exv4w3



 





Exhibit 4.3




SECOND SUPPLEMENTAL INDENTURE




     THIS SECOND SUPPLEMENTAL INDENTURE dated as of January 29, 2007 (this “Supplemental
Indenture”) is entered into by and among McDATA Corporation, a Delaware corporation (“McDATA”),
McDATA Services Corporation, a Minnesota corporation f/k/a Computer Network Technology Corporation
(the “Company”), Brocade Communication Systems, Inc., a Delaware Corporation (“Brocade”), and U.S.
Bank National Association, a national banking association, as trustee (the “Trustee”). Capitalized
terms used herein and not otherwise defined have the meanings set forth in the Indenture (as
defined below).



RECITALS




     A. The Company has heretofore executed and delivered to the Trustee an indenture dated as of
February 20, 2002 (the “Original Indenture”) providing for the issuance of 3.00% Convertible
Subordinated Notes due 2007 of the Company (the “Securities”), as supplemented by the First
Supplemental Indenture dated as of June 1, 2005 by and among the Company, McDATA and the Trustee
(the “First Supplemental Indenture” and collectively with the Original Indenture, the “Indenture”).



     B. McDATA has entered into an Agreement and Plan of Reorganization dated as of August 7, 2006
by and among Brocade Communication Systems, Inc., a Delaware corporation (“Brocade”), Worldcup
Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Brocade (“Merger Sub”),
and McDATA (the “Merger Agreement”) providing for the merger of Merger Sub with and into McDATA
with McDATA as the surviving corporation and a wholly-owned subsidiary of Brocade (the “Merger”).



     C. Pursuant to Section 1.6(a) of the Merger Agreement, at the effective time of the Merger
each outstanding share of McDATA’s Class A and Class B common stock, $0.01 par value per share
(“McDATA Stock”), shall be converted into the right to receive 0.75 shares of Brocade’s common
stock, $0.001 par value per share (“Brocade Stock”), together with cash in lieu of fractional
shares.



     D. Pursuant to Section 4.11 of the Indenture, as a condition precedent to any merger
effecting a change in the kind and amount of shares and other property issuable upon the conversion
of the Securities, the Company and Brocade shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have the right to
convert such Security into such other securities and property receivable in the merger by a holder
of McDATA Stock.



     E. In accordance with Section 11.1(a) of the Indenture the Company and the Trustee may amend
or supplement the Indenture or the Securities to comply with Section 4.11 without notice to or
consent of any Securityholder.



     F. The Company, McDATA and Brocade desire and have requested the Trustee to enter into this
Supplemental Indenture for the purpose of amending the Indenture to provide that, upon conversion
of the Securities under the Indenture, a Holder of Securities will receive



 









 




Brocade Stock in lieu of McDATA Stock to which such Holder would have been entitled to receive
pursuant to the Merger Agreement had such Holder converted the Securities immediately prior to the
Merger.




     G. Brocade has agreed to become a guarantor with respect to the Securities as set forth in
Article Three of this Supplemental Indenture.



     H. Each of the Company, McDATA and Brocade has duly authorized the execution and delivery of
this Supplemental Indenture.



     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby covenant and agree for the equal and ratable benefit of the Holders of the Securities as
follows:



ARTICLE ONE

RELATION TO INDENTURE; DEFINITIONS




     Section 1.01 Relation to Indenture. This Supplemental Indenture constitutes an
integral part of the Indenture. In the event of inconsistencies between the Indenture and this
Supplemental Indenture, the terms of this Supplemental Indenture shall govern.



     Section 1.02. Definitions. The definitions of “Board of Directors”, “Common Stock”,
“Officer” and “Officers’ Certificate” in Section 1.1 of the Indenture are hereby amended and
restated in their entirety to read as follows:




     “Board of Directors” means the Board of Directors of the Company (or where so
specified, of McData or Brocade) or any authorized committee of such Board of Directors.




     “Common Stock” means the common stock of Brocade, par value $0.001 per share, as it
exists on the date of the Second Supplemental Indenture, and any shares of any class or
classes of Capital Stock of Brocade resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of Brocade and
which are not subject to redemption by Brocade; provided, however, that if at any time there
shall be more than one such resulting class, the shares of each such class then so issuable
on conversion of Securities shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.




     “Officer” means the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Controller, the Secretary or any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company (or where so
specified, of McDATA or Brocade).



 









 






     “Officers’ Certificate” means a certificate signed by two Officers; provided, however,
that for purposes of Sections 4.11 and 6.3, “Officers’ Certificate” means a certificate
signed by the principal executive officer, principal financial officer or principal
accounting officer of the Company (or where so specified, of McDATA or Brocade) and by one
other Officer.



ARTICLE TWO

AMENDMENTS




     Section 2.01 Name. The first paragraph of the Indenture is amended and restated to
read as follows:




     “THIS INDENTURE dated as of February 20, 2002 is between McDATA Services Corporation, a
Minnesota corporation f/k/a Computer Network Technology Corporation (the “Company”), and
U.S. Bank National Association, a national banking association, as Trustee (the Trustee”).”



     Section 2.02 Conversion. Article IV of the Indenture is hereby amended and restated
in its entirety to read as set forth on Annex A hereto.



     Section 2.03 Consolidation, Etc., on Certain Terms. Section 7.1 of the Indenture is
hereby amended and restated to read as follows:




     “Section 7.1 Company, McDATA and Brocade May Consolidate, Etc., Only on Certain Terms




     None of the Company, McDATA or Brocade shall consolidate with or merge into any other
Person (in a transaction in which the Company, McDATA or Brocade, as the case may be, is not
the surviving corporation) or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:




     (1) in case the Company shall consolidate with or merge into another Person (in a
transaction in which the Company is not the surviving corporation) or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, the Person
formed by such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation, limited liability company,
partnership or trust, shall be organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of and any
premium and interest on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or observed and the
conversion rights shall be provided for in accordance with Article IV, by supplemental
indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the
Person (if other than the Company) formed by such consolidation or into



 









 







which the Company shall have been merged or by the Person which shall have acquired the
Company’s assets, and any guarantor of the obligations under the Indenture;




     (2) in case McDATA shall consolidate with or merge into another Person (in a
transaction in which McDATA is not the surviving corporation) or convey, transfer or lease
its properties and assets substantially as an entirety to any Person, the Person formed by
such consolidation or into which McDATA is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of McDATA substantially as an
entirety shall be a corporation, limited liability company, partnership or trust, shall be
organized and validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the
obligations of McDATA under the guaranty set forth in Article Three of the First
Supplemental Indenture dated as of June 1, 2005, and assume the performance or observance of
every covenant of this Indenture on the part of McDATA to be performed or observed by it,
executed and delivered to the Trustee, by the Person formed by such consolidation or into
which McDATA shall have been merged or by the Person which shall have acquired McDATA’s
assets and any guarantor of the obligations under the Indenture;




     (3) in case Brocade shall consolidate with or merge into another Person (in a
transaction in which Brocade is not the surviving corporation) or convey, transfer or lease
its properties and assets substantially as an entirety to any Person, the Person formed by
such consolidation or into which Brocade is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of Brocade substantially
as an entirety shall be a corporation, limited liability company, partnership or trust,
shall be organized and validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the obligations of Brocade under the guaranty set forth in Article Three of the
Second Supplemental Indenture dated as of January 29, 2007, and assume the performance or
observance of every covenant of this Indenture on the part of Brocade to be performed or
observed by it and the conversion rights shall be provided for in accordance with Article
IV, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to
the Trustee, by the Person (if other than Brocade) formed by such consolidation or into
which Brocade shall have been merged or by the Person which shall have acquired Brocade’s
assets and any guarantor of the obligations under the Indenture;




     (3) immediately after giving effect to such transaction in clause (1) or (2) of this
Section 7.1, no Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing; and




     (4) the Company, McDATA or Brocade, as the case may be, has delivered to the Trustee an
Officers’ Certificate of the Company, McDATA or Brocade, as the case may be, and an Opinion
of Counsel on behalf of the Company, McDATA or Brocade, as



 









 







the case may be, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with this Article VII and that all conditions precedent herein
provided for relating to such transaction have been complied with.”



     Section 2.04 Successor Substituted. Section 7.2 of the Indenture is hereby amended
and restated in its entirety to read as follows:



     “Upon any consolidation of the Company, McDATA or Brocade with, or merger of the
Company, McDATA or Brocade into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company, McDATA or Brocade substantially as an entirety in
accordance with Section 7.1, the successor Person formed by such consolidation or into which
the Company, McDATA or Brocade is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and power of,
the Company, McDATA or Brocade, as the case may be, under this Indenture with the same
effect as if such successor Person had been named as the Company, McDATA or Brocade herein,
and thereafter, except in the case of a lease, the predecessor Person shall be relieved of
all obligations and covenants under this Indenture and the Securities.”



     Section 2.05 Events of Default. Section 8.1 of the Indenture is hereby amended to
add new clauses (8) and (9) as follows:



     “(8) Brocade pursuant to or within the meaning of any Bankruptcy Law:




     (i) commences a voluntary case or proceeding;




     (ii) consents to the entry of an order for relief against it in an involuntary case or
proceeding;




     (iii) consents to the appointment of a Custodian of it or for all or substantially all
of its property; or




     (iv) makes a general assignment for the benefit of its creditors; or




(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:




     (i) is for relief against Brocade in an involuntary case or proceeding;




     (ii) appoints a Custodian of Brocade or for all or substantially all of the property of
Brocade; or




     (iii) orders the liquidation of Brocade;”



 









 





     Section 2.06 Supplemental Indenture. Section 11.6 of the Indenture is hereby amended
and restated in its entirety to read as follows:



     “The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this
Article XI if the amendment or supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, in its sole discretion, but
need not sign it. In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and, subject to Section 9.1, shall be fully protected in
relying upon, an Opinion of Counsel of the Company, McDATA or Brocade, as the case may be, stating
that such amendment or supplemental indenture is authorized or permitted by this Indenture. The
Company may not sign an amendment or supplemental indenture until the Board of Directors of each
the Company, McDATA and Brocade approves it.



     Section 2.07 No Recourse Against Others. Section 13.10 of the Indenture is hereby
amended and restated in its entirety to read as follows:




     “All liability described in paragraph 18 of the Securities of any director, officer,
employee or shareholder, as such, of the Company, McDATA or Brocade is waived and released.”



     Section 2.08 Form of Security. Certain provisions of Exhibit B to the Indenture are
amended, restated and supplemented as set forth in Annex B attached hereto. Pursuant to Section
11.5 of the Indenture and upon the execution of this Supplemental Indenture, the Trustee shall
amend, restate and supplement in the form set forth in Annex B attached hereto the terms of the
then outstanding Securities, and all Securities presented or delivered to the Trustee on and after
the date hereof shall be amended, restated and supplemented in the form of Annex B attached hereto
to give effect to this Supplemental Indenture.



     The Trustee shall not at any time be under any responsibility to acquire or cause any Security
now or hereafter outstanding to be presented or delivered to it for any purposes provided for in
this Section 2.08.



ARTICLE THREE

BROCADE GUARANTY




     Section 3.01 Brocade Guaranty.



     (a) Subject to the provisions of this Article Three, Brocade fully and unconditionally
guarantees to each Holder of Securities hereunder and to the Trustee on behalf of the Holders: (1)
the due and punctual payment of the principal of, premium, if any, and interest on each Security,
when and as the same shall become due and payable, whether at maturity, by acceleration or
otherwise, all in accordance with the terms of the Security and the Indenture and (2) in the case
of any extension of time of payment or renewal of any Securities or any of such other obligations,
that the same will be promptly paid in full when due in accordance with the terms of the extension
or renewal, at the stated maturity, by acceleration or otherwise, subject,



 









 







however, in the case of clauses (1) and (2) above, to the limitations set forth in the next
succeeding paragraph (the “Brocade Guaranty”).



     (b) Brocade hereby waives diligence, presentment, demand of payment, filing of claims with a
court in the event of merger or bankruptcy of the Company, any right to require a Holder to pursue
any right or take any action (including, without limitation, a presentment, protest, demand for
payment, notice of dishonor or any other notice) against the Company, the benefit of discussion,
protest or notice with respect to any such Security or the debt evidenced thereby and all demands
whatsoever (except as specified above), and covenants that the Brocade Guaranty will not be
discharged as to any such Security except by payment in full of the principal thereof and interest
thereon or as provided in Section 10.1 of the Indenture. In the event of any declaration of
acceleration of such obligations as provided in Article 8 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by Brocade for the purposes
of this Article Three. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article 8 of the Indenture, the Trustee shall promptly make
a demand for payment on the Securities under the Brocade Guaranty provided for in this Article
Three.



     (c) If the Trustee or any Holder is required by any court or otherwise to return to the
Company or Brocade, or any custodian, receiver, liquidator, trustee, sequestrator or other similar
official acting in relation to the Company or Brocade, any amount paid to the Trustee or such
Holder in respect of a Security, the Brocade Guaranty, to the extent theretofore discharged, shall
be reinstated in full force and effect. Brocade further agrees, to the fullest extent that it may
lawfully do so, that, as between it, on the one hand, and the Holders and the Trustee, on the other
hand, the maturity of the obligations guarantied hereby may be accelerated as provided in Article 8
of the Indenture for the purposes of the Brocade Guaranty, notwithstanding any stay, injunction or
other prohibition extant under any applicable bankruptcy law preventing such acceleration in
respect of the obligations guarantied hereby.



     (d) Brocade shall be subrogated to the rights of the Holders of any Security against the
Company but only to the extent and in the amount that a joint and several obligor with the Company
would be entitled to contribution from the Company, in respect of any amount paid by Brocade to any
Holder pursuant to the provisions of the Brocade Guaranty; provided, that Brocade shall not be
entitled to enforce, or to receive any payments arising out of or based upon, such right of
subrogation until the principal of, premium, if any, and interest on all the Securities shall have
been paid in full.



     (e) The Company shall have a right of contribution against Brocade in respect of any amounts
paid by the Company to any Holder pursuant to the Securities and this Supplemental Indenture but
only to the extent and in the amount that a joint and several obligor with Brocade would be
entitled to contribution from Brocade.



     Section 3.02 Notice to Trustee; Events of Default. Brocade shall give prompt written
notice to the Trustee of any fact known to Brocade that would prohibit the making of any payment to
or by the Trustee in respect of the Brocade Guaranty pursuant to the provisions of this Article
Three. The failure to make a payment on account of principal of, premium, if any, or



 









 







interest on the Securities by reason of any provision of Sections 3.01 and 3.02 of this
Supplemental Indenture will not be construed as preventing the occurrence of an Event of Default.



ARTICLE FOUR

MISCELLANEOUS




     Section 4.01 Notices. Any notice, request or communication shall be given in writing
and delivered in person or mailed by first-class mail, postage prepaid, addressed as follows:



     If to the Company:


McDATA Services Corporation

11802 Ridge Parkway

Broomfield, Colorado 80021

Attention: President




     If to McDATA:


McDATA Corporation

11802 Ridge Parkway

Broomfield, Colorado 80021

Attention: General Counsel




     If to Brocade:


Brocade Communication Systems, Inc.

1745 Technology Drive

San Jose, California 95110

Attention: General Counsel




     If to the Trustee:


U.S. Bank National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul, Minnesota 55107

Attention: Corporate Trust Group




     Such notices or communications shall be effective when received. The Company, McDATA, Brocade
or the Trustee by notice to the others may designate additional or different addresses for
subsequent notices or communications.



     4.02 Confirmation of Original Indenture. Except as amended and supplemented hereby,
the Indenture is hereby ratified, confirmed and reaffirmed in all respects. The Indenture and this
Supplemental Indenture shall be read, taken and construed as one and the same instrument.



 









 





     4.03 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.



     4.04 Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.



     4.05 Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.



     4.06 Separability Clause. In case any provision in this Supplemental Indenture shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.



     4.07 The Trustee. The Trustee shall not be responsible in any manner whatsoever for
or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of
the recitals contained herein, all of which recitals are made solely by McDATA, Brocade and the
Company.



[Remainder of Page Intentionally Left Blank]




 









 








     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.



Dated: January 29, 2007




	 	 	 	 	 
	 	McDATA SERVICES CORPORATION

 	 
	 	By:  	/s/ Scott Berman
 	 
	 	 	Name:  	Scott Berman 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	McDATA CORPORATION

 	 
	 	By:  	/s/ Scott Berman
 	 
	 	 	Name:  	Scott Berman 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	BROCADE COMMUNICATION SYSTEMS, INC.

 	 
	 	By:  	/s/ Richard Deranleau
 	 
	 	 	Name:  	Richard Deranleau 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	 	By:  	/s/  Raymond S. Haverstock
 	 
	 	 	Name:  	Raymond S. Haverstock 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to the Second Supplemental Indenture

(3.00% Convertible Subordinated Notes)




 









 








ANNEX A




ARTICLE IV



CONVERSION




Section 4.1 Conversion Privilege





     (a) Subject to and upon compliance with the provisions of this Article IV, at the option of
the Holder, any Security or any portion of the principal amount thereof which is an integral
multiple of $1,000 may be converted at the principal amount thereof, or of such portion thereof,
into duly authorized, fully paid and nonassessable shares of Common Stock, at the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion; provided, however, that if
such Security is called for redemption pursuant to Article III or submitted or presented for
repurchase pursuant to Article XII, such conversion right shall terminate at the close of business
on the second Business Day immediately preceding the Redemption Date or Change in Control
Repurchase Date, as the case may be, for such Security or such earlier date as the Holder presents
such Security for redemption or for purchase (unless the Company shall default in making the
Redemption Price or Change in Control Repurchase Price payment when due, in which case the
conversion right shall terminate at the close of business on the date such default is cured and
such Security is redeemed or purchased, as the case may be). If such Security is submitted or
presented for purchase pursuant to Article III or Article XII and is then subsequently withdrawn,
such conversion right shall no longer be terminated, and the Holder of such Security may convert
such Security pursuant to this Section 4.1. The number of shares of Common Stock issuable upon
conversion of a Security shall be determined by dividing the principal amount of the Security or
portion thereof surrendered for conversion by the Conversion Price in effect on the Conversion
Date. The Conversion Price is set forth in paragraph 8 of the Securities and is subject to
adjustment as provided in this Article IV.



     Provisions of this Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.



     A Security in respect of which a Holder has delivered a Change in Control Repurchase Notice
pursuant to Section 12.1(c) exercising the option of such Holder to require the Company to purchase
such Security may be converted only if such Change in Control Repurchase Notice is withdrawn by a
written notice of withdrawal delivered to a Paying Agent prior to the close of business on the
Business Day immediately preceding the Change in Control Repurchase Date in accordance with Section
12.2.



     A Holder of Securities is not entitled to any rights of a holder of Common Stock until such
Holder has converted its Securities to Common Stock, and only to the extent such Securities are
deemed to have been converted into Common Stock pursuant to this Article IV.



Section 4.2 Conversion Procedure




     To convert a Security, a Holder must (a) complete and manually sign the conversion notice on
the back of the Security and deliver such notice to a Conversion Agent, (b) surrender the Security
to a Conversion Agent, (c) furnish appropriate endorsements and transfer documents



1









 







if required by a Registrar or a Conversion Agent, and (d) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all of those requirements is the “Conversion
Date.” As soon as practicable after the Conversion Date, the Company shall deliver to the Holder
through a Conversion Agent a certificate for the number of whole shares of Common Stock issuable
upon the conversion and cash in lieu of any fractional shares pursuant to Section 4.3. Anything
herein to the contrary notwithstanding, in the case of Global Securities, conversion notices may be
delivered and such Securities may be surrendered for conversion in accordance with the Applicable
Procedures as in effect from time to time.



     The person in whose name the Common Stock certificate is registered shall be deemed to be a
shareholder of record on the Conversion Date; provided, however, that no surrender of a Security on
any date when the stock transfer books of Brocade shall be closed shall be effective to constitute
the person or persons entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the person or persons entitled to receive such shares of Common Stock as
the record holder or holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; provided, further, that such conversion
shall be at the Conversion Price in effect on the Conversion Date as if the stock transfer books of
Brocade had not been closed. Upon conversion of a Security, such person shall no longer be a Holder
of such Security. No payment or adjustment will be made for dividends or distributions on shares of
Common Stock issued upon conversion of a Security.



     Securities so surrendered for conversion (in whole or in part) during the period from the
close of business on any regular record date to the opening of business on the next succeeding
interest payment date (excluding Securities or portions thereof called for redemption on a
Redemption Date during the period beginning at the close of business on a regular record date and
ending at the opening of business on the first Business Day after the next succeeding interest
payment date, or if such interest payment date is not a Business Day, the second such Business Day)
shall also be accompanied by payment in funds acceptable to the Company of an amount equal to the
interest payable on such interest payment date on the principal amount of such Security then being
converted, and such interest shall be payable to such registered Holder notwithstanding the
conversion of such Security, subject to the provisions of this Indenture relating to the payment of
defaulted interest by the Company. Except as otherwise provided in this Section 4.2, no payment or
adjustment will be made for accrued interest on a converted Security. If the Company defaults in
the payment of interest payable on such interest payment date, the Company shall promptly repay
such funds to such Holder.



     Nothing in this Section shall affect the right of a Holder in whose name any Security is
registered at the close of business on a record date to receive the interest payable on such
Security on the related interest payment date in accordance with the terms of this Indenture and
the Securities. If a Holder converts more than one Security at the same time, the number of shares
of Common Stock issuable upon the conversion shall be based on the aggregate principal amount of
Securities converted.



     Upon surrender of a Security that is converted in part, the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder, a new Security equal in principal amount to
the unconverted portion of the Security surrendered.



2









 





Section 4.3 Fractional Shares




     Brocade will not issue fractional shares of Common Stock upon conversion of Securities. In
lieu thereof, the Company will pay an amount in cash based upon the current market price
(determined as set forth in Section 4.6(f)) of the Common Stock on the Trading Day immediately
prior to the Conversion Date.



Section 4.4 Taxes on Conversion




     If a Holder converts a Security, the Company shall pay any documentary, stamp or similar issue
or transfer tax due on the issue of shares of Common Stock upon such conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a
name other than the Holder’s name. The Conversion Agent may refuse to deliver the certificate
representing the Common Stock being issued in a name other than the Holder’s name until the
Conversion Agent receives a sum sufficient to pay any tax which will be due because the shares are
to be issued in a name other than the Holder’s name. Nothing herein shall preclude any tax
withholding required by law or regulation.



Section 4.5 Brocade to Provide Stock




     Brocade shall, prior to issuance of any Securities hereunder, and from time to time as may be
necessary, reserve, out of its authorized but unissued Common Stock, a sufficient number of shares
of Common Stock to permit the conversion of all outstanding Securities into shares of Common Stock.



     All shares of Common Stock delivered upon conversion of the Securities shall be newly issued
shares, shall be duly authorized, validly issued, fully paid and nonassessable and shall be free
from preemptive rights and free of any lien or adverse claim.



     Brocade will endeavor promptly to comply with all federal and state securities laws regulating
the offer and delivery of shares of Common Stock upon conversion of Securities, if any, and will
list or cause to have quoted such shares of Common Stock on each national securities exchange or on
the Nasdaq Global Select Market or Nasdaq Global Market (collectively, “NNM”) or other
over-the-counter market or such other market on which the Common Stock is then listed or quoted;
provided, however, that if rules of such automated quotation system or exchange permit Brocade to
defer the listing of such Common Stock until the first conversion of the Securities into Common
Stock in accordance with the provisions of this Indenture, Brocade covenants to list such Common
Stock issuable upon conversion of the Securities in accordance with the requirements of such
automated quotation system or exchange at such time.



Section 4.6 Adjustment of Conversion Price




     The conversion price as stated in paragraph 8 of the Securities (the “Conversion Price”) shall
be adjusted from time to time by the Company as follows:



     (a) In case Brocade shall (i) pay a dividend on its Common Stock in shares of Common Stock,
(ii) make a distribution on its Common Stock in shares of Common Stock, (iii)



3









 







subdivide its outstanding Common Stock into a greater number of shares, or (iv) combine its
outstanding Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive that number of shares of Common Stock which
it would have owned had such Security been converted immediately prior to the happening of such
event. An adjustment made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of subdivision or combination.



     (b) In case Brocade shall issue rights or warrants to all or substantially all holders of its
Common Stock entitling them (for a period commencing no earlier than the record date described
below and expiring not more than 60 days after such record date) to subscribe for or purchase
shares of Common Stock (or securities convertible into Common Stock) at a price per share (or
having a conversion price per share) less than the current market price per share of Common Stock
(as determined in accordance with subsection (f) of this Section 4.6) on the record date for the
determination of shareholders entitled to receive such rights or warrants, the Conversion Price in
effect immediately prior thereto shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to such record date by a
fraction of which the numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of the convertible securities
so offered, which shall be determined by multiplying the number of shares of Common Stock issuable
upon conversion of such convertible securities by the conversion price per share of Common Stock
pursuant to the terms of such convertible securities) would purchase at the current market price
per share (as determined in accordance with subsection (f) of this Section 4.6) of Common Stock on
such record date, and of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common Stock offered (or
into which the convertible securities so offered are convertible). Such adjustment shall be made
successively whenever any such rights or warrants are issued, and shall become effective
immediately after such record date. If at the end of the period during which such rights or
warrants are exercisable not all rights or warrants shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would have been based upon the number
of additional shares of Common Stock actually issued (or the number of shares of Common Stock
issuable upon conversion of convertible securities actually issued).



     (c) In case Brocade shall distribute to all or substantially all holders of its Common Stock
any shares of Capital Stock of Brocade (other than Common Stock), evidences of indebtedness or
other non-cash assets (including securities of any person other than Brocade but excluding (i)
dividends or distributions paid exclusively in cash or (ii) dividends or distributions referred to
in subsection (a) of this Section 4.6), or shall distribute to all or substantially all holders of
its Common Stock rights or warrants to subscribe for or purchase any of its securities (excluding
those rights and warrants referred to in subsection (b) of this Section 4.6), then in each such
case the Conversion Price shall be adjusted so that the same shall equal the price determined by
multiplying the current Conversion Price by a fraction of which the numerator shall be the current
market price per share (as determined in accordance with subsection (f) of this Section 4.6) of the
Common Stock on the record date described below less the fair market



4









 







value on such record date (as determined by the Board of Directors of Brocade, whose
determination shall be conclusive evidence of such fair market value and which shall be evidenced
by an Officers’ Certificate of Brocade delivered to the Trustee) of the portion of the Capital
Stock, evidences of indebtedness or other non-cash assets so distributed or of such rights or
warrants applicable to one share of Common Stock (determined on the basis of the number of shares
of Common Stock outstanding on the record date), and of which the denominator shall be the current
market price per share (as determined in accordance with subsection (f) of this Section 4.6) of the
Common Stock on such record date. Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution.



     (d) In case Brocade shall, by dividend or otherwise, at any time distribute (a “Triggering
Distribution”) to all or substantially all holders of its Common Stock cash in an aggregate amount
that, together with the aggregate amount of (i) any cash and the fair market value (as determined
by the Board of Directors of Brocade, whose determination shall be conclusive evidence thereof and
which shall be evidenced by an Officers’ Certificate of Brocade delivered to the Trustee) of any
other consideration payable in respect of any tender offer by Brocade or a Subsidiary of Brocade
for Common Stock consummated within the 12 months preceding the date of payment of the Triggering
Distribution and in respect of which no Conversion Price adjustment pursuant to this Section 4.6
has been made and (ii) all other cash distributions to all or substantially all holders of its
Common Stock made within the 12 months preceding the date of payment of the Triggering Distribution
and in respect of which no Conversion Price adjustment pursuant to this Section 4.6 has been made,
exceeds an amount equal to 10.0% of the product of the current market price per share of Common
Stock (as determined in accordance with subsection (f) of this Section 4.6) on the Business Day
(the “Determination Date”) immediately preceding the day on which such Triggering Distribution is
declared by Brocade multiplied by the number of shares of Common Stock outstanding on the
Determination Date (excluding shares held in the treasury of Brocade), the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying such Conversion Price
in effect immediately prior to the Determination Date by a fraction of which the numerator shall be
the current market price per share of the Common Stock (as determined in accordance with subsection
(f) of this Section 4.6) on the Determination Date less the sum of the aggregate amount of cash and
the aggregate fair market value (determined as aforesaid in this Section 4.6(d)) of any such other
consideration so distributed, paid or payable within such 12 months (including, without limitation,
the Triggering Distribution) applicable to one share of Common Stock (determined on the basis of
the number of shares of Common Stock outstanding on the Determination Date) and the denominator
shall be such current market price per share of the Common Stock (as determined in accordance with
subsection (f) of this Section 4.6) on the Determination Date, such reduction to become effective
immediately prior to the opening of business on the day next following the date on which the
Triggering Distribution is paid.



     (e) In case any tender offer made by Brocade or any of its Subsidiaries for Common Stock shall
expire and such tender offer (as amended upon the expiration thereof) shall involve the payment of
aggregate consideration in an amount (determined as the sum of the aggregate amount of cash
consideration and the aggregate fair market value (as determined by the Board of Directors of
Brocade, whose determination shall be conclusive evidence thereof and which shall be evidenced by
an Officers’ Certificate of Brocade delivered to the Trustee thereof) of any other



5









 







consideration) that, together with the aggregate amount of (i) any cash and the fair market
value (as determined by the Board of Directors of Brocade, whose determination shall be conclusive
evidence thereof and which shall be evidenced by an Officers’ Certificate of Brocade delivered to
the Trustee) of any other consideration payable in respect of any other tender offers by Brocade or
any Subsidiary of Brocade for Common Stock consummated within the 12 months preceding the
Expiration Date (as defined below) and in respect of which no Conversion Price adjustment pursuant
to this Section 4.6 has been made and (ii) all cash distributions to all or substantially all
holders of its Common Stock made within the 12 months preceding the Expiration Date and in respect
of which no Conversion Price adjustment pursuant to this Section 4.6 has been made, exceeds an
amount equal to 10.0% of the product of the current market price per share of Common Stock (as
determined in accordance with subsection (f) of this Section 4.6) as of the last date (the
“Expiration Date”) at which tenders could have been made pursuant to such tender offer (as it may
be amended) (the last time at which such tenders could have been made on the Expiration Date is
hereinafter sometimes called the “Expiration Time”) multiplied by the number of shares of Common
Stock outstanding (including tendered shares but excluding any shares held in the treasury of
Brocade) at the Expiration Time, then, immediately prior to the opening of business on the day
after the Expiration Date, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior to close of
business on the Expiration Date by a fraction of which the numerator shall be the product of the
number of shares of Common Stock outstanding (including tendered shares but excluding any shares
held in the treasury of Brocade) at the Expiration Time multiplied by the current market price per
share of the Common Stock (as determined in accordance with subsection (f) of this Section 4.6) on
the Trading Day next succeeding the Expiration Date and the denominator shall be the sum of (x) the
aggregate consideration (determined as aforesaid) payable to shareholders based on the acceptance
(up to any maximum specified in the terms of the tender offer) of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the “Purchased Shares”) and (y) the product of the number of shares of Common
Stock outstanding (less any Purchased Shares and excluding any shares held in the treasury of
Brocade) at the Expiration Time and the current market price per share of Common Stock (as
determined in accordance with subsection (f) of this Section 4.6) on the Trading Day next
succeeding the Expiration Date, such reduction to become effective immediately prior to the opening
of business on the day following the Expiration Date. In the event that Brocade is obligated to
purchase shares pursuant to any such tender offer, but Brocade is permanently prevented by
applicable law from effecting any or all such purchases or any or all such purchases are rescinded,
the Conversion Price shall again be adjusted to be the Conversion Price which would have been in
effect based upon the number of shares actually purchased. If the application of this Section
4.6(e) to any tender offer would result in an increase in the Conversion Price, no adjustment shall
be made for such tender offer under this Section 4.6(e). For purposes of this Section 4.6(e), the
term “tender offer” shall mean and include both tender offers and exchange offers, all references
to “purchases” of shares in tender offers (and all similar references) shall mean and include both
the purchase of shares in tender offers and the acquisition of shares pursuant to exchange offers,
and all references to “tendered shares” (and all similar references) shall mean and include shares
tendered in both tender offers and exchange offers.



     (f) For the purpose of any computation under subsections (b), (c), (d) and (e) of this Section
4.6, the current market price per share of Common Stock on any date shall be deemed to



6









 







be the average of the daily closing prices for the 30 consecutive Trading Days commencing 45
Trading Days before (i) the Determination Date or the Expiration Date, as the case may be, with
respect to distributions or tender offers under subsections (c), (d) and (e) of this Section 4.6 or
(ii) the record date with respect to distributions, issuances or other events requiring such
computation under subsection (b), (c), (d) or (e) of this Section 4.6. The closing price for each
day shall be the last reported sales price or, in case no such reported sale takes place on such
date, the average of the reported closing bid and asked prices in either case on the NNM or, if the
Common Stock is not listed or admitted to trading on the NNM, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted
to trading on the NNM or any national securities exchange, the last reported sales price of the
Common Stock as quoted on the NNM or, in case no reported sales takes place, the average of the
closing bid and asked prices as quoted on the NNM or any comparable system or, if the Common Stock
is not quoted on the NNM or any comparable system, the closing sales price or, in case no reported
sale takes place, the average of the closing bid and asked prices, as furnished by any two members
of the National Association of Securities Dealers, Inc. selected from time to time by Brocade for
that purpose. If no such prices are available, the current market price per share shall be the fair
value of a share of Common Stock as determined by the Board of Directors of Brocade (which shall be
evidenced by an Officers’ Certificate of Brocade delivered to the Trustee).



     (g) In any case in which this Section 4.6 shall require that an adjustment be made following a
record date or a Determination Date or Expiration Date, as the case may be, established for
purposes of this Section 4.6, Brocade may elect to defer (but only until five Business Days
following the filing by the Company with the Trustee of the certificate described in Section 4.9)
issuing to the Holder of any Security converted after such record date or Determination Date or
Expiration Date the shares of Common Stock and other Capital Stock of Brocade issuable upon such
conversion over and above the shares of Common Stock and other Capital Stock of Brocade issuable
upon such conversion only on the basis of the Conversion Price prior to adjustment; and, in lieu of
the shares the issuance of which is so deferred, Brocade shall issue or cause its transfer agents
to issue due bills or other appropriate evidence prepared by Brocade of the right to receive such
shares. If any distribution in respect of which an adjustment to the Conversion Price is required
to be made as of the record date or Determination Date or Expiration Date therefor is not
thereafter made or paid by Brocade for any reason, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect if such record date had not been fixed or such
effective date or Determination Date or Expiration Date had not occurred.



Section 4.7 No Adjustment




     No adjustment in the Conversion Price shall be required unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Price as last adjusted; provided, however,
that any adjustments which by reason of this Section 4.7 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All calculations under this
Article IV shall be made to the nearest cent or to the nearest one-hundredth of a share, as the
case may be.



7









 





     No adjustment need be made for issuances of Common Stock pursuant to a Brocade plan for
reinvestment of dividends or interest or for a change in the par value or a change to no par value
of the Common Stock.



     To the extent that the Securities become convertible into the right to receive cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on the cash.



Section 4.8 Adjustment for Tax Purposes




     The Company shall be entitled to make such reductions in the Conversion Price, in addition to
those required by Section 4.6, as it in its discretion shall determine to be advisable in order
that any stock dividends, subdivisions of shares, distributions of rights to purchase stock or
securities or distributions of securities convertible into or exchangeable for stock hereafter made
by Brocade to its shareholders shall not be taxable.



Section 4.9 Notice of Adjustment




     Whenever the Conversion Price or conversion privilege is adjusted, Brocade shall promptly mail
to Securityholders a notice of the adjustment and file with the Trustee an Officers’ Certificate of
Brocade briefly stating the facts requiring the adjustment and the manner of computing it. Unless
and until the Trustee shall receive an Officers’ Certificate of Brocade setting forth an adjustment
of the Conversion Price, the Trustee may assume without inquiry that the Conversion Price has not
been adjusted and that the last Conversion Price of which it has knowledge remains in effect.



Section 4.10 Notice of Certain Transactions




     In the event that:




     (1) Brocade takes any action which would require an adjustment in the Conversion Price;




     (2) Brocade consolidates or merges with, or transfers all or substantially all of its
property and assets to, another corporation and shareholders of Brocade must approve the
transaction; or




     (3) there is a dissolution or liquidation of the Company or Brocade,


the Company shall mail to Holders and file with the Trustee a notice stating the proposed record or
effective date, as the case may be. The Company shall mail the notice at least ten days before such
date. Failure to mail such notice or any defect therein shall not affect the validity of any
transaction referred to in clause (1), (2) or (3) of this Section 4.10.




Section 4.11 Effect of Reclassification, Consolidation, Merger or Sale on Conversion Privilege




     If any of the following shall occur, namely: (a) any reclassification or change of shares of
Common Stock issuable upon conversion of the Securities (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of a



8









 







subdivision or combination, or any other change for which an adjustment is provided in Section
4.6); (b) any consolidation or merger or combination to which Brocade is a party other than a
merger in which Brocade is the continuing corporation and which does not result in any
reclassification of, or change (other than in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination) in, outstanding shares
of Common Stock; or (c) any sale or conveyance as an entirety or substantially as an entirety of
the property and assets of Brocade (determined on a consolidated basis), directly or indirectly, to
any person, then Brocade, or such successor, purchasing or transferee corporation, as the case may
be, shall, as a condition precedent to such reclassification, change, combination, consolidation,
merger, sale or conveyance, execute and deliver to the Trustee a supplemental indenture providing
that the Holder of each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, combination, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock deliverable upon conversion of such
Security immediately prior to such reclassification, change, combination, consolidation, merger,
sale or conveyance. Such supplemental indenture shall provide for adjustments of the Conversion
Price which shall be as nearly equivalent as may be practicable to the adjustments of the
Conversion Price provided for in this Article IV. If, in the case of any such consolidation,
merger, combination, sale or conveyance, the stock or other securities and property (including
cash) receivable thereupon by a holder of Common Stock include shares of stock or other securities
and property of a person other than the successor, purchasing or transferee corporation, as the
case may be, in such consolidation, merger, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other person and by any guarantor of the Company’s
obligations pursuant to the Indenture and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors of Brocade shall reasonably
consider necessary by reason of the foregoing. The provisions of this Section 4.11 shall similarly
apply to successive reclassifications, changes, combinations, consolidations, mergers, sales or
conveyances.



     In the event the Company, McDATA and Brocade shall execute a supplemental indenture pursuant
to this Section 4.11, Brocade shall promptly file with the Trustee (x) an Officers’ Certificate of
Brocade briefly stating the reasons therefor, the kind or amount of shares of stock or other
securities or property (including cash) receivable by Holders of the Securities upon the conversion
of their Securities after any such reclassification, change, combination, consolidation, merger,
sale or conveyance, any adjustment to be made with respect thereto and that all conditions
precedent have been complied with and (y) an Opinion of Counsel on behalf of Brocade that all
conditions precedent have been complied with, and shall promptly mail notice thereof to all
Holders.



Section 4.12 Trustee’s Disclaimer




     The Trustee shall have no duty to determine when an adjustment under this Article IV should be
made, how it should be made or what such adjustment should be, but may accept as conclusive
evidence of that fact or the correctness of any such adjustment, and shall be protected in relying
upon, an Officers’ Certificate of Brocade including the Officers’ Certificate with respect thereto
which Brocade is obligated to file with the Trustee pursuant to Section 4.9. The Trustee makes no
representation as to the validity or value of any securities or assets issued upon



9









 







conversion of Securities, and the Trustee shall not be responsible for Brocade’s failure to
comply with any provisions of this Article IV.



     The Trustee shall not be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture executed pursuant to Section 4.11, but may
accept as conclusive evidence of the correctness thereof, and shall be fully protected in relying
upon, the Officers’ Certificate of Brocade with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 4.11.



Section 4.13 Voluntary Reduction




     Brocade from time to time may reduce the Conversion Price by any amount for any period of time
if the period is at least 20 days and if the reduction is irrevocable during the period if the
Board of Directors determines that such reduction would be in the best interest of the Company and
Brocade and Brocade provides 15 days prior notice of any such reduction in the Conversion Price;
provided, however, that in no event may Brocade reduce the Conversion Price to be less than the par
value of a share of Common Stock.




10









 








ANNEX B




AMENDMENT, RESTATEMENT AND SUPPLEMENT TO SECURITY



1. All references in Exhibit A to the Indenture to Computer Network Technology Corporation, as
trustee, shall mean McDATA Services Corporation, a Minnesota corporation f/k/a Computer Network
Technology Corporation.



2. The legends on the form of the face of the Security are amend and restated in their entirety as
follows:





     “[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY.]1




     [THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH





 




			
	1	 	This paragraph should be included only if the
Security is a Global Security.




1









 











PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER.]2




     THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 (IF AVAILABLE), OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (II) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.]2




     [THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION
RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY
WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.]”


3. Paragraph 8 of the form of the reverse side of the Security is amended and restated in its
entirety as follows:





     “8. Conversion




     Subject to compliance with the provisions of the Indenture, a Holder of a
Security may convert the principal amount of such Security (or any portion thereof
equal to $1,000 or any integral multiple of $1,000 in excess thereof) into shares of
Common Stock at the Conversion Price in effect at the time of conversion under
certain circumstances described in the Indenture; provided, however, that if the
Security is called for redemption pursuant to Article III of the Indenture or upon a
Change in Control, the conversion right will terminate at the close of business on
the Business Day immediately preceding the redemption date





 




			
	2	 	These paragraphs to be included only if the
Security is a Transfer Restricted Security.




2









 











or the Change in Control Repurchase Date, as the case may be, for such Security
or such earlier date as the Holder presents such Security for redemption or purchase
(unless the Company shall default in making the redemption payment or Change in
Control Repurchase Price, as the case may be, when due, in which case the conversion
right shall terminate at the close of business on the date such default is cured and
such Security is redeemed or purchased).



     A Security in respect of which a Holder has delivered a Change in Control
Repurchase Notice exercising the option of such Holder to require the Company to
repurchase such Security may be converted only if such notice of exercise is
withdrawn in accordance with the terms of the Indenture.



     The Conversion Price is $19.67 per share, subject to adjustment under certain
circumstances. The number of shares of Common Stock issuable upon conversion of a
Security is determined by dividing the principal amount of the Security or portion
thereof converted by the Conversion Price in effect on the Conversion Date. No
fractional shares will be issued upon conversion; in lieu thereof, an amount will be
paid in cash based upon the closing price (as defined in the Indenture) of the
Common Stock on the Trading Day immediately prior to the Conversion Date.



     To convert a Security, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to a Conversion Agent, (b)
surrender the Security to a Conversion Agent, (c) furnish appropriate endorsements
and transfer documents if required by a Registrar or a Conversion Agent, and (d) pay
any transfer or similar tax, if required. Securities so surrendered for conversion
(in whole or in part) during the period from the close of business on any Record
Date to the opening of business on the next succeeding Interest Payment Date
(excluding Securities or portions thereof called for redemption or upon a Change in
Control on a Redemption Date or Change in Control Repurchase Date, as the case may
be, during the period beginning at the close of business on a Record Date and ending
at the opening of business on the first Business Day after the next succeeding
Interest Payment Date, or if such Interest Payment Date is not a Business Day, the
second such Business Day) shall also be accompanied by payment in funds acceptable
to the Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of such Security then being converted, and such
interest shall be payable to such registered Holder notwithstanding the conversion
of such Security, subject to the provisions of this Indenture relating to the
payment of defaulted interest by the Company. If the Company defaults in the payment
of interest payable on such Interest Payment Date, the Company shall promptly repay
such funds to such Holder. A Holder may convert a portion of a Security equal to
$1,000 or any integral multiple thereof.



     A Security in respect of which a Holder had delivered a Change in Control
Purchase Notice exercising the option of such Holder to require the Company to



3









 







purchase such Security may be converted only if the Change in Control Purchase
Notice is withdrawn in accordance with the terms of the Indenture.”


4. Paragraph 16 of the form of the reverse side of the Security is amended and restated in its
entirety as follows:





     “16. Defaults and Remedies




     Under the Indenture, an Event of Default includes: (i) default for 30 days in
payment of any interest on any Securities; (ii) default in payment of any principal
(including, without limitation, any premium, if any) on the Securities when due;
(iii) failure by the Company for 60 days after notice to it to comply with any of
its other agreements contained in the Indenture or the Securities; and (iv) certain
events of bankruptcy, insolvency or reorganization of the Company, McDATA
Corporation, a Delaware corporation (“McDATA”), or Brocade Communication Systems,
Inc., a Delaware corporation (“Brocade”). If an Event of Default (other than as a
result of certain events of bankruptcy, insolvency or reorganization of the Company)
occurs and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities then outstanding may declare all unpaid principal to the
date of acceleration on the Securities then outstanding to be due and payable
immediately, all as and to the extent provided in the Indenture. If an Event of
Default occurs as a result of certain events of bankruptcy, insolvency or
reorganization of the Company, McDATA or Brocade, unpaid principal of the Securities
then outstanding shall become due and payable immediately without any declaration or
other act on the part of the Trustee or any Holder, all as and to the extent
provided in the Indenture. Holders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity satisfactory
to it before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except a default
in payment of principal or interest) if it determines that withholding notice is in
their interests. The Company is required to file periodic reports with the Trustee
as to the absence of default.”


5. Paragraph 18 of the form of the reverse side of the Security is amended and restated in its
entirety as follows:





     “18. No Recourse Against Others




     A director, officer, employee or shareholder, as such, of the Company, McDATA
or Brocade shall not have any liability for any obligations of the Company, McDATA
or Brocade, as the case may be, under the Securities or the Indenture nor for any
claim based on, in respect of or by reason of such obligations or their creation.
The Holder of this Security by accepting this Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance of
this Security.”



4









 




6. Paragraph 22 of the form of the reverse side of the Security is amended and restated in its
entirety as follows:





     “22. Indenture to Control; Governing Law




     In the case of any conflict between the provisions of this Security and the
Indenture, the provisions of the Indenture, as amended or supplemented from time to
time, shall control. This Security shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to principles of conflicts
of law.




     The Company will furnish to any Holder, upon written request and without
charge, a copy of the Indenture. Requests may be made to: McDATA Services
Corporation, 11802 Ridge Parkway, Broomfield, Colorado 80021, Attention: Chief
Financial Officer.”


7. The form of the reverse side of the Security is amended and supplemented by adding a Paragraph
23 thereto as follows:





     “23. Brocade Guaranty




     This Security is entitled to the benefits of the Brocade Guaranty made for the
benefit of the Holders. Reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and obligations of Brocade
thereunder.”


8. The form of Conversion Notice attached to the form of the Security is amended and restated in
its entirety as follows:




5









 








“CONVERSION NOTICE





     To convert this Security into Common Stock, check the box: o




     To convert only part of this Security, state the principal amount to be
converted (must be $1,000 or a multiple of $1,000): $___.




     If you want the stock certificate made out in another person’s name, fill in
the form below:


 



(Insert assignee’s soc. sec. or tax I.D. no.)



 



 



 



(Print or type assignee’s name, address and zip code)




	 	 	 	 	 	 	 
	 

	 	 	 	 	Your Signature:
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 
	 	 	 
	 

	 	 	 	 	 	(Sign exactly as your name appears on the other side of this Security)
	 
	

	 	*Signature guaranteed by:	 	 	 	 
	 
	By:

	 	 	 	”	 	 
	 

	 	 	 	 	 	 







 




			
	*	 	The signature must be guaranteed by an
institution which is a member of one of the following recognized signature
guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP);
(ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock
Exchange Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.




6









 









7. The form of the Security is amended and supplemented by adding the following Guaranty thereto:




“GUARANTY





     The undersigned (“Brocade”) hereby unconditionally guaranties to the extent set
forth in the Indenture, dated February 20, 2002 between McDATA Services Corporation
f/k/a Computer Network Technology Corporation, as issuer (the “Issuer”), and U.S.
Bank National Association, a national banking association, as Trustee (the
“Trustee”), as supplemented by First Supplemental Indenture dated as of June 1, 2005
by and among the Issuer, the Trustee and McDATA Corporation (“McDATA”) and that
Second Supplemental Indenture dated as of January 29, 2007 by and among the Issuer,
the Trustee, McDATA and Brocade (as amended, restated or supplemented from time to
time, the “Indenture”), and subject to the provisions of the Indenture, as
supplemented, (a) the due and punctual payment of the principal of, and premium, if
any, and interest on the Securities, when and as the same shall become due and
payable, whether at maturity, by acceleration or otherwise, the due and punctual
payment of interest on overdue principal of, premium, if any, and, to the extent
permitted by law, interest, all in accordance with the terms set forth in Article
Three of the Second Supplemental Indenture, and (b) in case of any extension of time
of payment or renewal of any Securities or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration or
otherwise.




     The obligations of Brocade to the Holders pursuant to this Guaranty and the
Indenture, as supplemented, are expressly set forth in Article Three of the Second
Supplemental Indenture and reference is hereby made to the Indenture, as
supplemented, for the precise terms and limitations of this Guaranty.




     Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Indenture.




     IN WITNESS WHEREOF, Brocade has caused this Guaranty to be duly executed as of
the date set forth below.



     Dated: January 29, 2007



	 	 	 	 	 
	 	Brocade:





BROCADE COMMUNICATION SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: ”	 	 
	 




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