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                                                                    EXHIBIT 10.1

                               FIRST AMENDMENT OF
                            CROSSROADS SYSTEMS, INC.
                        1999 EMPLOYEE STOCK PURCHASE PLAN

      THIS AMENDMENT made as of the date set forth below by Crossroads Systems,
Inc. (the "Corporation"),

                              W I T N E S S E T H:

      WHEREAS, the Corporation maintains the Crossroads Systems, Inc. 1999
Employee Stock Purchase Plan (the "Plan") for the benefit of its eligible
employees; and

      WHEREAS, all words with initial capital letters shall have the same
meaning herein as ascribed thereto in the Plan; and

      WHEREAS, the Corporation desires to amend the Plan, effective as of the
June 1 offering period, to (i) increase the maximum number of shares of Common
Stock purchasable in the aggregate by all Participants on any one Purchase Date
under the Plan and the International Plan from Seventy-Five Thousand (75,000)
shares to One Hundred Eighty-Seven Thousand Five Hundred (187,500) shares and
(ii) to delete the individual per Participant limit of a maximum of Seven
Hundred Fifty (750) shares purchasable on any one Purchase Date; and

      WHEREAS, in the Plan, the Board reserved the right to amend the Plan from
time to time with the prior approval of the Corporation's stockholders under
certain circumstances as described in the Plan; and

      WHEREAS, the Board has authorized appropriate officers to amend the Plan
to effect the changes generally described above and as specifically set forth in
the amendment below;

      NOW, THEREFORE, the Plan is hereby amended effective as of the first day
of the offering period commencing on or immediately after June 1, 2004 by this
First Amendment thereto, as follows:

      1.    Section VII.D. of the Plan is hereby amended in its entirety to
provide as follows:

                  " D. NUMBER OF PURCHASABLE SHARES. The number of shares of
            Common Stock purchasable by a Participant on each Purchase Date
            within the offering period shall be the number of whole shares
            obtained by dividing the amount collected from the Participant
            through payroll deductions during the Purchase Interval ending with
            that Purchase Date by the purchase price in effect for the
            Participant for that Purchase Date. However, the maximum number of
            shares of Common Stock purchasable in the aggregate by all
            Participants on any one Purchase Date under the Plan and the
            International Plan shall not exceed One Hundred Eighty-Seven
            Thousand Five Hundred (187,500) shares, subject to

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            periodic adjustments in the event of certain changes in the
            corporation's capitalization.

      2.    Except as modified herein, the Plan is specifically ratified and
affirmed.

      IN WITNESS WHEREOF, this First Amendment of the Plan is executed this 4th
day of March, 2004, to be effective as herein provided.

                                    CROSSROADS SYSTEMS, INC.

                                    By: /s/ Andrea Wenholz
                                       -------------------------------------

                                    Title: V.P. of Finance and CFO
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