SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 9, 2006
TERAYON COMMUNICATION SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
(State or Other Jurisdiction
4988 Great America Parkway
Santa Clara, California 95054
(Address of Principal Executive Offices and Zip Code)
Registrants telephone number, including area code: (408) 235-5500
(Former Name or Former Address, if Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
Item 1.01. Entry into a Material Definitive Agreement.
Terayon Communication Systems, Inc. (Terayon) has entered into an amended Sub-Sublease
Agreement (the Sub-Sublease) to sublease its current corporate headquarters located at 4988 Great
America Parkway, Santa Clara, California and consisting of approximately 140,965 square feet (the
Current Office Space), to Citrix Systems, Inc. (Citrix). Additionally, Terayon has entered
into a Lease Agreement (the Lease) with Sobrato Development Companies #871 (Landlord) to lease
approximately 63,069 square feet of office space located at 2450 Walsh Avenue, Santa Clara,
California (the New Office Space), which will serve as Terayons new corporate headquarters.
The term of the Sub-Sublease is scheduled to commence on or before September 18, 2006 and end
on October 31, 2009. Under the Sub-Sublease, Terayon will receive monthly rental payments of
approximately $176,200 for the first year of the Sub-Sublease, with such monthly rental payments
increasing by 3% beginning in October 2007, and by approximately 3% beginning in October 2008.
The Lease is for a term of 36 months, commencing on October 1, 2006 and ending on September
31, 2009. Under the Lease, Terayon is obligated to make monthly rental payments of $63,069 to
Landlord beginning on October 1, 2006, with such monthly rental payments increasing by 3% effective
each successive October 1 over the lease term.
The Sub-Sublease and Lease are intended to enable Terayon to reduce its unused office space
and lower its overall rental payment obligations and related operating expenses.
This Current Report includes forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. All statements
other than statements of historical fact are forward-looking statements for purposes of these
provisions, including any statements regarding the benefits to Terayons future financial condition
and performance expected to result from the Sub-Sublease and Lease transactions. In some cases,
forward-looking statements can be identified by the use of terminology such as may, will,
expects, plans, anticipates, intended, estimates, potential, or continue or the
negative thereof or other comparable terminology. There can be no assurance that such expectations
or any of the forward-looking statements will prove to be correct, and actual results could differ
materially from those projected or assumed in the forward-looking statements. Our forward-looking
statements are subject to inherent risks and uncertainties including, but not limited to, the
process of calculating, reviewing and analyzing final financial results, our ability to relocate in
a timely and cost-efficient manner, adverse changes in general economic or business conditions,
adverse changes in the real estate market, the failure of third parties to meet their contractual
commitments and other factors. All forward-looking statements and reasons why results may differ
included in this Current Report are made as of the date hereof, and we assume no obligation to
update any such forward-looking statement or reason why actual results might differ.