Document:

exv10w3

Exhibit 10.3

PPA #1526-031701

OEM PURCHASE AGREEMENT

FOURTEENTH AMENDMENT

This
FOURTEENTH Amendment (the “FOURTEENTH Amendment”) effective
as of October 24, 2008, (the
“Effective Date”) amends the OEM Purchase Agreement (the “Agreement”) dated December 16, 2002, by
and between HEWLETT-PACKARD COMPANY, a Delaware corporation having its principal place of business
at 3000 Hanover Street, Palo Alto, California 94304 (“HP”) and BROCADE COMMUNICATIONS SYSTEMS, INC.
a Delaware corporation having its principal place of business at 1745 Technology Drive, San Jose,
California 95110, and BROCADE COMMUNICATIONS SYSTEMS SWITZERLAND SARL., a corporation organized
under the laws of Geneva, and having its principal place of business at 29 Route de l’Aeroport Case
Postale 105, CH-1215 Geneva 15, Switzerland (collectively “Supplier”).

RECITALS

WHEREAS, HP and Supplier have entered into the Agreement pursuant to which HP agreed to purchase,
and Supplier agreed to sell OEM Products in accordance with the terms and conditions set forth
therein; and,

WHEREAS, HP and Supplier desire to enter into this FOURTEENTH Amendment to addend new OEM Products
to the Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and
valuable consideration the receipt and sufficiency of which are hereby acknowledged, HP and
Supplier agree as follows:

This is a Product Addendum that is intended to name additional OEM Products to the Agreement in
accordance with Section 2.18 of the Agreement. This addition will cause the following Exhibits to
be amended:

Exhibit A OEM Products and Specifications. HP Products that have been launched since the
date of the OEM Agreement that have not been previously addended to the Agreement are
listed in Attachment A and are hereby incorporated. These include [**] Part numbers for
Brocade products that may have already been included in the OEM Agreement. This is
intended to capture all [**] part numbers not previously covered under this Agreement.
These will be subject to [**] the Agreement. Specifications for these products will be
stored in each party’s respective revision controlled document systems, [**].

Exhibit C Pricing and Fees. Each Product being added to this Agreement is listed in
Attachment A with the initial cost at the time of the launch of the

 

			
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HP / Brocade CONFIDENTIAL

Page 1 of 3

 

 

PPA #1526-031701

product. The parties
negotiate costs from time to time as referenced in Section 4.1. It is not necessary to amend the Agreement as a
result of these changes.

Exhibit H HP Supplier Quality Assurance Requirements and Additional Warranties. Each
Product being added to this Agreement must meet the agreed-to [**]. Reports provided to
HP will include data for these products.

The parties have caused this Amendment to be executed by their duly authorized representatives as
indicated below.

	 	 	 	 	 	 	 	 	 	 	 
	AGREED:	 	 	 	 	 	 	 	 
	BROCADE COMMUNICATIONS	 	 	 	HEWLETT-PACKARD COMPANY	 	 
	SYSTEMS INC. (“SUPPLIER”)	 	 	 	(“HP”)	 	 
	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Charles Leeming	 	 	 	By:	 	/s/ Richard Gentilini	 	 
	 	 	 

	 	 
	 	 	 	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Name:
	 	Charles Leeming	 	 	 	Name:	 	Richard Gentilini	 	 
	 	 	 

	 	 
	 	 	 	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Title:
	 	VP, OEM Sales	 	 	 	Title:	 	Director, SWD Global Procurement	 	 
	 	 	 

	 	 
	 	 	 	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	10/24/08	 	 	 	Date:	 	3-14-09	 	 
	 	 	 

	 	 
	 	 	 	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 
	AGREED:	 	 	 	 	 	 	 	 
	BROCADE COMMUNICATIONS	 	 	 	 	 	 	 	 
	SWITZERLAND, SARL. (“SUPPLIER”)	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Ulrich Plechschmidt	 	 	 	 	 	 	 	 
	 	 	 

	 	 	 	 	 	 	 	 
	Name:
	 	Ulrich Plechschmidt	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Title:
	 	Vice President FMEA	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	24-October-2008	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

 

			
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HP / Brocade CONFIDENTIAL

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PPA #1526-031701

Attachment A

OEM Products – Pricing and Fees

A list of OEM Products with their Pricing and Fees at the time of their initial launch are hereby
attached. The Products may change revision from time to time, as mutually agreed by the parties.
It is not necessary to amend the Agreement when the Products are revised.

[**]

 

			
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HP / Brocade CONFIDENTIAL

Page 3 of 3exv10w4

Exhibit 10.4

GOODS AGREEMENT

STATEMENT OF WORK

Agreement # ROC-P-68

SOW# 8

This Statement of Work #8 (“SOW #8”) adopts and incorporates by reference and solely for the
purposes of this SOW #8 amends certain terms and conditions of Goods Agreement # ROC-P-68 (the
“Agreement”) between International Business Machines Corporation (“Buyer”) and Brocade
Communications Systems, Inc. and Brocade Communications Switzerland SarL (collectively,
“Supplier”). Transactions performed under this SOW #8 will be conducted in accordance with and be
subject to the terms and conditions of this SOW and the Agreement. The initial term of this SOW #8
shall be effective upon the last signature to this SOW #8 (“Effective Date”). The initial term of
this SOW #8 is three (3) years from the Effective Date (the “Initial Term”). Upon expiration of
this Term, this SOW will be automatically renewed for additional one (1) year terms (each period,
a “Renewal Term”) unless terminated by either party upon [**]written notice prior to the
expiration of any Renewal Terms. (Unless otherwise specified, the Initial Term and each Renewal
Term shall be collectively referred to as the “Term”). Unless otherwise provided herein,
capitalized terms shall have the meaning as set forth in the Agreement.

R E C I T A L S

     WHEREAS, Buyer and Supplier desire that Buyer become the worldwide leader in sales of Ethernet
networking products through the OEM distribution of Supplier’s portfolio of Ethernet networking
products covered by this SOW;

     WHEREAS, Buyer and Supplier desire to attain first year revenue of [**] USD and second year
revenue of $[**] USD; provided, however, neither party has guaranteed to the other that such
revenue targets will be achieved; and

     WHEREAS, in order to accelerate Buyer’s entry and growth into this product segment and in
recognition of Supplier’s status as Buyer’s preferred vendor for such Ethernet networking products,
[**]; and.

     WHEREASNOW, THEREFORE, in consideration of the mutual premises and other good and mutual
consideration contained herein, Supplier and Buyer agree as follows:

A G R E E M E N T

1.0 PRODUCT DESCRIPTION

1.1 Initial Products

The following is the initial set of Products to be made available to Buyer under this SOW #8:
NetIron MLX 4/8/16 Slot Chassis, NetIron CES 2000 48-port switches, FastIron GS 48-port switches
and FastIron SX800/SX1600 chassis. A complete description and listing of Products and related post
warranty maintenance and support service offerings is attached hereto as Attachment A, which may be
updated from time to time by written consent of the parties.

1.2 Customization Of Products

	1.2.1	 	Products will be sold and marketed under the Buyer’s brand;
	 
	1.2.2  Supplier products that are already generally available by Buyer’s announcement date will not
be subject to customization, unless agreed to by Supplier and Buyer in advance; provided, however,
that such products will receive new Mylar (i.e., the Buyer logo) and labels, but there will be no
changes from the Supplier black paint to Buyer black paint and no painting in areas that are not
currently painted;
	 
	1.2.3	 	Future customization support for new releases of these products or for added products will be
as mutually agreed upon; and
	 
	1.2.4	 	Supplier will meet Buyer’s accessibility requirements process in a mutually agreed upon
timeframe.

 

			
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1.3 Future Product Roadmap

Supplier is not required to include any Buyer-specific future features, product lines, software
code streams or any other custom product or accessories, unless otherwise agreed. Buyer and
Supplier will work to unify the Supplier product set with Buyer data center management offerings
(e.g., Director/Tivoli).

1.4 Open Source Software

Supplier will deliver at the earlier of a date requested by Buyer or prior to its first shipment of
Product: (i) a fully completed and signed certificate of originality (in a form to be specified by
Buyer) for all Code and Documentation, and (ii) all Code and Documentation owned or licensable by
Supplier that is required to operate the Products and for the purpose of facilitating the basic
design or use of the Products including, by way of example, all drivers, firmware and software
development kits associated with the Products or useful in the design of Buyer systems which will
incorporate Products. The foregoing will be provided in a format and media as specified by Buyer.
Additionally, Supplier will promptly deliver to Buyer all updates (including, without limitation,
all error corrections, enhancements and new versions) to such Code and Documentation in the same
format and media as specified by Buyer.

1.5 Certifications

Supplier is responsible (at its own cost) for obtaining Supplier’s standard agency approvals as
agreed to by the Parties. Should Buyer require multiple listing registration of such agency
approvals, Supplier will assist Buyer, at Buyer’s cost. Cost of any unique or incremental listings
agreed to by the parties will be at Buyer’s expense.

1.6 Quality Standards

1.6.1 Supplier shall provide to Buyer information documenting the Products’ compliance with the
quality standards set forth as Attachment B to this SOW#8.

1.6.2 Any of Supplier’s contract manufacturers shall be certified to an ISO 9000 standard or
higher.

1.6.3 At Buyer’s request, supplier shall perform failure analysis on failed Products returned to
Supplier. Upon determining the root cause of the failure, Supplier shall communicate that root
cause to Buyer and establish a corrective action plan to remediate such root cause. Buyer will
assist Supplier with tracking all open failures and will work with Supplier to implement
appropriate corrective action as reasonably determined necessary by Supplier.

1.7 General Product Specifications

          Where applicable, Products will comply with all the requirements set forth in the Buyer
documents identified below:

	 	•	 	CS1-1121-015, IBM Corporate Standard “Automatic Identification (AI) for Packaging,
Distribution and Manufacturing — Bar Coded Labels”
	 
	 	•	 	BA21-9261-11b, “Packaging and Handling - Supplier and Interplant Requirements”
	 
	 	•	 	ISO 2859, Sampling Procedures for Inspection by Attributes
	 
	 	•	 	ISO 3951, Sampling Procedures for Inspection by Variables
	 
	 	•	 	EIA -  599 -  A, Continuous Improvement
	 
	 	•	 	EIA -  659 -  A, Failure, Mechanism, Driven Reliability Monitoring
	 
	 	•	 	EIA -  670, Quality System Assessment
	 
	 	•	 	EIA -  671- A, Problem Analysis and Corrective Actions
	 
	 	•	 	EIA -  JESD -  38, Standard for Failure Analysis Report Format
	 
	 	•	 	EIA -  JESD -  46, Product Change Notice
	 
	 	•	 	EIA -  JESD -  50, Maverick Product Elimination
	 
	 	•	 	SQE 001 ECAT Supplier Quality Requirements
	 
	 	•	 	Supplier’s published specifications, catalogs, marketing materials, and other
documentation, including references in such materials to future upgrades or performance
	 
	 	•	 	FAA Certification, Supplier certifies that Products and their packages do not contain
explosives, hazardous materials, incendiaries and/or destructive devices as defined by the
FAA
	 
	 	•	 	IBM Environmental Engineering Specifications 46G3772, and either 53P6233 or 97P3864 (as
approved by Buyer) found in the Environmental Requirements section of IBM’s Information for
Suppliers website:

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(http://www-03.ibm.com/procurement/proweb.nsf/ContentDocsByTitle/United+States~Information+for+suppliers).

	 	•	 	All Product claims, descriptions, specifications, and other requirements described in
the Product bill of material, elsewhere in this Agreement, and via other written or
electronic communications sent from or approved by Buyer.
	 
	 	•	 	Supplier Quality Requirements Document (SQRD).
	 
	 	•	 	Product Quality Addendum (PQA)
	 
	 	•	 	Vol 3 section 3.1.1 of the IBM Global Label guidelines documents the required format for
shipping labels:

http://www-

03.IBM.com/procurement/proweb.nsf/objectdocswebview/fileglobal+labeling+guide+3/$file/gl_guide 3.pdf

Please be advised that all IBM Global Label Guidelines can be found externally on the IBM
Global Procurement website:

http://www-

03.Buyer.com/procurement/proweb.nsf/ContentDocsByTitle/United+States~Global+labeling+guides?OpenDocument&Parent=Information+for+suppliers
	 
	 	•	 	The IBM Corporate Standard for country of origin marking can be found at:

https://w3-03.IBM.com/chq/ico/icoweb.nsf/ObjectFileDocView/C-S+1-1121-

003+Country+of+Origin+Labeling+for+Products,+Sub-assemblies+and+Parts+Jun2004.pdf/$File/C-S+1-1121-003+Country+of+Origin+Labeling+for+Products,+Sub-assemblies+and+Parts+Jun2004.pdf
	 
	 	•	 	The IBM Corporate Standard for Accessibility Guidelines can be found at:

http://www-
03.ibm.com/procurement/proweb.nsf/ContentDocsByTitle/United+States~Accessibility+guidelines+for+suppliers?OpenDocument&Parent=Information+for+suppliers

Buyer and Supplier will mutually agree to the applicable Accessibility Guidelines for each
Product.

2.0 PART NUMBERS, PRICE AND OTHER TERMS

2.1 Pricing

All product part numbers and pricing are attached hereto as Attachment A, Products and Pricing.

All prices are in U.S. dollars. Transfer prices will be based on [**], as shown in Attachment A,
and such prices will be updated to reflect changes to [**]. Supplier agrees to give Buyer [**].
No price increases would be effective until 30 days after such notice is received.

Supplier agrees to a minimum [**]. Both Supplier and Buyer must mutually agree to additional
products added to the agreement.

Supplier agrees to provide a quarterly rebate of one percent (1%) on those [**] if Buyer achieves
the quarterly revenue spend targets with Supplier set forth below. The initial eligibility period
is [**]. If Buyer [**] for [**] and [**], then [**]. The parties will [**] for the foregoing [**]
shall be [**].

OOW (Out of Warranty) post warranty unit price for repair is as stated in Exhibit A, “Post Warranty
Services”, under Pricing.

The parties agree to meet as required from time to time, but no more often than once each quarter,
to discuss any changes in marketplace conditions and if warranted, agree to negotiate in good faith
any price adjustments necessary to have the Products remain competitively priced.

2.2 Payment terms Terms for payment on all invoices will be net [**]days from receipt
of an acceptable invoice by Buyer.

 

			
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2.3 Taxes and duties Prices do not include any sales, use or other similar taxes that do not apply
to Buyer as a reseller of Products and/or Services. As may be necessary from time to time, the
parties agree to negotiate in good faith to establish the terms and conditions for all legal,
regulatory and administrative requirements, in addition to all associated duties and fees,
associated with importation of Products into the country where the Product is received by Buyer,
which terms will be incorporated into this Agreement when signed by both parties. Supplier’s
invoices shall state applicable taxes owed by the Buyer, if any, by tax jurisdiction and with a
proper breakdown between taxable and non-taxable Products and Services. Supplier shall remit such
tax payments to the appropriate jurisdiction. Supplier agrees to use its commercially reasonable
efforts to properly calculate any applicable Taxes at the time of invoice. Supplier and Buyer
agree to cooperate to minimize any applicable Taxes, including reasonable notice and cooperation in
connection with any audit. Any incremental taxes shall be Supplier’s responsibility. If Buyer
provides certification of an exemption from Tax or reduced rate of Tax imposed by an applicable
taxing authority, then Supplier shall not invoice for nor pay over any such Tax unless and until
the applicable taxing authority assesses such Tax, at which time Supplier shall invoice and Buyer
shall pay any such Tax that is legally owed.

Buyer shall withhold taxes, if required under the law to be withheld on payments made to Supplier
hereunder and shall be required to remit to Supplier only the net proceeds thereof. Buyer shall
remit the taxes withheld to the appropriate government authority and agrees to provide Supplier in
a timely manner with properly executed documentation or other information or receipts or
certificates evidencing Buyer’s payment of any such withholding tax.

2.4 Point of Sale (POS) Reporting

Buyer will provide Point of Sale (POS) Information to Supplier by the 15th of each month for sales
in the previous month. The POS report will include the following information:

Supplier — i.e. Brocade

Channel (Chnl) — i.e. Retail, Internal, GTS, etc.

Contract (Con) — i.e. IBM contract number

Machine Type (Mt) —

Feature Code (PnFc) —

IBM Part number (IBM Pn)

Brocade Part number (Brocade Pn)

Description

Serial Number

GEO

Country Name or State

Zip Code

Quantity

Ship Date (Assd)

MES = non-configured upgrade to existing order

Bp = IBM Business partner; this field indicates whether the unit(s) went to IBM reseller or direct end user

2.5 Delivery

2.5.1 Shipment All Products purchased under this Agreement will be shipped Ex-Works manufacturing
site/merge centers (based on Incoterms 2000) to Buyer and/or designated End Users or Buyer
Resellers, except where Buyer requires Product in a consignment hub where shipment will be ExWorks
consignment hub location or other terms negotiated between the parties. As used in this Agreement,
shipment and delivery are synonymous. For purposes of this Agreement, shipment and delivery occur
upon delivery of Products by Supplier at Supplier’s point of shipment to the common carrier
specified by Buyer. Supplier will notify Buyer prior to shipping a partial quantity of a
particular Order of Products. In the event that Supplier is unable to ship Products on the
committed Ship Date as specified in Section 4.2, Supplier agrees, at Buyer’s option, to use
reasonable premium freight transportation to expedite delivery to Buyer.

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2.5.2 Delivery Flexibility Buyer and Supplier will work together to ensure maximum order delivery
flexibility. Supplier shall obtain Buyer’s approval prior to making any early shipments. Early
shipments are defined as any deliveries made [**] or more prior to Buyer’s requested shipment date.

2.5.3 Title and Risk of Loss Title to Equipment (exclusive of title to Software), and risk of loss
will pass from Supplier to Buyer upon delivery to Buyer’s designated carrier, as specified in
Buyer’s Purchase Order. Title to Software Products remains with Supplier but risk of loss passes
upon delivery to Buyer’s designated carrier. At the time of Product delivery, Supplier shall
provide Buyer with all documents of title necessary for Buyer (or its Affiliates) to take
possession of such Products.

2.6 Country of Origin Supplier certifies the Products purchased hereunder shall have a country of
origin of USA, Mexico or China, as provided under applicable United States law and regulations. If
there are any changes to a Product’s country of origin, Supplier will notify Buyer by providing a
new country of origin certification signed by an authorized Supplier representative before shipping
any Products other than those with the country of origin listed above. Additionally, for MES
orders, Supplier will provide Buyer with country of origin details for each line item within every
MES order. These details are to be made available to Buyer prior to shipment, so as to enable
Buyer to update shipping systems and create shipping documentation with relevant and accurate
country of origin information. Supplier acknowledges that Buyer will rely upon this certification
in making representations to Buyer customers and to comply with various laws and regulations.

2.7 Warranty period Product warranty period is [**] from the date of shipment for Equipment and
[**] for Software, except for Products identified as FRU’s (Field Replacement Units) in Attachment
A for which the [**] warranty period will commence on the earlier of: (i) [**] following the date
of shipment, or (ii) upon installation at a customer site; provided Buyer notifies Supplier in
writing of the date the FRU is installed, the serial number of the switch the FRU is installed
into, and the serial number of the defective FRU. For warranty redemption, Buyer shall not return
any Product, which Buyer determines to be defective, without a return material authorization number
(“RMA”) issued by Supplier.

2.8 Notice of Product Withdraw Supplier will provide Buyer with [**] written notice of its intent
to withdraw any Product prior to the last date of manufacture of a Product (“End of Life” or
“EOL”). Buyer shall provide to Supplier a non-binding forecast for Products and FRUs [**] from the
receipt of Supplier’s notice of End of Life. Buyer will provide a revised EOL FRU forecast in each
year during the [**] EOL period, as requested by Supplier. Buyer shall provide to Supplier a
non-cancelable last-time buy WA for forecasted Products no later than [**] prior to the End of Life
date (last date of manufacture). Such Product purchases must be scheduled to ship no later than
the End of Life date. For delivery requests outside of the Notice Period or order requests after
Buyer’s last-time buy purchase has been placed, Supplier will review on a case-by-case basis
Buyer’s request(s).

2.9 Epidemic Defect Rate The Epidemic Defect Rate is defined as [**] or more occurring with the
same Product for the same defect over a [**] rolling average.

2.10 Use of Subcontractors Either party may use subcontractors to perform its obligations
hereunder. Notwithstanding this subsection, either party’s use of subcontractors will not relieve
such party of the responsibility for the subcontractor’s performance.

3.0 ORDER FULFILLMENT

3.1 Configure To Order (CTO) —  Supplier agrees to manufacture, assemble, test, inspect, package
and deliver Configure to Order (CTO) Products in accordance with Buyer’s Product configuration
details contained in Release WA’s. Supplier will assemble the CTO Product in accordance with
Specifications, test per Buyer approved process, and package for shipment designated by Buyer in
support of customer order fulfillment. CTO products will be manufactured in accordance with IBM
Quality standards specified in the Supplier Quality Requirements Document (SQRD), including Product
Quality Addendums (PQA), if any, to the SQRD, and in accordance with

 

			
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IBM’s product structure / content defined in the formal EC released BOM structure. Initially,
non-integrated chassis based Product may ship as a zero port base chassis and modules (e.g. port
blades), but must be tendered in a single complete shipment. Supplier recognizes Buyer’s need for
a factory install configuration model and will work with Buyer to implement such a model no later
than [**]

3.2 Fulfillment Logistics — General

Buyer will acquire and sell products on a direct ship basis via a single Supplier US source of
supply during the initial phase of this Agreement. The parties will negotiate in good faith the
location and timing of future changes to a single worldwide source of supply so as to limit
disruption in supply to Buyer’s customers and allow adequate time for required infrastructure
changes to Buyer’s fulfillment processes.

3.3 Forecast

Buyer shall provide Supplier with a non-binding twelve (12) month rolling monthly forecast no less
often than monthly throughout the term of this Agreement for Products and Parts as mutually agreed
between the parties. The first forecast shall be made available to Supplier no later than sixty
(60) days prior to the date Buyer declares the Product as being generally available (“GA”) to
Buyer’s customers. Forecasts are not Orders or a commitment to buy, and are used for planning
purposes only, and Buyer has no obligation to purchase units of Products in accordance with its
forecasts. Supplier understands and agrees that such forecasts are for Supplier’s planning
purposes only and they do not create any obligation or liability on the part of Buyer, either
directly or indirectly.

The most recent forecast will supersede previous forecasts. Buyer will send WAs to Supplier or
Supplier’s subcontractor(s) on a daily basis as they are generated.

3.4 WA Issuance

Buyer is under no obligation to purchase any Products and/or Services, except as ordered in WAs and
within the liability limits addressed elsewhere in the Agreement. Supplier or Supplier’s
subcontractor(s) will comply with Buyer’s requested changes to delivery of Products specified in a
WA as described in this SOW without additional charge to Buyer. The parties acknowledge that WAs
may be placed on Supplier under this SOW by entities other than the Buyer, but only to the extent
expressly authorized by Buyer (and agreed to by Supplier, such that Supplier’s consent will not be
unreasonably withheld) in writing, and Supplier agrees that for such purchases that (a) the Buyer
authorized third party purchaser under this SOW, shall have extended to it all the obligations,
protections, rights, and other benefits of the Agreement with respect to the applicable WA; (b)
Buyer is a third party beneficiary and has the right to enforce the terms of this Agreement on
such purchases on a joint and several basis; and (c) Buyer shall not be liable to either party with
regard to such purchase transactions.

4.0 WA FLEXIBILITY

4.1 Allocation of Product Supply

Supplier or Supplier’s subcontractor(s) shall deliver Products as specified in the WAs.
Notwithstanding any other provisions of this Agreement if Supplier or Supplier’s subcontractor(s)
are unable to deliver Product as specified in the WAs, Supplier or Supplier’s subcontractor(s) will
give Buyer prompt written notice of such inability to deliver Product along with an estimate of the
duration of the shortage. During such shortage period, the parties agree that Supplier or
Supplier’s subcontractor(s) will use an allocation method for fulfilling Buyer’s WAs providing
Buyer, at a minimum, a share of available capacity equivalent to the proportion of normal
production capacity applied to fulfilling Buyer’s WAs immediately before the occurrence of such
shortage. If Supplier or Supplier’s subcontractor(s) fail to correct such inability to supply
Product or fail to develop a plan, acceptable to Buyer, to correct such inability to supply
Product, Buyer will have the right to cancel such WA(s) or portions thereof by written notice. If
Buyer cancels WAs under this Section 4.1 Buyer’s only obligation is to pay for Products already
delivered at the time of Buyer’s cancellation notice.

4.2 Standard Order Lead Time, End of Quarter, and End of Month Lead Time

Supplier is responsible to plan, purchase and stock inventory levels in accordance with Buyer’s
forecast to support a time commitment of [**]beginning on the Effective Date. [**], Supplier will
support a time commitment of [**] or

 

			
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less between WA receipt and shipment. Prior to September 1, 2009, the Parties will establish a
mitigation plan for high priority orders that require a ship time of less than [**].

Notwithstanding the foregoing, Supplier agrees to a standard WA turnaround time of [**] from the
time of WA receipt to shipment during the last [**] of the quarter (March, June, September,
December) or last [**] of a non-quarter-end month-end (January, February, April, May, July, August,
October, and November), and will use commercially reasonable efforts to meet this requirement and
to satisfy last day WAs inside of [**].

Supplier understands the need and agrees to work (and agrees to have Supplier’s subcontractor(s)
work) weekends and holidays as necessary when the weekend or holiday falls within the last [**] of
Buyer’s quarter (March, June, September, December) and within the last [**] of Buyer’s non-quarter
month-ends (January, February, April, May, July, August, October, and November). Buyer will notify
Supplier at least [**] in advance of such weekends or holidays if Supplier is required to staff for
such holidays and weekends.

4.3 Order Process

Supplier or Supplier’s subcontractor(s) shall acknowledge and accept via WA Acknowledgement all of
Buyer’s WAs issued in accordance with the provisions of this SOW within [**] of receipt or as
required by Buyer.

WA’s will be communicated to the Supplier or Supplier’s subcontractor(s) via Buyer’s Hardcard, to
be replaced by Buyer’s FTP Interface program within a commercially reasonable timeframe. These
messages will be transmitted in batches three (3) or more times per day. Each batch of WAs will be
separated into three categories; “new WAs”, “altered WAs”, and “cancelled WAs”. WA detail is
passed in the form of CTO Product part numbers, with each Product part number to be invoiced
against its respective blanket purchase order. The WA detail shall include the “due date” which
indicates the date the Product, MES or FRU, as the case may be, must be ready for transport to
Buyer or its designated agent (“Due Date”).

4.4 Modified/Cancelled Order

Buyer may cancel or modify a WA [**] prior to Supplier or Supplier’s subcontractor(s) tender of
product to Buyer or Buyer’s agent. Supplier or Supplier’s subcontractor(s) will use commercially
reasonable efforts to manage all requests. Buyer will work to minimize and/or mitigate such events
within [**] of the scheduled ship date.

4.5 Upside Flexibility

Supplier will use commercially reasonable efforts to meet a [**] increase to the current forecast
within [**] of Buyer’s notification of such requirement.

4.6 Resolution of Customer Shipment Conflicts

Except in the case of evidence sufficient to convince Buyer, acting reasonably and in good faith,
of a third party’s fault or Buyer’s misorder, Supplier assumes full responsibility for shipment of
Product which Buyer’s customers claim as missing from Supplier or Supplier’s subcontractor(s)
shipment; provided that, Supplier or Supplier’s subcontractor(s) failed to include such Product
Part in the shipment and the Part’s absence is not a result of third party actions (e.g. Buyer’s
carrier or the Parts were not included in the original order) taken after Supplier or Supplier’s
subcontractor(s) delivered the Product package to Buyer’s carrier. In such cases, Buyer will
notify Supplier of the specific missing Products or Parts. Supplier will use commercially
reasonable efforts to ship missing Products or Parts to designated Buyer location with [**]of
notification from Buyer. Supplier is responsible for all freight and handling charges associated
with missing Product or Parts if Supplier is responsible for missing Parts in the shipment. All
shipments for missing Parts are to be shipped next day air or the most expeditious method possible.

4.7 Special Orders

Supplier agrees to use commercially reasonable efforts to fulfill Buyer’s WA requirements placed
outside Buyer’s FTP Interface Program. There will be no additional charges for WA requirements
placed outside Buyer’s FTP Interface.

 

			
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4.8 Shipped and Uninstalled (S&U) Process

Supplier shall provide Shipped & Uninstalled CTO Product and MES Product (“S&U”) support to Buyer
as outlined in the process below for shipping, controlling, and reuse of S&U that have been
returned to Buyer as S&U.

Shipped and Uninstalled (S&U):

a)   Will be returned to Buyer from Buyer’s business partners, locations and
customers, then shipped by Buyer to Supplier or Supplier’s subcontractor(s)

     b)   Buyer will confirm that S&U is un-used through an inspection process

     c)   Buyer will request an RMA from Supplier for S&U.

d)   Per the RMA, Buyer will deliver the S&U to Supplier or Supplier’s subcontractor(s) and
Supplier or Supplier’s subcontractor(s) will accept return of the S&U Product and credit
Buyer [**] for the S&U upon Supplier’s acceptance of the returned S&U product.

e)   Buyer shall pay Supplier a flat fee per order for each S&U that is returned to Supplier
or Supplier’s subcontractor(s) as an approved RMA, as outlined below. Each fee covers the
complete order per the original WA invoice price.

CTO (Plant) Orders: [**]

MES Orders:

     [**]

     [**]

Notwithstanding the foregoing, Supplier or Supplier’s subcontractor(s) shall have no obligation to
accept return of S&U if Supplier is no longer providing Buyer with CTO or MES Products for any
reason, including without limitation, termination of the Base Agreement or SOW or Buyer’s decision
to no longer have Supplier supply Buyer with CTO or MES Products and to move such function to a
third party or back to Buyer. Supplier or Supplier’s subcontractor(s) shall, at Buyer’s expense
and risk of loss, send any S&U Product received by Supplier or Supplier’s subcontractor(s) after
such time to a location which shall be designated by Buyer in writing. The return of S&U’s in any
given quarter is limited to [**] of the previous quarter’s spend.

In the event that a CTO Product represented as S&U by Buyer is believed by Supplier to be damaged
or used, Supplier will contact Buyer or Buyer’s designated representative for instructions to
return damaged or used product to Buyer. Product mutually agreed to be “used” cannot be
refurbished and returned to Buyer as new. Otherwise, S&U may be considered new by Supplier and may
be used to fulfill future Buyer new WAs after any necessary re-testing and /or re-configuration.

4.9 Rework Orders

For Product that does not comply with the requirements of Section 4.8, Supplier or Supplier’s
subcontractor(s) shall rework unopened, unused returned Product per Buyer requirement in exchange
for a reasonable rework fee. Supplier will not be required to credit Buyer for these returns
outside the limitations of Section 4.8. Buyer will pay freight for such returns to Supplier and
return of Product to Buyer.

4.10 HVEC Hub Replenishment

4.10.1 Pull Definitions

“Pull Products” means Products specified in the Pull Product Profile per agreement of the Parties.

“Pull Product Profile” or “Pull Profile” or “MIRS Profile” means the agreed to Pull Products and
process including, but not limited to, Product Type, Part Number, Replenishment Lead-Time and
Packaging Specifications.

“Pull Purchase Order” or “Pro forma Purchase Order” or “PPO” means a blanket PO used for invoicing,
receiving and forecasting purposes and does not represent a firm offer by Buyer nor bind Buyer to
any quantity or delivery date.

“Upside Flexibility” means a percentage of Pull Products specified in the Pull Profile in excess of
the Planning Schedule Quantity.

“Buffer Inventory Replenishment Lead-time” means the time from Supplier’s receipt of Buyer’s
Planning Schedule for Supplier to replenish the Buffer Inventory.

“Planning Schedule” means Buyer’s forecast of requirements for Pull Products.

 

			
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“Pull Notification” or “Shipping Schedule” means Buyer’s only authorization (WA) for Supplier to deliver a specified quantity of Pull Products.

“Pull Notification Lead-Time” means the time from Supplier’s receipt of a Pull Notification to shipment of the Pull Products to Buyer’s location.

“Pull Program Inventory” means the minimum inventory for which Supplier is responsible to maintain, to satisfy Buyer’s quantities as specified in the Planning Schedule.

“Buffer Inventory” means the additional inventory that Supplier keeps as a safety inventory.

4.10.2 Planning

Buyer will issue a PPO to Supplier for all Pull Products. Buyer may issue a Planning Schedule at
intervals as specified in the Pull Profile, the most recent Planning Schedule to supersede all
previous Planning Schedules. The Planning Schedule provides a forecast of requirements for the
Pull Products and establishes Upside Flexibility, if any, with the Supplier.

4.10.3 Pull Delivery

Supplier will deliver to Buyer on the delivery date the Pull Products specified in the Pull
Notifications issued by Buyer, provided such Pull Notifications do not exceed the Planning Schedule
Quantity. To the extent practicable, Supplier will comply with Pull Notifications for quantities
of Pull Products in excess of the Planning Schedule Quantity, but at a minimum in accordance with
the Upside Flexibility.

4.10.4 Pull Limitation of Liability

Buyer makes no representation or warranty and assumes no liability regarding the quantity of Pull
Products that it will purchase.

4.10.5 End of Life Order

Pull Products for which Supplier has provided a written End of Life notice will be in accordance
with Section 2.8, “Notice of Product Withdrawal”.

4.10.6 Inventory

Supplier will maintain a minimum of [**] of inventory in the hubs based on Buyer’s Forecast.

5.0 DOCUMENTATION

“Documentation” shall mean the OEM Manual and the Users Guide that Supplier generally makes
available to its customers containing descriptive, operating, installation, engineering and
maintenance information for Products, as such documents may be amended from time to time and any
updates, modifications and enhancements made to them, during the term of this SOW.

Supplier shall provide Buyer with a master copy and one copy of all Documentation for each Product,
in both hardcopy format and electronic format, suitable for dissemination by Buyer. Solely in
conjunction with Buyer’s sale, installation, service and support of Products purchased under this
Agreement, Supplier grants Buyer a nonexclusive, royalty-free right and license to copy, use,
modify, translate and otherwise prepare derivative works of the Documentation and distribute the
Documentation and derivative works to its customers, provided that Buyer keep Supplier’s copyright
and other proprietary notices as may appear on such Documentation and refrain from doing anything
that would jeopardize Supplier’s proprietary and other rights in the Documentation. Should Buyer
require Supplier to make modifications to said Documentation, the cost will be at Buyer’s expense.

6.0 ENGINEERING CHANGES:

Engineering Changes shall not be applied to any Product under this Agreement unless implementation
is conducted in accordance with the following engineering process:

 

			
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Supplier Changes: Supplier will notify Buyer (through the Technical Coordinator) of any
engineering change that materially affects form, fit or function of the Product or any changes in
sourcing or critical component suppliers. Notification will be in the form of a monthly 30, 60, 90
day report and will supply Buyer with a written description of the anticipated effect the
engineering change will have on the Product, including price (savings), performance, reliability,
serviceability, manufacturability and any cost impact to Buyer as a result of the implementation of
the engineering change. For material changes that affect form, fit or function, Buyer has the
right to approve or disapprove of such engineering changes, which approval shall not be
unreasonably withheld. Buyer may elect to evaluate and test the prototype, parts and/or designs
specified as part of the proposed change and Supplier shall provide such parts to Buyer at no
charge for such evaluation and testing. Buyer (through the Technical Coordinator) shall approve or
disapprove Supplier proposed changes within thirty (30) days of receipt of a written request,
except for changes required to satisfy governmental standards or safety for which Buyer shall
respond within five (5) business days, unless extended by mutual consent. Failure to respond
within the applicable timeframe shall be deemed to be Buyer’s acceptance of such proposed change.
If such change affects price, the Buyer Business Coordinator must also provide approval. If Buyer
approves the engineering change, the Product Specification and unit pricing will be amended as
required. Buyer will not unreasonably refuse to approve Supplier’s engineering changes into the
Product.

Buyer Changes: Buyer may request in writing (through the Technical Coordinator) that
Supplier incorporate an engineering change into the Product. Such request will include a
description of the proposed change sufficient to permit Supplier to evaluate its feasibility.
Within thirty (30) days of such request (or extended by mutual consent), Supplier will advise Buyer
of the conditions under which it would make the engineering change. Supplier’s evaluation will be
in writing and will state the increase or decrease price adjustment (if any) and the effect on the
performance, reliability, safety, appearance, dimensions, tolerances, manufacturability and
serviceability of the Product. Buyer’s Technical Coordinator shall approve or disapprove the
engineering change based on Supplier’s written evaluation. If such change affects price, the
Buyer’s Business Coordinator must provide approval prior to implementation. If Buyer approves the
engineering change, the Product Specification and unit pricing will be amended as required.
Supplier will not unreasonably refuse to incorporate Buyer’s engineering changes into the Product.

In the event a change/improvement initiated by either party shall result in a cost decrease, it is
understood and agreed the parties shall mutually agree to a price decrease effective immediately
upon complete implementation of such change/improvement.

7.0 DISASTER RECOVERY PLAN

Supplier shall maintain throughout the term of this SOW a formal disaster recovery plan which
covers Supplier’s ability to continue Product shipment and maintain contracted commitments in the
event of a disaster.

8.0 MANUFACTURING RIGHTS:

8.1 Cessation of Product Business:

If, during the term of this Agreement:

	A)	 	Supplier (or its contracted manufacturer) ceases engineering, manufacturing or assembling
services (except as expressly provided in Section 2.8 of this Agreement) contracted for
hereunder; or
	 
	B)	 	An assignment is made of Supplier’s business for the benefit of creditors; or

	 
	C)	 	A petition in bankruptcy is filed by or against Supplier; or
	 
	D)	 	A receiver or trustee in bankruptcy or a similar officer is appointed to take charge of all
or part of Supplier’s property under bankruptcy law or corporate reorganization law; or
	 
	E)	 	Supplier is adjudicated a bankrupt; or
	 
	F)	 	Supplier shall be dissolved or liquidated or have a petition for dissolution or liquidation
filed with respect to it

(Each such event shall hereafter be referred to as a “Trigger Event”).

10

 

Buyer shall notify Supplier in writing if Buyer is aware or becomes aware of the occurrence of such
a Trigger Event, or Supplier shall notify Buyer in writing if Supplier is aware or becomes aware of
the occurrence of such a Trigger Event, and Supplier shall have thirty (30) days after the date of
such written notification or from the date of the occurrence of such a Trigger Event in which to
remedy such condition or conditions, or such longer period as is mutually agreed to by the parties
in writing (hereafter referred to as the “Cure Period”).

8.2 Election of Remedies by Buyer:

If Supplier is unable to remedy the Trigger Event during the Cure Period, within [**] after the end
of the Cure Period, Buyer shall select one of the following options to ensure an adequate supply of
Product: (i) exercise the right to manufacture (or have manufactured) Products pursuant to
Sections 8.3 through 8.6 inclusive, or (ii) purchase Product from third parties. If Buyer fails to
provide Supplier with written notice of such election within such [**] period, the parties agree
that Buyer will be deemed to have selected option (ii) of this Section 8.2.

8.3 Know-How Transfer:

If Buyer selects the right to manufacture (or have manufactured) pursuant to option (i) in Section
8.2 above, Supplier will promptly deliver to Buyer the following “Manufacturing Assistance Items”:
those tools, fixtures, microcode and equipment (over which Supplier has control) that were designed
and built for the manufacture and test of Products, if available for transfer; copies of
engineering drawings of parts, subassemblies and applicable packaging; copies of inspection,
assembly and test instructions; copies of test cases; copies of tooling prints and detailed part
production process documentation; and a list of Supplier’s suppliers and their addresses and
Supplier’s consent, where required, to the sale of such supplies to Buyer. These Manufacturing
Assistance Items are to be provided by Supplier in order to enable Buyer to make or have made
Products and/or Spare Parts. In addition, Supplier shall, upon Buyer’s request and payment by
Buyer of Supplier’s then-current standard rates therefore, provide such technical assistance as may
be reasonably requested to enable Buyer to make or have a third party make Products and/or Spare
Parts, subject to the reasonable availability of Supplier personnel. Nothing contained herein
shall obligate Supplier to disclose to Buyer any confidential information of a third party, the
disclosure of which requires permission of such third party, provided that Supplier agrees to use
commercially reasonable efforts to obtain such permission if such confidential information is
necessary for Buyer to make or have made Products and/or Spare Parts. All Manufacturing Assistance
Items and non-public information of any kind that is required to produce the Products and Spare
Parts, whether in written or oral form (“Supplier Confidential Information”) shall be deemed to be
confidential to Supplier and shall not be disclosed to any employee or agent without a need to know
such information to manufacture the Products and Spare Parts as authorized in Section 8.4 below,
both during the term of this SOW and thereafter. Buyer shall ensure that it has obtained or will
obtain from its employees and agents, and the employees and agents of its Subsidiaries and
authorized third parties, who will receive Supplier Confidential Information a written agreement to
hold such Supplier Confidential Information in confidence and to use the same care and discretion
to avoid disclosure of such information as Buyer uses with its own similar information which it
does not wish to disclose, but in no event less than commercially reasonable measures to protect
such information. All such Supplier Confidential Information shall be maintained in a locked
facility accessible only by authorized personnel.

8.4 Right to Manufacture:

If Buyer selects the right to manufacture (or have manufactured) pursuant to option (i) in Section
8.2 above, Supplier will grant to Buyer a non-exclusive, non-assignable, royalty-free, worldwide
license under all Supplier’s and Supplier’s Subsidiaries’ patents, copyrights, mask work rights,
and trade secrets and all related information, such license being sufficient to allow Buyer to use
the Manufacturing Assistance Items and other information provided by Supplier pursuant to
Subsection 8.3 above (the “Manufacturing Know-How”) and to make, have made, use lease and/or sell
Products, successor Products and/or Spare Parts, together with the right of Buyer to sublicense to
its Subsidiaries or a third party to make, have made, use, lease and/or sell Products, successor
Products and/or Spare Parts, subject to the limitation set forth in Section 8.5 below (“Limited
Manufacturing License”). Unless earlier terminated as set forth in Section 8.5 below, except with
respect to existing Products or Spare Parts that are being manufactured on or after such time and
except as specified in the next sentence, Supplier acknowledges and agrees that the Limited
Manufacturing License granted under this Section 8.4 shall immediately terminate upon termination
of this SOW. Notwithstanding the foregoing, as to successor Products, Supplier agrees that
provided Buyer has used commercially reasonable efforts to discontinue the use of Supplier’s
Confidential Information after

 

			
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the termination of the Limited Manufacturing License, Supplier
hereby grants to Buyer an immunity from suit with respect to the usage of any Supplier Confidential Information that has been mentally retained in
the unaided memory of the employees and agents of Buyer, its subsidiaries and any third parties
authorized by Buyer and its Subsidiaries.

8.5 Termination of Manufacturing Rights:

If Buyer selects the right to manufacture (or have manufactured) pursuant to option (i) in Section
8.2 above, and, during the term of Limited Manufacturing License, begins to make substantial volume
purchases of any similar Ethernet Products from any third party, the parties agree that the Limited
Manufacturing License granted to Buyer under Section 8.4 shall terminate effective [**] after the
commencement of any such substantial volume purchases. Upon any termination of the Limited
Manufacturing License, Buyer shall use commercially reasonable efforts to return to Supplier or
destroy all Supplier Confidential Information to Supplier, retaining no copies in any tangible form
or medium, and provide to Supplier a certificate from a Buyer executive attesting to such fact.

8.6 Cancellation of Purchase Order(s) (WAs) under Section 8, Manufacturing Rights:

Upon the date of transfer of “Manufacturing Assistance Items” under Section 8.3 above, any WAs of
Buyer for Products issued by Buyer on or after the date of any of the Trigger Events, may be
canceled by Buyer by a written notice to Supplier, and Buyer will have no further obligations
thereunder except Buyer’s obligations in connection with acceptable Products already delivered
prior to such cancellation, including but not limited to, payment obligations for such delivered
Products, unless otherwise agreed to by the parties.

9.0 SUPPLIER SERVICES

9.1 Professional Services: Unless otherwise specified by a customer, for Ethernet engagements
involving the sale of Supplier Ethernet Products that require relevant services including
installation, design, implementation, and consulting, including leased-based, onsite engineers
(collectively, “ Professional Services”), and where Buyer’s Services organizations do not have the
capability to source the resource for these services from within Buyer’s organization or its
established vendors, Supplier shall be the preferred subcontractor to Buyer. Any Professional
Services purchased by Buyer will be set forth in a separate statement of work for such engagement
and shall be provided in accordance with the terms and conditions of the existing Brocade/IBM
International Master Agreement for Subcontracting # [**].

9.2 Product Repair— Field Failures: Supplier shall use commercially reasonably efforts to
comply with the requirements set forth in the Certified Service Part (CSP) document on file with
Buyer and Supplier, CSP Specification PN: 22R0129; EC: H83590A, as updated, outlining the Buyer
requirements of Supplier to bring a field returned, used Product to a level that qualifies the
Product as a CSP. Supplier agrees to repair and/or upgrade field returned, used Products in
accordance with this CSP document.

9.3 Post Warranty Services

9.3.1 Definitions:

"Backline Support” refers to the escalation point for Frontline Support, for issues that
cannot reasonably be resolved by Frontline Support, such as complicated installation or
configuration issues, compatibility issues, complicated problem isolation and troubleshooting, and
escalation of verified bugs to engineering. Backline Support is provided through telephone and
e-mail support during normal Supplier business hours and after-hours support for Severity 1
problems. For more details, please refer to Supplier’s Service Plan Policies Document
http://www.brocade.com/support/service_policies.jsp

"End of Life” or “EOL” means the date and process by which Supplier discontinues the manufacture of
a product as set forth in 2.8.

“End of Service” or “EOS” means date when Buyer officially discontinues Customer service and
support for a Product. EOS dates are only addressed for the purposes of defining the date through
which Supplier will make

 

			
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Repair Services available for Products, and do not affect Supplier’s
obligations with respect to FRU or other Product availability.”

“Frontline Support” includes the initial direct contact with the end-user, call logging,
entitlement verification, problem definition and isolation, determination of whether a solution is
contained in the end user documentation, review of symptoms in the Supplier Knowledge Base for
known resolutions, problem escalation to Supplier, and closing the case with the end user after
problem resolution.

“Field Replaceable Unit” or “FRU” means a Product, Product component, Product subassembly, Product
documentation, Product code, or other Product part used to service a Customer system as described
in the Product written specifications.

“Maintenance” — Maintenance Release Version is always a number. It is used to indicate a
scheduled (date driven) release of defect fixes and carefully selected RFEs (Requests for
Enhancements).

“Major Release” — Major Release is always indicated by a number. (Example: 3.6.00c  — The first
two numbers (3.6) indicate a major release.) It is used for introducing major features and/or
major hardware architectural changes or introductions.

“Minor Release” — Minor Release is always indicated by a number. (Example: 3.6.00c  — The second
set of numbers (.00) to the right of the decimal point indicate a minor release.) It is used for
introducing a carefully selected set of minor features, within the major release train, that have
minor impact on the code, and/or sometimes for introducing support for a minor hardware enhancement
— e.g., a new line card for a chassis.

“Patch Release” — Patch release is always indicated by a letter. It is used only to identify
fixes

“Post Warranty Products” means Products for which the original warranty period has expired.

“Product_version_code (string designator)” — the product code name that will be used. To avoid
potential issues, all products will be named with lowercase.

“Software Maintenance” refers to the provision to Buyer by Supplier of certain software updates at
no additional charge (beyond any charges for Support and Maintenance” during the Software
Maintenance period). Maintenance and Patch releases are generally included with Software
Maintenance. Platform and Feature releases generally are not included with Software Maintenance.

“Support and Maintenance” or “Software Maintenance and Support” mean Backline Support and Software
Maintenance.

“Turn Around Time” or “TAT” means the elapsed time from Products arriving at Supplier to
shipment date back to Buyer.

9.3.2 Availability: Supplier will maintain the capability to supply spare parts of Products
(“Spare Parts”) for a period of [**] of such Products as specified herein. Supplier may assign its
rights to warranty replacement Spare Parts or EOL Spare Parts to a Buyer approved third party.
Buyer will have no obligation to have any Products repaired by Supplier.

9.3.3 Pricing: Post Warranty repair (OOW) pricing is set forth in Attachment A, which shall not be
greater than [**] of the then current FRU price. In the event Supplier determines, in good faith,
that a Product returned for repair is unrepairable, Buyer may purchase a replacement FRU at the
then-current FRU price. All other FRUs that are not listed in Attachment A, “Products and
Pricing”, have been determined by Supplier to be non-repairable. Any change in this unit price
shall be as mutually agreed upon by the Parties.

 

			
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9.3.4 Planning: Buyer may periodically issue non-binding forecasts for post warranty repair
service. The Supplier will implement an auditable process for Products sent to the Supplier for
repair and Supplier will inform Buyer of receipt of Products from Buyer. Supplier will use
commercially reasonable efforts to achieve a maximum Repair Yield and will inform Buyer if it is
unable to achieve the Yield.

9.3.5 Packaging and Delivery: The Products will be individually packaged and labeled according to
Buyer specification GA-21-9261-11, unless otherwise agreed to. Packaging may be reused only with
Buyer’s written authorization. The terms of delivery for Products will be as stated under Section
2.5 (Delivery) and Supplier will notify Buyer of discrepancies between the shipping documents and
received Products. The TAT for Serviced Products will not be more than [**] after receipt of said
Products, unless specified otherwise. Supplier will use commercially reasonable efforts to reduce
the TAT days and make adjustment to Buyer accordingly.

9.3.6 Materials: All Products and associated spares, including scrap materials, will be returned
to the owning affiliate as specified in the relevant WA. Buyer may request a quarterly inventory
report of AFR Products and associated spares or may designate a third party to conduct such
activity. All consigned materials supplied on a consigned basis will remain property of Buyer and
Supplier will provide a quarterly inventory report of such materials. Supplier will use all parts
supplied by Buyer solely for the performance of this Agreement unless otherwise agreed.

9.3.7 Repair Warranty: For a period of [**] or the remainder of the original warranty period for
the Product, whichever is longer, from the date a repaired Product is Delivered to Buyer, Supplier
will repair or replace Products, at Supplier’s discretion, without charge if the Product fails to
conform to the specifications specified in Supplier’s web site. The warranty period for repaired
Post Warranty Products will be determined based on the out of warranty repair price listed in
Attachment A, “Products and Pricing”.

9.3.8 Product Support: Supplier will continue to provide technical support as defined in Section
9.4, for [**] after the termination of SOW 8 or [**] after the last ship date as indicated on an
End of Life notice provided by Supplier pursuant to Section 2.8, whichever is earlier.

9.4 Technical Support — Technical Support services include Level 1, Level 2, Level 3 and Level 4
responsibilities defined below, for Product, documentation and Maintenance and Minor Releases
arising out of technical support responsibilities, and all such releases created or made available
by Supplier. These Services are provided at no incremental charge to Buyer beyond the initial
transfer price of the Product. [**]

9.4.1. Level 1

Buyer will perform the following Level 1 support responsibilities:

	 	•	 	Create the Problem Management Record (“PMR”);
	 
	 	•	 	Obtain from Customer a description of the Problem);
	 
	 	•	 	Search for any known resolution(s) relevant to the Problem;
	 
	 	•	 	If a resolution to the Problem is known, specify such resolution to Customer;
	 
	 	•	 	Pass the PMR to Level 2, and update the PMR documenting Level 1 actions.

9.4.2 Level 2

Supplier will assist Buyer as required by Buyer for non-Severity 1 and Severity 2 issues, in
performing the following Level 2 support responsibilities:

	 	•	 	Receive the PMR from Level 1;
	 
	 	•	 	Analyze Problem symptoms and gather additional data from Customer as required;
	 
	 	•	 	Recreate Problem on the Developer Test System;
	 
	 	•	 	Determine if Problem is due to improper installation of the Product by Customer;
	 
	 	•	 	Determine if Problem is due to operationally related hardware or software at the
Customer’s location;
	 
	 	•	 	Attempt a bypass or circumvention for high impact Problems (i.e., Severity 1 and 2);
	 
	 	•	 	Update the PMR documenting Level 2 actions.

 

			
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Buyer will [**]. This [**] will be [**] of the [**]. After [**] will [**]. The objective is [**]
the [**] and [**]. Buyer and Supplier will [**]. Buyer and Supplier will [**], as required, [**].

9.4.3 Level 3

Supplier will provide Level 3 support during normal Business Hours, and will make commercially
reasonable efforts to have Level 3 support on call twenty-four (24) hours per day, seven (7) days
per week, 365 days per year;

	 	•	 	Receive the PMR number and supporting documentation (including serial number and model
type) and materials from Level 2;
	 
	 	•	 	Analyze Problem symptoms and diagnose Problem;
	 
	 	•	 	Notify Level 2 if additional information, materials or documentation are required;
	 
	 	•	 	Attempt to recreate Problem on the Developer Test System;
	 
	 	•	 	Assist Level 2 in developing a bypass or circumvention for high impact Problem (i.e.,
Severity 1 and 2);
	 
	 	•	 	Deliver corrections to the Product and/or Product code to Buyer within the applicable
Correction Times to fix Problems identified by Buyer;
	 
	 	•	 	Confirm resolution of Problem with Customer, and document Level 3 actions through
regular communication; and
	 
	 	•	 	Answer Backline Support questions from Buyer and/or Customer concerning the operation
and use of Products.

9.4.4 Level 4

Supplier will provide Level 4 support to Buyer as the highest level of escalation support available
at no additional charge for Problems that result from Supplier root cause. Level 4 support shall
be available as required according to the severity of the Problem, and at Buyer’s and Supplier’s
agreed upon discretion. If mutually agreed, Supplier will provide off-shift Level 4 support if
Buyer indicates such support is required.

The Level 4 Support escalation process is required for complex Problems and will provide
engineering development assistance from Supplier. Level 4 Support includes but is not limited to
the Level 3 activities defined in Section 9.4.3 and the following reengineering activities:

	 	•	 	Analyzing and reproducing, as necessary, the reported defect to understand root cause;
	 
	 	•	 	Developing a fix or workaround for the reported defect;
	 
	 	•	 	Setting up the test bed of appropriate Supplier hardware and software versions to test
the defect fix;
	 
	 	•	 	Testing that the defect fix works with the other current Supplier products/release
levels that may be running at the affected customer site(s); and
	 
	 	•	 	Continually retesting that the defect fix still works with each new version of other
Supplier products/release levels that may be getting introduced at the affected customer
site(s).

Supplier root cause is defined as Problems resulting from defects in materials and workmanship
and/or errors in conforming to Product Specifications according to Section 1.1 “Specifications”
relating solely to hardware, firmware, and software at time of Product shipment or subsequent
releases as mutually agreed to by both parties according to Section 6.0 “Engineering Changes”.
Root cause will be demonstrated by test and problem determination analysis by Supplier.

If Buyer requires Level 4 Support for Problems that are demonstrated by Supplier through root cause
analysis not to result from Supplier root cause, Supplier will provide technical support to Buyer
at Supplier’s then-current Time & Materials rates, provided that no other Supplier customer
receives more favorable rates for similar services, and as mutually agreed to by the parties.

Supplier shall notify Buyer of a planned EOL announcement for any Supplier Product or Software [**]
before the published date or the date on which the Backline Support of Software is planned to be
transitioned to a third party company. Any consent by Buyer shall not relieve Supplier of any
obligations under this Agreement, including breach thereof by any such third party.

 

			
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15

 

9.4.5 Other Technical Support Responsibilities

Supplier will provide to Buyer the name and phone numbers of Supplier Personnel to contact for all
technical support matters related to the Product. Supplier will provide training listed in Section
9.4.6 to Buyer to enable Buyer to perform technical support functions for the Product and will keep
Buyer informed of any known Problems and their associated solutions. Supplier shall contact Buyer
directly in the event Buyer Customers contact Supplier for Product support services. No other
support shall be provided unless directed by Buyer for these Products.

9.4.6 Product Training

Supplier will provide product training, and at the scope and level of effort described below. This
training will be provided on either Supplier’s or Buyer’s premises and will include:

	 	•	 	In-depth Training for each product launch

	 	•	 	[**] and
	 
	 	•	 	Field sales and technical sales training for product launch

	 	•	 	[**].
	 
	 	•	 	On-going and future training opportunities for each of
the products covered in this SOW.

	 	•	 	[**];
	 
	 	•	 	[**];
	 
	 	•	 	[**];
	 
	 	•	 	[**]
	 
	 	•	 	[**].

9.4.7 Severity

Upon Buyer sending an incident report to Supplier, Buyer shall assign the incident report a
severity level in accordance with the severity level assigned to each defect or problem
(“collectively, “Problem”) in accordance with the table below. Due to varying complexity of
problems, the target defect resolution times listed in this section are goals, and not firm
deadlines.

	 	 	 	 	 	 	 
	Defect	 	 	 	 	 	 
	Severity	 	 	 	Service Objective	 	 
	Level	 	Definition	 	Response Time	 	Target Defect Resolution Time
	Severity 1

	 	Product or system
is not operational
and/or all data
inaccessible or
lost. Data flow
may be stopped or
errors that
significantly
impact Customer’s
operation. These
issues will be
regarded as having
a critical impact
to the end user’s
data. Supplier
support personnel
will require
continuous
availability of
Buyer contact until
resolution.
	 	Supplier will
provide Buyer with
an immediate
Response to its
initial request
after receiving
notification of
Problem from Buyer,
such Response time
not to exceed [**]
hours. For the
purpose of this
Agreement a
“Response” is
defined as a
telephone call or
e-mail with
appropriate and
required
information from
Supplier
acknowledging that
an incident report
has been received
and that an
appropriate
technical resource
has been assigned
and is available to
work with IBM
product field
engineering
support.
	 	Supplier will ensure
resources will be applied
continuously, around the
clock, with a goal of
providing a solution or
acceptable work-around
within [**] hrs. Supplier
will provide a formal
Problem summary and
resolution plan within [**]
days from the date of
Problem intake. Critical
Situations may require the
Customer, Supplier, and
Buyer to be at their
respective work locations or
available around the clock.
	 
	 	 	 	 	 	 
	Severity 2

	 	Product or system
is operational, but
has severely
restricted
functionality
and/or degradation
that end-user
regards as
impacting its
business.
	 	Supplier will
provide Buyer with
a Response to its
initial request
within [**] hours,
and during normal
Business Hours.
	 	Supplier resources will be
applied continuously, during
Supplier’s normal Business
Hours, until a solution or
work-around is developed.
Supplier will provide a
work-around, fix or patch or
resolve the defect in less
than [**] from the date of
Problem intake. If Supplier
provides a work-around, fix
or patch, the severity level
of the Problem will be
downgraded.

 

			
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16

 

	 	 	 	 	 	 	 
	Defect	 	 	 	 	 	 
	Severity	 	 	 	Service Objective	 	 
	Level	 	Definition	 	Response Time	 	Target Defect Resolution Time
	Severity 3

	 	Product or system
is operational with
functional
limitations or
restrictions that
end user does not
regard as critical
to its overall
operations.
	 	Supplier will
 provide Buyer with
a Response to its
initial request
within [**] hours,
and during normal
Business Hours.
	 	Supplier provides a
 work-around, fix, or patch
or resolve the defect in
less than [**] from the date
 of Problem intake. Supplier
resources will be applied on
an as available basis. If
Supplier provides a
work-around, fix or patch
the severity level of the
Problem may be downgraded.
	 
	 	 	 	 	 	 
	Severity 4

	 	Low or no impact
Problems or
questions
associated with
Product usage,
implementation,
performance or any
other inquiries.
	 	Supplier will
provide Buyer with
a Response to its
initial request,
within [**], and
during normal
Business Hours.
	 	Supplier will provide a
 work-around, fix, or patch
or resolve the defect in
less than [**] from the date
of Problem intake. Supplier
resources will be applied on
an as available basis. If
Supplier provides a
work-around, fix or patch
the severity level of the
Problem may be downgraded.

Buyer will use commercially reasonable efforts to resolve Severity Level 3 and 4 problems prior to
contacting Supplier for assistance.

Either Buyer or Supplier may require that a certain Problem be managed as a higher Severity Level
than as classified. If either party requires such higher Severity Level, then the Problem will be
managed as that higher Severity Level.

In the event Buyer and Supplier disagree on the severity level of a given defect, Buyer and
Supplier agree to promptly review defect reports related to potential Buyer-Customer impact. Buyer
agrees to provide data on failures, as available, with specific Buyer platforms, Customer captures,
re-configurations with test data and other information that may be needed to classify the defect
accurately.

9.4.8 Software Maintenance and Support Program

All Products purchased under this SOW shall be eligible for coverage under Seller’s annual Software
Maintenance and Support Program. Under the terms of this support program, Supplier shall provide
for a fee, Software Maintenance and Support for Products. [**]. After the expiration of the
Initial Coverage Period, subsequent Software Maintenance and Support shall be referenced as
“Post-contract Customer Support” “PCS.” Supplier will make PCS available for [**]. Software
Maintenance and Support (including PCS) is defined as the inclusion of product/software
upgrades/enhancements that significantly improve the marketability of the product, product
interoperability updates together with the Technical Support defined in section 9.4. Buyer will
make available to its customers the software upgrade feature options included in Attachment A.
Customers that purchase this feature shall be entitled to such software upgrades. [**].

Buyer may order for its customers PCS at the prices listed on Attachment A. Customers will have
the option to purchase incremental PCS at either the time of initial purchase of the Product, or as
a renewal agreement after the Initial Period.

PCS will be sold to Buyer’s customer base as a part option or Feature Code. A Supplier part number
will be linked to each of the Buyer’s feature codes.

 

			
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17

 

9.5 Sales Training: Supplier agrees to provide Buyer all current marketing and sales training
materials for the Products. Supplier agrees to actively assist in the marketing and sales training
of a reasonable number of Buyer personnel, such quantity to be mutually agreed to.

Technical training requested by Buyer will be made available by Supplier at its San Jose facility
at Supplier’s standard rates, as accepted and agreed to by Buyer. However, in the case of new
Products added to this SOW #8, Supplier shall provide mutually agreed upon presales training to
Buyer to support new Products at a mutually agreed upon time, date and location. Each party shall
be responsible for all costs associated with the attendance of such training by such party’s
personnel. Buyer acknowledges that the materials distributed by the Supplier during the technical
training are protected by copyright, and that the Buyer shall have no rights to reproduce such
materials without the prior written consent of Supplier.

9.6 Cessation of Post-Warranty Service:

Should Supplier fail to provide post-warranty services as specified in Section 9.3, in paragraphs
titled Availability and Product Support or, during the term of this SOW, technical support as
specified in Section 9.4 with respect to a Product that has been withdrawn as specified in this
SOW, then Buyer shall notify Supplier if Buyer becomes aware of such occurrence and Supplier shall
have [**] after the date of Buyer’s notification in which to remedy such condition or conditions,
or such longer period mutually agreed by the parties in writing. If an applicable failure by
Supplier to provide services to Buyer is not remedied as specified in the preceding sentence, then
Buyer may, upon written notice to Supplier, obtain from Supplier Manufacturing Assistance Items
required to make or have made Spare Parts and to provide warranty and technical support services
solely: (i) for the affected Product, (ii) under the terms of the Limited Manufacturing License set
forth above in Section 8.4, and (iii) for the remainder of the five (5) year period specified in
Section 9.3.2, “Availability and Product Support”. Notwithstanding the foregoing, the parties
agree that Supplier shall only be required to deliver to Buyer Supplier Confidential Information
and Manufacturing Assistance Items which are strictly required for the manufacture of the Spare
Parts and for Buyer’s provision of warranty and technical support services for the affected
Product, and that upon the termination of the Limited Manufacturing License with respect to such
items, Buyer shall use commercially reasonable efforts to return to Supplier or destroy all
Supplier Confidential Information, retaining no copies in any tangible form or medium, and provide
to Supplier a certificate from a Buyer executive attesting to such fact.

9.7 Field Replaceable Units (FRU) Emergency

9.7.1 Definition

“Code A-Alert Emergency Order” or “EO” means WA placed by Buyer with a leadtime from Supplier’s
receipt of the WA to the shipping date not to exceed [**].

9.7.2 Code A-Alert Order Placement

Supplier will provide Buyer with a [**] contact for Code A-Alert orders. This will be an out of
process band contact that Supplier will establish in addition to the formal order placed on
Supplier by Buyer. Buyer will notify Supplier via email/telephone upon Emergency Order (EO)
placement. Supplier will respond to all EO via email, EDI (or other electronic commerce approach)
and/or telephone, such EO to be confirmed by Buyer with a written WA mailed or electronically
transmitted to Supplier within two (2) calendar days of EO placement. Supplier will acknowledge EO
back to Buyer via email or telephone within the specified order confirmation time periods stated
below.

9.7.3 Code A-Alert Emergency Order Work Authorizations

WAs will include Buyer’s Purchase Order number, Buyer’s part number, part number description,
quantity, unit Price, order type (short lead time, in the event a short lead time order is placed,
are orders with requested Delivery Dates in less than the agreed to Lead Time), Delivery Date and
ship to address.

9.7.4 Code A-Alert Emergency Order Shipments

Supplier will drive commercially reasonable efforts to secure parts associated with Code A Alert
orders on an expedited basis. These efforts will include response and capabilities according to
currently agreed to provisions [**]. These efforts will include utilizing current Brocade supplier
contacts to drive earliest possible product

 

			
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Confidential treatment has been requested with respect to the omitted portions.

18

 

shipment on a case by case basis within the bounds of
what can be driven by Brocade’s supply chain on an expedited basis.

9.7.5 Code A-Alert Emergency Order Delivery and Cancellation

Supplier will deliver EOs directly to the address specified in the WA and in accordance with this
SOW. Code A-Alert Emergency Order(s) are non-cancelable; provided, however, Buyer may contact
Supplier anytime prior to time of shipment to make changes to the specified receiving location.

10.0 GOVERNANCE PROCESS/COMMUNICATIONS COORDINATORS

10.1 Governance Process

The Executive Sponsors and Business Coordinators shall meet on a quarterly basis to discuss the
objectives of the relationship, establish and track funding levels, and measure performance against
commitments defined in Attachment C, Initial Business Terms for Ethernet Networking Products. In
the event either Party requests escalation of an issue covered by this Agreement, the parties will
work first with the Business Coordinators listed below. If the issue cannot be resolved within 30
days, then the Business Coordinators will escalate such issue to the Executive Sponsors listed
below for discussion and resolution.

10.2 Communications Coordinators:

All communications between the parties will be carried out through the following designated
coordinators.

EXECUTIVE SPONSORS

	 	 	 	 	 	 	 
	 	 	 	 	FOR	 	 
	FOR SUPPLIER	 	 	 	BUYER	 	 
	 
	[**]

	 	[**]
	 	[**]
	 	[**]
	[**]

	 	[**]

[**]
	 	[**]
	 	[**]

[**]

[**]
	[**]

	 	[**]
	 	[**]
	 	[**]
	[**]

	 	[**]
	 	[**]
	 	[**]

BUSINESS COORDINATORS

	 	 	 	 	 	 	 
	FOR SUPPLIER	 	 	 	FOR BUYER	 	 
	 
	[**]

	 	[**]
	 	[**]
	 	[**]
	Address

	 	[**]

[**]
	 	Address
	 	[**]

[**]
	[**]

	 	[**]
	 	[**]
	 	[**]
	[**]

	 	[**]
	 	[**]
	 	[**]

TECHNICAL COORDINATORS

	 	 	 	 	 	 	 
	FOR SUPPLIER	 	 	 	FOR BUYER	 	 
	 
	[**]

	 	[**]
	 	[**]
	 	[**]
	Address

	 	[**]

[**]
	 	Address
	 	[**]

[**]
	[**]

	 	[**]
	 	[**]
	 	[**]
	[**]

	 	[**]
	 	[**]
	 	[**]

 

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

19

 

All legal notices will be sent to the following addresses and will be deemed received (a) two (2)
days after mailing if sent by certified mail, return receipt requested or (b) on the date
confirmation is received if sent by facsimile to the party set forth below:

LEGAL NOTICES

	 	 	 	 	 	 	 
	FOR SUPPLIER	 	 	 	FOR BUYER	 	 
	 
	[**]

	 	[**]

[**]
	 	[**]
	 	[**]
	Address

	 	[**]

[**]
	 	Address
	 	[**]

[**]

[**]
	[**]

	 	[**]
	 	[**]
	 	[**]
	[**]

	 	[**]
	 	[**]
	 	[**]

11.0 Hazardous Substance and Environmental Law Requirements

Supplier is responsible for understanding and complying with: (a) all applicable Buyer
specifications, whether referenced on the plans, in the Agreement or otherwise in a contract
document between Buyer and Supplier, and (b) all Environmental Laws applicable to Supplier that
restrict, regulate or otherwise govern Buyer’s direct or indirect import, export, sale or other
distribution of Supplier’s Products or Deliverables on a stand-alone basis, or as part of a buyer
server, storage, or retail store solution. “Environmental Laws” means those laws, rules and
regulations (local, state, provincial or federal) of the nations of the European Union, United
States, Canada, Brazil, Venezuela, Switzerland, Norway, South Africa, Israel, Egypt, Hong Kong,
Russia, China, Singapore, Taiwan, India, Korea and Australia that relate to environmental matters,
including without limitation material restrictions, material bans, product labeling, availability
of product environmental information, energy efficiency, end-of-life product take back, packaging,
batteries and other similar requirements. For example, Environmental Laws include without
limitation those laws of the European Union member states that implement Directive 2002/95/EC
regarding restriction of the use of certain hazardous substances in electrical and electronic
equipment. As requested by Buyer, Supplier shall provide evidence of compliance with the legal
requirements resulting from its obligations above by suitable means, and shall assist Buyer with
any reporting obligations related to Supplier’s Products or Deliverables on a stand-alone basis, or
as part of a buyer server, storage, or retail store solution. Supplier certifies that the
information and data provided in accordance with the foregoing, as well as any other information or
data provided in accordance with the applicable specifications is accurate, true, and complete.
Should supplier become aware of any conflict between the requirements of a Buyer specification
applicable to the Product or Deliverable and the Environmental Laws, Supplier shall notify Buyer in
writing of the conflict and Buyer shall inform Supplier which restriction controls.
Notwithstanding the foregoing, where Buyer is deemed the producer of supplier’s products or
deliverables under a European Union member state’s implementation of Directive 2002/96/EC on waste
electrical and electronic equipment, Buyer shall have responsibility as the producer under this law
unless it contracts with Supplier to perform some or all of the producer responsibilities.

11.1 Based on evaluation of the Specifications, Supplier takes except to the following provisions.

	11.1.1	 	Specification 46G3772

	 	•	 	Sec 2.1: Supplier will comply with the Maximum Concentration Value (MCV) limits
specified per the RoHS directive;
	 
	 	•	 	Sections 2.3.1 Supplier will report the approximate weight in grams for the
substance present in the part supplied to Buyer to be reported to Buyer;
	 
	 	•	 	Section 2.3.2 remove the requirement to report the approximate weight in grams for
the substance present in the part supplied to Buyer to be reported to Buyer; and
	 
	 	•	 	Section 2.4.2 Plastic Parts Marking in accordance with ISO 11469-05. Supplier does
not use any of the listed “Commonly Used Resins.

	11.1.2	 	Specification 53P6233

 

			
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20

 

	 	•	 	Section 2.3.2 Requirement for Printed Circuit Boards. Supplier will use Sn/Pb HASL
coated boards for all the products until conversion to a Pb-Free process; and
	 
	 	•	 	Section 2.3.4 Acceptable Uses of Leaded Solder. Supplier will continue to use
components with Sn/Pb solder- solder includes all materials that become part of the
final solder joint, including solder finishes on component leads or PCBs until such
time Sn/Pb solder can be eliminated from the Supplier’s products

12.0 SURVIVAL: Any provisions of this Agreement which by their nature extend beyond its
termination remain in effect until fulfilled, and apply to respective successors and assignees.

	 	 	 	 	 	 	 	 	 	 	 
	Accepted and Agreed To:	 	 	 	Accepted and Agreed To:	 	 
	International Business Machines Corporation	 	 	 	Brocade Communications Systems, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steve Peterson                                       4/1/09	 	 	 	By:	 	/s/ Ian Whiting                                           03/31/09	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Authorized Signature
                                        Date	 	Authorized Signature                                        Date  
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Steve Peterson	 	 	 	Ian Whiting	 	 
	 	 	 	 	 	 	 
	Type or Print Name	 	 	 	Type or Print Name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	GCM OFM Procurement	 	 	 	Sr. VP W.W. Sales	 	 
	 	 	 	 	 	 	 
	Title & Organization	 	 	 	Title & Organization	 	 
	Address:	 	 	 	Address: 1745 Technology Drive	 	 
	 

	 	 	 	 	 	 	 	         San Jose, CA 95110	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Accepted and Agreed To:	 	 
	 
	 	 	 	 	 	 	Brocade Communications Switzerland, SarL	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Kevin L. McKenna                              01 April 2009	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Authorized
Signature                                        Date  
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Kevin L. McKenna	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Type or Print Name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Director	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title & Organization	 	 

21

 

ATTACHMENT A

Products and Pricing

Excel File is attached hereto for Products and Pricing.

Pricing Files Removed for Confidentiality

22

 

ATTACHMENT B

SUPPLIER QUALITY ATTACHMENT

This Supplier Quality Attachment (“SQA”) adopts and incorporates by reference the terms and
conditions of SOW # 8 (“SOW”) and Goods Agreement #ROC-P-68 (“Agreement”) between Buyer and
Supplier.

1.0 INCORPORATION OF SQA DOCUMENTS

The SQA consists of this document, and applicable product specification documents and specifications.

2.0 QUALITY REQUIREMENTS

The requirements of this SQA shall constitute Supplier’s quality program which must be implemented
and maintained during the term of the SOW.

Supplier will set forth the yearly quality and reliability performance commitments for the current
year and through the remainder of the initial term of the SOW in a product quality report (“PQR”).
The PQR shall include the mutually agreed product monitoring plan to be used to validate the
effectiveness of process control limits and the Product meets the quality and reliability defined
in such PQR. It is Buyer’s expectation that Supplier will use e-business platforms (Web based
applications) for ongoing real time quality management, including but not limited to information
associated with Supplier Quality Management Systems (“SQMS”) and Product Change Notification
(“PCN”), etc. or as specified in the PQR.

3.0 ISO REQUIREMENTS

For ISO compliance, Supplier’s contracted manufacturer is ISO 9001* compliant (“Compliant”).

 

			
	*	 	Note: ISO 9001 & 9004 have been developed as a consistent pair of quality management system
standards. ISO 9001 is considered the standard by which the Supplier is expected to be compliant;
it is understood ISO 9004 provides a wider range of guidelines of objectives than ISO 9001,
particularly for the continuous improvement of an organization’s overall performance and
efficiency. ISO 9004 is recommended as a guide to assist those suppliers who wish to move beyond
the basic requirements of ISO 9001.

4.0 AUDITS

On a periodic basis, upon reasonable prior written notice, the Buyer or Buyer’s quality
representative shall conduct audits/visits at the Supplier’s and Supplier’s contract manufacturer’s
manufacturing locations. The Supplier shall, at Buyer’s request, permit access to the auditors to
manufacturing operations and/or inspection of Products for Buyer, including access to the contract
manufacturer’s facilities. Any such audit is subject to the contract manufacturer’s security
requirements and shall not allow access to contract manufacturer’s proprietary or confidential
information. Periodic audits shall include process control, quality inspection test data, internal
audit reports, and other information solely related to Products to verify compliance to the terms
of this SQA. Under normal circumstances, Supplier shall be given at least a two weeks advance
written notice by Buyer’s representatives of their intent to visit. Buyer’s inspection of Product
at the Supplier or contract manufacturer shall not relieve the Supplier’s responsibility to furnish
Product compliant with the applicable written specifications as set forth in the SOW. Any
Confidential Information exchanged in connection with the audit shall be handled in accordance with
Section 14.6 of the Goods Agreement ([**], dated April 15, 1999).

5.0 DOCUMENT CONTROL

Supplier shall use commercially reasonable efforts to ensure that all documents such as
software/firmware, engineering drawings, specifications, contracts, policies, procedures,
manufacturing process flow chart, and work instructions (including test procedures) are under
revision control and available to all necessary Supplier personnel in Supplier’s manufacturing
environment. Supplier shall have a system for the effective updating/removal of any obsolete
documentation from all manufacturing areas.

 

			
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23

 

6.0 RECORDS

Supplier shall establish and maintain procedures for identification, collection, indexing, filing,
storage, maintenance, and disposition of all quality records including, but not limited to:
Statistical Process Control (“SPC”) data. This includes raw data or control charts, Cp and Cpk for
critical/identified process parameters, and all records which provide evidence of sub-tier supplier
activity, such as source inspections and First Article inspections, and records of all inspection
and test activity to provide objective evidence that Products have passed acceptance criteria.
Records shall be maintained for the life of the SOW plus the entire warranty period, as set forth
in the SOW. All records shall be maintained in a central location and shall upon request be made
available to Buyer’s quality representative for review only. All such documents shall be deemed to
be the Confidential Information of Supplier.

7.0 CONTINUOUS IMPROVEMENT PROCESS

Supplier shall develop and implement a continuous improvement process that will provide for a
cost-effective reduction in process-related excursions. The program, at a minimum, shall include:
the supplier management strategy; manufacturing process controls (i.e., Maverick Product
Elimination); a documented, systematic approach for identifying focus areas for continuous
improvement for the [**], through the [**] of the SOW, or for [**] from the start of the SOW,
whichever is shorter; and Early Failure Rate, Intrinsic Failure Rate, Shipped Product Quality Level
and Failure Rate commitment and reduction plans to achieve Buyer goals. Supplier shall provide, at
Buyer’s request, status of the continuous improvement process and results.

8.0 QUALITY PROBLEM NOTIFICATION TO BUYER

Supplier must notify Buyer of any quality or reliability problem which may affect Products, that
have been identified by Supplier’s internal testing (i.e., process control data, internal test
data, burn-in data, etc.), by contract manufacturers which produce Products on behalf of Supplier,
or by another customer (see ISO 9001). In case of problems, Supplier shall use commercially
reasonable efforts to provide Buyer with the requested traceability data (p/n, lot number, date
code, volumes, ship to locations, etc.) within [**]. The notification should include an immediate
containment plan and a schedule for definition and implementation of permanent corrective actions.
After the notification there shall be no shipment of suspect Products to Buyer without prior
approval from Buyer’s quality representative.

9.0 PRODUCT RE-QUALIFICATION COSTS

Following Buyer qualification of the Product, Buyer reserves the right to re-qualify any product if
the Supplier changes the manufacturing process, product (form, fit or function), raw materials, or
specifications which may affect performance, function, quality or reliability. Supplier shall bear
the reasonable costs of any re-qualifications required for changes made without Buyer’s approval in
accordance with Section 6.0 of the SOW.

10. PART HISTORY

Supplier shall maintain a history file for each Product part number manufactured that tracks:
materials and/or design changes controlled by the supplier; design changes controlled by Buyer
(engineering changes, etc.); and purchased part manufacturer source changes.

11. PART QUALITY

Unless otherwise specifically agreed upon within the SOW, Supplier shall be responsible for the
quality levels of each of Supplier’s components that comprise the Product or final assembly.

12. CORRECTIVE ACTION PROCESS

Following a lot rejection by Buyer under Section 6.0 of the Goods Agreement, or a quality problem
notification under Section 8 of this SQA, Supplier shall implement a corrective action process
which shall provide documentation to identify the following: a) Specific defect description and
failure mechanism; b) Containment of affected Product; c) Technical investigation/root cause
analysis; d) Corrective action plan and preventive actions to preclude a recurrence, and; e)
Verification of effectiveness of actions. With the
exception of safety defects with respect to which Supplier shall provide a preliminary failure
analysis not to exceed [**]from receipt of suspected defective product, failure analysis response
times from Supplier will

 

			
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24

 

not exceed [**] from receipt of suspected defective product for preliminary analysis and fourteen
(14) days for detailed analysis. The corrective action process shall include a checkpoint to
determine if additional Products are exposed and the corrective action process and documentation
specified within this Section.

13. EXCEPTION APPROVAL PROCESS

Supplier shall not knowingly ship nonconforming Product to Buyer without written approval from
Buyer’s quality representative. In certain cases, Buyer’s quality representative may approve
shipment of suspected nonconforming Product if an evaluation plan pre-approved by the quality
representative is executed with results reasonably acceptable to the representative.

14. REVIEW AND DISPOSITION OF NONCONFORMING PRODUCTS

If Supplier intends to ship nonconforming Product to Buyer, then Supplier shall implement a
Material Review Board (“MRB”) to review and determine the disposition of nonconforming materials.
At a minimum, the MRB shall consist of representatives from Manufacturing, Engineering and Quality
Engineering. The Supplier’s process shall include the following dispositions: a) Rework — Product
reworked to meet specified requirements; b) Use As Is — No actions taken on Product, Product does
not meet specified requirements but is functional; c) Repaired — Product has been reworked to be
functional but does not meet specified requirements; d) Scrap — Product not useable and does not
meet specified requirements, or; e) Screen – Additional product test/inspection to meet
specification. Any plans to rework or repair nonconforming materials shall be subject to final
approval by Buyer’s quality representative, such approval not to be unreasonably withheld. Any
plans to use as-is must be pre-approved by Buyer’s quality representative. All MRB records shall be
maintained by Supplier and upon request, made available to Buyer for review. All MRB records shall
be deemed the Confidential Information of Supplier.

15. PRODUCT IDENTIFICATION AND LOT TRACEABILITY

Supplier shall establish and maintain procedures and processes for the identification and lot
traceability of critical components during all stages of production, delivery, and installation per
applicable ISO standards. Identification must be traceable through to the finished Product by
serial numbers or equivalent methods. Both forward and backward traceability shall be available.
Response time for traceability requests shall not exceed [**].

16. QUALITY REPORTING

Monthly executive summary reports in a format mutually agreed upon format shall be forwarded to
Buyer at a mutually agreeable time or as specified in specific PQRs. Continuous quality reporting
real time will be via SQMS or as specified in specific PQRs.

17. SUPPLIER QUALITY & RELIABILITY (“SQR”) REVIEW MEETINGS

Buyer requires regular Supplier quality/reliability meetings determined by a mutually agreeable
schedule, to increase visibility into product and field performance. The intent is to conduct
timely meetings in preparation for future business reviews/contractual negotiations. The agenda for
the meeting shall be as set forth in exhibit 1 unless otherwise mutually agreed by the parties.

18. APPLICABLE PRODUCT SPECIFICATIONS & TESTS

	 	a.	 	ISO 2859-1 (Sampling Procedures for Inspection by Attributes)
	 
	 	b.	 	ISO 3951 (Sampling Procedures for Inspection by Variables)

19. QUALITY MANAGEMENT

Quality issues will be managed according to the terms and conditions in the Agreement.

Supplier will develop and maintain a Supplier Quality Requirements Document (SQRD) as described or
required by Buyer. Buyer may amend the SQRD utilizing a Product Quality Addendum (PQA) containing
product-specific requirements, metrics, etc.

This document will cover, but is not limited to, the following:

	 	§	 	Supplier Quality Policy

 

			
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	 	§	 	Process definition and Flow Charts
	 
	 	§	 	Continuous Improvement
	 
	 	§	 	Change Management (Engineering and Process)
	 
	 	§	 	Sub- Supplier Management
	 
	 	§	 	Data Management
	 
	 	§	 	Operator Training and Certification
	 
	 	§	 	Supplier or Supplier’s subcontractor(s) will provide yield and inspection data to
Buyer on a monthly basis. Supplier and Buyer will establish periodic Quality
Meetings, such frequency to be determined by Buyer. Such meetings could include but
are not limited to those items listed below:

	 	o	 	Average Outgoing Quality
	 
	 	o	 	Field Returns
	 
	 	o	 	Ongoing Reliability Test
	 
	 	o	 	In Process Yields / Data Monitoring
	 
	 	o	 	Process Change Notification
	 
	 	o	 	Alerts / Stop Ship History and Actions

20. USE OF SUBCONTRACTORS

Supplier’s use of subcontractors will not relieve Supplier of the responsibility for the
subcontractor’s performance, and Supplier’s responsibilities assumed under this Agreement will be
equally applicable to such subcontractors, as must be agreed upon between Supplier and such
subcontractors. Buyer reserves the right to review both the Supplier’s management system for the
operations of its subcontractors and to review with Supplier, their subcontractor’s management
system for operations for the purposes of this Agreement. Buyer reserves the right to reject
Supplier’s use of a subcontractor in performance of this Agreement for any reason.

26

 

Attachment C

INITIAL BUSINESS TERMS

FOR ETHERNET NETWORKING PRODUCTS

	 	 	 	 	 
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ATTACHMENT D

Sales Assistance and Support

	1.	 	Marketing Approval
	 
	 	 	Under the terms of this Attachment, Buyer approves Supplier to perform certain sales and
support activities on Buyer’s behalf. If an End User requests, or if Supplier does not
fulfill Supplier’s responsibilities under the terms of this Attachment, the SOW or the
Agreement, Buyer may terminate in writing, its approval for Supplier to perform such
activities for such End User.

	2.	 	Sales Assistants

2.1 Supplier will provide, [**], the following described individuals as dedicated Sales
Assistance and Support personnel to support the sales of the Products and Services in the
identified geographies (“Sales Assistants”). Such Sales Assistants shall be exclusively
dedicated to the marketing, selling and distributing of Buyer branded Products and
Services, [**] substantially based on its performance in selling such Products and Services
and will be managed separately from Supplier’s staff that market and sell any Supplier or
third-party branded products or services. To the extent that Buyer discloses to the Sales
Assistants any information concerning Buyer’s [**], Supplier will ensure that such
individuals will not share or disclose such information to any other of Supplier’s
employees, representatives or agents responsible for the [**] of Supplier’s or other third
parties products or services [**] covered by this Attachment.

Each Sales Assistant will be assigned to support [**]. [**].

	 	•	 	[**]
	 
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[**]

	 	•	 	Reporting Structure:  [**]
	 
	 	•	 	[**].
	 
	 	•	 	[**].
	 
	 	•	 	[**].

 

			
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	3.	 	The Parties’ Relationship Under this Attachment
	 
	 	 	The parties agree that:

	 	a.	 	unless otherwise agreed to in writing by the parties, each party is
responsible for its own expenses regarding fulfillment of its responsibilities and
obligations under the terms of this Attachment;
	 
	 	b.	 	neither of party will assume or create any obligations on behalf of the other
or make any representations or warranties about the other, other than those
authorized;
	 
	 	c.	 	each party will comply with all applicable laws and regulations (such as
those governing consumer transactions); and
	 
	 	d.	 	Supplier and the entities within its Enterprise are allowed to store and use
Buyer’s contact information, including names, phone numbers and e-mail addresses,
anywhere Supplier does business. Such information will be processed and used solely
in connection with our business relationship through this Agreement, and may be
provided to contractors, resellers, and assignees of Supplier and entities within its
Enterprise for uses consistent with their collective business activities, including
communicating with Buyer (for example, for processing orders, for promotions and for
market research).
	 
	 	e.	 	Neither Supplier nor Buyer shall offer or make payments or gifts (monetary
or otherwise) to anyone for the purpose of wrongfully influencing decisions in favor
of Buyer, directly or indirectly

	4.	 	Supplier’s Responsibilities To Buyer
	 
	 	 	Supplier agrees:

	 	a.	 	[**]
	 
	 	b.	 	[**]
	 
	 	c.	 	[**]
	 
	 	d.	 	[**]
	 
	 	e.	 	[**]
	 
	 	f.	 	[**]
	 
	 	g.	 	[**]
	 
	 	h.	 	[**]
	 
	 	i.	 	to comply with the terms of the Code of Conduct set forth in URL:
http://www-200.ibm.com/partnerworld/pwhome.nsf/weblook/pub_join_memctr_agreement_code.html

	5.	 	Supplier’s Responsibilities To End Users

	 	5.1	 	Supplier agrees to perform [**]:
	 
	 	a.	 	[**]
	 
	 	b.	 	[**]

 

			
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	 	c.	 	[**]
	 
	 	d.	 	[**]
	 
	 	e.	 	[**]
	 
	 	f.	 	[**]
	 
	 	g.	 	[**].
	 
	 	5.2	 	Marketing to Public Sector End Users

[**].

	6.	 	Demonstration and Evaluation Products and Services

Supplier may acquire from Buyer Products and Services for demonstration and evaluation
purposes, unless Buyer specifies otherwise. Such Products and Services must be used
primarily in support of Supplier’s Sales Assistant activities.

	7.	 	Trademarks

Buyer will notify Supplier in writing of the applicable Buyer trademarks, logos and/or
emblems (“Buyer Marks”) Supplier is authorized to use. Buyer will provide Supplier with
written guidelines regarding the use of Buyer Marks, which Buyer may periodically modify.
Supplier may use the Buyer Marks only:

	 	a.	 	In association with Products and Services Buyer authorizes Supplier to
market; and
	 
	 	b.	 	as described in the written guidelines provided to Supplier.

Supplier agrees not to register or use any mark that is confusingly similar to any of the
Buyer’s Marks. Buyer’s Trademarks and any goodwill resulting from them, belong to Buyer.

	8.	 	Confidential Information

The following shall be considered Supplier’s Confidential Information under the terms and
conditions of CDA #[**] dated February 2, 1999 and any Supplements thereto which have been
signed or which may be signed in the future:

	 	a.	 	All information marks or otherwise states to be confidential;
	 
	 	b.	 	Any information Supplier identifies as “Confidential” on a Supplier website
or on Supplier’s systems; Buyer’s accessing of such information is considered Buyer’s
Agreement to accept it as confidential;
	 
	 	c.	 	Any of the following prepared or provided by Supplier:

	 	(1)	 	Sale leads;
	 
	 	(2)	 	Information regarding End Users;
	 
	 	(3)	 	Unannounced information about Products or Services;
	 
	 	(4)	 	Business plans; or
	 
	 	(5)	 	Market intelligence; and

	 	d.	 	Any of the following information Buyer provides to Supplier on Buyer’s
request:

	 	(1)	 	Reporting data;

 

			
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	 	(2)	 	Financial data;
	 
	 	(3)	 	The business plan;
	 
	 	(4)	 	Customer satisfaction data; or
	 
	 	(5)	 	Sales information.

	9.	 	Supplier and Supplier Personnel

Notwithstanding anything to the contrary in this Attachment, Supplier remains an
independent contractor and this Agreement does not create an agency, partnership or joint
venture relationship between Buyer and Supplier or Buyer and Supplier’s personnel. Buyer
assumes no liability or responsibility for Supplier Personnel. Supplier will: (i) ensure
it and Supplier Personnel are in compliance with all laws, regulations, ordinances and
licensing requirements; (ii) be responsible for the supervision, control, compensation,
withholdings, health and safety of Supplier’s personnel; (iii) ensure that Supplier
personnel performing Services on Buyer’s or Customer’s premises comply with On Premises
Guidelines set forth below; (iv) inform Buyer if a former employee of Buyer will be
assigned work under this Agreement, such assignment subject to Buyer’s approval; (v) be
solely responsible for training of Supplier personnel and for establishing and maintaining
records pertaining to such training which will be subject to audit by Buyer or as part of
an ISO audit; (vi) upon request, provide Buyer, for export evaluation purposes, the country
of citizenship and permanent residence and immigration status of assigned Supplier
personnel (Buyer retaining the right to refuse to accept the assignment of Buyer personnel
for export reasons); and (vii) Supplier personnel comply with Buyer’s Business Conduct
Guidelines.

	10.	 	On Premises Guidelines

Supplier will ensure that Supplier Personnel assigned to work on Buyer’s or Buyer’s
Customer’s premises will:

	 	(1)	 	to the extent permitted by local law, participate in a pre-assignment
criminal background check covering the regions in which the person was employed,
assigned or resided for the past seven years (or longer as required by local law)
        , and Supplier will only assign personnel who have not been convicted of any crime
or offense: (1) punishable as a felony or with a maximum term of imprisonment of
one year or more; or (2) involving an act of dishonesty, fraud, deceit or
misrepresentation or which involves conduct which would cause a reasonable person
to have substantial doubts about the individual’s honesty, fairness, respect for
the rights of others, or for the laws. In the event the background check is
completed after the assignment is made and the assignee fails the background
check, Supplier will not disclose any details of the background report to Buyer.
Instead, Supplier will inform Buyer that Supplier cannot be compliant with the
terms of this Agreement if the assignee remains with Buyer under the terms of this
Attachment
	 
	 	(2)	 	maintain a current and complete list of the persons’ names and social
security/employee identification numbers;
	 
	 	(3)	 	obtain from Buyer for each person a valid identification badge from
and ensure that it is displayed to gain access to and while on Buyer’s premises
(it is Buyer’s policy to deactivate such badges if not used for one month);
	 
	 	(4)	 	maintain a signed acknowledgment that each person will comply with
Buyer’s posted Safety and Security Guidelines;
	 
	 	(5)	 	ensure that each person with regular access to Buyer’s and Buyer’s
customer’s premises complies with all parking restrictions and with vehicle
registration requirements if any;

34

 

	 	(6)	 	at Buyer’s request, remove a person from Buyer’s or Buyer’s
customer’s premises and not reassign such person to work on Buyer’s or Buyer’s
customer’s premises (Buyer is not required to provide a reason for such request),
and
	 
	 	(7)	 	notify Buyer immediately upon completion or termination of any
assignment and return Buyer’s identification badge and any other items or
materials provided by Buyer (and upon request, provide documentation of compliance
with this requirement).

	11.	 	General Business Activity Restriction

Supplier will ensure that Supplier personnel assigned to work on Buyer’s or Buyer’s
customer’s premises:

	 	(1)	 	will not conduct any non-Buyer related business activities (such as
interviews, hirings, dismissals, or personnel solicitations);
	 
	 	(2)	 	will not conduct Supplier’s personnel training (except for training
relating to such employee’s assignment under this Attachment);
	 
	 	(3)	 	will not attempt to participate in Buyer or Buyer customer benefit
plans or activities;
	 
	 	(4)	 	will not send or receive non-Buyer related mail or e-mail through
Buyer or Buyer customer’s mail or e-mail systems; and
	 
	 	(5)	 	will not sell, advertise or market any products or distribute
printed, written or graphic materials on Buyer’s or Buyer’s customer’s premises
without Buyer’s written permission.

	12.	 	Buyer’s Safety and Security Guidelines

Supplier will ensure that Supplier personnel assigned to work on Buyer’s or Buyer’s
Customer’s premises:

	 	(1)	 	do not bring weapons of any kind onto Buyer’s or Buyer’s Customer’s
premises;
	 
	 	(2)	 	do not manufacture, sell, distribute, possess, use or be under the
influence of controlled substances (for nonmedical reasons) or alcoholic beverages
while on Buyer’s or Buyer’s Customer’s premises;
	 
	 	(3)	 	do not have in their possession hazardous materials of any kind on
Buyer’s or Buyer’s Customer’s premises without Buyer’s authorization;
	 
	 	(4)	 	acknowledge that all persons, property, and vehicles entering or
leaving Buyer’s or Buyer’s Customer’s premises are subject to search; and
	 
	 	(5)	 	remain in authorized areas only (limited to the work locations,
cafeterias, rest rooms and, in the event of a medical emergency, Buyer’s or
Buyer’s Customer’s medical facilities). Supplier will promptly notify Buyer of any
accident or security incidents involving loss of or misuse or damage to Buyer’s
intellectual or physical assets; physical altercations; assaults; or harassment
and provide Buyer with a copy of any accident or incident report involving the
above. Supplier must coordinate with Buyer or Customer access to Buyer’s or
Buyer’s Customer’s premises during non-regular working hours.

	13.	 	Asset Control

In the event Supplier Personnel has access to information, information assets, supplies or
other property, including property owned by third parties but provided to Supplier
personnel by Buyer (“Buyer Assets”), Supplier personnel:

35

 

	 	(1)	 	will not remove Buyer Assets from Buyer’s or Buyer’s Customer’s
premises without Buyer’s authorization;
	 
	 	(2)	 	will use Buyer Assets only for purposes of this Agreement and
reimburse Buyer for any unauthorized use;
	 
	 	(3)	 	will only connect with, interact with or use programs, tools or
routines that Buyer agrees are needed to provide Services;
	 
	 	(4)	 	will not share or disclose user identifiers, passwords, cipher keys
or computer dial port telephone numbers;
	 
	 	(5)	 	in the event the Buyer Assets are confidential, will not copy,
disclose or leave such assets unsecured or unattended. Buyer may periodically
audit Supplier’s data residing on Buyer Assets; and
	 
	 	(6)	 	will comply with Buyer’s Security and Use Guidelines for IBM
Employees..

	14.	 	Supervision of Supplier’s Personnel

Supplier will provide continual supervision of its personnel provided under this Agreement,
at no additional cost to Buyer. Supplier’s supervisor shall have full supervisory authority
over all day-to-day employment relationship decisions relating to Supplier’s personnel,
including those decisions relating to: wages, hours, terms and conditions of employment,
hiring, discipline, performance evaluations, termination, counseling and scheduling.
Supplier’s supervisors responsible for each work location will be responsible to know that
work location’s planned holiday (and other closing) schedules and the impacts all such
schedules have on Supplier’s personnel. Supplier will conduct orientation sessions with its
personnel before placement on an assignment with Buyer, during which orientation such
personnel will be told who their Supplier supervisor is and how that supervisor can be
contacted. Supplier will, from time to time, ensure that all of its personnel working under
this Agreement continue to be aware of this information.

	15.	 	Business Reviews

The parties will review issues relating to assignment of Sales Assistants at the quarterly
meetings contemplated in Attachment C.

36

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