exv10w3






Exhibit 10.3




February 29, 2008



Mr. Michael Harrison

Brocade Communications Systems, Inc.

1745 Technology Drive

San Jose, CA 95110




Subject: Amendment 2 to SOW #6 of the IBM/Brocade Goods Agreement ROC-P-68



This letter (the “Amendment) serves as Amendment Number 2 to SOW #6, of the Goods
Agreement ROC-P-68 (the “Agreement”), which the parties hereto do mutually agree to amend
as follows:




	 	1.	 	Delete the first paragraph of Section 2.0 and replace with the following
language:






	 	 	Brocade will identify and provide Storage Area Network (SAN) sales professionals to
assist in driving incremental IBM sales revenue. The ‘skill-split target’ of this
resource will be approximately fifty percent (50%) sales and fifty percent (50%)
technical, with geographic placement mapped as ably as possible and practical to the
areas of most anticipated need and demand. Further, these resources will be placed
within the IBM Americas Group (‘AG’) Sales Geography, with a definitive focus on the
United States; IBM’s Europe, Middle East and Africa (‘EMEA’) Sales Geography; and
IBM’s Asia Pacific & Japan Sales Geographies. Brocade will make the resources’ names
and assigned locations available to IBM in advance of placement of said resource.






	 	2.	 	Delete Section 3.0 Term/Termination and replace with the following language:
	 
	 	a.	 	Term: “The initial term of this SOW #6 shall be effective from April 7, 2007 to
February 28, 2008 (the “Initial Term”). After the Initial Term, this SOW #6 shall
terminate on December 31, 2008, unless earlier terminated as provided in Section 2b below.
	 
	 	b.	 	Termination:






	 	i.	 	Either party may terminate this SOW #6 without cause by giving the
other party ninety (90) days’ notice of its intent to terminate the Agreement.
	 
	 	ii.	 	This Agreement shall automatically terminate if (i) either party
applies to court for its winding-up or a liquidator, receiver, administrative
receiver, administrator, examiner or similar officer is appointed over all or a
substantial part of its assets; or (ii) either party commits a material breach of
this Agreement, which if capable of being remedied, shall not have been remedied
within thirty (30) days of notice being served on it by the other party.






	 	c.	 	Brocade Personnel: Brocade shall have the right, in its sole discretion, to terminate
the services of any of its personnel contemplated hereunder for any reason at any time, in
which event Brocade shall identify a replacement resource in its sole discretion. IBM
shall not be entitled to terminate the employment of any Brocade personnel contemplated
hereunder.
	 
	 	3.	 	Delete Section 4.0, Costs and Payments, in its entirety and replace with the
following language:




 









 











     4.0             Costs and Payments




	 	a.	 	In consideration for Brocade subservices, IBM and Brocade agree to the following:
	 
	 	•	 	The annual full burden compensation (includes all individual compensation
inclusive of salary, bonus, commissions, benefits, 401(k) match, company car (if
available), business expenses, education/seminars, per diems (if available), etc.)
for each individual Brocade resource will be calculated at
[**].
	 
	 	•	 	The compensation rate of [**] cost for these individuals will be split
[**] between IBM and Brocade.
	 
	 	•	 	Brocade will at all times remain the responsible payroll provider for such
Brocade Resources. IBM will reimburse Brocade 50% of the cost of each Brocade
Resource in accordance with this Agreement. And for the avoidance of doubt, such
Brocade Resources are, and will remain, Brocade employees.






	 	b.	 	IBM Payment for Brocade Resources: IBM and Brocade [**] whereby [**] such [**]
from [**] for [**] during the [**] will [**] for such [**] to [**] of such [**] will [**] of the
[**] for [**] for the [**] on a [**] for the [**]






	 	c.	 	Reconciliation:
	 
	 	•	 	A quarterly reconciliation will take place to determine the actual number of IBM
badged Brocade Director products sold, against an agreed to target number of
placements beforehand. Additionally, this reconciliation will include an analysis
of the overall anticipated positive impact on gross revenues derived from their
efforts.
	 
	 	•	 	IBM and Brocade agree to quarterly checkpoints of overall progress of the
program.
	 
	 	•	 	Program adjustments to accelerate growth and success, as deemed appropriate and
acceptable by IBM and Brocade, may be made at the checkpoint, or other jointly
agreed to times.
	 
	 	•	 	Upon subsequent reviews of the success of the proposal, a decision will be made
whether to extend, alter, or cancel this Agreement.






	 	d.	 	Reporting:
	 
	 	 	 	IBM will provide Brocade with a monthly written report [**]Such report [**] the [**]and
[**]If a [**]for the [**]in any [**]  The parties agree that such
reconciliation will occur within 15 days after the end of each such reporting period.





The parties acknowledge that they have read this Amendment, understand it, and agree to
be bound by its terms and conditions. All capitalized terms not defined herein shall
have the meaning set forth in the Goods Agreement or SOW #6. All other terms and
conditions of the Goods Agreement and SOW #6 that are unaffected by the revisions set
forth in this Amendment shall remain in full force and effect. Further, the parties
agree that this Amendment and the Goods Agreement and SOW #6 are the complete and
exclusive statement of the agreement between the parties, superseding all proposals or
other prior agreement, oral or written, and all other communications between the parties
relating to this subject.





 




			
	[**]	 	Certain information on this page has been omitted
and filed separately with the Securities and Exhange Commission. Confidential
treatment has been requested with respect to the omitted portions.




 









 










	 	 	 	 	 	 	 
	ACCEPTED AND AGREED TO:

	 	 	 	ACCEPTED AND AGREED TO:	 	 
	International Business Machines Corporation

	 	 	 	Brocade Communications Systems Inc.	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 


	 	 
	 	 

	 	 
	Authorized Signature

	 	 	 	Authorized Signature	 	 
	 


	 	 
	 	 

	 	 
	Type or Print Name

	 	 	 	Type or Print Name	 	 
	 


	 	 
	 	 

	 	 
	Title & Organization

	 	 	 	Title & Organization	 	 
	 


	 	 
	 	 

	 	 







 












 






EXHIBIT (C-1)




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	[**]	 	Certain information on this page has been omitted
and filed separately with the Securities and Exhange Commission. Confidential
treatment has been requested with respect to the omitted portions. 




-4-









 










February 29, 2008




Mr. Michael Harrison

Brocade Communications Systems, Inc.

1745 Technology Drive

San Jose, CA 95110




Subject: Amendment 2 to SOW #6 of the IBM/Brocade Goods Agreement ROC-P-68



This letter (the “Amendment) serves as Amendment Number 2 to SOW #6, of the Goods
Agreement ROC-P-68 (the “Agreement”), which the parties hereto do mutually agree to amend
as follows:




	 	1.	 	Delete the first paragraph of Section 2.0 and replace with the following
language:
	 
	 	 	 	Brocade will identify and provide Storage Area Network (SAN) sales professionals to
assist in driving incremental IBM sales revenue. The ‘skill-split target’ of this
resource will be approximately fifty percent (50%) sales and fifty percent (50%)
technical, with geographic placement mapped as ably as possible and practical to the
areas of most anticipated need and demand. Further, these resources will be placed
within the IBM Americas Group (‘AG’) Sales Geography, with a definitive focus on the
United States; IBM’s Europe, Middle East and Africa (‘EMEA’) Sales Geography; and
IBM’s Asia Pacific & Japan Sales Geographies. Brocade will make the resources’ names
and assigned locations available to IBM in advance of placement of said resource.
	 
	 	2.	 	Delete Section 3.0 Term/Termination and replace with the following language:
	 
	 	a.	 	Term:  “The initial term of this SOW #6 shall be effective from April 7, 2007 to
February 28, 2008 (the “Initial Term”). After the Initial Term, this SOW #6 shall
terminate on December 31, 2008, unless earlier terminated as provided in Section 2b below.
	 
	 	b.	 	Termination:






	 	i.	 	Either party may terminate this SOW #6 without cause by giving the
other party ninety (90) days’ notice of its intent to terminate the Agreement.
	 
	 	ii.	 	This Agreement shall automatically terminate if (i) either party
applies to court for its winding-up or a liquidator, receiver, administrative
receiver, administrator, examiner or similar officer is appointed over all or a
substantial part of its assets; or (ii) either party commits a material breach of
this Agreement, which if capable of being remedied, shall not have been remedied
within thirty (30) days of notice being served on it by the other party.






	 	c.	 	Brocade Personnel: Brocade shall have the right, in its sole discretion, to terminate
the services of any of its personnel contemplated hereunder for any reason at any
time, in which event Brocade shall identify a replacement resource in its sole discretion.
IBM shall not be entitled to terminate the employment of any Brocade personnel contemplated
hereunder.
	 
	 	3.	 	Delete Section 4.0, Costs and Payments, in its entirety and replace with the
following language:




 









 












	 	4.0	 	Costs and Payments






	 	a.	 	In consideration for Brocade subservices, IBM and Brocade agree to the following:
	 
	 	•	 	The annual full burden compensation (includes all individual compensation
inclusive of salary, bonus, commissions, benefits, 401(k) match, company car (if
available), business expenses, education/seminars, per diems (if available), etc.)
for each individual Brocade resource will be calculated at $263,000.
	 
	 	•	 	The compensation rate of $263,300 cost for these individuals will be split
evenly between IBM and Brocade.
	 
	 	•	 	Brocade will at all times remain the responsible payroll provider for such
Brocade Resources. IBM will reimburse Brocade 50% of the cost of each Brocade
Resource in accordance with this Agreement. And for the avoidance of doubt, such
Brocade Resources are, and will remain, Brocade employees.






	 	b.	 	IBM Payment for Brocade Resources:  IBM and Brocade [**]whereby [**]such
[**] from [**] for [**]during the [**]will [**]for such [**]to [**]of such [**]will
[**]of the [**]for [**]for the [**]on a [**]for the [**]






	 	c.	 	Reconciliation:
	 
	 	•	 	A quarterly reconciliation will take place to determine the actual number of IBM
badged Brocade Director products sold, against an agreed to target number of
placements beforehand. Additionally, this reconciliation will include an analysis
of the overall anticipated positive impact on gross revenues derived from their
efforts.
	 
	 	•	 	IBM and Brocade agree to quarterly checkpoints of overall progress of the
program.
	 
	 	•	 	Program adjustments to accelerate growth and success, as deemed appropriate and
acceptable by IBM and Brocade, may be made at the checkpoint, or other jointly
agreed to times.
	 
	 	•	 	Upon subsequent reviews of the success of the proposal, a decision will be made
whether to extend, alter, or cancel this Agreement.






	 	d.	 	Reporting:
	 
	 	 	 	IBM will provide Brocade with a monthly written report [**]Such report [**] the [**]and
[**]If a [**]for the [**]in any [**]  The parties agree that such
reconciliation will occur within 15 days after the end of each such reporting period.





The parties acknowledge that they have read this Amendment, understand it, and agree to
be bound by its terms and conditions. All capitalized terms not defined herein shall
have the meaning set forth in the Goods Agreement or SOW #6. All other terms and
conditions of the Goods Agreement and SOW #6 that are unaffected by the revisions set
forth in this Amendment shall remain in full force and effect. Further, the parties
agree that this Amendment and the Goods Agreement and SOW #6 are the complete and
exclusive statement of the agreement between the parties, superseding all proposals or
other prior agreement, oral or written, and all other communications between the parties
relating to this subject.



	 	 	 
	ACCEPTED AND AGREED TO:

	 	ACCEPTED AND AGREED TO:
	International Business Machines Corporation

	 	Brocade Communications Systems Inc.
	By:

	 	By:
	 

	 	 
	Authorized Signature

	 	Authorized Signature








 




			
	[**]	 	Certain information on this page has been omitted
and filed separately with the Securities and Exhange Commission. Confidential
treatment has been requested with respect to the omitted portions.




 









 










	 	 	 
	 

	 	 
	Type or Print Name

	 	Type or Print Name
	 
	 	 
	 

	 	 
	Title & Organization

	 	Title & Organization