Amendment Number 1
to
OEM Purchase and License Agreement
Between EMC Corporation and Brocade Communications, Inc.
OEM Agreement Number OEM 051208 Dated May 20,
2008
This Amendment
Number 1 (“the Amendment”) to the OEM Purchase and
License Agreement (the “Agreement”) dated May 20,
2008 BROCADE Communications Systems, Inc., a Delaware corporation
with an office located at 1745 Technology Drive, San Jose,
California 95110, and BROCADE Communications Switzerland SarL., a
Geneva corporation with principal offices at 29 Route de
l’Aeroport, Case Postale 105, CH-1215, Geneva 15,
Switzerland, and BROCADE Communications Services Switzerland,
SarL,, a Geneva corporation with principal offices at 29 Route de
l’Aeroport, Case Postale 105, CH-1215, Geneva 15, Switzerland
(collectively, “ BROCADE ”), and EMC
Corporation, 176 South Street, Hopkinton, MA 01748 together with
its designated Subsidiaries (“EMC”), and commences on
the date accepted and executed by BROCADE (“Effective
Date”).
WHEREAS , the parties wish to amend the Agreement so as
to define the Kanban Process as it relates to Brocade owned KanBans
to be placed within EMC designated warehouses;
NOW
THEREFORE, in consideration of the above and the other respective
promises of the parties set forth herein, the parties hereto agree
as follows:
1.0 Delete
Sections 7.4.1 through 7.4.5 of the Agreement in its entirety
and replace with the following Sections 7.4.1 through
7.4.5:
7.4 Purchase
Orders — Kanban Process
7.4.1 KanBan
Order Process. The KanBan
order, delivery and reschedule process (the “KanBan
Process”) established herein shall be in addition to and an
alternative to the Standard Process. EMC may order Products for
placement into a BROCADE Consignment KanBan (as defined below)
subject to issuance of Quarterly Purchase Orders and Release
Notices (each as defined below); in which case the procedures set
forth below shall apply. Notwithstanding anything herein to the
contrary, EMC may continue to order Products pursuant to the order
process in Section 7.3, provided that a sixty (60) day
(or less if agreed to by the parties) advance notification in
writing is provided to BROCADE.
(a) A “KanBan” shall be a supply of
Products in a fixed lot size as defined by EMC’s
“KanBan Calculator Report”. EMC may increase
BROCADE’s Consignment KanBan inventory level above the
quantities calculated by the KanBan Calculator Report solely as
required to fulfill EMC’s remaining current quarter material
requirements planning demand.
Such increases
will be made via False Pull Notices communicated to BROCADE. The
KanBan Calculator Report uses the following formula to determine
bin size: [1.5(LT)(ADD) + SS(ADD)] / EOQ, where
LT = Lead Time
which is made up of BROCADE process time plus Transit time. BROCADE
process time is defined as the time from when BROCADE receives the
replenishment notice until the time Product is on BROCADE dock to
be picked up by the carrier. Transit time is the time from carrier
pick up to delivery at EMC’s dock.
ADD = Average
Daily Demand is EMC’s quarterly demand quantity divided by 60
business days.
SS = Safety
Stock, a pre-determined number that EMC may decide to add.
Currently Safety Stock is .5. EMC agrees that the SS number will
not increase without BROCADE’s mutual consent.
EOQ = Economic
Order Quantity is determined by a specific calculation of pallet
size and shipping economies.)
Products to be
stocked in:
BROCADE
Consignment KanBan- BROCADE owned Products that are provided to EMC
for storage in one of the BROCADE Consignment KanBan Sites for the
purpose of on-demand fulfillment of EMC’s requirements for
Products. A “BROCADE Consignment KanBan Site” shall
mean the EMC designated warehouse locations identified in
Exhibit M.
(b) EMC will establish a quarterly purchase order
and BROCADE will deliver products as detailed in EMC’s KanBan
Calculator Report to the BROCADE Consignment KanBan sites within
one week of receipt of EMC’s written authorization to do so.
EMC will maintain a minimum of thirteen (13) weeks of purchase
order coverage. EMC will also issue a DSR which will include
EMC’s demand that will match EMC’s Purchase order
coverage. BROCADE will fill in its supply commitment and return the
DSR to EMC within two (2) Business Days. BROCADE will make
material available to support its supply commitment within the
KanBan replenishment lead times detailed in Paragraph 7.4.1(c)
below regardless of the quantity of products actually Pulled
through this KanBan Process. BROCADE will be measured on making
material available per EMC’s DSR demand and actual release
notice fulfillment lead times. EMC will communicate changes to its
demand via the DSR and update its purchase orders to match the DSR
within one (1) day of changes to the DSR demand. BROCADE will
respond to DSR demand changes within a maximum of two
(2) Business Days. BROCADE will provide weekly supply updates
via the DSR between 8pm ET Friday and 12:00 noon ET each Monday
that will include any changes to BROCADE’s supply commitments
and actual “make available” quantities from the
previous week. BROCADE will promptly communicate any changes in
supply commitments via the DSR. EMC’s liability is limited to
the following which shall supercede the cancellation terms set
forth in Section 7.3.3.2 above, when the parties are utilizing
the KanBan process:
[**] of
purchase price for Products located in BROCADE’s Consignment
KanBans and replenishment notices in process that do not exceed the
KanBan Calculator Report, which Products BROCADE is unable to
reallocate to another customer using commercially reasonable
efforts. EMC’s cancellation fee for such Products shall be
calculated using the purchase price in effect as of the date that
such Products were added to the BROCADE Consignment KanBan. BROCADE
will use commercially reasonable efforts to reallocate these
Products and EMC will not be charged a cancellation fee if BROCADE
is successful.
EMC purchase
liability is limited to 100% of EMC unique labels and manuals that
are beyond the BROCADE Consignment KanBan quantities and within
[**] calendar days of EMC’s purchase order delivery
date.
EMC has no
purchase liability beyond [**] calendar days of EMC’s
purchase
|
