PURCHASE AGREEMENT

                                     BETWEEN

                      BROCADE COMMUNICATIONS SYSTEMS, INC.

                                       AND

                         SEQUENT COMPUTER SYSTEMS, INC.




CONTENTS                                                                   PAGE
                                                                         
1.      DEFINITIONS                                                          2
2.      SCOPE OF AGREEMENT                                                   2
3.      TERM AND TERMINATION                                                 3
4.      PRODUCT DOCUMENTATION AND TRAINING                                   3
5.      PRICE AND PAYMENT                                                    4
6.      FORECASTING                                                          5
7.      PURCHASE ORDERS                                                      5
8.      SHIPPING, DELIVERY AND PACKAGING                                     9
9.      INSPECTION AND ACCEPTANCE                                           10
10.     WARRANTY                                                            10
11.     [*]
12.     RETURN MATERIAL AUTHORIZATION                                       12
13.     MANDATORY CHANGES                                                   12
14.     SEQUENT REQUESTED CHANGES                                           13
15.     BROCADE REQUESTED CHANGES                                           14
16.     PRODUCT WITHDRAWAL                                                  15
17.     MEETINGS AND SUPPLIER PERFORMANCE                                   15
18.     REPORTS                                                             16
19.     MATERIAL MANAGEMENT                                                 16
20.     LIMITATION OF LIABILITY                                             16
21.     CONFIDENTIAL AND PROPRIETARY INFORMATION                            16
22.     INFRINGEMENT                                                        17
23.     INDEMNITY AND INSURANCE                                             18
24.     NOTICES                                                             19
25.     MISCELLANEOUS PROVISIONS                                            19
26.     ENTIRE AGREEMENT                                                    21

ATTACHMENTS

A       PRODUCT SPECIFICATION                                               23
B       PRODUCT AND PRODUCT SUPPORT PRICING                                 24
C       SUPPLIER QUALITY                                                    26
D       PRODUCT SUPPORT                                                     32
E       REPORTS                                                             38


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<PAGE>   2
                               PURCHASE AGREEMENT

                                     BETWEEN

                      BROCADE COMMUNICATIONS SYSTEMS, INC.

                                       AND

                         SEQUENT COMPUTER SYSTEMS, INC.

This Agreement, effective_______________("Effective Date"), is entered into by
and between Sequent Computer Systems, Inc. ("Sequent"), an Oregon corporation,
and Brocade Communications Systems, Inc. ("Brocade"), a California corporation.

Now, therefore, the parties agree as follows:

1.      DEFINITIONS

        1.1    "Product(s)" means the products described in Attachment A,
               Product Specification and any other product(s) added to this
               Agreement by mutual consent of the parties.

        1.2    "Product Documentation" means Brocade's assembly drawings, user
               manuals, diagnostic software documentation, operations manuals,
               and any other such materials required for the maintenance,
               operation, and use of the Products generally made available to
               customers. Upon mutual agreement between the parties, Brocade
               will provide additional documentation not generally made
               available to customers.

        1.3    "Product Support" means the type and level of support described
               in Attachment D, Product Support, subject to the provisions
               contained in this Agreement.

        1.4    "Field Replaceable Unit" ("FRU") means a component of the Product
               that will be used to replace or repair failed Product in the
               field.

2.      SCOPE OF AGREEMENT

        2.1    Brocade agrees to sell Products and Product Support to Sequent in
               accordance with the terms and conditions of this Agreement. This
               Agreement is non-exclusive and the parties may enter into similar
               agreements with other parties. The parties acknowledge that
               Sequent may sell the Products worldwide for use with Sequent's
               NUMA-Q and Symmetry product lines and other product lines as
               mutually agreed between the parties. Sequent shall not be
               obligated to purchase any Products or Product Support from
               Brocade hereunder.

        2.2    The parties acknowledge that this Agreement may be executed prior
               to complete qualification of the Product by Sequent.
               Qualification of the Product by Sequent and the Product meeting
               all Product specifications as required in Attachment A are
               conditions precedent to Sequent's willingness to purchase
               Products or Product Support under this Agreement.

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<PAGE>   3
3.      TERM AND TERMINATION

        3.1    Subject to the provisions of sub-Sections 3.2, 3.3, and 3.4,
               below, the term of this Agreement shall be for a period of [*]
               from the Effective Date.

        3.2    Sequent may terminate this Agreement at any time, without cause,
               by giving Brocade at least [*] prior written notice. Termination
               of the Agreement will not relieve the parties of any obligations
               incurred prior to the date of termination, including any Sequent
               liability for cancellations as described in sub-Section 7.7.

        3.3    Either party may immediately terminate this Agreement if the
               other party:

                (i)   becomes insolvent or bankrupt, files or has filed against
                      it a petition in bankruptcy and any proceeding under the
                      bankruptcy or insolvency laws is not dismissed within
                      thirty (30) calendar days, or undergoes a reorganization
                      pursuant to a petition in bankruptcy filed with respect to
                      it; or

                (ii)  has all or a substantial portion of its capital stock or
                      assets expropriated by any government; or

                (iii) is dissolved or liquidated, or has a petition for
                      dissolution or liquidation filed with respect to it; or

                (iv)  is subject to property attachment, court injunction, or
                      court order which substantially and negatively affects its
                      operations; or

                (v)   makes an assignment for the benefit of creditors.

        3.4    Either party may terminate this Agreement if the other party
               fails to perform any of its material obligations under the terms
               and conditions of this Agreement so as to be in default hereunder
               and fails to cure such default within [*] after receiving written
               notice thereof.

4.      PRODUCT DOCUMENTATION AND TRAINING

        4.1    Brocade shall provide Sequent with one (1) reproducible copy of
               the Product Documentation in the form of printed material,
               magnetic media, CD ROM, or electronic means as mutually agreed,
               at no charge to Sequent. Brocade reserves the right to change the
               content of the Product Documentation at any time. In the event
               that such Documentation is changed during the term of this
               Agreement, Brocade agrees, also at no charge, to promptly notify
               Sequent of revised Product Documentation and its availability on
               Brocade's web site. Additional copies of Product Documentation
               and changes thereto may be ordered by Sequent at Brocade's
               then-current price.

        4.2    Brocade hereby grants to Sequent without additional charge the
               right to reproduce any Product Documentation furnished under this
               Section together with an unconditional license to Sequent or each
               Sequent customer who purchases the Product to use the Product
               Documentation to maintain, use, or provide training on the
               Product purchased by such customer. Any reproduced

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<PAGE>   4
               copies of such Documentation shall contain legends and copyrights
               appearing on the copies of the Product Documentation which were
               furnished to Sequent.
   

        4.3    Brocade will provide one initial training course to a maximum of
               [*] Sequent employees at a time and location to be agreed upon
               between the parties. The training course and materials will be at
               no charge to Sequent. [*] for use in subsequent training. [*]
    

        4.4    Brocade will provide additional training to Sequent when Product
               changes are made that affect Product Support. [*]

        4.5    Sequent may request training courses in addition to those
               described in sub-Section 4.3 and 4.4, above, at Brocade's
               then-current charges.

5.      PRICE AND PAYMENT

   
        5.1    [*]
    

        5.2    [*]

   
        5.3    [*] 
    

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<PAGE>   5
   
        5.4    [*]
    

        5.5    Pricing does not include federal, state, or local excise, sales,
               or use taxes, except those taxes that are based on Brocade's
               income. If such taxes are applicable, they shall be set out as a
               separate line item on Brocade's invoice.

        5.6    Payment terms for all Products and Product Support shall be net
               [*] from the date of a correct invoice. Payment of an invoice
               shall not constitute or imply acceptance of the Product or
               Product Support or relieve Brocade of any obligations assumed
               under this Agreement, nor prevent Sequent from asserting any
               other rights it may have under this Agreement or at law or in
               equity.
   

        5.7    [*]

        5.8    [*]
    

6.      FORECASTING

        Sequent agrees to provide Brocade with twelve-month rolling forecasts of
        Sequent's estimated annual Product purchase requirements. These
        forecasts are good faith estimates only, and Sequent shall not be liable
        to Brocade for failure to purchase any of the forecasted Product.

7.      PURCHASE ORDERS

        7.1    Sequent's purchase orders shall be the sole basis for purchase of
               Product and Product Support under this Agreement. Designated
               Sequent procurement agents shall be the only persons authorized
               to issue purchase orders or changes to purchase orders. Purchase
               orders and change orders may be transmitted by mail, facsimile,
               or other methods approved by both parties. Purchase order numbers
               shall be referenced on all correspondence, invoicing, and packing
               slips relating to each order.

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        7.2    Purchase orders will specify: (i) Sequent's part numbers, (ii)
               Product description, (iii) Product revision level, (iv) quantity
               ordered, (v) shipping destination, and (vi) due-on-dock dates.
               Brocade shall acknowledge in writing its acceptance of such
               purchase orders within [*] from receipt of Sequent's purchase
               order.

        7.3    Sequent's part numbers and part number revision levels appearing
               on the purchase orders shall be considered the most recent. In
               the event that Brocade finds any discrepancy between the part or
               revision level numbers appearing on a purchase order and any
               other part or revision level numbers which Brocade believes are
               correct, Brocade shall obtain clarification from Sequent before
               shipment of the Product.

        7.4    Product lead-time shall be no greater than the lead times in the
               schedule below, from receipt of Sequent's purchase order until
               shipment by Brocade to Sequent's requested point of delivery.
               Brocade shall use best efforts to meet deliveries requested
               inside the Product lead-time. Brocade agrees to meet the Product
               lead-times according to the following schedule.

   


                      Time Period                      Lead Time (Calendar Days)
                      -----------                      -------------------------
                                                    
                      through 9/30/97                         [*] 

                      10/1/97-3/31/98                         [*] 

                       4/1/98-onward                          [*] 

    


        7.5    Upside Flexibility Model: Sequent shall have the right for any
               given purchase order on "unallocated Product" as that term is
               described below, to an increase in quantities in issued purchase
               orders as follows:




                      Number of Calendar Days
               Prior to Scheduled Due on Dock Date            Allowable Increase
                                                           
                                         
                                         
                         [*]                                         [*]%
                                         
                                                                     [*]%
                                
                                                                     [*]%
                                
                                                                     [*]%
                                
                                
                                         
                                      
                                                                     [*]%
                                      
                                                                     [*]%
                                      
                                                                     [*]%
                                      
                                                                     [*]%



               For the purposes of this sub-Section, "unallocated Product" shall
               mean a Product not on allocation; with allocation defined as
               Brocade's inability to meet the allowable increase in quantities
               provided above due to Product component or capacity constraint
               which is beyond the reasonable control of Brocade.

        7.6    Sequent shall have the right to reschedule delivery for [*] up to
               maximum of [*] out from the original scheduled due-on-dock date
               for all quantities not scheduled for delivery in Sequent's then-
               current fiscal quarter. For all reschedules of quantities
               scheduled


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<PAGE>   7


               for delivery in Sequent's then-current fiscal quarter, [*] of the
               monthly volume can be rescheduled up to [*] out into Sequent's
               next fiscal quarter. Sequent shall provide Brocade written notice
               of requested reschedules at least [*] prior to the scheduled
               due-on-dock date.

        7.7    This sub-Section governs cancellation of Product by Sequent.
               Sequent shall have the right to cancel delivery for any
               particular Product subject to the provisions of this sub-Section.

               7.7.1  Sequent cancellations of Product occurring in calendar
                      year 1997 are subject to the following cancellation
                      schedule and fees:

   


                                                                           
               [*]                                                                                       
                                                                              
                                                                              

    

               *      On cancellations occurring within 1 - 30 calendar days
                      from the due on dock date of the cancelled Product
                      cancellation fees will be;

                      [*] of the Product purchase price of the cancelled
                      Product, [*]

               **     On cancellations occurring within 31 - 60 calendar days
                      from the due on dock date of the cancelled Product;

                      Cancellation fees shall be based on [*] of the cancelled
                      Product purchase price.

               ***    On cancellations occurring greater than [*] calendar days
                      from the due on dock date of the cancelled Product;

                      [*]

               7.7.2  Cancellations occurring during calendar year 1998 through
                      the remainder of the term of the Agreement are subject to
                      the following cancellation schedule and fees:

   


           
    
              [*]                                                       

    


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                      [*]
    

               *      On cancellations occurring within 1 - 15 calendar days
                      from the due on dock date of the cancelled Product
                      cancellation fees will be;

                      [*] of the Product purchase price of the cancelled
                      Product, [*]

               **     On cancellations occurring within 16 - 30 calendar days
                      from the due on dock date of the cancelled Product;

                      Cancellation fees will be based on Brocade's [*] of the
                      cancelled Product purchase price.

               ***    On cancellations occurring within 31 - 60 calendar days
                      from the due on dock date of the cancelled Product;

                      Cancellation fees shall be based on [*] of the cancelled
                      Product purchase price.

               ****   On cancellations occurring greater than [*] calendar days
                      from the due on dock date of the cancelled Product;

                      [*]

               7.7.3  [*]

               7.7.4  Prior to any subsequent re-sale of a cancelled Product
                      Brocade may invoice Sequent for such Product, as of the
                      Product's due-on-dock date. Payment terms will be net
                      [*] from the date of a correct invoice. [*]

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8.      SHIPPING, DELIVERY, AND PACKAGING

        8.1    Brocade shall follow all instructions contained in Sequent's
               routing instructions, which Sequent will provide to Brocade.
               Sequent may modify its routing instructions from time to time and
               will provide Brocade with an updated version of any such modified
               instructions. Brocade shall be responsible for any freight
               charges incurred for Product shipped outside the routing
               instructions to include, but not be limited to, use of other than
               Sequent preferred carriers.

        8.2    Brocade will ship the Product so that delivery is made at
               Sequent's dock or a dock location designated by Sequent on the
               due-on-dock date specified in the purchase order, subject to
               Sequent's right to reschedule or cancel delivery as provided in
               sub-Sections 7.6 and 7.7, above. Brocade shall maintain a minimum
               on-time delivery performance of [*] to Sequent's requested
               due-on-dock dates. Deliveries will be considered on time if they
               are made no more than [*] earlier or [*] later than the
               due-on-dock date specified in the Sequent purchase order. Sequent
               may refuse to accept deliveries that are not on time. [*] If
               Sequent agrees to take partial shipments of any order, each such
               partial shipment shall be deemed a separate transaction. [*]

        8.3    If Brocade anticipates or becomes aware that it will not supply
               the Product on the due-on-dock delivery date acknowledged by
               Brocade for any reason, Brocade shall notify Sequent immediately
               after Brocade has knowledge of the situation. The notification
               may be communicated by facsimile, telephone, electronic mail, or
               any other method agreed to by the parties, provided that Brocade
               shall obtain Sequent's actual acknowledgment of the notice of
               anticipated delay. Brocade and Sequent will jointly develop
               alternatives to resolve any late delivery of the Product,
               including use of premium routing. Brocade will develop recovery
               plans with new committed due-on-dock dates and communicate such
               plans to Sequent within [*] of missed shipments. If Brocade is
               unable to deliver the Product on the acknowledged due-on-dock
               date, through no fault of Sequent, Sequent may require Brocade
               to use premium routing and ship the Product freight pre-paid
               at Brocade's expense.

        8.4    In the event of Product allocation due to circumstances beyond
               Brocade's reasonable control, Brocade shall [*] to supply the
               number of Products in Sequent's then current forecast covering
               the affected period of allocation, in no event less than the
               proportion of Sequent's percentage of Product on order to the
               total Product on order by all of Brocade's customers for the
               Product or similar Products.

        8.5    Except as provided otherwise in sub-sections 8.1 and 8.3, above,
               sub-section 13.2.1, below, and applicable provisions of
               Attachment D, [*] unless otherwise specified by Sequent's
               designated procurement agents.

        8.6    Each shipment of the Product by Brocade shall include a packing
               slip which contains at a minimum: (i) Brocade's name; (ii) box
               number (e.g., 1 of 3, 2 of 3); (iii) receiving address; (iv)
               Sequent's purchase order number; (v) Sequent's part


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<PAGE>   10
               number; (vi) revision level of Sequent's part number; (vii)
               Product serial number; (viii) shipping quantity; (ix) date of
               shipment; and (x) return material authorization ("RMA") number,
               when applicable.

        8.7    Unless requested otherwise by Sequent, all shipments to a single
               Sequent-designated location shipped on the same day shall be
               consolidated by Brocade into a single shipment.

        8.8    Brocade shall provide the following information about its Product
               in writing within two weeks of execution of the Agreement: (i)
               country of origin; (ii) NAFTA preference criteria; (iii)
               harmonized scheduled tariff classification number; and (iv)
               export commerce control number ("ECCN"). Brocade, at its expense,
               will prepare all international shipping documentation, including
               commercial invoice, NAFTA certificate, Shipper's Letter of
               Instruction, Shipper's Export Declaration, and any other
               necessary documentation, for international shipments upon request
               from Sequent, provided that the Product can be shipped to the
               requested destination under a General License under the U.S.
               Export Administration Regulations. If a validated or other
               specific prior license is required under the U.S. Export
               Administration Regulations, Brocade may request that the Product
               be exported by Sequent and that Sequent assume all responsibility
               for export licenses and other export documentation.

9.      INSPECTION AND ACCEPTANCE

        Inspection and acceptance of the Product by Sequent will be made within
        [*] after delivery. Failure to inspect and accept or reject the Product
        shall neither relieve Brocade from warranty responsibility or any
        applicable quality requirements, infringement, or Product liability as
        provided in this Agreement nor impose any liability on Sequent. Product
        not conforming to Product specifications may, at Sequent's option, be
        returned to Brocade at Brocade's expense for repair or replacement of
        the Product, [*] for any amounts previously paid by Sequent for the
        Product, or, if the foregoing remedies are insufficient, [*].

10.     WARRANTY

        Brocade warrants that all new Product delivered under this Agreement
        will for a period of [*] from the date of shipment of the Product by
        Brocade: (i) conform to and perform in accordance with the Product
        specifications identified in Attachment A, and to any drawings agreed
        upon by the parties or samples provided to and approved by Sequent; and
        (ii) be free from defects in materials and workmanship. This warranty
        shall survive inspection, test, acceptance, and payment. The warranties
        provided in this Section, referred to hereinafter as the Product
        Warranty, are in addition to any other remedies available at law or in
        equity, including the remedies set forth in Section 11, below.

11.     [*]

        11.1   In addition to the provisions of this Section, Brocade shall be
               subject to the requirements and expectations provided for in
               Attachment C.

        11.2   For the purposes of this Section, the following definitions
               apply.


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<PAGE>   11

               11.2.1 "Reimbursement" shall mean monetary compensation, no
                      charge replacement Product, unscheduled price reductions,
                      or some mutually agreed to combination thereof. Other
                      forms of Reimbursement may be identified by mutual
                      agreement on a case by case basis.

               11.2.2 The terms "Quality Failure," "Reliability Failure," "Red
                      Light," and "Purge" are defined in Attachment C.

        11.3   [*] Quality Failures, Reliability Failures, Red Lights, and
               Purges when the quality and/or reliability of the Product drops
               below the thresholds defined in this sub-Section.

               11.3.1 [*] will be [*] when any of the following events occur:

                       (i)   Brocade-confirmed Quality Failures in parts per
                             million ("PPM") exceed [*] the PPM
                             defined in Section 5 of Attachment C; or

                       (ii)  A Red Light or Purge is directly attributable to
                             Brocade's inability to meet the Product
                             specification or PPM thresholds described in this
                             sub-Section, or results from a safety violation.

               11.3.2 [*] when any of the following events occur:

                       (i)   Product mean time between failures ("MTBF") drops
                             below [*] of Brocade's predicted MTBF of [*] for a
                             16 port switch and [*] for an 8 port switch; or


                       (ii)  A Red Light or Purge is directly attributable to
                             Brocade's inability to meet the Product
                             specification or the MTBF thresholds described in
                             this sub-Section, or results from a safety
                             violation.
   
               11.3.3 [*] to Sequent will be based on accumulated performance
                      over a [*] rolling period. For instance:

                      [*]
    

               11.3.4 The parties will summarize and communicate quality and
                      reliability data to provide metrics needed to track
                      performance as provided in Section 7 of Attachment C.

        11.4   [*]
               

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                (ii)  [*]

                (iii) An "incident" as described in 11.4 (i) and 11.4 (ii) above
                      begins when a Quality Failure, Reliability Failure, Red
                      Light or Purge is directly attributable to Brocade's
                      inability to meet the Product specification or the
                      appropriate PPM or MTBF thresholds, as provided in this
                      Section 11, or results from a safety violation. An
                      "incident" ends when Brocade meets or exceeds the
                      deficient Product specification or PPM or MTBF threshold
                      or the safety violation has been fully resolved.

        11.5   [*] to Sequent under this Section shall be made by the parties at
               the end of each calendar year quarter and [*] Brocade to Sequent
               within [*] from the date of the accounting.

        11.6   Remedies in this Section are in addition to those outlined in
               Section 10, Warranty. Payment under this Section shall not
               relieve Brocade of any obligations assumed, nor prevent Sequent
               from asserting any other rights it may have, under this
               Agreement. Amounts paid pursuant to sub-Section 11.4 constitute
               all damages per incident for Quality Failures and/or
               Reliability Failures under this Agreement.

12.     RETURN MATERIAL AUTHORIZATION

        If Brocade requires an RMA to expedite the return of defective Product,
        Brocade shall provide a verbal RMA allowing immediate return of the
        Product and follow up with a written RMA within [*] from the date of
        giving the verbal RMA. Except for the need to obtain an RMA, Brocade
        shall not require prior approval for the return of Product from Sequent.

13.     MANDATORY CHANGES

        13.1   In the event that changes are required to make the Product
               conform to safety and/or regulatory agency requirements
               ("Mandatory Engineering Changes"), Brocade shall immediately
               implement the Mandatory Engineering Changes


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               without charge to Sequent in further production of the Product.
               Brocade shall provide Sequent with written notice of any
               Mandatory Engineering Changes at the time that Brocade knows of
               such requirements.

        13.2   Brocade and Sequent shall discuss and mutually agree upon one or
               more of the following remedies, or any other agreed upon
               remedies, for implementing Mandatory Engineering Changes on
               previously delivered Product. Brocade shall use best efforts to
               immediately implement the selected remedies, [*].


               13.2.1 Sequent may return the affected Product to Brocade or an
                      authorized Brocade facility for implementation of the
                      Mandatory Engineering Change or Product replacement.
                      [*]
                      
               13.2.2 Sequent may request and Brocade will ship Mandatory
                      Engineering Change kits for Product delivered to Sequent
                      before the Mandatory Engineering Change was implemented.
                      Brocade shall provide Sequent with installation
                      instructions and/or training necessary to implement the
                      Mandatory Engineering Change.

               13.2.3 Brocade may be requested to provide on-site technical
                      assistance at the appropriate location to implement the
                      Mandatory Engineering Change.

               13.2.4 Sequent may request that a Brocade-approved third party
                      organization implement Mandatory Engineering Change kits
                      for the affected Product.

        13.3   In the event that Brocade cannot implement all Mandatory
               Engineering Changes to Product delivered to Sequent within a
               reasonable time, not to exceed [*] from the date of Brocade's
               written notice to Sequent of the requirement for such changes,
               Brocade shall provide no charge replacement Product to Sequent in
               exchange for the Product requiring the Mandatory Engineering
               Change.

        13.4   Sequent shall have the option to cancel open purchase orders
               without penalty if the Mandatory Engineering Changes are
               incompatible with or adversely affect performance of Products
               purchased by Sequent and such changes are not made compatible
               with the Products or Sequent is not provided with an acceptable
               remedy within [*] after Brocade receives notification from
               Sequent of its intent to cancel its open purchase orders.

14.     SEQUENT REQUESTED CHANGES

        14.1   Sequent may request that Brocade provide [*] evaluation of
               changes to the Product or changes to the method of packing,
               packaging, or shipment of the Product. Sequent's request will
               include a written description of the proposed change sufficient
               to permit Brocade to evaluate its feasibility.

        14.2   If Sequent's proposed change is accepted by Brocade, Brocade
               shall notify Sequent in writing within [*] from the date of
               request, of the terms and conditions under which it would make
               the change requested by Sequent. Brocade's written evaluation
               shall state the cost, if any, to make the


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<PAGE>   14
               change and the date that Brocade would be able to implement such
               change. If the proposed change would be at cost to Sequent,
               Sequent must provide prior written approval to Brocade before the
               change is made. In the evaluation of the effect such changes may
               have on regulatory agency certifications, the above referenced
               [*] may be extended to take into account the time necessary for
               Brocade to obtain new regulatory agency certifications.

15.     BROCADE REQUESTED CHANGES

        15.1   Subject to the provisions of this Section 15, Brocade may propose
               optional changes, including changes that affect form, fit,
               function, [*] as those terms are defined below, which are not
               Mandatory Engineering Changes ("Optional Engineering Changes").
               For the purposes of this Section, the following definitions
               apply:

               15.1.1 "Form" means the dimensions, weight, appearance,
                      packaging, labeling, finish, texture, color, or material
                      properties of the Product.

               15.1.2 "Fit" means the assembly interchangeability or attachment
                      scheme of the Product or FRU within the Product. Fit
                      includes the ability of an item to become an integral part
                      of another item.

               15.1.3 "Function" means performance, operational interface to
                      other components or functions, fitness for use, or
                      testability of the Product or FRU within the Product.
                     
               15.1.4 [*]

               15.1.5 [*]

        15.2   Brocade shall maintain a formal product change control system to
               ensure that notification is submitted to Sequent on all proposed
               changes to Products covered by Attachment A. Brocade shall
               provide ongoing Product technology directions and schedules for
               all Product and Product-related options. Included in the change
               notification process shall be the following:

                (i)     anticipated last shipment date of unchanged Product;

                (ii)    means of identification between changed and unchanged
                        Product;

                (iii)   a complete and detailed description of the change
                        proposed and any data that will support the benefits of
                        the change;

                (iv)    impact to installed base of Product, including FRU
                        inventories.
   
        15.3   [*]
    

        15.4   If the Optional Engineering Changes proposed by Brocade in
               Sequent's sole opinion necessitate evaluation by Sequent for
               compatibility with Sequent's systems and/or specifications,
               Brocade upon Sequent's request shall provide Sequent with one (1)
               set of evaluation products, FRUs, or designs which

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


                                    Page 14
<PAGE>   15
               incorporate the proposed changes. Sequent will request such
               evaluation products, FRUs, or designs within [*] of receipt of
               Brocade's change proposal. Evaluation products, FRUs, or designs
               that are provided to Sequent under this provision are for
               evaluation purposes and will be returned to Brocade after the
               evaluation period. Sequent has the right, without liability, to
               accept or reject Brocade's proposed Optional Engineering Changes
               and will inform Brocade of its approval or rejection of those
               changes in writing within [*] from Sequent's receipt of notice of
               Brocade's proposed changes or within [*] of receipt of the
               evaluation products, FRUs, or designs, whichever is later. If no
               written response is received by Brocade from Sequent within the
               applicable period, Sequent will be deemed not to have accepted
               the changes.

        15.5   If Sequent rejects the Optional Engineering Changes, Brocade
               shall continue supplying the unaltered Product or provide Sequent
               with opportunities for last time buy of the unaltered Product
               under the terms of Section 16, below.

        15.6   Brocade will incorporate changes accepted by Sequent into Product
               on Sequent's open purchase orders and, at Sequent's request, into
               Product going through Brocade's repair process.

        15.7   Any changed Product resulting from application of this Section
               shall be considered added to this Agreement and subject to its
               terms and conditions.

16.     PRODUCT WITHDRAWAL

        Brocade will notify Sequent in writing at least [*] prior to withdrawal
        of a Product. Brocade will ship Product for open purchase orders that
        Brocade has accepted before the withdrawal date for an additional [*]
        after the withdrawal date. All EOL ("End of Life") purchase orders will
        be considered non-cancellable.

17.     MEETINGS AND SUPPLIER PERFORMANCE

        17.1   Brocade appoints its Account Manager and Sequent appoints its
               designated Supplier Business Manager as liaisons to monitor
               Brocade's performance under this Agreement. These liaisons will
               also be responsible for coordinating meetings, discussions and
               reports provided for in this Agreement. The names and telephone
               and facsimile numbers of the liaisons will be provided and may be
               changed by notice from one party to the other.
   

        17.2   Sequent's designated liaison will conduct quarterly supplier
               performance review and planning meetings with Brocade's Sequent
               account management team. Sequent and Brocade shall mutually
               develop supplier performance requirements and goals based on
               Brocade's obligations and responsibilities under this Agreement,
               to be evaluated by the parties at these periodic meetings.
               Brocade's performance requirements and goals will be based on:
               [*] The locations and times for these meetings will be determined
               by Sequent and Brocade. The purpose of these meetings will
               include the following:
    

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


                                     Page 15

<PAGE>   16
                (i) Review Brocade's performance over the previous quarter;

               (ii) Review action items and resolution;

              (iii) Identify opportunities and areas of improvement;

               (iv) Agreement on commitments, set target dates, and identify
                    persons responsible;

                (v) Review appropriate Brocade reports;

               (vi) [*]

              (vii) Review Brocade quality and reliability improvement plans;

             (viii) Publish minutes.

18.     REPORTS

        Recurring reports to be provided by Brocade and Sequent under this
        Agreement are listed in Attachment E, Reports. All reports will be made
        available in electronic form or as otherwise mutually agreed. There
        shall be no charge to either for any recurring reports required under
        this Agreement.

19.     MATERIAL MANAGEMENT AND PERFORMANCE STANDARDS

        19.1   Brocade shall manage the scheduling of material to meet Sequent's
               Product availability and delivery requirements as set forth in
               this Agreement and on accepted purchase orders. Brocade will
               provide status reports to Sequent that include open order status
               and ship date information, on the following schedule:



                                                         
                                    1997:                   [*]

                                    1998:                   [*]



        19.2   Brocade shall manage sub-tier supplier performance in areas to
               include quality, availability, including allocated Product, and
               delivery to meet the requirements of this Agreement. Brocade
               shall set performance goals and objectives with sub-tier
               suppliers and monitor progress against goals. Sequent may request
               status reports periodically to audit these suppliers'
               performance.

20.     LIMITATION OF LIABILITY
   

        EXCEPT AS PROVIDED FOR IN [*] NEITHER PARTY SHALL BE LIABLE TO THE OTHER
        FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
        INCLUDING LOST PROFITS, ARISING OUT OF THIS AGREEMENT OR ANY PERFORMANCE
        HEREUNDER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
        SUCH DAMAGES.
    

21.     CONFIDENTIAL AND PROPRIETARY INFORMATION

        21.1   Both parties may, in connection with this Agreement, disclose to
               the other party information considered confidential and
               proprietary information of the disclosing party ("Confidential
               Information"). Information shall be considered Confidential
               Information if identified as confidential in nature by the
               disclosing party at the time of disclosure, or which by its
               nature is normally and reasonably considered confidential, such
               as information related to past, present or future research,
               development, or business affairs, any proprietary products,
               materials or

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



                                    Page 16
<PAGE>   17
               methodologies, or any other information which provides the
               disclosing party with a competitive advantage. Confidential
               Information, if disclosed or provided in tangible form, shall be
               clearly and conspicuously identified as company confidential or
               proprietary. Confidential Information, if orally or visually
               disclosed, shall be identified as company confidential or
               proprietary in nature at the time of disclosure. The receiving
               party shall protect the disclosing party's Confidential
               Information with the same degree of care that it regularly uses
               to protect its own Confidential Information from unauthorized use
               or disclosure, but in no event less than a reasonable degree of
               care. Confidential Information shall not be provided or disclosed
               to anyone except those employees of the receiving party with a
               need to know under this Agreement. No rights or licenses under
               patents, trademarks or copyrights are granted or implied by any
               disclosure of Confidential Information. Confidential Information
               and any and all authorized copies thereof shall remain the
               property of the disclosing party and shall be destroyed or
               returned if requested by the disclosing party. The receiving
               party shall not export or re-export Confidential Information
               without the appropriate United States or foreign government
               export licenses. This Section 21 shall survive the expiration or
               termination of this Agreement for a period of [*]

        21.2   The obligations of confidentiality imposed by this Agreement
               shall not apply to any Confidential or Proprietary Information
               that: (a) is rightfully received from a third party without
               accompanying markings or disclosure restrictions; (b) is
               independently developed by employees of the receiving party who
               have not had access to such Confidential Information; (c) is or
               becomes publicly available through no wrongful act of the
               receiving party; (d) is already known by the receiving party as
               evidenced by documentation bearing a date prior to the date of
               disclosure; or, (e) is approved for release in writing by an
               authorized representative of the disclosing party.

        21.3   The terms and conditions of this Agreement, but not its
               existence, are considered Confidential Information.

22.     INFRINGEMENT

        22.1   Brocade will defend or settle at its own expense any action or
               claim brought against Sequent to the extent that such action is
               based upon a claim that any Product purchased hereunder infringes
               a patent, copyright, trade secret, or any intellectual property
               right of any third party. Brocade shall indemnify and hold
               Sequent harmless against all costs and expenses and damages,
               including reasonable attorneys' fees, and shall pay those costs,
               expenses, and damages incurred by Sequent, so long as Sequent
               provides the following: (i) prompt notification of any claim,
               provided that Sequent has actual knowledge of such claim; (ii)
               reasonable cooperation and assistance with a claim at Brocade's
               expense; (iii) sole control of defense and settlement to Brocade.

        22.2   In the defense or settlement of a claim for infringement of a
               patent, copyright, trade secret, or any intellectual property
               right of any third party, Brocade may procure for Sequent the
               right to continue using the Product, or if such remedy is not
               reasonably available, replace or modify the Product so that its
               use or resale becomes non-infringing, provided that any
               replacement or modified product meets substantially the same
               specifications as the original and is acceptable to


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


                                     Page 17

<PAGE>   18
               Sequent. If any of the above remedies are not available, Sequent
               may return the Product to Brocade and receive [*] for the
               Product.

        22.3   Brocade shall have no liability to Sequent to the extent that a
               claim of infringement is based upon (i) compliance with Sequent's
               designs, plans, or specifications if without such designs, plans,
               or specifications the Product would not have been infringing;
               (ii) the combination of the Product with other products or
               devices not supported hereunder where the Product itself would
               not be infringing; or (iii) modifications of the Product made by
               Sequent or on Sequent's behalf by a party other than Brocade,
               where the unmodified Product would not be infringing.

23.     INDEMNITY AND INSURANCE

        23.1   Brocade shall defend, indemnify, and hold Sequent harmless at
               Brocade's sole cost and expense, from tangible property damage,
               personal injury including death, and expense, including
               attorney's fees, incurred by an employee, agent, invitee, or
               customer of Sequent, regardless of how caused if arising out of a
               Product defect or defect that results from the providing of
               services, except to the extent such loss, property damage,
               personal injury, or expense, including attorneys' fees, was
               caused by the negligence of Sequent or its employees, customers,
               or authorized agents while acting within the scope of their
               authority.

        23.2   Brocade shall provide Sequent with a certificate of insurance
               with not less than the following coverages upon execution of this
               Agreement. Sequent shall be named as an additional insured on
               Brocade's insurance coverage. The fulfillment of the insurance
               obligations shall not otherwise relieve Brocade of any liability
               assumed under the Agreement or in any way modify or limit any
               obligations of indemnification hereunder.




               Coverage                        Required Limits
               --------                        ---------------
                                            
               Worker's Compensation:          Statutory

               Employer's Liability:           [*] each accident, bodily injury by accident
                                               [*] each employee, bodily injury by disease
                                               [*] policy limit, bodily injury by disease

               Comprehensive General
               Liability:                      [*] general aggregate
                                               [*] products/completed operations aggregate
                                               [*] personal and advertising injury limit
                                               [*] each occurrence limit

               Automobile Liability:           [*] combined single limit, bodily injury and
                                               property damage coverage



        23.3   Certificates of insurance shall state that a policy or policies
               have been issued and are in force at such time, that the policy
               or policies shall not expire or lapse, and that the policy or
               policies will not be cancelled or changed so as to affect the
               insurance described in the certificate until after thirty (30)
               days prior written


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


                                    Page 18
<PAGE>   19
               notice to Sequent of such change. Such certificates or true
               copies thereof and any notices regarding insurance shall be sent
               to:

                         Sequent Computer Systems, Inc.
                         15450 S.W. Koll Parkway
                         Beaverton, OR 97006-6064
                         Attn: Manager, Contracts, MS EDO2-805

        23.4   Upon Sequent's request, Brocade shall furnish Sequent, for its
               inspection and approval, policies of insurance with all
               endorsements, or conformed specimens thereof, certified by the
               insurance company to be true and correct copies. The fulfillment
               of this insurance obligation shall not otherwise relieve Brocade
               of any liability assumed under this Agreement or in any way
               modify or limit Brocade's obligations to indemnify Sequent
               hereunder.

24.     NOTICES

        Any legal notice required or permitted to be made or given to either
        party pursuant to this Agreement shall be sufficiently made or given on
        the date of delivery if delivered personally or on the date of mailing
        if sent by certified or registered mail (postage prepaid and return
        receipt requested) to the other party at the address set forth below.
        Either party may change the information below by giving the other party
        prior written notice of such change.

              Brocade:          Brocade Communications Systems, Inc.
                                1901 Guadalupe Parkway
                                San Jose, CA 95131
                                Attn: Chief Financial Officer

              Sequent:          Sequent Computer Systems, Inc.
                                15450 S.W. Koll Parkway
                                Beaverton, OR 97006
                                Attn: Manager, Contracts, MS EDO2-805

25.     MISCELLANEOUS PROVISIONS

        25.1   Compliance with Laws

               Brocade shall comply with all applicable federal, state, country,
               and local laws, ordinances, regulations, and codes in the
               performance of this Agreement.

        25.2   Governing Law

               This Agreement shall be governed by and construed in accordance
               with the laws of the State of Oregon.

        25.3   Waiver

               The failure of either party to insist upon or enforce strict
               conformance by the other party of any provision of this Agreement
               or to exercise any right under this Agreement shall not be
               construed as a waiver or relinquishment of such party's

                                     Page 19


<PAGE>   20
               right unless made in writing and shall not constitute any
               subsequent waiver or relinquishment.

        25.4   Amendments, Changes, and Modifications

               Amendments, changes, or modifications to the Agreement, to be
               valid, must be in writing and signed by authorized
               representatives of both parties. Any verbal agreements,
               discussions, and understandings, express or implied, shall not
               constitute an amendment to this Agreement.

        25.5   Invalid Provisions

               If any provision of this Agreement is finally held by a court of
               competent jurisdiction to be illegal or unenforceable, the
               legality, validity, and enforceability of the remaining
               provisions of this Agreement shall not be affected or impaired.

        25.6   Survival

               The provisions of Section 10 (Warranty), Section 11 [*], Section
               16 (Product Withdrawal), Section 20 (Limitation of Liability),
               Section 21 (Confidential and Proprietary Information), Section 22
               (Infringement), Section 23 (Indemnity and Insurance), sub-Section
               25.1 (Compliance with Laws), sub-Section 25.2 (Governing Law),
               and applicable provisions of Attachment D (Product Support) of
               this Agreement shall survive the termination or expiration of
               this Agreement. Outstanding purchase orders shall survive the
               termination of this Agreement.

        25.7   Force Majeure

               Neither party shall be responsible for delays or failures in
               performance resulting from acts beyond the reasonable control of
               such party, including, but not limited to, acts of God, strikes
               or other labor disputes, riots, acts of war, communication line
               failures, power failures, fire, or disasters. The time for
               performance of any delayed obligation shall be extended for the
               time period lost by reason of the delay, except that if the delay
               exceeds thirty (30) calendar days from the beginning of the
               delay, Sequent may terminate this Agreement for cause without
               further notice or liability to Brocade.

        25.8   Successors and Assigns

               Except as specifically provided for in sub-Section 3.3.2 of
               Attachment D, below, [*]. Any assignment of rights shall not work
               as a novation of obligations hereunder without written agreement.
               [*], either party may assign this Agreement to a surviving entity
               in connection with any merger, acquisition, or consolidation of
               not less than a majority ownership in the merged, acquired, or
               consolidated company by the surviving entity.


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

                                    Page 20


<PAGE>   21
        25.9   Attorney's Fees

               If either party commences litigation to enforce any provision of
               this Agreement, the prevailing party shall be entitled to recover
               reasonable attorneys' fees and expenses of litigation, including
               fees and expenses of any appeal.

        25.10  Headings

               The section and paragraph headings of this Agreement are intended
               as a convenience only, and shall not affect the interpretation of
               its provisions.

        25.11  Conflicting Terms

               The terms and conditions of this Agreement shall take precedence
               over any conflicting terms and conditions contained on Sequent's
               purchase orders and Brocade's quotation or acknowledgment.

        25.12  Cumulative Remedies

               The rights and remedies afforded to either party pursuant to any
               provision of this Agreement are in addition to and do not in any
               way limit any other rights or remedies afforded to either party
               by any other provision of this Agreement or by law. All such
               rights and remedies are cumulative and may be exercised
               singularly or concurrently.

26.     ENTIRE AGREEMENT

        This Agreement, including all Attachments, constitutes the entire
        Agreement between the parties and supersedes all prior or
        contemporaneous agreements, discussions, and understandings between the
        parties, either express or implied. The following Attachments are part
        of this Agreement and are incorporated herein by this reference.

        Attachments:

        A      Product Specification
        B      Product and Product Support Pricing
        C      Supplier Quality
        D      Product Support
        E      Reports

                                     Page 21


<PAGE>   22
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

Sequent Computer Systems, Inc.              Brocade Communications Systems, Inc.


By: /s/ Wayne A. Pittarger                  By: /s/ Bruce J. Bergman
  -------------------------------              ----------------------------
(Signature)                                 (Signature)

Name:     Wayne A. Pittarger                Name:     Bruce J. Bergman
      --------------------------                 --------------------------
(Printed or Typed)                          (Printed or Typed)

Title: VP Operations                        Title: CEO
       -------------------------                  -------------------------
Date: 6/17/97                               Date: 6/17/97
      --------------------------                  -------------------------

                                    Page 22


<PAGE>   23
                                  ATTACHMENT A

                              PRODUCT SPECIFICATION

This Attachment describes the Product and Product specifications required under
the Agreement.

1.      PRODUCT DESCRIPTION AND PRODUCT SPECIFICATIONS

        The Products and Product specifications are described below. The Product
        specifications are further described in Sequent documents identified by
        the Sequent part numbers listed below. Such documents identified below
        are incorporated by reference as though fully set forth herein. Product
        descriptions and specifications are subject to change by mutual
        agreement of the parties.




        PRODUCT DESCRIPTION                                       Production Specifications
        -------------------                                      (By Sequent Part Numbers)
                                                                 -------------------------
                                                              
        16 Port Fibre Channel Switch                                  1003-69661 
        8 Port Fibre Channel Switch                                   1003-69660 
        0 Port Fibre Channel Switch for Service Spares                1003-73151
        G-Port Card for Service Spares                                1003-73153 
        GBIC, multi-mode, non-OFC for FC Switch (2M to 500M)          1003-73152



                                     Page 23


<PAGE>   24
                                  ATTACHMENT B

                       PRODUCT AND PRODUCT SUPPORT PRICING

This Attachment sets forth Product and Product Support pricing to Sequent from
Brocade under the Agreement.

        1.     PRODUCT PRICING




                                                                       1997               1998*
                                                                                      (not to exceed)
                                                                                
        1.1    8 Port Sequent part number 1003-69660;
               Brocade part number B1600-110                           [*]                 [*] 

        1.2    16 Port: Sequent part number 1003-69661;
               Brocade part number B1600-100                           [*]                 [*] 

        1.3    0 Port: Sequent part number 1003-73151;
               Brocade part number X1017                               [*]                 [*] 

        1.4    GBIC: Sequent part number 1003-73152
               Brocade part number X1006                               [*]                 [*] 

        1.5    G-Port Card: Sequent part number 1003-73153;
               Brocade part number X1003                               [*]                 [*] 



        *  Note: Pricing for 1999 through the remainder of the term of the
                 Agreement will be as agreed upon between the parties [*].

        ** Note: For initial stocking orders and subsequent orders in excess of
                 a net aggregate of [*], Brocade will apply a [*] for Brocade
                 part number X1003 and a [*] for Brocade part number X1006.

2.      PRODUCT SUPPORT PRICING

        2.1    Exchange Product Charges

               The charge for Exchange Product, as that term is defined in
               sub-Section 3.1 of Attachment D, shall be [*] of the then-current
               Product price or the repair price for the Product, whichever is
               less.

        2.2    Out of Warranty Repair Charges


                                                                         
               (i)    Switch:                                          [*] 
               (ii)   G Port without GBIC:                             [*] 


        2.3    NTF Charges

               Charges for NTF testing of Product will be per the following
               schedule:


                                                                         
               (i)    Switch:                                          [*] 



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

                                    Page 24
<PAGE>   25


                                                                        
               (ii)   G-Port Card:                                     [*] 



        2.4    Recertification Charges

               Charges for re-certification, as provided in sub-Section 6 of
               Attachment D, shall be [*].

        2.5    Charges for out of warranty upgrade will be as agreed upon
               between the parties on a case-by-case basis.

3.      TRAINING

        Charges for additional training (training conducted other than the
        original/initial one day training course provided to Sequent and Sequent
        service partners) shall be as follows:

        (i)    One (1) day at Brocade:                            [*] per person
               Includes:                            Copy of all course materials

        (ii)   One (1) day at Sequent-specified site:
                         [*][*] persons/5 person minimum, plus travel expenses
                                       [*] per person for more than five persons
               Includes:             Copy of all course materials for each
                                     person


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

                                     Page 25


<PAGE>   26
                                  ATTACHMENT C

                                SUPPLIER QUALITY

1.      INTRODUCTION, SCOPE AND [*] 

        1.1    This Attachment is subject to applicable terms and conditions of
               the Agreement and defines the quality requirements and
               expectations for Brocade under the Agreement. Changes to this
               Attachment must be approved by the parties' designated quality
               representatives. Except as specifically provided otherwise, there
               will be no charge to Sequent for activities and discharge of
               obligations required of Brocade described in this Attachment.

        1.2    Brocade shall implement the procedures, plans, goals and
               processes to include but not be limited to: (i) document control;
               (ii) continuous improvement; (iii) customer feedback; (iv)
               performance tracking against objectives; and (v) corrective
               action processes required of Brocade to remain in compliance with
               its obligations under the Agreement.

        1.3    Brocade shall create, implement and maintain a continuous
               process improvement program with the goals of reducing costs and
               lead-time and improving quality and service to Sequent. Such
               program shall be documented and provided to Sequent.

        1.4    [*] 


2.      INSPECTION, AUDIT RIGHTS AND STOP SHIPS

        2.1    Sequent shall have the right to inspect and audit any
               manufacturing or administrative site, including Brocade sites
               that supply goods or services, including the Product, subject to
               agreements with Brocade suppliers. In addition, on an annual
               basis at a time which is mutually agreed upon between the
               parties, Sequent shall be entitled to audit Brocade records and
               processes which directly insure that Brocade [*]. Sequent shall
               also be entitled to review relevant documents pertaining to
               quality information including but not limited to procedures and
               certificates of conformance affecting materials, including the
               Products, if requested. Brocade shall assist Sequent in arranging
               such inspections, audits and reviews.

        2.2    Sequent shall have the right, without liability, to stop
               Brocade's shipments to Sequent and/or Sequent's customers of
               Product that does not conform to the specifications and criteria
               contained herein. Sequent will advise Brocade of such
               non-conformance. Such Products shall not be shipped by Brocade
               unless (i) Brocade has corrected the areas of non-conformance in
               the Product and Sequent approves Product shipment or (ii) Sequent
               permits shipment of such Products pending Brocade's correction of
               the non-conformance.


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

                                    Page 26


<PAGE>   27
3.      DEFINITIONS

        3.1    Quality Failure: Any failure that occurs in Sequent's factory
               during integration/systems test or during the first [*]
               after installation at a Sequent customer site, both
               circumstances sometimes referred to as "dead on arrival" ("DOA").
               These failures are considered in the calculation of the
               parts-per-million ("PPM") failure rate. This includes any and all
               functional and non-functional failures, to include but not be
               limited to incorrect labels and missing jumpers.

        3.2    Reliability Failure: Any failure that occurs after the first
               [*] of operation after installation at Sequent's customer's 
               site. Reliability is measured as mean-time-between-failure(s)
               ("MTBF").

        3.3    Red Light: A Red Light is anything that causes data corruption,
               loss of use, safety, and/or other problems that negatively impact
               the customer's ability to effectively use the Product per its
               functional specification or intended use. This includes not only
               the Product or a service but also related processes such as
               shipping and documentation. When a Red Light occurs, Product is
               not shipped and resources are redirected to solve the situation.

        3.4    Purge: Removal and segregation of Product in Sequent's factory
               and service centers due to a discrepancy with a particular lot or
               date code of the Product.

        3.5    Quality Issues: Quality Issues are those issues that arise when
               the Products do not meet the Product specifications and include
               but are not limited to incorrect packaging, labeling, incorrect
               revision levels and Purges.

        3.6    Routine Questions and Issues: Routine Questions and Issues are
               those that do not address Quality Failures, Red Lights, Purges
               or Quality Issues.

4.      PERFORMANCE ACTIVITIES

        4.1    Brocade shall establish, implement and maintain a comprehensive
               quality assurance program to ensure the consistent supply of
               Products that meet the requirements specified in the Agreement
               and this Attachment. Details of the program shall be made
               available to Sequent upon request and Sequent has the right to
               survey and audit the program. Sequent will provide a minimum of
               two (2) weeks notice prior to any planned survey or audit.

        4.2    Brocade shall have a documented system to ensure a consistent
               supply of materials used for the assembly of Products. This
               system shall maintain procedures for incoming inspection per
               category of material and procedures outlining the qualification
               of new materials suppliers.

        4.3    Brocade shall have a formally documented manufacturing process
               and quality control system. Brocade shall also maintain
               established intervals for preventive maintenance of manufacturing
               equipment.

        4.4    Brocade shall have a documented system to ensure continued
               accuracy of measurement equipment in manufacturing. Measuring
               equipment shall be

                                     Page 27


<PAGE>   28
               calibrated at established intervals against certified standards
               that have valid relationships to national standards.

        4.5    Brocade shall have an established program for statistical process
               control ("SPC") in manufacturing. This program shall use SPC
               tools to control and improve the manufacturing process and its
               capabilities. Documentation for process control shall consist of
               control procedures, SPC limits and SPC violation rules.

        4.6    Brocade shall maintain and use a system for identifying and
               segregating non-conforming material. Adequate documentation
               concerning the nature of the non-conformance shall be generated
               and maintained.

        4.7    All material received at Sequent shall conform with the
               requirements specified in the purchase order and the Product
               specifications. To support Sequent's quality assurance program
               and to enable compliance with regulatory requirements, the
               current revision of each of the following items must be furnished
               to Sequent upon request:

                (i)  [*]
                (ii) [*]
               (iii) [*]

5.      SEQUENT QUALITY FAILURE AND RELIABILITY FAILURE REQUIREMENTS

        5.1    The Quality Failure requirement for the Product is that the
               failure rate shall be no higher than [*]. This
               failure rate will be measured by calculating the number of
               defects found in Sequent factory in addition to any failures that
               occur within the first [*] after installation
               at a customer site, divided by the total number of Products
               shipped. [*]

               [*] 

        5.2    The Reliability Failure Goal for the 16 Port Switch is [*]
               MTBF (Annual Failure Rate (AFR) x [*]). The Reliability
               Failure Goal for the 8 Port Switch is [*] MTBF (Annual
               Failure Rate (AFR) equal to or approximately %)

        5.3    A Red Light will occur if the reliability of the Product drops
               below the required [*] for the 16 port switch or [*]
               for the 8 port switch.


                                      [*]


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


                                    Page 28
<PAGE>   29
6.      TECHNICAL SUPPORT AND RESPONSIVENESS

        6.1    Brocade shall promptly notify Sequent, in writing, of any
               discrepancies found which could have a detrimental effect on
               previously shipped Product. In such cases, Brocade shall provide
               a timely response with effective corrective action for any
               nonconformity discovered.

        6.2    Routine Questions and Issues. Brocade will provide [*]
               acknowledgment, by electronic mail ("Email"),
               facsimile ("Fax") or other method of communication agreed to by
               the parties, of all Sequent requests for assistance with Routine
               Questions and Issues, including but not limited to questions
               regarding Product service and support. Sequent shall have access
               to Brocade personnel, to include but not be limited to
               developers, order fulfillment, quality and technical personnel,
               to assist Sequent. Brocade personnel shall use best efforts to
               provide a response to Sequent's requests for assistance within
               [*] of receipt of the request.

        6.3    Failure Analysis. Brocade shall perform failure analysis on
               all failed Products returned to Brocade. Failure analysis will be
               a cooperative effort between Brocade and Sequent to determine the
               root cause of the failure. Initial failure analysis on failed
               Products shall be completed within [*] from Brocade's receipt of
               the Products; except in isolated incidents based on extreme
               critical Sequent customer need, from the time of receipt by
               Brocade of defective Product from Sequent, Brocade agrees to
               provide expedited failure analysis on a commercially reasonable
               basis, including isolation of the defect to the basic component
               level. Complete failure analysis to root cause shall be completed
               within [*] from receipt of failed Product. Once failure analysis
               has been completed, Brocade will Email or Fax a failure analysis
               report to the Sequent Supplier Engineer designated by Sequent to
               work with Brocade. The failure analysis report shall include at a
               minimum, the Product part number, Product serial number, failure
               cause and corrective action that Brocade will take to prevent
               further occurrences of the failure. There will be no charges for
               failure analysis.

        6.4    Quality Issues. Quality Issues must be responded to by Brocade
               within two (2) business days after being notified that such an
               issue exists. Brocade shall completely close the Quality Issue
               with effective corrective action that will prevent a repeat
               failure within [*] depending on the nature of the issue.

        6.5    Red Lights. Red Lights shall be highest priority and shall cause
               immediate allocation of all necessary Brocade resources to
               expeditiously develop and implement effective containment and
               resolution plans in conjunction with Sequent, until problem
               resolution. Brocade's commitment of resources shall be at its
               expense and shall include but not be limited to committing
               Brocade personnel to work evenings and weekends or, if necessary,
               to send such personnel to Sequent's site or Sequent's customer's
               site.

        6.6    Brocade shall comply with the Sequent Corporate Standard
               Operating Policy for Electrostatic Discharge Control, Sequent
               part number 1003-55472-E01, a copy of which has been provided to
               Brocade.

*Certain information on this page has been omitted and filed separately with the
 Commission. Confidential treatment has been requested with respect to the
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                                     Page 29


<PAGE>   30
        6.7    Depending on the amount and/or complexity of quality issues
               outstanding at any given time, either party may initiate ongoing
               weekly conference calls between the parties for the purpose of
               quality issue resolution.

7.      QUALITY DATA AND REPORTING

        7.1    The parties will be responsible for providing each other with
               quality data. The specific data, the party responsible for the
               data, and the time for reporting is as follows:




                                                                                 
               Data (Field Metrics) & Responsible Party                             Time of Reporting

               Summary of field Quality Failures  [*] after                         On or before the
               install) (Sequent)                                                   15th of the month

               Reliability Data in the form of average time between                 On or before
               the replacement ("ATBR"). ATBR includes all                          15th of the month
               replacements, some of which may not have been actual failures
               (Sequent)

               Data (Factory Metrics) & Responsible Party                           Time of Reporting

               Summary of all inspection/test station yields for the                On or before the
               month for all Products shipped to Sequent (Brocade)                  15th of the month

               Pareto of failures for the above stations for the month              On or before the
               for all Products shipped to Sequent (Brocade)                        15th of the month

               Failure analysis summary of Sequent returned                         On or before the
               Products (Brocade)                                                   15th of the month

               [*]



        7.2    This above data will be sent by Email, Fax or other method agreed
               to by the parties, between Brocade and Sequent quality personnel
               no later than the required time of reporting.

        7.3    All Brocade test records must be archived for a minimum of 
               [*]. Brocade shall maintain and analyze in-process failure
               data and use best efforts to improve test suites to drive the
               number of in-process failures to zero.

        7.4    Test flow diagram and content for all Products including systems,
               features and spares shall be available to Sequent upon request.

8.      CORRECTIVE ACTION PROCESS

        All Quality Failures and Reliability Failures shall be resolved to root
        cause. Brocade shall perform failure analysis on defective Products in
        accordances with sub-Section 6.3 of the Agreement. Upon determining the
        root cause of the failure, Brocade shall establish a corrective action
        plan, with Sequent's assistance if requested, to insure that the Product
        defect is removed and that root cause corrective action is implemented.
        Sequent will assist Brocade with tracking all open failures and will
        work with Brocade to insure that the proper repair priority is set. In
        the event Brocade encounters a no trouble found ("NTF") in a Product
        sent from Sequent, Brocade shall re-submit through the complete
        manufacturing test process for a final assembly.

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

                                    Page 30
<PAGE>   31
9.      MULTIPLE FAILURE PRODUCT DISPOSITION

        9.1    Product of a specific part and serial number with a history of
               [*] or more failures ("Multi-failure Product") shall be clearly
               labeled as non-conforming due to multiple failures and segregated
               from good Product, as the term "good" is described in sub-section
               9.2, below.

        9.2    Multi-failure Product may be re-labeled as "good" and used as a
               replacement Product when the following criteria have been met:

               (i)    Brocade provides to the designated Sequent Supplier
                      Engineer ("SE"), written documentation of a positive
                      correlation between all failures and Brocade's fixes; and

               (ii)   Product meets all Product specifications and test
                      criteria; and

               (iii)  Sequent's SE has provided Brocade with written
                      authorization to label the documented Multi-failure
                      Product as good.

        9.3    In the event that no positive correlation between failure and fix
               can be established for a Multi-failure Product, then Brocade
               shall not repair or use such Product as a replacement Product.
               Brocade shall submit a scrap request to Sequent's designated
               Supplier Engineer for review and authorization. Brocade's
               requests for scrap authorization shall include the following
               information:

               (i)   Product part, revision, and serial numbers;

               (ii)  Documented history of remedial processes performed on
                     the Product; and

               (iii) Product's failure mode or quality conformance issue.

        9.4    Brocade may be required to return scrapped Product to Sequent for
               verification and analysis. Sequent will notify Brocade of this
               requirement at the time of Product scrap authorization.

*Certain information on this page has been omitted and filed separately with the
 Commission. Confidential treatment has been requested with respect to the
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                                     Page 31


<PAGE>   32
                                  ATTACHMENT D

                                 PRODUCT SUPPORT

This Attachment sets forth the terms and conditions that govern the support for
the Product(s). Notwithstanding anything that may be construed to the contrary,
Sequent shall not have an obligation to purchase any Product Support from
Brocade under the Agreement.

1.      PRODUCT SUPPORT AND PRODUCT SUPPORT DURATION

        1.1    At Sequent's request, Brocade shall provide the Product Support
               described in this Attachment. Charges for Product Support are
               provided in Attachment B to the Agreement.

        1.2    Product Support may include but not be limited to Product: (1)
               testing; (ii) repair; (iii) upgrades; (iv) failure analysis; and
               (v) advance exchange.
   

        1.3    Brocade shall provide Product repair and testing at reasonable
               prices and throughput time as provided in this Attachment D for a
               period of not less than [*] years after Product withdrawal.
    

        1.4    In the event that Brocade is unable or unwilling to comply with
               Sequent's Product Support requirements, Brocade will, at
               Sequent's request, assist Sequent in identifying another repair
               source to provide all or part of the Product Support. Brocade's
               assistance may include, but is not limited to: (i) training
               required by Sequent and/or the third party to provide Product
               Support and (ii) providing Sequent and/or the third party with
               all necessary documentation and component sourcing information
               required to perform Product Support. Such assistance will be
               provided to Sequent [*].
   

        1.5    The parties acknowledge that Product returns to Brocade may come
               from three (3) different sources: (i) Sequent's service
               organization; (ii) Sequent's evaluation and demonstration product
               organization; and (iii) [*]. Processing returns may differ
               depending on the source of the return. [*]
    

2.      PRODUCT REPAIR

        2.1    Upon Sequent's request for Product repair, Brocade shall ship
               repaired or replacement Product within [*] of receipt of
               Sequent's defective Product.

        2.2    All field returned Product shall be upgraded and/or repaired as
               agreed between the parties, and then reassembled, tested and
               packaged per Sequent's requirements for new Product. All final
               test and inspection as required by Brocade for new Product shall
               be performed on field returned Product prior to its return to
               Sequent.


*Certain information on this page has been omitted and filed separately with the
 Commission. Confidential treatment has been requested with respect to the
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                                    Page 32


<PAGE>   33
        2.3    There shall be no charge for Product repair during Product
               warranty. Prices for out-of-warranty Product repair are as
               provided in sub-Section 2.2. of Attachment B.

3.      EXCHANGE PRODUCT

        3.1 For purposes of this Section 3, the following definitions apply:

               3.1.1  "Exchange Product" means a new Product or a Product that
                      has been previously repaired or refurbished and which
                      Brocade uses to replace defective Product.

               3.1.2  "Product Warranty" means the warranty period as provided
                      for in Section 10 of the Agreement.

               3.1.3  "Product Support Warranty" means the warranty, as
                      described in sub-Section 3.5.3, below, applicable to
                      Exchange Product delivered pursuant to this Section 3
                      after expiration of the Product Warranty.

        3.2    Brocade will provide replacement Product to Sequent under the
               provisions of this Section 3. The charge for Exchange Product
               shall be as provided in sub-Section 2.1 of Attachment B.

        3.3    Repair of Exchange Product

               3.3.1  All field returned Product shall be upgraded and/or
                      repaired as agreed between the parties, and then
                      reassembled, tested and packaged per Sequent's
                      requirements for new Product. All final test and
                      inspection required by Brocade for new Product shall be
                      performed on field returned Product prior to its return to
                      Sequent.

               3.3.2  Brocade shall be responsible for repair and/or
                      refurbishment of Products that may be provided to Sequent
                      as Exchange Product. Brocade may assign repair or
                      refurbishment activities to a third party provided that
                      Brocade's assignee repairs and/or refurbishes Product in
                      accordance with Attachment C, Supplier Quality, and the
                      provisions of this Agreement. Brocade shall remain liable
                      to Sequent for its obligations under the Agreement, to
                      include but not be limited to providing Exchange Product.

        3.4    In-Warranty Product Exchange

               3.4.1  During Product Warranty, Brocade shall replace defective
                      Product under Product Warranty in accordance with and
                      subject to the following provisions. Except as provided in
                      sub-Section 3.4.1.2, below, there shall be no charge to
                      Sequent for Exchange Product provided under this
                      sub-Section 3.4.

                      3.4.1.1   Upon Sequent's request for an Exchange Product,
                                Sequent shall provide the serial number of the
                                failed Product and Brocade

                                     Page 33


<PAGE>   34
                                shall ship Exchange Product to Sequent or to a
                                location designated by Sequent:

                                (i)     within [*] of Sequent's request; or

                                (ii)    in case of a Quality Failure, as defined
                                        in Attachment C, Brocade will ship an
                                        Exchange Product (equivalent to new,
                                        defined as any repaired line integration
                                        failure, and line integration and DOA
                                        NTFs) within [*] of Sequent's request.
                                        If a new (not previously repaired or
                                        refurbished) Exchange Product is
                                        required, Brocade will ship such
                                        Exchange Product within [*] starting the
                                        next business day. Brocade may request
                                        that line integration failures be
                                        retained at Sequent as Brocade will have
                                        the option to send a trained technician
                                        to diagnose a failure to a FRU level and
                                        effect repair on site, provided that
                                        Sequent can accommodate Brocade's
                                        request without impact to the Sequent
                                        customer requested ship date.

                        3.4.1.2 Sequent will use best efforts to return the
                                defective Product to Brocade within [*] from
                                domestic locations and [*] from international
                                locations from the date of delivery of the
                                Exchange Product unless otherwise directed to
                                hold or dispose of the defective Product by
                                Brocade. Brocade shall provide to Sequent a
                                listing by location of Brocade's exchange
                                facilities. In the event that the failed Product
                                is not returned to Brocade within the applicable
                                time period, Brocade may invoice Sequent for the
                                difference between the then-standard commercial
                                list price of a new Product and the price of an
                                Exchange Product, for the replacement Product;
                                provided, however, that upon receipt of the
                                defective Product from Sequent, Brocade shall
                                credit Sequent for the amount invoiced less any
                                reasonable and necessary administrative costs
                                incurred by Brocade for the invoice and credit
                                transactions.

                        3.4.1.3 Upon shipment of an Exchange Product, Brocade
                                shall notify Sequent of the Exchange Product
                                serial number that is being shipped as the
                                replacement.

                        3.4.1.4 Sequent shall be responsible for all freight
                                charges for return of failed Product and Brocade
                                shall be responsible for freight charges for
                                shipment of Exchange Product.

                        3.4.1.5 Brocade shall honor the original Product
                                Warranty of a Product and provide Exchange
                                Product under this Agreement, regardless of
                                whether Sequent was the original purchaser of
                                the Product.

               3.4.2  From the date of delivery, the Exchange Product shall be
                      warranted in accordance with and for the remainder of the
                      Product Warranty of the defective Product which was
                      replaced or in accordance with and for the period of the
                      Product Support Warranty provided at sub-Section 3.5.3 of


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                                    Page 34


<PAGE>   35
                      this Attachment, whichever is longer, provided that
                      Sequent has provided Brocade with the serial number of the
                      failed Product, as defined in sub-Section 3.4.1.1. In the
                      case where no serial number is provided by Sequent, the
                      Exchange Product warranty shall default to [*]. Warranty
                      tracking and documentation for Products and FRUs as
                      configured upon initial shipment from Brocade, including
                      Exchange Products, shall be the responsibility of Brocade.

        3.5    Post-Warranty Product Exchange and Repair

               3.5.1  The provisions of this sub-Section 3.5 shall apply solely
                      to replacement of Product after expiration of the Product
                      Warranty.

               3.5.2  Brocade shall repair or replace or exchange defective
                      Product under Product Support Warranty in accordance with
                      and subject to the following provisions.

                      3.5.2.1 Upon Sequent's request for Exchange Product,
                              Brocade shall ship Exchange Product to Sequent
                              within three (3) business days of Sequent's
                              request at no charge.

                      3.5.2.2 Sequent will use best efforts to return the
                              defective Product to Brocade within [*] from
                              domestic locations and [*] from international
                              locations, from the date of delivery of the
                              Exchange Product unless otherwise directed to hold
                              or dispose of the defective Product by Brocade.
                              Brocade shall provide to Sequent a listing by
                              location of Brocade's exchange facilities. In the
                              event that the failed Product is not returned to
                              Brocade during the applicable time period, Brocade
                              may invoice Sequent for the Exchange Product
                              Charge per Attachment B less the Out of Warranty
                              Repair charge per Attachment B. Invoices generated
                              under these circumstances shall be payable net [*]
                              from the date of receipt of a correct invoice.

                      3.5.2.3 Upon shipment of an Exchange Product, Brocade
                              shall notify Sequent of the Exchange Product
                              serial number that is being shipped as the
                              replacement.

                      3.5.2.4 Sequent shall be responsible for freight charges
                              for shipment of defective Product to Brocade.
                              Brocade shall be responsible for freight charges
                              for shipment of Exchange Product.

               3.5.3  Products, including Exchange Product used to replace
                      defective Products under this Section 3.5 of Attachment D,
                      are warranted for a period of [*] from the date of
                      delivery of the Exchange Product, to conform to and
                      perform in accordance with the Sequent's specifications in
                      effect at the time of the replacement of the defective
                      Product, and to be free from defects in materials and
                      workmanship ("Product Support Warranty"). The
                      above-referenced Product Support Warranty is subject to
                      the applicable provisions of Section 10, Warranty, of the
                      Agreement. Warranty tracking and documentation for
                      Products,


*Certain information on this page has been omitted and filed separately with the
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                                     Page 35


<PAGE>   36
                      including Exchange Products, shall be the responsibility
                      of Brocade. Sequent shall have the right to audit
                      Brocade's records that directly verify and monitor Product
                      warranty, at times and places mutually agreed upon.

4.      FAILURE ANALYSIS

        Brocade shall provide failure analysis in accordance with the provisions
        of sub-Section 6.3 of Attachment C.

5.      NO TROUBLE FOUND ("NTF") TESTING

        5.1    Brocade shall provide NTF testing under the provisions of this
               Section 5. For purposes of this Section 5, NTF shall mean that a
               Product has undergone testing and has been determined by Brocade
               to conform to and perform in accordance with all applicable
               specifications, without repair, upgrade, or other modification
               being required. Charges for NTF testing of Products are provided
               for in Attachment B.

        5.2    Upon Sequent's request, Brocade shall provide NTF testing on
               Products, Such testing shall commence no later than [*] from
               Brocade's receipt of the Product to be tested. Brocade shall
               provide Sequent with the reports documenting and describing its
               NTF results no later than [*] after Brocade receives the Product.
               There shall be no charge to Sequent for NTF reports.

6.      RECERTIFICATION

        6.1    For purposes of this sub-Section, the following definition 
               applies:

               "Recertification" shall include the following: (i) diagnostic
               testing; (ii) upgrade with Mandatory Engineering Changes, if
               required; (iii) system test; (iv) HASS test; (v) burn-in; and
               (vi) final test.

        6.2    Brocade shall provide Recertification under the provisions of
               this Section 6. Charges for Recertification testing of Products
               are provided for in Attachment B.

        6.3    Upon Sequent's request, Brocade shall provide Recertification on
               Products. Such testing shall commence no later than [*] from
               Brocade's receipt of the Product to be tested. Brocade shall
               provide Sequent with the reports documenting and describing the
               Recertification results no later than [*] after Brocade receives
               the Product. There shall be no charge to Sequent for
               Recertification reports.

        6.4    Recertification will be performed on any Product that has been at
               Sequent or one of Sequent's customers for period not exceeding
               [*]. This Product would have originally been shipped to Sequent
               or one of Sequent's customers for the purpose of qualification,
               demonstration or on a similar trial basis. The expectation is
               that after undergoing Brocade's Recertification process, this
               Product could be returned to Sequent as "equivalent-to-new"
               product.

        6.5    In the event that Product is returned from one of Sequent's
               customers after a period exceeding [*] and Brocade's estimated
               cost of

*Certain information on this page has been omitted and filed 
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                                    Page 36


<PAGE>   37
               recertification exceeds the standard cost provided in sub-Section
               2.4 of Attachment B, Brocade shall provide a quotation with a
               complete breakdown of time and materials for the Recertification
               and upon Sequent's acceptance of the pricing Brocade shall
               perform the Recertification.

                                     Page 37


<PAGE>   38
                                  ATTACHMENT E

                                     REPORTS

This Attachment summarizes the reports required of Brocade and Sequent under the
Agreement. There shall be no charge to either party for any reports required
under the Agreement.

1.      RECURRING REPORTS

        1.1    Brocade Provided Reports

               1.1.1  Brocade Factory Metrics

                      Brocade will provide these reports to the designated
                      Sequent Supplier Engineer as provided in sub-Section 7.1
                      of Attachment C. The content of these reports shall
                      include:

                      (i)     Summary of all inspection/test station yields
                              for the month for all Products shipped to
                              Sequent;

                      (ii)    Pareto of failures for all inspection/test
                              stations for the month for all Products shipped
                              to Sequent; and

                      (iii)   Failure analysis summary of Sequent returned
                              Products.

               1.1.2  Repair Throughput and Aging Profile

                      Brocade will provide these reports [*] as agreed upon
                      between the parties.

        1.2    Sequent Provided Reports

               1.2.1  Sequent Field Metrics

                      Sequent will provide the following reports as provided for
                      in sub-Section 7.1 of Attachment C. The content of these
                      reports shall include:

                      (i)   Summary of field Quality Failures
                      (ii)  Reliability Data in the form of average time
                            between failures ("ATBR"). ATBR includes all
                            replacements, some of which may not have been
                            actual failures.

2.      REQUESTED REPORTS

        2.1    Brocade Provided Reports

               2.1.1  Sub-Tier Supplier Performance

                      The content shall include status reports indicating
                      sub-tier supplier performance as provided in Section 19 of
                      the Agreement.

*Certain information on this page has been omitted and filed 
 separately with the Commission. Confidential treatment has 
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                                     Pg. 38


<PAGE>   39
               2.1.2  NTF Test Reports

                      The NTF reports required in Section 5 of Attachment D are
                      to be supplied no later than ten 10) business days after
                      completion of the NTF testing. Content of the reports will
                      be as provided in sub-Section 5.2 of Attachment D.

               2.1.3  Failure Analysis Reports

                      Failure Analysis reports, including report content and
                      time requirements, are to be supplied under sub-Section
                      6.3 of Attachment C.

               2.1.4  Recertification Reports

                      The Recertification reports required in Section 6 of
                      Attachment D are to be supplied no later than ten (10)
                      business days after completion of the Recertification.
                      Content of the reports will be as provided in sub-Section
                      6.3 of Attachment D.

                                     Page 39



SUPPLEMENT NO. 1 TO PURCHASE AGREEMENT BETWEEN SEQUENT COMPUTER SYSTEMS, INC. AND BROCADE COMMUNICATIONS SYSTEMS, INC. The above referenced agreement ("Agreement") entered into between Sequent Computer Systems, Inc. ("Sequent") and Brocade Communications Systems, Inc. ("Brocade") is amended as provided below. This supplement number 1 ("Supplement") is effective September 26, 1997 ("Supplement Effective Date."). 1. DEFINITIONS 1.1 "Caterpillar Product" shall mean the product described in Attachment A of this Supplement. 1.2 "Caterpillar Development Project" shall mean the development of the Caterpillar Product, including prototype and Production Caterpillar Products. 1.3 "Production Caterpillar Product" shall mean Caterpillar Products that will be available for purchase and resale by Sequent. 2. SCOPE OF SUPPLEMENT 2.1 This Supplement, together with the Agreement, contains the terms and conditions which govern Brocade's development of the Caterpillar Product for Sequent. 2.2 The Caterpillar Product shall be developed in accordance with the Caterpillar Product description and specification as provided in Attachment A. 2.3 The parties acknowledge that this Supplement may be executed prior to complete qualification of the Caterpillar Product by Sequent. Qualification of the Caterpillar Product by Sequent and the Caterpillar Product meeting all specifications as required in Attachment A are conditions precedent to Sequent's obligations under this Supplement or under the Agreement. 2.4 Upon completion of the Caterpillar Development Project and Brocade making the Production Caterpillar Product available to Sequent, the parties shall add the Caterpillar Product to the Agreement. Any purchases of the Production Caterpillar Product by Sequent will be governed by the Agreement as amended by this Supplement. 1 <PAGE> 2 3. CATERPILLAR DEVELOPMENT PROJECT 3.1 Unless otherwise mutually agreed to in writing by the parties, Brocade shall begin the Caterpillar Development Project and provide Sequent with the deliverables described below on or before the dates indicated: Deliverable Completion Date ----------- --------------- Delivery of the first prototype November 7, 1997 Caterpillar Product to Sequent Delivery of the first Production December 27, 1997 Caterpillar Product to Sequent 3.2 Brocade shall provide Sequent with a Production Caterpillar Product that conforms to and performs in accordance with the descriptions and specifications provided in Attachment A and, unless otherwise agreed to in writing by the parties, Brocade shall use [*] to make a Production Caterpillar Product available for purchase by Sequent no later than December 27, 1997. Brocade recognizes the importance of delivering the Production Caterpillar Product at the earliest possible time. 3.3 After the Production Caterpillar Product has been made available to Sequent and within a time period to be agreed upon between the parties, Brocade shall upgrade all prototype Caterpillar Products previously delivered to Sequent to Production Caterpillar Products. Such upgrades shall be done [*]. 4. CATERPILLAR DEVELOPMENT PROJECT ACCEPTANCE, PRICING, AND PAYMENT 4.1 Brocade may invoice Sequent for the amounts set forth below upon satisfaction of the acceptance criteria set forth in sub-Section 4.2, below for the listed deliverable. Such payments, when made, shall constitute full and complete payment to Brocade for all of its efforts and deliverables under the Caterpillar Development Project, including, but not limited to, all costs and expenses for work, communications, and technical data and equipment that Brocade is required to provide to Sequent under this Supplement. In the event Sequent terminates the Agreement without cause prior to completion of all deliverables under this Supplement, Brocade will be entitled solely to actual, substantiated, documented, necessary and reasonable costs and expenses incurred by Brocade under the Supplement up to the date of notice of termination. If the Agreement is so terminated prior to full completion of Brocade's obligations, in no event shall Sequent's obligation to Brocade exceed the payment amount that would have been due Brocade following acceptance of the next listed, but uncompleted, deliverable. *Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 2 <PAGE> 3 Deliverable Payment Amount ----------- -------------- Delivery of the first prototype $[*] Caterpillar Product to Sequent Delivery of the first Production $[*] Caterpillar Product to Sequent 4.2 Sequent's obligation to pay the amounts listed above is conditioned on satisfaction of the following acceptance criteria: 4.2.1 Delivery of the first prototype Caterpillar Product to Sequent. This deliverable will be accepted at such time as Sequent determines that Brocade has provided Sequent with the first prototype Caterpillar Product that satisfies the requirements of Attachment A. 4.2.2 Delivery of the first Production Caterpillar Product to Sequent. This deliverable will be accepted at such time as Sequent determines that Brocade has provided Sequent with the first Production Caterpillar Product that satisfies the requirements of Attachment A. 5. CATERPILLAR PRODUCT PRICING 5.1 Unless otherwise agreed to by the parties, prototype and Production Caterpillar Product pricing shall be in accordance with the following pricing matrix. Pricing is based on cumulative Caterpillar Product purchases. Cumulative Purchase Volume Price per Caterpillar Product -------------------------- ----------------------------- [*] $[*] [*] not to exceed $[*] 5.2 The prices listed above shall remain in effect until Brocade ships [*] Caterpillar Products to the total marketplace. At such time that Brocade ships in excess of [*] Caterpillar Products, Brocade shall reduce the above referenced prices to Sequent by [*] per Caterpillar Product, or any subsequent low cost Product offering that Sequent purchases, until such time as Sequent has realized a total price reduction of $[*]. 6. PRECEDENCE 6.1 For purposes of this Supplement, the term "Product," as such term is used in the Agreement, will mean the prototype and Production Caterpillar Product as the terms and conditions of the Agreement apply to this Supplement. 6.2 The terms and conditions of this Supplement shall take precedence over any conflicting terms and conditions of the Agreement. Except as otherwise provided in this Supplement, the remaining terms and conditions of the Agreement shall remain in full force and effect. *Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 3 <PAGE> 4 IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by their duly authorized representatives. SEQUENT COMPUTER SYSTEMS, INC. BROCADE COMMUNICATIONS SYSTEMS, INC. By: /s/ Robert D. Bakker By: /s/ CHARLES W. SMITH ---------------------------------- ---------------------------------- (Signature) (Signature) Name: Robert D. Bakker Name: Charles W. Smith ----------------------------- ----------------------------- (Printed or Typed) (Printed or Typed) Title: Sr. Director Mfg. Ops Title: Vice President, Worldwide Sales --------------------- ------------------------------- Date: 4/20/98 Date: April 16, 1998 ----------------------------- ----------------------------- 4 <PAGE> 5 ATTACHMENT A PRODUCT SPECIFICATION Attachment A is amended to include the following: 1. PRODUCT DESCRIPTION AND PRODUCT SPECIFICATIONS Product Specifications Product Description (By Sequent Part Numbers) ------------------- ------------------------- 6 Port Fibre Channel Switch 1003-74200 16 Port FRU FCS-9ASY-16 6 Port FRU FCS-9ASY-06 5 <PAGE> 6 ATTACHMENT B PRODUCT AND PRODUCT SUPPORT PRICING Attachment B is amended to include the following: 1. Product Pricing 1997 1998* (not to exceed) 1.4 GBIC: Sequent part number 1003-73152 Brocade part number X1006 [*] [*] 1.6 16 Port FRU: Sequent part number FCS-9ASY-16 [*] [*] 1.7 6 Port FRU: Sequent part number FCS-9ASY-06 [*] [*] 1.8 6 Port: Sequent part number 1003-74200 [*] [*] *Note: Pricing for 1999 through the remainder of the term of the Agreement will be as agreed upon between the parties [*]. **Note: For initial stocking orders and subsequent orders in excess of a net aggregate of [*], Brocade will apply a [*] for Brocade part number X1003 and a [*] for Brocade part number X1006. ***Note: Refer to sub-Section 5.1 of the Agreement regarding volume based pricing requirements. *Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 6 <PAGE> 7 ATTACHMENT C SUPPLIER QUALITY Attachment C is amended as follows: 1. Delete sub-Section 11.3.2(i) and insert: "Product mean time between failures ("MTBF") drops below [*] of Brocade's predicted MTBF of [*] for a 16 port switch and [*] for a 6 port switch; or" 2. Delete sub-Section 5.2 and insert: "The Reliability Failure Goal for the 16 Port Switch is [*] MTBF (Annual Failure Rate ("AFR") [*]). The Reliability Failure Goal for the 6 Port Switch is [*] MTBF (AFR [*]). *Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 7

Source: OneCLE Business Contracts.