revenues and profits

EX-10.81 7 f04919exv10w81.txt EXHIBIT 10.81 EXHIBIT 10.81 OEM PURCHASE AGREEMENT SECOND AMENDMENT This Second Amendment ("Amendment") effective as of the 25th day of October 2004 amends the OEM Purchase Agreement dated December 16, 2002 ("Agreement") by and between Hewlett-Packard Company a Delaware Corporation having a place of Business located at 20555 SH 249 Houston, Texas 77070, ("HP") and Brocade Communications Systems, Inc., a Delaware corporation having its principal place of business located at 1745 Technology Drive, San Jose, California 95110 ("Brocade"). RECITALS WHEREAS, HP and Brocade have entered into the Agreement pursuant to which HP agreed to purchase and Brocade agreed to sell OEM Products in accordance with the terms and conditions set forth therein; and WHEREAS, HP and Brocade desire to add an additional product to the Agreement pursuant to the attached Exhibit so that HP may offer such OEM Products for sale to HP customers. AGREEMENTS NOW THEREFOR, 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 Brocade agree as follows: 1. Definitions Terms used in this Amendment that are not defined herein shall have the same meaning given thereto in the Agreement. 2. Confirmation and Ratification Except as expressly amended herein, all unmodified and remaining terms and conditions of the Agreement shall remain in full force and effect. All capitalized terms not defined in this Amendment shall have the same meaning as set forth in the Agreement. In the event of a conflict between the Agreement and the Amendment, the terms of the Amendment shall govern. 3. Amendments HP and Brocade hereby agree that the Agreement is hereby amended to include the following items: Exhibit A-2-A is added to Exhibit A of the Agreement. Section 10 of Exhibit A-2-A is added to Exhibit C of the Agreement. The parties have caused this Amendment to be executed by their duly authorized representatives as indicated below. HEWLETT-PACKARD COMPANY BROCADE COMMUNICATIONS SYSTEMS, INC. By: /s/ RICHARD GENTILINI By: /s/ MICHAEL KLAYKO --------------------- ------------------ Name: RICHARD GENTILINI Name: MICHAEL KLAYKO Title: DIRECTOR, NSS PROCUREMENT Title: VP, WW SALES Date: 10-27-04 Date: OCTOBER 26, 2004 EXHIBIT A-2-A PRODUCT ADDENDUM HP CONFIGUATION SPECIFICATIONS (Product Addendum with [**] to be attached) - ---------- [**] 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. PRODUCT ADDENDUM A-2-A TO EXHIBIT A-2 OF OEM PURCHASE AGREEMENT This Product Addendum by and between Hewlett-Packard Company ("HP"), and Brocade Communications Systems, Inc. ("Brocade") is issued pursuant to Exhibit A-2 of the OEM Procurement Agreement between the parties dated December 16, 2002 ("Agreement") and is incorporated therein by reference. 1. SCOPE. This Product Addendum sets forth the work efforts between HP and Brocade for the Brocade SAN Switch for HP BladeSystem p-Class henceforth referred to as ("SAN Switch") that incorporates the functionality and commands as defined in HP's [**] (Attachment 1) [**]. 2. DEFINITIONS. Capitalized terms used but not defined herein shall have the meaning assigned to them in the OEM Agreement. The following definitions shall apply to this Product Addendum. 2.1 "General Availability" means, with respect to a particular product, the date on which the product is initially introduced into the stream of commerce for revenue by both companies. 2.2 "Milestone" means each of the various tasks to be accomplished by Brocade and HP as set forth in Section 5, Deliverables, Schedule and Milestones, below. 2.3 "Qualification Plan" means Qualification Plan for the SAN Switch. The Qualification Plan will be developed by the parties according to the timeline indicated in the [**] and based on the outline of Attachment 3 to the [**]. 2.4 "Specification" as referred to in this document means the [**]Brocade Technical Specification(s) for SAN Switch that may be updated from time to time. 2.5 [**], added hereto as Attachment 1 and shall include the [**]of the OEM Product. - ---------- [**] 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. HP/Brocade Confidential 3. PROJECT MANAGEMENT. Brocade and HP shall each assign a Project Manager who will act as the primary point of contact for purposes of this Product Addendum. The parties' Project Managers are: Brocade: HP: [**][**] [**] [**] [**] [**] [**] Each party may change their designated Project Manager by providing written notice to the other. 4. RESPONSIBILITIES. 4.1 Brocade shall: 4.1.1 Produce a fibre channel SAN Switch kit. 4.1.2 Modify existing revision of Brocade's fabric operating system software to operate with the SAN Switch in the environment as defined in the [**]. 4.1.3 [**]necessary components to develop and manufacture SAN Switch units. 4.1.4 Conduct appropriate qualifications before delivery as specified in the [**]. 4.1.5 Assemble and deliver the complete product solution. 4.2 HP shall: 4.2.1 [**] deliver requirements for the SAN Switch product. 4.2.2 [**]. 4.2.3 Assist Brocade in the identification [**] of parts and components to be used in the SAN Switch product. 4.2.4 Assist Brocade with technical issues related to BladeSystems products. 4.3 Both parties shall provide their respective deliverables to the other party in accordance with the Schedule and as further described in Section 5. 5. DELIVERABLES, SCHEDULE, AND MILESTONES. 5.1 Brocade Deliverables: 5.1.1 SAN Switch assembly kit as defined in the [**] - ---------- [**] 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. HP/Brocade Confidential 5.1.2 Prototype units and any additional deliverables as described in Attachment #2 to the [**]. 5.1.3 Other deliverables as specified in the [**]. 5.2 HP Deliverables: 5.2.1 Licensed Materials as specified in the MLA. 5.2.2 Deliverables as specified in the [**]. 5.3 Schedule and Milestones. The Schedule of Milestones ("Schedule"), target dates, and associated deliverables is set forth in the [**]. Brocade and HP understand and agree that adherence to the Schedule is a material term of this Product Addendum. The parties recognize that unforeseen factors may necessitate changes to the Schedule, and such changes will be made with the mutual agreement of the Project Managers for each party and executed in writing by the parties. 6. COMPATIBILITY REQUIREMENTS. Compatibility Requirements shall be defined [**]. 7. PERFORMANCE CRITERIA, ACCEPTANCE. 7.1 Acceptance testing shall commence as set forth in the [**], Schedule and Milestones. Acceptance testing shall be conducted in accordance with the procedures and criteria set forth in the Qualification Plan. The OEM Product shall be deemed accepted after successful completion of the acceptance testing and a determination by the parties that the OEM Product complies with the [**] requirements set forth in the [**] and the Qualification Plan. 7.2 In the event that the OEM Product fails to meet the acceptance criteria, Brocade agrees to make commercially reasonable changes to the OEM Product to correct identified errors or non-compliance. The corrected OEM Product shall be delivered within [**] after determination that the OEM Product has not been accepted, unless the parties mutually agree to a different time period. If Brocade fails to make such changes or perform such changes within the required time period, or the OEM - ---------- [**] 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. HP/Brocade Confidential Product still is not accepted, then HP may [**] written notice to Brocade. 8. INTELLECTUAL PROPERTY RIGHTS. 8.1 License Grants to HP. License Grants to HP related to the SAN Switch are described in Section 13 of the Agreement. 8.2 License Grant License grants made to Brocade by HP, pursuant to HP deliverables in the [**], (if any) shall be as provided in the Materials License Agreement with an effective date of August 29, 2004 and Transmittal #2 to the Materials License Agreement both of which shall be incorporated herein by reference. 9. FEES. 9.1 In the event HP cancels the program for any reason, HP agrees to pay Brocade cancellation fees [**], not to exceed $[**]. The calculation for determination of the fees is based on the [**]. Once a schedule has been provided to HP and a POR date has been agreed to, the [**] POR to GA will be divided in to [**] to establish the [**]. Fees will begin at [**] and [**], based on the [**]. No monies are due to Brocade should [**]. 10.0 COSTS. Production Costs Model Cost ----- ---- VL2 [**] Full Fabric [**] Power Pack [**] Note: The definitions for VL2, Full Fabric and Power Pack shall be as described in the [**]. These units include [**] and [**]described above. - ---------- [**] 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. HP/Brocade Confidential Cost of the [**] (estimated at approximately [**]), plus [**] of the [**] cost to [**], will be added to the Full Fabric and Power Pack models above. The [**]in all three models will be the currently HP-Brocade supported [**]without specialized branding (standard Brocade [**]stock). If in the event HP determines additional requirements are that HP labeled [**] must be used, HP agrees that Brocade will be able to source them via [**]at a cost of [**] or less, per [**]. If the cost to [**] is more than [**], HP agrees to accept increase to material cost that [**] Pre-Production Costs Qualification Units - [**] "Alpha" units provided by Brocade to HP at [**]. Any quantity in excess of [**]units will be provided per Attachment 2 of the [**]. 11.0 QOQ COST REDUCTIONS Shall be determined by the current process as described in the OEM Agreement dated December 2002. 12.0 WARRANTY, MAINTENANCE AND SUPPORT: Shall be as described in the current OEM Agreement as of December 2002. 13.0 TERM AND TERMINATION. 13.1 Term. The term of this Product Addendum shall commence on the Effective Date and shall continue in effect until HP General Availability, unless earlier terminated in accordance with Section 10 of the Master Agreement. 13.2 Effect of Termination. Unless this Product Addendum is terminated [**], all licenses granted to HP hereunder as of the date of such termination shall [**]this Product Addendum. Notwithstanding, Termination as defined in Section 24 of the OEM Agreement shall remain in effect and will apply to this Product Addendum. - ---------- [**] 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. HP/Brocade Confidential 14.0 SIGNATURES. The parties have caused this Product Addendum to be executed by their duly authorized representatives and made effective as of the date of the last signature below (the "Effective Date"). HEWLETT-PACKARD COMPANY BROCADE COMMUNICATIONS SYSTEMS, INC. By: /s/ RICHARD GENTILINI By: /s/ MICHAEL KLAYKO --------------------- ------------------ Name: RICHARD GENTILINI Name: MICHAEL KLAYKO Title: DIRECTOR, NSS PROCUREMENT Title: VP, WW SALES Date: 10-27-04 Date: OCTOBER 26, 2004 HP/Brocade Confidential ATTACHMENT 1 TO PRODUCT ADDENDUM NO. 1 TO OEM PURCHASE AGREEMENT [**] - ---------- [**] 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. HP/Brocade Confidential APPENDIX A QUALIFICATION PLAN HP/Brocade Confidential [**] - -------------- [**] This attachment to Exhibit 10.81 has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this attachment.