Summary of FOUNDRY NETWORKS INC

Item 8.01. Other Events.
On December 11, 2008, the Company and the members of its Board of Directors entered a Memorandum of Understanding (the "MOU") with plaintiff in the matter of Doug Edrington v. Bobby R., Johnson Jr., et. al. originally filed on July 23, 2008 in the Superior Court of the State of California for the County of Santa Clara.
In connection with, and pursuant to, the MOU, the Company is providing below supplemental disclosures to those set forth in its definitive revised proxy materials (the "Revised Proxy Materials") filed by the Company with the Securities and Exchange Commission on November 14, 2008 and relating to the rescheduled special meeting of stockholders of the Company to be held for the purpose of, among other things, adopting the Agreement and Plan of Merger, dated as of July 21, 2008 (the "Merger Agreement"), among Brocade Communications Systems, Inc., Falcon Acquisition Sub, Inc., a wholly-owned subsidiary of Brocade, and the Company as amended by Amendment No. 1 to Agreement and Plan of Merger dated as of November 7, 2008.
Opinion of Merrill Lynch. The Company's disclosures contained in the Revised Proxy Materials under the section entitled "Proposal No.1 - The Merger - Opinion of Merrill Lynch" beginning on page 36 of the Revised Proxy Materials are supplemented as follows:
Opinion of Merrill Lynch
Comparable Public Trading Multiples Analysis The subsection entitled "Comparable Public Trading Multiples Analysis" on pages 38-39 of the Revised Proxy Materials makes reference to eight publicly traded networking companies that Merrill Lynch deemed to be relevant to its analysis of us. The subsection also makes reference to the full ranges of multiples from which Merrill Lynch determined relevant ranges of multiples for such companies. The multiples for each company from which such relevant ranges were derived, which are based on publicly available information and research analyst estimates, are set forth in the table below:

Company                                                            CY2009 Enterprise Value/EBITDA        CY2009 Share Price/Cash EPS
Cisco Systems, Inc.                                                                     7.2x                                12.0x
Juniper Networks, Inc.                                                                  6.3x                                12.5x
F5 Networks, Inc.                                                                       6.5x                                12.9x
Riverbed Technology, Inc.                                                               5.8x                                15.4x
Blue Coat Systems, Inc.                                                                 4.0x                                 7.3x
Aruba Networks, Inc.                                                                    4.3x                                10.6x
Extreme Networks, Inc.                                                                  4.2x                                11.0x
SonicWALL, Inc.                                                                         2.4x                                13.9x


                                                         Max                            7.2x                                15.4x

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      Company    CY2009 Enterprise Value/EBITDA     CY2009 Share Price/Cash EPS
         Mean                         5.1 x                            12.0 x
       Median                         5.0 x                            12.3 x
          Min                         2.4 x                             7.3 x

Comparable Transaction Analysis
The subsection entitled "Comparable Transaction Analysis" on page 39 of the
Revised Proxy Materials makes reference to ten precedent transactions in the
networking industry which Merrill Lynch deemed to be relevant to its analysis of
us. The subsection also makes reference to the full ranges of multiples from
which Merrill Lynch determined relevant ranges for such transactions. The
multiples for each transaction from which such relevant ranges were derived,
which are based on publicly available information and research analyst
estimates, are set forth in the table below:

Enterprise Value Enterprise Value/
Date Announced Acquirer Target (in millions) Form of Consideration NTM EBITDA
04/21/08 Blue Coat Systems, Inc. Packeteer, Inc. $ 192.6 Cash 19.5 x*
09/23/07 Arris Group, Inc. CCOR, Inc. 638.0 Cash/Stock 11.3 x
06/27/07 CommScope, Inc. Andrew Corporation 2,631.6 Cash/Stock 9.7 x
04/26/07 Mitel Networks Corp./
Francisco Partners Inter-Tel, Inc. 515.3 Cash 8.0 x
01/04/07 Cisco Systems, Inc. IronPort Systems, Inc. 830.0 Cash/Stock NA
12/19/06 LM Ericsson AB Redback Networks, Inc. 1,885.8 Cash 32.8 x*
11/14/06 Motorola, Inc. Netopia, Inc. 177.1 Cash 14.3 x
08/23/06 International Business
Machine Corp. Internet Security Systems, Inc. 1,067.8 Cash 14.2 x
11/14/05 Gores Group LLC &
Tennenbaum Capital
Partners LLC Enterasys Networks, Inc. 270.9 Cash 11.2 x
04/26/05 Juniper Networks, Inc. Peribit Networks, Inc. 337.0 Cash/Stock NA

Max 14.3 x
Mean 11.5 x
Median 11.3 x
Min 8.0 x

* Denotes multiple excluded from the max, mean, median and min statistic.

General
The last paragraph on page 41 of the Revised Proxy Materials makes reference to terms of the engagement letter between Merrill Lynch and us. Under the terms of the engagement letter between Merrill Lynch and us, Merrill Lynch agreed to provide financial advisory services to us, including an opinion as to the fairness from a financial point of view of the consideration to be received pursuant to the merger by holders of shares of our common stock, and we agreed to pay Merrill Lynch a customary fee, which is contingent upon completion of the merger, of $15.8 million plus 0.60% of any dividend declared by us.

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Opinion of Houlihan Lokey. The Company's disclosures contained in the Revised Proxy Materials under the section entitled "Proposal No. 1 - The Merger - Opinion of Houlihan Lokey" beginning on page 42 of the Revised Proxy Materials are supplemented as follows:
Opinion of Houlihan Lokey
Selected Companies Analysis
The subsection entitled "Selected Companies Analysis" on pages 45-46 of the Revised Proxy Materials makes reference to fifteen publicly traded companies that Houlihan Lokey selected as part of its analysis. At the bottom of page 46, the same subsection also makes reference to a range of selected multiples that Houlihan Lokey derived from its selected companies analysis. Differences in such multiples for a particular company relative to the multiples determined by Merrill Lynch for the same company may arise from, among other things, the dates of each of the Houlihan Lokey and Merrill Lynch analyses, and the methodologies and sources of publicly available information used by each of them. These multiples are set forth below:

                                            CY2008             CY2009            CY2008           CY2009
                                          Enterprise         Enterprise        Enterprise       Enterprise       Share Price/     Share Price/
              Company                   Value/Revenue      Value/Revenue      Value/EBITDA     Value/EBITDA        2008 EPS         2009 EPS
3Com Corporation                                 0.6x               0.5x             4.0x *            3.8x *           6.5x *           6.8x *
Adtran, Inc.                                     1.5x               1.5x             5.8x              5.9x            12.2x            11.9x
Alcatel-Lucent                                   0.4x *             0.4x *           5.2x              4.4x            24.8x             8.5x *
Aruba Networks, Inc.                             0.6x               0.5x             9.6x              4.1x           NM                11.3x
Blue Coat Systems, Inc.                          1.2x               0.9x             6.7x              6.6x            13.3x             8.6x *
Brocade Communications Systems, Inc.             0.7x               0.6x             2.3x *            1.7x *           6.5x *           6.4x *
Cisco Systems, Inc.                              2.2x               2.1x             6.7x              6.6x            11.0x            10.8x
Citrix Systems, Inc.                             2.4x               2.2x             9.1x              8.2x            15.2x            13.8x
Extreme Networks, Inc.                           0.5x *             0.5x *          17.2x              9.1x            21.6x            15.1x
F5 Networks, Inc.                                2.6x               2.4x             9.2x              8.0x            21.2x            13.4x
Juniper Networks, Inc.                           2.1x               1.9x             8.0x              6.0x            14.5x            13.0x
Nortel Networks Corporation                      0.3x *             0.3x *           3.7x *            3.6x *        NEG                17.9x
Riverbed Technology, Inc.                        1.6x               1.4x            12.3x              9.0x            21.2x            16.8x
SonicWALL, Inc.                                  0.7x               0.7x             6.6x              5.8x            17.1x            14.4x
Telefonaktiebolaget LM Ericsson                  0.8x               0.8x             6.3x              5.2x            12.8x            10.9x

                                Mean             1.4x               1.3x             8.5x              6.6x            16.8x            13.2x
                              Median             1.3x               1.2x             7.3x              6.3x            15.2x            13.5x

* Denotes multiple excluded from mean and median statistics

Selected Transactions Analysis
The subsection entitled "Selected Transactions Analysis" on page 47 of the Revised Proxy

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Materials makes reference to 15 precedent transactions, as to which Houlihan Lokey reviewed publicly available information and data as part of its analysis. At the bottom of page 47 of the Revised Proxy Materials, the same subsection also makes reference to a range of selected multiples that Houlihan Lokey derived from its selected transactions analysis. Differences in such multiples and transaction values for a particular transaction relative to the multiples and transaction values determined by Merrill Lynch for the same transaction may arise from, among other things, the methodologies and sources of publicly available information used by each of them. These multiples are set forth below:

                                                                                                Transaction          Transaction          Transaction          Transaction
                                                                       Transaction              Value/ LTM           Value/ NTM            Value/ TM           Value/ NTM
            Acquiror                           Target                     Value                   Revenue              Revenue              EBITDA               EBITDA
Blue Coat Systems, Inc.              Packeteer, Inc.                 $         190.2                     1.3 x                1.1 x                 NM                 14.2 x
Aastra Technologies Limited          Telefonaktiebolaget LM
                                     Ericsson's Enterprise
                                     Communication Business          $         138.6                     0.3 x                 NA                  3.5 x                 NA
Arris Group, Inc.                    CCOR, Inc.                      $         655.4                     2.4 x                2.1 x               15.2 x*              10.8 x
CommScope, Inc.                      Andrew Corporation              $       2,838.9                     1.3 x                1.2 x               12.9 x               10.8 x
Mitel Networks Corporation           Inter-Tel, Inc.                 $         466.0                     1.0 x                1.0 x                9.6 x                7.3 x
Silver Lake Partners and Texas       Avaya, Inc.
Pacific Group, Inc.                                                  $       7,371.0                     1.4 x                1.4 x               13.6 x               10.4 x
Cisco Systems, Inc.                  IronPort Systems, Inc.          $         830.0                     8.3 x*               6.4 x*                NA                   NA
Telefonaktiebolaget LM Ericsson      Redback Networks, Inc.          $         1,900                     7.8 x*               5.8 x*                NM                 25.1 x*
Motorola, Inc.                       Netopia, Inc.                   $         181.4                     1.7 x                1.3 x                 NM                 17.2 x*
International Business Machines      Internet Security Systems,
Corp.                                Inc.                            $       1,058.6                     3.1 x                2.9 x               12.3 x               11.7 x
Brocade Communications Systems,      McDATA Corp.
Inc.                                                                 $         653.3                     1.0 x                0.9 x                4.7 x                3.5 x
Alcatel SA                           Lucent Technologies, Inc.       $      14,617.6                     1.6 x                1.5 x                8.3 x                8.9 x
Cisco Systems, Inc.                  Scientific-Atlanta, Inc.        $       5,324.0                     2.7 x                2.3 x               12.3 x                9.8 x
Gores Group LLC and Tennenbaum       Enterasys Networks, Inc.
Capital Partners LLC                                                 $         276.2                     0.8 x                0.8 x                 NM                 12.8 x
Juniper Networks, Inc.               Peribit Networks, Inc.          $         337.0                    10.0 x*                NA                   NA                   NA

                                                                                Mean                     1.6 x                1.5 x                9.7 x               10.0 x
                                                                              Median                     1.4 x                1.3 x               11.0 x               10.6 x

* Denotes multiple excluded from mean and median statistics

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Other Matters
The first paragraph on page 49 of the Revised Proxy Materials makes reference to terms of the engagement letter between Houlihan Lokey and us. Under the terms of the engagement letter between Houlihan Lokey and us, Houlihan Lokey was engaged by us to provide an opinion to the board of directors regarding the fairness from a financial point of view of the consideration to be received by the holders of our common stock (other than Brocade, Falcon Acquisition Sub, Inc. and their respective affiliates). We agreed to pay Houlihan Lokey a customary fee of $850,000, a portion of which was payable upon Houlihan Lokey's engagement and the balance of which was payable upon the delivery of Houlihan Lokey's opinion. None of the fees payable to Houlihan Lokey are contingent upon the successful completion of the merger.

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