AGREEMENT FOR ASIC DESIGN AND PURCHASE OF PRODUCTS

EXHIBIT 10.8



Agreement for ASIC Design and Purchase of Products





IBM Microelectronics

1000 River Street

Essex Junction, Vermont





Juniper Networks



Agreement Number V1967 Commencement Date: At Signoff



IBM Customer Account Representative: Ed Buturla



Name and Address of Buyer:



Juniper Networks 385 Ravendale Drive Mountain View, CA 94043



This agreement ("Agreement") is entered into by and between International Business Machines Corporation, incorporated under the laws of the State of New York ("IBM") and Juniper Networks, ("Buyer"), incorporated under the laws of the State of California.



This Agreement and its attachments ("Attachments") sets forth the terms and conditions pursuant to which semiconductor products will be designed, manufactured, sold and purchased. The terms and conditions by which IBM licenses to Buyer the IBM Design Kits specified in Attachment A are governed by the IBM Design Kit License initially executed by the parties on April 14, 1997.



1.0 DEFINITIONS



1.1 "ASIC(S)" means application specific integrated circuits.



1.2 "ASIC TOOL KITS" means any computer aided design software and data provided

by IBM and used by Buyer for the purpose of designing or checking ASIC

designs, as updated or enhanced from time to time by IBM.



1.3 "BUYER DELIVERABLE ITEMS" means any information and materials supplied to

IBM by Buyer, as set forth in Attachment B, including, without limitation,

software, schematics, netlists, microcode, designs or techniques, as

accepted by IBM and utilized in the design of or otherwise incorporated

into a Product.



1.4 "ENGINEERING CHANGE" means a mechanical or electrical change to the

Product which affects form, fit, function or maintainability.



1.5 "IBM DELIVERABLE ITEMS" means the information, materials and tools supplied

to Buyer by IBM, as set forth in Attachment B, including, without

limitation, IBM Design Kits, ASIC Tool Kits and Prototype devices.



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1.6 "IBM DESIGN KITS" means any IBM computer aided design software and data

(including libraries) provided to Buyer for the purpose of designing or

testing ASIC designs, as updated and enhanced from time to time. The term

"IBM Design Kits" includes ASIC Tool Kits.



1.7 "INITIAL ASIC DESIGN REVIEW CHECKLIST" ("IDR") means a report in form and

content as regularly used by IBM to make a preliminary assessment of the

feasibility of Buyer's proposed Product design.



1.8 "MILESTONES" means completion of the (i) initial design review ("IDR

Milestone"), (ii) pre-layout and timing analysis ("RTL Milestone"), and

(iii) the release to manufacturing ("RTM Milestone") stages of work.



1.9 "NON-RECURRING ENGINEERING CHARGES" ("NRE CHARGES") means the costs for

NRE Services.



1.10 "NON-RECURRING ENGINEERING SERVICES" ("NRE SERVICES") means engineering

services provided by IBM to develop Products to be manufactured under this

Agreement, which shall include delivery of Prototypes as specified in

Attachment C.



1.11 "PRODUCT(S)" means production units of the ASIC product(s) to be sold and

purchased under this Agreement as specified in Attachment A and as may be

amended by the parties to include additional Products. Products shall not

include Prototypes.



1.12 "PRODUCT SPECIFICATIONS" means the specifications for each Product

including, without limitation, the post-layout electronic data interchange

format ("EDIF") and timing requirements (including clock skew

requirements), a statement of post-layout test coverage and I/O placement;

as documented in the RTM, expressly or by specific incorporation.



1.13 "PROTOTYPE ACCEPTANCE" means Buyer's written approval that Buyer's

Prototype evaluation demonstrates Prototype conformance to Product



1.14 "PROTOTYPE DEVICE(S)" OR "PROTOTYPES" means a preliminary version of a

Product which may or may not be functional and which is not suitable for

production in commercial quantities.



1.15 "PURCHASE ORDER LEAD TIME" means the required minimum amount of time

between IBM's receipt of the Purchase Order issued by Buyer and the

requested shipment date necessary to accommodate manufacturing cycle time,

as specified in Attachment C.



1.16 "RELEASE TO LAYOUT CHECKLIST" ("RTL") means a performance approval report

in form and content as regularly used by IBM to document completion of the

pre-layout Level Sensitive Scan Design ("LSSD") and timing analysis

milestone of the SOW.



1.17 "RELEASE TO MANUFACTURING CHECKLIST" ("RTM") means a performance approval

report in form and content as regularly used by IBM to document the design

review milestone at the completion of the post-layout timing analysis.



1.18 "SCHEDULED SHIPMENT DATE" means the date for shipment of Product requested

by Buyer in a Purchase Order.



1.19 "SHIPMENT DATE" means the date for shipment of Product requested by Buyer

in a Purchase Order.



1.20 "STATEMENT OF WORK" or "SOW" means a statement of work as set forth in

Attachment A that identifies the respective design obligations that the

parties agree to complete for the development of particular Products.



2.0 TERM OF AGREEMENT



This Agreement shall become effective on the date it is executed by Buyer

and IBM (the "Commencement Date"). The term of this Agreement will begin

on the Commencement Date and will be effective for a period of three (3)

years after the date of execution (the "Contract Period"), subject,

however, to earlier termination as permitted under Section 13.0.





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3.0 WORK SCOPE



3.1 IBM will provide Buyer with engineering support and assistance and Buyer

will provide IBM with the Buyer Deliverable items and cooperate with IBM in

the use of IBM Deliverable Items to enable IBM to manufacture Products, in

accordance with the SOW. The Products are designed for verification on IBM

ASIC tools and to be manufactured by IBM under this Agreement. The terms

and conditions by which IBM licenses the IBM Design Kits are exclusively

governed by the IBM Design Kit License Agreement, which is hereby

incorporated by reference.



3.2 In the event that multiple Products are developed under this Agreement or

this Agreement is amended to include other Products, each such Product

shall be developed under and subject to a separate SOW, separate

development checklist and separate Product pricing.



4.0 ASIC PRODUCT DESIGN



4.1 IBM'S ASIC development checklists shall document the development of each of

Buyer's Product design(s).



4.1.1 The IDR will be used to make a preliminary feasibility assessment of

each of Buyer's proposed Product design and to advise Buyer of any areas

where Buyer's design(s) do not conform to IBM design requirements.



4.1.2 The RTL shall include, expressly or by specific incorporation, the

design specifications for each Product required by Buyer to successfully

place, route, time and conform to LSSD and provide static timing analysis.

The RTL shall also document the fact that such information is available to

Buyer and has been communicated to Buyer before each Product netlist is

released to layout. Buyer's signature on the RTL shall record Buyer's

acknowledgment of satisfactory completion of all work on such Product

through such Milestone.



4.1.3 Buyer's signature on the RTM shall record Buyer's acknowledgment of

(i) satisfactory completion of all work on such Product through the RTM

Milestone and (ii) the specifications to which IBM's warranty obligations,

set forth in Section 14.0, apply. To the extent that specifications and

test parameters contained in the RTM vary those set forth in the RTL, the

specifications contained in the RTM shall govern.



4.1.4 Buyer's signature on the RTL and RTM checklists shall not be

unreasonably withheld.



4.2 All Milestone and Prototype delivery schedules are estimates only.



4.3 Any data relating to a Product design that Buyer is to furnish to IBM must

be compatible with IBM tools, with which IBM will verify all design and

engineering work for conformance to IBM's technology groundrules.



4.4 Buyer may request changes to any Product design during the course of the

SOW by submitting a written request to IBM. Upon receipt by IBM of any such

request, IBM shall promptly inform Buyer of the effect of the requested

change on the SOW including estimated completion of the design work to

incorporate any requested changes and applicable price increase(s), if any.

IBM may, however, continue work without regard to the requested change

until both parties have agreed in writing to adjustment in price and

estimated completion date terms, unless Buyer specifically notifies IBM in

writing to halt work.



4.5 Buyer may, for the applicable unit price specified in Section 4.0 of

Attachment C, order Prototypes in addition to the quantity included in the

NRE Charges at any time before five (5) working days prior to RTM signoff.

Subject to the RTM signoff and adequate yield from the initial wafer lot,

IBM shall use reasonable efforts to deliver such additional Prototypes

within two (2) weeks of the estimated delivery date for Prototypes.



4.6 Subject to the terms and conditions of this Agreement, both parties will

exercise reasonable diligence in performing the design activities set forth

in the SOW for each Product.



4.7 IBM agrees to provide Products to Buyer as requested by Buyer and accepted

by IBM subject to the provisions of Section 5.0 and Section 6.0.



4.8 All computer data provided to IBM by Buyer will be free from any virus,

worm or other routines that would permit unauthorized access or otherwise

harm software, hardware or data.



5.0 PRODUCT DEMAND FORECASTS



5.1 The first Product demand forecast agreed to by Buyer and IBM is set forth

in Attachment C. The forecast covers twelve (12) months broken out by

Product and month. During the term of this Agreement, Buyer will provide

IBM with updated Product demand forecasts on a monthly basis covering a

rolling twelve (12) month period (not to extend beyond the Contract

Period), which will be reviewed for approval by IBM within ten (10) days of

receipt by IBM. Updated forecasts shall be in substantially the same format

as the first forecast in Attachment C. Forecasts shall be provided to IBM's

Customer Account Representative as identified above.





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Forecasts shall constitute good faith estimates of Buyer's anticipated

requirements for Products for the periods indicated based on current market

conditions, and IBM's acceptance shall constitute IBM's good faith

intention to quote and supply such requirements if requested and ordered by

Buyer in accordance with this Section 5.0. Notwithstanding the foregoing,

Product demand forecasts accepted by IBM shall not contractually obligate

IBM to supply, nor contractually obligate Buyer to purchase, the quantities

of units of Product set forth in such forecasts.



5.2 Buyer may request Products that exceed Product demand forecasts previously

accepted by IBM. Such requests are subject to rejection by IBM for any

reason, including, without limitation, resource availability.



6.0 PURCHASE ORDERS



6.1 Buyer shall order NRE Services by issuing written purchase orders. Purchase

orders for NRE Services will be deemed accepted by IBM unless rejected in

writing by IBM, specifying the reasons for rejection, within fourteen (14)

calendar days after IBM's receipt of such purchase order.



6.2 Buyer shall order Products by issuing written purchase orders. Purchase

orders for Products must be received by IBM in advance, with at least the

Purchase Order Lead Time specified in Attachment C, to allow IBM to meet

Buyer's requested Shipment Date. Requested Shipment Dates will be deemed

accepted (subject to the Purchase Order Lead Time) by IBM if the purchase

order requesting such Shipment Date is accepted by IBM. If so accepted, a

requested Shipment Date shall constitute a Scheduled Shipment Date. Subject

to IBM's written acceptance, Buyer may request an improved Scheduled

Shipment Date. Such acceptance shall not be unreasonably withheld by IBM.



6.3 Purchase orders for Products will be deemed accepted by IBM unless rejected

in writing by IBM, specifying the reasons for rejection, within fourteen

(14) calendar days after IBM's receipt of such purchase order. Purchase

orders for Products may be rejected by IBM if such purchase order requests

a quantity of Products that (i) exceeds the most recent Product demand

forecast accepted by IBM or (ii) a Shipment Date IBM deems unacceptable, or

(iii) does not comply with the terms and conditions of this Agreement, or

if Buyer is in breach of this Agreement.



6.4 Purchase orders issued to IBM shall include the following:



6.4.1 NRE Services and/or Product(s) being ordered;



6.4.2 quantity of units of Product requested (in increments of the

minimum ship pack quantity ("SPQ") only);



6.4.3 NRE charges and/or unit price per Attachment C;



6.4.4 billing address;



6.4.5 shipping instructions, including carrier, destination address

and requested shipment dates;



6.4.6 reference to this Agreement and Agreement Number.



6.5 This Agreement shall take precedence over and govern in case of any

additional, different or conflicting terms and conditions in any purchase

order(s) or any other form of either party. Purchase orders and other forms

of either party may not vary the terms of this Agreement. Additional,

different or conflicting terms and conditions on a purchase order or other

form shall be of no effect.



6.6 Notwithstanding any other provision of this Agreement, in the event that

IBM's ability to supply the Product is constrained (except as caused by

Buyer) for reasons which include, but are not limited to, component

availability, and the Scheduled Shipment Date cannot be met, IBM will

reduce the quantities of Products to be supplied to Buyer in proportion to

the reduction in quantities of products of the same technology or utilizing

the same manufacturing process to be supplied to satisfy others. Receipt of

such allocated supply and later delivery of all undelivered ordered

quantities after the constraint ends shall constitute Buyer's exclusive

remedy in the event of such supply constraint.



7.0 PRICING



7.1 Buyer shall pay IBM the NRE Charge applicable to such Product as set forth

in Attachment C, as well as other sums for special services as are

separately listed or referenced in Attachment C.





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7.2 The unit price for each unit of Product ordered shall be calculated at the

time the applicable purchase order is accepted using the Product's Price

Quantity Matrix set forth in Attachment C. The quantity used as an input

into such Price Quantity Matrix shall be the yearly cumulative quantity of

units of a Products determined by the purchase orders accepted by IBM

within such calendar year after the Commencement Date, including the units

of Product requested in the purchase order that is the subject of such

price calculation.



8.0 TITLE AND SHIPMENT



8.1 Title and risk of loss for a Product pass to Buyer when IBM delivers the

Product to the carrier.



8.2 Products shall be shipped from the manufacturing location FOB for domestic

U.S. destinations and ExWorks (as defined in the 1990 INCO Terms) for

international shipments.



8.3 In no event shall IBM be deemed to assume any liability in connection with

any shipment, nor shall the carrier be construed as an agent of IBM.



9.0 INVOICING, PAYMENT TERMS, TAXES



9.1 NRE Charges shall accrue and be invoiced on the schedule set forth in

Section 2.0 of Attachment C. IBM shall invoice Buyer for all units of

Product upon shipment. All payments under this Agreement shall be due

[***]. If Buyer's account becomes in arrears or if Buyer exceeds its credit

limit with IBM, in addition to any other right under this Agreement, [***]

IBM reserves the right to cease development work or stop shipment to Buyer
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