Document:

exv10w12

 

Exhibit 10.12

FIRST AMENDMENT TO LEASE
AGREEMENT

     This FIRST AMENDMENT TO LEASE AGREEMENT (“First Amendment”) is made and entered into as of
March 6, 2008, by and between BP MV RESEARCH PARK, LLC, a Delaware limited liability company
(“Landlord”), and CAVIUM NETWORKS, INC., a Delaware corporation (“Tenant”).

RECITALS:

     A. Landlord (as successor-in-interest to MB Technology Park, LLC, a California limited
liability company) and Tenant (successor-in-interest to Cavium Networks, a California corporation,
which was incorrectly identified in the Lease as “Cavium Networks, Inc., a California corporation”)
entered into that certain Lease Agreement dated April 15, 2005 (the “Lease”), whereby Landlord
leased to Tenant and Tenant leased from Landlord approximately 32,260 rentable square feet of space
(the “Premises”) which consist of the entire building located at 805 East Middlefield Road,
Mountain View, California (the “Building”).

     B. Tenant desires to extend the Term of the Lease, and make certain other modifications to the
Lease, and in connection therewith Landlord and Tenant desire to amend the Lease on the terms and
conditions contained herein.

AGREEMENT:

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows.

     1. Defined Terms. All terms defined in the Lease when used herein or in the exhibits hereto
shall have the same meaning as is given such terms in the Lease unless expressly superseded by the
terms of this First Amendment.

     2. Extended Term. Landlord and Tenant hereby acknowledge and agree that the
Term is currently scheduled to expire on May 31, 2008 pursuant to the terms of the Lease.
Notwithstanding any provision to the contrary contained in the Lease, Landlord and Tenant hereby
agree that the Term shall be extended for a period of thirty-nine (39) months (the “Extended
Term”). The Extended Term shall commence on June 1, 2008 (the “Extended Term Commencement Date”)
and shall expire on August 31, 2011 (the “Extended Term Expiration Date”), unless sooner terminated
as provided in the Lease, as hereby amended.

     3. Rent.

          3.1 Base Rent. Commencing on the Extended Term Commencement Date, and continuing throughout
the remainder of the Extended Term, Tenant shall pay Base Rent for the Premises in accordance with
the following schedule:

					
	 
	 	 
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	 	[Cavium Networks, Inc.]

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Monthly Base
	 	 	 	 	 	 	 	 	 	 	Rent Per
	 	 	 	 	 	 	 	 	 	 	Rentable Square
	 	 	 	 	 	 	Monthly Installment	 	Foot of the
	Period During Extended Term	 	Annual Base Rent	 	of Base Rent	 	Premises
	June 1, 2008-July 31, 2009
	 	$	774,240.00	 	 	$	64,520.00	 	 	$	2.00	 
	August 1, 2009-July 31, 2010
	 	$	871,020.00	 	 	$	72,585.00	 	 	$	2.25	 
	August 1, 2010-August 31, 2011
	 	$	967,800.00	 	 	$	80,650.00	 	 	$	2.50	 

     
     3.2 Abated
Base Rent. Notwithstanding anything in Section 3.1 above to the contrary, provided
that Tenant is not in default under the Lease, as hereby amended, beyond any applicable notice and
cure period set forth in the Lease, as amended, Tenant shall not be obligated to pay an amount
equal to One Hundred Sixty-One Thousand Three Hundred and No/100 Dollars ($161,300.00), in the
aggregate, of the Base Rent due under the Lease, as hereby amended, for the full months of June,
July, 2008 and for the period of August 1-15, 2008 (the “Base Rent Abatement Period”). The
foregoing Base Rent abatement right set forth in this Section 3.2 has been granted to Tenant as
additional consideration for Tenant’s agreement to enter into this First Amendment and comply with
the terms and conditions otherwise required under the Lease, as hereby amended. If Tenant shall be
in default under the Lease, as amended, and shall fail to cure such default within the time, if
any, permitted for cure pursuant to the Lease, as amended, then in addition to any other remedies
Landlord may have under the Lease, as amended, Landlord may, at its option, elect by delivery of
written notice to Tenant, one or both of the following remedies: (x) Tenant shall immediately
become obligated to pay to Landlord all Base Rent previously abated hereunder as of such default,
with interest on such amounts as provided pursuant to the Lease, as amended, from the date such
Base Rent would have otherwise been due but for the Base Rent abatement provided herein; or (y) the
unexpired portion of the Base Rent Abatement Period as of the expiration of any applicable notice
and cure period set forth in the Lease, as amended, following such default, shall be moved to the
end of the Extended Term (provided that such abatement shall not exceed One Hundred Sixty-One
Thousand Three Hundred and No/100 Dollars ($161,300.00), in the aggregate) and Tenant shall
immediately be obligated to begin paying the Base Rent due for the Premises at the full amounts of
the monthly installments therefor set forth above. The foregoing Base Rent abatement right set
forth in this Section 3.2 shall be personal to the originally named Tenant under this First
Amendment (“Original Tenant”) and may only be exercised by the Original Tenant (and not any
assignee, or any subtenant or other transferee of the Original Tenant’s interest in the Lease, as
amended).

     4. “As-Is” Condition. Tenant hereby acknowledges and agrees that Tenant has been and is in
occupancy of the Premises as of the date hereof and that Tenant shall continue to accept the
Premises during the Extended Term in its currently existing, “as is” condition, and that Landlord
shall not be obligated to provide or pay for any improvement work or services related to the
improvement of the Premises. Tenant also acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty regarding the
condition of the Premises or with respect to the suitability of the Premises for the conduct
of Tenant’s business.

					
	 
	 	 
	 	805 Middlefield Road
	 
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	 	[Cavium Networks, Inc.]

 

 

     5. 
Security Deposit. Landlord and Tenant acknowledge that, in
accordance with Article 4 of
the Lease, Tenant has previously delivered the sum of Fifty-Two Thousand and No/100 Dollars
($52,000.00) (the “Existing Security Deposit”) to Landlord as security for the faithful performance
by Tenant of the terms, covenants and conditions of the Lease. Concurrently with Tenant’s execution
of this First Amendment, Tenant shall deposit with Landlord an amount equal to Twenty-Eight
Thousand Six Hundred Fifty and No/100 Dollars
($28,650.00) to be held by Landlord as a part of the Security Deposit. To the extent that the total
amount held by Landlord at any time as security for the Lease, as hereby amended, is less than
Eighty Thousand Six Hundred Fifty and No/100 Dollars ($80,650.00), Tenant shall pay the difference
to Landlord within five (5) days following Tenant’s receipt of notice thereof from Landlord. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code and all other
provisions of law, now or hereafter in effect, which (i) establish the time frame by which a
landlord must refund a security deposit under a lease, and/or (ii) provide that a landlord may
claim from a security deposit only those sums reasonably necessary to remedy defaults in the
payment of rent, to repair damage caused by a tenant or to clean the premises, it being agreed that
Landlord may, in addition, claim those sums specified in this Article 4 of the Lease and/or those
sums reasonably necessary to compensate Landlord for any loss or damage caused by Tenant’s default
of the Lease, as amended, including, but not limited to, all damages or rent due upon termination
of the Lease, as amended, pursuant to Section 1951.2 of the California Civil Code.

6. Tenant’s
Indemnity and Insurance.

          6.1 Tenant’s Indemnity.

               6.1.1 Indemnity. All references to and the definition of “Indemnitees” in the Lease are hereby
replaced with reference to, and the meaning of, the “Landlord Parties,” as that term is defined in
Section 6.13 of this First Amendment.

               6.1.2 Subtenants
and other occupants. Tenant shall require its subtenants and other occupants
of the Premises to provide similar indemnities to the Landlord Parties in a form acceptable to
Landlord.

               6.1.3 Survival. The terms of this Section and Section 14 of the Lease shall survive any
termination or expiration of the Lease, as amended.

          6.2 Tenant’s Risk. Tenant agrees to use and occupy the Premises, and to use such other
portions of the Building(s) and the Park as Tenant is given the right to use by the Lease, as
amended, at Tenant’s own risk. The Landlord Parties shall not be liable to the Tenant Parties for
any damage, injury, loss, compensation, or claim (including, but not limited to, claims for the
interruption of or loss to a Tenant Party’s business) based on, arising out of or resulting from
any cause whatsoever, including, but not limited to, any fire, robbery, theft, mysterious
disappearance, or any other crime or casualty, the actions of any other tenants of the Building(s)
or of any other person or persons, or any leakage in any part or portion of the Premises or the
Building(s) or the Park, or from water, rain or snow that may
leak into, or flow from any part of the Premises or the Building(s) or the Park, or from
drains, pipes or plumbing fixtures in the Building(s) or the Park. Any goods, property or personal
effects stored or placed in or about the Premises shall be at the sole risk of the Tenant Party,
and neither the Landlord Parties nor their insurers shall in any manner be held responsible
therefor. The Landlord Parties

					
	 
	 	 
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shall not be responsible or liable to a Tenant Party, or to those claiming by, through or under a
Tenant Party, for any loss or damage that may be occasioned by or through the acts or omissions of
persons occupying adjoining premises or any part of the premises adjacent to or connecting with the
Premises or any part of the Building(s) or otherwise. The provisions of this section shall be
applicable until the expiration or earlier termination of the Term, and during such further period
as Tenant may use or be in occupancy of any part of the Premises or of the Building(s).

          6.3 Tenant’s
Commercial General Liability Insurance. Tenant agrees to maintain in full force
on or before the Extended Term Commencement Date and continuing throughout the Extended Term, and
thereafter, for so long as Tenant is in occupancy of any part of the Premises, a policy of
commercial general liability insurance, on an occurrence basis, issued on a form at least as broad
as Insurance Services Office (“ISO”) Commercial General Liability Coverage “occurrence” form CG 00
01 10 01 or another ISO Commercial General Liability “occurrence” form providing equivalent
coverage. Such insurance shall include broad form contractual liability coverage, specifically
covering but not limited to the indemnification obligations undertaken by Tenant in the Lease, as
amended. The minimum limits of liability of such insurance shall be $5,000,000 per occurrence.

          6.4 Tenant’s
Property Insurance. Tenant shall maintain at all times during the Extended Term
of the Lease business interruption insurance and insurance against loss or damage covered by the
so-called “all risk” type insurance coverage with respect to Tenant’s property, fixtures,
furniture, equipment, machinery, goods, supplies, wares and merchandise, and all alterations,
improvements and other modifications made by or on behalf of the Tenant in the Premises, and other
property of Tenant located at the Premises, except to the extent paid for by Landlord (collectively
“Tenant’s Property”). The business interruption insurance required by this section shall be in
minimum amounts typically carried by prudent tenants engaged in similar operations, but in no event
shall be in an amount less than twelve (12) months of the Base Rent then in effect during the
Extended Term of the Lease. The “all risk” insurance required by this section shall be in an amount
at least equal to the full replacement cost of Tenant’s Property. In addition, during such time as
Tenant is performing work in or to the Premises, Tenant, at Tenant’s expense, shall also maintain,
or shall cause its contractor(s) to maintain, builder’s risk insurance for the full insurable value
of such work. Landlord and such additional persons or entities as Landlord may reasonably request
shall be named as loss payees, as their interests may appear, on the policy or policies required by
this section. In the event of loss or damage covered by the “all risk” insurance required by this
section, the responsibilities for repairing or restoring the loss or damage shall be determined in
accordance with Article 27 of the Lease. To the extent that Landlord is obligated to pay for the
repair or restoration of the loss or damage covered by the policy, Landlord shall be paid the
proceeds of the “all risk” insurance covering the loss or damage. To the extent Tenant is obligated
to pay for the repair or restoration of the loss or damage, covered by the policy, Tenant shall be
paid the proceeds of the “all risk” insurance covering the loss or damage. If
both Landlord and Tenant are obligated to pay for the repair or restoration of the loss or
damage covered by the policy, the insurance proceeds shall be paid to each of them in the pro rata
proportion of their obligations to repair or restore the loss or damage. If the loss or damage is
not repaired or restored (for example, if the Lease, as amended, is terminated pursuant to Article
27 of the Lease), the insurance proceeds shall be paid to Landlord and Tenant in the pro rata
proportion of their relative contributions to the cost of the leasehold improvements covered by the
policy.

					
	 
	 	 
	 	805 Middlefield Road
	 
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          6.5 Tenant’s
Other Insurance. Throughout the Extended Term, Tenant shall obtain and maintain
(1) comprehensive automobile liability insurance (covering any automobiles owned or operated by
Tenant) issued on a form at least as broad as ISO Business Auto Coverage form CA 00 01 07 97 or
other form providing equivalent coverage; (2) worker’s compensation insurance or participation in a
monopolistic state workers’ compensation fund; and (3) employer’s liability insurance or (in a
monopolistic state) Stop Gap Liability insurance. Such automobile liability insurance shall be in
an amount not less than One Million Dollars
($1,000,000) for each accident. Such worker’s compensation insurance shall carry minimum limits as
defined by the law of the jurisdiction in which the Premises are located (as the same may be
amended from time to time). Such employer’s liability insurance shall be in an amount not less than
One Million Dollars ($1,000,000) for each accident, One Million Dollars
($1,000,000) disease-policy limit, and One Million Dollars ($1,000,000) disease-each employee.

          6.6 Requirements
For Insurance. All insurance required to be maintained by Tenant pursuant to
the Lease, as amended, shall be maintained with responsible companies that are admitted to do
business, and are in good standing, in the jurisdiction in which the Premises are located and that
have a rating of at least “A” and are within a financial size category of not less than “Class X”
in the most current Best’s Key Rating Guide or such similar rating as may be reasonably selected by
Landlord. All such insurance shall: (1) be acceptable in form and content to Landlord; (2) be
primary and noncontributory; and (3) contain an endorsement prohibiting cancellation, failure to
renew, reduction of amount of insurance, or change in coverage without the insurer first giving
Landlord ten (10) days’ prior written notice of such proposed action. No such policy shall contain
any deductible greater than $25,000. Such deductibles shall be deemed to be “insurance” for
purposes of the waiver in Section 6.13 below. Landlord reserves the right from time to time to
require Tenant to obtain higher minimum amounts of insurance based on such limits as are
customarily carried with respect to similar properties in the area in which the Premises are
located. The minimum amounts of insurance required by the Lease, as amended, shall not be reduced
by the payment of claims or for any other reason. In the event Tenant shall fail to obtain or
maintain any insurance meeting the requirements of this Section, or to deliver such policies or
certificates as required by this Section, Landlord may, at its option, on five (5) days notice to
Tenant, procure such policies for the account of Tenant, and the cost thereof shall be paid to
Landlord within five (5) days after delivery to Tenant of bills therefor.

          6.7 Additional
Insureds. The commercial general liability and auto insurance carried by Tenant
pursuant to the Lease, as amended, shall name Landlord, Landlord’s managing agent, and such other
Persons as Landlord may reasonably request from time to
time as additional insureds with respect to liability arising out of or related to the Lease,
as amended, or the operations of Tenant (collectively “Additional Insureds”). Such insurance shall
provide primary coverage without contribution from any other insurance carried by or for the
benefit of Landlord, Landlord’s managing agent, or other Additional Insureds. Such insurance shall
also waive any right of subrogation against each Additional Insured.

          6.8 Certificates
of Insurance. On or before the Extended Term Commencement Date, Tenant shall
furnish Landlord with certificates evidencing the insurance coverage required by the Lease, as
amended, and renewal certificates shall be furnished to Landlord at least annually thereafter, and
at least ten (10) days prior to the expiration date of each policy for which a certificate was
furnished. (An acceptable form of such a certificate is attached as Exhibit A.) In jurisdictions
requiring mandatory participation in a monopolistic state

					
	 
	 	 
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workers’ compensation fund, the insurance certificate requirements for the coverage required for
workers’ compensation will be satisfied by a letter from the appropriate state agency confirming
participation in accordance with statutory requirements. Such current participation letters
required by this Section shall be provided every six (6) months for the duration of the Lease, as
amended. Failure by the Tenant to provide the certificates or letters required by this Section
shall not be deemed to be a waiver of the requirements in this Section. Upon request by Landlord, a
true and complete copy of any insurance policy required by the Lease, as amended, shall be
delivered to Landlord within ten (10) days following Landlord’s request.

          6.9 Subtenants
And Other Occupants. Tenant shall require its subtenants and other occupants of
the Premises to provide written documentation evidencing the obligation of such subtenant or other
occupant to indemnify the Landlord Parties to the same extent that Tenant is required to indemnify
the Landlord Parties pursuant to Section 14 of the Lease, and to maintain insurance that meets the
requirements of this Section, and otherwise to comply with the requirements of this Section. Tenant
shall require all such subtenants and occupants to supply certificates of insurance evidencing that
the insurance requirements of this Section have been met and shall forward such certificates to
Landlord on or before the earlier of (i) the date on which the subtenant or other occupant or any
of their respective direct or indirect partners, officers, shareholders, directors, members,
trustees, beneficiaries, servants, employees, principals, contractors, licensees, agents, invitees
or representatives first enters the Premises or (ii) the commencement of the sublease. Tenant shall
be responsible for identifying and remedying any deficiencies in such certificates or policy
provisions.

          6.10 No Violation Of Building Policies. Tenant shall not commit or permit any violation of the
policies of fire, boiler, sprinkler, water damage or other insurance covering the Park and/or the
fixtures, equipment and property therein carried by Landlord, or do or permit anything to be done,
or keep or permit anything to be kept, in the Premises, which in case of any of the foregoing (i)
would result in termination of any such policies, (ii) would adversely affect Landlord’s right of
recovery under any of such policies, or (iii) would result in reputable and independent insurance
companies refusing to insure the Park or the property of Landlord in amounts reasonably
satisfactory to Landlord.

          6.11 Tenant To Pay Premium Increases. If, because of anything done, caused or permitted to be
done, or omitted by Tenant (or its subtenant or other occupants of
the Premises), the rates for liability, fire, boiler, sprinkler, water damage or other
insurance on the Park or on the property and equipment of Landlord or any other tenant or subtenant
in the Building(s) shall be higher than they otherwise would be, Tenant shall reimburse Landlord
and/or the other tenants and subtenants in the Building(s) for the additional insurance premiums
thereafter paid by Landlord or by any of the other tenants and subtenants in the Building(s) which
shall have been charged because of the aforesaid reasons, such reimbursement to be made from time
to time on Landlord’s demand.

          6.12 Landlord’s Insurance.

               6.12.1 Required insurance. Landlord shall maintain insurance against loss or damage with
respect to the Building(s) on an “all risk” type insurance form, with customary exceptions, subject
to such deductibles as Landlord may determine, in an amount equal to at least the replacement value
of the Building(s). Landlord shall also maintain such

					
	 
	 	 
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insurance with respect to any improvements, alterations, and fixtures of Tenant located at the
Premises to the extent paid for by Landlord. The cost of such insurance shall be treated as a part
of Operating Expenses. Such insurance shall be maintained with an insurance company selected by
Landlord. Payment for losses thereunder shall be made solely to Landlord.

               6.12.2 Optional insurance. Landlord may maintain such additional insurance with respect to the
Building(s) and the Park, including, without limitation, earthquake insurance, terrorism insurance,
flood insurance, liability insurance and/or rent insurance, as Landlord may in its sole discretion
elect. Landlord may also maintain such other insurance as may from time to time be required by
Landlord’s Mortgagee. The cost of all such additional insurance shall also be part of the Operating
Expenses.

               6.12.3 Blanket and self-insurance. Any or all of Landlord’s insurance may be provided by
blanket coverage maintained by Landlord or any affiliate of Landlord under its insurance program
for its portfolio of properties, or by Landlord or any affiliate of Landlord under a program of
self-insurance, and in such event Operating Expenses shall include the portion of the reasonable
cost of blanket insurance or self-insurance that is allocated to the Building(s).

               6.12.4 No obligation. Landlord shall not be obligated to insure, and shall not assume any
liability of risk of loss for, Tenant’s Property, including any such property or work of tenant’s
subtenants or occupants. Landlord will also have no obligation to carry insurance against, nor be
responsible for, any loss suffered by Tenant, subtenants or other occupants due to interruption of
Tenant’s or any subtenant’s or occupant’s business.

          6.13 Waiver Of Subrogation. The parties hereto waive and release any and all rights of
recovery against the other, and agree not to seek to recover from the other or to make any claim
against the other, and in the case of Landlord, against all Tenant Parties, and in the case of
Tenant, against all Landlord Parties, for any loss or damage incurred by the waiving/releasing
party to the extent such loss or damage is insured under any insurance policy required by the
Lease, as amended, or which would have been so insured had the party carried the insurance it was
required to carry hereunder. Tenant shall obtain from its subtenants and other occupants of the
Premises a similar waiver and release of claims against Tenant and/or Landlord. In addition, the
parties hereto (and in the case of Tenant, its subtenants and other occupants of the Premises)
shall procure an appropriate clause in, or
endorsement on, any insurance policy required by the Lease, as amended, pursuant to which the
insurance company waives subrogation. The insurance policies required by the Lease, as amended,
shall contain no provision that would invalidate or restrict the parties’ waiver and release of the
rights of recovery in this section. The parties hereto covenant that no insurer shall hold any
right of subrogation against the parties hereto by virtue of such insurance policy.

     The term “Landlord Party” or “Landlord Parties” shall mean Landlord, any affiliate of
Landlord, Landlord’s managing agents for the Building(s), each Landlord’s Mortgagee, and each of
their respective direct or indirect partners, officers, shareholders, directors, members, trustees,
beneficiaries, servants, employees, principals, contractors, licensees, agents or representatives.
For the purposes of this First Amendment, notwithstanding anything set forth in the Lease, as
amended, to the contrary, the term “Tenant Party” or “Tenant Parties” shall mean Tenant, any
affiliate of Tenant, any permitted subtenant or any other permitted occupant of the Premises, and

					
	 
	 	 
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each of their respective direct or indirect partners, officers, shareholders, directors, members,
trustees, beneficiaries, servants, employees, principals, contractors, licensees, agents, invitees
or representatives.

          6.14 Tenant’s Work. During such times as Tenant is performing work or having work or services
performed in or to the Premises, Tenant shall require its contractors, and their subcontractors of
all tiers, to obtain and maintain commercial general liability, automobile, workers compensation,
employer’s liability, builder’s risk, and equipment/property insurance in such amounts and on such
terms as are customarily required of such contractors and subcontractors on similar projects. The
amounts and terms of all such insurance are subject to Landlord’s written approval, which approval
shall not be unreasonably withheld. The commercial general liability and auto insurance carried by
Tenant’s contractors and their subcontractors of all tiers pursuant to this section shall name
Landlord, Landlord’s managing agent, and such other Additional Insureds named by Landlord from time
to time. Such insurance shall provide primary coverage without contribution from any other
insurance carried by or for the benefit of Landlord, Landlord’s managing agent, or other Additional
Insureds. Such insurance shall also waive any right of subrogation against each Additional Insured.
Tenant shall obtain and submit to Landlord, prior to the earlier of (i) the entry onto the Premises
by such contractors or subcontractors or (ii) commencement of the work or services, certificates of
insurance evidencing compliance with the requirements of this section.

     7. Option Term.

          7.1 Option Right. Landlord hereby grants to the Original Tenant, and any “Permitted
Transferee,” as that term is defined in Section 15.7 of the Lease, one (1) option to extend the
Extended Term for a period of three (3) years (the “Option Term”), which option shall be
irrevocably exercised only by written notice delivered by Tenant to Landlord not earlier than
August 31, 2010 and not later than November 30, 2010, provided that the following conditions (the
“Option Conditions”) are satisfied: (i) as of the date of delivery of such notice, Tenant is not in
default under the Lease, as amended; (ii) as of the end of the Extended Term, Tenant is not in
default under the Lease, as amended, beyond any applicable notice and cure period; (iii) Tenant has
not previously been in default under the Lease, as
amended, beyond any applicable notice and cure period, more than once; and (iv) the Lease, as
amended, then remains in full force and effect and Original Tenant or a Permitted Transferee
occupies the entire Premises at the time the option to extend is exercised and as of the
commencement of the Option Term. Landlord may, at Landlord’s option, exercised in Landlord’s sole
and absolute discretion, waive any of the Option Conditions in which case the option, if otherwise
properly exercised by Tenant, shall remain in full force and effect. Upon the proper exercise of
such option to extend, and provided that Tenant satisfies all of the Option Conditions (except
those, if any, which are waived by Landlord), the Extended Term, as it applies to the entire
Premises, shall be extended for a period of three (3) years. The rights contained in this
Section
7 shall be personal to Original Tenant and any Permitted Transferee and may be exercised by
Original Tenant or a Permitted Transferee only (and not by any other assignee, sublessee or
transferee of Tenant’s interest in the Lease, as amended).

          7.2 Option Rent. The annual Rent payable by Tenant during the Option Term (the “Option Rent”)
shall be equal to the “Fair Rental Value,” as that term is defined below, for the Premises as of
the commencement date of the Option Term. The “Fair Rental

					
	 
	 	 
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Value,” as used in this First Amendment shall be equal to the annual rent per rentable square foot,
including all escalations, at which tenants (pursuant to leases consummated within the twelve (12)
month period preceding the first day of the Option Term), are leasing non-sublease, non-encumbered,
non-equity space which is not significantly greater or smaller in size than the subject space, for
a comparable lease term, in an arm’s length transaction, which comparable space is located in
buildings within the Park and the comparable office buildings located in the Mountain View,
California area (“Comparable Buildings”) (transactions satisfying the foregoing criteria shall be
known as the “Comparable Transactions”), taking into consideration the following concessions (the
“Concessions”): (a) rental abatement concessions, if any, being granted such tenants in connection
with such comparable space; (b) tenant improvements or allowances provided or to be provided for
such comparable space, and taking into account the value, if any, of the existing improvements in
the subject space, such value to be based upon the age, condition, design, quality of finishes and
layout of the improvements and the extent to which the same can be utilized by a general office
user other than Tenant; and (c) other reasonable monetary concessions being granted such tenants in
connection with such comparable space; provided, however, that in calculating the Fair Rental
Value, no consideration shall be given to (i) the fact that Landlord is or is not required to pay a
real estate brokerage commission in connection with Tenant’s exercise of its right to extend the
Extended Term, or the fact that landlords are or are not paying real estate brokerage commissions
in connection with such comparable space, and (ii) any period of rental abatement, if any, granted
to tenants in comparable transactions in connection with the design, permitting and construction of
tenant improvements in such comparable spaces. The Fair Rental Value shall additionally include a
determination as to whether, and if so to what extent, Tenant must provide Landlord with financial
security, such as a letter of credit or guaranty, for Tenant’s Rent obligations in connection with
Tenant’s lease of the Premises during the Option Term. Such determination shall be made by
reviewing the extent of financial security then generally being imposed in Comparable Transactions
from tenants of comparable financial condition and credit history to the then existing financial
condition and credit history of Tenant (with appropriate adjustments to account for differences in
the then-existing financial condition of Tenant and such other tenants). The Concessions (A) shall
be reflected in the effective rental rate (which effective rental rate shall take into
consideration
the total dollar value of such Concessions as amortized on a straight-line basis over the
applicable term of the Comparable Transaction (in which case such Concessions evidenced in the
effective rental rate shall not be granted to Tenant)) payable by Tenant, or (B) at Landlord’s
election, all such Concessions shall be granted to Tenant in kind. Notwithstanding anything to the
contrary contained in this Section 7.2 above, if there are not a sufficient number of Comparable
Transactions with a comparable lease term to the Option Term (i.e. three (3) years) to determine
the Fair Rental Value for a lease of such duration, then the Fair Rental Value for purposes of this
Section 7.2 shall be equal to that of Comparable Transactions with a term of five (5) years,
provided that the Concessions shall be appropriately prorated on a fractional basis to account for
the shorter term of lease.

          7.3 Determination of Option Rent. In the event Tenant timely and appropriately exercises the
option to extend the Extended Term, Landlord shall notify Tenant of Landlord’s determination of the
Option Rent on or before the Extended Term Expiration Date. If Tenant, on or before the date which
is thirty (30) days following the date upon which Tenant receives Landlord’s determination of the
Option Rent, in good faith objects to Landlord’s determination of the Option Rent, then Landlord
and Tenant shall attempt to agree upon the Option Rent using their best good-faith efforts. If
Landlord and Tenant fail to reach agreement

					
	 
	 	 
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within thirty (30) days following Tenant’s objection to the Option Rent (the “Outside Agreement
Date”), then each party shall make a separate determination of the Option Rent, as the case may be,
within five (5) days, and such determinations shall be submitted to arbitration in accordance with
Sections 7.3.1 through 7.3.7, below.

               7.3.1 Landlord and Tenant shall each appoint one arbitrator who shall be, at the option of the
appointing party, a real estate broker, appraiser or attorney who shall have been active over the
five (5) year period ending on the date of such appointment in the leasing or appraisal, as the
case may be, of commercial office buildings in the area of Mountain View, California. The
determination of the arbitrators shall be limited solely to the issue of whether Landlord’s or
Tenant’s submitted Option Rent is the closest to the actual Option Rent, taking into account the
requirements of Section 7.2 of this First Amendment, as determined by the arbitrators. Each such
arbitrator shall be appointed within fifteen (15) days after the Outside Agreement Date. Landlord
and Tenant may consult with their selected arbitrators prior to appointment and may select an
arbitrator who is favorable to their respective positions. The arbitrators so selected by Landlord
and Tenant shall be deemed “Advocate Arbitrators.”

               7.3.2 The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to
an engagement letter within ten (10) business days of the date of the appointment of the last
appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral Arbitrator”)
who shall be qualified under the same criteria set forth hereinabove for qualification of the two
Advocate Arbitrators, except that neither the Landlord or Tenant or either parties’ Advocate
Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or subsequent to
his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly
prepared by Landlord’s counsel and Tenant’s counsel.

               7.3.3 The three arbitrators shall, within thirty (30) days of the appointment of the Neutral
Arbitrator, reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted
Option Rent, and shall notify Landlord and Tenant thereof.

               7.3.4 The decision of the majority of the three arbitrators shall be binding upon Landlord and
Tenant.

               7.3.5 If either Landlord or Tenant fails to appoint an Advocate Arbitrator within fifteen (15)
days after the Outside Agreement Date, then either party may petition the presiding judge of the
Superior Court of Santa Clara County to appoint such Advocate Arbitrator subject to the criteria in
Section 7.3.1 of this First Amendment, or if he or she refuses to act, either party may petition
any judge having jurisdiction over the parties to appoint such Advocate Arbitrator.

               7.3.6 If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral
Arbitrator, then either party may petition the presiding judge of the Superior Court of Santa Clara
County to appoint the Neutral Arbitrator, subject to criteria in Section 7.3.2 of this First
Amendment, or if he or she refuses to act, either party may petition any judge having jurisdiction
over the parties to appoint such arbitrator.

               7.3.7 The cost of the arbitration shall be paid by Landlord and Tenant equally.

					
	 
	 	 
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     In the event that the Option Rent shall not have been determined pursuant to the terms hereof
prior to the commencement of the Option Term, Tenant shall be required to pay the Option Rent
initially provided by Landlord to Tenant, and upon the final determination of the Option Rent, the
payments made by Tenant shall be reconciled with the actual amounts of Option Rent due, and the
appropriate party shall make any corresponding payment to the other party.

     8. Consequential Damages. Notwithstanding any provision to the contrary contained in the
Lease, as amended, neither Landlord any of the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant’s business, including but not
limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of
goodwill or loss of use, in each case, however occurring.

     9. Audit Right. Notwithstanding anything to the contrary contained in Section 6.5 of the
Lease, Landlord and Tenant hereby agree that, effective as of the date hereof, the rights set forth
in Section 6.5 of the Lease may be exercised by Tenant only if as of the date of Tenant’s timely
and proper request for an audit, Tenant is not in default under the Lease, as amended.

     10. Patriot Act and Executive Order 13224. As an inducement to Landlord to enter into this
First Amendment, Tenant hereby represents and warrants that: (i) Tenant is not, nor is it owned or
controlled directly or indirectly by, any person, group, entity or nation named on any list issued
by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”)
pursuant to Executive Order 13224 or any similar list or any law, order, rule or regulation or any
Executive Order of the President of the United States as a terrorist, “Specially Designated
National and Blocked Person” or other banned or blocked person (any such person, group, entity or
nation being hereinafter referred to as a
“Prohibited Person”); (ii) Tenant is not (nor is it owned or controlled, directly or
indirectly, by any person, group, entity or nation which is) acting directly or indirectly for or
on behalf of any Prohibited Person; and (iii) from and after the effective date of the above
referenced Executive Order, neither Tenant (nor any person, group, entity or nation which owns or
controls Tenant, directly or indirectly) has conducted or will conduct business or has engaged or
will engage in any transaction or dealing with any Prohibited Person, including without limitation
any assignment of the Lease, as hereby amended, or any subletting of all or any portion of the
Premises or the making or receiving of any contribution of funds, goods or services to or for the
benefit of a Prohibited Person in violation of the U.S. Patriot Act or any OFAC rule or regulation.
In connection with the foregoing, it is expressly understood and agreed that (y) any breach by
Tenant of the foregoing representations and warranties shall be deemed a default by Tenant under
the Lease, as amended, and shall be covered by the indemnity provisions of Section 14 of the Lease,
and (z) the representations and warranties contained in this Section 10 shall be continuing in
nature and shall survive the expiration or earlier termination of the Lease, as hereby amended.

     11. Notices. Notwithstanding anything to the contrary contained in the Lease, as of the date
of this First Amendment, any notices to Landlord must be sent, transmitted, or delivered, as the
case may be, to the following addresses:

					
	 
	 	 
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              Boston
Properties Limited Partnership

               
     Four Embarcadero Center

              
       Lobby Level, Suite One 

              
      San Francisco, California 94111

              
      Attention: Mr. Bob Pester

                    and

     
               
Boston Properties, Inc.

              
      Prudential Center Tower 

              
      800 Boylston Street, Suite 1900

            
        Boston, Massachusetts 02199

            
        Attention: General Counsel

                    and

      
              Boston
Properties Limited Partnership

               
     Four Embarcadero Center 

              
      Lobby Level, Suite One 

              
      San Francisco, California 94111

              
       Attention: Regional Counsel

                    and

     
               Allen
Matkins Leck Gamble Mallory & Natsis LLP 

            
        1901 Avenue of the
Stars, Suite 1800 

            
        Los Angeles, California 90067

            
        
Attention: Anton N. Natsis, Esq.

     12. Broker. Landlord and Tenant hereby warrant to each other that they have had no dealings
with any real estate broker or agent in connection with the negotiation of this First
Amendment excepting only Cornish & Carey Commercial and Colliers International (the
“Brokers”), and that they know of no other real estate broker or agent who is entitled to a
commission in connection with this First Amendment. Each party agrees to indemnify and defend the
other party against and hold the other party harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable
attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be
owing on account of any dealings with any real estate broker or agent occurring by, through, or
under the indemnifying party other than the Brokers. The terms of this Section 12 shall survive the
expiration or earlier termination of the Lease.

     13. Use of Premises. The first sentence of Section 9.1 of the Lease is hereby amended and
restated in its entirety as follows:

“The Premises are to be used solely for the uses stated in the Basic Lease
Information and for no other purposes without Landlord’s prior written consent,
which consent may be given or withheld in Landlord’s sole discretion.”

     14. Development of the Park.

					
	 
	 	 
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          14.1 Subdivision. Landlord reserves the right to further subdivide all or a portion of the
Park. Tenant agrees to execute and deliver, upon demand by Landlord and in the form requested by
Landlord, any additional documents needed to conform the Lease, as amended, to the circumstances
resulting from such subdivision.

          14.2 The Other Improvements. If portions of the Park or property adjacent to the Park
(collectively, the “Other Improvements”) are owned by an entity other than Landlord, Landlord, at
its option, may enter into an agreement with the owner or owners of any or all of the Other
Improvements to provide (i) for reciprocal rights of access and/or use of the Park and the Other
Improvements, (ii) for the common management, operation, maintenance, improvement and/or repair of
all or any portion of the Park and the Other Improvements, (iii) for the allocation of a portion of
the Operating Expenses and Taxes to the Other Improvements and the Operating Expenses and Taxes for
the Other Improvements to the Park, and (iv) for the use or improvement of the Other Improvements
and/or the Park in connection with the improvement, construction, and/or excavation of the Other
Improvements and/or the Park. Nothing contained herein shall be deemed or construed to limit or
otherwise affect Landlord’s right to convey all or any portion of the Park or any other of
Landlord’s rights described in the Lease, as amended.

          14.3 Construction of the Park and Other Improvements. Tenant acknowledges that portions of
the Park and/or the Other Improvements may be under construction during Tenant’s occupancy of the
Premises during the Extended Term, and that such construction may result in levels of noise, dust,
odor, obstruction of access, etc. which are in excess of that present in a fully constructed
project. Tenant hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.

     15. Building and Park Renovations. It is specifically understood and agreed that Landlord has
no obligation and has made no promises to alter, remodel, improve, renovate, repair or decorate the
Premises, Building, or the Park or any part thereof and that no
representations respecting the condition of the Premises, the Building, or the Park have been
made by Landlord to Tenant; provided, however, Landlord hereby acknowledges that it intends to
paint the exterior of the Building (the “Building Painting”) and agrees that the costs, fees and
expenses incurred by Landlord in connection with such Building Painting shall not be included
Operating Expenses. In addition, Tenant hereby acknowledges that Landlord is currently renovating
or may during the Extended Term renovate, improve, alter, or modify (collectively, the
“Renovations”) the Park, the Building and/or the Premises. Provided that Landlord diligently
pursues, in a commercially reasonable manner, such Renovations to completion once commenced, Tenant
hereby agrees that such Renovations shall in no way constitute a constructive eviction of Tenant
nor entitle Tenant to any abatement of Rent. Landlord shall have no responsibility and shall not be
liable to Tenant for any injury to or interference with Tenant’s business arising from the
Renovations, nor shall Tenant be entitled to any compensation or damages from Landlord for loss of
the use of the whole or any part of the Premises or of Tenant’s personal property or improvements
resulting from the Renovations, or for any inconvenience or annoyance occasioned by such
Renovations. Notwithstanding the foregoing, Landlord hereby agrees that if Landlord, in its sole
and absolute discretion, elects to construct any new buildings or other improvements in the Park
(collectively, “Additional Improvements”), or elects to demolish or to otherwise remove any
existing buildings or other improvements from the Park (collectively, “Removed Improvements”), then
the addition of any such Additional Improvements, or the removal of any such Removed Improvements,
shall not cause any new

					
	 
	 	 
	 	805 Middlefield Road
	 
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	 	-13-
	 	[Cavium Networks, Inc.]

 

 

category of Operating Expenses or Taxes to be billed to Tenant, or materially increase Tenant’s
Share of Operating Costs or Tenant’s Share of Taxes, or otherwise materially reduce Tenant’s rights
under this Lease or materially interfere with Tenant’s access to, and/or use of the Premises.

     16. Deletions. Sections 2.2 (Option to Extend), 12 (Insurance) and 13 (Waiver of Subrogation)
of the Lease are hereby deleted in their entirety and are of no further force or effect.

     17. No Further Modification. Except as specifically set forth in this First Amendment, all of
the terms and provisions of the Lease shall remain unmodified and in full force and effect. In the
event of any conflict between the terms and conditions of the Lease, and the terms and conditions
of this First Amendment, the terms and conditions of this First Amendment shall prevail.

[signatures on next page]

					
	 
	 	 
	 	805 Middlefield Road
	 
	 	 	 	First Amendment
	 
	 	-14-
	 	[Cavium Networks, Inc.]

 

 

     IN WITNESS WHEREOF, this First Amendment has been executed as of the day and year first above
written.

	 	 	 	 	 
	 	“Landlord”:

BP MV RESEARCH PARK LLC,

a Delaware limited liability company

 	 
	 	By:  	BP OFFICE FUND REIT, INC.,
 	 
	 	 	a Maryland corporation, 	 
	 	 	its sole member and manager 	 
	 	 	 
	 	By:  	/s/ Rod C. Diehl
 	 
	 	 	Name:  	ROD C. DIEHL 	 
	 	 	Title:  	SENIOR VICE PRESIDENT, LEASING 	 
	 
	 	“Tenant”:

CAVIUM NETWORKS, INC,

a Delaware corporation

 	 
	 	By:  	/s/ Arthur Chadwick
 	 
	 	 	Name:  	Arthur Chadwick 	 
	 	 	Title:  	CFO 	 
	 	 	 
	 	By:  	/s/ Syed Ali
 	 
	 	 	Name:  	Syed Ali 	 
	 	 	Title:  	President, CEO 	 
	 

PLEASE NOTE: THIS AMENDMENT MUST BE EXECUTED BY EITHER (I) BOTH (A) THE CHAIRMAN OF THE BOARD, THE
PRESIDENT OR ANY VICE PRESIDENT OF TENANT, AND (B) THE SECRETARY, ANY ASSISTANT SECRETARY, THE
CHIEF FINANCIAL OFFICER, OR ANY ASSISTANT TREASURER OF TENANT; OR (II) AN AUTHORIZED SIGNATORY OF
TENANT PURSUANT TO A CERTIFIED CORPORATE RESOLUTION, A COPY OF WHICH SHOULD BE DELIVERED WITH THE
EXECUTED ORIGINALS.

					
	 	 	 	 	 
	 
	 	 	 	805 Middlefield Road
	 
	 	 	 	First Amendment
	 
	 	-15-
	 	[Cavium Networks, Inc.]

 

 

EXHIBIT A

ACCEPTABLE FORM OF INSURANCE

	 	 	 	 	 	 
	 ACORDTM     CERTIFICATE OF LIABILITY INSURANCE	DATE (MM/DD/YY)
	 	 	 	 
	 PRODUCER	 	 	THIS CERTIFICATE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AMEND, EXTEND OR
ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW.

	 	 	 	 
	 	 	 	COMPANIES AFFORDING COVERAGE
	 	 	 	 
	 

	 	 	COMPANY	 	 
	 109722-ALL-GL-06-07

	 	 	     A	 	 
	 	 	 	 
	 INSURED

	 	 	COMPANY	 	 
	 

	 	 	     B	 	 
	 	 	 	 
	 

	 	 	COMPANY	 	 
	 

	 	 	     C	 	 
	 	 	 	 
	 

	 	 	COMPANY	 	 
	 

	 	 	     D	 	 
	 	 	 	 
	 COVERAGES                              
This certificate supersedes and replaces any previously issued certificate.
	THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN
ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR
OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY
PERTAIN,  THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS
SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.
AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 CD
 LTR	TYPE OF INSURANCE	 	 	POLICY NUMBER	 	 	POLICY EFFECTIVE 
DATE (MM/DD/YY)	 	 	POLICY EXPIRATION 
DATE (MM/DD/YY)	 	 	LIMITS
	 	 	 GENERAL LIABILITY	 	 	 	 	 	 	 	 	 	 	  GENERAL AGGREGATE	 	 	$
	 	 	      	 COMMERCIAL GENERAL LIABILITY	 	 	 	 	 	 	 	 	 	 	  PRODUCTS — COMP/OP AGG	 	 	$
	 	 	 	 	 CLAIMS MADE	 	 	 OCCUR	 	 	 	 	 	 	 	 	 	 	  PERSONAL & ADV INJURY	 	 	$
	 	 	 	 OWNER’S
& CONTRACTOR’S PROT	 	 	 	 	 	 	 	 	 	 	  EACH OCCURRENCE	 	 	$
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	  FIRE DAMAGE (Any one Illegible) 	 	 	$
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  MED EXP (Any one person)	 	 	$
	 	 	 	 	 	 	 	 
	 	 	 AUTOMOBILE LIABILITY	 	 	 	 	 	 	 	 	 	 	  COMBINED SINGLE LIMIT	 	 	$
	 	 	 	 ANY AUTO	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 ALL OWNED AUTOS	 	 	 	 	 	 	 	 	 	 	  BODILY INJURY
  (Per person)	 	 	$
	 	 	 	 SCHEDULED AUTOS	 	 	 	 	 	 	 	 	 	 
	 	 	 	 HIRED AUTOS	 	 	 	 	 	 	 	 	 	 	  BODILY INJURY
  (Per accident)	 	 	$
	 	 	 	 NON-OWNED AUTOS	 	 	 	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	  PROPERTY DAMAGE	 	 	$
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 GARAGE LIABILITY	 	 	 	 	 	 	 	 	 	 	  AUTO ONLY — EA
  ACCIDENT	 	 	$
	 	 	 	 ANY AUTO	 	 	 	 	 	 	 	 	 	 	  OTHER THAN AUTO ONLY	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	  EACH ACCIDENT 	 	 	$
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	AGGREGATE 	 	 	$
	 	 	 	 	 	 	 	 
	 	 	 EXCESS LIABILITY	 	 	 	 	 	 	 	 	 	 	  EACH OCCURRENCE	 	 	$
	 	 	 	 UMBRELLA FORM	 	 	 	 	 	 	 	 	 	 	  AGGREGATE	 	 	$
	 	 	 	 OTHER THAN UMBRELLA FORM	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$
	 	 	 	 	 	 	 	 
	 	 	WORKERS COMPENSATION AND
EMPLOYERS’ LIABILITY
	 	 	 	 	 	 	 	 	 	 	 X  	 	  WC STATU-

TORY LIMITS	 	  OTH-
ER	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  EACH ACCIDENT	 	 	$
	 	 	THE PROPRIETOR/

PARTNERS/EXECUTIVE
OFFICERS ARE:
	 	 	 INCL	 	 	 	 	 	 	 	 	 	 	  DISEASE — POLICY LIMIT	 	 	$
	 	 	 	 	 EXCL	 	 	 	 	 	 	 	 	 	 	  DISEASE — EACH EMPLOYEE	 	 	$
	 	 	 	 	 	 	 	 
	 	 	 OTHER	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 
	 DESCRIPTION
OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS

	 
	 	 	 
	 
	 	 	 
	 
	 	 	 
	 	 	 	 
	 CERTIFICATE
HOLDER                    NYC-D02611111-D1

	 	 	CANCELLATION
	 
	 	 	 
	 

	 	 	SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE INSURANCE COMPANY WILL ENDEAVOR TO MAIL
30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT,
BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY
KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
	 

	 	 	AUTHORIZED REPRESENTATIVE
	 
	 	 	 
	 

	 	 	/s/ Nancy Bartolino
	 

	 	 	 
	 

	 	 	Nancy Bartolino
	 ACORD 25 (11/05)

	 	 	© ACORD
CORPORATION 1988 

					
	 	 	 	 	 
	 
	 	 	 	805 Middlefield Road
	 
	 	EXHIBIT A
	 	First Amendment
	 
	 	-1-
	 	[Cavium Networks, Inc.]exv10w3

 

Exhibit 10.3

ALNYLAM PHARMACEUTICALS, INC

2004 STOCK INCENTIVE PLAN, AS AMENDED

1. Purpose

     The purpose of this 2004 Stock Incentive Plan (the “Plan”) of Alnylam Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by
enhancing the Company’s ability to attract, retain and motivate persons who make (or are expected
to make) important contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the interests of such
persons with those of the Company’s stockholders. Except where the context otherwise requires, the
term “Company” shall include any of the Company’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder (the “Code”) and any other business venture (including,
without limitation, joint venture or limited liability company) in which the Company has a
controlling interest, as determined by the Board of Directors of the Company (the “Board”).

2. Eligibility

     All of the Company’s employees, officers, directors, consultants and advisors (including
persons who have entered into an agreement with the Company under which they will be employed by
the Company in the future) are eligible to be granted options or restricted stock awards (each, an
“Award”) under the Plan. Each person who has been granted an Award under the Plan shall be deemed
a “Participant”.

3. Administration and Delegation

     (a) Administration by Board of Directors. The Plan will be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be
the sole and final judge of such expediency. All decisions by the Board shall be made in the
Board’s sole discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the
Plan made in good faith.

     (b) Appointment of Committees. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a
Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee or officers.

 

 

     (c) Delegation to Officers. To the extent permitted by applicable law, the Board may
delegate to one or more officers of the Company the power to grant Awards to employees or officers
of the Company or any of its present or future subsidiary corporations and to exercise such other
powers under the Plan as the Board may determine, provided that the Board shall fix the terms of
the Awards to be granted by such officers (including the exercise price of such Awards, which may
include a formula by which the exercise price will be determined) and the maximum number of shares
subject to Awards that the officers may grant; provided further, however, that no officer shall be
authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the
Company (as defined by Rule 16a-1 under the Exchange Act).

4. Stock Available for Awards

     (a) Number of Shares. Subject to adjustment under Section 10, Awards may be made
under the Plan for up to the number of shares of common stock, $0.0001 par value per share, of the
Company (the “Common Stock”) that is equal to the sum of:

          (1) 1,578,947 shares of Common Stock; plus

          (2) such additional number of shares of Common Stock (up to 2,451,315 shares) as is equal to
the sum of (x) the number of shares of Common Stock reserved for issuance under the Company’s 2002
and 2003 Employee, Director and Consultant Stock Plans (the “Existing Plans”) that remain available
for grant under the Existing Plans immediately prior to the closing of the Company’s initial public
offering and (y) the number of shares of Common Stock subject to awards granted under the Existing
Plans which awards expire, terminate or are otherwise surrendered, canceled, forfeited or
repurchased by the Company at their original issuance price pursuant to a contractual repurchase
right (subject, however, in the case of Incentive Stock Options (as hereinafter defined) to any
limitations of the Code); plus

          (3) an annual increase to be added on the first day of each of the Company’s fiscal years
during the period beginning in fiscal year 2005 and ending on the second day of fiscal year 2014
equal to the lesser of (i) 2,631,578 shares of Common Stock, (ii) five percent (5%) of the
outstanding shares on such date or (iii) an amount determined by the Board.

     Notwithstanding the foregoing, no more than 13,157,894 shares of Common Stock (subject to
adjustment under Section 8) may be issued pursuant to all Awards other than Options (each as
hereinafter defined). Furthermore, notwithstanding clause (3) above, in no event shall the number
of shares available under this Plan be increased as set forth in clause (3) to the extent such
increase, in addition to any other increases proposed by the Board in the number of shares
available for issuance under all other employee or director stock plans, would result in the total
number of shares then available for issuance under all employee and director stock plans exceeding
25% of the outstanding shares of the Company on the first day of the applicable fiscal year.

     If any Award expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the result of shares of Common Stock

- 2 -

 

subject to such Award being repurchased by the Company at the original issuance price pursuant
to a contractual repurchase right) or results in any Common Stock not being issued, the unused
Common Stock covered by such Award shall again be available for the grant of Awards under the Plan,
subject, however, in the case of Incentive Stock Options (as hereinafter defined), to any
limitations under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.

     (b) Per-Participant Limit. Subject to adjustment under Section 10, the maximum number
of shares of Common Stock with respect to which Awards may be granted to any Participant under the
Plan shall be 526,315 per calendar year. The per-Participant limit described in this Section 4(b)
shall be construed and applied consistently with Section 162(m) of the Code (“Section 162(m)”).

5. Stock Options

     (a) General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as
hereinafter defined) shall be designated a “Nonstatutory Stock Option”.

     (b) Incentive Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be
granted to employees of Alnylam Pharmaceuticals, Inc., any of Alnylam Pharmaceuticals, Inc.’s
present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the
Code, and any other entities the employees of which are eligible to receive Incentive Stock Options
under the Code, and shall be subject to and shall be construed consistently with the requirements
of Section 422 of the Code. The Company shall have no liability to a Participant, or any other
party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not
an Incentive Stock Option.

     (c) Exercise Price. The Board shall establish the exercise price at the time each
Option is granted and specify it in the applicable option agreement; provided, however, that the
exercise price shall be not less than 100% of the Fair Market Value (as hereinafter defined) at the
time the Option is granted.

     (d) Duration of Options. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Board may specify in the applicable option agreement; provided,
however, that no Option will be granted for a term in excess of 10 years.

     (e) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including
electronic notice) approved by the Board together with payment in full as specified in Section 5(f)
for the number of shares for which the Option is exercised.

     (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:

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          (1) in cash or by check, payable to the order of the Company;

          (2) except as the Board may otherwise provide in an option agreement, by (i) delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax withholding or (ii)
delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions
to a creditworthy broker to pay promptly to the Company the exercise price and any required tax
withholding;

          (3) if provided for in the option agreement or approved by the Company in its sole discretion,
by delivery of shares of Common Stock owned by the Participant valued at their fair market value as
determined by (or in a manner approved by) the Board (“Fair Market Value”), provided (i) such
method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired
directly from the Company, was owned by the Participant at least six months prior to such delivery
and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements; or

          (4) by any combination of the above permitted forms of payment.

6. Director Options.

     (a) Initial Grant to New Directors. Upon the commencement of service on the Board by
any individual who is not then an employee of the Company or any subsidiary of the Company, the
Company shall grant to such person a Nonstatutory Stock Option to purchase 25,000 shares of Common
Stock (subject to adjustment under Section 8).

     (b) Annual Grant. On the date of each annual meeting of stockholders of the Company,
beginning with the annual meeting in 2005, the Company shall grant a Nonstatutory Stock Option to
purchase 10,000 shares of Common Stock (subject to adjustment under Section 8) to each member of
the Board of Directors of the Company (1) who is both serving as a director of the Company
immediately prior to and immediately following such annual meeting, (2) who is not then an employee
of the Company or any of its subsidiaries; and (3) who has served as a director of the Company for
at least six months. In addition, on the date of each annual meeting of stockholders of the
Company, beginning with the annual meeting in 2005, the Company shall grant a Nonstatutory Stock
Option to purchase 10,000 shares of Common Stock (subject to adjustment under Section 8) to the
Chairman of the Audit Committee of the Board of Directors of the Company.

     (c) Terms of Director Options. Options granted under this Section 6 shall (i) have an
exercise price equal to the last reported sale price of the Common Stock on The Nasdaq Stock Market
or the national securities exchange on which the Common Stock is then traded on the date of grant
(and if the Common Stock is not then traded on The Nasdaq Stock Market or a national securities
exchange, the fair market value of the Common Stock on such date as determined by the Board), (ii)
expire on the earlier of 10 years from the date of grant or three months following termination of
service as a director and (iii) contain such other terms and conditions as the Board shall
determine. Options granted under Section 6(a) shall vest as to 8,333 shares on each of the first
and second anniversaries of the date of grant and as to the remaining

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8,334 shares on the third anniversary of the date of grant subject to the individual’s
continued service as a director. Options granted under Section 6(b) shall vest in full on the first
anniversary of the date of grant subject to the individual’s continued service as a director.

     (d) Board Discretion. The Board retains the specific authority to from time to time
increase or decrease the number of shares subject to Options granted under this Section 6.

7. Restricted Stock

     (a) Grants. The Board may grant Awards entitling recipients to acquire shares of
Common Stock, subject to the right of the Company to repurchase all or part of such shares at their
issue price or other stated or formula price (or to require forfeiture of such shares if issued at
no cost) from the recipient in the event that conditions specified by the Board in the applicable
Award are not satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a “Restricted Stock Award”).

     (b) Terms and Conditions. The Board shall determine the terms and conditions of a
Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue
price, if any.

     (c) Stock Certificates. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless otherwise determined by
the Board, deposited by the Participant, together with a stock power endorsed in blank, with the
Company (or its designee). At the expiration of the applicable restriction periods, the Company
(or such designee) shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a manner determined
by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the
event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective
designation by a Participant, “Designated Beneficiary” shall mean the Participant’s estate.

8. Adjustments for Changes in Common Stock and Certain Other Events

     (a) Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this
Plan, (ii) the amount of the annual increase in the number of securities available under this Plan
set forth in Section 4(a)(3)(i); (iii) the limit on the number of securities available under this
Plan for Awards other than Options set forth in Section 4(a), (iv) the per-Participant limit set
forth in Section 4(b), (v) the number and class of securities and exercise price per share subject
to each outstanding Option and each Option issuable under Section 6, and (vi) the repurchase price
per share subject to each outstanding Restricted Stock Award, shall be appropriately adjusted by
the Company (or substituted Awards may be made, if applicable) to the extent determined by the
Board.

- 5 -

 

     (b) Reorganization Events.

          (1) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation
of the Company with or into another entity as a result of which all of the Common Stock of the
Company is converted into or exchanged for the right to receive cash, securities or other property,
(b) any exchange of all of the Common Stock of the Company for cash, securities or other property
pursuant to a share exchange transaction or (c) any liquidation or dissolution of the Company.

          (2) Consequences of a Reorganization Event on Awards. In connection with a
Reorganization Event, the Board shall take any one or more of the following actions as to all or
any outstanding Awards on such terms as the Board determines: (i) provide that Awards shall be
assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof), (ii) upon written notice to a Participant, provide that the
Participant’s unexercised Options or other unexercised Awards shall become exercisable in full and
will terminate immediately prior to the consummation of such Reorganization Event unless exercised
by the Participant within a specified period following the date of such notice, (iii) in the event
of a Reorganization Event under the terms of which holders of Common Stock will receive upon
consummation thereof a cash payment for each share surrendered in the Reorganization Event (the
“Acquisition Price”), make or provide for a cash payment to a Participant equal to (A) the
Acquisition Price times the number of shares of Common Stock subject to the Participant’s Options
or other Awards (to the extent the exercise price does not exceed the Acquisition Price) minus (B)
the aggregate exercise price of all such outstanding Options or other Awards, in exchange for the
termination of such Options or other Awards, (iv) provide that outstanding Awards shall become
realizable or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part
prior to or upon such Reorganization Event, (v) provide that, in connection with a liquidation or
dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if
applicable, net of the exercise price thereof) and (vi) any combination of the foregoing.

               For purposes of clause (i) above, an Option shall be considered assumed if, following
consummation of the Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an
affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in
fair market value to the per share consideration received by holders of outstanding shares of
Common Stock as a result of the Reorganization Event.

- 6 -

 

               To the extent all or any portion of an Option becomes exercisable solely as a result of clause
(ii) above, the Board may provide that upon exercise of such Option the Participant shall receive
shares subject to a right of repurchase by the Company or its successor at the Option exercise
price; such repurchase right (x) shall lapse at the same rate as the Option would have become
exercisable under its terms and (y) shall not apply to any shares subject to the Option that were
exercisable under its terms without regard to clause (ii) above.

               Without limiting the generality of Sections 9(f) and 10(d) below, the Board shall have the
right to amend this Section 8(b)(2) to the extent it deems necessary or advisable.

          (3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Company’s successor and shall apply to the cash, securities or other
property which the Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common Stock subject to such
Restricted Stock Award. Upon the occurrence of a Reorganization Event involving the liquidation or
dissolution of the Company, except to the extent specifically provided to the contrary in the
instrument evidencing any Restricted Stock Award or any other agreement between a Participant and
the Company, all restrictions and conditions on all Restricted Stock Awards then outstanding shall
automatically be deemed terminated or satisfied.

9. General Provisions Applicable to Awards

     (a) Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Option intended to be an
Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of
the Participant, shall be exercisable only by the Participant. References to a Participant, to the
extent relevant in the context, shall include references to authorized transferees.

     (b) Documentation. Each Award shall be evidenced in such form (written, electronic or
otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition
to those set forth in the Plan.

     (c) Board Discretion. Except as otherwise provided by the Plan, each Award may be
made alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.

     (d) Termination of Status. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during which, the
Participant,

- 7 -

 

or the Participant’s legal representative, conservator, guardian or Designated Beneficiary may
exercise rights under the Award.

     (e) Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant. Except as the Board may otherwise provide in an Award, for so
long as the Common Stock is registered under the Exchange Act, Participants may satisfy such tax
obligations in whole or in part by delivery of shares of Common Stock, including shares retained
from the Award creating the tax obligation, valued at their Fair Market Value; provided, however,
that the total tax withholding where stock is being used to satisfy such tax obligations cannot
exceed the Company’s minimum statutory withholding obligations (based on minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes, that are applicable
to such supplemental taxable income). Shares surrendered to satisfy tax withholding requirements
cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
The Company may, to the extent permitted by law, deduct any such tax obligations from any payment
of any kind otherwise due to a Participant.

     (f) Amendment of Award. The Board may amend, modify or terminate any outstanding
Award, including but not limited to, substituting therefor another Award of the same or a different
type, changing the date of exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required
unless the Board determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     (g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.

     (h) Acceleration. The Board may at any time provide that any Award shall become
immediately exercisable in full or in part, free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be.

     (i) Deferrals. The Board may permit Participants to defer receipt of any Common Stock
issuable upon exercise of an Option or upon the lapse of any restriction applicable to any
Restricted Stock Award, subject to such rules and procedures as it may establish.

     (j) Share Issuance. To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Common Stock or Restricted Stock, the Board may
provide for the issuance of such shares on a non-certificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange on which the Common Stock is traded.

- 8 -

 

10. Miscellaneous

     (a) No Right To Employment or Other Status. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as giving a Participant
the right to continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

     (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to such Option are adjusted as of the date of the distribution of the dividend (rather than
as of the record date for such dividend), then an optionee who exercises an Option between the
record date and the distribution date for such stock dividend shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such
Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of
business on the record date for such stock dividend.

     (c) Effective Date and Term of Plan. The Plan shall become effective on the date on
which it is adopted by the Board, but no Award may be granted unless and until the Plan has been
approved by the Company’s stockholders. No Awards shall be granted under the Plan after the
completion of 10 years from the earlier of (i) the date on which the Plan was adopted by the Board
or (ii) the date the Plan was approved by the Company’s stockholders, but Awards previously granted
may extend beyond that date.

     (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time; provided that, to the extent determined by the Board, no amendment
requiring stockholder approval under any applicable legal, regulatory or listing requirement shall
become effective until such stockholder approval is obtained. No Award shall be made that is
conditioned upon stockholder approval of any amendment to the Plan.

     (e) Provisions for Foreign Participants. The Board may, without amending the Plan,
modify Awards or Options granted to Participants who are foreign nationals or employed outside the
United States or establish subplans under the Plan to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.

     (f) Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware, without regard to
any applicable conflicts of law.

As amended through June 8, 2005

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AMENDMENT NO. 1 TO

2004 STOCK INCENTIVE PLAN, AS AMENDED

OF

ALNYLAM PHARMACEUTICALS, INC.

     The 2004 Stock Incentive Plan, as amended (the “Plan”), of Alnylam Pharmaceuticals, Inc. is
hereby further amended as follows:

Sections 6(a) and (b) are deleted in their entirety and the following substituted in their
place:

     “(a) Initial Grant to New Directors. Upon the commencement of service on the Board by
any individual who is not then an employee of the Company or any subsidiary of the Company, the
Company shall grant to such person a Nonstatutory Stock Option to purchase 30,000 shares of Common
Stock (subject to adjustment under Section 8).

     (b) Annual Grant. On the date of each annual meeting of stockholders of the Company,
beginning with the annual meeting in 2007, the Company shall grant a Nonstatutory Stock Option to
purchase 15,000 shares of Common Stock (subject to adjustment under Section 8) to each member of
the Board of Directors of the Company (1) who is both serving as a director of the Company
immediately prior to and immediately following such annual meeting, (2) who is not then an employee
of the Company or any of its subsidiaries; and (3) who has served as a director of the Company for
at least six months. In addition, on the date of each annual meeting of stockholders of the
Company, beginning with the annual meeting in 2007, the Company shall grant a Nonstatutory Stock
Option to purchase 10,000 shares of Common Stock (subject to adjustment under Section 8) to the
Chairman of the Audit Committee of the Board of Directors of the Company.”

     Except as set forth above, the remainder of the Plan remains in full force and effect.

	 	 	 
	 
	 	Adopted by the Board of Directors on
	 
	 	September 12, 2006.

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