on the Tenant's part to be made
or performed. All sums so paid by Landlord and all
necessary incidental costs together with interest
thereon at the rate of 12% from the date of such
payment by the Landlord shall be payable to Landlord
on demand, and Tenant covenants to pay such sums,
and Landlord shall have, in addition to any other
right or remedy of Landlord, the same right and
remedies in the event of the nonpayment thereof by
Tenant as in the case of default by Tenant in the
payment of Rent.
WAIVER 31. If either Landlord or Tenant waives the performance
of any term, covenant or condition contained in this
Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any
other term, covenant or condition contained herein.
The acceptance of rent by Landlord shall not
constitute a waiver of any preceding breach by
Tenant of any term, covenant or condition of this
Lease, regardless of Landlord's knowledge of such
preceding breach at the time Landlord accepted such
Rent. Failure by Landlord to enforce any of the
terms, covenants or conditions of this Lease for any
length of time shall not be deemed to waive or to
decrease the right of Landlord to insist thereafter
upon strict performance by Tenant. Waiver of
Landlord of any term, covenant or condition
contained in this Lease may only be made by a
written document signed by Landlord.
NOTICES 32. Each provision of this Lease or of any applicable
governmental laws, ordinances, regulations and other
requirements with reference to the sending, mailing
or delivery of any notice or the making of any
payment by Landlord or Tenant to the other shall be
deemed to be complied with when and if the following
steps are taken:
A. All Rent and other payments required to be made
by Tenant to Landlord hereunder shall be payable to
Landlord at the address set forth in the Basic Lease
Information, or at such other address as Landlord
may specify from time to time by written notice
delivered in accordance herewith. Tenant's
obligation to pay Rent and any other amounts to
Landlord under the terms of this Lease shall not be
deemed satisfied until such Rent and other amounts
have been actually received by Landlord.
B. All notices, demands, consents and approvals
which may or are required to be given by either
party to the other hereunder shall be in writing and
shall be deemed to have been fully given when
deposited in the United States mail, certified or
registered, postage prepaid, and addressed to the
party to be notified at the address for such party
specified in the Basic Lease Information or to such
other place as the party to be notified may from
time to time designate by at least fifteen (15) days
notice to the notifying party. Tenant appoints as
its agent to receive the service of all default
notices and notice of commencement of unlawful
detainer proceedings the person in charge of or
apparently in charge of or occupying the Premises at
the time, and, if there is no such person, then such
service may be made by attaching the same on the
main entrance of the Premises.
ATTORNEYS' 33. In the event either party places the enforcement of
FEES this Lease, or any part thereof, or the collection
of any Rent due, or to become due hereunder, or
recovery of the possession of the Premises in the
hands of an attorney or files suit upon the same,
the prevailing party shall recover its reasonable
attorneys' fees and court costs.
SUCCESSORS 34. This Lease shall be binding upon and inure to the
AND ASSIGNS benefit of Landlord, its successors and assigns, and
shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment
may be approved by Landlord hereunder. Tenant's
assigns.
FORCE MAJEURE 35. Whenever a period of time is herein prescribed for
action to be taken by Landlord or Tenant, Landlord
or Tenant, as relevant, shall not be liable or
responsible for, and there shall be excluded from
the computation for any such period of time, any
delays due to strike, riots, acts of God, shortages
of labor or materials, war, governmental laws,
regulations or restrictions or any other causes of
any kind whatsoever which are beyond the control of
Landlord or Tenant, as relevant.
MISCELLANEOUS 36. A. The term "Tenant" or any pronoun used in place
thereof shall indicate and include the masculine or
feminine, the singular or plural number,
individuals, firms or corporations, and their and
each of their respective successors, executors,
administrators and permitted assigns, according to
the context hereof.
B. Time is of the essence regarding this Lease and
all of its provisions.
C. This Lease shall in all respects be governed by
the laws of the State of California.
D. This Lease, together with its exhibits,
contains all the agreements of the parties hereto
and supersedes any previous negotiations.
E. There have been no representations made by the
Landlord or understandings made between the parties
other than those set forth in this Lease and its
exhibits.
F. This Lease may not be modified except by a
written instrument by the parties hereto.
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<PAGE> 32
G. If, for any reason whatsoever, any of the provisions
hereof shall be unenforceable or ineffective, all of the
other provisions shall be and remain in full force and
effect.
ADDITIONAL
PROVISIONS 37. Additional paragraph's 38, 39, 40 & 41, Addenda to Lease
items 1 - 17. Exhibits A, B & C attached hereto and made
a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Lease
the day and year first above written.
"LANDLORD"
Spieker Properties, L.P.
a California limited partnership
By: Spieker Properties, Inc.
a Maryland Corporation
Its: General Partner
By: /s/ JOHN A. FOSTER
-------------------------
John A. Foster
Its: Senior Vice President
-------------------------
Date: 12/19/95
-------------------------
"TENANT"
At Home Corporation
a Delaware corporation
By: /s/ William R. Hearst III
-------------------------
Its: Chief Executive Officer
-------------------------
Date: 12/19/95
-------------------------
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<PAGE> 33
ADDITIONAL PARAGRAPHS TO LEASE AGREEMENT DATED DECEMBER 13,
1995, BETWEEN SPIEKER PROPERTIES, L.P., A CALIFORNIA
LIMITED PARTNERSHIP, AS LANDLORD, AND AT HOME CORPORATION, A
DELAWARE CORPORATION, AS TENANT, FOR APPROXIMATELY 32,908
SQUARE FOOT PREMISES LOCATED AT 385 RAVENDALE DRIVE,
MOUNTAIN VIEW, CALIFORNIA.
38. TENANT IMPROVEMENTS
None. Tenant agrees to accept the Premises in "as is"
condition with no Tenant improvements to be provided
by Landlord.
39. TENANT PARKING
Lessee shall be entitled to the non-exclusive use of
one hundred thirty eight (138) parking spaces.
40. RESTORATION
At Lease termination. Tenant will not be required to
remove any of the tenant improvements existing in the
Premises at Lease Commencement.
41. RENEWAL OPTION
<PAGE> 34
ADDENDA TO LEASE AGREEMENT DATED DECEMBER 13, 1995, BETWEEN SPIEKER PROPERTIES,
L.P., A CALIFORNIA LIMITED PARTNERSHIP, AS LANDLORD, AND AT HOME CORPORATION, A
DELAWARE CORPORATION, AS TENANT, FOR APPROXIMATELY 32,908 SQUARE FOOT PREMISES
LOCATED AT 385 RAVENDALE DRIVE, MOUNTAIN VIEW, CALIFORNIA
ADDENDUM 1. RENT
Rent for the Premises shall be as follows:
Months 1-12:
Months 13-24:
Months 25-36:
Months 37-48:
Months 49-60:
Months 61-72:
ADDENDUM 2. ALTERATIONS
Tenant may make non structural alterations to the interior of the Premises up to
ten thousand dollars ($10,000), per annum without obtaining prior written
consent of Landlord. Such improvements shall not have an impact or cause change
to the building's structure, mechanical or plumbing systems.
ADDENDUM 3. LETTER OF CREDIT
ADDENDUM 4. ADA COMPLIANCE
Tenant shall not be required to make any structural changes or any changes which
constitute capital expenditures in order to comply with any law, ordinance, rule
or regulation unless such changes are a result of Tenant's particular use of the
Premises.
Tenant shall have the sole responsibility for complying, at Tenant's cost, with
provisions of the American with Disabilities Act of 1990 ("ADA") as it may later
be amended, with respect to the Premises and to the common areas of the Project,
where such compliance has been brought about: (i) by any alterations to the
Premises or to the common areas by the Tenant or on behalf of the Tenant, by
Landlord or otherwise, performed after the Term Commencement Date; (ii) by any
changes to Tenant's use of the Premises; or (iii) by any architectural barriers
caused by Tenant's installation of any equipment, furniture, or other personal
property on the Premises (items (i), (ii) and (iii) collectively, "Tenants ADA
Responsibilities"). Tenant shall indemnify, defend and hold Landlord, its agents
and employees harmless from and against any and all claims, damages or
liabilities arising directly or indirectly from Tenant's failure to satisfy any
of Tenant's ADA Responsibilities. Landlord shall indemnify, defend and hold
Tenant, its agents and employees harmless from and against any and all claims,
damages or liabilities arising directly or indirectly from Landlord's failure to
comply with any obligations of a landlord under the ADA, other than such claims,
damages or liabilities arising from Tenant's failure to satisfy any of Tenant's
ADA Responsibilities [REMAINDER OF PAGE ILLEGIBLE].
<PAGE> 35
ADDENDA TO LEASE
DECEMBER 13, 1995
ADDENDUM 6. HAZARDOUS SUBSTANCES
A. TENANT INDEMNITY REGARDING HAZARDOUS SUBSTANCES
Tenant shall indemnify, defend and hold harmless Landlord, its employees,
partners, agents, assigns, licensees, servants, subsidiaries and affiliate
organizations against any and all claims, suits, loss, costs (including costs of
investigation, clean up, monitoring, restoration and reasonable attorneys'
fees); damage or liability, whether foreseeable or unforeseeable, by reason of
property damage (including diminution in the value of property of Landlord),
personal injury or death directly arising from or related to ANY HAZARDOUS
SUBSTANCE (as defined below) released, manufactured, discharged, disposed, used
or stored ON THE PREMISES BY TENANT OR TENANT'S AGENTS, EMPLOYEES, CONTRACTORS
OR ASSIGNS REGARDLESS OF WHO CAUSED THE SAME, EXCEPT FOR HAZARDOUS SUBSTANCE (i)
(A) ORIGINATING ON PROPERTY WHICH IS NOT LEASED, OWNED OR OTHERWISE USED OR
CONTROLLED BY TENANT AND (B) WHICH MIGRATED THROUGH THE AIR, GROUNDWATER OR
OTHERWISE TO THE PROJECT; OR (ii) WAS NOT CAUSED BY TENANT, ITS EMPLOYEES,
INVITEES, SUBTENANTS, AGENTS, ASSIGNEES, LICENSEES OR SERVANTS.
For the purpose of this indemnity, Hazardous Substances are defined,
collectively, as oil, flammable explosives, asbestos, radioactive materials,
hazardous wastes, toxic or contaminated substances or similar materials,
including, without limitation, any substances which are "hazardous substances",
"hazardous wastes", "hazardous materials", or "toxic substances" under
applicable environmental laws, ordinances or regulations.
The provisions of this Tenant indemnity regarding Hazardous Substances shall
survive the termination of the Lease.
B. LANDLORD INDEMNITY REGARDING HAZARDOUS MATERIALS
Landlord shall indemnify, defend and hold harmless Tenant, its officers,
employees, shareholders, parent, subsidiary and affiliate organizations and
agents to the extent of Landlord's interest in the Project, against any and all
claims, suits, loss, costs (including costs of investigation, clean up,
monitoring, restoration and reasonable attorneys' fees), damage of liability,
whether foreseeable or unforeseeable, by reason of property damage, personal
injury or death directly arising from a related to the presence of Hazardous
Substances (as defined below) in, on or about the Project immediately prior to
Tenant's first occupancy (unless caused by Tenant, its employees, invitees,
subtenants, agents, assigns, licensees or servants) or the subsequent release,
disposal, use or storage of Hazardous Substances in, on or about the Project by
Landlord, its employees, agents, assigns, licensees or servants.
For the purposes of this Indemnity Hazardous Substances are defined,
collectively, as oil, flammable explosives, asbestos, radioactive materials,
hazardous waste, toxic or contaminated substances or similar materials,
including, without limitation, any substances which are "hazardous substances",
"hazardous waste", hazardous materials" or "toxic substances" under applicable
laws, ordinances or regulations.
The provisions of this Landlord Indemnity regarding Hazardous Substances shall
survive the termination of the Lease.
ADDENDUM 7. REAL ESTATE TAX EXCLUSIONS
In addition, the following shall not constitute real property taxes for the
purpose of this Lease, and nothing contained herein shall be deemed to require
Tenant to pay any of the following: (i) any franchise, succession or transfer
taxes; (ii) interest on taxes or penalties resulting from Landlord's failure to
pay taxes; (iii) real estate taxes resulting from over standard improvements
made by other tenants.
ADDENDUM 8. BASIC OPERATING COST EXCLUSIONS
The following shall not constitute Basic Operating Costs for the purpose of this
Lease, and nothing contained herein shall be deemed to require Tenant to pay any
of the following: (i) legal fees, brokerage commissions, advertising costs and
other related expenses incurred in connection with the leasing of the Building;
(ii) damage and repairs attributable to condemnation, fire or other casualty,
covered under any insurance policy (above any "deductible" position thereof)
carried by Landlord in connection with the Building; (iii) damage and repairs
covered under any warranty or insurance policy carried by Landlord in connection
with the Building or Property; (iv) damage and repairs necessitated by the
negligence or willful misconduct of Landlord or Landlord's Landlord's employees,
contractors or agents; (v) executive salaries of Landlord; (vi) salaries of
service personnel to the extent that such service personnel perform services not
solely in connection with the management, operation, repair or maintenance of
the Building or Common Areas; (vii) Landlord's general overhead expenses not
related to the Building; (viii) payments of principal or interest on any
mortgage or other encumbrance including ground lease payments and points,
commissions and legal fees associated with financing; (ix) depreciation; (x)
legal fees, accountants' fees and other expenses incurred in connection with
disputes with Tenant or other tenants or occupants of the Building or associated
with the enforcement of any leases or defense of the Landlord's title to or
interest in
<PAGE> 36
ADDENDA TO LEASE
DECEMBER 13, 1995
ADDENDUM 8. BASIC OPERATING COST ESTIMATES (CONTINUED)
the Building or any part thereof; (xi) costs (including permit, license and
inspection fees) incurred in renovating or otherwise improving, decorating,
painting or altering space for other tenants or other occupants or vacant space
in the Building; (xii) costs incurred due to violation by Landlord or any other
tenant in the Building, of the terms and conditions of any lease; (xiii)
charitable or political contributions; (xiv) interest, penalties or other costs
arising out of Landlord's failure to make timely payments of its obligations;
(xv) costs incurred in advertising and promotional activities for the Building.
Landlord and Tenant agree that the cost of any structural repairs or
replacements or any improvements, alterations or expenditures of a capital
nature which exceed Ten Thousand Dollars ($10,000) in cost, shall be amortized
over the useful life of such item, as determined by generally accepted
accounting principles and that Tenant shall be solely responsible for the
portion of such amortized cost coming due within the Term of this Lease.
ADDENDUM 9. INDEMNIFICATION
Landlord shall indemnify, defend by counsel reasonably satisfactory to Tenant
and hold Tenant harmless from and against any and all claims, liabilities,
judgments, causes of action, damages, costs and expenses (including, without
limitation, reasonable attorney's and experts' fees), caused by or arising in
connection with the gross negligence or willful misconduct of Landlord or
Landlord's agents, employees, contractors or invitees.
ADDENDUM 10. TENANT'S NOTICE TO LANDLORD
Tenant may give Landlord notice of any repairs that are required under the terms
of this Lease and Landlord shall proceed forthwith to effect the same with
reasonable diligence, but in no event shall Landlord commence to proceed with
repairs required later than ten (10) days after receipt of such notice.
ADDENDUM 11. EXCEPTIONS TO TENANT'S REPAIR OBLIGATIONS
In no event shall Tenant's obligation to repair under this subsection extend to
(i) damage and repairs covered under any insurance policy carried by Landlord in
connection with the Building (provided that nothing herein shall be deemed to
alter or terminate Tenant's obligation to reimburse Landlord for Tenant's
Proportionate Share of the "deductible" portion of the Landlord's property
insurance policy); (ii) damage caused in whole or in part by the negligence or
willful misconduct of Landlord or Landlord's agents, employees, invitees or
licensees; (iii) repairs covered under Basic Operating Costs; (iv) reasonable
wear and tear; (v) conditions covered under any warranties of Landlord's
contractors; or (vi) damage by fire and other casualties, or acts of
governmental authorities, or acts of God and the elements, except to the extent
such damage is caused by Tenant or Tenant's agents, employees or contractors.
ADDENDUM 12. SUBORDINATION
Notwithstanding anything to the contrary in the Lease, the effective
subordination of this Lease to any future mortgages, deeds of trust, other
security interest or leases shall be subject to the fulfillment of the
conditions precedent that the holder of such mortgage or other lien on the
Building or Property shall first have agreed in writing that so long as Tenant
is not in default, the Lease shall not be terminated by foreclosure or sale
pursuant to the terms of such mortgage or lien.
ADDENDUM 13. SECURITY DEPOSIT
Provided that Tenant is not then in default under the Lease, Landlord shall
return the Security Deposit to Tenant within thirty (30) days of the expiration
or earlier termination of the Lease.
ADDENDUM 14. BONUS RENT
If Tenant shall assign, sublease or otherwise transfer all or any portion of the
Premises to a party other than Tenant Affiliate (as defined below), Landlord and
Tenant shall evenly divide any rent or other consideration paid to Tenant in
connection with such assignment, sublease or other transfer which is in excess
of the Base Rent due under this Lease, after first deducting out for the
Tenant's account the cost of (i) broker's commission paid by Tenant with regard
to the transfer; (ii) reasonable legal fees; and (iii) the cost of improvements
made to the subleased premises by Tenant at Tenant's expense for the purpose of
subletting which, upon the expiration or earlier termination of this Lease shall
or may become the property of Landlord pursuant to the terms hereof.
ADDENDUM 15. CORPORATE TRANSFERS
Notwithstanding anything to the contrary in the Lease, the terms of Section 21.D
of the Lease shall not apply at any time that Tenant is a publicly traded
company.
<PAGE> 37
ADDENDA TO LEASE
DECEMBER 13, 1995
ADDENDUM 16. TENANT AFFILIATES
Tenant may assign this Lease or sublet any portion of the Premises without
Landlord's consent to any of the following (i) any corporation which controls,
is controlled by or under common control with Tenant; (ii) any corporation
resulting from the merger or consolidation of Tenant and has a net worth equal
to or greater than Ten Million Dollars ($10,000,000) upon execution of the
assignment or sublease document; (iii) any person or entity which acquires all
of the assets of Tenant as a going concern of the business that is being
conducted on the Premises (collectively, "Tenant Affiliate"), provided that
such assignee assumes in full the obligations of Tenant under the Lease.
Landlord's right to terminate the Lease in response to a requested assignment
or subletting shall not apply to an assignment of the Lease or subletting of
the Premises to a Tenant Affiliate.
ADDENDUM 17. POSSESSION AND LEASE COMMENCEMENT
As of the date of this Lease Agreement, Landlord has not been notified by any
governmental authority to perform any repairs, alterations, additions or
improvements to bring this Building into compliance.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum the day
and year first above written.
"LANDLORD"
Spieker Properties, L.P.
a California limited partnership
By: Spieker Properties, Inc.
a Maryland Corporation
Its: General Partner
By: /s/ JOHN A. FOSTER
----------------------------
John A. Foster
Its: Senior Vice President
----------------------------
Date: 12/19/95
----------------------------
"TENANT"
At Home Corporation
a Delaware corporation
By: /s/ William R. Hearst III
----------------------------
Its: Chief Executive Officer
----------------------------
Date: 12/15/95
----------------------------
<PAGE> 1
EXHIBIT 10.6
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (the "Agreement") is made and entered
into effective as of October 1, 1996 (the "Effective Date"), by and between
Scott Kriens (the "Employee") and Juniper Networks, Inc., a California
corporation (the "Company").
R E C I T A L S
A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "Board") recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication of the Employee, notwithstanding the
possibility, threat or occurrence of a change of control (as defined below) of
the Company.
B. The Board believes that it is in the best interests of the Company
and its shareholders to provide the Employee with an incentive to continue his
employment and to maximize the value of the Company upon a Change of Control for
the benefit of its shareholders.
C. The Board believes that it is imperative to provide the Employee with
certain severance benefits upon the Employee's termination of employment
following a Change of Control and thereby provide the Employee with enhanced
financial security and sufficient encouragement to remain with the Company
notwithstanding the possibility of a Change of Control.
D. To accomplish the foregoing objectives, the Board of Directors has
directed the Company, upon execution of this Agreement by the Employee, to agree
to the terms provided herein.
E. Certain capitalized terms used in the Agreement are defined in
Section 8 below.
AGREEMENT
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:
1. Duties and Scope of Employment.
(a) Position. The Company shall employ the Employee in the
position of Chief Executive Officer with such duties, responsibilities and
compensation as in effect as of the Effective Date; provided, however, that the
Board shall have the right, prior to the occurrence of a Change of Control, to
revise such responsibilities and compensation from time to time as the Board may
deem necessary or appropriate.
<PAGE> 2
(b) Obligations. The Employee shall devote his full business
efforts and time to the Company and its subsidiaries. The foregoing, however,
shall not preclude the Employee from engaging in such activities and services as
do not interfere or conflict with his responsibilities to the Company.
2. At-Will Employment. The Company and the Employee acknowledge that the
Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established Employee plans and
policies at the time of termination. The terms of this Agreement shall terminate
upon the earlier of (i) the date that all obligations of the parties hereunder
have been satisfied or (ii) the date upon which this Agreement terminates by
consent of the parties hereto. A termination of the terms of this Agreement
pursuant to the preceding sentence shall be effective for all purposes, except
that such termination shall not affect the payment or provision of compensation
or benefits on account of a termination of employment occurring prior to the
termination of the terms of this Agreement.
3. Compensation and Benefits.
(a) Base Compensation. The Company shall pay the Employee as
compensation for services a base salary at the annualized rate agreed upon by
the Company and the Employee as of the Effective Date in effect at the time of
the Change of Control (as defined herein). Such salary shall be reviewed at
least annually and shall be increased from time to time subject to
accomplishment of such performance and contribution goals and objectives as may
be established from time to time by the Board of Directors. Such salary shall be
paid periodically in accordance with normal Company payroll practices. The
annual compensation specified in this Section 3(a), together with any increases
in such compensation that the Board may grant from time to time, is referred to
in this Agreement as "Base Compensation."
(b) Bonus. Beginning with the Company's next fiscal year and for
each fiscal year thereafter during the term of this Agreement, if the Board
implements a bonus program, the Employee shall be eligible to receive an annual
bonus (the "Bonus") based upon targets approved prior to the beginning of each
fiscal year by the Board (the "Target Bonus"). The Bonus payable hereunder shall
be paid in accordance with the Company's normal practices and policies.
(c) Employee Benefits. The Employee shall be eligible to
participate in the Employee benefit plans and executive compensation programs
maintained by the Company applicable to other key executives of the Company,
including (without limitation) retirement plans, savings or profit-sharing
plans, deferred compensation plans, supplemental retirement or excess-benefit
plans, stock option, incentive or other bonus plans, life, disability, health,
accident and other insurance programs, paid vacations, and similar plans or
programs, subject in each case to the generally applicable terms and conditions
of the plan or program in question and to the determination of any committee
administering such plan or program.
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<PAGE> 3
4. Change of Control.
(a) Accelerated Vesting Upon a Change of Control. In the event of
a Change of Control, in addition to any portion of the Employee's restricted
stock and options that were vested immediately prior to such Change of Control,
shares of restricted stock shall be released from the repurchase option and
options shall become vested and exercisable as to an additional amount as though
the Employee had remained continuously employed for a period of eighteen (18)
months following such Change of Control. In addition, at a Change of Control,
shares of restricted stock and options shall be released from the repurchase
option and options shall become vested and exercisable at a rate which is 1.5
times the rate otherwise set forth in the Agreement for a period of twelve (12)
full calendar months following the Change of Control; provided however, if the
Employee's employment with the Company terminates at any time within such twelve
(12) month period after a Change of Control as a result of Involuntary
Termination other than for Cause, then upon such termination, shares of
restricted stock shall be released from the repurchase options and options shall
become vested and exercisable with respect to all of the shares which otherwise
would vest during such twelve (12) month period under this section; provided
further that if such Involuntary Termination results from an event described in
Section 8(b)(i), (ii), (iii), (iv) or (v), Employee shall agree to provide
transition services pursuant to Section 5 hereof and during such transition
period, shares of restricted stock shall be released from the repurchase option
and options shall become vested and exercisable at a rate which is 1.5 times the
rate otherwise set forth in the Agreement.
(b) Compensation. In addition to the above, if Employee's
employment with the Company is terminated as a result of an Involuntary
Termination other than for Cause, upon a Change of Control, Employee shall be
entitled to receive Base Compensation and Benefits for a period of three (3)
months.
5. Transition Services. Following a Change of Control, if the Board of
Directors so requests, Employee shall continue his employment for a period not
to exceed twelve (12) months to assist in the transition. Employee's duties and
obligations under this Section 5 are limited solely to provide transition
services. Any additional or other duties or obligations must be negotiated
separately. During such time, Employee shall continue to receive an amount equal
to the Base Compensation (including bonus) and Benefits for the year in which
the Change of Control occurs.
6. Termination Apart from a Change of Control. If Employee's employment
is terminated as a result of Involuntary Termination other than for Cause, he
shall be entitled to receive three (3) months Base Compensation and Benefits,
regardless of whether there has been a Change of Control. In addition, if no
Change of Control has occurred, Employee's restricted stock shall be released
from the repurchase option and options shall become vested and exercisable as to
an additional amount as though the Employee had remained continuously employed
for a period of three (3) months.
7. Certain Business Combinations. In the event it is determined by the
Board of Directors, upon receipt of a written opinion of the Corporation's
independent public accountants, that the enforcement of any Section or
subsection of this Agreement, including, but not limited to,
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<PAGE> 4
Section 4(a) hereof, which allows for the acceleration of the release of the
repurchase option with respect to restricted shares of the Corporation's common
stock upon a termination in connection with a Change of Control, would preclude
accounting for any proposed business combination of the Corporation involving a
Change of Control as a pooling of interests, and the Board otherwise desires to
approve such a proposed business transaction which requires as a condition to
the closing of such transaction that it be accounted for as a pooling of
interests, then any such Section or subsection of this Statement shall be null
and void. For purposes of this Section 7, the Board's determination shall
require the unanimous approval of the disinterested Board members.
8. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
(a) Change of Control. "Change of Control" shall mean the
occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding voting securities,
other than in a private financing where securities are acquired directly from
the Company;
(ii) A change in the composition of the Board of
Directors of the Company occurring within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual not otherwise an Incumbent Director whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or
(iii) The approval by shareholders of the Company of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the approval by
the shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
(b) Involuntary Termination. "Involuntary Termination" shall mean
(i) without the Employee's express written consent, a significant reduction of
the Employee's duties, position or responsibilities, or the removal of the
Employee from such position and responsibilities, unless the Employee is
provided with a comparable position (i.e., a position of equal or greater
organizational level, duties, authority, compensation and status); (ii) without
the Employee's express written
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<PAGE> 5
consent, a substantial reduction, without good business reasons, of the
facilities and perquisites (including office space and location) available to
the Employee immediately prior to such reduction; (iii) a significant reduction
by the Company in the Base Compensation of the Employee as in effect immediately
prior to such reduction; (iv) a material reduction by the Company in the kind or
level of Employee benefits to which the Employee is entitled immediately prior
to such reduction with the result that the Employee's overall benefits package
is significantly reduced; (v) without the Employee's express written consent,
the relocation of the Employee to a facility or a location more than 50 miles
from the Employee's then present location; (vi) any purported termination of the
Employee by the Company which is not effected for Disability or for Cause, or
any purported termination for which the grounds relied upon are not valid; or
(vii) the failure of the Company to obtain the assumption of this Agreement by
any successors contemplated in Section 10 below.
(c) Cause. "Cause" shall mean (i) any act of personal dishonesty
taken by the Employee in connection with his responsibilities as an Employee and
intended to result in substantial personal enrichment of the Employee, (ii) the
conviction of a felony which the Board reasonably believes had or will have a
material detrimental effect on the Company's reputation or business, (iii) a
willful act by the Employee which constitutes gross misconduct and which is
injurious to the Company, and (iv) continued violations by the Employee of the
Employee's obligations which are demonstrably willful and deliberate on the
Employee's part after there has been delivered to the Employee a written demand
for performance from the Company which describes the basis for the Company's
belief that the Employee has not substantially performed his duties.
(d) Disability. "Disability" shall mean that the Employee has
been unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the Employee
or the Employee's legal representative (such agreement as to acceptability not
to be unreasonably withheld).
(e) Termination Date. "Termination Date" shall mean the date on
which either party delivers a notice of termination to the other.
9. Successors.
(a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner and
to the same extent as the Company would be required to perform such obligations
in the absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this Agreement by
operation of law.
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<PAGE> 6
(b) Employee's Successors. The terms of this Agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
10. Notice.
(a) General. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by the Company for
Cause or by the Employee as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice of termination to the
other party hereto given in accordance with Section 10 of this Agreement. Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date (which shall be not more than 30 days after
the giving of such notice). The failure by the Employee to include in the notice
any fact or circumstance which contributes to a showing of Involuntary
Termination shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights
hereunder.
11. Arbitration. At the option of either party, any and all disputes or
controversies whether of law or fact and of any nature whatsoever arising from
or respecting this Agreement shall be decided by arbitration in accordance with
the rules and regulations of the American Arbitration Association.
The arbitrator shall be selected as follows: in the event the
Company and the Employee agree on one arbitrator, the arbitration shall be
conducted by such arbitrator. In the event the Company and the Employee do not
so agree, the Company and the Employee shall each select one independent,
qualified arbitrator and the two arbitrators so selected shall select the third
arbitrator. The Company reserves the right to object to any individual
arbitrator who shall be employed by or affiliated with a competing organization.
Arbitration shall take place at Santa Clara County, California, or
any other location mutually agreeable to the parties. At the request of either
party, arbitration proceedings will be conducted in the utmost secrecy; in such
case all documents, testimony and records shall be received, heard and
maintained by the arbitrators in secrecy under seal, available for the
inspection only of the Company or the Employee and their respective attorneys
and their respective experts who shall agree in advance and in writing to
receive all such information confidentially and to maintain such information in
secrecy until such information shall become generally known. The arbitrator, who
shall act by majority vote, shall be able to decree any and all relief of an
equitable nature,
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<PAGE> 7
including but not limited to such relief as a temporary restraining order, a
temporary and/or a permanent injunction, and shall also be able to award
damages, with or without an accounting and costs, provided that punitive damages
shall not be awarded. The decree or judgment of an award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
Reasonable notice of the time and place of arbitration shall be
given to all persons, other than the parties, as shall be required by law, in
which case such persons or those authorized representatives shall have the right
to attend and/or participate in all the arbitration hearings in such manner as
the law shall require.
12. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Employee may receive from any
other source.
(b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.
(c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.
(d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(f) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (d) shall be
void.
(g) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment
taxes.
(h) Assignment by Company. The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another
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<PAGE> 8
affiliate of the Company or to the Company; provided, however, that no
assignment shall be made if the net worth of the assignee is less than the net
worth of the Company at the time of assignment. In the case of any such
assignment, the term "Company" when used in a section of this Agreement shall
mean the corporation that actually employs the Employee.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
COMPANY: JUNIPER NETWORKS, INC.
By:
-------------------------------------
Title:
----------------------------------
EMPLOYEE: -----------------------------------------
Scott Kriens
-8-
<PAGE> 1
EXHIBIT 10.7
JUNIPER NETWORKS, INC.
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (the "AGREEMENT") is made and entered
into by and between Marcel Gani (the "EMPLOYEE") and Juniper Networks, Inc., a
California corporation (the "COMPANY"), effective as of February 18, 1997.
R E C I T A L S
A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other Change of Control. The
Board of Directors of the Company (the "BOARD") recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.
B. The Board believes that it is imperative to provide the Employee with
certain benefits upon a Change of Control which provides the Employee with
enhanced financial security and provides incentive and encouragement to the
Employee to remain with the Company notwithstanding the possibility of a Change
of Control.
The parties hereto agree as follows:
1. TERM OF AGREEMENT. This Agreement shall terminate on the earlier of
(i) the date that all obligations of the parties hereto with respect to this
Agreement have been satisfied or (ii) the date upon which this Agreement
terminates by consent of the parties hereto.
2. AT-WILL EMPLOYMENT. The Company and the Employee acknowledge that the
Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control,
unless the termination is to avoid this agreement, the Employee shall not be
entitled to any payments, benefits, damages, awards or compensation other than
as provided by this Agreement, or as may otherwise be available in accordance
with the Company's established employee plans and practice or pursuant to other
agreements with the Company.
3. DEFINITIONS.
(a) "CHANGE OF CONTROL" means the occurrence of any of the
following events:
<PAGE> 2
(i)Any "person" (as such term is used in Sections s13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"BENEFICIAL OWNER" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding voting securities
other than in a private financing transaction approved by the Board of
Directors; or
(ii) the direct or indirect sale or exchange by the
stockholders of the Company of all or substantially all of the stock of the
Company;
(iii) a merger or consolidation in which the Company is a
party and in which the stockholders of the Company before such Ownership Change
do not retain, directly or indirectly, at a least majority of the beneficial
interest in the voting stock of the Company after such transaction;
(iv) or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets.
(b) BASE COMPENSATION. The Company shall pay the Employee as
compensation for services a base salary at the annualized rate agreed upon by
the Company and the Employee as of the Effective Date or in effect at the time
of Termination. Such salary shall be reviewed at least annually and shall be
increased from time to time subject to accomplishment of such performance and
contribution goals and objectives as may be established from time to time by the
Board of Directors. Such salary shall be paid periodically in accordance with
normal Company payroll practices. The annual compensation specified in this
Section, together with any increases in such compensation that the Board may
grant from time to time, is referred to in this Agreement as "Base
Compensation."
(c) EMPLOYEE BENEFITS. The Employee shall be eligible to
participate in the Employee benefit plans and executive compensation programs
maintained by the Company applicable to other key executives of the Company,
including (without limitation) retirement plans, savings or profit-sharing
plans, deferred compensation plans, supplemental retirement or excess-benefit
plans, stock option, incentive or other bonus plans, life, disability, health,
accident and other insurance programs, paid vacations, and similar plans or
programs, subject in each case to the generally applicable terms and conditions
of the plan or program in question and to the determination of any committee
administering such plan or program.
(d) INVOLUNTARY TERMINATION. "Involuntary Termination" shall mean
(i) without the Employee's express written consent, a significant reduction of
the Employee's duties, position or responsibilities, or the removal of the
Employee from such position and responsibilities, unless the Employee is
provided with a comparable position (i.e., a position of equal or greater
organizational level, duties, authority, compensation and status); (ii) without
the Employee's express written consent, a substantial reduction, without good
business reasons, of the facilities and perquisites (including office space and
location) available to the Employee immediately prior to such reduction; (iii) a
significant reduction by the Company in the Base Compensation of the Employee as
in effect immediately prior to such reduction; (iv) a material reduction by the
Company in the kind or level of
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<PAGE> 3
Employee benefits to which the Employee is entitled immediately prior to such
reduction with the result that the Employee's overall benefits package is
significantly reduced; (v) without the Employee's express written consent, the
relocation of the Employee to a facility or a location more than 50 miles from
the Employee's then present location; (vi) any purported termination of the
Employee by the Company which is not effected for Disability or for Cause, or
any purported termination for which the grounds relied upon are not valid; or
(vii) the failure of the Company to obtain the assumption of this Agreement by
any successors contemplated in Section 7 below.
(e) CAUSE. "Cause" shall mean (i) any act of personal dishonesty
taken by the Employee in connection with his responsibilities as an Employee and
intended to result in substantial personal enrichment of the Employee, (ii) the
conviction of a felony which the Board reasonably believes had or will have a
material detrimental effect on the Company's reputation or business, (iii) a
willful act by the Employee which constitutes gross misconduct and which is
injurious to the Company, and (iv) continued violations by the Employee of the
Employee's obligations which are demonstrably willful and deliberate on the
Employee's part after there has been delivered to the Employee a written demand
for performance from the Company which describes the basis for the Company's
belief that the Employee has not substantially performed his duties.
4. CHANGE OF CONTROL BENEFITS.
(a) Change of Control. Employee shall be entitled to receive from
the Company the benefits as provided in this Section 4 if there is a Change of
Control that occurs while Employee is employed by the Company.
(i)Option and Restricted Stock Accelerated Vesting. In
the event of a Change of Control that occurs while Employee is employed by the
Company, shares of restricted stock shall be released from the repurchase option
and options shall become immediately vested and exercisable as to the number of
shares that would vest over the next thirty (30) months or the balance of
Employee's unvested stock if a lesser amount. Notwithstanding the foregoing, if
such vesting acceleration would cause a contemplated Change of Control
transaction that was intended to be accounted for as a "pooling-of-interests"
transaction to become ineligible for such accounting treatment under generally
accepted accounting principles, as determined by the Company's independent
public accountants (the "ACCOUNTANTS") prior to the Change of Control,
Employee's stock options and restricted stock shall not have their vesting so
accelerated.
(ii) Compensation. In addition to the above, if
Employee's employment with the Company is terminated as a result of Involuntary
Termination other than for Cause, regardless of whether there has been a Change
of Control, Employee shall be entitled to receive Base Compensation and Benefits
for a period of three (3) months.
5. ATTORNEY FEES, COSTS AND EXPENSES. The prevailing party, determined
without regard to whether or not the action results in a final judgment, shall
be entitled to collect from the other party its reasonable attorneys' fees,
costs and expenses incurred in connection with any action brought by either
party in connection with the subject matter of this Agreement.
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<PAGE> 4
6. LIMITATION ON PAYMENTS. In the event that the benefits provided for
in this Agreement or otherwise payable to the Employee (i) constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code") and (ii) but for this Section, would be subject to
the excise tax imposed by Section 4999 of the Code, then the Employee's
severance benefits under subsection 3(b) shall be payable either
(a) in full, or
(b) as to such lesser amount which would result in no portion of
such benefits being subject to excise tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by the Employee on an after-tax basis, of the greatest amount of
benefits under subsection 3(b), notwithstanding that all or some portion of such
benefits may be taxable under Section 4999 of the Code. Unless the Company and
the Employee otherwise agree in writing, any determination required under this
Section 6 shall be made in writing by the Company's independent public
accountants (the "Accountants"), whose determination shall be conclusive and
binding upon the Employee and the Company for all purposes. For purposes of
making the calculations required by this Section 6, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and the Employee shall furnish
to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 6.
7. SUCCESSORS.
(a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession. For all purposes under this Agreement, the term
"COMPANY" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this Section 7
(a) or which becomes bound by the terms of this Agreement by operation of law.
(b) Employee's Successors. The terms of this Agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devisees and legatees.
8. NOTICE. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case
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<PAGE> 5
of the Employee, mailed notices shall be addressed to him at the home address
which he most recently communicated to the Company in writing. In the case of
the Company, mailed notices shall be addressed to its corporate headquarters,
and all notices shall be directed to the attention of its Secretary.
9. MISCELLANEOUS PROVISIONS.
(a) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.
(b) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.
(c) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California as applied to agreements entered into and performed within California
solely by residents of that state.
(d) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(e) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
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<PAGE> 6
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the date set forth
above.
COMPANY JUNIPER NETWORKS, INC.
-----------------------------------
Scott Kriens, President
EMPLOYEE
-----------------------------------
Marcel Gani
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<PAGE> 7
<PAGE> 1
08/21/97
EXHIBIT 10.8
Agreement for ASIC Design and Purchase of Products
between
IBM Microelectronics
1000 River Street
Essex Junction, Vermont
and
Juniper Networks
Agreement Number V1967
Commencement Date: At Signoff
IBM Customer Account
Representative: Ed Buturla
Name and Address of Buyer:
Juniper Networks
385 Ravendale Drive
Mountain View, CA 94043
This agreement ("Agreement") is entered into by and between International
Business Machines Corporation, incorporated under the laws of the State of New
York ("IBM") and Juniper Networks, ("Buyer"), incorporated under the laws of
the State of California.
This Agreement and its attachments ("Attachments") sets forth the terms and
conditions pursuant to which semiconductor products will be designed,
manufactured, sold and purchased. The terms and conditions by which IBM
licenses to Buyer the IBM Design Kits specified in Attachment A are governed by
the IBM Design Kit License initially executed by the parties on April 14, 1997.
1.0 DEFINITIONS
1.1 "ASIC(S)" means application specific integrated circuits.
1.2 "ASIC TOOL KITS" means any computer aided design software and data provided
by IBM and used by Buyer for the purpose of designing or checking ASIC
designs, as updated or enhanced from time to time by IBM.
1.3 "BUYER DELIVERABLE ITEMS" means any information and materials supplied to
IBM by Buyer, as set forth in Attachment B, including, without limitation,
software, schematics, netlists, microcode, designs or techniques, as
accepted by IBM and utilized in the design of or otherwise incorporated
into a Product.
1.4 "ENGINEERING CHANGE" means a mechanical or electrical change to the
Product which affects form, fit, function or maintainability.
1.5 "IBM DELIVERABLE ITEMS" means the information, materials and tools supplied
to Buyer by IBM, as set forth in Attachment B, including, without
limitation, IBM Design Kits, ASIC Tool Kits and Prototype devices.
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1.6 "IBM DESIGN KITS" means any IBM computer aided design software and data
(including libraries) provided to Buyer for the purpose of designing or
testing ASIC designs, as updated and enhanced from time to time. The term
"IBM Design Kits" includes ASIC Tool Kits.
1.7 "INITIAL ASIC DESIGN REVIEW CHECKLIST" ("IDR") means a report in form and
content as regularly used by IBM to make a preliminary assessment of the
feasibility of Buyer's proposed Product design.
1.8 "MILESTONES" means completion of the (i) initial design review ("IDR
Milestone"), (ii) pre-layout and timing analysis ("RTL Milestone"), and
(iii) the release to manufacturing ("RTM Milestone") stages of work.
1.9 "NON-RECURRING ENGINEERING CHARGES" ("NRE CHARGES") means the costs for
NRE Services.
1.10 "NON-RECURRING ENGINEERING SERVICES" ("NRE SERVICES") means engineering
services provided by IBM to develop Products to be manufactured under this
Agreement, which shall include delivery of Prototypes as specified in
Attachment C.
1.11 "PRODUCT(S)" means production units of the ASIC product(s) to be sold and
purchased under this Agreement as specified in Attachment A and as may be
amended by the parties to include additional Products. Products shall not
include Prototypes.
1.12 "PRODUCT SPECIFICATIONS" means the specifications for each Product
including, without limitation, the post-layout electronic data interchange
format ("EDIF") and timing requirements (including clock skew
requirements), a statement of post-layout test coverage and I/O placement;
as documented in the RTM, expressly or by specific incorporation.
1.13 "PROTOTYPE ACCEPTANCE" means Buyer's written approval that Buyer's
Prototype evaluation demonstrates Prototype conformance to Product
Specifications.
1.14 "PROTOTYPE DEVICE(S)" OR "PROTOTYPES" means a preliminary version of a
Product which may or may not be functional and which is not suitable for
production in commercial quantities.
1.15 "PURCHASE ORDER LEAD TIME" means the required minimum amount of time
between IBM's receipt of the Purchase Order issued by Buyer and the
requested shipment date necessary to accommodate manufacturing cycle time,
as specified in Attachment C.
1.16 "RELEASE TO LAYOUT CHECKLIST" ("RTL") means a performance approval report
in form and content as regularly used by IBM to document completion of the
pre-layout Level Sensitive Scan Design ("LSSD") and timing analysis
milestone of the SOW.
1.17 "RELEASE TO MANUFACTURING CHECKLIST" ("RTM") means a performance approval
report in form and content as regularly used by IBM to document the design
review milestone at the completion of the post-layout timing analysis.
1.18 "SCHEDULED SHIPMENT DATE" means the date for shipment of Product requested
by Buyer in a Purchase Order.
1.19 "SHIPMENT DATE" means the date for shipment of Product requested by Buyer
in a Purchase Order.
1.20 "STATEMENT OF WORK" or "SOW" means a statement of work as set forth in
Attachment A that identifies the respective design obligations that the
parties agree to complete for the development of particular Products.
2.0 TERM OF AGREEMENT
This Agreement shall become effective on the date it is executed by Buyer
and IBM (the "Commencement Date"). The term of this Agreement will begin
on the Commencement Date and will be effective for a period of three (3)
years after the date of execution (the "Contract Period"), subject,
however, to earlier termination as permitted under Section 13.0.
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3.0 WORK SCOPE
3.1 IBM will provide Buyer with engineering support and assistance and Buyer
will provide IBM with the Buyer Deliverable items and cooperate with IBM in
the use of IBM Deliverable Items to enable IBM to manufacture Products, in
accordance with the SOW. The Products are designed for verification on IBM
ASIC tools and to be manufactured by IBM under this Agreement. The terms
and conditions by which IBM licenses the IBM Design Kits are exclusively
governed by the IBM Design Kit License Agreement, which is hereby
incorporated by reference.
3.2 In the event that multiple Products are developed under this Agreement or
this Agreement is amended to include other Products, each such Product
shall be developed under and subject to a separate SOW, separate
development checklist and separate Product pricing.
4.0 ASIC PRODUCT DESIGN
4.1 IBM'S ASIC development checklists shall document the development of each of
Buyer's Product design(s).
4.1.1 The IDR will be used to make a preliminary feasibility assessment of
each of Buyer's proposed Product design and to advise Buyer of any areas
where Buyer's design(s) do not conform to IBM design requirements.
4.1.2 The RTL shall include, expressly or by specific incorporation, the
design specifications for each Product required by Buyer to successfully
place, route, time and conform to LSSD and provide static timing analysis.
The RTL shall also document the fact that such information is available to
Buyer and has been communicated to Buyer before each Product netlist is
released to layout. Buyer's signature on the RTL shall record Buyer's
acknowledgment of satisfactory completion of all work on such Product
through such Milestone.
4.1.3 Buyer's signature on the RTM shall record Buyer's acknowledgment of
(i) satisfactory completion of all work on such Product through the RTM
Milestone and (ii) the specifications to which IBM's warranty obligations,
set forth in Section 14.0, apply. To the extent that specifications and
test parameters contained in the RTM vary those set forth in the RTL, the
specifications contained in the RTM shall govern.
4.1.4 Buyer's signature on the RTL and RTM checklists shall not be
unreasonably withheld.
4.2 All Milestone and Prototype delivery schedules are estimates only.
4.3 Any data relating to a Product design that Buyer is to furnish to IBM must
be compatible with IBM tools, with which IBM will verify all design and
engineering work for conformance to IBM's technology groundrules.
4.4 Buyer may request changes to any Product design during the course of the
SOW by submitting a written request to IBM. Upon receipt by IBM of any such
request, IBM shall promptly inform Buyer of the effect of the requested
change on the SOW including estimated completion of the design work to
incorporate any requested changes and applicable price increase(s), if any.
IBM may, however, continue work without regard to the requested change
until both parties have agreed in writing to adjustment in price and
estimated completion date terms, unless Buyer specifically notifies IBM in
writing to halt work.
4.5 Buyer may, for the applicable unit price specified in Section 4.0 of
Attachment C, order Prototypes in addition to the quantity included in the
NRE Charges at any time before five (5) working days prior to RTM signoff.
Subject to the RTM signoff and adequate yield from the initial wafer lot,
IBM shall use reasonable efforts to deliver such additional Prototypes
within two (2) weeks of the estimated delivery date for Prototypes.
4.6 Subject to the terms and conditions of this Agreement, both parties will
exercise reasonable diligence in performing the design activities set forth
in the SOW for each Product.
4.7 IBM agrees to provide Products to Buyer as requested by Buyer and accepted
by IBM subject to the provisions of Section 5.0 and Section 6.0.
4.8 All computer data provided to IBM by Buyer will be free from any virus,
worm or other routines that would permit unauthorized access or otherwise
harm software, hardware or data.
5.0 PRODUCT DEMAND FORECASTS
5.1 The first Product demand forecast agreed to by Buyer and IBM is set forth
in Attachment C. The forecast covers twelve (12) months broken out by
Product and month. During the term of this Agreement, Buyer will provide
IBM with updated Product demand forecasts on a monthly basis covering a
rolling twelve (12) month period (not to extend beyond the Contract
Period), which will be reviewed for approval by IBM within ten (10) days of
receipt by IBM. Updated forecasts shall be in substantially the same format
as the first forecast in Attachment C. Forecasts shall be provided to IBM's
Customer Account Representative as identified above.
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Forecasts shall constitute good faith estimates of Buyer's anticipated
requirements for Products for the periods indicated based on current market
conditions, and IBM's acceptance shall constitute IBM's good faith
intention to quote and supply such requirements if requested and ordered by
Buyer in accordance with this Section 5.0. Notwithstanding the foregoing,
Product demand forecasts accepted by IBM shall not contractually obligate
IBM to supply, nor contractually obligate Buyer to purchase, the quantities
of units of Product set forth in such forecasts.
5.2 Buyer may request Products that exceed Product demand forecasts previously
accepted by IBM. Such requests are subject to rejection by IBM for any
reason, including, without limitation, resource availability.
6.0 PURCHASE ORDERS
6.1 Buyer shall order NRE Services by issuing written purchase orders. Purchase
orders for NRE Services will be deemed accepted by IBM unless rejected in
writing by IBM, specifying the reasons for rejection, within fourteen (14)
calendar days after IBM's receipt of such purchase order.
6.2 Buyer shall order Products by issuing written purchase orders. Purchase
orders for Products must be received by IBM in advance, with at least the
Purchase Order Lead Time specified in Attachment C, to allow IBM to meet
Buyer's requested Shipment Date. Requested Shipment Dates will be deemed
accepted (subject to the Purchase Order Lead Time) by IBM if the purchase
order requesting such Shipment Date is accepted by IBM. If so accepted, a
requested Shipment Date shall constitute a Scheduled Shipment Date. Subject
to IBM's written acceptance, Buyer may request an improved Scheduled
Shipment Date. Such acceptance shall not be unreasonably withheld by IBM.
6.3 Purchase orders for Products will be deemed accepted by IBM unless rejected
in writing by IBM, specifying the reasons for rejection, within fourteen
(14) calendar days after IBM's receipt of such purchase order. Purchase
orders for Products may be rejected by IBM if such purchase order requests
a quantity of Products that (i) exceeds the most recent Product demand
forecast accepted by IBM or (ii) a Shipment Date IBM deems unacceptable, or
(iii) does not comply with the terms and conditions of this Agreement, or
if Buyer is in breach of this Agreement.
6.4 Purchase orders issued to IBM shall include the following:
6.4.1 NRE Services and/or Product(s) being ordered;
6.4.2 quantity of units of Product requested (in increments of the
minimum ship pack quantity ("SPQ") only);
6.4.3 NRE charges and/or unit price per Attachment C;
6.4.4 billing address;
6.4.5 shipping instructions, including carrier, destination address
and requested shipment dates;
6.4.6 reference to this Agreement and Agreement Number.
6.5 This Agreement shall take precedence over and govern in case of any
additional, different or conflicting terms and conditions in any purchase
order(s) or any other form of either party. Purchase orders and other forms
of either party may not vary the terms of this Agreement. Additional,
different or conflicting terms and conditions on a purchase order or other
form shall be of no effect.
6.6 Notwithstanding any other provision of this Agreement, in the event that
IBM's ability to supply the Product is constrained (except as caused by
Buyer) for reasons which include, but are not limited to, component
availability, and the Scheduled Shipment Date cannot be met, IBM will
reduce the quantities of Products to be supplied to Buyer in proportion to
the reduction in quantities of products of the same technology or utilizing
the same manufacturing process to be supplied to satisfy others. Receipt of
such allocated supply and later delivery of all undelivered ordered
quantities after the constraint ends shall constitute Buyer's exclusive
remedy in the event of such supply constraint.
7.0 PRICING
7.1 Buyer shall pay IBM the NRE Charge applicable to such Product as set forth
in Attachment C, as well as other sums for special services as are
separately listed or referenced in Attachment C.
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7.2 The unit price for each unit of Product ordered shall be calculated at the
time the applicable purchase order is accepted using the Product's Price
Quantity Matrix set forth in Attachment C. The quantity used as an input
into such Price Quantity Matrix shall be the yearly cumulative quantity of
units of a Products determined by the purchase orders accepted by IBM
within such calendar year after the Commencement Date, including the units
of Product requested in the purchase order that is the subject of such
price calculation.
8.0 TITLE AND SHIPMENT
8.1 Title and risk of loss for a Product pass to Buyer when IBM delivers the
Product to the carrier.
8.2 Products shall be shipped from the manufacturing location FOB for domestic
U.S. destinations and ExWorks (as defined in the 1990 INCO Terms) for
international shipments.
8.3 In no event shall IBM be deemed to assume any liability in connection with
any shipment, nor shall the carrier be construed as an agent of IBM.
9.0 INVOICING, PAYMENT TERMS, TAXES
9.1 NRE Charges shall accrue and be invoiced on the schedule set forth in
Section 2.0 of Attachment C. IBM shall invoice Buyer for all units of
Product upon shipment. All payments under this Agreement shall be due
[***]. If Buyer's account becomes in arrears or if Buyer exceeds its credit
limit with IBM, in addition to any other right under this Agreement, [***]
IBM reserves the right to cease development work or stop shipment to Buyer
or ship to Buyer on a cash-in-advance basis until Buyer's account is again
current.
9.2 IBM reserves a purchase money security interest in Products purchased under
this Agreement in the amount of the price and in Buyer's proceeds from the
same, including, without limitation, accounts receivable. Purchase money
security interests will be satisfied by payment in full. Buyer agrees to
execute UCC-1 financing statements or other appropriate documents to be
filed in order to perfect IBM's security interest.
9.3 Buyer is responsible for all taxes related to Products except for taxes
based on IBM's net income.
9.4 Buyer shall provide IBM with a copy of a valid reseller's exemption
certificate for Products purchased for resale for each applicable taxing
jurisdiction. Based on such certificate, and where the law permits, IBM
will treat Buyer as exempt from applicable state and local sales tax for
Products purchased hereunder. Buyer shall notify IBM promptly in writing of
any modification or revocation of its exempt status. Buyer shall reimburse
IBM for any and all assessments resulting from a refusal by a taxing
jurisdiction to recognize any Buyer reseller's exemption certificate, or
from Buyer's failure to have a valid reseller's exemption certificate. If
Buyer purchases Product under this Agreement for internal use, Buyer agrees
to notify IBM and pay applicable sales tax.
10.0 INTEREST ON OVERDUE PAYMENTS
Buyer will be liable for interest on any overdue payment under this
Agreement, [***] commencing on the date such
payment becomes due at an annual rate equal to the maximum legal rate in
the jurisdiction where the claim is asserted [***].
11.0 CANCELLATION CHARGES, RESCHEDULING AND ORDER CHANGE PROVISIONS
11.1 Buyer may cancel a purchase order or any portion thereof upon written
notice to IBM. If Buyer cancels a purchase order for NRE Services or
Prototypes, or if Buyer unreasonably withholds its signature from the RTL
or RTM, IBM will cease further work in connection with the Product and
invoice Buyer for the total of all unpaid NRE Charges applicable to the
next development Milestone (Section 2.0 of Attachment C), an NRE
cancellation charge pursuant to Section 3.0 of Attachment C and the
applicable unit price for any canceled Prototype devices that were ordered
pursuant to Section 4.5 of this Agreement. For purchase orders for units of
Product, if the written notice is less than the Purchase Order Lead Time
then a cancellation charge, as specified in Section 9.0 of Attachment C
will immediately become due for each canceled unit.
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11.2 For a purchase order for production units which is more than thirty
(30) days, but less than the Purchase Order Lead Time, from its
Scheduled Shipment Date, Buyer may request in writing a one-time
deferral of the Scheduled Shipment Date for not more than ninety (90)
days, with no cancellation charge imposed. However, if this purchase
order is subsequently deferred or canceled, then the cancellation
charge specified in Section 9.0 of Attachment C will be due.
12.0 ENGINEERING CHANGES
12.1 IBM may implement Engineering Changes required to satisfy governmental
standards, protect Product, system or data integrity, or for
environmental, health or safety reasons ("Mandatory Engineering
Changes").
12.2 For all previously shipped Product not incorporating Mandatory
Engineering Changes, IBM may provide replacement Products (including
parts, materials and documentation) at the expense of the party at
fault. Buyer must use reasonable effort to install Mandatory
Engineering Changes on all Buyer installed Products and Products in
its inventory. If IBM requests the return of Products displaced by
installation of replacement Products, Buyer will promptly return any
displaced Products to IBM after installation of such replacement
Products, at IBM's expense.
12.3 In addition to Mandatory Engineering Changes, IBM may implement
Engineering Changes that result in cost reductions to the Product
("Elective Engineering Changes") with prior approval from Buyer. Such
approval shall not be unreasonably withheld. IBM shall give Buyer
prompt notice of Elective Engineering Changes.
12.4 IBM may make available other Engineering Changes ("Optional Engineering
Changes"). The cost of any Optional Engineering Changes that Buyer
desires to implement will be borne by Buyer and will be determined
through a request for quote process.
13.0 TERMINATION OF AGREEMENT
13.1 If either party is in material default of a provision of this Agreement
and such default is not corrected within (30) days of receipt of
written notice, this Agreement may be terminated by the party not in
default.
13.1.1 If Buyer terminates due to IBM default, all previously accepted
purchase orders shall be automatically without charge to Buyer, except
for any specific purchase order(s) that the parties mutually agree not
to cancel.
13.1.2 If IBM terminates due to Buyer default at IBM's discretion, all
previously accepted purchase orders shall be automatically canceled and
adjustment changes and cancellation charges will apply in addition to
any other amounts then due.
13.2 Notwithstanding the provisions of Section 13.1, either party shall have
the right to terminate this Agreement immediately if:
13.2.1 The other party flies a petition in bankruptcy, undergoes a
reorganization pursuant to a petition in bankruptcy, is adjudicated a
bankrupt, becomes insolvent, becomes dissolved or liquidated, files a
petition for dissolution or liquidation, makes an assignment for
benefit of creditors, or has a receiver appointed for its business; or
13.2.2 The other party is subject to property attachment or court
injunction or court order which has a substantial negative effect on
its ability to fulfill its obligations under this Agreement.
13.3 IBM may terminate this Agreement, or its obligation with respect to
specifically affected Products, immediately if:
13.3.1 Buyer unreasonably withholder its consent of IBM to make
Elective Engineering Changes under Section 12.0; or
13.3.2 IBM receives a claim or charge, and [***] otherwise has a
reasonable basis to believe any time during the term of this Agreement,
that any of the Buyer Deliverable items infringe third party
intellectual property rights. [***]
13.4 In the event this Agreement is terminated pursuant to Section 13.1.2,
13.2 or 13.3, all amounts due and payable to the non-terminating party
as of the date of such termination shall become immediately due and
payable.
13.5 Either party may terminate this Agreement without cause upon one (1)
year's prior written notice to the other. If Buyer is the terminating
party, all previously accepted
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purchase orders will be filed, but IBM shall not be obligated to accept further
purchase orders after receiving notice. If IBM is the terminating party, IBM
will continue to accept new purchase orders pursuant to Section 6.0 during the
notice period.
13.6 All Products shipped against accepted purchase orders will be subject to
the terms and conditions of this Agreement notwithstanding any
termination or expiration of the term of this Agreement.
14.0 WARRANTIES
14.1 IBM warrants that each unit of Product after delivery will be free from
defects in material and workmanship and will conform to the Product
Specifications as set forth in the RTM for the applicable period set
forth in Attachment C. Delivery to Buyer of each unit of Product is
deemed to occur five (5) days after shipment from IBM. Buyer
acknowledges that the functionality of Products is contingent upon
Buyer's designs and, therefore, the warranty of this Section 14.1 does
not apply to the functionality of Products fabricated hereunder. This
warranty does not include repair of damage resulting from failure to
provide a suitable installation environment, or any use for other than
the intended purpose, accident, disaster, neglect, misuse,
transportation, alterations, or non-IBM repairs or activities.
14.2 Any unit of Product that fails to conform to the warranty of Section
14.1, while under warranty, may be returned, transportation prepaid by
Buyer, to the location IBM designates for repair, replacement or credit,
at IBM's discretion. [***] IBM will repair or replace such units or
provide a credit to Buyer for the purchase price paid for such units by
Buyer. IBM will ship replacement units back to Buyer, transportation
prepaid by IBM, and such units of Product will be considered newly
delivered for warranty purposes.
14.3 Should any unit of Product returned to IBM hereunder be found by IBM to
be free from defects or non-conformities, IBM will return such unit of
Product to Buyer transportation prepaid by IBM. Payment for such unit of
Product will be due and payable by Buyer upon receipt of the invoice.
[***]
14.4 Prototypes provided by IBM under this Agreement are provided on an "AS
IS" basis, without warranty of any kind.
14.5 No course of dealing, course of performance, usage of trade, Product or
Prototype description shall be deemed to establish a warranty, express
or implied.
14.6 THE FOREGOING WARRANTIES MADE BY IBM ARE EXCLUSIVE AND IN LIEU OF ANY
OTHER WARRANTIES FROM IBM, EXPRESS OR IMPLIED INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, AND ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT.
15.0 CONFIDENTIAL INFORMATION
All information exchanged under this Agreement will be deemed to be
non-confidential. If a party wishes to exchange confidential
information, the exchange will be made under the terms of the separate
agreement for exchange of confidential information (Agreement Number
V0903) as executed between the parties on 4/27/96.
16.0 TRADEMARKS AND TRADE NAMES
16.1 Neither this Agreement, nor the sale of Products hereunder, shall be
deemed to give either party any right to use the other party's
trademarks or any of the other party's trade names without specific,
prior written consent.
17.0 INTELLECTUAL PROPERTY RIGHTS
17.1 Buyer represents, and IBM acknowledges Buyer's representation, that all
Buyer Deliverable items for the Products are the property of Buyer.
Buyer represents and warrants it is the rightful owner, or authorized
licensee (with all requisite rights to sublicense) of the Buyer
Deliverable Items and all other designs, information, and materials
supplied to IBM hereunder, and that no part of such materials knowingly
incorporate or infringe the intellectual property of any third party.
17.2 IBM or its licensors shall retain and have all intellectual property
right (including, without limitation, mask work rights) associated with
any intellectual property furnished by IBM
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in connection with this Agreement, including without limitation, (i)
all base array layers, (ii) all IBM-licensed library elements
(including, without limitation, any megafunctions or cores), (iii) all
design methodologies and tools [***]. To the extent Buyer has access
to such intellectual property, Buyer shall use such intellectual
property solely for the purpose of designing Prototypes and Products
for manufacture pursuant to this Agreement. Buyer hereby conveys to IBM
any intellectual property rights it may acquire therein.
17.3 IBM shall own any masks made by IBM using logic data provided by Buyer.
IBM will use any tangible netlist tape(s), and tangible GDS II tape(s)
received from Buyer or generated exclusively for Buyer hereunder, and
any masks made from such GDS II tape(s), only to manufacture Products
for sale to Buyer.
17.4 If in the course of performance under this Agreement either party
discovers or invents any process, pattern, device or other invention,
that party shall be deemed the owner of such discovery or invention. In
the event any such invention is jointly discovered or invented by the
parties, the parties shall be deemed joint owners of such discovery or
invention without any duty of accounting.
17.5 The parties understand and agree that no license or other right is
granted herein to either party, directly or by implication, estoppel or
otherwise, with respect to any know-how, inventions, patents, trade
secrets, copyrights, mask works or other intellectual property rights,
except as may be required by IBM to manufacture the Product(s). No
additional license or other right, express or implied, shall arise from
the consummation of this Agreement, or from any acts, statements or
dealings leading to such consummation.
18.0 INTELLECTUAL PROPERTY INDEMNIFICATION
18.1 IBM shall indemnify Buyer from and against any damages finally settled
or awarded by a court of competent jurisdiction resulting from any
direct infringement of any patents or copyrights of a third party in
any country in which IBM sells similar products that expose IBM to
similar liabilities as the Product, arising as a result of any of IBM's
manufacturing process, equipment or testing, that is not specifically
required by Buyer's designs, specifications or instructions. IBM shall
defend at its own expense, including attorney's fees, any suit brought
against Buyer alleging such infringement. In the event that Buyer
becomes enjoined from using Product in its inventory due to such
infringement, IBM at its option and expense, will secure for Buyer the
right to continue to use and market the Product, or modify or replace
the Product with a non-infringing product. If IBM determines that
neither of the foregoing alternatives is reasonably available, Buyer
may return the Product in Buyer's inventory to IBM for a credit equal
to the price paid for the units of Product affected. IBM shall have no
obligation regarding any claim based upon modification of the Product
by Buyer or its customers, use of the Product in other than its
intended operating environment or the combination, operation or use of
the product with non-IBM products or equipment.
18.2 Buyer shall indemnify IBM from and against any damages finally settled
or awarded by a court of competent jurisdiction resulting from any
direct infringement of any patents or copyrights of a third party in
any country where Buyer uses or distributes the Product, arising as a
result of IBM's compliance with any of Buyer's design, specifications,
instructions or modifications of the Product by Buyer and shall defend
at its own expense, including attorney's fees, any suit brought against
IBM alleging any such infringement.
18.3 The rights provided in Sections 18.1 and 18.2 are contingent upon the
parties seeking to enforce indemnification by giving prompt written
notice to the indemnifying party regarding any claim, demand or action
for which the indemnified party seeks indemnification. The indemnified
party is required to fully cooperate with the indemnifying party at the
indemnifying party's expense and shall allow the indemnifying party to
control the defense or settlement of any such claim, demand or action,
including obtaining the written consent of the indemnifying party prior
to any settlement proposal or settlement. IBM shall have the right to
waive Buyer's obligations under Section 18.2 and provide for its own
defense [***].
18.4 The purchase, receipt or possession of the Product from or through IBM
carries no license or immunity, express or implied, under any patent of
IBM covering the combination of the Product with other products or the
use of any such combination, or under any patent or other intellectual
property right of any third party relating to the Product or its
combinations with any other products.
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18.5 Except as expressly stated in this Agreement, this Section 18.0 states the
entire liability of the parties and their exclusive remedies with respect
to infringement and all other warranties against infringement of any
intellectual property rights, statutory, express or implied are hereby
disclaimed.
19.0 INDEPENDENT PARTIES
Each party hereto is an independent contractor and is not an agent of the
other party for any purpose whatsoever. Neither party shall make any
warranties or representations on the other party's behalf, nor shall it
assume or create any other obligations on the other party's behalf. IBM
and Buyer agree to indemnify from and against any damages finally awarded
by a court of competent jurisdiction resulting from any violation of
this Section 19.0.
20.0 LIMITATION OF REMEDIES
20.1 IBM's entire liability and Buyer's exclusive remedy are set forth in this
Section:
20.1.1 In all situations involving non-conforming or defective Products
furnished under this Agreement as set forth in Section 14.1, Buyer's
exclusive remedy is the replacement of the Products or a credit to Buyer of
the purchase price paid for such units by Buyer, at IBM's sole discretion.
20.1.2 IBM's liability for actual damages for any cause whatsoever (other
than as set forth in Section 20.1.1), shall be limited to the greater of
fifty thousand dollars ($50,000) or the applicable unit price for the
specific units of Product that caused the damages or that are the subject
matter of, or are directly related to, the cause of action. This limitation
will apply, except as otherwise stated in this Section, regardless of the
form of action, whether in contract or in tort, including negligence. This
limitation will not apply to the payment of costs, damages and attorney's
fees referred to in Section 18.0. This limitation will also not apply to
claims by Buyer for bodily injury or damage to real property or tangible
personal property caused by IBM's negligence. [***]
20.1.3 In no event will either party be liable to the other party for any
lost profits, lost savings, incidental damages or other consequential
damages, even if advised of the possibility of such damages, except as
provided in Section 18.0. In addition IBM will not be liable for any claim
based on any third-party claim, except as provided in Section 18.0. In no
event will IBM be liable for any damages caused by Buyer's failure to
perform Buyer's responsibilities.
20.1.4 In addition, IBM shall have no liability when the Products are used
in conjunction with (a) any medical implantation or other direct life
support applications where malfunction may result in direct physical harm
or injury to persons or (b) commercial aviation, nuclear materials, or
other ultra-hazardous activities.
21.0 SUBCONTRACT AND ASSIGNMENT
21.1 IBM has the right to subcontract its responsibilities under this
Agreement, provided that any subcontractor retained by IBM is obligated in
writing to the same obligations as set forth herein with respect to IBM.
In the event that IBM does subcontract certain portions of its
responsibilities, the term "employee" as used herein shall be deemed to
include such subcontractor and/or its employees.
21.2 Neither party to this Agreement may assign its rights or delegate its
duties, in whole or in part, without the prior written consent of the other
party, [***] except that IBM may assign its rights to payment. [***] Any
act in derogation of the foregoing will be null and void.
21.3 During the term of this Agreement and for one (1) year thereafter, Buyer
shall not solicit any IBM employee who is directly engaged in performing
activities under this Agreement to fill out an application for employment;
nor shall Buyer solicit the employees of any third party engaged on behalf
of IBM in performing activities that are related to this Agreement.
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22.0 COMPETITIVE PRODUCTS AND SERVICES
Neither this Agreement nor any activities hereunder will impair any
right of IBM or Buyer to design, develop, manufacture, market, service,
or otherwise deal in, directly or indirectly, other products or
services including those which are competitive with those offered by
IBM or Buyer.
23.0 PROMOTIONAL ACTIVITY
Press releases and other like publicity, advertising or promotional
material which mention the other party by name, this Agreement or any
term hereof shall be agreed upon by both parties in writing prior to
any release.
24.0 FORCE MAJEURE
Except for payments due IBM, neither party shall be in default or
liable for any delay or failure of compliance with this Agreement due
to an act of nature, public enemy, freight embargo, or other cause if
such act of nature, public enemy, freight embargo, or other cause is
beyond the control of the non-performing party. A non-performing party
shall cure as soon as practicable.
25.0 NOTICES
25.1 All notices shall be in writing and shall be deemed delivered when sent
by certified mail return receipt requested.
IBM JUNIPER
Address Address
1055 Joaquin Road 385 Ravendale Drive
Mountain View, CA 94043 Mountain View, CA 94043
Attn: Attn:
Archna Nigam/Brian McDonnell Marcel Gani
25.2 Day to day activities under this Agreement will be directed by the
Technical Coordinators identified in Attachment A, who will be
responsible for maintaining technical liaison between the parties.
Either party may change its respective representative designated for
receipt of notices, or its Technical Coordinator and their addresses
designated for notices by notifying the other party in the same manner
as any other notice.
26.0 GENERAL PROVISIONS
26.1 This Agreement may be executed in any number of identical counterparts,
each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument when each
party has signed one such counterpart.
26.2 The activities of each party and its employees, agents or
representatives while on the other party's premises (including any
design center) shall comply with the host company's policies and
procedures for such facilities, including security procedures and
visitation guidelines.
26.3 Each party will comply with all applicable federal, state and local
laws, regulations and ordinances including, without limitation, the
regulations of the U.S. Government relating to the export of
commodities and technical data insofar as they relate to the activities
under this Agreement. Buyer agrees that machines, commodities, and
technical data provided under this Agreement are subject to
restrictions under the export control laws and regulations of the
United States of America, including, without limitation, the U.S.
Export Administration Act and the U.S. Export Administration
Regulations. Buyer hereby gives its written assurance that neither
machines, commodities or technical data provided by IBM under this
Agreement, nor the direct product thereof, will be exported, or
re-exported, directly or indirectly, to prohibited countries or
nationals thereof without first obtaining applicable government
approval. Buyer agrees it is responsible for obtaining required
government documents and approvals prior to export of any machine,
commodity, or technical data.
26.4 This Agreement shall be construed, and the legal relations between the
parties hereto shall be determined, in accordance with the substantive
laws of the State of New York, without regard to the conflict of laws
principles thereof. The parties hereto expressly
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waive any right they may have to a jury trial and agree that any
proceeding under this Agreement shall be tried by a judge without a
jury.
26.5 If any section or subsection of this Agreement is found by competent
judicial authority to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of any such section
or subsection in every other respect and the remainder of this Agreement
shall continue in effect so long as the redacted Agreement still
expresses the intent of the parties. If the intent of the parties cannot
be preserved, this Agreement shall be either renegotiated or terminated.
26.6 Irrespective of nonpayment, no actions, regardless of form, arising out
of this Agreement, may be brought by either party more than two (2)
years after the cause of action has arisen
26.7 This Agreement may be modified only by a written amendment signed by
persons authorized to do so bind Buyer and IBM. This Agreement shall not
be supplemented or modified by any course of dealing, course of
performance or trade usage. The term "this Agreement" as used herein
includes any applicable Attachments or future written amendment(s) made
in accordance with this Section.
26.8 Failure by either party to insist in any instance on strict conformance
by the other to any term of this Agreement or failure by either party to
act in the event of a breach will not be construed as a consent to or
waiver of any subsequent breach of the same or of any other term
contained in this Agreement.
26.9 All obligations and duties which by their nature survive the expiration
or termination of this Agreement shall remain in effect beyond any
expiration or termination, including, without limitation, Sections 8.0,
9.0, 10.0, 13.6, 14.0, 15.0, 16.0, 17.0, 18.0, 19.0 and 20.0.
26.10 The headings in this Agreement are for convenience only and are not
intended to affect the meaning or interpretation of this Agreement.
27.0 SOLE AGREEMENT
The parties acknowledge that each has read this Agreement and its
Attachments, understands them, and agrees to be bound by their terms and
conditions. Further, the parties agree that this Agreement and its
Attachments and the IBM Design Kit License Agreement, are the complete
and exclusive statement of the agreement between the parties, which
supersedes all proposals and all prior agreements, oral or written, and
all other communications between the parties relating to the subject
matter hereof.
Agreed to: Agreed to:
INTERNATIONAL BUSINESS JUNIPER NETWORKS
MACHINES CORPORATION
By: [Illegible] By: /s/ Marcel Gani
------------------------- -------------------------
Authorized Signature Authorized Signature
Name Name: Marcel Gani
Title Title: Chief Financial Officer
Dated: Dated: 8/26/97
-------------------- --------------------
-----------------------------------------------------------------------------
This agreement shall not bind either party to any obligations unless and until
it is executed in writing by both parties.
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ATTACHMENT A
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[***]
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ATTACHMENT B
Deliverable Items
[to be customized to the transaction]
[***]
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ATTACHMENT C
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[***]
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SIGNATURE COPY EXHIBIT 10.8.1
AMENDMENT 1 TO AGREEMENT V1967
This Amendment to the Agreement for ASIC Design and Purchase of Products
("Amendment 1") is made and entered into between Juniper Networks ("Buyer"),
and IBM Microelectronics ("IBM"). This Amendment 1 shall be effective as of the
last date signed below (the "Effective Date").
WHEREAS IBM and Buyer are parties to the Agreement for ASIC Design and Purchase
of Products, Agreement Number V1967 having an effective date of August 26, 1997
(the "Agreement");
WHEREAS IBM and Buyer desire to amend the Agreement as set forth herein;
NOW THEREFORE the parties hereby agree as follows:
1. Restated Product Appendices: Attached hereto is a complete set of the
revised, updated Product Attachments for the Agreement that replace all prior
Product Attachments in their entirety.
2. No Other Amendment or Modification. Except as expressly set forth in this
Amendment 1, the Agreement remains in full force and effect without
modification. The terms and conditions of this Amendment 1 and the Agreement
shall not be modified or amended except by a writing signed by authorized
representatives of both parties.
3. Entire Agreement. The Agreement, as amended herein, sets forth the entire
agreement and understanding between the parties, and supersedes and cancels all
previous negotiations, agreements, commitments and writings, in respect to the
subject matter hereof, and neither party hereto shall be bound by any term,
clause, provision or condition except as expressly provided in the Agreement as
amended herein or as duly set forth on or subsequent to the date hereof in
writing, signed by duly authorized representatives of the parties.
Agreed to: Agreed to:
INTERNATIONAL BUSINESS JUNIPER NETWORKS
MACHINES CORPORATION
By: /s/ PETER D. HANSEN By: /s/ GARY HEIDENREICH
--------------------------- ------------------------------
Authorized Signature Authorized Signature
Name: Peter Hansen Name: Gary Heidenreich
Title: V.P. North America Sales Title: V.P. of Operations
Dated: 1/5/98 Dated: 12-16-97
------------------------ ---------------------------
IBM Page 1 of 8 Juniper Networks
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SIGNATURE COPY
ATTACHMENT A
[***]
IBM Page 2 of 8 Juniper Networks
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SIGNATURE COPY Juniper6.1wp
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SIGNATURE COPY Juniper6.1wp
ATTACHMENT B
Deliverable Items
[to be customized to the transaction]
[***]
IBM Page 4 of 8 Juniper Networks
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SIGNATURE COPY Juniper6.lwp
ATTACHMENT C
[***]
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SIGNATURE COPY Juniper6.lwp
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SIGNATURE COPY
[***]
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SIGNATURE COPY
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EXHIBIT 10.8.2
February 19, 1998
SIGNATURE COPY
AMENDMENT 2 TO AGREEMENT V1967
This Amendment to the Agreement for ASIC Design and Purchase of Products
("Amendment 2") is made and entered into between Juniper Networks ("Buyer"),
and IBM Microelectronics ("IBM"). This Amendment 2 shall be effective as of the
last date signed below (the "Effective Date").
WHEREAS IBM and Buyer are parties to the Agreement for ASIC Design and Purchase
of Products, Agreement Number V1967 having an effective date of August 26, 1997
(the "Agreement");
WHEREAS IBM and Buyer desire to amend the Agreement as set forth herein;
NOW THEREFORE the parties hereby agree as follows:
1. Additional Product Attachments: Attached hereto as an addition to the
Agreement are Product Attachments for Chip K.
2. No Other Amendment or Modification. Except as expressly set forth in this
Amendment 2, the Agreement as amended remains in full force and effect without
modification. The terms and conditions of this Amendment 2 and the Agreement
shall not be modified or amended except by a writing signed by authorized
representatives of both parties.
3. Entire Agreement. The Agreement, as amended, sets forth the entire
agreement and understanding between the parties, and supersedes and cancels all
previous negotiations, agreements, commitments and writings, in respect to the
subject matter hereof, and neither party hereto shall be bound by any term,
clause, provision or condition except as expressly provided in the Agreement as
amended herein or as duly set forth on or subsequent to the date hereof in
writing, signed by duly authorized representatives of the parties.
Agreed to: Agreed to:
INTERNATIONAL BUSINESS JUNIPER NETWORKS
MACHINES CORPORATION
By: /s/ PETER D. HANSEN By: /s/ GARY HEIDENREICH
--------------------------- ------------------------------
Authorized Signature Authorized Signature
Name: Peter Hansen Name: Gary Heidenreich
Title: V.P. North America Sales Title: V.P. of Operations
Dated: 3/2/98 Dated: 2-23-98
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IBM Page 1 of 7 Juniper Networks
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February 19, 1998
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February 19, 1998
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February 19, 1998
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Deliverable Items
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IBM Page 5 of 7 Juniper Networks
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Amend2K.4.lwp February 19, 1998
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Amend2K.4.1wp
February 19, 1998
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EXHIBIT 10.9
Standard Manufacturing Agreement
Solectron Confidential
STANDARD MANUFACTURING AGREEMENT
Solectron California Corporation ("Solectron") whose principal place of business
is located at 847 Gibraltar Drive, Milpitas, California 95035 and Fine Pitch
Technology Inc. whose principal place of business is located at 2450 Autumnvale
Drive, San Jose, California 95131 (Solectron California Corporation and Fine
Pitch Technology Inc. collectively referred to as "Solectron") and Juniper
Networks Inc. ("Customer") whose principal place of business is located at 385
Ravendale Drive, Mountain View, California 94043 in their desire to formulate a
strategic business relationship and to define their expectations regarding this
relationship, hereby agree as follows:
1.0 PRECEDENCE:
1.1 This Agreement is intended by Solectron and Customer to operate as a basic
set of operating conditions regarding their respective business
relationship. Product specific requirements along with specific business
terms and conditions will be mutually agreed to and documented by an
addendum to this Agreement.
1.2 It is the intent of the parties that this Agreement and its addenda shall
prevail over the Standard Manufacturing Agreement previously entered into
by the party's with the effective date of February 10, 1998. It is the
intent of the parties that this Agreement and its addenda shall also
prevail over the terms and conditions of any purchase order, acknowledgment
form or other instrument.
1.3 This Agreement may be executed in one or more counterparts, each of which
will be deemed the original, but all of which will constitute but one and
the same document. The parties agree this Agreement and its addenda may not
be modified except in writing signed by both parties.
2.0 TERM
2.1 This Agreement shall commence on the effective date, June 10, 1998, and
shall continue for an initial term of one (1) year. This Agreement shall
automatically be renewed for successive one(1) year increments unless
either party requests in writing, at least ninety (90) days prior to the
anniversary date, that this Agreement not be so renewed.
3.0 PRODUCT FORECAST
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3.1 Customer will provide an annual twelve (12) month forecast and a monthly
six (6) month rolling Product forecast to Solectron.
4.0 MATERIAL PROCUREMENT
4.1 Solectron is authorized to purchase materials using standard purchasing
practices including, but not limited to, acquisition of material
recognizing Economic Order Quantities, ABC buy policy and long lead time
component management in order to meet the forecasted requirements of
Customer. [***]
Customer recognizes its financial responsibility for the material
purchased by Solectron on behalf of Customer. Customer is responsible for
material to the extent that (i) material was purchased by Solectron to
support the Product forecast and agreed upon safety stock; (ii) Solectron
exercised reasonable business judgment in managing suppliers and lead
times; (iii) Solectron complied with Customer cancellation instructions
in a timely manner (canceled all open orders within one (1) week of
receiving instructions).
4.2 Customer may revise or cancel a purchase order for Product and may also
eliminate a component from a Product. If Customer revises or cancels a
purchase order ("Order"), or eliminates a component, or through revised
forecast (downside) causes excess inventory, Solectron shall identify all
potential liability of Customer for material on order, material on hand,
work in process, and finished goods. Solectron shall undertake
commercially reasonable efforts to cancel all applicable component
purchase orders and reduce component inventory through return for credit
programs or allocate components for alternate programs to minimize
charges to Customer. Customer agrees to compensate Solectron for costs
incurred for finished goods (including profit); work in process
(including labor performed); material on hand which could not be returned
or used for other customers and at other sites of Solectron; material on
order which could not be canceled; applicable material supplier's
restocking or cancellation fees; and agreed
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Standard Manufacturing Agreement
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Solectron handling charges. Customer agrees to pay carrying costs to
Solectron of [***].
4.3 Solectron will report its inventory position to Customer on a monthly
basis, including the following data: quantity of raw material, work in
process and any open orders that cannot be canceled due to supplier lead
time. Report will specifically identify any material on hand or on order
where the quantity exceeds the agreed three (3) month forward looking
forecast plus safety stock.
4.4 Solectron shall undertake reasonable efforts to cancel all applicable
component purchase orders and reduce component inventory through return
for credit programs or allocate components for alternate programs if
applicable.
5.0 PURCHASE ORDERS AND PRICE REVIEWS
5.1 Initial order placement will be an Order from Customer to Solectron issued
electronically with facsimile copy as backup. Shipment of Product to
Customer from date of acceptance shall be [***] for forecasted Product
[***]. Solectron will provide notice to Customer of Order acceptance and
scheduled shipment date [***].
5.2 Customer may issue specific Orders to Solectron which will be identified
as "high priority" at time of Order placement. Scheduled shipment of
designated "high priority" Product will be [***]. Solectron will ship
these Products [***]. Solectron's on-time delivery performance of "high
priority" Products will be taken into consideration by the parties during
quarterly price reviews.
5.3 In the event Customer issues Orders in excess of forecasts and agreed to
safety stock, Solectron will use commercially reasonable efforts to
recover and replenish inventory levels. Expediting costs for such Orders
will be agreed upon prior to Order placement. Solectron will provide
Customer with "what-if" shortages results [***].
5.4 Solectron and Customer will meet every three (3) months during the term
of this Agreement to review safety stock levels, pricing and to determine
whether any price adjustment is required. [***]
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Standard Manufacturing Agreement
Solectron Confidential
5.5 Solectron will provide pricing for average monthly volumes of [***]. If
volumes fall below [***] production rate of [***], Solectron and
Customer agree to review the causes. If the volumes have dropped due to
the end of Product life, Solectron and Customer agree to develop their
end-of-life support strategy. If the low volumes are only temporary,
Solectron and Customer will discuss what if any fixed program costs are
required to maintain the Solectron team. Solectron will attempt to
minimize the fixed program costs by re-assigning personnel whenever
possible. Solectron will consider production volumes of comparable (within
the same Product family) follow-on products when calculating total monthly
volumes realized.
6.0 DELIVERY
6.1 Solectron will target [***] on time delivery, defined as shipment of
Product by Solectron within a window of [***] except as provided above.
Each configuration order received from Customer will include the date on
which the Product is to be delivered to either Customer or their
designated customer location.
6.2 The FOB point is ex factory.
6.3 Solectron and Customer shall agree to delivery schedule flexibility
requirements specific to the Product as documented in the addenda.
6.4 Upon learning of any potential delivery delays, Solectron will notify
Customer as to the cause and extent of such delay.
6.5 If Solectron fails to make deliveries at the specified time and such
failure is caused by Solectron, Solectron will, at no additional cost to
Customer, employ accelerated measures such as material expediting fees,
premium transportation costs, or labor overtime required to meet the
specified delivery schedule or minimize the lateness of deliveries.
6.6 Should Customer require Solectron to undertake export activity on behalf
of Customer, Customer agrees to submit requested export information to
Solectron pursuant to Solectron Guidelines for Customer-Driven Export
Shipments as provided in the addenda.
7.0 PAYMENT TERMS
7.1 Solectron and Customer agree to payment terms of Net 30 days from the date
of invoice.
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7.2 Currency will be in U.S. Dollars unless specifically negotiated and
reflected in the addenda.
7.3 Until the purchase price and all other charges payable to Solectron have
been received in full, Solectron retains and Customer grants to Solectron
a security interest in the products delivered to Customer and any proceeds
therefrom.
8.0 QUALITY
8.1 The Customer program quality requirements shall be in accordance with IAW
ISO 9002. Printed Circuit Board Assemblies ("PCBA") shall be fabricated
IAW with IPC-A-610 Rev.B, Class 2. Low volumes will prohibit the use of
statistical based methods for quality management. Rather, all entities
agree to evaluate quality performance using a yield or Defects Per Million
(DPM) process, with a Pareto of failures. Improvements will be prioritized
and assigned appropriate resources by all parties.
9.0 ENGINEERING CHANGES
9.1 Customer may, upon advance written notice to Solectron, submit engineering
changes for incorporation into the Product. It is important that this
notification include documentation of the change to effectively support an
investigation of the impact of the engineering change. Solectron will make
a reasonable effort to review the engineering change and report to
Customer [***]. If any such change affects the price, delivery, or quality
performance of said Product, an equitable adjustment will be negotiated
between Solectron and Customer prior to implementation of the change.
9.2 Solectron agrees not to undertake significant process changes, design
changes, or process step discontinuance affecting electrical performance
and/or mechanical form and fit without prior written notification and
concurrence of the Customer.
10.0 INVENTORY MANAGEMENT
10.1 Solectron agrees to purchase components according to the Customer approved
vendor list (AVL) including any sourcing plans as provided by the addenda.
10.2 All customer tooling/equipment furnished to Solectron or paid for by
Customer in connection with this Agreement shall:
a) Be clearly marked and remain the personal property of Customer.
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Solectron Confidential
b) Be kept free of liens and encumbrances
c) Unless otherwise agreed, Customer is responsible for the general
maintenance of Customer tooling/equipment.
Solectron shall hold Customer property at its own risk and shall not
modify the property without the written permission of Customer. Upon
Customer's request, Solectron shall redeliver the property to Customer in
the same condition as originally received by Solectron with the exception
of reasonable wear and tear. In the event the property is lost, damaged or
destroyed, Solectron's liability for the property is limited to the book
value of the property.
11.0 CONFIDENTIAL INFORMATION
11.1 Solectron and Customer agree to execute, as part of this Agreement, a
Nondisclosure Agreement for the reciprocal protection of confidential
information.
11.2 Subject to the terms of the Nondisclosure Agreement and the proprietary
rights of the parties, Solectron and Customer agree to exchange, at least
semi-annually, relevant process development information and business plans
to include market trends, process technologies, product requirements, new
product developments, available capacity and other information to support
technology advancements by both Solectron and Customer.
12.0 WARRANTY
12.1 Solectron warrants for a period of [***] from the date of
manufacture of the Product, that (i) the Product will conform to the
specifications applicable to such Product at the time of its manufacture,
which are furnished in writing by Customer and accepted by Solectron; (ii)
such Product will be of good material (supplied by Solectron) and
workmanship and free from defects for which Solectron is responsible in
the manufacture; (iii) such Product will be free and clear of all liens and
encumbrances and that Solectron will convey good and marketable title to
such Product. In the event that any Product manufactured shall not be in
conformity with the foregoing warranties, Solectron shall, at Solectron's
option, either credit Customer for any such nonconformity (not to exceed
the purchase price paid by Customer for such Product), or, at Solectron's
expense, replace, repair or correct such Product. The foregoing
constitutes Customer's sole remedies against Solectron for breach of
warranty claims.
12.2 Solectron shall have no responsibility or obligation to Customer under
warranty claims with respect to Products that have been subjected to
abuse, misuse, accident, alteration, neglect or unauthorized repair.
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Standard Manufacturing Agreement
Solectron Confidential
THE WARRANTIES CONTAINED IN THIS SECTION ARE IN LIEU OF, AND SOLECTRON
EXPRESSLY DISCLAIMS AND CUSTOMER WAIVES ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR ARISING BY COURSE OF DEALING OR
PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR OTHERWISE, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS
FOR A PARTICULAR USE.
12.3 An Epidemic Condition exists when Failure reports or statistical samplings
show that [***] of the same Product installed or shipped during any one
month contain an identical, repetitive defect in Solectron supplied
material and/or workmanship.
If during the warranty period of one year, the same Product shows evidence
of an Epidemic Condition Juniper shall promptly notify Solectron of such
condition. Upon notification, Juniper shall have the right, pending
correction of the Epidemic Condition, to postpone further shipments of
such Product by giving written notice of such postponement to Solectron.
Such postponement shall temporarily relieve Solectron of its shipment
liability and Juniper of any shipment liability for such postponed
shipments. Both parties shall work together to prepare and propose a
corrective action plan addressing implementation and procedure milestones
for remedying such Epidemic Condition(s). Both parties shall use best
efforts to implement the remedy in accordance with the agreed upon
schedule.
In the event of Epidemic Failure Solectron will:
(a) Incorporate the remedy in the affected Product in accordance with
Juniper engineering change order procedures.
(b) Ship all subsequent Products incorporating the required modification.
(c) [***]
12.4 Solectron shall have no liability or responsibility under Sections above
for any losses or damages to the extent that any such Epidemic Failure
claims are the result of:
12.4.a Solectron's compliance with Customer specifications;
12.4.b the negligence of Customer or any other person providing goods or
services in connection with the design, development, production,
and distribution of the Product (with the exception of Solectron
manufacture of the Product);
12.4.c modification or alteration of the Product by a party other than
Solectron;
12.4.d defects in Customer's products or components thereof (with the
exception of the Products and Solectron supplied components
thereof).
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13.0 TERMINATION
13.1 If either party fails to meet any one or more of the terms and
conditions as stated in either this Agreement or the addenda,
Solectron and Customer agree to negotiate in good faith to resolve
such default. If the defaulting party fails to cure such default or
submit an acceptable written plan to resolve such default within
thirty (30) days following notice of default, the nondefaulting party
shall have the right to terminate this Agreement by furnishing the
defaulting party with thirty (30) days written notice of termination.
13.2 This Agreement shall immediately terminate should either party; (i)
become insolvent; (ii) enter into or file a petition, arraignment or
proceeding seeking an order for relief under the bankruptcy laws of
its respective jurisdiction; (iii) enter into a receivership of any of
its assets or; (iv) enter into a dissolution of liquidation of its
assets or an assignment for the benefit of its creditors.
13.3 Either Solectron or Customer may terminate this Agreement without
cause by giving ninety (90) days advance written notice to the other
party.
14.0 DISPUTE RESOLUTION
14.1 In the spirit of continued cooperation, the parties intend to and
hereby establish the following dispute resolution procedure to be
utilized in the unlikely event any controversy should arise out of or
concerning the performance of this Agreement.
14.2 It is the intent of the parties that any dispute be resolved
informally and promptly through good faith negotiation between
Solectron and Customer. Either party may initiate negotiation
proceedings by written notice to the other party setting forth the
particulars of the dispute. The parties agree to meet in good faith to
jointly define the scope and a method to remedy the dispute. If these
proceedings are not productive of a resolution, then senior management
of Solectron and Customer are authorized to and will meet personally
to confer in a bona fide attempt to resolve the matter.
14.3 Should any disputes remain existent between the parties after
completion of the two-step resolution process set forth above, then
the parties shall promptly submit any dispute to mediation with an
independent mediator. In the event mediation is not successful in
resolving the dispute, the parties agree to submit the dispute to
binding arbitration as provided by their respective jurisdiction.
15.0 LIMITATION OF LIABILITY
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IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, OR TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCT LIABILITY, OR
OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY DAMAGES OF ANY KIND WHETHER OR NOT
EITHER PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
16.0 PATENT, COPYRIGHT AND TRADEMARK INDEMNITY
Each party (the "indemnifying party") shall defend, indemnify, and hold
harmless the other party from any claims by a third party of infringement
of intellectual properties resulting from the acts of the indemnifying
party pursuant to this Agreement, provided that the other party (i) gives
the indemnifying party prompt notice of any such claims, (ii) renders
reasonable assistance to the indemnifying party thereon, and (iii)
permits the indemnifying party to direct the defense of the settlement of
such claims.
17.0 GENERAL
17.1 Each party to this Agreement will maintain insurance to protect itself
from claims (i) by the party's employees, agents and subcontractors under
Worker's Compensation and Disability Acts, (ii) for damages because of
injury to or destruction of tangible property resulting out of any
negligent act, omission or willful misconduct of the party or the party's
employees or subcontractors, (iii) for damages because of bodily injury,
sickness, disease or death of its employees or any other person arising
out of any negligent act, omission, or willful misconduct of the party or
the party's employees, agents or subcontractors.
17.2 Neither party shall delegate, assign or transfer its rights or
obligations under this Agreement, whether in whole or part, without the
written consent of the other party provided, however, upon prior written
notice to Solectron Customer may assign or transfer its rights to those
parties as provided in Exhibit A.
17.3 Neither party shall be liable for any failure or delay in its
performance under this Agreement due to acts of God, acts of civil or
military authority, fires, floods, earthquakes, riots, wars or any other
cause beyond the reasonable control of the delayed party provided that
the delayed party: (i) gives the other party written notice of such cause
within fifteen (15) days of the discovery of the event; and (ii) uses its
reasonable efforts to remedy such delay in its performance.
17.4 This Agreement shall be governed by, and construed in accordance with
the laws of the State of California, excluding its conflict of laws
provisions. In any action to enforce this Agreement, the prevailing party
shall be awarded all court costs and reasonable attorney fees incurred.
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Agreed:
Solectron California Corporation Customer Juniper Networks
By: /s/ JIM WILLIAMS By: /s/ GARY HEIDENREICH
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Name: Jim Williams Name: Gary Heidenreich
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Title: Vice President Title: VP, Operations
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Date: 8/8/98 Date: 6/10/98
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Fine Pitch Technology Inc.
By: /s/ YEN-HAO PAN
----------------------------
Name: Yen-Hao Pan
--------------------------
Title: Operation Mgr
----------------------------
Date: 6/3/98
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JUNIPER NETWORKS SOLECTRON ADDENDUM TO STANDARD MANUFACTURING AGREEMENT
This Addendum and the Standard Manufacturing Agreement (SMA) set forth the terms
and conditions under which Solectron agrees to manufacture and support the
Juniper Networks Martini product based on the specifications provided by Juniper
Networks. SOLECTRON agrees to perform such manufacturing, and to ship to Juniper
or it's customers in return for payment. This Addendum is hereby incorporated by
reference into the SMA. Except as set forth herein, the Addendum is subject to
each and every provision of the SMA. Capitalized terms not otherwise defined
here shall have the meanings ascribed to such terms in the SMA.
This addendum describes changes and additions to the SMA. It follows the
numbering scheme of the SMA. If a specific item was NOT changed or modified,
that item number will NOT be seen in the Addendum. For example, there were no
changes to Item 1.1. Thus, there is no 1.1 under section 1.0 although 1.1.1. has
been added under section 1.1 and thus are elements of this Addendum.
Signatures
/s/ JIM DAILY /s/ GARY HEIDENREICH
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Jim Daly Gary Heidenreich
Division Manager Vice President of Operations
Complex Systems Division Juniper Networks
Solectron
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PRICE EXHIBIT
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