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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Registration Rights Agreement which superseded and replaced in its entirety the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.
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"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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"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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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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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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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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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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(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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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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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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(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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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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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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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.
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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.
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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]
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]
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]
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]
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]
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]
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]
23
EXHIBIT A
COMMON SERIES A SERIES B SERIES C SERIES D SERIES D1
NAME STOCK PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED
---- --------- --------- --------- --------- --------- ---------
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