Exhibit 10.5

EXECUTION COPY

BROCADE COMMUNICATIONS SYSTEMS, INC.

$300,000,000

6.625% Senior Secured Notes due 2018

$300,000,000

6.875% Senior Secured Notes due 2020

Purchase Agreement

January 13, 2010

J.P. Morgan Securities Inc.

  As Representative of the

  several Initial Purchasers listed

  in Schedule 1 hereto

c/o J.P. Morgan Securities Inc.

270 Park Avenue

New York, NY 10179

Ladies and Gentlemen:

Brocade Communications Systems, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the several initial purchasers listed in Schedule
1 hereto (the “Initial Purchasers”), for whom you are acting as representative
(the “Representative”), $300,000,000 principal amount of its 6.625% Senior
Secured Notes due 2018 (the “2018 Notes”) and $300,000,000 principal amount of
its 6.875% Senior Secured Notes due 2020 (the “2020 Notes”, and together with
the 2018 Notes, the “Securities”). The 2018 Notes will be issued pursuant to an
Indenture to be dated as of the Closing Date (as defined below) (the “2018
Indenture”) among the Company, the guarantors listed in Schedule 2 hereto (the
“Guarantors”) and Wells Fargo Bank, National Association (“Wells Fargo”), as
trustee (the “2018 Trustee”), and the 2020 Notes will be issued pursuant to an
Indenture to be dated as of the Closing Date (the “2020 Indenture”, and together
with the 2018 Indenture, the “Indentures”) among the Company, the Guarantors and
Wells Fargo, as trustee (the “2020 Trustee”, and together with the 2018 Trustee,
the Trustees). The Securities will be guaranteed on a secured senior basis by
each of the Guarantors (the “Guarantees”).

The Securities and the Guarantees will be secured by a lien, subject to
Permitted Exceptions (as defined below) on all the Company’s and the Guarantors’
assets that secure that certain Credit Agreement, dated as of October 7, 2008
(as amended, supplemented or otherwise modified from time to time, the “Senior
Secured Credit Facility”), among the Company, the lenders party thereto and Bank
of America, N.A., as administrative agent (the “Administrative Agent”) (such
assets, collectively, the “Collateral”).

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The portion of the Collateral relating to real property and fixtures shall be
described in the mortgages, deeds of trust or deeds to secure debt delivered
pursuant to Section 4(p) hereof in form and substance reasonably satisfactory to
the Representative (collectively, the “Mortgages”) with respect to each property
listed on Annex D hereto (each, a “Mortgaged Property” and, collectively, the
“Mortgaged Properties”) and the portion of the Collateral other than real
property shall be described in the Security Agreement for the 2018 Notes (the
“2018 Security Agreement”) and the Security Agreement for the 2020 Notes (the
“2020 Security Agreement”), each to be dated the Closing Date (collectively, the
“Security Agreements” and, together with the Mortgages, the “Collateral
Documents”). Each of the Collateral Documents shall be delivered to Wells Fargo,
acting as collateral agent (the “Collateral Agent”), granting a security
interest with respect to the Collateral, subject to Permitted Exceptions, for
the benefit of the Trustees and each holder of the Securities and the successors
and assigns of the foregoing. The rights of the holders of the Securities with
respect to the Collateral shall be further governed by the Intercreditor
Agreement to be dated the Closing Date (the “Intercreditor Agreement”) among the
Company, the Guarantors, the Administrative Agent and the Collateral Agent.

The Securities will be sold to the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the “Securities Act”), in reliance
upon an exemption therefrom. The Company and the Guarantors have prepared a
preliminary offering memorandum dated January 8, 2010 (the “Preliminary Offering
Memorandum”) and will prepare an offering memorandum dated the date hereof (the
“Offering Memorandum”) setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. The Company hereby confirms
that it has authorized the use of the Preliminary Offering Memorandum, the other
Time of Sale Information (as defined below) and the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement. Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Preliminary Offering Memorandum. References herein to the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering Memorandum shall be
deemed to refer to and include any document incorporated by reference therein.

At or prior to the time when sales of the Securities were first made (the “Time
of Sale”), the following information shall have been prepared (collectively, the
“Time of Sale Information”): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on Annex A hereto.

Holders of each of the 2018 Notes and the 2020 Notes (including the Initial
Purchasers and their direct and indirect transferees) will be entitled to the
benefits of a Registration Rights Agreement, to be dated the Closing Date and
substantially in the form attached hereto as Exhibit A (each, a “Registration
Rights Agreement”, and collectively, the “Registration Rights Agreements”),
pursuant to which the Company and the Guarantors will agree to file one or more
registration statements with the Securities and Exchange Commission (the
“Commission”) providing for the registration under the Securities Act of such
Securities or the Exchange Securities referred to (and as defined) in the
applicable Registration Rights Agreement.

 

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The Company hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and resale of the Securities, as follows:

1. Purchase and Resale of the Securities. (a) The Company agrees to issue and
sell the Securities to the several Initial Purchasers as provided in this
Agreement, and each Initial Purchaser, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase from the Company
(i) the respective principal amount of 2018 Notes set forth opposite such
Initial Purchaser’s name in Schedule 1 hereto under the caption “2018 Notes” at
a price equal to 97.559% of the principal amount thereof plus accrued interest,
if any, from January 20, 2010 to the Closing Date and (ii) the respective
principal amount of 2020 Notes set forth opposite such Initial Purchaser’s name
in Schedule 1 hereto under the caption “2020 Notes” at a price equal to 97.434%
of the principal amount thereof plus accrued interest, if any, from January 20,
2010 to the Closing Date. The Company will not be obligated to deliver any of
the Securities except upon payment for all the Securities to be purchased as
provided herein.

(b) The Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale Information.
Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) it is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act (a “QIB”) and an accredited investor within the meaning of
Rule 501(a) under the Securities Act;

(ii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act (“Regulation D”) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act; and

(iii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities as part of their initial offering
except:

(A) within the United States to persons whom it reasonably believes to be QIBs
in transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and
in connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A; or

(B) in accordance with the restrictions set forth in Annex C hereto.

 

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(c) Each Initial Purchaser acknowledges and agrees that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Sections 6(f) and 6(g), counsel for the Company and counsel for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers, and compliance by the Initial Purchasers
with their agreements, contained in paragraph (b) above (including Annex C
hereto), and each Initial Purchaser hereby consents to such reliance.

(d) The Company acknowledges and agrees that the Initial Purchasers may offer
and sell Securities to or through any affiliate of an Initial Purchaser and that
any such affiliate may offer and sell Securities purchased by it to or through
any Initial Purchaser, subject to compliance by the Initial Purchasers with
their agreements contained in Section 1(b) above, including Annex C hereto.

(e) The Company and the Guarantors acknowledge and agree that the Initial
Purchasers are acting solely in the capacity of an arm’s length contractual
counterparty to the Company and the Guarantors with respect to the offering of
Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as financial advisors or fiduciaries to, or
agents of, the Company, the Guarantors or any other person. Additionally,
neither the Representative nor any other Initial Purchaser is advising the
Company, the Guarantors or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company and the
Guarantors shall consult with their own advisors concerning such matters and
shall be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and neither the
Representative nor any other Initial Purchaser shall have any responsibility or
liability to the Company or the Guarantors with respect thereto. Any review by
any Representative or any other Initial Purchaser of the Company, the Guarantors
and the transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of such Representative or
such Initial Purchaser, as the case may be, and shall not be on behalf of the
Company, the Guarantors or any other person. The Company and the Guarantors
agree that they will not claim that the Initial Purchasers, or any of them, has
rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company or the Guarantors, in connection with such
transactions or the process leading thereto.

2. Payment and Delivery. (a) Payment for and delivery of the Securities will be
made at the offices of Simpson Thacher & Bartlett LLP, 2550 Hanover Street, Palo
Alto, CA 94304, at 10:00 A.M., New York City time, on January 20, 2010, or at
such other time or place on the same or such other date, not later than the
fifth business day thereafter, as J.P. Morgan Securities Inc. and the Company
may agree upon in writing. The time and date of such payment and delivery is
referred to herein as the “Closing Date”.

(b) Payment for the Securities shall be made by wire transfer in immediately
available funds to the account(s) specified by the Company to J.P. Morgan
Securities Inc. against delivery to the nominee of The Depository Trust Company,
for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the “Global Note”), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Company. The Global Note will be made available for inspection by the
Representative not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date.

 

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3. Representations and Warranties of the Company and the Guarantors. The Company
and the Guarantors jointly and severally represent and warrant to each Initial
Purchaser that:

(a) Preliminary Offering Memorandum, Time of Sale Information and Offering
Memorandum. The Preliminary Offering Memorandum, as of its date, did not, the
Time of Sale Information, at the Time of Sale, did not, and at the Closing Date,
will not, and the Offering Memorandum, in the form first used by the Initial
Purchasers to confirm sales of the Securities and as of the Closing Date, will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and the Guarantors make no representation or warranty with respect to
any statements or omissions made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum, the Time of Sale Information or the
Offering Memorandum.

(b) Additional Written Communications. The Company (including its agents and
representatives, other than the Initial Purchasers in their capacity as such)
has not prepared, made, used, authorized, approved or referred to and will not
prepare, make, use, authorize, approve or refer to any written communication
that constitutes an offer to sell or solicitation of an offer to buy the
Securities (each such communication by the Company or its agents and
representatives (other than a communication referred to in clauses (i), (ii) and
(iii) below) an “Issuer Written Communication”) other than (i) the Preliminary
Offering Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on
Annex A hereto, including a term sheet substantially in the form of Annex B
hereto, which constitute part of the Time of Sale Information, and (iv) any
electronic road show or other written communications, in each case used in
accordance with Section 4(c) hereof. Each such Issuer Written Communication,
when taken together with the Time of Sale Information, did not, and at the
Closing Date will not, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation and warranty with respect to
any statements or omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use in any Issuer Written Communication.

(c) Incorporated Documents. The documents incorporated by reference in each of
the Time of Sale Information and the Offering Memorandum, when filed with the
Commission, conformed or will conform, as the case may be, in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder, and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

 

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(d) Financial Statements. The financial statements and the related notes thereto
included or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum present fairly in all material respects the
financial position of the Company and its subsidiaries as of the dates indicated
and the results of their operations and the changes in their cash flows for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby (subject, in the case of interim
financial statements, to normal recurring year-end adjustments); the other
financial information included or incorporated by reference in each of the Time
of Sale Information and the Offering Memorandum has been derived from the
accounting records of the Company and its subsidiaries and fairly presents the
information shown thereby in all material respects; and the pro forma financial
information and the related notes thereto included or incorporated by reference
in each of the Time of Sale Information and the Offering Memorandum has been
prepared in accordance with the Commission’s rules and guidance with respect to
pro forma financial information, and the assumptions underlying such pro forma
financial information are reasonable.

(e) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included or incorporated by reference in each of the
Time of Sale Information and the Offering Memorandum (i) there has not been any
material changes in the capital stock (other than the issuance of shares of the
Company’s common stock pursuant to the Company’s employee stock purchase plans,
the vesting of restricted stock units and upon exercise of stock options and
warrants described as outstanding in, and the grant of options and awards under
existing equity incentive plans described in, the Time of Sale Information and
the Offering Memorandum) or long-term debt of the Company or any of its
subsidiaries, or any dividend or distribution of any kind declared, set aside
for payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development that would reasonably be expected to
result in a material adverse change, in or affecting the business, properties,
financial position or results of operations of the Company and its subsidiaries
taken as a whole; (ii) neither the Company nor any of its subsidiaries has
entered into any transaction or agreement (other than agreements entered into
with original equipment manufacturers in the ordinary course of business
consistent with past practice and the sale and leaseback of the Company’s
building and property located at 1600 Technology Drive, San Jose, CA 95110) that
is material to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the Company nor any of
its subsidiaries has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case as otherwise disclosed in the Time of Sale Information.

(f) Organization and Good Standing. The Company, each Guarantor and each of its
Significant Subsidiaries (as defined below) have been duly organized and are
validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified, in good standing or have such power
or authority would not, individually or in the aggregate, have a material
adverse effect on the business, properties, financial position,

 

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results of operations of the Company and its subsidiaries taken as a whole or on
the performance by the Company and the Guarantors of their obligations under the
Securities and the Guarantees (a “Material Adverse Effect”). The subsidiaries
listed in Schedule 3 to this Agreement are the only significant subsidiaries (as
defined in Rule 1-02 of Regulation S-X under the Exchange Act) of the Company
(the “Significant Subsidiaries”) and no other subsidiary or subsidiaries of the
Company, individually or in the aggregate, constitutes or constitute a
significant subsidiary (as defined in Rule 1-02 of Regulation S-X under the
Exchange Act) of the Company.

(g) Capitalization. The Company has and, as of October 31, 2009, after giving
effect to the offering of the Securities, the Company would have had, an
authorized capitalization as set forth in each of the Time of Sale Information
and the Offering Memorandum under the heading “Capitalization”; and all the
outstanding shares of capital stock or other equity interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable (except, in the case of any foreign subsidiary, for
directors’ qualifying shares and except as otherwise disclosed in each of the
Time of Sale Information and the Offering Memorandum) and are owned directly or
indirectly by the Company, free and clear of any lien, charge, encumbrance,
security interest, restriction on voting or transfer or any other claim of any
third party, other than as expressly permitted in the Security Agreements or
Indentures and, after giving effect to the offering of the Securities, under or
pursuant to the Collateral Documents.

(h) Stock Options. With respect to the outstanding stock options (the “Stock
Options”) granted pursuant to the stock-based compensation plans of the Company
and its subsidiaries (the “Company Stock Plans”), except as otherwise disclosed
in the Time of Sale Information and the Offering Memorandum, (i) each Stock
Option intended to qualify as an “incentive stock option” under Section 422 of
the Code so qualifies, (ii) each grant of a Stock Option was duly authorized no
later than the date on which the grant of such Stock Option was by its terms to
be effective (the “Grant Date”) by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company (or a duly
constituted and authorized committee thereof) and any required stockholder
approval by the necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and delivered by each
party thereto, (iii) each such grant was made in accordance with the terms of
the Company Stock Plans, the Exchange Act and the rules of the Nasdaq Global
Select Market, (iv) the per share exercise price of each Stock Option was equal
to the fair market value of a share of Common Stock (as defined in the
applicable Company Stock Plan) on the applicable Grant Date and (v) each such
grant was properly accounted for in accordance with U.S. generally accepted
accounting principles in the financial statements (including the related notes)
of the Company and disclosed in the Company’s filings with the Commission in
accordance with the Exchange Act and all other applicable laws, except in the
case of clauses (i)-(v) in such instances that are reasonably expected to not
have a Material Adverse Effect. Except as otherwise disclosed in the Time of
Sale Information and the Offering Memorandum, the Company has not knowingly
granted, and there is no and has been no policy or practice of the Company of
granting, Stock Options prior to the release or other public announcement of
material information regarding the Company or its subsidiaries or their results
of operations or prospects, except in such instances that are reasonably
expected to not have a Material Adverse Effect.

 

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(i) Due Authorization. The Company and each of the Guarantors have full right,
power and authority to execute and deliver this Agreement, the Securities, the
Indentures (including each Guarantee set forth therein), each of the Collateral
Documents, the Intercreditor Agreement, the Exchange Securities and the
Registration Rights Agreements (collectively, the “Transaction Documents”) and
to perform their respective obligations hereunder and thereunder; and all action
required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken.

(j) The Indentures. Each of the Indentures has been duly authorized by the
Company and each of the Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Company and each of the Guarantors
enforceable against the Company and each of the Guarantors in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability (collectively,
the “Enforceability Exceptions”); and on the Closing Date, each of the
Indentures will conform in all material respects to the requirements of the
Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the
rules and regulations of the Commission applicable to an indenture that is
qualified thereunder.

(k) The Securities and the Guarantees. The Securities have been duly authorized
by the Company and, when duly executed, authenticated, issued and delivered as
provided in the applicable Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the applicable Indenture; and the Guarantees have been duly
authorized by each of the Guarantors and, when the Securities have been duly
executed, authenticated, issued and delivered as provided in the applicable
Indenture and paid for as provided herein, will be valid and legally binding
obligations of each of the Guarantors, enforceable against each of the
Guarantors in accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the applicable Indenture.

(l) The Exchange Securities. On the Closing Date, the Exchange Securities
(including the related guarantees) will have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as contemplated by
the applicable Registration Rights Agreement, will be duly and validly issued
and outstanding and will constitute valid and legally binding obligations of the
Company, as issuer, and each of the Guarantors, as guarantor, enforceable
against the Company and each of the Guarantors in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits
of the applicable Indenture.

(m) Purchase and Registration Rights Agreements. This Agreement has been duly
authorized, executed and delivered by the Company and each of the Guarantors;
and each of the Registration Rights Agreements has been duly authorized by the
Company and each of the Guarantors and on the Closing Date will be duly executed
and delivered by the Company and each of the Guarantors and, when duly executed
and delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to the Enforceability Exceptions, and except
that rights to indemnity and contribution thereunder may be limited by
applicable law and public policy.

 

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(n) Collateral Documents and Intercreditor Agreement. Each of the Collateral
Documents and the Intercreditor Agreement has been duly authorized by the
Company and each of the Guarantors, in each case, to the extent a party thereto,
and, when duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding agreement of
the Company and each of the Guarantors, in each case, to the extent a party
thereto, enforceable against the Company and each of the Guarantors, to the
extent a party thereto, in accordance with its terms, subject to the
Enforceability Exceptions. The Collateral conforms in all material respects to
the description thereof contained in the Time of Sale Information and the
Offering Memorandum. Schedule 5 hereto sets forth, as of the date of this
Agreement and as of the Closing Date: all agreements or instruments of
indebtedness for borrowed money of the Company, the Guarantors and each other
subsidiary of the Company.

(o) Mortgages. Upon execution and delivery, the Mortgages will be effective to
grant a legal, valid and enforceable mortgage lien on each mortgagor’s right,
title and interest in the property described therein. When the Mortgages are
duly recorded in the proper recorders’ offices or appropriate public records and
the mortgage recording fees and taxes, if any, in respect thereof are paid and
compliance is otherwise had with the formal requirements of state law applicable
to the recording of real estate mortgages generally, each such Mortgage shall
constitute a validly perfected and enforceable lien and security interest in the
related portion of the Mortgaged Property constituting real property or fixtures
for the benefit of the Trustees and the holders of the Securities, pari passu
with the security interest in such property in favor of the Administrative Agent
for the benefit of the lenders under the Senior Secured Credit Facility, subject
only to the encumbrances and exceptions to title expressly permitted in the
Mortgages or Indentures (including those liens expressly permitted to be
incurred or which exist on the Collateral pursuant to the Indentures) or
expressly set forth as an exception to the policies of title insurance obtained
to insure the lien of each Mortgage with respect to each of the Mortgaged
Properties, including, without limitation, the mortgages securing the Senior
Secured Credit Facility (such encumbrances and exceptions, the “Mortgage
Permitted Exceptions”), and to the Enforceability Exceptions.

(p) Security Agreement. The 2018 Security Agreement and the 2020 Security
Agreement, as applicable, when duly executed and delivered in accordance with
its terms by each of the parties thereto, will be effective to grant a valid and
enforceable security interest, in favor of the Collateral Agent for the benefit
of the Trustees and the holders of, as applicable, the 2018 Notes or the 2020
Notes, in each grantor’s right, title and interest in the Collateral (other than
the Mortgaged Properties), subject to the Enforceability Exceptions.

(q) Personal Property Collateral. Upon the proper filing of financing
statements, or Mortgages, or to the extent applicable, appropriate filings in
the U.S. Patent and Trademark Office and the U.S. Copyright Office in order to
perfect the security interest in the United States registrations or applied for
intellectual property which is part of the Collateral, as applicable, with
respect to the Collateral described in the Security Agreements and the fixtures
and certain personal property described in the Mortgages (the “Personal Property
Collateral”), in each case, in the proper recording office, the security
interests granted thereby will constitute valid,

 

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perfected liens and security interests in the Collateral of each grantor or
mortgagor, for the benefit of the Trustees and the holders of the Securities,
enforceable in accordance with the terms contained therein, to the extent such
security interests can be perfected by filing a financing statement under the
UCC of the jurisdiction of organization of such grantor or by filing a mortgage
under the local law of the jurisdiction in which the fixtures are located, and
subject only to the encumbrances and exceptions to title expressly permitted in
the Security Agreements or Indentures (including those liens expressly permitted
to be incurred or which exist on the Collateral pursuant to the Indentures or
the Collateral Documents) (such encumbrances and exceptions, together with the
Mortgage Permitted Exceptions, the “Permitted Exceptions”), and to the
Enforceability Exceptions.

(r) Ownership of Collateral. The Company and the Guarantors collectively own,
have rights in, or have the power and authority to collaterally assign rights
in, the Collateral, free and clear of any liens other than the Permitted
Exceptions and liens pursuant to the Senior Secured Credit Facility.

(s) Descriptions of the Transaction Documents. Each Transaction Document
conforms in all material respects to the description thereof contained in each
of the Time of Sale Information and the Offering Memorandum.

(t) No Violation or Default. Neither the Company nor any of its subsidiaries is
(i) with respect to the Company, any Guarantor or any Significant Subsidiary, in
violation of its charter or by-laws or similar organizational documents; (ii) in
default, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of clauses (ii) and (iii) above,
for any such default or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.

(u) No Conflicts. The execution, delivery and performance by the Company and
each of the Guarantors of each of the Transaction Documents to which each is a
party, the issuance and sale of the Securities (including the Guarantees) and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents
will not (i) breach or violate any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, except liens, charges or encumbrances created or imposed pursuant to
the Collateral Documents or as may have been waived or otherwise approved
pursuant to such indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument, (ii) result in the violation of the provisions of the
charter or by-laws or similar organizational documents of

 

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the Company, any Guarantor or any of the Company’s Significant Subsidiaries or
(iii) result in the violation of any law or statute or any judgment, order, rule
or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (i) and (iii) above, for any such
breach, violation or default that would not, individually or in the aggregate,
have a Material Adverse Effect.

(v) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company and each of the Guarantors of each of the Transaction Documents
to which each is a party, the issuance and sale of the Securities (including the
Guarantees) and compliance by the Company and each of the Guarantors with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for (x) such consents, approvals, authorizations,
orders and registrations or qualifications as may be required (i) under
applicable state securities laws in connection with the purchase and resale of
the Securities by the Initial Purchasers, (ii) to perfect the Collateral Agent’s
security interests granted pursuant to the Collateral Documents and the related
financing statements and (iii) with respect to the Exchange Securities
(including the related guarantees) under the Securities Act, the Trust Indenture
Act and applicable state securities laws as contemplated by the Registration
Rights Agreements, (y) such consents, approvals, authorizations, orders and
registrations or qualifications as have been obtained or (z) such consents,
approvals, authorizations, orders and registrations or qualifications the
failure of which to obtain would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or have a material
adverse effect on the consummation of offering of the Securities or the
transactions contemplated by the Transaction Documents.

(w) Legal Proceedings. Except as otherwise disclosed in each of the Time of Sale
Information and the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or may be a party or to which any property
of the Company or any of its subsidiaries is or may be the subject that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and no such investigations, actions, suits or
proceedings are, to the knowledge of the Company and each of the Guarantors,
overtly threatened.

(x) Independent Accountants. KPMG LLP, who has audited certain financial
statements of the Company and its subsidiaries, are independent registered
accountants with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public
Company Accounting Oversight Board (United States) and as required by the
Securities Act.

(y) Title to Real and Personal Property. The Company and its subsidiaries have
good and marketable title to, or have valid rights to lease or otherwise use,
all items of real and personal property that are material to the respective
businesses of the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances, claims and defects and imperfections of title except
Permitted Exceptions and those that (i) do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries or (ii) could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

 

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(z) Title to Intellectual Property. The Company and its subsidiaries own or
possess adequate rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses, except in
any such instances that, individually or in the aggregate, are not reasonably
expected to have a Material Adverse Effect; and the conduct of their respective
businesses will not conflict in any material respect with any such rights of
others, and, except as otherwise disclosed in the Time of Sale Information and
the Offering Memorandum, the Company and its subsidiaries have not received any
notice of any claim of infringement of or conflict with any such rights of
others, except in any such instances that, individually or in the aggregate, are
not reasonably expected to have a Material Adverse Effect.

(aa) No Undisclosed Relationships. No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one hand, and
the directors, officers, a person who is known to the Company to be the
beneficial owner of more than five percent of any class of the Company’s voting
securities or any other affiliate of the Company or any of its subsidiaries, on
the other, that would be required by the Securities Act to be described in a
registration statement filed with the Commission and that is not so described in
each of the Time of Sale Information and the Offering Memorandum.

(bb) Investment Company Act. Neither the Company nor any of its subsidiaries is,
and after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in each of the Time of Sale
Information and the Offering Memorandum none of them will be, an “investment
company” or an entity “controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder (collectively, the “Investment Company Act”).

(cc) Taxes. Except as otherwise disclosed in the Time of Sale Information and
the Offering Memorandum, the Company and its subsidiaries have filed all
federal, state, local and foreign tax returns required to be filed through the
date hereof and has paid all taxes shown as due on such returns, except in such
instances that are reasonably expected to not have a Material Adverse Effect;
the Company and its subsidiaries have either paid or appropriately reserved
under generally accepted accounting principals (“GAAP”) for all federal, state,
local and foreign taxes required to be paid through the date hereof, except in
such instances that are reasonably expected to not have a Material Adverse
Effect; and except as otherwise disclosed in each of the Time of Sale
Information and the Offering Memorandum, there is no material tax deficiency
that has been, or that is expected to be, asserted against the Company or any of
its Significant Subsidiaries or any Guarantor or any of their respective
properties or assets.

(dd) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities

 

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that are necessary for the ownership or lease of their respective properties or
the conduct of their respective businesses as described in each of the Time of
Sale Information and the Offering Memorandum, except where the failure to
possess or make the same would not, individually or in the aggregate, have a
Material Adverse Effect; and except as otherwise disclosed in each of the Time
of Sale Information and the Offering Memorandum, neither the Company nor any of
its subsidiaries has received notice of any revocation or modification of any
such material license, certificate, permit or authorization or has any reason to
believe that any such material license, certificate, permit or authorization
will not be renewed in the ordinary course.

(ee) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company
and each of the Guarantors, is threatened, except as would not have a Material
Adverse Effect.

(ff) Compliance With Environmental Laws. Except as otherwise disclosed in the
Time of Sale Information and the Offering Memorandum, (i) the Company and its
subsidiaries (x) are in compliance with all applicable federal, state, local and
foreign laws, statutes, rules, regulations, requirements, decisions and orders
relating to the protection of the environment or natural resources, or to
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”), (y) have received and are in compliance
with all permits, licenses, certificates or other authorizations or approvals
required of them under applicable Environmental Laws to conduct their respective
businesses, and (z) have not received written notice of any actual or potential
liability under or relating to any Environmental Laws, including for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, and have no knowledge of any
event or condition that would reasonably be expected to result in any such
notice, and (ii) there are no costs or liabilities associated with Environmental
Laws of or relating to the Company or its subsidiaries, except in the case of
each of (i) and (ii) above, for any such failure to comply, or failure to
receive required permits, licenses or approvals, or cost or liability, as would
not, individually or in the aggregate, have a Material Adverse Effect; and
(iii) except as otherwise disclosed in the Time of Sale Information and the
Offering Memorandum, (x) there are no proceedings that are pending, or that are
known to be contemplated, against the Company or any of its subsidiaries under
any Environmental Laws in which a governmental entity is also a party, other
than such proceedings regarding which it is reasonably believed no monetary
sanctions of $100,000 or more will be imposed, (y) the Company and its
subsidiaries are not aware of any issues regarding compliance with, or
liabilities or other obligations under, Environmental Laws that could reasonably
be expected to have a Material Adverse Effect, and (z) none of the Company and
its subsidiaries anticipates material capital expenditures relating to any
Environmental Laws other than customary amounts incurred in the ordinary course
of business during the construction of the Company’s new corporate headquarters
in San Jose, California.

(gg) Hazardous Substances. There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission, or other
release of any kind of toxic wastes or hazardous substances, including, but not
limited to, any naturally occurring radioactive materials, brine, drilling mud,
crude oil, natural gas liquids and other petroleum materials, by, due to or
caused by the Company or any of its subsidiaries (or, to the Company’s or any
Guarantor’s knowledge, any other entity (including any predecessor) for whose
acts or omissions the Company or any of its subsidiaries is or could reasonably
be expected to be liable) upon any of

 

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the property now or previously owned or leased by the Company or any of its
subsidiaries, or upon any other property, in violation of any Environmental Laws
or in a manner or to a location that could reasonably be expected to give rise
to any liability under the Environmental Laws, except for any violation or
liability which would not, individually or in the aggregate, have a Material
Adverse Effect.

(hh) Compliance With ERISA. Except as otherwise disclosed in the Time of Sale
Information and the Offering Memorandum or as would not have a Material Adverse
Effect, (i) Each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for
which the Company or any member of its “Controlled Group” (defined as any
organization which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the
“Code”)) would have any liability (each, a “Plan”) has been maintained in
compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the Code;
(ii) no prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any Plan excluding
transactions effected pursuant to a statutory or administrative exemption;
(iii) for each Plan that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in
Section 412 of the Code, whether or not waived, has occurred or is reasonably
expected to occur; (iv) the fair market value of the assets of each Plan exceeds
the present value of all benefits accrued under such Plan (determined based on
those assumptions used to fund such Plan); (v) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to
occur; and (vi) neither the Company nor any member of the Controlled Group has
incurred, nor reasonably expects to incur, any liability under Title IV of ERISA
(other than contributions to the Plan or premiums to the PBGC, in the ordinary
course and without default) in respect of a Plan (including a “multiemployer
plan”, within the meaning of Section 4001(a)(3) of ERISA).

(ii) Disclosure Controls. The Company and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required
disclosure. The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule
13a-15 of the Exchange Act.

(jj) Accounting Controls. The Company and its subsidiaries maintain systems of
“internal control over financial reporting” (as defined in Rule 13a-15(f) of the
Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. The Company and its subsidiaries maintain
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with

 

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management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed in each of the
Time of Sale Information and the Offering Memorandum, there are no material
weaknesses or significant deficiencies in the Company’s internal controls. The
Company’s auditors and the Audit Committee of the Board of Directors of the
Company have been advised of: (i) all significant deficiencies and material
weaknesses in the design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the Company’s ability
to record, process, summarize and report financial information; and (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal controls over financial
reporting.

(kk) Insurance. The Company, the Guarantors and the Significant Subsidiaries
have insurance covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which insurance is in
amounts and insures against material losses and risks and are reasonably
believed to be adequate to protect the Company, the Guarantors and the
Significant Subsidiaries and their respective businesses; and neither the
Company, nor the Guarantors nor any of the Significant Subsidiaries has
(i) received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order
to continue such insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business.

(ll) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company and each of the Guarantors, any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.

(mm) Compliance with Money Laundering Laws. The operations of the Company and
its subsidiaries are and have been conducted at all times in material compliance
with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Guarantor, overtly threatened.

 

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(nn) Compliance with OFAC. None of the Company, any of its subsidiaries or, to
the knowledge of the Company or any Guarantor, any director, officer, agent,
employee or affiliate of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Department of the Treasury (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering of the Securities
hereunder, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

(oo) Solvency. On and immediately after the Closing Date, the Company (after
giving effect to the issuance of the Securities and the other transactions
related thereto as described in each of the Time of Sale Information and the
Offering Memorandum) will be Solvent. As used in this paragraph, the term
“Solvent” means, with respect to a particular date, that on such date (i) the
fair value of the assets of the Company and its consolidated subsidiaries taken
as a whole is not less than the total amount of liabilities of the Company and
its consolidated subsidiaries taken as a whole; (ii) the Company is able to pay
its debts and other liabilities, contingent obligations and commitments as they
mature and become due in the normal course of business; (iii) assuming
consummation of the issuance of the Securities as contemplated by this
Agreement, the Time of Sale Information and the Offering Memorandum, the Company
is not incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature; and (iv) the Company is not engaged in any business or
transaction, and does not propose to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Company is
engaged.

(pp) Senior Indebtedness. The Securities constitute “senior indebtedness” as
such term is defined in any indenture or agreement governing any outstanding
subordinated indebtedness of the Company.

(qq) No Restrictions on Subsidiaries. Except pursuant to the Senior Secured
Credit Facility, no subsidiary of the Company is currently prohibited, directly
or indirectly, under any agreement or other instrument to which it is a party or
is subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s properties or assets to the Company or any other
subsidiary of the Company.

(rr) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement and the agreement dated January 7, 2010 between the Company and
Qatalyst Partners LP) that would give rise to a valid claim against any of them
or any Initial Purchaser for a brokerage commission, finder’s fee or like
payment in connection with the offering and sale of the Securities, other than
in connection with the amendment to Senior Secured Credit Facility. Without
derogation of the reimbursement obligation of the Initial Holders contemplated
by Section 10 below, the Company is responsible for payment of any such payments
to Qatalyst Partners LP.

 

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(ss) Rule 144A Eligibility. On the Closing Date, the Securities will not be of
the same class as securities listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in an automated inter-dealer
quotation system; and each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains or will contain all the
information that, if requested by a prospective purchaser of the Securities,
would be required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.

(tt) No Integration. Neither the Company nor any of its affiliates (as defined
in Rule 501(b) of Regulation D) has, directly or through any agent (including,
without limitation, any financial advisor to the Company), sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act), that is or will be integrated with
the sale of the Securities in a manner that would require registration of the
Securities under the Securities Act.

(uu) No General Solicitation or Directed Selling Efforts. None of the Company or
any of its affiliates or any other person (including, without limitation, any
financial advisor to the Company) acting on its or their behalf (other than the
Initial Purchasers, as to which no representation is made) has (i) solicited
offers for, or offered or sold, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engaged in any directed selling
efforts within the meaning of Regulation S under the Securities Act (“Regulation
S”), and all such persons have complied with the offering restrictions
requirement of Regulation S.

(vv) Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 1(b) (including Annex
C hereto) and their compliance with their agreements set forth therein, it is
not necessary, in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement, the Time of
Sale Information and the Offering Memorandum, to register the Securities under
the Securities Act or to qualify the Indentures under the Trust Indenture Act.

(ww) No Stabilization. Neither the Company nor any of the Guarantors nor any
person acting on their behalf (including, without limitation, any financial
advisor to the Company) has taken, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization
or manipulation of the price of the Securities.

(xx) Margin Rules. Neither the issuance, sale and delivery of the Securities and
the Guarantees by the Company and the Guarantors nor the application of the
proceeds thereof by the Company as described in each of the Time of Sale
Information and the Offering Memorandum will violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System or any other regulation of such
Board of Governors.

(yy) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in any of the Time of Sale Information or the Offering Memorandum
has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.

 

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(zz) Statistical and Market Data. Nothing has come to the attention of the
Company or the Guarantors that has caused the Company or any Guarantor to
believe that the statistical and market-related data included or incorporated by
reference in each of the Time of Sale Information and the Offering Memorandum is
not based on or derived from sources that are reliable and accurate in all
material respects.

(aaa) Sarbanes-Oxley Act. There is and has been no failure on the part of the
Company or any of the Company’s directors or officers, in their capacities as
such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 related to loans and Sections 302 and 906 related
to certifications.

4. Further Agreements of the Company and the Guarantors. The Company and each of
the Guarantors jointly and severally covenant and agree with each Initial
Purchaser that:

(a) Delivery of Copies. The Company will deliver, without charge, to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication and the Offering
Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.

(b) Offering Memorandum, Amendments or Supplements. Before finalizing the
Offering Memorandum or making or distributing any amendment or supplement to any
of the Time of Sale Information or the Offering Memorandum or filing with the
Commission any document that will be incorporated by reference therein, the
Company will furnish to the Representative and counsel for the Initial
Purchasers a copy of the proposed Offering Memorandum or such amendment or
supplement or document to be incorporated by reference therein for review, and
will not distribute any such proposed Offering Memorandum, amendment or
supplement or file any such document with the Commission to which the
Representative reasonably objects, provided that nothing is this section shall
prevent the Company from complying with its obligations under law or the rules
of the NASDAQ Global Select Market (the “Exchange”).

(c) Additional Written Communications. Before making, preparing, using,
authorizing, approving or referring to any Issuer Written Communication, the
Company will furnish to the Representative and counsel for the Initial
Purchasers a copy of such written communication for review and will not make,
prepare, use, authorize, approve or refer to any such written communication to
which the Representative reasonably objects.

(d) Notice to the Representative. The Company will advise the Representative
promptly, and confirm such advice in writing, (i) of the issuance by any
governmental or regulatory authority of any order preventing or suspending the
use of any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum or the initiation or threatening of any proceeding for
that purpose; (ii) of the occurrence of any event at any time prior to the
completion of the initial offering of the Securities as a result of which any of
the

 

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Time of Sale Information, any Issuer Written Communication or the Offering
Memorandum as then amended or supplemented would include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing when such Time of
Sale Information, Issuer Written Communication or the Offering Memorandum is
delivered to a purchaser, not misleading; and (iii) of the receipt by the
Company of any notice with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or suspending any such qualification of
the Securities and, if any such order is issued, will use its reasonable best
efforts to obtain as soon as possible the withdrawal thereof.

(e) Time of Sale Information. If at any time prior to the Closing Date (i) any
event shall occur or condition shall exist as a result of which any of the Time
of Sale Information as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement any of the Time of Sale Information to comply with law, the Company
will immediately notify the Initial Purchasers thereof and forthwith prepare
and, subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to any of the Time of Sale Information (or any
document to be filed with the Commission and incorporated by reference therein)
as may be necessary so that the statements in any of the Time of Sale
Information as so amended or supplemented will not, in light of the
circumstances under which they were made, be misleading or so that any of the
Time of Sale Information will comply with law.

(f) Ongoing Compliance of the Offering Memorandum. If at any time prior to the
completion of the initial offering of the Securities (i) any event shall occur
or condition shall exist as a result of which the Offering Memorandum as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Company will
immediately notify the Initial Purchasers thereof and forthwith prepare and,
subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (including such document to be incorporated by reference therein)
will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law.

(g) Blue Sky Compliance. The Company will qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions in the United
States of America or Canada as the Representative shall reasonably request and
will continue such qualifications in effect so long as required for the offering
and resale of the Securities; provided that neither the

 

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Company nor any of the Guarantors shall be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such
jurisdiction where it would not otherwise be required to so qualify, (ii) file
any general consent to service of process in any such jurisdiction or
(iii) subject itself to taxation in any such jurisdiction if it is not otherwise
so subject.

(h) Clear Market. During the period from the date hereof through and including
the date that is 90 days after the date hereof, the Company and each of the
Guarantors will not, without the prior written consent of J.P. Morgan Securities
Inc., offer, sell, contract to sell or otherwise dispose of any debt securities
issued or guaranteed by the Company or any of the Guarantors and having a tenor
of more than one year.

(i) Use of Proceeds. The Company will apply the net proceeds from the sale of
the Securities as described in the Time of Sale Information and the Offering
Memorandum under the heading “Use of proceeds”.

(j) Supplying Information. While the Securities remain outstanding and are
“restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and each of the Guarantors will, during any period
in which the Company is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon the request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(k) DTC. The Company will assist the Initial Purchasers in arranging for the
Securities to be eligible for clearance and settlement through The Depository
Trust Company (“DTC”).

(l) No Resales by the Company. The Company will not, and will not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to, resell any
of the Securities that have been acquired by any of them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act.

(m) No Integration. Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) will, directly or through any agent (including,
without limitation, any financial advisor to the Company), sell, offer for sale,
solicit offers to buy or otherwise negotiate in respect of, any security (as
defined in the Securities Act), that is or will be integrated with the sale of
the Securities in a manner that would require registration of the Securities
under the Securities Act.

(n) No General Solicitation or Directed Selling Efforts. None of the Company or
any of its affiliates or any other person (including, without limitation, any
financial advisor to the Company) acting on its or their behalf (other than the
Initial Purchasers, as to which no covenant is given) will (i) solicit offers
for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engage in any directed selling
efforts within the meaning of Regulation S, and all such persons will comply
with the offering restrictions requirement of Regulation S.

 

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(o) No Stabilization. Neither the Company nor any of the Guarantors will take,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.

(p) Collateral Filings. Within the time periods set forth on Schedule 4, the
Company and the Guarantors shall deliver, furnish and/or cause to be furnished
all of the documents set forth on Schedule 4.

5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser hereby
represents and agrees that it has not and will not use, authorize use of, refer
to, or participate in the planning for use of, any written communication that
constitutes an offer to sell or the solicitation of an offer to buy the
Securities other than (i) the Preliminary Offering Memorandum and the Offering
Memorandum, (ii) a written communication that contains no “issuer information”
(as defined in Rule 433(h)(2) under the Securities Act) that was not included
(including through incorporation by reference) in the Preliminary Offering
Memorandum or the Offering Memorandum, (iii) any written communication listed on
Annex A or prepared pursuant to Section 4(c) above (including any electronic
road show), (iv) any written communication prepared by such Initial Purchaser
and approved by the Company in advance in writing or (v) any written
communication relating to or that contains the terms of the Securities and/or
other information that was included (including through incorporation by
reference) in the Preliminary Offering Memorandum or the Offering Memorandum.

6. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial
Purchaser to purchase Securities on the Closing Date as provided herein is
subject to the performance by the Company and each of the Guarantors of their
respective covenants and other obligations hereunder and to the following
additional conditions:

(a) Representations and Warranties. The representations and warranties of the
Company and the Guarantors contained herein shall be true and correct on the
date hereof and on and as of the Closing Date; and the statements of the
Company, the Guarantors and their respective officers made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the
Closing Date.

(b) No Downgrade. Subsequent to the earlier of (A) the Time of Sale and (B) the
execution and delivery of this Agreement, (i) no downgrading shall have occurred
in the rating accorded the Securities or any other debt securities or preferred
stock issued or guaranteed by the Company or any of its subsidiaries by any
“nationally recognized statistical rating organization”, as such term is defined
by the Commission for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, or has changed its outlook with respect to, its rating
of the Securities or of any other debt securities or preferred stock issued or
guaranteed by the Company or any of its subsidiaries (other than an announcement
with positive implications of a possible upgrading).

 

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(c) No Material Adverse Change. No event or condition of a type described in
Section 3(e) hereof shall have occurred or shall exist, which event or condition
is not described in each of the Time of Sale Information (excluding any
amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) the effect of which in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.

(d) Officer’s Certificate. The Representative shall have received on and as of
the Closing Date a certificate of an executive officer of the Company and of
each Guarantor who has specific knowledge of the Company’s or such Guarantor’s
financial matters and is satisfactory to the Representative (i) confirming that
such officer has carefully reviewed the Time of Sale Information and the
Offering Memorandum and, to the knowledge of such officer, the representations
set forth in Sections 3(a) and 3(b) hereof are true and correct, (ii) confirming
that the other representations and warranties of the Company and the Guarantors
in this Agreement are true and correct in all material respects (except to the
extent already qualified by materiality, in which case such representations,
warranties and statements shall be true and correct in all respects) and that
the Company and the Guarantors have complied with all agreements and satisfied
all conditions on their part to be performed or satisfied hereunder at or prior
to the Closing Date and (iii) to the effect set forth in paragraphs (b) and
(c) above.

(e) Comfort Letters. On the date of this Agreement and on the Closing Date, KPMG
LLP shall have furnished to the Representative, at the request of the Company,
letters, dated the respective dates of delivery thereof and addressed to the
Initial Purchasers, in form and substance reasonably satisfactory to the
Representative, containing statements and information of the type customarily
included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained or incorporated
by reference in each of the Time of Sale Information and the Offering
Memorandum; provided, that the letters delivered on the Closing Date shall use a
“cut-off” date no more than three business days prior to the Closing Date.

(f) Opinion and 10b-5 Statement of Counsel for the Company. Cooley Godward
Kronish LLP, counsel for the Company, shall have furnished to the
Representative, at the request of the Company, their written opinion and 10b-5
statement, dated the Closing Date and addressed to the Initial Purchasers, in
the form agreed between the Company and the Representative.

(g) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers. The
Representative shall have received on and as of the Closing Date an opinion and
10b-5 statement of Simpson Thacher & Bartlett LLP, counsel for the Initial
Purchasers, with respect to such matters as the Representative may reasonably
request, and such counsel shall have received such documents and information as
they may reasonably request to enable them to pass upon such matters.

(h) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the Securities or the
issuance of the Guarantees in the United States, Canada or any jurisdiction in

 

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which the Securities have been sold by the Initial Purchasers; and no injunction
or order of any federal, state or foreign court shall have been issued that
would, as of the Closing Date, prevent the issuance or sale of the Securities or
the issuance of the Guarantees in the United States, Canada or any jurisdiction
in which the Securities have been sold by the Initial Purchasers.

(i) Good Standing. The Representative shall have received on and as of the
Closing Date satisfactory evidence of the good standing of the Company and the
Guarantors in their respective jurisdictions of organization and their good
standing in such other jurisdictions as the Representative may reasonably
request, in each case in writing or any standard form of telecommunication from
the appropriate governmental authorities of such jurisdictions.

(j) Registration Rights Agreement. The Initial Purchasers shall have received a
counterpart of each of the Registration Rights Agreements that shall have been
executed and delivered by a duly authorized officer of the Company and each of
the Guarantors

(k) DTC. The Securities shall be eligible for clearance and settlement through
DTC.

(l) Collateral Filings. Except as otherwise contemplated by the Security
Agreements, each document (including any Uniform Commercial Code financing
statement) required by the Security Agreements, or under law or reasonably
requested by the Representative, in each case, to be filed, registered or
recorded, or delivered for filing on or prior to the Closing Date, in order to
create in favor of the Trustees, for the benefit of the holders of the
Securities, a perfected lien and security interest in the Personal Property
Collateral, which is conveyed by the Security Agreements and which can be
perfected by the making of such filings, registrations or recordations, prior
and superior to the right of any other person (other than Permitted Exceptions),
shall be in proper form for filing, registration or recordation.

(m) CFO Certificate. On the Closing Date, the Chief Financial Officer of the
Company shall have delivered to the Representative a certificate, in form and
substance reasonably satisfactory to the Representative, as to certain matters
disclosed in the Preliminary Offering Memorandum and the Offering Memorandum.

(n) Insurance. On or prior to the Closing Date, the Initial Purchasers shall
have received satisfactory evidence that the Company and the Guarantors maintain
insurance with respect to the Collateral as specified by applicable terms of the
Indentures.

(o) Senior Secured Credit Facility. Concurrently with or prior to the Closing
Date, (i) the Senior Secured Credit Facility shall be amended to permit, among
other things, the issuance of the Securities and the Exchange Securities; and
(ii) the Representative shall have received all documents entered into and
received in connection with any amendment of the Senior Secured Credit Facility,
in form and substance reasonably satisfactory to the Representative.

 

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(p) Collateral Documents. The Initial Purchasers shall have received conformed
counterparts of the Collateral Documents (except as otherwise provided herein
with respect to timing of the delivery of the Mortgages and related documents),
each duly executed and delivered by each party thereto, each in forms and
substance reasonably satisfactory to the Representative.

(q) Intercreditor Agreement. The Initial Purchasers shall have received
conformed counterparts of the Intercreditor Agreement duly executed and
delivered by each party thereto, in form and substance reasonably satisfactory
to the Representative.

(r) Lien Searches. The Representative shall have received the results of a
recent lien search in each of the jurisdictions where they may reasonably
request, and such search shall reveal no liens on any of the assets of the
Company and the Guarantors or their respective subsidiaries except for
(i) Permitted Exceptions and (ii) liens that will be released concurrently with
or prior to the issuance and sale of the Securities by the Company.

(s) Additional Documents. On or prior to the Closing Date, except as otherwise
expressly permitted under this Agreement, the Indenture or the Security
Agreements to be furnished after the Closing Date, the Company and the
Guarantors shall have furnished to the Representative such further certificates
and documents as the Representative may reasonably request. On or prior to the
Closing Date, the Company shall have furnished to the Representative the letter,
dated on or before the Closing Date, to the Company from its financial advisor
substantially in the form attached hereto as Exhibit B.

All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

7. Indemnification and Contribution.

(a) Indemnification of the Initial Purchasers. The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates, directors and officers and each person, if
any, who controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation,
reasonable legal fees and other reasonable expenses incurred in connection with
any suit, action or proceeding or any claim asserted, as such fees and expenses
are incurred), joint or several, that arise out of, or are based upon, any
untrue statement, or alleged untrue statement, of a material fact contained in
the Preliminary Offering Memorandum, any of the other Time of Sale Information,
any Issuer Written Communication or the Offering Memorandum (or any amendment or
supplement thereto) or any omission, or alleged omission, to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each case
except insofar as such losses, claims, damages or liabilities arise out of, or
are based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser or through the Representative expressly for use therein.

 

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(b) Indemnification of the Company. Each Initial Purchaser agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of the Guarantors,
each of their respective directors and officers and each person, if any, who
controls the Company or any of the Guarantors within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity set forth in paragraph (a) above, but only with respect to any
losses, claims, damages or liabilities that arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such Initial
Purchaser furnished to the Company in writing by such Initial Purchaser or
through the Representative expressly for use in the Preliminary Offering
Memorandum, any of the other Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum (or any amendment or supplement
thereto), it being understood and agreed that the only such information
furnished by any Initial Purchaser consists of the following information: the
information contained in (i) the third paragraph, (ii) the fourth paragraph,
(iii) the fourth and fifth sentences of the fifteenth paragraph and (iv) the
first and sixth sentences of the seventeenth paragraph, in each case under the
caption “Plan of distribution” in the Offering Memorandum.

(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the “Indemnified
Person”) shall promptly notify the person against whom such indemnification may
be sought (the “Indemnifying Person”) in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under paragraph (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under paragraph (a) or (b) above. If any
such proceeding shall be brought or asserted against an Indemnified Person and
it shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person (who
shall not, without the consent of the Indemnified Person, be counsel to the
Indemnifying Person) to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding, as incurred. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary; (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or

 

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potential differing interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Indemnified Persons, and that all such reasonable fees and expenses shall be
reimbursed as they are incurred. Any such separate firm for any Initial
Purchaser, its affiliates, directors and officers and any control persons of
such Initial Purchaser shall be designated in writing by J.P. Morgan Securities
Inc. and any such separate firm for the Company, the Guarantors, their
respective directors and officers and any control persons of the Company and the
Guarantors shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested that an Indemnifying Person reimburse
the Indemnified Person for reasonable fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.

(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors on the one hand and
the Initial Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
received by the Initial Purchasers in connection therewith, as provided in this
Agreement, bear to the aggregate offering price of the Securities. The relative
fault of the Company and the Guarantors on the one hand and the Initial
Purchasers

 

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on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or any Guarantor or by the Initial Purchasers and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

(e) Limitation on Liability. The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
purchase obligations hereunder and not joint.

(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.

8. Termination. This Agreement may be terminated in the absolute discretion of
the Representative, by notice to the Company, if after the execution and
delivery of this Agreement and on or prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on the New York Stock
Exchange, the NASDAQ Stock Market or the over-the-counter market; (ii) trading
of any securities issued or guaranteed by the Company or any of the Guarantors
shall have been suspended on any exchange or in any over-the-counter market;
(iii) a general moratorium on commercial banking activities shall have been
declared by federal or New York State authorities; (iv) a material disruption
occurs in commercial banking or securities settlement or clearance services in
the United States; or (v) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representative, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum.

 

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9. Defaulting Initial Purchaser. (a) If, on the Closing Date, any Initial
Purchaser defaults on its obligation to purchase the Securities that it has
agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their
discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Initial Purchasers to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date
for up to five full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Initial Purchasers may be
necessary in the Time of Sale Information, the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Time of Sale Information or the Offering
Memorandum that effects any such changes. As used in this Agreement, the term
“Initial Purchaser” includes, for all purposes of this Agreement unless the
context otherwise requires, any person not listed in Schedule 1 hereto that,
pursuant to this Section 9, purchases Securities that a defaulting Initial
Purchaser agreed but failed to purchase.

(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Company shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser’s pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.

(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers. Any termination of this
Agreement pursuant to this Section 9 shall be without liability on the part of
the Company or the Guarantors, except that the Company and each of the
Guarantors will continue to be liable for the payment of expenses as set forth
in Section 10 hereof and except that the provisions of Section 7 hereof shall
not terminate and shall remain in effect.

(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Company, the Guarantors or any non-defaulting
Initial Purchaser for damages caused by its default.

10. Payment of Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company and each
of the Guarantors jointly and severally agree to pay or cause to be paid the
following costs and expenses incident to the performance of their respective
obligations hereunder, (i) the costs incident to the printing of the Preliminary
Offering Memorandum, any other Time of Sale

 

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Information, any Issuer Written Communication and the Offering Memorandum
(including any amendment or supplement thereto) and the distribution thereof;
(ii) the fees and expenses of the Company’s and the Guarantors’ counsel;
(iii) any fees charged by rating agencies for rating the Securities; (iv) 50% of
the fees and expenses of any chartered aircraft used by the Company in
connection with any “road show” presentation to potential investors; and (v) all
other expenses incurred by the Company in connection with any “road show”
presentation to potential investors up to a maximum of $25,000; provided,
however, that, if the closing of the offering contemplated by this Agreement
occurs, upon or promptly following such closing, the Initial Purchasers agree to
reimburse the Company for the Company’s out-of-pocket fee to its investment
advisor in connection with such offering in an amount equal to $1,750,000, and
reimburse the Company for a portion of the Company’s documented out-of-pocket
expenses in connection with such offering exceeding $25,000 in an amount not to
exceed $1,239,000.

11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and any controlling persons referred to herein, and the affiliates,
officers and directors of each Initial Purchaser referred to in Section 7
hereof. Nothing in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein. No purchaser of Securities
from any Initial Purchaser shall be deemed to be a successor merely by reason of
such purchase.

12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Company, the Guarantors or the Initial Purchasers.

13. Patriot Act. In accordance with the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial
Purchasers are required to obtain, verify and record information that identifies
their respective clients, including the Company, which information may include
the name and address of their respective clients, as well as other information
that will allow the Initial Purchasers to properly identify their respective
clients.

14. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term “affiliate” has the meaning set forth in
Rule 405 under the Securities Act; (b) the term “business day” means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term “Exchange Act” means the Securities Exchange Act of
1934, as amended; (d) the term “subsidiary” has the meaning set forth in Rule
405 under the Securities Act; and (e) the term “written communication” has the
meaning set forth in Rule 405 under the Securities Act.

15. Miscellaneous. (a) Authority of the Representative. Any action by the
Initial Purchasers hereunder may be taken by J.P. Morgan Securities Inc. on
behalf of the Initial Purchasers, and any such action taken by J.P. Morgan
Securities Inc. shall be binding upon the Initial Purchasers.

 

29

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(b) Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Initial
Purchasers shall be given to the Representative c/o J.P. Morgan Securities Inc.,
270 Park Avenue, New York, New York 10017 (fax: (212) 270-1063), Attention:
Rajesh Kapadia. Notices to the Company or any Guarantor shall be given to it c/o
the Company at 1745 Technology Drive, San Jose, California 95110 (fax:
(408) 333-5620); Attention: Chief Financial Officer, with a copy to General
Counsel (fax: (408) 333-5630) and with a copy to Cooley Godward Kronish LLP,
3175 Hanover Street, Palo Alto, CA 94304 (fax: (650) 849-7400), Attention: Nancy
H. Wojtas.

(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.

(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.

(f) Headings. The headings herein are included for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.

 

30

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If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.

 

Very truly yours, BROCADE COMMUNICATIONS SYSTEMS, INC. By  

/s/ Richard Deranleau

Title:   Vice President and Chief Financial Officer BROCADE COMMUNICATIONS
SYSTEMS SKYPORT LLC By  

/s/ Richard Deranleau

Title:   Chief Financial Officer INRANGE TECHNOLOGIES CORPORATION By  

/s/ Richard Deranleau

Title:   Chief Financial Officer MCDATA CORPORATION By  

/s/ Richard Deranleau

Title:   Chief Financial Officer MCDATA SERVICES CORPORATION By  

/s/ Richard Deranleau

Title:   Treasurer STRATEGIC BUSINESS SYSTEMS, INC. By  

/s/ Jean Furter

Title:   Treasurer FOUNDRY NETWORKS, LLC By  

/s/ Richard Deranleau

Title:   Chief Financial Officer

 

31

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Accepted: January 13, 2010

J.P. MORGAN SECURITIES INC.

 

By  

/s/ Curt Sigfstead

  Authorized Signatory

For itself and on behalf of the

several Initial Purchasers listed in

Schedule 1 hereto.

 

32

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Schedule 1

 

      Principal Amount to be Purchased

Initial Purchaser

   2018 Notes    2020 Notes

J.P. Morgan Securities Inc.

   $ 154,717,000    $ 154,717,000

Goldman, Sachs & Co.

   $ 88,680,000    $ 88,680,000

Barclays Capital Inc.

   $ 26,415,000    $ 26,415,000

Banc of America Securities LLC

   $ 15,094,000    $ 15,094,000

Wells Fargo Securities, LLC

   $ 15,094,000    $ 15,094,000              

Total

   $ 300,000,000.00    $ 300,000,000.00

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Schedule 2

Guarantors

BROCADE COMMUNICATIONS SYSTEMS SKYPORT LLC

INRANGE TECHNOLOGIES CORPORATION

MCDATA CORPORATION

MCDATA SERVICES CORPORATION

STRATEGIC BUSINESS SYSTEMS, INC.

FOUNDRY NETWORKS, LLC

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Schedule 3

Significant Subsidiaries

BROCADE COMMUNICATIONS SWITZERLAND SARL (a Swiss company)

BROCADE GLOBAL HOLDINGS GMBH (a Swiss company)

FOUNDRY NETWORKS HOLDINGS LLC (a Delaware limited liability company)

FOUNDRY NETWORKS INTERNATIONAL LLC (a Delaware limited liability company)

FOUNDRY NETWORKS INTERNATIONAL HOLDINGS C.V. (a Netherlands partnership)

BROCADE COMMUNICATIONS LUXEMBOURG HOLDINGS II SCS (a Luxembourg partnership)

BROCADE COMMUNICATIONS LUXEMBOURG HOLDINGS SARL (a Luxembourg company)

BROCADE COMMUNICATIONS LUXEMBOURG SARL (a Luxembourg company)

BROCADE SWITZERLAND HOLDINGS GMBH (a Swiss company)

BROCADE TECHNOLOGY GMBH (a Swiss company)

FOUNDRY NETWORKS, LLC (a Delaware limited liability company)

INRANGE TECHNOLOGIES CORPORATION (a Delaware corporation)

MCDATA CORPORATION (a Delaware corporation)

MCDATA INTERNATIONAL LTD. (a U.K. company)

MCDATA SERVICES CORPORATION (a Minnesota corporation)

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Schedule 4

POST-CLOSING MATTERS

Within 90 days after the Closing Date the Initial Purchasers and the Trustees
shall have received each of the following documents, which shall be reasonably
satisfactory in form and substance to the Initial Purchasers, the Trustees and
each of their respective counsel with respect to the Collateral, as appropriate:

 

  (i) Mortgages. Fully executed counterparts of Mortgages for each of the
Mortgaged Properties, together with evidence that counterparts of all the
Mortgages have been delivered to First American Title Insurance Company, 633
Third Avenue, New York, NY 10017, Attention: Steven Farber (the “Title Company”)
for recording in all applicable jurisdictions to the extent necessary or, in the
reasonable opinion of the Representative, desirable to effectively create a
valid and enforceable mortgage lien on each Mortgaged Property in favor of the
Collateral Agent for its benefit and the benefit of the Trustees and the holders
of the Securities, pari passu with the security interest in such property in
favor of the Administrative Agent for the benefit of the lenders under the
Senior Secured Credit Facility, securing the obligations related to the
Securities (provided that in jurisdictions that impose mortgage recording taxes,
such Mortgages shall not secure indebtedness in an amount exceeding 100% of the
fair market value of such Mortgaged Property, as reasonably determined, in good
faith, by the Company and reasonably acceptable to the Representative), subject
to the Mortgage Permitted Exceptions.

 

  (ii) Counsel Opinions. Opinions limited to enforceability of the Mortgages
addressed to the Initial Purchasers and the Collateral Agent, of local counsel
in each jurisdiction where the Mortgaged Property is located.

 

  (iii) Title Insurance. With respect to each Mortgaged Property, a policy of
title insurance (or commitment to issue such a policy having the effect of a
policy of title insurance) insuring (or committing to insure) the lien of the
applicable Mortgage as a valid and enforceable mortgage or deed of trust lien on
the real property described therein, in an amount equal to 110% of the fair
market value of such Mortgaged Property as reasonably determined, in good faith,
by the Company and reasonably acceptable to the Representative (such policies
collectively, the “Mortgage Policies”) issued by such Title Company, which
reasonably assures the Representative that the Mortgages on such Mortgaged
Properties are valid and enforceable mortgage liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances except Mortgage
Permitted Exceptions and liens with junior priority and such Mortgage Policies
shall otherwise be in form and substance reasonably satisfactory to the
Representative and shall include such title endorsements and affirmative
coverages as shall reasonably be required by the Collateral Agent.

--------------------------------------------------------------------------------

  (iv) Survey. The Company and the appropriate Guarantors shall deliver to the
Title Company and the Collateral Agent any and all surveys as shall be required
by the Title Company to cause the Title Company to issue the title insurance
required pursuant to clause (iii) above without an exception for survey
coverage.

 

  (v) Mortgaged Property Indemnification. With respect to each Mortgaged
Property, such affidavits, certificates, instruments of indemnification and
other items (including a so-called “gap” indemnification) as shall be reasonably
required to induce the Title Company to issue the Mortgage Policy/ies and
endorsements contemplated above.

 

  (vi) Collateral Fees and Expenses. Evidence reasonably acceptable to the
Representative of payment by the Company of all Mortgage Policy premiums, search
and examination charges, mortgage recording taxes, fees, charges, costs and
expenses required for the recording of the Mortgages, fixture filings and
issuance of the Mortgage Policies referred to above.

 

2

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Schedule 5

List of Indebtedness for Borrowed Money

 

  •  

Senior Secured Credit Facility

 

  •  

2.25% Subordinated Convertible Notes due February 15, 2010, issued by McData
Corporation

--------------------------------------------------------------------------------

Annex A

Additional Time of Sale Information

1. With respect to the 2018 Notes, term sheet containing the terms of the 2018
Notes, substantially in the form set forth in Annex B under the caption “2018
Notes”.

2. With respect to the 2020 Notes, term sheet containing the terms of the 2020
Notes, substantially in the form set forth in Annex B under the caption “2020
Notes”.

--------------------------------------------------------------------------------

Annex B

BROCADE COMMUNICATIONS SYSTEMS, INC.

Pricing Term Sheet for 2018 Notes and 2020 Notes

2018 Notes

 

Issuer:    Brocade Communications Systems, Inc. Security Description:    6.625%
Senior Secured Notes due 2018 Distribution:    144A/Reg S with registration
rights Size:    $300,000,000 Gross Proceeds:    $297,717,000 Maturity:   
January 15, 2018 Coupon:    6.625% Issue Price:    99.239% of face amount Yield
to Maturity:    6.75% Spread to Benchmark Treasury:    +329 basis points
Benchmark Treasury:    UST 4.25% due 11/15/2017 Interest Payment Dates:   
January 15 and July 15, commencing July 15, 2010 Clawback:    Up to 35% at
106.625% Until:    January 15, 2013 Optional Redemption:    Make-whole call @
T+50bps prior to January 15, 2013, then:

On or after:

   Price:   January 15, 2013    103.313 %  January 15, 2014    103.313 % 
January 15, 2015    101.656 %  January 15, 2016 and thereafter    100.000 % 

Change of Control Triggering Event:    Putable at 101% of principal plus accrued
interest Trade Date:    January 13, 2010 Settlement:    T+4; January 20, 2010
CUSIP:   

144A: 111621 AE8

Reg S: U11097 AB5

ISIN:   

144A: US111621AE81

Reg S: USU11097AB50

Denominations/Multiple:    $2,000 x $1,000 Ratings:    Ba2/BBB- Bookrunners:   
J.P. Morgan    Goldman, Sachs & Co. Co-Managers:    Barclays    BofA Merrill
Lynch    Wells Fargo Securities

--------------------------------------------------------------------------------

2020 Notes

 

Issuer:    Brocade Communications Systems, Inc. Security Description:    6.875%
Senior Secured Notes due 2020 Distribution:    144A/Reg S with registration
rights Size:    $300,000,000 Gross Proceeds:    $297,342,000 Maturity:   
January 15, 2020 Coupon:    6.875% Issue Price:    99.114% of face amount Yield
to Maturity:    7% Spread to Benchmark Treasury:    +321 basis points Benchmark
Treasury:    UST 3.375% due 11/15/2019 Interest Payment Dates:    January 15 and
July 15, commencing July 15, 2010 Clawback:    Up to 35% at 106.875% Until:   
January 15, 2013 Optional Redemption:    Make-whole call @ T+50bps prior to
January 15, 2015, then:

 

On or after:

   Price:   January 15, 2015    103.438 %  January 15, 2016    102.292 % 
January 15, 2017    101.146 %  January 15, 2018 and thereafter    100.000 % 

 

Change of Control Triggering Event:    Putable at 101% of principal plus accrued
interest Trade Date:    January 13, 2010 Settlement:    T+4; January 20, 2010
CUSIP:   

144A: 111621 AH1

 

Reg S: U11097 AC3

ISIN:   

144A: US111621AH13

 

Reg S: USU11097AC34

Denominations/Multiple:    $2,000 x $1,000 Ratings:    Ba2/BBB- Bookrunners:   
J.P. Morgan    Goldman, Sachs & Co. Co-Managers:    Barclays    BofA Merrill
Lynch    Wells Fargo Securities

 

B-2

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Annex C

Restrictions on Offers and Sales Outside the United States

In connection with offers and sales of Securities outside the United States:

(a) Each Initial Purchaser acknowledges that the Securities have not been
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except
pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.

(b) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) Such Initial Purchaser has offered and sold the Securities, and will offer
and sell the Securities, (A) as part of their distribution at any time and
(B) otherwise until 40 days after the later of the commencement of the offering
of the Securities and the Closing Date, only in accordance with Regulation S
under the Securities Act (“Regulation S”) or Rule 144A or any other available
exemption from registration under the Securities Act.

(ii) None of such Initial Purchaser or any of its affiliates or any other person
acting on its or their behalf has engaged or will engage in any directed selling
efforts with respect to the Securities, and all such persons have complied and
will comply with the offering restrictions requirement of Regulation S.

(iii) At or prior to the confirmation of sale of any Securities sold in reliance
on Regulation S, such Initial Purchaser will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the distribution compliance period a
confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering of the
Securities and the date of original issuance of the Securities, except in
accordance with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the meanings given
to them by Regulation S.”

(iv) Such Initial Purchaser has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of the
Company.

--------------------------------------------------------------------------------

Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in
this Agreement have the meanings given to them by Regulation S.

(c) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the United Kingdom
Financial Services and Markets Act 2000 (the “FSMA”)) received by it in
connection with the issue or sale of any Securities in circumstances in which
Section 21(1) of the FSMA does not apply to the Company or the Guarantors; and

(ii) it has complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom.

(d) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that, in relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a “Relevant Member
State”), with effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the “Relevant
Implementation Date”) it has not made and will not make an offer of the
Securities to the public in that Relevant Member State prior to the publication
of a prospectus in relation to the notes which has been approved by the
competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of the Securities to the public in that
Relevant Member State at any time:

(i) to legal entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose corporate purpose
is solely to invest in securities;

(ii) to any legal entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance sheet of more than
€43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in
its last annual or consolidated accounts;

(ii) to fewer than 100 natural or legal persons (other than qualified investors
as defined in the Prospectus Directive) subject to obtaining the prior consent
of the representatives for any such offer; or

 

C-2

--------------------------------------------------------------------------------

(iv) in any other circumstances which do not require the publication by us of a
prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of notes to the
public” in relation to any notes in any Relevant Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the Securities so as to enable an investor to decide to
purchase or subscribe the Securities, as the same may be varied in that Member
State by any measure implementing the Prospectus Directive in that Member State
and the expression Prospectus Directive means Directive 2003/71/EC and includes
any relevant implementing measure in each Relevant Member State.

(e) Each Initial Purchaser acknowledges that no action has been or will be taken
by the Company that would permit a public offering of the Securities, or
possession or distribution of any of the Time of Sale Information, the Offering
Memorandum, any Issuer Written Communication or any other offering or publicity
material relating to the Securities, in any country or jurisdiction where action
for that purpose is required.

 

C-3

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Annex D

Mortgaged Property

 

Entity of Record

  

Address

   City    State Brocade Communications Systems, Skyport LLC    1600 Technology
Drive    San Jose    CA McDATA Corporation    4 Brocade Parkway    Broomfield   
CO McDATA Corporation    Land    Broomfield    CO Brocade Communications
Systems, Inc    Land    San Jose    CA

--------------------------------------------------------------------------------

Exhibit A

Form of Registration Rights Agreement

[2018][2020] Notes

This REGISTRATION RIGHTS AGREEMENT dated January [20], 2010 (this “Agreement”)
is entered into by and among Brocade Communications Systems, Inc., a Delaware
corporation (the “Company”), the guarantors listed in Schedule 1 hereto (the
“Guarantors”) and J.P. Morgan Securities Inc. (“JPMorgan”), Goldman, Sachs &
Co., Barclays Capital Inc., Banc of America Securities LLC and Wells Fargo
Securities, LLC (the “Initial Purchasers”).

The Company, the Guarantors and the Initial Purchasers are parties to the
Purchase Agreement dated January 13, 2010 (the “Purchase Agreement”), which
provides for the sale by the Company to the Initial Purchasers of, among other
things, $300,000,000 aggregate principal amount of the Company’s [6.625]
[6.875]% Senior Secured Notes due [2018][2020] (the “Securities”) which will be
guaranteed on a senior secured basis by each of the Guarantors. As an inducement
to the Initial Purchasers to enter into the Purchase Agreement, the Company and
the Guarantors have agreed to provide to the Initial Purchasers and their direct
and indirect transferees the registration rights set forth in this Agreement.
The execution and delivery of this Agreement is a condition to the closing under
the Purchase Agreement.

In consideration of the foregoing, the parties hereto agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:

“Additional Guarantor” shall mean any subsidiary of the Company that executes a
Subsidiary Guarantee under the Indenture after the date of this Agreement.

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed.

“Company” shall have the meaning set forth in the preamble and shall also
include the Company’s successors.

“Electing Holder” shall mean any Holder that has returned a completed and signed
Notice and Questionnaire to the Company in accordance with Section 2(b).

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.

--------------------------------------------------------------------------------

“Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

“Exchange Offer” shall mean the exchange offer by the Company and the Guarantors
of Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.

“Exchange Offer Registration” shall mean a registration under the Securities Act
effected pursuant to Section 2(a) hereof.

“Exchange Offer Registration Statement” shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein or deemed a part thereof, all
exhibits thereto and any document incorporated by reference therein.

“Exchange Securities” shall mean senior secured notes issued by the Company and
guaranteed by the Guarantors under the Indenture containing terms identical to
the Securities (except that the Exchange Securities will not be subject to
restrictions on transfer or to any increase in annual interest rate for failure
to comply with this Agreement) and to be offered to Holders of Securities in
exchange for Securities pursuant to the Exchange Offer.

“Free Writing Prospectus” means each free writing prospectus (as defined in Rule
405 under the Securities Act) prepared by or on behalf of the Company or used or
referred to by the Company in connection with the sale of the Securities or the
Exchange Securities.

“Guarantors” shall have the meaning set forth in the preamble and shall also
include any Guarantor’s successors and any Additional Guarantors.

“Holders” shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their successors, assigns and direct and
indirect transferees who become owners of Registrable Securities under the
Indenture; provided that for purposes of Sections 4 and 5 of this Agreement, the
term “Holders” shall include Participating Broker-Dealers.

“Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.

“Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.

“Indenture” shall mean the Indenture relating to the Securities dated as of
January [20], 2010 among the Company, the Guarantors and Wells Fargo Bank,
National Association, as trustee, and as the same may be amended from time to
time in accordance with the terms thereof.

 

2

--------------------------------------------------------------------------------

“Initial Purchasers” shall have the meaning set forth in the preamble.

“Inspector” shall have the meaning set forth in Section 3(a)(xiv) hereof.

“Issuer Information” shall have the meaning set forth in Section 5(a) hereof.

“JPMorgan” shall have the meaning set forth in the preamble.

“Majority Holders” shall mean the Holders of a majority of the aggregate
principal amount of the outstanding Registrable Securities; provided that
whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, any Registrable Securities owned
directly or indirectly by the Company or any of its affiliates shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage or amount; and provided, further, that if the
Company shall issue any additional Securities under the Indenture prior to
consummation of the Exchange Offer or, if applicable, the effectiveness of any
Shelf Registration Statement, such additional Securities and the Registrable
Securities to which this Agreement relates shall be treated together as one
class for purposes of determining whether the consent or approval of Holders of
a specified percentage of Registrable Securities has been obtained.

“Notice and Questionnaire” shall mean a notice of registration statement and
selling security holder questionnaire distributed to an Initial Purchaser by the
Company upon receipt of a Shelf Request from such Initial Purchaser.

“Participating Broker-Dealers” shall have the meaning set forth in Section 4(a)
hereof.

“Person” shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.

“Prospectus” shall mean the prospectus included in, or, pursuant to the rules
and regulations of the Securities Act, deemed a part of, a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
any document incorporated by reference therein.

 

3

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“Purchase Agreement” shall have the meaning set forth in the preamble.

“Registrable Securities” shall mean the Securities; provided that the Securities
shall cease to be Registrable Securities (i) when a Registration Statement with
respect to such Securities has become effective under the Securities Act and
such Securities have been exchanged or disposed of pursuant to such Registration
Statement, (ii) the date of the second anniversary of this Agreement, provided
that such date shall be extended by the number of days of any extension that
occurs pursuant to Section 3(d) hereof or (iii) when such Securities cease to be
outstanding.

“Registration Expenses” shall mean any and all expenses incident to performance
of or compliance by the Company and the Guarantors with this Agreement,
including without limitation: (i) all SEC, stock exchange or Financial Industry
Regulatory Authority registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with applicable state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
Underwriters or Holders in connection with blue sky qualification of any
Exchange Securities or Registrable Securities, with supporting documentation),
(iii) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, any Free Writing Prospectus and any amendments or supplements
thereto, any underwriting agreements, securities sales agreements or other
similar agreements and any other documents relating to the performance of and
compliance with this Agreement, with supporting documentation, (iv) all rating
agency fees, (v) all fees and disbursements relating to the qualification of the
Indenture under applicable securities laws, (vi) the fees and disbursements of
the Trustee and its counsel, (vii) the fees and disbursements of counsel for the
Company and the Guarantors and, in the case of a Shelf Registration Statement,
the fees and disbursements of one counsel for the Holders (which counsel shall
be selected by the Majority Holders and which counsel may also be counsel for
the Initial Purchasers), with supporting documentation, and (viii) the fees and
disbursements of the independent public accountants of the Company and the
Guarantors, including the expenses of any special audits or “comfort” letters
required by or incident to the performance of and compliance with this
Agreement, but excluding fees and expenses of counsel to the Underwriters (other
than fees and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions, brokerage commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable Securities by
a Holder.

“Registration Statement” shall mean any registration statement of the Company
and the Guarantors that covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement and all amendments and
supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein or deemed a
part thereof, all exhibits thereto and any document incorporated by reference
therein.

 

4

--------------------------------------------------------------------------------

“SEC” shall mean the United States Securities and Exchange Commission.

“Securities” shall have the meaning set forth in the preamble.

“Securities Act” shall mean the Securities Act of 1933, as amended from time to
time.

“Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b)
hereof.

“Shelf Registration” shall mean a registration effected pursuant to Section 2(b)
hereof.

“Shelf Registration Statement” shall mean a “shelf” registration statement of
the Company and the Guarantors that covers all or a portion of the Registrable
Securities (but no other securities unless approved by a majority of the Holders
whose Registrable Securities are to be covered by such Shelf Registration
Statement) on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein or deemed a part
thereof, all exhibits thereto and any document incorporated by reference
therein.

“Shelf Request” shall have the meaning set forth in Section 2(b) hereof.

“Subsidiary Guarantees” shall mean the guarantees of the Securities and Exchange
Securities by the Guarantors under the Indenture.

“Staff” shall mean the staff of the SEC.

“Target Registration Date” shall have the meaning set forth in Section 2(d)
hereof.

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended
from time to time.

“Trustee” shall mean the trustee with respect to the Securities under the
Indenture.

“Underwriter” shall have the meaning set forth in Section 3(e) hereof.

 

5

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“Underwritten Offering” shall mean an offering in which Registrable Securities
are sold to an Underwriter for reoffering to the public.

2. Registration Under the Securities Act. (a) To the extent not prohibited by
any applicable law or applicable interpretations of the Staff, the Company and
the Guarantors shall use their commercially reasonable efforts to (i) cause to
be filed an Exchange Offer Registration Statement covering an offer to the
Holders to exchange all the Registrable Securities for Exchange Securities and
(ii) have such Registration Statement remain effective until 180 days after the
last Exchange Date for use by one or more Participating Broker-Dealers. The
Company and the Guarantors shall commence the Exchange Offer promptly after the
Exchange Offer Registration Statement is declared effective by the SEC and use
their commercially reasonable efforts to complete the Exchange Offer not later
than 60 days after such effective date.

The Company and the Guarantors shall commence the Exchange Offer by mailing the
related Prospectus, appropriate letters of transmittal and other accompanying
documents to each Holder (which, with respect to Notes represented by global
certificates in the name of The Depository Trust Company (“DTC”) or a nominee
thereof, may be effected through the facilities of DTC) stating, in addition to
such other disclosures as are required by applicable law, substantially the
following:

 

(i) that the Exchange Offer is being made pursuant to this Agreement and that
all Registrable Securities validly tendered and not properly withdrawn will be
accepted for exchange;

 

(ii) the dates of acceptance for exchange (which shall be a period of at least
20 Business Days from the date such notice is mailed) (the “Exchange Dates”);

 

(iii) that any Registrable Security not tendered will remain outstanding and
continue to accrue interest but will not retain any rights under this Agreement,
except as otherwise specified herein;

 

(iv) that any Holder electing to have a Registrable Security exchanged pursuant
to the Exchange Offer will be required to (A) surrender such Registrable
Security, together with the appropriate letters of transmittal, to the
institution and at the address (located in the Borough of Manhattan, The City of
New York) and in the manner specified in the notice, or (B) effect such exchange
otherwise in compliance with the applicable procedures of the depositary for
such Registrable Security, in each case prior to the close of business on the
last Exchange Date; and

 

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(v) that any Holder will be entitled to withdraw its election, not later than
the close of business on the last Exchange Date, by (A) sending to the
institution and at the address (located in the Borough of Manhattan, The City of
New York) specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange and a statement that such Holder
is withdrawing its election to have such Securities exchanged or (B) effecting
such withdrawal in compliance with the applicable procedures of the depositary
for the Registrable Securities.

As a condition to participating in the Exchange Offer, a Holder will be required
to represent to the Company and the Guarantors that (i) any Exchange Securities
to be received by it will be acquired in the ordinary course of its business,
(ii) at the time of the commencement of the Exchange Offer it has no arrangement
or understanding with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Securities in violation of the
provisions of the Securities Act, (iii) it is not an “affiliate” (within the
meaning of Rule 405 under the Securities Act) of the Company or any Guarantor
and (iv) if such Holder is a broker-dealer that will receive Exchange Securities
for its own account in exchange for Registrable Securities that were acquired as
a result of market-making or other trading activities, then such Holder will
deliver a Prospectus (or, to the extent permitted by law, make available a
Prospectus to purchasers) in connection with any resale of such Exchange
Securities.

As soon as practicable after the last Exchange Date, the Company and the
Guarantors shall:

 

(i) accept for exchange Registrable Securities or portions thereof validly
tendered and not properly withdrawn pursuant to the Exchange Offer; and

 

(ii) deliver, or cause to be delivered, to the Trustee for cancellation all
Registrable Securities or portions thereof so accepted for exchange by the
Company and issue, and cause the Trustee to promptly authenticate and deliver to
each Holder, Exchange Securities equal in principal amount to the principal
amount of the Registrable Securities tendered by such Holder.

The Company and the Guarantors shall use their commercially reasonable efforts
to complete the Exchange Offer as provided above and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws and regulations in connection with the Exchange Offer. The
Exchange Offer shall not be subject to any conditions, other than that the
Exchange Offer does not violate any applicable law or applicable interpretations
of the Staff.

(b) In the event that (i) the Company and the Guarantors determine that the
Exchange Offer Registration provided for in Section 2(a) above is not available
or may not be completed as soon as practicable after the last Exchange

 

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Date because it would violate any applicable law or applicable interpretations
of the Staff, (ii) the Exchange Offer is not for any other reason completed by
the Target Registration Date (it being understood that participation in the
Exchange Offer of all Holders eligible to participate therein is not required
for the Company and the Guarantors to complete the Exchange Offer) or (iii) upon
receipt of a written request (a “Shelf Request”) from any Initial Purchaser
representing that it holds Registrable Securities that are or were ineligible to
be exchanged in the Exchange Offer, the Company and the Guarantors shall use
their commercially reasonable efforts to cause to be filed as soon as
practicable after such determination date or Shelf Request, as the case may be,
a Shelf Registration Statement providing for the sale of all the Registrable
Securities by the Holders thereof and to have such Shelf Registration Statement
become effective no later than the Target Registration Date; provided that no
Holder will be entitled to have any Registrable Securities included in any Shelf
Registration Statement, or entitled to use the prospectus forming a part of such
Shelf Registration Statement, until such Holder shall have delivered a completed
and signed Notice and Questionnaire and provided such other information
regarding such Holder as is contemplated by Section 3(b) to the Company.

In the event that the Company and the Guarantors are required to file a Shelf
Registration Statement pursuant to clause (iii) of the preceding sentence, the
Company and the Guarantors shall use their commercially reasonable efforts to
file and have become effective both an Exchange Offer Registration Statement
pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf
Registration Statement (which may be a combined Registration Statement with the
Exchange Offer Registration Statement) with respect to offers and sales of
Registrable Securities held by the Initial Purchasers after completion of the
Exchange Offer.

The Company and the Guarantors agree to use their commercially reasonable
efforts to keep the Shelf Registration Statement continuously effective until
the date on which the Securities cease to be Registrable Securities or such
shorter period that will terminate when all the Registrable Securities covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (the “Shelf Effectiveness Period”). The Company and the
Guarantors further agree to supplement or amend the Shelf Registration
Statement, the related Prospectus and any Free Writing Prospectus if required by
the rules, regulations or instructions applicable to the registration form used
by the Company for such Shelf Registration Statement or by the Securities Act or
by any other rules and regulations thereunder or if reasonably requested by a
Holder of Registrable Securities with respect to information relating to such
Holder, and to use their commercially reasonable efforts to cause any such
amendment to become effective, if required, and such Shelf Registration
Statement, Prospectus or Free Writing Prospectus, as the case may be, to become
usable as soon as thereafter practicable. The Company and the Guarantors agree
to furnish to the Electing Holders copies of any such supplement or amendment
promptly after its being used or filed with the SEC.

 

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(c) The Company and the Guarantors shall pay all Registration Expenses in
connection with any registration pursuant to Section 2(a) or Section 2(b)
hereof. Each Holder shall pay all underwriting discounts and commissions,
brokerage commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder’s Registrable Securities pursuant to the Shelf
Registration Statement.

(d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC. A Shelf Registration Statement pursuant to Section 2(b)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC or is automatically effective upon filing with the SEC as
provided by Rule 462 under the Securities Act.

In the event that either the Exchange Offer is not completed (the “Exchange
Offer Default”) or the Shelf Registration Statement, if required pursuant to
Section 2(b) hereof, does not become effective (the “Shelf Registration Default”
and, together with the Exchange Offer Registration Default, the “Registration
Default”) on or prior to, in the case of the Exchange Offer, 365 days after the
Closing Date or, in the case of the Shelf Registration Statement, the later of
365 days after the Closing Date and 90 days after the receipt by the Company of
a Shelf Request (the “Target Registration Date”), the interest rate on the
Registrable Securities will be increased by (i) 0.25% per annum for the first
90-day period immediately following the Target Registration Date and (ii) an
additional 0.25% per annum with respect to each subsequent 90-day period, in
each case until the Exchange Offer is completed, the Shelf Registration
Statement, if required hereby, becomes effective or the Securities cease to be
Registrable Securities, up to a maximum increase of 1.00% per annum.

If the Shelf Registration Statement, if required hereby, has become effective
and thereafter either ceases to be effective or the Prospectus contained therein
ceases to be usable, in each case whether or not permitted by this Agreement, at
any time during the Shelf Effectiveness Period, and such failure to remain
effective or usable exists for more than 45 days (whether or not consecutive) in
any 12-month period, then the interest rate on the Registrable Securities will
be increased by (i) 0.25% per annum for the first 90-day period and (ii) an
additional 0.25% per annum with respect to each subsequent 90-day period, up to
a maximum increase of 1.00% per annum, commencing on the 45th day in such
12-month period and ending on such date that the Shelf Registration Statement
has again become effective or the Prospectus again becomes usable, as the case
may be.

 

9

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(e) Without limiting the remedies available to the Initial Purchasers and the
Holders, the Company and the Guarantors acknowledge that any failure by the
Company or the Guarantors to comply with their obligations under Section 2(a)
and Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may obtain
such relief as may be required to specifically enforce the Company’s and the
Guarantors’ obligations under Section 2(a) and Section 2(b) hereof.

3. Registration Procedures. (a) In connection with their obligations pursuant to
Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall use
their commercially reasonable efforts to, as expeditiously as possible:

(i) prepare and file with the SEC a Registration Statement on the appropriate
form under the Securities Act, which form (x) shall be selected by the Company
and the Guarantors, (y) shall, in the case of a Shelf Registration, be available
for the sale of the Registrable Securities by the Holders thereof and (z) shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith; and use their commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective for the
applicable period in accordance with Section 2 hereof;

(ii) prepare and file with the SEC such amendments and post-effective amendments
to each Registration Statement as may be necessary to keep such Registration
Statement effective for the applicable period in accordance with Section 2
hereof and cause each Prospectus to be supplemented by any required prospectus
supplement and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and keep each Prospectus current during the period described in
Section 4(3) of and Rule 174 under the Securities Act that is applicable to
transactions by brokers or dealers with respect to the Registrable Securities or
Exchange Securities;

(iii) to the extent any Free Writing Prospectus is used, file with the SEC any
Free Writing Prospectus that is required to be filed by the Company or the
Guarantors with the SEC in accordance with the Securities Act and to retain any
Free Writing Prospectus not required to be filed;

(iv) in the case of a Shelf Registration, furnish to each Electing Holder, to
counsel for the Initial Purchasers, to counsel for such Holders and to each
Underwriter of an Underwritten Offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, preliminary prospectus or
Free Writing Prospectus, and any amendment or supplement thereto, as such
Holder, counsel or Underwriter may reasonably request in order to facilitate the
sale or other disposition of the Registrable Securities thereunder; and, subject
to

 

10

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Section 3(c), the Company and the Guarantors consent to the use of such
Prospectus, preliminary prospectus or such Free Writing Prospectus and any
amendment or supplement thereto in accordance with applicable law by each of the
Holders of Registrable Securities and any such Underwriters in connection with
the offering and sale of the Registrable Securities covered by and in the manner
described in such Prospectus, preliminary prospectus or such Free Writing
Prospectus or any amendment or supplement thereto in accordance with applicable
law;

(v) register or qualify the Registrable Securities under all applicable state
securities or blue sky laws of such jurisdictions as any Holder of Registrable
Securities covered by a Registration Statement shall reasonably request in
writing by the time the applicable Registration Statement becomes effective;
cooperate with such Holders in connection with any filings required to be made
with the Financial Industry Regulatory Authority; and do any and all other acts
and things that may be reasonably necessary or advisable to enable each Holder
to complete the disposition in each such jurisdiction of the Registrable
Securities owned by such Holder; provided that neither the Company nor any
Guarantor shall be required to (1) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (2) file any general consent to service of
process in any such jurisdiction or (3) subject itself to taxation in any such
jurisdiction if it is not so subject;

(vi) notify counsel for the Initial Purchasers and, in the case of a Shelf
Registration, notify each Electing Holder and counsel for such Holders promptly
and, if requested by any such Holder or counsel, confirm such advice in writing
(1) when a Registration Statement has become effective, when any post-effective
amendment thereto has been filed and becomes effective and when, after the
effective date of any such Registration Statement, any Free Writing Prospectus
or any amendment or supplement to the Prospectus or any Free Writing Prospectus
has been filed, (2) of any request by the SEC or any state securities authority
for amendments and supplements to a Registration Statement, Prospectus or Free
Writing Prospectus or for additional information after the Registration
Statement has become effective, (3) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
including the receipt by the Company of any notice of objection of the SEC to
the use of a Shelf Registration Statement or any post-effective amendment
thereto pursuant to Rule 401(g)(2) under the Securities Act, (4) if, between the
applicable effective date of a Shelf Registration Statement and the closing of
any sale of Registrable Securities covered thereby, the representations and
warranties of the Company or any Guarantor contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to an offering of such Registrable Securities cease to be true and
correct in all material respects or if the Company or any Guarantor receives any
notification with respect to the

 

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suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (5) of the
happening of any event during the period a Registration Statement is effective
that makes any statement made in such Registration Statement or the related
Prospectus or any Free Writing Prospectus untrue in any material respect or that
requires the making of any changes in such Registration Statement or Prospectus
or any Free Writing Prospectus in order to make the statements therein not
misleading and (6) of any determination by the Company or any Guarantor that a
post-effective amendment to a Registration Statement or any amendment or
supplement to the Prospectus or any Free Writing Prospectus would be
appropriate;

(vii) obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement or, in the case of a Shelf Registration, the resolution
of any objection of the SEC pursuant to Rule 401(g)(2), including by filing an
amendment to such Shelf Registration Statement on the proper form, at the
earliest practicable time and provide immediate notice to each Electing Holder
of the withdrawal of any such order or such resolution;

(viii) in the case of a Shelf Registration, furnish to each Electing Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without any
documents incorporated therein by reference or exhibits thereto, unless
requested);

(ix) in the case of a Shelf Registration, cooperate with the Holders of
Registrable Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends (including one or more global certificates, if applicable)
and enable such Registrable Securities to be issued in such denominations and
registered in such names (consistent with the provisions of the Indenture) as
such Holders may reasonably request at least one Business Day prior to the
closing of any sale of Registrable Securities;

(x) in the case of a Shelf Registration, upon the occurrence of any event
contemplated by Section 3(a)(vi)(5) hereof, use their commercially reasonable
efforts to prepare and file with the SEC a supplement or post-effective
amendment to such Shelf Registration Statement or the related Prospectus or any
Free Writing Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered (or, to the
extent permitted by law, made available) to purchasers of the Registrable
Securities, such Prospectus or Free Writing Prospectus, as the case may be, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company and the Guarantors
shall notify the Electing Holders to suspend use of the

 

12

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Prospectus or any Free Writing Prospectus as promptly as practicable after the
occurrence of such an event, and such Holders hereby agree to suspend use of the
Prospectus or any Free Writing Prospectus, as the case may be, until the Company
and the Guarantors have amended or supplemented the Prospectus or any Free
Writing Prospectus, as the case may be, to correct such misstatement or
omission;

(xi) a reasonable time prior to the filing of any Registration Statement, any
Prospectus, any Free Writing Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus or a Free Writing
Prospectus or of any document that is to be incorporated by reference into a
Registration Statement, a Prospectus or a Free Writing Prospectus after initial
filing of a Registration Statement, provide copies of such document to the
Initial Purchasers and their counsel (and, in the case of a Shelf Registration
Statement, to the Holders of Registrable Securities and their counsel) and make
such of the representatives of the Company and the Guarantors as shall be
reasonably requested by the Initial Purchasers or their counsel (and, in the
case of a Shelf Registration Statement, the Holders of Registrable Securities or
their counsel) available for discussion of such document; and the Company and
the Guarantors shall not, at any time after initial filing of a Registration
Statement, use or file any Prospectus, any Free Writing Prospectus, any
amendment of or supplement to a Registration Statement or a Prospectus or a Free
Writing Prospectus, or any document that is to be incorporated by reference into
a Registration Statement, a Prospectus or a Free Writing Prospectus, of which
the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, the Holders of Registrable Securities and their counsel)
shall not have previously been advised and furnished a copy or to which the
Initial Purchasers or their counsel (and, in the case of a Shelf Registration
Statement, the Holders of Registrable Securities or their counsel) shall object;

(xii) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the initial effective date of a
Registration Statement;

(xiii) cause the Indenture to be qualified under the Trust Indenture Act in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be; cooperate with the Trustee and the Holders to
effect such changes to the Indenture as may be required for the Indenture to be
so qualified in accordance with the terms of the Trust Indenture Act; and
execute, and use their commercially reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes and all other
forms and documents required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner;

 

13

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(xiv) in the case of a Shelf Registration, make available for inspection by a
representative of the Holders of the Registrable Securities (an “Inspector”),
any Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, any attorneys and accountants designated by a majority
of the Holders of Registrable Securities to be included in such Shelf
Registration and any attorneys and accountants designated by such Underwriter,
at reasonable times and in a reasonable manner, all pertinent financial and
other records, documents and properties of the Company and its subsidiaries, and
cause the respective officers, directors and employees of the Company and the
Guarantors to supply all information reasonably requested by any such Inspector,
Underwriter, attorney or accountant in connection with a Shelf Registration
Statement; provided that if any such information is identified by the Company or
any Guarantor as being confidential or proprietary, each Person receiving such
information shall take such actions as are reasonably necessary to protect the
confidentiality of such information to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of the rights and interests
of any Inspector, Holder or Underwriter); provided, further, that all
information that is provided by the Company shall be kept confidential by such
Persons, unless disclosure thereof is required or requested under compulsion of
law (whether by oral question, interrogatory, subpoena, civil investigative
demand or otherwise), by order or act of any court or governmental or regulatory
authority or body, or such information is or has become available to the public
generally through the Company or through a third party without an accompanying
obligation of confidentiality owed by such Person to the Company, or the Company
consents to the non-confidential treatment of such information;

(xv) in the case of a Shelf Registration, use their commercially reasonable
efforts to cause all Registrable Securities to be listed on any securities
exchange or any automated quotation system on which similar securities issued or
guaranteed by the Company or any Guarantor are then listed if requested by the
Majority Holders, to the extent such Registrable Securities satisfy applicable
listing requirements;

(xvi) if reasonably requested by any Holder of Registrable Securities covered by
a Shelf Registration Statement, as soon as practicable include in a Prospectus
supplement or post-effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included therein and make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as the Company has received notification of the matters to be so
included in such filing;

(xvii) in the case of a Shelf Registration, enter into such customary agreements
and take all such other actions in connection therewith (including those
requested by the Holders of a majority in principal amount of the Registrable
Securities covered by the Shelf Registration Statement) in order to expedite or
facilitate the disposition of such Registrable Securities including, but not
limited to, an Underwritten Offering and in such connection, (1) to the extent
possible, make such representations and warranties to the Holders and any

 

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Underwriters of such Registrable Securities with respect to the business of the
Company and its subsidiaries and the Registration Statement, Prospectus, any
Free Writing Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested, (2) obtain opinions of counsel to the
Company and the Guarantors (which counsel and opinions, in form, scope and
substance, shall be reasonably satisfactory to the Holders and such Underwriters
and their respective counsel) addressed to each selling Holder and Underwriter
of Registrable Securities, covering the matters customarily covered in opinions
requested in underwritten offerings, (3) obtain “comfort” letters from the
independent certified public accountants of the Company and the Guarantors (and,
if necessary, any other certified public accountant of any subsidiary of the
Company or any Guarantor, or of any business acquired by the Company or any
Guarantor for which financial statements and financial data are or are required
to be included in the Registration Statement) addressed to each selling Holder
(to the extent permitted by applicable professional standards) and Underwriter
of Registrable Securities, such letters to be in customary form and covering
matters of the type customarily covered in “comfort” letters in connection with
underwritten offerings, including but not limited to financial information
contained in any preliminary prospectus, Prospectus or Free Writing Prospectus
and (4) deliver such documents and certificates as may be reasonably requested
by the Holders of a majority in principal amount of the Registrable Securities
being sold or the Underwriters, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company and the Guarantors made pursuant
to clause (1) above and to evidence compliance with any customary conditions
contained in an underwriting agreement; and

(xviii) so long as any Registrable Securities remain outstanding, cause each
Additional Guarantor upon the creation or acquisition by the Company of such
Additional Guarantor, to execute a counterpart to this Agreement in the form
attached hereto as Annex A and to deliver such counterpart, together with an
opinion of counsel as to the enforceability thereof against such entity, to the
Initial Purchasers no later than five Business Days following the execution
thereof.

(b) In the case of a Shelf Registration Statement, the Company may require each
Holder of Registrable Securities to furnish to the Company a Notice and
Questionnaire and such other information regarding such Holder and the proposed
disposition by such Holder of such Registrable Securities as the Company and the
Guarantors may from time to time reasonably request in writing.

 

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(c) Each Holder of Registrable Securities covered in a Shelf Registration
Statement and each Participating Broker-Dealer intending to use the Prospectus
included in the Registration Statement for resales of Exchange Securities agrees
that, upon receipt of any notice from the Company and the Guarantors of the
happening of any event of the kind described in Section 3(a)(vi)(3) or
3(a)(vi)(5) hereof, such Person will forthwith discontinue disposition of
Registrable Securities pursuant to the Shelf Registration Statement or use of
the Prospectus or any Free Writing Prospectus until such Person’s receipt of the
copies of the supplemented or amended Prospectus and any Free Writing Prospectus
contemplated by Section 3(a)(x) hereof and, if so directed by the Company and
the Guarantors, such Holder will deliver to the Company and the Guarantors all
copies in its possession, other than permanent file copies then in such Holder’s
possession, of the Prospectus and any Free Writing Prospectus covering such
Registrable Securities that is current at the time of receipt of such notice.

(d) If the Company and the Guarantors shall give any notice to suspend the
disposition of Registrable Securities pursuant to a Registration Statement, the
Company and the Guarantors shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders of such
Registrable Securities shall have received copies of the supplemented or amended
Prospectus or any Free Writing Prospectus necessary to resume such dispositions.
The Company and the Guarantors may give any such notice only twice during any
365-day period and any such suspensions shall not exceed 30 days for each
suspension and there shall not be more than two suspensions in effect during any
365-day period.

(e) The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment bank or
investment banks and manager or managers (each an “Underwriter”) that will
administer the offering will be selected by the Holders of a majority in
principal amount of the Registrable Securities included in such offering.

4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff has taken
the position that any broker-dealer that receives Exchange Securities for its
own account in the Exchange Offer in exchange for Securities that were acquired
by such broker-dealer as a result of market-making or other trading activities
(a “Participating Broker-Dealer”) may be deemed to be an “underwriter” within
the meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Securities.

The Company and the Guarantors understand that it is the Staff’s position that
if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and
the

 

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means by which Participating Broker-Dealers may resell the Exchange Securities,
without naming the Participating Broker-Dealers or specifying the amount of
Exchange Securities owned by them, such Prospectus may be delivered by
Participating Broker-Dealers (or, to the extent permitted by law, made available
to purchasers) to satisfy their prospectus delivery obligation under the
Securities Act in connection with resales of Exchange Securities for their own
accounts, so long as the Prospectus otherwise meets the requirements of the
Securities Act.

(b) In light of the above, and notwithstanding the other provisions of this
Agreement, the Company and the Guarantors agree to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement for a period
of up to 180 days after the last Exchange Date (as such period may be extended
pursuant to Section 3(d) of this Agreement), in order to expedite or facilitate
the disposition of any Exchange Securities by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above. The
Company and the Guarantors further agree that Participating Broker-Dealers shall
be authorized to deliver such Prospectus (or, to the extent permitted by law,
make available) during such period in connection with the resales contemplated
by this Section 4.

(c) The Initial Purchasers shall have no liability to the Company, any Guarantor
or any Holder with respect to any request that they may make pursuant to
Section 4(b) above.

5. Indemnification and Contribution. (a) The Company and each Guarantor, jointly
and severally, agree to indemnify and hold harmless each Initial Purchaser and
each Holder, their respective affiliates, directors and officers and each
Person, if any, who controls any Initial Purchaser or any Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, reasonable legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred), joint or several, that arise out of, or are
based upon, (1) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or any omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (2) any untrue statement
or alleged untrue statement of a material fact contained in any Prospectus, any
Free Writing Prospectus or any “issuer information” (“Issuer Information”) filed
or required to be filed pursuant to Rule 433(d) under the Securities Act, or any
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, in each case except insofar as such losses,
claims, damages or liabilities arise out of, or are based upon, (i) any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to any Initial Purchaser or
information

 

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relating to any Holder furnished to the Company in writing through JPMorgan or
any selling Holder, respectively expressly for use therein or (ii) the use of
any such Registration Statement or any Prospectus or any Free Writing Prospectus
after notice has been given to Holders pursuant to Section 3(a)(vi)(5) prior to
such time as the Company furnishes an amended or supplemented prospectus
pursuant to Section 3(a)(x). In connection with any Underwritten Offering
permitted by Section 3, the Company and the Guarantors, jointly and severally,
will also indemnify the Underwriters, if any, selling brokers, dealers and
similar securities industry professionals participating in the distribution,
their respective affiliates and each Person who controls such Persons (within
the meaning of the Securities Act and the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Holders, if requested
in connection with any Registration Statement, any Prospectus, any Free Writing
Prospectus or any Issuer Information.

(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Guarantors, the Initial Purchasers and the other
selling Holders, the directors of the Company and the Guarantors, each officer
of the Company and the Guarantors who signed the Registration Statement and each
Person, if any, who controls the Company, the Guarantors, any Initial Purchaser
and any other selling Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the indemnity set
forth in paragraph (a) above, but only with respect to any losses, claims,
damages or liabilities that arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to such Holder furnished to
the Company in writing by such Holder expressly for use in any Registration
Statement, any Prospectus and any Free Writing Prospectus.

(c) If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnification may be sought pursuant to either paragraph
(a) or (b) above, such Person (the “Indemnified Person”) shall promptly notify
the Person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided that the failure to notify the Indemnifying Person
shall not relieve it from any liability that it may have under paragraph (a) or
(b) above except to the extent that it has been materially prejudiced (through
the forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it
from any liability that it may have to an Indemnified Person otherwise than
under paragraph (a) or (b) above. If any such proceeding shall be brought or
asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 5
that the Indemnifying Person may designate in such proceeding and shall pay the

 

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reasonable fees and expenses of such proceeding and shall pay the reasonable
fees and expenses of such counsel related to such proceeding, as incurred. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded after consultation with legal counsel that there
may be legal defenses available to it that are different from or in addition to
those available to the Indemnifying Person; or (iv) the named parties in any
such proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Persons,
and that all such reasonable fees and expenses shall be reimbursed as they are
incurred. Any such separate firm (x) for any Initial Purchaser, its affiliates,
directors and officers and any control Persons of such Initial Purchaser shall
be designated in writing by JPMorgan, (y) for any Holder, its directors and
officers and any control Persons of such Holder shall be designated in writing
by the Majority Holders and (z) in all other cases shall be designated in
writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify each Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested that an Indemnifying Person reimburse the Indemnified Person for
reasonable fees and expenses of counsel as contemplated by this paragraph, the
Indemnifying Person shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by the Indemnifying Person of such request and
(ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.

 

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(d) If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors from the offering of the Securities and the Exchange
Securities, on the one hand, and by the Holders from receiving Securities or
Exchange Securities registered under the Securities Act, on the other hand, or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of the Company
and the Guarantors on the one hand and the Holders on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Guarantors on the one hand and the Holders
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Guarantors or by the Holders and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

(e) The Company, the Guarantors and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any reasonable legal or other
expenses incurred by such Indemnified Person in connection with any such action
or claim. Notwithstanding the provisions of this Section 5, in no event shall a
Holder be required to contribute any amount in excess of the amount by which the
total price at which the Securities or Exchange Securities sold by such Holder
exceeds the amount of any damages that such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders’ obligations to contribute pursuant to this
Section 5 are several and not joint.

 

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(f) The remedies provided for in this Section 5 are not exclusive and shall not
limit any rights or remedies that may otherwise be available to any Indemnified
Person at law or in equity.

(g) The indemnity and contribution provisions contained in this Section 5 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of the Initial
Purchasers or any Holder or any Person controlling any Initial Purchaser or any
Holder, or by or on behalf of the Company or the Guarantors or the officers or
directors of or any Person controlling the Company or the Guarantors,
(iii) acceptance of any of the Exchange Securities and (iv) any sale of
Registrable Securities pursuant to a Shelf Registration Statement.

6. General.

(a) No Inconsistent Agreements. The Company and the Guarantors represent,
warrant and agree that (i) the rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of any other outstanding securities issued or guaranteed by the Company
or any Guarantor under any other agreement and (ii) neither the Company nor any
Guarantor has entered into, or on or after the date of this Agreement will enter
into, any agreement that is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof.

(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company and the Guarantors have obtained the written consent of
Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Securities unless consented to in
writing by such Holder. Any amendments, modifications, supplements, waivers or
consents pursuant to this Section 6(b) shall be by a writing executed by each of
the parties hereto.

(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if
to a Holder, at the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this Section 6(c),
which address initially is, with respect to the Initial Purchasers, the address
set forth in the Purchase Agreement; (ii) if to the Company and the Guarantors,
initially at the Company’s address set forth in the Purchase Agreement and

 

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thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(c); and (iii) to such other persons at their
respective addresses as provided in the Purchase Agreement and thereafter at
such other address, notice of which is given in accordance with the provisions
of this Section 6(c). All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next Business Day if timely delivered to an air courier
guaranteeing overnight delivery. Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee, at the address specified in the Indenture.

(d) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, assigns and transferees of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in violation
of the terms of the Purchase Agreement or the Indenture. If any transferee of
any Holder shall acquire Registrable Securities in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject
to all the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof. The Initial Purchasers
(in their capacity as Initial Purchasers) shall have no liability or obligation
to the Company or the Guarantors with respect to any failure by a Holder to
comply with, or any breach by any Holder of, any of the obligations of such
Holder under this Agreement.

(e) Third Party Beneficiaries. Each Holder shall be a third party beneficiary to
the agreements made hereunder between the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of other Holders
hereunder.

(f) Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

(g) Headings. The headings in this Agreement are for convenience of reference
only, are not a part of this Agreement and shall not limit or otherwise affect
the meaning hereof.

 

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(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

(i) Entire Agreement; Severability. This Agreement contains the entire agreement
between the parties relating to the subject matter hereof and supersedes all
oral statements and prior writings with respect thereto. If any term, provision,
covenant or restriction contained in this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable or against public
policy, the remainder of the terms, provisions, covenants and restrictions
contained herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The Company, the Guarantors and the Initial
Purchasers shall endeavor in good faith negotiations to replace the invalid,
void or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, void or unenforceable
provisions.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

BROCADE COMMUNICATIONS SYSTEMS, INC. By:  

 

Name:   Title:   BROCADE COMMUNICATIONS SYSTEMS SKYPORT LLC By:  

 

Name:   Title:   INRANGE TECHNOLOGIES CORPORATION By:  

 

Name:   Title:   MCDATA CORPORATION By:  

 

Name:   Title:   MCDATA SERVICES CORPORATION By:  

 

Name:   Title:   STRATEGIC BUSINESS SYSTEMS, INC. By:  

 

Name:   Title:  

 

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FOUNDRY NETWORKS, LLC

By:

 

 

Name:

 

Title:

 

Confirmed and accepted as of the date first above written:

J.P. MORGAN SECURITIES INC.

For itself and on behalf of the

  several Initial Purchasers

 

By  

 

  Authorized Signatory

 

25

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Schedule 1

Guarantors

BROCADE COMMUNICATIONS SYSTEMS SKYPORT LLC

INRANGE TECHNOLOGIES CORPORATION

MCDATA CORPORATION

MCDATA SERVICES CORPORATION

STRATEGIC BUSINESS SYSTEMS, INC.

FOUNDRY NETWORKS, LLC

--------------------------------------------------------------------------------

Annex A

Counterpart to Registration Rights Agreement

The undersigned hereby absolutely, unconditionally and irrevocably agrees as a
Guarantor (as defined in the Registration Rights Agreement, dated as of January
[20], 2010, by and among Brocade Communications Systems, Inc., a Delaware
corporation (the “Company”), the guarantors party thereto and J.P. Morgan
Securities Inc., on behalf of itself and the other Initial Purchasers, relating
to the Company’s [6.625] [6.875]% Senior Secured Notes due [2018][2020]) to be
bound by the terms and provisions of such Registration Rights Agreement.

IN WITNESS WHEREOF, the undersigned has executed this counterpart as of
                            .

 

[NAME] By:  

 

Name:   Title:  

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Exhibit B

Form of Letter

Qatalyst Partners LP

3 Embarcadero Center, 6th Floor

San Francisco, CA 94111

January     , 2010

Brocade Communications Systems, Inc.

1745 Technology Drive

San Jose, CA 95110

Attention: Richard Deranleau

Ladies and Gentlemen:

Reference is hereby made to the purchase agreement dated January     , 2010 (the
“Purchase Agreement”) between you and J.P. Morgan Securities Inc., as
representative of the several initial purchasers named therein (the
“Representative”). Terms defined in the Purchase Agreement shall have such
meanings when used herein.

We confirm that Qatalyst Partners LP is a member of the Financial Industry
Regulatory Authority (“FINRA”) in good standing and a broker-dealer registered
as such under the Securities Exchange Act of 1934, as amended.

We also confirm that, in connection with the offering of the Securities
contemplated under the Purchase Agreement, neither Qatalyst Partners LP nor any
of its affiliates, directly or indirectly, (a) has sold or will sell, has
offered or will offer for sale, has solicited or will solicit offers to buy, the
Securities, or (b) has taken or will take any action that, if taken by the
Company, would cause there to be a misrepresentation or breach of covenant
pursuant to Section 3(tt), (uu), or (ww) or Section 4(m), (n) or (o) of the
Purchase Agreement.

This letter is being delivered solely to you in connection with the offering of
the Securities and may not be relied upon by any other party or for any other
purpose without our prior written consent. We acknowledge that a copy of this
letter may be disclosed to the Representatives in accordance with Section 6(s)
of the Purchase Agreement.

 

Sincerely,

Qatalyst Partners LP

By:

 

 

Name:

 

Title:

 

 

2