**EXHIBIT10.14.1**

 

**McDATA CORPORATION**

 

**DISTRIBUTION AGREEMENTAgreement No. 40-98-0096-07**

 

**(As Amended Through Amendment #17)**

 

***“McDATA”***

McDATA Corporation310 Interlocken ParkwayBroomfield, CO  80021-3464

 

***“Buyer”***

Hitachi Data Systems Corporation

750 Central Expressway

Santa Clara, CA 95050-2627

 

**This Distribution Agreement**(“**Agreement**”)is entered into by and between McDATA and Buyer, and commences on the dateaccepted and executed by McDATA (“**Effective Date**”).

 

Each of thedocuments identified below is incorporated herein by reference.

 

Distribution Agreement

 
| Exhibit A |   | Pricing                                                        |
|-----------|--------|----------------------------------------------------------------|
|      |   |                                                           |
| Exhibit B |   | Product  Specifications                                        |
|      |   |                                                           |
| Exhibit C |   | Operational  Provisions                                        |
|      |   |                                                           |
| Exhibit D |   | Conditions of  Software Acceptance; Customer License Agreement |
|      |   |                                                           |
| Exhibit E |   | Buyer Entities  Authorized to Purchase                         |
|      |   |                                                           |
| Exhibit F |   | Trademarks                                                     |
|      |   |                                                           |
| Exhibit G |   | Terms for Use of  McDATA Enterprise SAN Methodology            |

 

This Agreement andthe applicable Exhibits identified above, are the complete agreement betweenMcDATA and Buyer with respect to the Products on Figure A-1 of Exhibit A ofthis Agreement, and replace all prior oral or written representations oragreements between the parties.

 
| *Executed and agreed to:*       |                           | *Accepted and agreed to:*            |   |
|---------------------------------|--------------------------------|--------------------------------------|--------|
|                            |                           |                                 |   |   |   |
| **McDATA Corporation (McDATA)** |                           | **Hitachi Data Systems Corporation** |   |
|                            |                           |                                 |   |   |   |
| By:                             | /s/  MICHAEL B. GUSTAFSON |                                 | By:    | /s/ DAVID COOMBS |   |
|                            |                           |                                 |   |   |   |
| Name:                           | Michael B.  Gustafson          |                                 | Name:  | David Coombs |   |
|                            |                           |                                 |   |   |   |
| Title:                          | VP Sales &  Services       |                                 | Title: | EVP, Operations |   |
|                            |                           |                                 |   |   |   |
| Date:                           | 12/15/99                       |                                 | Date:  | 12/13/99 |   |
|                            |                           |                                 |   |   |   |
| Effective Date:                 | December 15,  1999        |                                 |   |   |   |
|                                 |                                |                                      |        |  |  |  |  |  |  |  |

 

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**McDATA CORPORATION**

 

**DISTRIBUTION AGREEMENT**

 

**Table of Contents**

 

 

 
| ***Section Title*** |                                                                                                                  |
|--------------------------|-----------------------------------------------------------------------------------------------------------------------|
|                     |                                                                                                                  |
| 1                        | DEFINITIONS                                                                                                           |   |
|                     |                                                                                                                  |   |
| 2                        | TERM                                                                                                                  |   |
|                     |                                                                                                                  |   |
| 3                        | TERRITORY                                                                                                             |   |
|                     |                                                                                                                  |   |
| 4                        | MCDATA’S RESPONSIBILITIES                                                                                        |   |
|                     |                                                                                                                  |   |
| 5                        | BUYER’S RESPONSIBILITIES                                                                                         |   |
|                     |                                                                                                                  |   |
| 6                        | CREDIT AND PAYMENT TERMS                                                                                              |   |
|                     |                                                                                                                  |   |
|                     | 6.1           Credit                                                |   |
|                     |                                                                                                                  |   |
|                     | 6.2           Payment                                               |   |
|                     |                                                                                                                  |   |
| 7                        | TITLE AND RISK OF LOSS                                                                                                |   |
|                     |                                                                                                                  |   |
| 8                        | FORECASTS, ORDERS, AND  DELIVERY                                                                                      |   |
|                     |                                                                                                                  |   |
|                     | 8.1           Forecasts                                             |   |
|                     |                                                                                                                  |   |
|                     | 8.2           Purchase Orders                                       |   |
|                     |                                                                                                                  |   |
|                     | 8.3           Acceptance of Purchase Orders                         |   |
|                     |                                                                                                                  |   |
|                     | 8.4           Spares                                                |   |
|                     |                                                                                                                  |   |
|                     | 8.5           Order Rescheduling                                    |   |
|                     |                                                                                                                  |   |
|                     | 8.6           Shipment/Delivery and  Export/Import                  |   |
|                     |                                                                                                                  |   |
|                     | 8.7           Acceptance of  Products                               |   |
|                     |                                                                                                                  |   |
|                     | 8.8           Order Cancellation                                    |   |
|                     |                                                                                                                  |   |
| 9                        | PRODUCTS                                                                                                              |   |
|                     |                                                                                                                  |   |
|                     | 9.1           Product Specifications                                |   |
|                     |                                                                                                                  |   |
|                     | 9.2           Product Design  Changes and Field Modification Orders |   |
|                     |                                                                                                                  |   |
|                     | 9.3           Improvements                                          |   |
|                     |                                                                                                                  |   |
|                     | 9.4           Buyer Modification                                    |   |
|                     |                                                                                                                  |   |
|                     | 9.5           Product Discontinuance                                |   |
|                     |                                                                                                                  |   |
| 10                       | SOFTWARE LICENSE  & RESTRICTIONS                                                                                  |   |
|                     |                                                                                                                  |   |
| 11                       | WARRANTY                                                                                                              |   |
|                     |                                                                                                                  |   |
|                     | 11.1         Product Warranty                                                 |   |
|                     |                                                                                                                  |   |
|                     | 11.2         Software Warranty                                                |   |
|                     |                                                                                                                  |   |
|                     | 11.3         Title Warranty                                                   |   |
|                     |                                                                                                                  |   |
|                     | 11.4         Year 2000                                                        |   |
|                     |                                                                                                                  |   |
|                     | 11.5         Disclaimer                                                       |   |
|                     |                                                                                                                  |   |
| 12                       | TECHNICAL SUPPORT, REPAIRS, AND  TRAINING                                                                             |   |

 

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|   | 12.1         By McDATA                  |   |
|--------|---------------------------------------------------------------------------------|--------|
|   |                                                                            |   |
|   | 12.2         By Buyer                   |   |
|   |                                                                            |   |
| 13     | SOFTWARE MAINTENANCE                                                            |   |
|   |                                                                            |   |
|   | 13.1         Software Support           |   |
|   |                                                                            |   |
|   | 13.2         Program Errors             |   |
|   |                                                                            |   |
|   | 13.3         Software Update Service    |   |
|   |                                                                            |   |
|   | 13.4         Limitations                |   |
|   |                                                                            |   |
| 14     | PROPRIETARY RIGHTS INDEMNIFICATION                                              |   |
|   |                                                                            |   |
| 15     | DOCUMENTATION:  REPRODUCTION, MODIFICATION, AND  DISTRIBUTION RIGHTS       |   |
|   |                                                                            |   |
| 16     | IDENTIFICATION OF  PRODUCTS AND TRADEMARK RIGHTS                                |   |
|   |                                                                            |   |
|   | 16.1         Identification of Products |   |
|   |                                                                            |   |
|   | 16.2         Trademark Rights           |   |
|   |                                                                            |   |
|   | 16.3         Operational Provisions     |   |
|   |                                                                            |   |
|   | 16.4         Web Access                 |   |
|   |                                                                            |   |
| 17     | CONFIDENTIALITY OF  INFORMATION                                                 |   |
|   |                                                                            |   |
| 18     | LIMITATION OF LIABILITY                                                         |   |
|   |                                                                            |   |
| 19     | TERMINATION                                                                     |   |
|   |                                                                            |   |
| 20     | GENERAL PROVISIONS                                                              |   |
|   |                                                                            |   |
|   | 20.1         Governing Law              |   |
|   |                                                                            |   |
|   | 20.2         Waiver                     |   |
|   |                                                                            |   |
|   | 20.3         Compliance with Laws       |   |
|   |                                                                            |   |
|   | 20.4         Notices                    |   |
|   |                                                                            |   |
|   | 20.5         Assignment                 |   |
|   |                                                                            |   |
|   | 20.6         Attorneys’ Fees       |   |
|   |                                                                            |   |
|   | 20.7         Official Language          |   |
|   |                                                                            |   |
|   | 20.8         Headings                   |   |
|   |                                                                            |   |
|   | 20.9         Force Majeure              |   |
|   |                                                                            |   |
|   | 20.10       Severability                          |   |
|   |                                                                            |   |
|   | 20.11       Contract Changes                      |   |
|   |                                                                            |   |
|   | 20.12       Records                               |   |

 

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| EXHIBIT A | PRODUCT PRICING                                               |   |
|-----------|---------------------------------------------------------------|--------|
|      |                                                          |   |
| EXHIBIT B | PRODUCT  SPECIFICATIONS                                       |   |
|      |                                                          |   |
| EXHIBIT C | OPERATIONAL  PROVISIONS                                       |   |
|      |                                                          |   |
| EXHIBIT D | CONDITIONS  OF SOFTWARE ACCEPTANCE CUSTOMER LICENSE AGREEMENT |   |
|      |                                                          |   |
| EXHIBIT E | BUYER  ENTITIES AUTHORIZED TO PURCHASE                        |   |
|      |                                                          |   |
| EXHIBIT F | TRADEMARKS                                                    |   |

 

**Distribution Agreement**

 

McDATA and Buyer agree as follows:

 

**1****              DEFINITIONS.**

 

**1.1****          “Buyer”**means that entity listed on the first page of this Agreement and allsubsidiaries or affiliates thereof designated to purchase hereunder as setforth on Exhibit E attached hereto, provided such subsidiaries or affiliatesare bound by the terms and conditions of this Agreement.

 

**1.2****          “Customer”**means any entity to which Buyer sells, rents, leases or otherwisedistributes McDATA Products, including Resellers and End User Customers.

 

**1.3****         **“**Reseller”**means an entity authorized byBuyer to purchase Products directly, or indirectly through Buyer’s channels ofdistribution, for the purpose of resale.

 

**1.4****          “EndUser Customer”**means any entity that purchases McDATA-manufactured Productsfrom Buyer or a Reseller and/or licenses Software associated therewith for itsuse in accordance with McDATA’s then current published specifications,configurations, and compatibility guidelines for data communicationsnetworking.

 

**1.5****          “EndUser Customer Software”**means, and is limited to, the Software in ObjectCode form, and includes (i) the machine-executable instructions and allassociated descriptive material and documentation for each processor withineach Product supplied by McDATA pursuant to this Agreement, (ii) subsequentupdates and/or enhancements provided by McDATA pursuant to this Agreement and(iii) any Software Feature Option(s) that is sublicensed pursuant to the termsof this Agreement. Such Software may be provided to Buyer on magnetic media orin written or graphic form that performs, describes, or illustrates theperformance of all on-line functions, off-line utilities, and diagnosticspertinent to the Product.

 

**1.6****          “ObjectCode”**means computer programming code, substantially or entirely in binaryform that is directly executable by a computer after suitable processing butwithout the intervening steps of compilation or assembly.

 

**1.7****          “Products”**means certain McDATA data communication equipment, hardware, software,related features, conversions, options, and other accessories as furtherdescribed in Figure A-1 of Exhibit A of this Agreement that Buyer is authorizedto purchase and distribute, and that may utilize the Software licensedhereunder.

 

**1.8****          “ProductSpecifications”**means the product specifications for the Products that arereferred to in Exhibit B, as amended from time to time, as “EngineeringDocument Numbers.”

 

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**1.9****         ****“Service Provider”**meansBuyer [***] [***] [***] [***] [***] [***] authorized by Buyer which performtechnical support for and repair Products.

 

**1.10****        “Services”**means the technical support, repairs, and training provided by McDATA toBuyer under this Agreement.

 

**1.11****        “Software”**means the collective reference to End User Customer Software, SoftwareFeature Option(s) and software that may be listed on Figure A-1.

 

**1.12****        “SoftwareFeature Option(s)”**means an optional feature for End User Customer Software,as available from time to time, that enables special attributes and/or providesadditional functionality, and that will be delivered to Buyer upon receipt ofits purchase order and payment of an additional license fee, if applicable.

 

**1.13****        “Spares”**means all parts or components of Products that are generally made availableby McDATA for separate sale.

 

**1.14****        “Trademark”**means the proprietary label(s) identified in Exhibit F under which the Productswill be marketed in the Territory, such as:

 

McDATAÒ

 

NOTE:  McDATA and the McDATA logo are registeredtrademarks of McDATA Corporation.

 

**2****              TERM. **The initialterm of this Agreement commences on the Effective Date and continues for aperiod of [***] ([***]) years, unless sooner terminated pursuant to the terminationprovisions in this Agreement. Thereafter, this Agreement shall be automatically renewed for successive[***] ([***]) year terms unless either party provides written notice to theother party of its intent to terminate this Agreement at least [***] ([***])days prior to the end of the then-current term.

 

**3****              TERRITORY. **Buyeris authorized to market the Products and sublicense the Software worldwide.

 

**4****              MCDATA’S RESPONSIBILITIES: **Subject to the terms and conditions ofthis Agreement, McDATA shall:

 

(i)            upon receipt andacceptance of a purchase order for Products and/or Software from Buyer,sell/license the specified Products and/or Software to Buyer at the pricesspecified in Exhibit A;

 

(ii)           grant Buyer the rightsand licenses in the Software as set forth in Section 10 of this Agreement;

 

(iii)          ship Products and/orSoftware to Buyer as set forth in Section 8 of this Agreement;

 

(iv)          warrant the Products andSoftware as set forth in Section 11 of this Agreement;

 

(v)           indemnify Buyer as setforth in Section 14 of this Agreement;

 

(vi)          offer technical support,repairs, and training to Buyer as set forth in Section 12 and Exhibit A ofthis Agreement, at the prices specified in Exhibit A;

 

(vii)         provide Software supportto qualified Buyer personnel as set forth in Section 13 of this Agreement;and

 

(viii)        make available to Buyerall new releases of Software, with all available documentation, as set forth inSection 13.

 

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**5****              BUYER’S RESPONSIBILITIES: **Subject to the terms and conditions ofthis Agreement, Buyer shall:

 

(i)            market, sell, lease,rent, and deliver Products to its Customers in the Territory as set forth inSection 3 of this Agreement;

 

(ii)           forecast, order, takedelivery of, accept, and pay for Products as set forth in Sections 6 and 8 ofthis Agreement;

 

(iii)          provide all requiredtechnical support for the Products to its Customers as set forth inSection 12 of this Agreement;

 

(iv)          provide all requiredinstallation services for the Products and Software to its Customers;

 

(v)           provide all requiredtraining for its Customers;

 

(vi)          provide all requiredsupport for the Software to its Customers as set forth in Section 13;

 

(vii)         protect McDATA’sproprietary rights as set forth in Section 10, 14, and 16 of thisAgreement; and

 

(viii)        stock Spares at levelssufficient to satisfy its Customers in accordance with Section 8.4 of thisAgreement.

 

**6****              CREDIT AND PAYMENT TERMS.**

 

**6.1****          Credit****. **McDATA reserves the right toreassess credit terms and increase or decrease credit limits at any time in itssole discretion, based on Buyer’s payment history, financial position, and/orperceived risk.

 

McDATA’s obligation todeliver Products ordered, to perform Services, and to license Software underthis Agreement shall be subject to Buyer’s adherence to all payment and creditterms stipulated herein. Following Buyer’s failure to comply with these terms,McDATA may, at any time, without liability, suspend credit and/or delay orreschedule delivery of additional Products, and/or suspend performance ofServices, and/or suspend performance of Software/maintenance support, and shallgive Buyer [***] days written notice of such action.

 

**6.2**          **Payment****. **In the event McDATA agrees to extend opencredit to Buyer, terms of payment are net [***] ([***]) days.  Each Product shipment shall be invoiced byMcDATA upon shipment, and paid for by Buyer when due, without regard to otherscheduled deliveries.  All paymentshereunder shall be made in United States Dollars by electronic wire transfer orbank check.

 

**7****              TITLE AND RISK OF LOSS. **Title and risk of loss or damage toProducts purchased by Buyer shall pass to Buyer upon shipment.

 

**8****              FORECASTS, ORDERS, AND DELIVERY.**

 

**8.1****          Forecasts****.** Within thirty (30) days after execution ofthis Agreement, Buyer will give McDATA a forecast in writing of its projectedpurchases of Products for the following [***] ([***])[***]; quantities are tobe identified by model by month.  On orbefore the fifteenth (15th) day of each month thereafter, Buyer will provideMcDATA with an updated forecast covering the projected purchases for [***][***] [***] [***] ([***]) [***] [***]. Such forecasts are Buyer’s projections of intended total purchasesinclusive of all applicable rescheduled

 

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quantities of Products,are for planning purposes only, and are not commitments to buy.  Such commitments are only valid upon Buyer’sissuance of purchase orders as defined in Section 8.2 below.

 

**8.2****          Purchase Orders****.**

 

**8.2.1****      **Buyershall, from time to time, issue purchase orders to McDATA for Products.  Such purchase orders are Buyer’s commitmentsto buy.  Normal lead-time for purchaseorders based on the forecast is [***] ([***]) [***] days after receipt of order(ARO).  Such purchase orders shall be inwriting and identify quantity, model, features and prices.  Each purchase order will be issued by Buyerat least [***] ([***]) [***] days before its first scheduled delivery date toBuyer’s specified location.  McDATA willuse best effort to comply with the delivery dates requested on such purchaseorders.

 

**8.2.2**       McDATA agrees to provide to HDS, withoutliability or charge, the ability to

 

modify quantities on eachissued purchase order as follows:

 

[***]

 

If Buyer requests an increase beyond the percentages specified above,McDATA will use best efforts to comply with such request.

 

**8.2.3**       Buyer may transmit purchaseorders by facsimile or e-mail provided such e-mail purchase orders are issuedby an authorized HDS representative. Buyer shall provide a written list of such authorized persons for eachHitachi Data Systems Entities listed on Exhibit E.  Orders are considered binding upon receipt by McDATA of saidfacsimile or e-mail, subject to acceptance as set forth below.

 

**8.3**          **Acceptance of Purchase Orders****. **McDATA will notify Buyer of its acceptance or rejection of a purchaseorder within [***] ([***]) [***] daysafter receipt of such purchase order, by email, facsimile or traditionalpost.  Failure of McDATA to notify Buyerwithin [***] ([***]) [***] days willbe deemed acceptance of a purchase order. In the event that McDATA rejects a purchase order, McDATA will informBuyer of the reason for such rejection. All purchase orders shall be governed by the terms and conditions ofthis Agreement, and none of the terms or conditions of Buyer’s purchase ordershall be applicable if they are in conflict with the terms or conditions ofthis Agreement unless otherwise agreed to in writing by McDATA.

 

**8.4**          **Spares****.**

 

**8.4.1**       **SpareParts Orders. **Buyer has full responsibility forstocking Spares at levels sufficient to satisfy its Reseller and End UserCustomer requirements.  As outlined inMcDATA’s then-current Spares, Repair and Upgrade Catalog, Spares to supportProducts currently in production may be ordered from 8:00 to 5:00 MT in threeways:  “Normal Spares”, “ExpediteSpares”, and “Emergency Spares”.  Ordersfor Normal Spares shall be placed by Buyer not less than [***] ([***]) days inadvance of the earliest delivery date specified in such orders.  Orders for Expedite Spares shall be placed byBuyer not less than[***] ([***]) days in advance of the earliest delivery datespecified in such orders.  McDATA shalluse its reasonable best efforts to ship orders for Emergency Spares within[***] ([***]) hours after receipt of order. Spares to support discontinued Products shall be handled in accordancewith the provisions of the applicable Product discontinuance notice.

 

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Notwithstanding the foregoing, for the [***]monthperiod commencing on the effective date of the Agreement, orders for NormalSpares may be placed by Buyer not less than [***] days in advance of theearliest delivery date specified in such orders.  All pricing on such orders will be at a [***] ([***]) discountoff McDATA’s End User “Spares, Repair and Upgrade Catalog”.  Spare parts orders placed less than [***]days in advance of the earliest delivery date, will be priced at the “Expedite”or “Emergency” levels according to lead-times specified in the “Spares, Repairand Upgrade Catalog”.  Upon expirationof such [***] month period, pricing and lead times revert to those stated inpreceding paragraph.

 

**8.4.2**       **OtherVendors. **Nothing contained herein shall prohibitBuyer from purchasing Spares or replacement parts from any other vendor,provided, however, that McDATA shall have no warranty responsibility withrespect to such Spares purchased from any other vendor or for Products in whichsuch Spares are installed.  The purchaseand use, by Buyer, of expendables (fuses and diskettes) acquired from sourcesother than McDATA shall not affect McDATA’s warranty responsibility for theaffected Products.

 

**8.5****          OrderRescheduling****. **Buyermay reschedule a purchase order within the calendar quarter of theoriginally scheduled ship date without penalty.  Within any calendar quarter (“Quarter”) Buyer mayreschedule the ship date for any purchase order(s) accepted by McDATA, onan unlimited basis without charge, if the new scheduled ship date for suchpurchase order(s) is within such Quarter. [***].  Except as set forthherein, no other rescheduling is allowed.

 

**8.6****          Shipment/Delivery and Export/Import. **When requested, McDATA will usereasonable efforts to assist Buyer in obtaining any documents (e.g., importcertificate, pro forma invoice) that are required to enable Buyer to import theProducts into the country of delivery (and, where necessary, for in-transitpassage of goods through another country) and enable McDATA to obtain an exportlicense for the exportation of the Products.

 

After appropriate export and import licenses are secured, McDATA willship each item of Product sold hereunder F.O.B., McDATA’s point of shipment.Buyer shall, at least [***] ([***]) days prior to the requested delivery dateof such Products, specify in writing the location to which the Products are tobe shipped, and may also specify the type of conveyance and/or carrier forshipment.

 

As used in this Agreement, shipment and delivery are synonymous.  For purposes of this Agreement, shipment anddelivery occur upon delivery of Products by McDATA at McDATA’s factory to thecommon carrier specified by Buyer.

 

**8.7****          Acceptanceof Products. **All Products soldunder this Agreement shall conform to McDATA’s then current Product Specificationsat time of delivery.  Buyer’s acceptanceof each Product shall occur upon delivery unless Buyer notifies McDATA inwriting within [***] ([***]) days after delivery that such Product does notconform to specifications.  Payment forany Product by Buyer shall not reduce the [***] ([***]) day period availablefor inspection and reporting of any nonconformance.  McDATA’s obligation for defective Products shall be limited toits repair or replacement (at McDATA’s option and expense) pursuant to thewarranty provisions of Section 11 of this Agreement.

 

In the event that any Product delivered to Buyer does not function inaccordance with the specifications during the [***] ([***]) day acceptanceperiod, and such malfunction is not due to freight damage or other exclusionsin Section 11.1, Buyer shall make a reasonable attempt to isolate andcorrect the problem and, if required, shall contact McDATA for

 

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assistance by telephone.  Ifthese steps prove unsuccessful, McDATA agrees, upon written request by Buyer,to either promptly repair or replace (at McDATA’s option and expense) themalfunctioning Product as a warranty adjustment to Buyer’s Products pursuant toSection 11.1.

 

**8.8**          **Order Cancel****lation. **If, upon installation at an End User Customer’ssite, Buyer finds that a Product has functional defects that render it unfitfor sale, Buyer shall notify McDATA by fax or in writing.  Within [***] ([***]) [***] days of receipt of such notice, McDATA shall shipa replacement Product to Buyer at no charge to Buyer.  Buyer shall ship the defective Product to McDATA within [***]([***]) [***] days of its notice toMcDATA.  In the event that Buyer doesnot ship the defective Product to McDATA within [***] ([***]) [***] days of its notice to McDATA, Buyer shall payMcDATA [***] [***] [***] [***] [***]

 

**9****              PRODUCTS. **McDATAagrees to sell to Buyer the Products listed in Figure A-1 of Exhibit A of thisAgreement, at the prices specified in Figure A-1 of Exhibit A, and under the termsspecified in this Agreement.  McDATAreserves the right to add or withdraw Products from this list.  Additionally, McDATA reserves the right atany time to make changes to any Products, including changes that are requiredto facilitate performance in accordance with Product Specifications.

 

**9.1****          ProductSpecifications****. **Referencenumbers (“Engineering Document Numbers”) for McDATA product specifications forthe Products are outlined in Exhibit B of this Agreement. All repairs andmaintenance for Products shipped prior to such change in Product Specificationsshall be provided according to the Product Specifications in effect at the timeof the shipment of such Products.

 

**9.2****          ProductDesign Changes and Field Mod****ification Orders.**

 

**9.2.1****       DesignChanges. **In the event McDATAproposes a change to the Products or Software which affects the form, fit orfunction of the Products and such change will be implemented for all ofMcDATA’s customers purchasing similar products with similar specifications fromMcDATA, or if such change would directly affect any Buyer-unique feature,McDATA agrees to provide Buyer prior notification of such change, and giveBuyer an opportunity to comment on such change.  On such notice, McDATA will state a date by which Buyer’scomments are required; such date shall be a minimum of [***] ([***]) [***] daysfrom the date of such notice.  If Buyerhas not responded on or before that date, McDATA will assume Buyer has nocomments, and will proceed with the change process.

 

McDATA shall have the right to make any other design changes to theProducts which do not affect the form, fit or function and do not affect aBuyer-unique feature at any time prior to shipment.

 

Buyer may request changes or modifications in the Products (BuyerInitiated Change) upon written request to McDATA specifying the same indetail.  As soon as practicable afterreceipt thereof, McDATA shall review the request and, if acceptable to McDATA,shall furnish Buyer price estimates, non-recurring development costs, and deliveryschedules for such changes or modifications. If same are acceptable to Buyer, McDATA will, upon receipt of a purchaseorder therefor, proceed to implement same at the expense of Buyer.

 

All rights in and to any Product design changes initiated by McDATA orrequested by Buyer shall be the exclusive property of McDATA.

 

**9.2.2**       **Field Changes. **In theevent that a Product field change is mandatory, McDATA will promptly provideBuyer a full description of the problem and resolution, and any hardware orsoftware required.  Buyer will providesuch information, hardware and software to Service Providers and End Users.

 

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**9.2.3****       ObsoleteSpares. **In the event that McDATAshall have rendered any Spares obsolete through Mandatory Changes, Buyer shallhave the right to return and receive [***] [***] [***] any excess inventory ofsuch Spares.  McDATA agrees to accept[***] [***] [***] [***] any such Spares provided the Spares rendered obsoletehave not been damaged or subjected to misuse and are returned to McDATA, insubstantially the same condition as received by Buyer, in a single lot shipmentat Buyer’s expense, within [***] ([***]) [***] days after date of notice fromMcDATA pursuant to Section 9.2.4 hereof.

 

**9.2.4**       **Notification**. McDATA will notify Buyer promptly of allengineering change notices (“ECNs”) which affect form, fit or function of theProduct, field changes (including whether they are optional or mandatory),technical and support documentation changes, microcode updates, driver andfirmware updates, and Product problems. Such notification will include a message to Buyer via electronic mail orfax concurrent with McDATA’s release of information to its support Web sites.  Buyer will provide such information, asappropriate, to Service Providers and End Users.

 

**9.3****          Improvements****. **  McDATA agrees to give Buyer the right to purchase any new orimproved product that has capabilities and functions comparable to the Productsthat McDATA makes generally available to its other customers with similardistribution strategies.  Such newmodels, options, features and improvements will be made available to Buyer[***] [***] [***] [***]

 

**9.4****          BuyerModification****. **Buyerrepresents that in no event shall Buyer alter any Product in any way to modifythe performance characteristics of that Product without the prior writtenpermission of McDATA.  The appropriateidentification labels, regulatory agency marks and verification of FCC Class A Complianceor the licensed agency number are indicated on the Products at the time ofshipment.  Buyer shall not modify anymarks or labels affixed to the Products by McDATA with those showing Buyer’sname, or otherwise modify or replace such marks or labels.  McDATA hereby disclaims any liability forthe possession, use, resale, or operation of any Products that, as a result ofan alteration by Buyer or any third party, affects its compliance with theapplicable regulations and/or requirements.

 

**9.5****          ProductDiscontinuance****. **McDATAreserves the right to discontinue Products by notifying Buyer in writing atleast [***] ([***]) days prior to the discontinuance date.  McDATA agrees to honor all purchases ordersreceived and accepted by McDATA prior to the date specified on thediscontinuance notice.

 

**10****           SOFTWARE LICENSE & RESTRICTIONS.**

 

**10.1****       **Buyerunderstands that the Software is proprietary to, trade secret of, andcopyrights by McDATA or its suppliers. Buyer further understands that Buyer and its Resellers and End UserCustomers are acquiring only the right to use the Software, and that allownership, copyright, and other intellectual property rights vested in thisSoftware shall remain with McDATA or its suppliers.

 

**10.2****       **McDATAgrants to Buyer the non-exclusive, non-transferable right and license to usethe Software, in Object Code form only, for support, marketing anddemonstration purposes and for the training of its Resellers and End UserCustomers.

 

**10.3****       **Buyeragrees that it shall not attempt to modify, reverse engineer, decompile,disassemble, decode or translate the Software. Buyer further agrees that it shall not copy the Software except forarchival or back-up purposes, as may be necessary for use on or with theProducts.

 

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**10.4****       **Buyer shall ensure that each End UserCustomer is provided a copy of the Software license that is between such EndUser and McDATA or its suppliers.  SuchSoftware license may be in the form of a click-through or shrinkwrap license.  In countries where click-through orshrinkwrap licenses are enforceable, McDATA’s click-through licenses orshrinkwrap licenses shall satisfy such requirement.  In countries where click-through licenses or shrinkwrap licensesare not enforceable, or if Buyer chooses not to use such a click-through orshrinkwrap license, Buyer shall use a license which contains substantially thesame terms and conditions as those set forth on Exhibit D.

 

**10.5**        Buyer shall not export, directly or indirectly, theSoftware to countries that are not signatories of the Berne Convention.

 

**10.6**        Buyer shall reasonably notify McDATA promptly of anyunauthorized use, disclosure, reproduction or distribution of Software whichcomes to Buyer’s attention.

 

**11****           WARRANTY.**

 

**11.1****        Product and Spares Warranty. **McDATA warrants that the Products andSpares purchased will, under normal use and service, conform to ProductSpecifications at the time of shipment and be free from defects in material andworkmanship for [***] [***], as measured from the date of shipment.

 

[***]

 

McDATA will, at its option and without charge to Buyer, promptly repairor replace, any Product (excluding expendables) that is determined to bedefective and that is returned to McDATA within this warranty period, providedthe Product or Spares has not been damaged, subjected to misuse, altered,improperly repaired or maintained by Buyer or third parties in a manner thatMcDATA reasonably determines to have adversely affected performance orreliability.  McDATA’s liability hereunderis limited to the repair or replacement of the defective Product or Spares anddoes not include any labor related to the removal and/or subsequentreinstallation thereof.  The abovewarranty extends solely to Buyer (and shall not be transferred or assigned inany manner) and all warranty claims must be generated by Buyer.  Repair or replacement of component parts byMcDATA shall not extend or decrease the Product or Spares warranty.

 

**11.2**        **Software Warranty****. **McDATA warrants that the licensedSoftware will, under normal use and service, conform to Product Specificationsand be free from defects in material and workmanship for [***][***], asmeasured from the date of shipment.

 

[***]

 

McDATA’s sole obligation under this warranty shall be to repair orreplace any defective Software media and/or to remedy any non-conformance ofthe Software to enable it to conform to the functional specifications set forthin its applicable documentation.

 

This warranty is only effective when the Software is used on or inconjunction with the Product(s) to which it relates.  Further, the warranties are contingent upon proper use of theSoftware by Buyer or Buyer’s Customers, and will not apply if the Software hasbeen modified without the prior written consent of McDATA.  McDATA makes no warranty that use of theSoftware will be uninterrupted or error-free, or that its use will meet Buyer’sor Buyer’s Customer’s suitability requirements.

 

**11.3**        **TitleWarranty****. **Exceptfor McDATA’s security interest in Products pending payment therefor pursuant toSection 6, McDATA warrants that title to all Products delivered to Buyerunder this Agreement shall be free and clear of all liens, encumbrances orother claims.

 

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**11.4**        **Year 2000.**** **Subject to the other provisions of this Section 11,McDATA warrants that for a period of one (1) year following the advent of theYear 2000 the Products sold to Buyer will under normal use and service, as setforth in the Product Specifications, record, store, process, and presentcalendar dates falling on or after January 1, 2000 (includingFebruary 29, 2000), in the same manner, and with the same functionality,except for limitations imposed by the underlying operating system andutilities, as such Products record, store, process and present calendar dateson or before December 31, 1999. Notwithstanding the foregoing, McDATAshall not be responsible for any output, results, errors or abnormalterminations to the extent that such are caused by (i) any products or servicesnot provided by McDATA or (ii) any data to be manipulated that is incorrect,ambiguous or that does not specify a century.

 

**11.5**        **Disclaimer****. **THE WARRANTIES AND CONDITIONS SET FORTHHEREIN AND THE OBLIGATIONS AND LIABILITIES OF McDATA HEREUNDER ARE IN LIEU OF,AND McDATA HEREBY DISCLAIMS, ALL OTHER EXPRESS OR IMPLIED WARRANTIES ANDCONDITIONS, INCLUDING, WITHOUT LIMITATION, THOSE OF MERCHANTABILITY AND/ORFITNESS FOR A PARTICULAR PURPOSE.  IN NOEVENT SHALL McDATA’S LIABILITY TO BUYER UNDER THIS SECTION EXCEED THEAMOUNT PAID BY BUYER TO McDATA FOR THE AFFECTED PRODUCT.

 

Buyer acknowledges and agrees that it will make no representations orwarranties to its Customers, on behalf of McDATA.

 

**12****           TECHNICALSUPPORT, REPAIRS AND TRAINING.**

 

**12.1****        By McDATA****:**

 

**12.1.1**     **TechnicalSupport. **McDATA will provide telephone support toBuyer as is reasonably required and will, in good faith, cooperate with Buyerto solve any technical difficulty specific to the designated products thatcannot be resolved by Buyer’s Technical Support Staff (TRC – US, Europe,Australia and Asia) that are trained to service and maintain the Products.  Buyer’s Technical Support Staff members musthave completed training by McDATA on the designated products.  McDATA’s Technical Support Center will bestaffed and available to Buyer’s Technical Support Staff 8:00 am to 5:00pm(Mountain Time, US) Monday through Friday, excluding holidays.  McDATA’s Technical Support Center will beavailable to the Buyer’s Technical Support Centers through an answering serviceat all other times for situations deemed critical by the Buyer’s TechnicalSupport Staff.  McDATA will acknowledgethe receipt of off-hours critical situation within [***] ([***]) hours of thetime Buyer logged the call with McDATA’s answering service.  Buyer acknowledges that all technicalsupport inquiries will originate from the Buyer’s Technical Support Staff(Worldwide TRC).

 

McDATA will provide and maintain alternate forms ofcommunication for questions from the Buyer’s Technical Support Staff by meansof standard email and through the McDATA public web site.

 

[***]

 

**12.1.2****    ****Repairs. **McDATA shall maintain a repair facilityin the United States for a period of [***] ([***]) years from the last date ofshipment to Buyer of each Product

 

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on a model by model basis. Such repair facility willbe available for spares, repairs, upgrades and on-going technical support(including technical support pursuant to Section 12.1.1 and SoftwareSupport pursuant to Section 13). [***] [***]

 

**12.1.3****    ****Technical Support Training. **Pricing for McDATA’s training isspecified in McDATA’s Training Guide, as discussed in Exhibit A of thisAgreement.  McDATA shall make availableto Buyer, at Buyer’s expense, training courses and materials designed toinstruct Service Providers in the operation and maintenance of the Products.

 

**12.1.4****     Informationand Documentation. **Information and documentation provided by McDATApursuant to Sections 9.2.2, 9.2.4, 12.1.1, 12.1.3, 15 and Exhibit A,Section 5.1 may be used, displayed and copied by Buyer [***] [***]solely for Service Providers’ use in supporting and repairing Products.  Buyer [***] [***] will include on any suchreproduction, copies or displays any of McDATA’s confidentiality, ownership,use restriction statements and other similar notations that appear on theoriginal versions of such material.  Theonly Web access Buyer [***] [***] may provide to such material which isdesignated McDATA confidential or proprietary is to Service Providers with aneed to know via Buyer’s [***] [***] restricted-access intranet or****password-controlledextranet; such confidential or proprietary material may not be posted on anyBuyer [***] [***] public Internet site.

 

**12.1.5****     Corrective Action.**  In the event that (a) Buyer becomes aware ofa recurring problem arising from or related to a Product, or a Product qualityproblem, or (b) an End User Customer specifically requests investigation of aProduct problem experienced by the End User Customer, Buyer will notify McDATA.  For a problem described under (a), theparties will consult to mutually develop an action plan, including faultidentification, for a prompt remedy. For an End User Customer problem described in (b), the parties will mutuallyinvestigate the matter and draft a response for the End User Customer.

 

**12.2****        By Buyer****:  Buyer Technical Support. **Buyer’s technical support groupwill attempt to remedy technical difficulties encountered by Buyer’sCustomers.  If Buyer is unable toresolve such technical difficulties, Buyer’s designated, trained technicalsupport group will act as the interface between McDATA’s service supportorganization (as set forth in Section 12.1.1) and Buyer’s field serviceorganization.

 

**13****           SOFTWARE MAINTENANCE. **Upon payment of the license fee and/or then-current annualmaintenance fee listed in Exhibit A, McDATA shall make available to Buyer thefollowing services:

 

**13.1****        Software Support****. **[***].  Buyer agrees to give McDATA prompt written notice of any programerrors it discovers.  McDATA shall provideBuyer with corrections to reported errors as soon as possible after receipt ofnotification and supporting materials from Buyer regarding such error.  In the event Buyer reports a program error,McDATA will resolve the error using the latest Software release.  The error will be deemed corrected whenMcDATA makes the latest release available to Buyer unless Buyer communicateswith McDATA, within [***] ([***]) days after Buyer’s receipt of the Softwarerelease, that the error has not been corrected.

 

**13.2****        Program Errors****. **McDATA and Buyer recognize thatSoftware nonconformities are of varying severity and require different levelsof responsiveness.

 

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Priority 1 - Critical Error

Priority 1 errors are those that corrupt data or that a user cannotconveniently work around.  McDATArecognizes that Priority 1 errors have a significant impact on End UserCustomers and require immediate attention. McDATA agrees to acknowledge receipt of Buyer’s report of such Priority1 errors within [***] ([***]) hours of such call, and further agrees tocommence corrective action as soon after receipt of such report as isreasonably possible, and will diligently pursue such corrective action untilthe errors are corrected.

 

Priority 2 - Serious Error

Priority 2 errors are errors for which work-arounds are available;however, they have a noticeable effect and require prompt attention.  McDATA agrees to acknowledge receipt ofBuyer’s report of such Priority 2 errors within [***] hours of such call.  In the event a Priority 2 error is notresolved within [***] ([***]) days after Buyer reports the error, McDATA willprovide Buyer with the schedule and action plan for prompt resolution.

 

Priority 3 - Minor Error

Priority 3 errors usually have minimal impact and need not be resolvedseparately.  Resolution of these errorsmay be incorporated in maintenance updates as periodically released by McDATA.

 

**13.3****        SoftwareUpdate Service****. **Uponpayment of the License Fees and Annual Maintenance Fees as defined in ExhibitA, Pricing, McDATA will provide Buyer with Software and documentation updates,as they become available for Buyer to provide to End User Customers, directly[***] [***] [***].  McDATA grants Buyer[***] [***] the limited right to post Software drivers, firmware and Softwareupdates on their secure, password protected intranet and extranet sites onlyfor use by Service Providers in the support of McDATA Software.  Buyer acknowledges that Software drivers,firmware and Software updates are proprietary and confidential information ofMcDATA and will not disclose drivers, firmware and software updates to othersunless specifically authorized under the terms of this Agreement.  McDATA Software drivers, firmware andsoftware updates posted on Buyer’s [***] [***] web site[***] shall include thefollowing legend:  “The McDATA Productsoftware drivers, firmware and software updates contained herein are owned byMcDATA and are considered confidential. Such McDATA Product software drivers, firmware and software updates maybe used only by McDATA’s licensees. Unauthorized copying of these software drivers, firmware and softwareupdates is strictly prohibited.”  [***].

 

**13.4**        **Limitations****.**

 

**13.4.1**     Should McDATA announce the availability of a newSoftware release that enhances and supersedes a previous release, McDATA willdiscontinue maintenance support for the previous release and shall provide[***] ([***]) months’ written notice to Buyer prior to the effective date ofsuch maintenance discontinuation.

 

**13.4.2**     For a period of [***] ([***]) years from the date ofthe last shipment to Buyer of a discontinued Product utilizing the Software,McDATA shall make available to Buyer such Software maintenance services as mayreasonably be required for such Products [***] [***] [***] [***] [***]

 

**14****           INDEMNIFICATION.**

 

**14.1****        ByMcDATA.**Subject to the provisions of Section 14.3, McDATA agrees, atits expense, to defend, indemnify and hold harmless Buyer and its officers,directors and employees

 

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from and against allthird party claims, suits and proceedings (l) arising in connection with anybreach of this Agreement by McDATA, or (ll) based on any third party claim thatthe Products and/or Software infringe or violate any United States patent ortrademark, or worldwide trade secret or copyright, and will pay all finaljudgments awarded or settlements entered into on such claim, proceeding orsuit. Notwithstanding the foregoing,****McDATA shall not be liable for any claimof infringement to the extent any Product or Software is altered or modifiedwithout McDATA’s authorization.

 

In the event the Products or Software become, or in McDATA’s opinionare likely to become, the subject of an infringement, McDATA shall have theright, at its option and expense, to (i) obtain the rights to continued use ofsuch Product or Software, (ii) replace or modify the Product or Software sothat it is no longer infringing, or if, despite McDATA’s best efforts, neither(i) nor (ii) is possible, (iii) [***].

 

The foregoing remedies are the sole remedies for infringement of anyintellectual property rights.

 

**14.2****        ByBuyer.**Subject to the provisions of Section 14.3, Buyer agrees, at itsexpense, to defend, indemnify and hold harmless McDATA and its officers,directors and employees from and against all third party claims, suits andproceedings arising in connection with (i) Buyer’s alteration or modificationof any Product as described in Section 9.4, (ii) any breach by Buyer of thisAgreement and (iii) Buyer’s modification of any Products and/or Software thatinfringes any third party’s U.S. patents, copyright or trade secrets and that,but for Buyer’s modifications, would not infringe such third party’s rights,and will pay all final judgments awarded or settlements entered into on suchclaim, proceeding or suit.

 

**14.3**        **Indemnification Procedures.**Theindemnifying party’s indemnification obligations are conditioned upon theindemnified party:  (i) giving promptnotice of the claim or action to the indemnifying party; (ii) granting solecontrol of the defense or settlement of the claim or action to the indemnifyingparty (except that the indemnified party’s prior written approval will berequired for any settlement that reasonably can be expected to require amaterial affirmative obligation of, result in any ongoing material liability toor materially prejudice or detrimentally impact the indemnified party in anyway); and (iii) providing reasonable cooperation and, at the indemnifying party’srequest and expense (except for the value of the time of the indemnifiedparty’s employees), assistance to the indemnifying party in the defense orsettlement of the claim or action.

 

**15****           DOCUMENTATION****:  REPRODUCTION, MODIFICATI****ON, ANDDISTRIBUTION RIGHTS. **Exceptas otherwise provided in Section 17 and in Exhibit A, Section 5.1hereof, and subject to the retention of all copyright notices and/orconfidentiality legends, Buyer [***] [***] shall have the right to (l) copy anyMcDATA-supplied documentation for use internally by their employees andauthorized subcontractors in order to promote and maintain the Products, and(ll) to translate, reproduce, and distribute to its Resellers and End UserCustomers copies of McDATA’s Product manuals and related documentation inconjunction with McDATA’s Products as purchased or leased by Resellers and EndUser Customers.  Buyer shall indemnifyand hold McDATA, its successors and assigns, harmless from and against anyliabilities, damage, costs, and expenses, including reasonable attorneys’ feeswith respect to claims resulting from the Buyer’s [***] [***]  translation of McDATA’s Product manuals andrelated documentation.

 

In the event the parties agree that Buyer may marketand distribute the Products under Buyer’s trademarks, and subject to theretention of all copyright notices and/or confidentiality legends, Buyer shallhave the further right to prepare, assemble, and circulate Buyer’s ownmaintenance manuals derived from such documentation for use by its employees and,in the maintenance of the Products. Buyer shall have the further right and obligation, at Buyer’s expense,to prepare a derivative work based upon McDATA’s end user documentation,including translations thereof, and to reproduce and distribute Buyer’s enduser documentation to its Reseller and End User Customers.

 

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**16****           IDENTIFICATIONOF PRODUCTS, TRADEMARK RIGHTS AND WEBACCESS**

 

**16.1****        Identificationof Products****. **McDATAand Buyer hereby agree that Products sold hereunder will be labeled andmarketed by Buyer under Trademarks and trade names owned by McDATA. Buyeragrees that for Products labeled and marketed under McDATA Trademarks or tradenames, Buyer shall not remove, alter or obscure any McDATA proprietary markingson any Product at any time.  Buyeragrees that, in its sales promotions, advertising literature and any otherpublic references, Buyer will identify such Products as McDATA’s Products.

 

In the event the partiesagree that the Products will be labeled and marketed by Buyer under Buyer’strademarks or trade names, McDATA shall have the right to affix and Buyer shallnot remove or cover over a nameplate indicating model number, serial number,patent number and/or patent pending legends, and any other markings that may berequired by law or by regulatory agencies. In such event, Buyer agrees that, in its sales promotions, advertisingliterature and any other public references, Buyer will identify such Productsas Buyer’s Products.

 

**16.2****        Trademark Rights****. **During the term of thisAgreement, McDATA grants permission to Buyer and Resellers to use McDATA’strade name and Trademarks only as follows: (l) in connection with the sale,lease, licensing, distribution, advertisement or promotion of the Products inthe Territory; (ll) to identify Buyer as an “Authorized Reseller” ofMcDATA.  Trademarks may be used only inthe form as forth in Section 1 of Exhibit F, attached hereto andincorporated herein, provided such Trademark is identified as being a registeredTrademark of McDATA Corporation as set forth in Section 2 of ExhibitF.  Buyer agrees to report anyinfringement, of which they are aware, relating to McDATA’s or its licensor’srights in said Trademarks and trade names. Buyer shall use McDATA’s Trademarks and trade names at Buyer’s place ofbusiness, in sales literature and all other promotional materials, and in allmedia advertisement, shall use McDATA’s trade name solely to reflect the sourceof such Products, and shall identify Trademarks and trade names as being theproperty of McDATA.

 

Both Buyer and McDATA recognize the importance ofmaintaining the nature and quality of products offered and services renderedunder McDATA’s Trademarks.  Therefore,Buyer agrees that all products and services provided under McDATA’s Trademarksshall be of the same and consistent high quality as those that are presentlyoffered by McDATA.

 

Prior to initial publication or commercial use, samples of Buyer’sintended use of McDATA’s Trademark and/or trade name in its printed materialshall be delivered to McDATA for review and approval.  In the event Buyer modifies such use, Buyer will submit suchmodification to McDATA for review and approval.  McDATA reserves the right to discontinue use or to substitute anyMcDATA Trademark or trade name at any time. Immediately upon written notice from McDATA of discontinued use, Buyershall immediately (or upon prompt liquidation of inventory) stop using theTrademark and/or trade name, and if so instructed by McDATA, destroy or returnto McDATA any remaining goods, advertising and packaging materials bearing suchtrademark and/or trade name.  In theevent of substitution, Buyer shall immediately use such new Trademark and/ortrade name, and stop using the previous Trademark and/or trade name, and if soinstructed by McDATA, destroy or return to McDATA any remaining goods,advertising and packaging materials bearing such previous Trademark and/ortrade name.

 

McDATA will, in its sole discretion, in its name andat its expense, apply for certificates of use or registration of itsTrademark(s), as applicable, or may require Buyer to apply therefor on McDATA’sbehalf and at its expense.  Buyer agreesto cooperate with McDATA in making such applications as may be reasonablyrequested.  Buyer

 

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acknowledges that all right, title and interest insaid Trademarks and trade names shall at all times vest in McDATA or McDATA’slicensors, and Buyer will not apply for or register Trademarks and/or tradenames which are the same as or confusingly similar thereto, except withMcDATA’s prior written consent.

 

It is the intention ofthe parties to protect as fully as possible all of their rights to theirrespective Trademarks.  Therefore, noright is granted hereunder for either party to use the Trademarks of the otherparty, except as provided herein or as specifically permitted in writing bysuch other party.  Willful use of aparty’s Trademark contrary to the provisions of this Section shall constitutea material breach of this Agreement.

 

**16.3****        OperationalProvisions****. **Inthe event the parties agree that the Products will be labeled and marketed byBuyer under Buyer’s Trademark, special provisions for identifying Productsbeing purchased by Buyer are set forth in the attached Exhibit C.

 

**16.4**        **Web Access****. **The HITACHI DATASYSTEMS web site may utilize and maintain (a) hyperlinks to the main and anyadditional relevant pages related to Products listed on Exhibit A of McDATA’sinternet site, www.mcdata.com, (b) unaltered electronic reproductions ofdocumentation (but not documents qualifying as Proprietary Information)supplied by McDATA to HITACHI DATA SYSTEMS, and (c) display the McDATA logos onconnection with promoting the Products. All Buyer uses of McDATA logos will comply with McDATA Trademark UsePolicies and logo specifications that are provided by McDATA to Buyer.  In accordance with Section 16.2, Buyerwill provide to McDATA samples of Buyer’s use of McDATA’s logos.  Upon termination of this Agreement, HITACHIDATA SYSTEMS shall cease to use any such marks, names, hyperlinks or logos, andshall, within a reasonable time, remove any reference to McDATA from itsadvertising and promotional material.

 

**17****           CONFIDENTIALITY OF INFORMATION.** Each party acknowledges that, in the courseof purchasing Product and/or licensing Software and meeting its respectiveobligations under this Agreement, it might obtain information relating to theProducts, the Software and/or the other party that is of a confidential andproprietary nature and, if furnished in written or other tangible form isclearly marked as being confidential or proprietary, or, if orally or visuallyfurnished, is identified as being confidential or proprietary in a writingsubmitted to the recipient within thirty (30) days after such oral or visualdisclosure (“Proprietary Information”). Such Proprietary Information may include, but is not limited to, tradesecrets, know-how, inventions, techniques, processes, programs, schematics,data, customer lists, financial information, and sales and marketingplans.  Each party agrees that, at alltimes during the term of this Agreement and for three (3) years after itstermination, it shall (i) not use or disclose the Proprietary Information ofthe other party, except as expressly authorized by this Agreement and (ii) useat least that level of effort to prevent the disclosure of the other party’sProprietary Information as that level of effort used by itself to protect itsown proprietary information of similar importance, but in any event at leastcommercially reasonable efforts. Each party further agrees that, whendisclosing Proprietary Information of the other party to its employees andResellers, it shall do so only (x) on a “need to know” basis to fulfill thatparty’s obligations under this Agreement or to operate, maintain, or supportthe Products, and (y) after such Resellers have executed writtenconfidentiality agreements with terms substantially equivalent to those herein.

 

Upon termination of this Agreement and upon request, the receivingparty shall promptly return all  of theother party’s Proprietary Information under its control and all copies thereofto the disclosing party, except that the receiving party shall be permitted toretain such copies of the Proprietary Information as are necessary to operate,maintain or support Products previously purchased pursuant to this Agreement.

 

Either party may publicly disclose the existence of this Agreement;however, neither party shall disclose the specific terms and conditions to anythird parties except by written agreement

 

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between McDATA and Buyer dated subsequent to the Effective Date or asrequired by law or the order of a court of this Agreement with other buyers.

 

The non-use and non-disclosure provisions of this Section shallnot apply to information that (i) can be documented, by adequate writtenrecords, that the receiving party already knew at the time of disclosure; (ii)is or becomes publicly known or readily ascertainable by the public through nowrongful act of the receiving party; (iii) can be documented, by adequatewritten records, to have been independently developed by the receiving partywithout reference to or use of any  ProprietaryInformation; (iv) is rightfully received by the receiving party from a thirdparty without breach of any confidentiality obligations by such third party;(v) is required to be disclosed by operation of law or pursuant to order of agovernment agency that has jurisdiction over such information; or (vi) isreleased by written mutual agreement of McDATA and Buyer.

 

The parties agrees that any violation of this or any other agreementcovering nondisclosure of  ProprietaryInformation or publication or any unauthorized disclosure of ProprietaryInformation shall constitute a violation of the terms of this Agreement.  Each party agrees that violation of theterms hereof shall cause the other party irreparable damages for which monetarydamages may be inadequate, and each party agrees that the other party shall beentitled to injunctive relief.

 

**18****           LIMITATION OF LIABILITY. **[***] [***] IN NO EVENT WILL EITHERPARTY BE LIABLE TO THE OTHER FOR****ANY INDIRECT, SPECIAL, INCIDENTAL ORCONSEQUENTIAL DAMAGES (INCLUDING LOSS OF ANTICIPATED REVENUE OR LOSS RESULTINGFROM BUSINESS DISRUPTION) ARISING IN CONNECTION WITH THIS AGREEMENT, WHETHER INAN ACTION FOR CONTRACT OR TORT AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISEDOF THE POSSIBILITY OF SUCH DAMAGE.

 

[***] IN NO EVENT SHALL THE LIABILITY OF EITHER PARTY TO THE OTHER, INANY INSTANCE, EXCEED  [***].

 

**19****           TERMINATION. **Inaddition to any other rights or remedies that may be available at law or inequity, either party may terminate this Agreement upon the occurrence of anyone of the following:

 

(i)            In the event of amaterial breach by either party in the performance of their obligationshereunder, the party alleging the breach shall give written notice specifyingthe nature and extent of the breach to the other party and such party shallhave thirty (30) days thereafter to cure the breach.  If the breach is not cured within the thirty (30) day period,termination shall become effective on the thirtieth (30th) day following the writtennotice.

 

(ii)           Immediately without noticein the event that the other party (1) ceases to carry on its business ascurrently conducted; (2) becomes insolvent; (3) makes a general assignment forthe benefit of creditors, (4) files a voluntary petition of bankruptcy, suffersor permits the appointment of a receiver for its business or assets; (5)becomes subject to any proceedings under any bankruptcy or insolvency law,where such proceeding has not been dismissed within sixty (60) days or (6) haswound up or liquidated, voluntarily, or otherwise.

 

Termination of this Agreement shall not relieve either party of theobligations incurred under this Agreement pursuant to Sections 6, 10.2, 10.3,11, 12.1.2, 14, 15, 16.2, 17, and 20.5, which Sections shall survive suchtermination.  In addition, any otherobligations under this Agreement that by their nature extend beyond theexpiration date or other termination of this Agreement shall survive and remainin effect until all such obligations are satisfied.

 

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**20****           GENERAL PROVISIONS.**

 

**20.1****        Governing Law****. **This Agreement shall in allrespects be governed by and construed in accordance with the laws of the Stateof Colorado of the United States of America, and shall not be construed inaccordance with or governed by the United Nations Convention for InternationalSales of Goods (CISG).

 

**20.2****        Waiver****. **No waiver of any right or remedyon one occasion by either party shall be deemed a waiver of such right orremedy on any other occasion.

 

**20.3****        Compliancewith Laws****. **Buyerand its Resellers shall comply with all applicable laws, including, withoutlimitation, the export control laws of the United States of America, any exportcontrol regulations of the United States, and any applicable laws orregulations of those countries involved in transactions concerning theexporting, importing and re-exporting of Products purchased under applicationof these terms and conditions. Buyer  and its Resellers shallalso comply with the United States Foreign Corrupt Practices Act and shallindemnify McDATA from and against any liabilities, damage, costs and expenses,including reasonable attorneys’ fees with respect to claims resulting fromviolations of such act by Buyer and/or its Resellers.

 

Further, Buyer acknowledges that the laws and regulations of the UnitedStates restrict the export and reexport of commodities and technical data ofUnited States origin, including some or all of the Software.

 

**20.4**        **Notices****. **Notices required hereunder shallbe in writing, and shall be deemed given when transmitted by facsimile(provided such facsimile is subsequently confirmed in writing within five (5)days of the facsimile date) or deposited with an express delivery service withguaranteed third day delivery, prepaid, addressed as follows:

 
| To McDATA:                             |                 | With an  additional copy to:            |
|----------------------------------------|----------------------|-----------------------------------------|
| McDATA  Corporation                    |                 | McDATA  Corporation                     |
| 310 Interlocken  Parkway               |                 | 310 Interlocken  Parkway                |
| Broomfield,  Colorado  80021-3464 |                 | Broomfield,  Colorado 80021-3464        |
| Attn.:                                 | Vice President  of   |                                    | Attn.:  Contract Operations |
|                                   | Marketing and  Sales |                                    |   |
| Facsimile #  303/465-4996              |                 |                                    |
|                                   |                 |                                    |
| To Buyer:  Hitachi Data Systems   |                 | With an  additional copy to:            |
| 750 Central  Expressway                |                 | Hitachi Data  Systems                   |
| Santa Clara,  CA  95051           |                 | 750 Central  Expressway                 |
| Attn.:  Vice President Alliances  |                 | Santa Clara,  CA  95051            |
| Facsimile #  408/748-8451              |                 | Attn.:  General Counsel, M/S 32-02 |
|                                   |                 | Facsimile #  408/970-5949               |

 

**20.5**        **Assignment****. **Neither****Buyer nor McDATA shallassign this Agreement or any rights hereunder without the prior written consentof the other party, which consent shall not be unreasonably withheld.

 

**20.6**        **Attorneys’ Fees****. **If any dispute arises between the partieswith respect to the matters covered by this Agreement that leads to aproceeding to resolve such dispute, the prevailing party shall be entitled toreceive its reasonable attorneys’ fees and out-of-pocket costs incurred inconnection with such proceeding, in addition to any other relief it may beawarded.

 

**20.7**        **Official Language****. **The official language of this Agreement,and all transactions conducted under this Agreement, is English.  Documents or notices not originally writtenin English shall have no effect under this Agreement until they have beentranslated into

 

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English by the party providing the notice or document and the Englishtranslation shall then be the controlling form of the document or notice.

 

**20.8**        **Headings****. **The headings provided in this Agreementare for convenience only and shall not be used in interpreting or construingthis Agreement.

 

**20.9**        **Force Majeure****. **Neither party shall be responsible forany failure to perform or delay in performing any of its obligations due tocauses beyond the reasonable control of the party, including but not limited toacts of God, war, riot, embargoes, acts of civil or military authorities, fire,floods, accidents, strikes, or shortages of transportation, facilities, fuel,energy, labor, or materials.  In theevent of such delay, either party may defer the performance for a period equalto the time of such delay.

 

**20.10**      **Severability****. **If any provision of this Agreement shallbe held illegal, unenforceable, or in conflict with any law having jurisdictionover this Agreement, the validity of the remaining portions or provisionshereof shall not be affected thereby.

 

**20.11**      **Contract Changes****.** Except as provided herein, this Agreement may not be modified oramended except by an instrument in writing signed by duly authorizedrepresentatives of both parties.  Theparties acknowledge that from time to time McDATA and Buyer may wish toimplement changes to this Agreement.  Onan ongoing basis, these changes will be executed in accordance with aformalized written process, and the overall Agreement may be amended annuallywith mutual agreement of both parties.

 

**20.12**      **Records****.**   During the term of this Agreement [***][***] Buyer shall maintain a full and complete record of all Buyer’s shipmentsof Software to Resellers and End User Customers including any information orreports Buyer receives from Resellers with regard to Product.  During such time, McDATA retains limitedrights to audit such records.  Suchaudit shall be conducted by an independent third party at McDATA’s expense andis subject to reasonable notice by McDATA and shall take place during Buyer’snormal business hours.

 

**EXHIBITA**

 

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**Figure A –1**

 

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**EXHIBITB**

 

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**EXHIBITC**

 

**OPERATIONAL PROVISIONS**

 

***In the event the parties agree that the Products will belabeled and marketed by Buyer under Buyer’s Trademark, the followingoperational provisions apply.***

 

All prices assumeBuyer’s purchase of McDATA’s standard Product design, standard parts andidentification thereof, packing and packaging and identification thereon, anddocumentation relating to installation, operation and maintenance, with thefollowing exceptions:

 

**1.****             Logos. **McDATA Products are normally shippedwithout a logo.  McDATA agrees to applyspecialized logos, as outlined below, to Products purchased by Buyer, providedBuyer has supplied sufficient information in compliance with McDATA’sManufacturing Specifications within ninety (90) days of the initial requestedship date, and has supplied logos/nameplates and/or labels within thirty (30)days of the requested ship date.

 

*CustomLogos. *McDATA will,at Buyer’s expense, produce and apply a specialized logo for Buyer if Buyerprovides the necessary artwork, dimensioned drawings, color, and materialspecifications.  McDATA will have thelogos designed and manufactured.  McDATAprefers to use a Lexan-type material.

 

*Buyer-ProvidedLogos. *McDATA willapply Buyer’s adhesive-backed logo to the Products if Buyer supplies the logos,and if Buyer provides clear instructions as to placement.  If Buyer supplies its logo to McDATA, McDATArequires Buyer’s logo part number so that McDATA may order the logos directlyfrom Buyer or Buyer’s recommended supplier. If Buyer supplies its own logo and McDATA has not received the logos intime for scheduled Product shipment, McDATA will ship the Product withoutBuyer’s logo on the unit.

 

**2.****             Identificationof Parts. **Buyer agrees that it willutilize McDATA’s system of component identification.  All field replaceable components of the Products shall bearMcDATA Corporation part numbers.  Othercomponents, as used on or in the field replaceable components of the Productsmay bear either McDATA Corporation part numbers or supplier part numbers.

 

**3.****             Packingand Shipping Containers. **McDATAagrees to package all Products, Spares and replacement components in accordancewith standard industry practices.

 

*Pre-PrintedShipping Carton Labels. *Productsare shipped in generic shipping cartons with generic pre-printed labels (e.g.,international handling labels).  Theselabels must be applied to all cartons and cannot be customized.

 

*Buyer-SuppliedCarton Labels. *McDATAwill apply Buyer-supplied shipping labels showing Buyer’s name, logo, etc.,provided Buyer supplies McDATA with pre-printed labels, and the part number forthose labels that allows McDATA to order the labels from Buyer or from Buyer’srecommended supplier.  If McDATA has notreceived the labels in time for scheduled Product shipment, McDATA will shipwithout Buyer’s label on the carton.

 

*CustomCarton Labels. *AtBuyer’s expense, McDATA will develop and supply special shipping labels forBuyer, provided Buyer supplies to McDATA the artwork necessary to create thelabels and the material requirements for the labels in sufficient time tocomplete the development and ordering of the special labels prior to thescheduled Product shipment date.

 

**4.****            **[***]

 

**5.****             ObsoleteParts Return. **[***]

 

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**EXHIBITD**

 

An extrasection break has been inserted above this paragraph. Do not delete thissection break.

 

 

**EXHIBITE**

 

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**EXHIBITF**

 

**TRADEMARKS**

 

Pursuant toSection 16.2, Buyer may use the following Trademarks:

 

**Section 1**               Logo:

 

 

Upon request,McDATA will provide a copy of the Corporate Standards for using McDATA’s Logo.

 

**Section 2**               The followingstatement must appear whenever the McDATA Trademark is used:

 

“McDATAÒ and the McDATAlogo are registered trademarks of McDATA Corporation.”

 

**EXHIBITG**

 

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