Document:

Amendment No. 1 to Credit Agreement

 
Exhibit
10.18(c) 
 
AMENDMENT NO. 1 TO CREDIT
AGREEMENT dated as of March 3, 2003 among GREATER BAY BANCORP, a California corporation (the “Borrower”), the banks, financial institutions and other institutional lenders parties to the Credit Agreement referred to below
(collectively, the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as agent (the “Agent”) for the Lenders. 
 
PRELIMINARY STATEMENTS: 
 
(1) The Borrower, the Lenders and the Agent have entered into a Credit Agreement dated as of December 16, 2002, (the “Credit
Agreement”). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement. 
 
(2) The Borrower and the Lenders have agreed to amend the Credit Agreement as hereinafter set forth. 
 
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2, hereby amended as follows: 
 
(a) Section 1.01 (Definitions) is amended by: 
 
(i) Adding a new definition of “Approved Marketable Securities” to read as follows:

 
“‘Approved Marketable
Securities’ means those securities listed on Schedule 4 hereto, and which are acceptable to the Agent.” 
 
(ii) Adding a new definition of “Cure Agreement” to read as follows: 
 
“‘Cure Agreement’ means that certain
Agreement under the Bank Holding Company Act dated February 17, 2003 between the Borrower and the Federal Reserve Bank of San Francisco, or any memorandum of understanding or other agreement that may hereafter be entered into by the Borrower or any
Subsidiary with any federal or state bank regulatory agency with respect to any matter covered by aforementioned Agreement under Bank Holding Company Act, including, but not limited to any matter covered by or outlined in the corrective action plan
referred to in Section 2 of the aforementioned Agreement under Bank Holding Company Act.” 
 

 
(iii) Adding
a new definition of “Security Agreement” to read as follows: 
 
“‘Security Agreement’ means that certain Security Agreement dated as of March 3, 2003 from the Borrower to the Agent, for the benefit of itself and the Secured Parties.”

 
(iv) Adding a new definition of
“Secured Parties” to read as follows: 
 
“‘Secured Parties’ means the Agent and the Lenders.” 
 
(v) Amending the definition of “Loan Documents” by inserting, after the words “the Pledge Agreement”, the
words “, the Security Agreement”. 
 
(b)
Section 3.02 (Conditions Precedent to Each Borrowing) is amended by inserting a new sub-clause (c) after sub-clause (b) to read as follows: 
 
“and (c) the Agent shall have a first priority perfected security interest in an amount of Approved Marketable Securities in respect
of such Borrowing to the extent required by Section 5.01(i).” 
 
(c) Section 5.01 (Affirmative Covenants) is amended by amending subclause (h) in its entirety to read as follows: 
 
“Additional Collateral. If at any time and from time to time the sum of (i) the value of the aggregate shareholder equity (as
determined in conformance with GAAP) of the voting common stock of the Collateral Subsidiary Bank and (ii) the fair market value of the Approved Marketable Securities pledged pursuant to Section 5.01(i) hereof is less than an amount equal to 150% of
aggregate Commitments (the difference between such value and the amount equal to 150% of the aggregate Commitments being the “Collateral Shortfall”), the Borrower shall immediately pledge to the Agent an amount of cash or Marketable
Securities in an aggregate amount not less than the Collateral Shortfall at such time (the “Additional Collateral”) to be held in a collateral account at the Agent on behalf of the Lenders and in connection therewith the Borrower shall
enter into such collateral documents as are reasonably requested by the Agent. The Agent shall release the Additional Collateral after financial statements filed with the FFIEC reflect that the sum of (i) value of the aggregate shareholder equity
(as determined above) of the Collateral Subsidiary Bank’s voting common stock and (ii) the fair market value of the Approved Marketable Securities pledged pursuant to Section 5.01(i) hereof exceeds an amount equal to 150% of the aggregate
Commitments.” 
 
(d) Section 5.01
(Affirmative Covenants) is amended by adding a new sub-clause (i), to read as follows: 
 
“(i) Pledge of Approved Marketable Securities. Until the Agent shall have received evidence reasonably satisfactory to it and the Required Lenders that the Federal Reserve Bank of San
Francisco or other appropriate federal or state bank regulatory agency, as applicable, has determined that 
 

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(a) the Borrower (or, if applicable, a Subsidiary) has performed its obligations under the Cure Agreement
or (b) the Borrower (or, if applicable, a Subsidiary) is otherwise no longer subject to the terms of the Cure Agreement, maintain in a collateral account at the Agent, or in an account in which the Agent otherwise has a first priority perfected
security interest, an amount (as determined herein) of Approved Marketable Securities not less than the aggregate principal amount of Advances outstanding; provided, that, the above requirement of this Section 5.01(i) shall remain in full force
and effect to the extent that any Lien permitted under Section 5.02(vi) below is in existence. For the purposes of this Section 5.01(i), the amount of Approved Marketable Securities shall be determined on the basis of the percentage of the market
value of the respective Approved Marketable Securities as set forth in Schedule 4 hereto. The Agent shall release from the collateral account any Approved Marketable Securities when and to the extent the amount of Approved Marketable Securities
exceeds the aggregate principal amount of Advances outstanding.” 
 
(e) Section 5.02(a) (Negative Covenants—Liens, Etc.) is amended by deleting the period at the end of sub-section (v) thereof and substituting therefor “; and” and by adding as new sub-section (vi), to
read as follows: 
 
“(vi) any Lien on the
Equity Interests of Mt. Diablo National Bank or Peninsula Bank of Commerce in favor of U.S. Bank, N.A. to secure the obligations of the Borrower under the US Bank Credit Agreement; provided, that, during any time that such Lien is in effect, the
Agent shall have a perfected security interest to the extent required by Section 5.01(i) hereof.” 
 
(f) A new Schedule 4 is inserted, in the form of the Schedule attached hereto. 
 
(g) Section 5.03 (Financial Covenants) is amended by
amending subclause (c) in its entirety to read as follows: 
 
“The Borrower will maintain a minimum ratio, calculated at each quarter end, of the sum of the (i) fair market value of unencumbered Marketable Securities then held by the Borrower and (ii) the fair market value of Approved
Marketable Securities pledged pursuant to Section 5.01(i) hereof to the then liability of all outstanding CODES of not less than 50%.” 
 
SECTION 2. Conditions of Effectiveness. This Amendment shall become effective as of the date first above written when, and only
when, each of the following conditions have been satisfied: 
 
(i) The Agent shall have received counterparts of this Amendment executed by the Borrower and all of the Lenders or, as to any of the Lenders, advice satisfactory to the Agent that such Lender has executed this Amendment;

 
(ii) The Agent shall have received a Security
Agreement in the form of Exhibit A hereto (the “Security Agreement”), duly executed by the Borrower and dated as of the date hereof; and 
 
(iii) The Agent shall have received for the ratable account of each Lender, a closing fee of 0.10% of the aggregate Commitments (and upon
receipt of such fee from the Borrower, the Agent will distribute the ratable portion of such fee to each Lender no later than the close of business on the second business day after receipt thereof by the Agent). 
 
(iv) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Amendment and the Security Agreement and the matters contemplated hereby and thereby, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this
Amendment and the Security Agreement and the matters contemplated hereby and thereby. 
 

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(v) A
certificate of the Secretary or an Assistant Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to sign this Amendment and the Security Agreement and the other documents to be delivered
hereunder and thereunder. 
 
This Amendment is
subject to the provisions of Section 8.01 of the Credit Agreement. 
 
SECTION 3. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: 
 
(i) The Borrower and each of its Subsidiaries (i) is a corporation duly incorporated, validly existing and in good standing under the
laws of the state of its incorporation, and is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or
qualification necessary and where failure to be so licensed or qualified would have a materially adverse impact on its business or properties; (ii) is in compliance with the requirements of applicable laws and regulations, except for such
noncompliance as would not materially and adversely affect its business or financial condition; and (iii) has all requisite power and authority to conduct its business, to own its properties and to execute and deliver, and to perform all of its
obligations under, the Loan Documents. 
 
(ii)
The execution, delivery and performance by the Borrower of this Amendment, the Security Agreement and the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the stockholders of the Borrower, or any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, except such as have already been
obtained, (ii) violate any provision of any law, rule or regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System) or of any order, writ, injunction or decree presently in effect having
applicability to the Borrower or any of its Subsidiaries or of the Articles of Incorporation or Articles of Association, as the case may be, or Bylaws of the Borrower or any of its Subsidiaries, (iii) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other material agreement, lease or instrument to which the Borrower or any of its Subsidiaries is a party or by which it or its properties may be bound or affected, or (iv) result in, or
require, the creation or imposition of any Lien or other charge or encumbrance of any nature upon or with respect to any of the properties now owned or hereafter acquired by the Borrower or any of its Subsidiaries, other than liens created pursuant
to the Loan Documents or the Security Agreement. The Borrower is not in violation of any such indenture or loan or credit agreement or any other material agreement, lease or instrument the violation or breach of which would be reasonably likely to
have a Material Adverse Effect other than the matters subject to the Cure Agreement. 
 

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(iii) This
Amendment, the Security Agreement, the Credit Agreement, as amended hereby, and the other Loan Documents constitute, the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective
terms, subject to any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar law affecting creditors’ rights generally, and general principles of
equity. 
 
SECTION 4. Reference to and Effect on
the Credit Agreement and the Loan Documents. (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring
to the Credit Agreement, and each reference in the Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement, as amended by this Amendment. 
 
(b)
The Credit Agreement, as specifically amended by this Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Pledge Agreement and
all of the Pledged Collateral described therein do and shall continue to secure all payment and other obligations of the Borrower under the Credit Agreement, as amended by this Amendment. 
 
(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any Lender or the Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement. 
 
SECTION 5. Costs, Expenses. The Borrower agrees to pay on demand all costs and expenses of the Agent
in connection with the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and
expenses of counsel for the Agent) in accordance with the terms of Section 8.04 of the Credit Agreement. 
 
SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. 
 

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SECTION 7.
Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of California. 
 
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written. 
 

	 GREATER BAY BANCORP

	
	 By
	 	 /s/    STEVEN C.
SMITH

	 	 	 Title: EVP, CAO, CFO

 
 
 

	 WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Agent and as Lender

	
	 By
	 	 /s/    AZIM RAJAN

	 	 	 Title: Vice President

 
 
 

	 U.S. BANK, N.A.

	
	 By
	 	 /s/    JON B. BEGGS

	 	 	 Title: Vice President

 
 
 

	 HARRIS TRUST AND SAVINGS BANK

	
	 By
	 	 /s/    TIMOTHY E.
BROCCOLO

	 	 	 Title: Managing Director

 

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SCHEDULE

 
[Schedule 4 to Credit Agreement]

 
APPROVED MARKETABLE SECURITIES

 

	 Marketable Security
	    	 Percentage of Market Value Allocated for
 Purposes of Section 5.01(i)

	
	 U.S. Government Bonds, Notes or Treasury Bills
	    	 90%

	
	 Municipal or U.S. corporate bonds rated at least AAA by SP or AA by Moody’s.
	    	 85%

	
	 Mortgage-backed Securities rated at least AAA by S&P or AA by Moody’s.
	    	 80%

	
	 Collateralized mortgage obligations rated at least AAA by S&P or AA by Moody’s.
	    	 80%

 
 

 
EXHIBIT A

 
Form of Security Agreement

 
 
 
SECURITY AGREEMENT 
 
Dated March __, 2003 
 
From 
 
GREATER BAY BANCORP 
 
as Grantor 
 
to 
 
WELLS FARGO BANK, N.A.

 
As Agent 
 
 

 
TABLE OF
CONTENTS 
 

	 Section

	  	 	  	 Page

	
	 Section 1.
	  	 Grant of Security
	  	 2

	
	 Section 2.
	  	 Security for Obligations
	  	 2

	
	 Section 3.
	  	 Delivery and Control of Collateral
	  	 2

	
	 Section 4.
	  	 Representations and Warranties
	  	 3

	
	 Section 5.
	  	 Further Assurances
	  	 4

	
	 Section 6.
	  	 Dividends; Etc.
	  	 4

	
	 Section 7.
	  	 Transfers and Other Liens
	  	 5

	
	 Section 8.
	  	 Agent Appointed Attorney-in-Fact
	  	 5

	
	 Section 9.
	  	 Agent May Perform
	  	 5

	
	 Section 10.
	  	 The Agent’s Duties
	  	 5

	
	 Section 11.
	  	 Remedies
	  	 6

	
	 Section 12.
	  	 Indemnity and Expenses
	  	 7

	
	 Section 13.
	  	 Amendments; Waivers; Etc.
	  	 7

	
	 Section 14.
	  	 Notices, Etc.
	  	 7

	
	 Section 15.
	  	 Continuing Security Interest; Assignments under the Credit Agreement
	  	 8

	
	 Section 16.
	  	 Execution in Counterparts
	  	 8

	
	 Section 17.
	  	 Governing Law
	  	 8

	
	 Schedule I
	  	 –  Location, Chief Executive Office, Place Where Agreements Are
Maintained, Type Of Organization, Jurisdiction Of Organization And Organizational Identification Number
	  	 
	
	 Exhibit A
	  	 –  Form of Securities Account Control Agreement
	  	 

 

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SECURITY
AGREEMENT 
 
SECURITY AGREEMENT dated March __,
2003 made by GREATER BAY BANCORP, a California corporation (the “Grantor”), to WELLS FARGO BANK N.A., as Agent (in such capacity, together with any successor agent appointed pursuant to Article VII of the Credit Agreement (as
hereinafter defined), the “Agent”) for the Secured Parties (as defined in the Credit Agreement). 
 
PRELIMINARY STATEMENTS. 
 
1. The Borrower has entered into a Credit Agreement dated as of December 16, 2002, as amended by Amendment No. 1 to Credit Agreement dated
as of March __, 2003, (said Agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the “Credit Agreement”) with the Lenders and the Agent (each as defined
therein). 
 
2. Pursuant to the Credit Agreement,
the Grantor is entering into this Agreement in order to grant to the Agent for the ratable benefit of the Secured Parties a security interest in the Collateral (as hereinafter defined). 
 
3. It is a condition precedent to the making of Advances by the Lenders under the Credit Agreement that the
Grantor shall have granted the assignment and security interest contemplated by this Agreement. 
 
4. The Grantor will derive substantial direct and indirect benefit from the transactions contemplated by the Loan Documents. 
 
5. Terms defined in the Credit Agreement and not otherwise defined in this Agreement are used in this
Agreement as defined in the Credit Agreement. Further, unless otherwise defined in this Agreement or in the Credit Agreement, terms defined in Article 9 of the UCC (as defined below) and/or in the Federal Book Entry Regulations (as defined below)
are used in this Agreement as such terms are defined in such Article 9 and/or the Federal Book Entry Regulations. “UCC” means the Uniform Commercial Code as in effect, from time to time, in the State of California;
provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of
California, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or
priority. The term “Federal Book Entry Regulations” means (a) the federal regulations contained in Subpart B (“Treasury/Reserve Automated Debt Entry System (TRADES)”) governing book-entry securities
consisting of U.S. Treasury bonds, notes and bills and Subpart D (“Additional Provisions”) of 31 C.F.R. Part 357, 31 C.F.R. §357.2, §357.10 through §357.14 and §357.41 through § 357.44 and (b) to the
extent substantially identical to the federal regulations referred to in clause (a) above (as in effect from time to time), the federal regulations governing other book-entry securities. 
 

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6. Under the
terms of the Credit Agreement, the Grantor is required to grant to the Secured Parties a security interest in certain Approved Marketable Securities from time to time (all such Approved Marketable Securities being the “Securities
Collateral”). 
 
NOW, THEREFORE, in
consideration of the premises and in order to induce the Lenders to make Advances under the Credit Agreement the Grantor hereby agrees with the Agent for the ratable benefit of the Secured Parties as follows: 
 
SECTION 8. Grant of Security. The Grantor hereby grants
to the Agent, for the ratable benefit of the Secured Parties, a security interest in its right, title and interest in and to the Securities Collateral held in the account, number 12713590 maintained with Wells Fargo Brokerage Services, LLC and
subject to a Securities Account Control Agreement (as defined in Section 3 below) or such other account or accounts maintained with one or more securities intermediaries and subject, in each case, to a Securities Account Control Agreement pursuant
to Section 3 below, as may be agreed to by the Agent from time to time, whether now owned or hereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising, and all dividends, distributions, return of capital,
interest, cash, instruments or other property from time to time received, receivable or otherwise distributed in respect of for or in exchange for any or all of such Securities Collateral (collectively, the “Collateral”) and
all proceeds relating to any and all of the Collateral. 
 
SECTION 9. Security for Obligations. This Agreement secures the payment of all Obligations of the Grantor now or hereafter existing under the Loan Documents, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, fees, premiums, penalties, indemnifications, contract causes of action, costs, expenses or otherwise (all such Obligations being the “Secured Obligations”). 
 
SECTION 10. Delivery and Control of Collateral. (a)
With respect to any Collateral that constitutes a security entitlement in which the Agent is not the entitlement holder, the Grantor will cause the securities intermediary with respect to such security entitlement either (i) to identify in its
records the Agent as the entitlement holder of such security entitlement against such securities intermediary or (ii) to agree in an authenticated record with the Grantor and the Agent that such securities intermediary will comply with entitlement
orders (that is, notifications communicated to the securities intermediary directing transfer or redemption of the financial asset to which the Grantor has a security entitlement) originated by the Agent without further consent of the Grantor, such
authenticated record to be in the form of Exhibit A hereto or such other form as is satisfactory to the Agent, (such agreement being a “Securities Account Control Agreement”). 
 
(b) The Grantor will not change or add any securities
intermediary that maintains any securities account in which any of the Collateral is credited or carried, or change or add any such securities account without first complying with the above provisions of this Section 3 in order to perfect the
security interest granted hereunder in such Collateral. 
 

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SECTION 11.
Representations and Warranties. The Grantor represents and warrants as follows: 
 
(a) The Grantor’s exact legal name, as defined in Section 9-503(a) of the UCC, is correctly set forth in Schedule 1 hereto. The Grantor is located (within the meaning of Section 9-307 of the UCC)
and has its chief executive office in the State of California. The information set forth in Schedule I hereto with respect to the Grantor is true and accurate in all respects. The Grantor has not previously changed its name, location, chief
executive office, place where it maintains its agreements, type of organization, jurisdiction of organization or organizational identification number from those set forth in Schedule I hereto. 
 
(b) The Grantor is the legal and beneficial owner of the
Collateral free and clear of any Lien, claim, option or right of others, except for the security interest created under this Agreement. No effective financing statement or other instrument similar in effect covering all or any part of such
Collateral or listing the Grantor or any trade name of the Grantor as debtor is on file in any recording office, except such as may have been filed in favor of the Agent relating to the Loan Documents. 
 
(c) All filings and other actions necessary to perfect the
security interest in the Collateral of the Grantor created under this Agreement have been duly made or taken and are in full force and effect, and this Agreement creates in favor of the Agent for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected first priority security interest in the Collateral, securing the payment of the Secured Obligations. 
 
(d) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the grant by the Grantor of the security interest granted hereunder or for the execution, delivery or performance of this Agreement by the Grantor, (ii) the perfection or maintenance of the security interest
created hereunder (including the first priority nature of such security interest), except for the filing of financing and continuation statements under the UCC, which financing statements have been duly filed and are in full force and effect, and
the actions described in Section 3 with respect to Collateral, which actions have been taken and are in full force and effect, or (iii) the exercise by the Agent of its rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection with the disposition of any portion of the Collateral by laws affecting the offering and sale of securities generally. 
 

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SECTION 12.
Further Assurances. (a) The Grantor agrees that from time to time, the Grantor will, at its expense, promptly execute and deliver, or otherwise authenticate, all further instruments and documents, and take all further action that may be
necessary or desirable, or that the Agent may request, in order to perfect and protect any pledge or security interest granted or purported to be granted by the Grantor hereunder or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any of the Collateral. 
 
(b) The Grantor hereby authorizes the Agent to file one or more financing or continuation statements, and amendments thereto, in each case without the signature of the Grantor, and regardless of whether any particular asset described
in such financing statements falls within the scope of the UCC or the granting clause of this Agreement. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient
as a financing statement where permitted by law. The Grantor ratifies its authorization for the Agent to have filed such financing statements, continuation statements or amendments filed prior to the date hereof. 
 
(c) The Grantor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Agent may reasonably request, all in reasonable detail. 
 
SECTION 13. Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing, the Grantor shall be entitled to receive and retain any and all dividends, interest and other distributions paid in respect of the Collateral if and to the extent that the payment thereof is not
otherwise prohibited by the terms of the Loan Documents; provided, however, that any and all: 
 
(a) dividends, interest and other distributions paid or payable other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for, any Collateral, 
 
(b) dividends and other distributions paid or payable in cash in respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus and 
 
(c) cash paid, payable or otherwise distributed in respect of principal of, or in redemption of, or in exchange for, any Collateral

 
shall be, and shall be forthwith delivered to the Agent to hold
as Collateral and shall, if received by the Grantor, be received in trust for the benefit of the Agent, be segregated from the other property or funds of the Grantor and be forthwith delivered to the Agent as Collateral in the same form as so
received (with any necessary indorsement). 
 

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(b) Upon the
occurrence and during the continuance of an Event of Default: 
 
(i) All rights of the Grantor to receive the dividends, interest and other distributions that it would otherwise be authorized to receive and retain pursuant to Section 6(a) shall automatically cease, and all such rights shall
thereupon become vested in the Agent, which shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights and to receive and hold as Collateral such dividends, interest and other distributions.

 
(ii) All dividends, interest and other
distributions that are received by the Grantor contrary to the provisions of paragraph (i) of this Section 6(b) shall be received in trust for the benefit of the Agent, shall be segregated from other funds of the Grantor and shall be forthwith paid
over to the Agent as Collateral in the same form as so received (with any necessary indorsement). 
 
SECTION 14. Transfers and Other Liens. The Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Collateral, other than sales, assignments and other dispositions of Collateral, and options relating to Collateral, permitted under the terms of the Credit Agreement, or (ii) create or suffer to exist any Lien upon
or with respect to any of the Collateral except for the pledge, assignment and security interest created under this Agreement. 
 
SECTION 15. Agent Appointed Attorney-in-Fact. The Grantor hereby irrevocably appoints the Agent the Grantor’s
attorney-in-fact, with full authority in the place and stead of the Grantor and in the name of the Grantor or otherwise, following the occurrence of an Event of Default from time to time in the Agent’s discretion, to take any action and to
execute any instrument that the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation: 
 
(a) to ask for, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral, 
 
(b) to receive, indorse and collect any drafts or other instruments, documents and chattel paper, in connection with clause (a) above, and 
 
(c) to file any claims or take any action or institute any proceedings that the Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the Agent with respect to any of the Collateral. 
 
SECTION 16. Agent May Perform. If the Grantor fails to perform any agreement contained herein, the Agent may but without any
obligation to do so and without notice, itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection therewith shall be payable by the Grantor under Section 12. 
 
SECTION 17. The Agent’s Duties. The powers
conferred on the Agent hereunder are solely to protect the Secured Parties’ interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no duty as to any Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not any Secured Party has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral. The Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to that which it accords its own property. 
 

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SECTION 18.
Remedies. If any Event of Default shall have occurred and be continuing: 
 
(a) The Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party upon
default under the UCC (whether or not the UCC applies to the affected Collateral) and also may: (i) require the Grantor to, and the Grantor hereby agrees that it will at its expense and upon request of the Agent forthwith, assemble all or part of
the Collateral as directed by the Agent and make it available to the Agent at a place and time to be designated by the Agent that is reasonably convenient to both parties; (ii) without notice, sell the Collateral or any part thereof upon such other
terms as the Agent may deem commercially reasonable; and (iii) exercise any and all rights and remedies of the Grantor under or in connection with the Collateral, or otherwise in respect of the Collateral, including, without limitation, (A) any and
all rights of the Grantor to demand or otherwise require payment of any amount under the Collateral, and (B) exercise all other rights and remedies with respect to the Collateral, including, without limitation, those set forth in Section 9-607 of
the UCC. 
 
(b) Any cash held by or on behalf of
the Agent and all cash proceeds received by or on behalf of the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Agent, be held by the Agent as collateral
for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 12) in whole or in part by the Agent for the ratable benefit of the Secured Parties against, all or any part of the Secured
Obligations, in the following manner: 
 
(i)
first, paid to the Agent for any amounts then owing to the Agent pursuant to Section 8.04 of the Credit Agreement or otherwise under the Loan Documents, ratably in accordance with such respective amounts then owing to the Agent; and

 
(ii) second, ratably paid to the
Lenders, respectively, for any amounts then owing to them, in their capacities as such, under the Loan Documents ratably in accordance with such respective amounts then owing to such Lenders. 
 
Any surplus of such cash or cash proceeds held by or on the behalf of the
Agent and remaining after payment in full of all the Secured Obligations shall be paid over to the Grantor or to whomsoever may be lawfully entitled to receive such surplus. 
 

6 

 
(c) All
payments received by the Grantor in respect of the Collateral shall be received in trust for the benefit of the Agent, shall be segregated from other funds of the Grantor and shall be forthwith paid over to the Agent in the same form as so received
(with any necessary indorsement). 
 
(d) The Agent
may, without notice to the Grantor except as required by law and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Secured Obligations against any funds held in any deposit account. 
 
SECTION 19. Indemnity and Expenses. (a) The Grantor
agrees to indemnify, defend and save and hold harmless each Secured Party and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement (including, without limitation, enforcement of this Agreement), except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. 
 
(b) The Grantor will upon demand pay to the Agent the amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that the Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral of the Grantor, (iii) the exercise or enforcement of any of the rights of the Agent or the other Secured Parties hereunder or (iv) the failure by the Grantor to perform or observe any of the provisions
hereof. 
 
SECTION 20. Amendments; Waivers;
Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Agent or any other Secured Party to exercise, and no delay in exercising any right hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. 
 
SECTION 21. Notices, Etc. All notices and other communications provided for hereunder shall be either (i) in writing (including
telecopier communication) and mailed, telecopied, or otherwise delivered or (ii) by electronic mail (if electronic mail addresses are designated as provided below) confirmed immediately in writing, in the case of the Borrower or the Agent, addressed
to it at its address specified in the Credit Agreement; or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and other communications shall, when mailed,
telecopied sent by electronic mail or otherwise, be effective when deposited in the mails, telecopied, sent by electronic mail and confirmed in writing, or otherwise delivered (or confirmed by a signed receipt), respectively, addressed as aforesaid;
except that notices and other communications to the Agent shall not be effective until received by the Agent. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or of any Security
Agreement Supplement or Schedule hereto shall be effective as delivery of an original executed counterpart thereof. 
 

7 

 
SECTION 22.
Continuing Security Interest; Assignments under the Credit Agreement. This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the earlier of (i) the date upon which the
Agent shall have received evidence, satisfactory to it, that the Federal Reserve Bank of San Francisco or other appropriate federal or state bank regulatory agency has determined that the Borrower (or, if applicable, a Subsidiary) has performed its
obligations under the Cure Agreement or the Borrower (or, if applicable, a Subsidiary) is otherwise no longer subject to the terms of the Cure Agreement and (ii) the date of payment in full of all obligations under the Credit Agreement and
termination of all Commitments thereunder, (b) be binding upon the Grantor, its successors and assigns and (c) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement (including, without limitation,
all or any portion of its Commitment, the Advances owing to it and the Note or Notes, if any, held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein
or otherwise, in each case as provided in Section 8.07 of the Credit Agreement. 
 
Upon the earlier of (i) and (ii) above, the pledge and security interest granted hereby shall terminate and all rights to the Collateral shall revert to the Grantor. Upon any such termination, the
Agent will, at the Grantor’s expense, execute and deliver to the Grantor such documents as the Grantor shall reasonably request to evidence such termination. 
 
SECTION 23. Execution in Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective
as delivery of an original executed counterpart of this Agreement. 
 
SECTION 24. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California. 
 
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written. 
 

	 GREATER BAY BANCORP

	
	 By
	 	  

	 	 	 Title:

 

8 

 
Schedule I to
the 
Security Agreement 
 
LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION, 
JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION NUMBER 
 

	 Grantor

	    	 Location

	    	 Chief Executive Office

	  	 Type of Organization

	  	 Jurisdiction of Organization

	    	 Organizational I.D. No.

	 Greater Bay Bancorp
	    	 	    	 	  	 Corporation
	  	 California
	    	 

 

 
Exhibit A to
the 
Security Agreement 
 
Section 1. FORM OF SECURITIES ACCOUNT CONTROL AGREEMENT 
 
CONTROL AGREEMENT dated as of March __, 2003, among GREATER BAY BANCORP, a California corporation (the
“Grantor”), WELLS FARGO BANK, N.A., as Agent (the “Secured Party”), and ______________________________________ (“_______”), as securities intermediary (the
“Securities Intermediary”). 
 
PRELIMINARY
STATEMENTS: 
 
(1) The Grantor has granted the
Secured Party a security interest (the “Security Interest”) in account no. _________________ maintained by the Securities Intermediary for the Grantor (the “Account”). 
 
(2) Terms defined in Article 8 or 9 of the Uniform Commercial
Code in effect in the State of California (“California Uniform Commercial Code”) are used in this Agreement as such terms are defined in such Article 8 or 9. 
 
NOW, THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the parties
hereto hereby agree as follows: 
 
(a) The
Account. The Grantor and Securities Intermediary represent and warrant to, and agree with, the Grantor and the Secured Party that: 
 
(i) The Securities Intermediary maintains the Account for the Grantor, and all property held by the Securities Intermediary for the
account of the Grantor is, and will continue to be, credited to the Account. 
 
(ii) The Account is a securities account. The Securities Intermediary is the securities intermediary with respect to the property credited from time to time to the Account. The Grantor is the
entitlement holder with respect to the property credited from time to time to the Account. 
 
(iii) The State of California is, and will continue to be, the Securities Intermediary’s jurisdiction of organization for purposes of Section 8-110(e) of the UCC so long as the Security Interest
shall remain in effect. 
 
(iv) Exhibit A
attached hereto is a statement of the property credited to the Account on the date hereof. 
 
(v) The Grantor and Securities Intermediary do not know of any claim to or interest in the Account or any property credited to the Account, except for claims and interests of the parties referred to in
this Agreement. 
 

 
(b)
Control by Secured Party. The Securities Intermediary will comply with all notifications it receives directing it to transfer or redeem any property in the Account (each an “Entitlement Order”) or other directions
concerning the Account (including, without limitation, directions to distribute to the Secured Party proceeds of any such transfer or redemption or interest or dividends on property in the Account) originated by the Secured Party without further
consent by the Grantor or any other person. 
 
(c)
Grantor’s Rights in Account. 
 
(a)
Except as otherwise provided in this Section 3, the Securities Intermediary will comply with Entitlement Orders and other directions concerning the Account originated by the Grantor without further consent by the Secured Party. 
 
(b) Until the Securities Intermediary receives a notice from
the Secured Party that the Secured Party will exercise exclusive control over the Account (a “Notice of Exclusive Control”), the Securities Intermediary may distribute to the Grantor all interest and regular cash dividends on
property in the Account. 
 
(c) If the Securities
Intermediary receives from the Secured Party a Notice of Exclusive Control, the Securities Intermediary will cease: 
 
(i) complying with Entitlement Orders or other directions concerning the Account originated by the Grantor, and 
 
(ii) distributing to the Grantor all interest and dividends
on property in the Account. 
 
(d) Priority of
Secured Party’s Security Interest. (a) The Securities Intermediary subordinates in favor of the Secured Party any security interest, lien, or right of setoff it may have, now or in the future, against the Account or property in the Account,
except that the Securities Intermediary will retain its prior lien on property in the Account to secure payment for property purchased for the Account and normal commissions and fees for the Account. 
 
(b) The Securities Intermediary will not agree with any
Person not party to this Agreement that the Securities Intermediary will comply with Entitlement Orders originated by such Person. 
 
(e) Statements, Confirmations, and Notices of Adverse Claims. (a) The Securities Intermediary will send copies of all statements
and confirmations for the Account simultaneously to the Grantor and the Secured Party. 
 
(b) When the Securities Intermediary knows of any claim or interest in the Account or any property credited to the Account other than the claims and interests of the parties referred to in this
Agreement, the Securities Intermediary will promptly notify the Secured Party and the Grantor of such claim or interest. 
 

2 

 
(f) The
Securities Intermediary’s Responsibility. (a) Except for permitting a withdrawal, delivery, or payment in violation of Section 3, the Securities Intermediary will not be liable to the Secured Party for complying with Entitlement Orders or
other directions concerning the Account from the Grantor that are received by the Securities Intermediary before the Securities Intermediary receives and has a reasonable opportunity to act on a Notice of Exclusive Control. 
 
(b) The Securities Intermediary will not be liable to the
Grantor or the Secured Party for complying with a Notice of Exclusive Control or with an Entitlement Order or other direction concerning the Account originated by the Secured Party, even if the Grantor notifies the Securities Intermediary that the
Secured Party is not legally entitled to issue the Notice of Exclusive Control or Entitlement Order or such other direction unless the Securities Intermediary takes the action after it is served with an injunction, restraining order, or other legal
process enjoining it from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction, restraining order or other legal process. 
 
(c) This Agreement does not create any obligation of the Securities Intermediary except for those expressly
set forth in this Agreement and in Part 5 of Article 8 of the California Uniform Commercial Code. In particular, the Securities Intermediary need not investigate whether the Secured Party is entitled under the Secured Party’s agreements with
the Grantor to give an Entitlement Order or other direction concerning the Account or a Notice of Exclusive Control. The Securities Intermediary may rely on notices and communications it believes given by the appropriate party. 
 
(g) Indemnity. The Grantor will indemnify the
Securities Intermediary, its officers, directors, employees and agents against claims, liabilities and expenses arising out of this Agreement (including, without limitation, reasonable attorney’s fees and disbursements), except to the extent
the claims, liabilities or expenses are caused by the Securities Intermediary’s gross negligence or willful misconduct as found by a court of competent jurisdiction in a final, non-appealable judgment. 
 
(h) Termination; Survival. (a) The Secured Party may
terminate this Agreement by notice to the Securities Intermediary and the Grantor. If the Secured Party notifies the Securities Intermediary that the Security Interest has terminated, this Agreement will immediately terminate. 
 
(b) The Securities Intermediary may terminate this Agreement
on 60 days’ prior notice to the Secured Party and the Grantor, provided that before such termination the Securities Intermediary and the Grantor shall make arrangements to transfer the property in the Account to another securities
intermediary that shall have executed, together with the Grantor, a control agreement in favor of the Secured Party in respect of such property in substantially the form of this Agreement or otherwise in form and substance satisfactory to the
Secured Party. 
 
(c) Sections 6 and 7 will
survive termination of this Agreement. 
 

3 

 
(i)
Governing Law. This Agreement and the Account will be governed by the law of the State of California. The Securities Intermediary and the Grantor may not change the law governing the Account without the Secured Party’s express prior
written agreement. 
 
(j) Entire Agreement.
This Agreement is the entire agreement, and supersedes any prior agreements, and contemporaneous oral agreements, of the parties concerning its subject matter. 
 
(k) Amendments. No amendment of, or waiver of a right under, this Agreement will be binding unless it
is in writing and signed by the party to be charged. 
 
(l) Financial Assets. The Securities Intermediary agrees with [the Control Agent,] the Secured Party and the Grantor that, to the fullest extent permitted by applicable law, all property credited from time to time to the
Account will be treated as financial assets under Article 8 of the California Uniform Commercial Code. 
 
(m) Notices. A notice or other communication to a party under this Agreement will be in writing (except that Entitlement Orders may
be given orally), will be sent to the party’s address set forth under its name below or to such other address as the party may notify the other parties and will be effective on receipt. 
 
(n) Binding Effect. This Agreement shall become
effective when it shall have been executed by the Grantor, the Secured Party and the Securities Intermediary, and thereafter shall be binding upon and inure to the benefit of the Grantor, the Secured Party and the Securities Intermediary and their
respective successors and assigns. 
 
(o)
Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of an original executed counterpart of this Agreement. 
 

4 

 
IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. 
 

	 GREATER BAY BANCORP

	
	 By
	 	  

	 	 	 Title:

	
	 	 	

	 	 	 Address:

	
	 	 	

	
	 	 	

 
 
 

	 WELLS FARGO BANK, N.A., as Agent

	
	 By
	 	  

	 	 	 Title:

	
	 	 	

	 	 	 Address:

	
	 	 	

	
	 	 	

 
 
 

	 WELLS FARGO BROKERAGE SERVICES, LLC
 as Securities Intermediary

	
	 By
	 	  

	 	 	 Title:

	
	 	 	

	 	 	 Address:

	
	 	 	

	
	 	 	

 

51999 Employee Stock Purchase Plan

 
Exhibit 4.2

 
SONICWALL, INC. 
1999 EMPLOYEE STOCK PURCHASE PLAN 
 
Adopted August 24, 1999 
As Amended Through December 13, 2002 
 
The following constitute the provisions of the 1999 Employee Stock Purchase Plan of SonicWALL, Inc. 
 
1.    Purpose.    The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock of the Company. It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The provisions of the Plan
shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 
 
2.    Definitions. 
 
(a)    “Board” means the Board of Directors of the Company. 
 
(b)    “Code” means the
Internal Revenue Code of 1986, as amended. 
 
(c)    “Common Stock” means the Common Stock of the Company. 
 
(d)    “Company” means SonicWALL, Inc., a California corporation. 
 
(e)    “Compensation”
means total cash compensation received by an Employee from the Company or a Designated Subsidiary. By way of illustration, but not limitation, Compensation includes regular compensation such as salary, wages, overtime, shift differentials, bonuses,
commissions and incentive compensation, but excludes relocation, expense reimbursements, tuition or other reimbursements and income realized as a result of participation in any stock option, stock purchase, or similar plan of the Company or any
Designated Subsidiary. 
 
(f)    “Continuous Status As An Employee” means the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in
the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed
by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company and its Designated Subsidiaries. 
 
(g)    “Contributions”
means all amounts credited to the account of a participant pursuant to the Plan. 
 

1 

 
(h)    “Corporate Transaction” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another
corporation. 
 
(i)    “Designated Subsidiaries” means the Subsidiaries which have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan; provided however
that the Board shall only have the discretion to designate Subsidiaries if the issuance of options to such Subsidiary’s Employees pursuant to the Plan would not cause the Company to incur adverse accounting charges. 
 
(j)    “Employee” means
any person, including an Officer, who is customarily employed for at least twenty (20) hours per week and more than five (5) months in a calendar year by the Company or one of its Designated Subsidiaries. Employee does not include any individual who
provides services to the Company or any Subsidiary as an independent contractor whether or not such individual is reclassified as a common law employee, unless the Company or a Subsidiary withholds or is required to withhold U.S. Federal employment
taxes for such individual pursuant to Section 3402 of the Code. 
 
(k)    “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 
(l)    “Offering Date” means the first business day of each Offering Period of the Plan.

 
(m)    “Offering
Period” means a period of twenty-four (24) months commencing on February 1 and August 1 of each year, except for the first Offering Period as set forth in Section 4(a). 
 
(n)    “Officer” means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
 
(o)    “Plan” means this Employee Stock Purchase Plan. 
 
(p)    “Purchase Date”
means the last day of each Purchase Period of the Plan. 
 
(q)    “Purchase Period” means a period of six (6) months within an Offering Period, except for the first Purchase Period as set forth in Section 4(b). 
 
(r)    “Purchase Price”
means with respect to a Purchase Period an amount equal to 85% of the Fair Market Value (as defined in Section 7(b) below) of a Share of Common Stock on the Offering Date or on the Purchase Date, whichever is lower; provided, however, that in the
event (i) of any increase in the number of Shares available for issuance under the Plan as a result of a shareholder-approved amendment to the Plan, and (ii) all or a portion of such additional Shares are to be issued with respect to one or more
Offering Periods that are underway at the time of such increase (“Additional Shares”), and (iii) the Fair Market Value of a Share of Common Stock on the date of such increase (the “Approval Date Fair Market Value”) is higher than
the Fair Market Value on the Offering Date for any such Offering Period, then in such instance the Purchase Price with respect to Additional Shares shall be 85% of the Approval Date Fair Market Value or the Fair Market Value of a Share of Common
Stock on the Purchase Date, whichever is lower. 
 

2 

 
(s)    “Share” means a share of Common Stock, as adjusted in accordance with Section 19 of the Plan. 
 
(t)    “Subsidiary” means a corporation, domestic or foreign, of which not less than 50% of the
voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. 
 
3.    Eligibility. 
 
(a)    Any person who is an Employee as of the Offering Date of a given Offering Period
shall be eligible to participate in such Offering Period under the Plan, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code; provided however that eligible Employees may not participate in more than
one Offering Period at a time. 
 
(b)    Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Subsidiary of the Company, or (ii) if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of the Fair Market Value (as defined in Section 7(b) below) of such stock (determined at the time such option is granted) for each calendar year in which such
option is outstanding at any time. 
 
4.    Offering Periods And Purchase Periods. 
 
(a)    Offering Periods.    The Plan shall be implemented by a series of Offering Periods of twenty-four (24) months’ duration, with new Offering
Periods commencing on or about February 1 and August 1 of each year (or at such other time or times as may be determined by the Board of Directors). The first Offering Period shall commence on the beginning of the effective date of the Registration
Statement on Form S-1 for the initial public offering of the Company’s Common Stock (the “IPO Date”) and continue until July 31, 2001. The Plan shall continue until terminated in accordance with Section 19 hereof. The Board of
Directors of the Company shall have the power to change the duration and/or the frequency of Offering Periods with respect to future offerings without shareholder approval if such change is announced at least five (5) days prior to the scheduled
beginning of the first Offering Period to be affected. 
 
(b)    Purchase Periods.    Each Offering Period shall consist of four (4) consecutive purchase periods of six (6) months’ duration. The last day of each Purchase Period shall be
the “Purchase Date” for such Purchase Period. A Purchase Period commencing on February 1 shall end on the next July 31. A Purchase Period commencing on August 1 shall end on the next January 31. 

 

3 

The first Purchase Period shall commence on the IPO Date and shall end on January 31, 2000. The Board of Directors of the Company shall have
the power to change the duration and/or frequency of Purchase Periods with respect to future purchases without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Purchase Period to
be affected. 
 
5.    Participation. 
 
(a)    An eligible Employee may become a participant in the Plan by completing a subscription agreement on the form provided by the Company and filing it with the Company’s payroll office prior to the
applicable Offering Date, unless a later time for filing the subscription agreement is set by the Board for all eligible Employees with respect to a given Offering Period. The subscription agreement shall set forth the percentage of the
participant’s Compensation (subject to Section 6(a) below) to be paid as Contributions pursuant to the Plan. 
 
(b)    Payroll deductions shall commence on the first payroll following the Offering Date and shall end on the last
payroll paid on or prior to the last Purchase Period of the Offering Period to which the subscription agreement is applicable, unless sooner terminated by the participant as provided in Section 10. 
 
6.    Method Of Payment Of
Contributions. 
 
(a)    A
participant shall elect to have payroll deductions made on each payday during the Offering Period in an amount not less than one percent (1%) and not more than fifteen percent (15%) (or such greater percentage as the Board may establish from time to
time before an Offering Date) of such participant’s Compensation on each payday during the Offering Period. All payroll deductions made by a participant shall be credited to his or her account under the Plan. A participant may not make any
additional payments into such account. 
 
(b)    A participant may discontinue his or her participation in the Plan as provided in Section 10, or, on one occasion only during a Purchase Period may increase and on one occasion only during a Purchase Period
may decrease the rate of his or her Contributions with respect to the Offering Period by completing and filing with the Company a new subscription agreement authorizing a change in the payroll deduction rate. The change in rate shall be effective as
of the beginning of the next calendar month following the date of filing of the new subscription agreement, if the agreement is filed at least ten (10) business days prior to such date and, if not, as of the beginning of the next succeeding calendar
month. 
 
(c)    Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) herein, a participant’s payroll deductions may be decreased during any Purchase
Period to 0%. Payroll deductions shall re-commence at the rate provided in such participant’s subscription agreement at the beginning of the first Purchase Period which is scheduled to end in the following calendar year, unless terminated by
the participant as provided in Section 10. 
 

4 

 
7.    Grant Of Option. 
 
(a)    On the Offering Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on each Purchase Date a number of Shares of the
Company’s Common Stock determined by dividing such Employee’s Contributions accumulated prior to such Purchase Date and retained in the participant’s account as of the Purchase Date by the applicable Purchase Price; provided however,
that the maximum number of Shares an Employee may purchase during each Purchase Period shall be 2,000 Shares (subject to any adjustment pursuant to Section 19 below), and provided further that such purchase shall be subject to the limitations set
forth in Sections 3(b) and 13. 
 
(b)    The fair market value of the Company’s Common Stock on a given date (the “Fair Market Value”) shall be determined by the Board based on the closing sales price of the Common Stock for such
date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported by the National Association of Securities Dealers Automated Quotation (Nasdaq) National Market or, if such price is not
reported, the mean of the bid and asked prices per share of the Common Stock as reported by Nasdaq or, in the event the Common Stock is listed on a stock exchange, the Fair Market Value per share shall be the closing sales price on such exchange on
such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported in The Wall Street Journal. For purposes of the Offering Date under the first Offering Period under the Plan, the
Fair Market Value of a share of the Common Stock of the Company shall be the Price to Public as set forth in the final prospectus filed with the Securities and Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as amended.

 
8.    Exercise Of
Option.    Unless a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of Shares will be exercised automatically on each Purchase Date of an Offering Period, and the maximum
number of full Shares subject to the option will be purchased at the applicable Purchase Price with the accumulated Contributions in his or her account. No fractional Shares shall be issued. The Shares purchased upon exercise of an option hereunder
shall be deemed to be transferred to the participant on the Purchase Date. During his or her lifetime, a participant’s option to purchase Shares hereunder is exercisable only by him or her. 
 
9.    Delivery.    As promptly as practicable after each Purchase Date of each Offering Period, the Company shall arrange the delivery to each participant, as appropriate, the Shares
purchased upon exercise of his or her option. No fractional Shares shall be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full Share shall be retained in the participant’s
account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 below. Any other amounts left over in a participant’s account after a Purchase Date shall be returned to
the participant. 
 

5 

 
10.    Voluntary Withdrawal; Termination Of Employment. 
 
(a)    A participant may withdraw all but not less than all the Contributions credited to his or her account under the
Plan at any time prior to each Purchase Date by giving written notice to the Company. All of the participant’s Contributions credited to his or her account will be paid to him or her promptly after receipt of his or her notice of withdrawal and
his or her option for the current period will be automatically terminated, and no further Contributions for the purchase of Shares will be made during the Offering Period. 
 
(b)    Upon termination of the participant’s Continuous Status as an Employee prior
to the Purchase Date of an Offering Period for any reason, including retirement or death, the Contributions credited to his or her account will be returned to him or her or, in the case of his or her death, to the person or persons entitled thereto
under Section 15, and his or her option will be automatically terminated. 
 
(c)    In the event an Employee fails to remain in Continuous Status as an Employee of the Company for at least twenty (20) hours per week during the Offering Period in which the
employee is a participant, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to his or her account will be returned to him or her and his or her option terminated. 
 
(d)    A participant’s withdrawal
from an offering will not have any effect upon his or her eligibility to participate in a succeeding offering or in any similar plan which may hereafter be adopted by the Company. 
 
11.    Automatic Withdrawal.    If the Fair Market Value of
the Shares on any Purchase Date of an Offering Period is less than the Fair Market Value of the Shares on the Offering Date for such Offering Period, then every participant shall automatically (i) be withdrawn from such Offering Period at the close
of such Purchase Date and after the acquisition of Shares for such Purchase Period, and (ii) be enrolled in the Offering Period commencing on the first business day subsequent to such Purchase Period. 
 
12.    Interest.    No interest shall accrue on the Contributions of a participant in the Plan. 
 
13.    Stock. 
 
(a)    Subject to adjustment as provided in Section 19, the maximum number of Shares which shall be made available for
sale under the Plan shall be 1,025,000 Shares. If the Board determines that, on a given Purchase Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for
sale under the Plan on the Offering Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Purchase Date, the Board may in its sole discretion provide (x) that the Company shall make a pro rata
allocation of the Shares of Common Stock available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such Purchase 

 

6 

Date, and continue all Offering Periods then in effect, or (y) that the Company shall make a pro rata allocation of the shares available for
purchase on such Offering Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on
such Purchase Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 below. The Company may make pro rata allocation of the Shares available on the Offering Date of any applicable Offering Period pursuant to the
preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s shareholders subsequent to such Offering Date. 
 
(b)    The participant shall have no interest or voting right in Shares covered by his or
her option until such option has been exercised. 
 
(c)    Shares to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her spouse. 
 
14.    Administration.    The Board, or a committee named by the Board, shall supervise and administer the Plan and shall have full power to adopt, amend and rescind any rules deemed
desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe and interpret the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. 
 
15.    Designation Of Beneficiary.

 
(a)    A participant may
file a written designation of a beneficiary who is to receive any Shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to the end of a Purchase Period but prior to
delivery to him or her of such Shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death
prior to the Purchase Date of an Offering Period. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. 
 
(b)    Such designation of beneficiary
may be changed by the participant (and his or her spouse, if any) at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such
participant’s death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company,
in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may
designate. 
 
16.    Transferability.    Neither Contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive Shares under the Plan may
be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or other disposition
shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 10. 
 

7 

 
17.    Use Of Funds.    All Contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to
segregate such Contributions. 
 
18.    Reports.    Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Employees at least annually, which
statements will set forth the amounts of Contributions, the per Share Purchase Price, the number of Shares purchased and the remaining cash balance, if any. 
 
19.    Adjustments Upon Changes In Capitalization; Corporate Transactions. 
 
(a)    Adjustment. Subject to any
required action by the shareholders of the Company, the number of Shares covered by each option under the Plan which has not yet been exercised and the number of Shares which have been authorized for issuance under the Plan but have not yet been
placed under option (collectively, the “Reserves”), as well as the maximum number of shares of Common Stock which may be purchased by a participant in a Purchase Period, the number of shares of Common Stock set forth in Section 13(a)(i)
above, and the price per Share of Common Stock covered by each option under the Plan which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the Common Stock (including any such change in the number of Shares of Common Stock effected in connection with a change in domicile of the Company), or any other increase or
decrease in the number of Shares effected without receipt of consideration by the Company; provided however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an option. 
 
(b)    Corporate Transactions. In the event of a dissolution or liquidation of the
Company, any Purchase Period and Offering Period then in progress will terminate immediately prior to the consummation of such action, unless otherwise provided by the Board. In the event of a Corporate Transaction, each option outstanding under the
Plan shall be assumed or an equivalent option shall be substituted by the successor corporation or a parent or Subsidiary of such successor corporation. In the event that the successor corporation refuses to assume or substitute for outstanding
options, each Purchase Period and Offering Period then in progress shall be shortened and a new Purchase Date shall be set (the “New Purchase Date”), as of which date any Purchase Period and Offering Period then in progress will terminate.
The New Purchase Date shall be on or before the date of consummation of the transaction and the Board shall notify each participant in writing, at least ten (10) days prior to the New Purchase Date, that the Purchase Date for his or her option has
been changed to the New Purchase Date and that his or her option 

 

8 

will be exercised automatically on the New Purchase Date, unless prior to such date he or she has withdrawn from the Offering Period as
provided in Section 10. For purposes of this Section 19, an option granted under the Plan shall be deemed to be assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction, each holder of
an option under the Plan would be entitled to receive upon exercise of the option the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence
of the transaction if the holder had been, immediately prior to the transaction, the holder of the number of Shares of Common Stock covered by the option at such time (after giving effect to any adjustments in the number of Shares covered by the
option as provided for in this Section 19); provided however that if the consideration received in the transaction is not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Board may, with
the consent of the successor corporation, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in Fair Market Value to the per Share consideration
received by holders of Common Stock in the transaction. The Board may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per Share of Common Stock covered by each
outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of Shares of its outstanding Common Stock, and in the event of the Company’s being
consolidated with or merged into any other corporation. 
 
20.    Amendment Or Termination. 
 
(a)    The Board may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19, no such termination of the Plan may affect options previously
granted, provided that the Plan or an Offering Period may be terminated by the Board on a Purchase Date or by the Board’s setting a new Purchase Date with respect to an Offering Period and Purchase Period then in progress if the Board
determines that termination of the Plan and/or the Offering Period is in the best interests of the Company and the shareholders or if continuation of the Plan and/or the Offering Period would cause the Company to incur adverse accounting charges as
a result of a change after the effective date of the Plan in the generally accepted accounting rules applicable to the Plan. Except as provided in Section 19 and in this Section 20, no amendment to the Plan shall make any change in any option
previously granted which adversely affects the rights of any participant. In addition, to the extent necessary to comply with Rule 16b-3 under the Exchange Act, or under Section 423 of the Code (or any successor rule or provision or any applicable
law or regulation), the Company shall obtain shareholder approval in such a manner and to such a degree as so required. 
 
(b)    Without shareholder consent and without regard to whether any participant rights may be considered to have been
adversely affected, the Board (or its committee) shall be entitled to change the Offering Periods and Purchase Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld
from the participant’s Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its sole discretion advisable which are consistent with the Plan. 
 

9 

 
21.    Notices.    All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
 
22.    Conditions Upon Issuance Of Shares.    Shares shall not be issued with respect to an
option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended,
the Exchange Act, the rules and regulations promulgated thereunder, applicable state securities laws and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. 
 
23.    Term Of Plan; Effective
Date. 
 
(a)    The Plan
was adopted by the Board on August 24, 1999 and shall become effective upon the IPO Date, provided no purchase option granted under the Plan shall be exercised, and no shares of Common Stock shall be issued hereunder, until (i) the Plan shall have
been approved by the shareholders of the Company and (ii) the Company shall have complied with all applicable requirements of the Securities Act of 1933, as amended (including the registration of the shares of Common Stock issuable under the Plan on
a Form S-8 registration statement filed with the Securities and Exchange Commission), all applicable listing requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock is listed for trading and all
other applicable requirements established by law or regulation. In the event such shareholder approval is not obtained, or such compliance is not effected, within twelve (12) months after the date on which the Plan is adopted by the Board, the Plan
shall terminate and have no further force or effect, and all sums collected from Participants during the initial offering period hereunder shall be refunded. 
 
(b)    Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i) the last business day
in July 2009, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which all purchase rights are exercised in connection with a
Corporate Transaction. No further purchase rights shall be granted or exercised, and no further payroll deductions shall be collected, under the Plan following such termination. 
 

10 

 
24.    Additional Restrictions of Rule 16b-3.    The terms and conditions of options granted hereunder to, and the purchase of Shares by, persons subject to Section 16 of the Exchange
Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, and such options shall contain, and the Shares issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may
be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions. 
 
25.    General Provisions. 
 
(a)    All costs and expenses incurred in the administration of the Plan shall be paid by
the Company; however, each Plan participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of any shares purchased under the Plan. 
 
(b)    Nothing in the Plan shall confer upon any participant any right to continue in the
employ of the Company or any Subsidiary for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary employing such person) or of the participant, which rights are hereby
expressly reserved by each, to terminate such person’s employment at any time for any reason, with or without cause. 
 
(c)    The provisions of the Plan shall be governed by the laws of the State of California without resort to its
conflict-of-laws rules. 
 
 

11 

 
SONICWALL,
INC. 
1999 EMPLOYEE STOCK PURCHASE PLAN 
SUBSCRIPTION AGREEMENT 
 
New Election              
Change of Election              
 
1.    I, ______________________________, hereby elect to participate in the SonicWALL, Inc. 1999 Employee Stock
Purchase Plan (the “Plan”) for the Offering Period _________________, _____ to _________________, _____, and subscribe to and purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan.

 
2.    I elect to have
Contributions in the amount of ____% of my Compensation, as those terms are defined in the Plan, applied to this purchase. I understand that this amount must not be less than 1% and not more than 15% of my Compensation during the Offering Period.
(Please note that no fractional percentages are permitted). 
 
3.    I hereby authorize payroll deductions from each paycheck during the Offering Period at the rate stated in Item 2 of this Subscription Agreement. I understand that all payroll deductions made by me shall be
credited to my account under the Plan and that I may not make any additional payments into such account. I understand that all payments made by me shall be accumulated for the purchase of shares of Common Stock at the applicable purchase price
determined in accordance with the Plan. I further understand that, except as otherwise set forth in the Plan, shares will be purchased for me automatically on the Purchase Date of each Offering Period unless I otherwise withdraw from the Plan by
giving written notice to the Company for such purpose. 
 
4.    I understand that I may discontinue at any time prior to the Purchase Date my participation in the Plan as provided in Section 10 of the Plan. I also understand that I can increase or decrease the rate of my
Contributions on one occasion only with respect to any increase and one occasion only with respect to any decrease during any Purchase Period by completing and filing a new Subscription Agreement with such increase or decrease taking effect as of
the beginning of the calendar month following the date of filing of the new Subscription Agreement, if filed at least ten (10) business days prior to the beginning of such month. Further, I may change the rate of deductions for future Offering
Periods by filing a new Subscription Agreement, and any such change will be effective as of the beginning of the next Offering Period. In addition, I acknowledge that, unless I discontinue my participation in the Plan as provided in Section 10 of
the Plan, my election will continue to be effective for each successive Offering Period. 
 
5.    I have received a copy of the Company’s most recent description of the Plan and a copy of the complete “SonicWALL, Inc. 1999 Employee Stock Purchase Plan.” I
understand that my participation in the Plan is in all respects subject to the terms of the Plan. 
 

1 

 
6.    Shares purchased for me under the Plan should be issued in the name(s) of (name of employee or employee and spouse only): _____________________________________________________________________________________

 
7.    In the event of my
death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due to me under the Plan: 
 

	 NAME:    (Please print)
	 	 	 	

	 	 	 	 	 	 	 (First)                                (Middle)   
                                 (Last)

	
	
	 	 	 	

	 (Relationship)
	 	 	 	 (Address)

	
	 	 	 	 	 	 	

 
8.    I understand that if I dispose of any shares received by me pursuant to the Plan within two (2) years after the Offering Date (the first day of the Offering Period during which I purchased such shares) or
within one (1) year after the Purchase Date, I will be treated for federal income tax purposes as having received ordinary compensation income at the time of such disposition in an amount equal to the excess of the fair market value of the shares on
the Purchase Date over the price which I paid for the shares, regardless of whether I disposed of the shares at a price less than their fair market value at the Purchase Date. The remainder of the gain or loss, if any, recognized on such disposition
will be treated as capital gain or loss. 
 
I
hereby agree to notify the Company in writing within thirty (30) days after the date of any such disposition, and I will make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon the disposition of the
Common Stock. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or
benefits attributable to the sale or early disposition of Common Stock by me. 
 
9.    If I dispose of such shares at any time after expiration of the two (2) year and one (1) year holding periods, I understand that I will be treated for federal income tax
purposes as having received compensation income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares under
the option, or (2) 15% of the fair market value of the shares on the Offering Date. The remainder of the gain or loss, if any, recognized on such disposition will be treated as capital gain or loss. 
 
I understand that this tax summary is only a summary and is
subject to change. I further understand that I should consult a tax advisor concerning the tax implications of the purchase and sale of stock under the Plan. 
 

2 

 
10.    I hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan. 
 

	
	 SIGNATURE: 
	  	  

	
	 SOCIAL SECURITY NUMBER: 
	  	  

	
	 DATE: 
	  	  

	
	 SPOUSE’S SIGNATURE (necessary if beneficiary is not spouse):

	
	

	 (Signature)

	
	

	 (Print name)

 

3 

 
SONICWALL,
INC. 
1999 EMPLOYEE STOCK PURCHASE PLAN 
NOTICE OF WITHDRAWAL 
 
I, ________________________________, hereby elect to withdraw my participation in the SonicWALL, Inc. 1999 Employee Stock Purchase Plan (the “Plan”) for the Offering Period that began on
_____________, ____. This withdrawal covers all Contributions credited to my account and is effective on the date designated below. I understand that all Contributions credited to my account will be paid to me within ten (10) business days of
receipt by the Company of this Notice of Withdrawal and that my option for the current period will automatically terminate, and that no further Contributions for the purchase of shares can be made by me during the Offering Period. The undersigned
further understands and agrees that he or she shall be eligible to participate in succeeding offering periods only by delivering to the Company a new Subscription Agreement. 
 

	
	 Dated:
	 	  

	
	

	 Signature of Employee

	
	

	 Social Security Number

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