Document:

<PAGE>   1
                                                                    EXHIBIT 10.8

                      FORM OF MASTER TRANSACTION AGREEMENT

                                     BETWEEN

                                 EMC CORPORATION

                                       AND

                               MCDATA CORPORATION

                      Effective as of _______________, 2000
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                         <C>
ARTICLE I THE DISTRIBUTION.........................................................................          2

         Section 1.1       The Distribution........................................................          2
         Section 1.2       Actions Prior to the Distribution.......................................          2
         Section 1.3       Sole Discretion of EMC..................................................          3
         Section 1.4       Conditions Precedent to Distribution....................................          4
         Section 1.5       Fractional Shares.......................................................          4

ARTICLE II  COVENANTS AND OTHER MATTERS............................................................          5

         Section 2.1       Other Agreements........................................................          2
         Section 2.2       Agreement for Exchange of Information...................................          5
         Section 2.3       Auditors and Audits; Annual and Quarterly
                           Statements and  Accounting..............................................          7
         Section 2.4       Payment of Expenses.....................................................         10
         Section 2.5       Dispute Resolution......................................................         10

ARTICLE III  MISCELLANEOUS.........................................................................         11

         Section 3.1       Limitation of Liability.................................................         11
         Section 3.2       Entire Agreement........................................................         12
         Section 3.3       Governing Law...........................................................         12
         Section 3.4       Actions Necessary to Effectuate Obligations Under this
                           Agreement...............................................................         12
         Section 3.5       Termination.............................................................         12
         Section 3.6       Notices.................................................................         12
         Section 3.7       Counterparts............................................................         13
         Section 3.8       Binding Effect; Assignment..............................................         13
         Section 3.9       Severability............................................................         13
         Section 3.10      Failure or Indulgence Not Waiver; Remedies Cumulative...................         14
         Section 3.11      Amendment...............................................................         14
         Section 3.12      Authority...............................................................         14
         Section 3.13      Interpretation..........................................................         14
         Section 3.14      Conflicting Agreements..................................................         14

ARTICLE IV  DEFINITIONS............................................................................         15
</TABLE>

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<TABLE>
<S>                                                                                                         <C>
         Section 4.1       Affiliated Company......................................................         15
         Section 4.2       Effective Date..........................................................         12
         Section 4.3       EMC's Auditors..........................................................         12
         Section 4.4       EMC Group...............................................................         12
         Section 4.5       Governmental Approvals..................................................         12
         Section 4.6       Governmental Authority..................................................         13
         Section 4.7       Information.............................................................         13
         Section 4.8       IPO Closing Date........................................................         13
         Section 4.9       McDATA's Group..........................................................         14
         Section 4.10      McDATA Auditors.........................................................         14
         Section 4.11      Person..................................................................         14
         Section 4.12      Record Date.............................................................         14
         Section 4.13      Subsidiary..............................................................         14
</TABLE>

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<PAGE>   4
                          MASTER TRANSACTION AGREEMENT

                  This Master Transaction Agreement (this "Agreement") is
entered into as of May    , 2000, between EMC Corporation ("EMC"), a
Massachusetts corporation, and McDATA Corporation ("McDATA"), a Delaware
corporation. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in Article V hereof.

                                    RECITALS

                  WHEREAS, in connection with a corporate restructuring of
McDATA, EMC and McDATA entered into various agreements (the "1997 Agreements")
dated as of October 1, 1997, relating to the allocation of various assets and
liabilities between EMC and McDATA and as to certain continuing rights and
obligations of EMC and McDATA; and

                  WHEREAS, EMC and McDATA currently propose that McDATA sell
shares of its Class B common stock, $.01 par value, to the public in an
underwritten public offering (the "IPO"); and

                  WHEREAS, EMC currently proposes to distribute to the
stockholders of EMC (the "Distribution"), approximately six to twelve months
after the closing of the IPO, the Class A common stock, $.01 par value, of
McDATA (the "Class A Stock") that is currently held by McDATA Holdings
Corporation, a wholly owned subsidiary of EMC ("Holdings"); and

                  WHEREAS, the parties intend in this Agreement to further
delineate the relationship between EMC and McDATA following the IPO, set forth
certain rights and obligations of EMC and McDATA following the IPO, address
certain matters relating to the Distribution, and provide for the execution and
delivery of certain additional agreements in order to facilitate and provide for
the foregoing;

                  NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth below, the parties hereto agree as follows:
<PAGE>   5
                                    ARTICLE I

                                THE DISTRIBUTION

                  Section 1.1 The Distribution.

                           (a) Delivery of Shares for Distribution. Subject to
Section 1.4 hereof, on or prior to the date the Distribution is effective (the
"Distribution Date"), EMC will deliver or cause to be delivered to the
distribution agent (the "Distribution Agent") to be appointed by EMC to
distribute to the stockholders of EMC on a pro rata basis the shares of Class A
Stock held by Holdings, or if Holdings has been liquidated or merged into EMC
prior thereto by EMC, pursuant to the Distribution for the benefit of holders of
record of common stock of EMC on the Record Date, a stock certificate or
certificates, endorsed by EMC or Holdings, as appropriate, representing all of
the outstanding shares of Class A Stock then beneficially owned by EMC, and
shall cause the transfer agent for the shares of common stock of EMC to instruct
the Distribution Agent to distribute on the Distribution Date the appropriate
number of such shares of Class A Stock to each such holder or designated
transferee or transferees of such holder.

                           (b) Shares Received. Subject to Sections 1.4 and 1.5,
each holder of common stock of EMC on the Record Date (or such holder's
designated transferee or transferees) will be entitled to receive in the
Distribution a number of shares of Class A Stock equal to the number of shares
of common stock of EMC held by such holder on the Record Date multiplied by a
fraction the numerator of which is the number of shares of Class A Stock
beneficially owned by EMC on the Record Date and the denominator of which is the
number of shares of common stock of EMC outstanding on the Record Date.

                           (c) Obligation to Provide Information. McDATA and
EMC, as the case may be, will provide to the Distribution Agent all share
certificates and any information required in order to complete the Distribution
on the basis specified above.

                  Section 1.2 Actions Prior to the Distribution.

                           (a) Information Statement. EMC and McDATA shall
prepare and mail, prior to the Distribution Date, to the holders of common stock
of EMC, such information concerning McDATA and the Distribution and such other

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<PAGE>   6
matters as EMC shall reasonably determine are necessary and as may be required
by law. EMC and McDATA will prepare, and McDATA will, to the extent required
under applicable law, file with the Commission any such documentation which EMC
and McDATA determine is necessary or desirable to effectuate the Distribution,
and EMC and McDATA shall each use its reasonable commercial efforts to obtain
all necessary approvals from the Commission with respect thereto as soon as
practicable.

                           (b) Blue Sky. EMC and McDATA shall take all such
actions as may be necessary or appropriate under the securities or blue sky laws
of the United States (and any comparable laws under any foreign jurisdiction) in
connection with the Distribution.

                           (c) Nasdaq Listing. McDATA shall prepare and file,
and shall use its reasonable commercial efforts to have approved, an application
for the additional listing of the common stock of McDATA to be distributed in
the Distribution on the Nasdaq National Market, subject to official notice of
distribution.

                           (d) Conditions. EMC and McDATA shall take all
reasonable steps necessary and appropriate to cause the conditions set forth in
Section 2.4 to be satisfied and to effect the Distribution on the Distribution
Date.

                  Section 1.3 Sole Discretion of EMC. [EMC currently intends to
complete the Distribution by six to twelve months following consummation of the
IPO. EMC shall, in its sole and absolute discretion, determine the date of the
consummation of the Distribution and all terms of the Distribution, including,
without limitation, the form, structure and terms of any transaction(s) and/or
offering(s) to effect the Distribution and the timing of and conditions to the
consummation of the Distribution. In addition, EMC may at any time and from time
to time until the completion of the Distribution, modify or change the terms of
the Distribution, including, without limitation, by accelerating or delaying the
timing of the consummation of all or part of the Distribution. McDATA shall
cooperate with EMC in all respects to accomplish the Distribution and shall, at
EMC's direction, promptly take any and all actions necessary or desirable to
effect the Distribution, including, without limitation, the registration under
the Securities Act of the Class A Stock on an appropriate registration form or
forms to be designated by EMC. EMC shall select any investment banker(s) and
manager(s) in connection with the Distribution, as well as any financial
printer, solicitation and/or exchange agent and outside counsel for EMC, any
such selection shall be reasonably acceptable to McDATA; provided, however, that
nothing herein shall prohibit McDATA from engaging (at its

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own expense) its own financial, legal, accounting and other advisors in
connection with the Distribution.]

                  Section 1.4 Conditions Precedent to Distribution. The
following are conditions that must take place prior to the consummation of the
Distribution. The conditions are for the sole benefit of EMC and shall not give
rise to or create any duty on the part of EMC or the EMC Board of Directors to
waive or not waive any such condition.

                           (a) IRS Ruling. EMC shall have obtained a private
letter ruling from the Internal Revenue Service in form and substance
satisfactory to EMC (in its sole discretion), and such ruling shall remain in
effect as of the Distribution Date, to the effect that (i) the distribution by
EMC of all of its Class A Stock to the stockholders of EMC, will qualify as a
tax-free distribution under Section 355 of the Code and (ii) no gain or loss
will be recognized by (and no amount will otherwise be included in the income
of) the stockholders of EMC upon their receipt of Class A Stock pursuant to the
Distribution.

                           (b) Government Approvals. Any material governmental
approvals and consents necessary to consummate the Distribution shall have been
obtained and be in full force and effect;

                           (c) No Legal Restraints. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Distribution shall
be in effect and no other event outside the control of EMC shall have occurred
or failed to occur that prevents the consummation of the Distribution; and

                           (d) No Material Adverse Effect. No other events or
developments shall have occurred subsequent to the IPO Closing Date that, in the
judgment of the Board of Directors of EMC, would result in the Distribution not
being in the best interests of EMC or its stockholders.

                  Section 1.5 Fractional Shares. As soon as practicable after
the Distribution Date, EMC shall direct the Distribution Agent to determine the
number of whole shares and fractional shares of Class A Stock allocable to each
holder of record or beneficial owner of common stock of EMC as of the Record
Date, to aggregate all such fractional shares and sell the whole shares obtained
thereby at the direction of EMC, in open market transactions, at then prevailing
trading prices, and to cause to be distributed to each such holder or for the
benefit of each such benefi-

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cial owner to which a fractional share shall be allocable such holder's or
owner's ratable share of the proceeds of such sale, after making appropriate
deductions of the amount required to be withheld for federal income tax purposes
and after deducting an amount equal to all brokerage charges, commissions and
transfer taxes attributed to such sale. EMC and the Distribution Agent shall use
their reasonable commercial efforts to aggregate the shares of common stock of
EMC that may be held by any beneficial owner thereof through more than one
account in determining the fractional share allocable to such beneficial owner.

                                   ARTICLE II

                           COVENANTS AND OTHER MATTERS

                  Section 2.1 Other Agreements. EMC and McDATA agree to execute
or cause to be executed by the appropriate parties and deliver, as appropriate,
such other agreements, instruments and other documents as may be necessary or
desirable in order to effect the purposes of the Indemnification and Insurance
Matters Agreement, the Master Confidential Disclosure Agreement, and the Amended
and Restated Tax Sharing Agreement, each, to be entered into between EMC and
McDATA as of the date hereof (collectively, the "Ancillary Agreements") and this
Agreement.

                  Section 2.2 Agreement for Exchange of Information.

                           (a) Generally. Each of EMC and McDATA agrees to
provide, or cause to be provided, to each other, at any time before or after the
Distribution Date, as soon as reasonably practicable after written request
therefor, any Information in the possession or under the control of such party
that the requesting party reasonably needs (i) to comply with reporting,
disclosure, filing or other requirements imposed on the requesting party
(including under applicable securities laws) by a Governmental Authority having
jurisdiction over the requesting party, (ii) for use in any other judicial,
regulatory, administrative or other proceeding or in order to satisfy audit,
accounting, claims, regulatory, litigation or other similar requirements or
(iii) to comply with its obligations under this Agreement or any Ancillary
Agreement, as the case may be; provided, however, that in the event that any
party determines that any such provision of Information could be commercially
detrimental, violate any law or agreement, or waive any attorney-client
privilege, the parties shall take all reasonable measures to permit the
compliance with such obligations in a manner that avoids any such harm or
consequence.

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                           (b) Internal Accounting Controls; Financial
Information. After the Effective Date, (i) each party shall maintain in effect
at its own cost and expense adequate systems and controls for its business to
the extent necessary to enable the other party to satisfy its reporting,
accounting, audit and other legal obligations, and (ii) each party shall
provide, or cause to be provided, to the other party and its Subsidiaries in
such form as such requesting party shall request, at no charge to the requesting
party, all financial and other data and information as the requesting party
determines necessary or advisable in order to prepare its financial statements
and reports or filings with any Governmental Authority.

                           (c) Ownership of Information. Any Information owned
by a party that is provided to a requesting party pursuant to this Section 2.2
shall be deemed to remain the property of the providing party. Unless
specifically set forth herein, nothing contained in this Agreement shall be
construed as granting or conferring rights of license or otherwise in any such
Information.

                           (d) Record Retention. To facilitate the possible
exchange of Information pursuant to this Section 2.2 and other provisions of
this Agreement after the Distribution Date, each party agrees to use its
reasonable commercial efforts to retain all Information in its respective
possession or control on the Distribution Date substantially in accordance with
the policies of each of EMC and McDATA as in effect on the Effective Date. No
party will destroy, or permit any of its Subsidiaries to destroy, any
Information that exists on the Effective Date (other than Information that is
permitted to be destroyed under adopted record retention policies) and that
falls under the categories listed in Section 2.2(a), without first using its
reasonable commercial efforts to notify the other party of the proposed
destruction and giving the other party the opportunity to take possession of
such Information prior to such destruction.

                           (e) Limitation of Liability. No party shall have any
liability to any other party in the event that any Information exchanged or
provided pursuant to this Section 2.2 is found to be inaccurate, in the absence
of gross negligence or willful misconduct by the party providing such
Information. No party shall have any liability to any other party if any
Information is destroyed or lost after reasonable commercial efforts by such
party to comply with the provisions of Section 2.2(d).

                           (f) Other Agreements Providing for Exchange of
Information. The rights and obligations granted under this Section 2.2 are
subject to any specific limitations, qualifications or additional provisions on
the sharing, exchange

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or confidential treatment of Information set forth in this Agreement and any
Ancillary Agreement.

                           (g) Production of Witnesses; Records; Cooperation.
After the Distribution Date, except in the case of a legal or other proceeding
by one party against another party, each party hereto shall use its reasonable
commercial efforts to make available to each other party, upon written request,
the former, current and future directors, officers, employees, other personnel
and agents of such party as witnesses and any books, records or other documents
within its control or which it otherwise has the ability to make available, to
the extent that any such person (giving consideration to business demands of
such directors, officers, employees, other personnel and agents) or books,
records or other documents may reasonably be required in connection with any
legal, administrative or other proceeding in which the requesting party may from
time to time be involved, regardless of whether such legal, administrative or
other proceeding is a matter with respect to which indemnification may be sought
hereunder. The requesting party shall bear all costs and expenses in connection
therewith.

                  Section 2.3 Auditors and Audits; Annual and Quarterly
Statements and Accounting. Each party agrees that, for so long as EMC is
required in accordance with United States generally accepted accounting
principles to consolidate McDATA's results of operations and financial position:

                           (a) Selection of Auditors. McDATA shall not select a
different accounting firm from that used by EMC to serve as its (and its
Subsidiaries') independent certified public accountants ("McDATA's Auditors")
for purposes of providing an opinion on its consolidated financial statements
without EMC's prior written consent.

                           (b) Date of Auditors' Opinion and Quarterly Reviews.
McDATA shall use its reasonable commercial efforts to enable the McDATA Auditors
to complete their audit such that they will date their opinion on McDATA's
audited annual financial statements no later than a date to be provided by EMC,
and to enable EMC to meet its timetable for the printing, filing and public
dissemination of EMC's annual financial statements. McDATA shall use its
reasonable commercial efforts to enable the McDATA Auditors to complete their
quarterly review procedures such that they will provide clearance on McDATA's
quarterly financial statements no later than a date to be provided by EMC.

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                           (c) Annual and Quarterly Financial Statements. McDATA
shall provide to EMC, no later than a date to be provided by EMC, all
Information that EMC reasonably requires for the preparation, printing, filing,
and public dissemination of EMC's annual and quarterly financial statements.
Without limiting the generality of the foregoing, McDATA will provide all
required financial Information with respect to McDATA and its Subsidiaries to
McDATA's Auditors in a sufficient and reasonable time and in sufficient detail
to permit McDATA's Auditors to take all steps and perform all reviews necessary
before a date to be provided by EMC in order to provide sufficient assistance to
EMC's Auditors with respect to financial Information to be included or contained
in EMC's annual and quarterly financial statements. Similarly, EMC shall provide
to McDATA on a timely basis all financial Information that McDATA reasonably
requires to meet its schedule for the preparation, printing, filing, and public
dissemination of McDATA's annual and quarterly financial statements. Without
limiting the generality of the foregoing, EMC will provide all required
financial Information with respect to EMC and its Subsidiaries to EMC's Auditors
in a sufficient and reasonable time and in sufficient detail to permit EMC's
Auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to McDATA's Auditors with respect to Information to be
included or contained in McDATA's annual and quarterly financial statements.

                           (d) Identity of Personnel Performing the Annual Audit
and Quarterly Reviews. McDATA shall authorize McDATA's Auditors to make
available to EMC's Auditors both the personnel who performed or will perform the
annual audits and quarterly reviews of McDATA and work papers related to the
annual audits and quarterly reviews of McDATA, in all cases within a reasonable
time prior to McDATA's Auditors' opinion date, so that EMC's Auditors are able
to perform the procedures they consider necessary to take responsibility for the
work of McDATA's Auditors as it relates to EMC's Auditors' report on EMC's
financial statements, all within sufficient time to enable EMC to meet its
timetable for the printing, filing and public dissemination of EMC's annual and
quarterly statements. Similarly, EMC shall authorize EMC's Auditors to make
available to McDATA's Auditors both the personnel who performed or will perform
the annual audits and quarterly reviews of EMC and work papers related to the
annual audits and quarterly reviews of EMC, in all cases within a reasonable
time prior to EMC's Auditors' opinion date, so that McDATA's Auditors are able
to perform the procedures they consider necessary to take responsibility for the
work of EMC's Auditors as it relates to McDATA's Auditors' report on McDATA's
statements, all within sufficient time to enable McDATA to meet its timetable
for the printing, filing and public dissemination of McDATA's annual and
quarterly financial statements.

                                      -8-
<PAGE>   12
                           (e) Access to Books and Records. McDATA shall provide
EMC's internal auditors and their designees such access to McDATA's and its
Subsidiaries' books and records that EMC may reasonably require in connection
with the conduct of reasonable audits relating to the financial statements
provided by McDATA pursuant hereto as well as to the internal accounting
controls and operations of McDATA and its Subsidiaries. Similarly, EMC shall
provide McDATA's internal auditors and their designees such access to EMC's and
its Subsidiaries' books and records that McDATA may reasonably require in
connection with the conduct of reasonable audits relating to the financial
statements provided by EMC pursuant hereto as well as to the internal accounting
controls and operations of EMC and its Subsidiaries

                           (f) Notice of Change in Accounting Principles. McDATA
shall give EMC as much prior notice as reasonably practical of any proposed
determination of, or any significant changes in, its accounting principles from
those in effect on the Effective Date. McDATA will consult with EMC and, if
requested by EMC, McDATA will consult with EMC's independent public accountants
with respect thereto. EMC shall give McDATA as much prior notice as reasonably
practical of any proposed determination of, or any significant changes in, its
accounting principles from those in effect on the Effective Date.

                           (g) Conflict with Third-Party Agreements. Nothing in
Sections 2.2 and 2.3 shall require McDATA or EMC to violate any agreement with
any third party regarding the confidentiality of confidential and proprietary
information relating to that third party or its business; provided, however,
that in the event that McDATA or EMC is required under Sections 2.2 and 2.3 to
disclose any such Information, McDATA and EMC shall use all commercially
reasonable efforts to seek to obtain such third party's consent to the
disclosure of such information.

                  Section 2.4 Payment of Expenses. [Except as otherwise provided
in this Agreement, the Ancillary Agreements or any other agreement between the
parties relating to the IPO or the Distribution, all costs and expenses of the
parties hereto in connection with the IPO (including underwriting discounts and
commissions) shall be born by McDATA and all costs and expenses of the parties
in connection with the Distribution shall be allocated between the parties on
such basis as may be mutually agreed.

                  Section 2.5 Dispute Resolution.

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                           (a) Arbitration. If a dispute, controversy or claim
("Dispute") arises between the parties relating to the interpretation or
performance of this Agreement or the grounds for the termination hereof, unless
otherwise mutually agreed, it shall be submitted to final and binding
arbitration under the then current Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), by three (3) arbitrators in New York, New York.
Such arbitrators shall be selected by the mutual agreement of the parties or,
failing such agreement, shall be selected according to the aforesaid AAA rules.
The arbitrators will be instructed to prepare and deliver a written, reasoned
opinion stating their decision within thirty (30) days of the completion of the
arbitration. [The prevailing party in such arbitration shall be entitled to
expenses, including costs and reasonable attorneys' and other professional fees,
incurred in connection with the arbitration (but excluding any costs and fees
associated with prior negotiation or mediation).] The decision of the arbitrator
shall be final and non-appealable and may be enforced in any court of competent
jurisdiction. The use of any alternative dispute resolution procedures will not
be construed under the doctrine of laches, waiver or estoppel to adversely
affect the rights of either party.

                           (b) Court Action. Any Dispute regarding any of the
following is not required to be arbitrated prior to seeking relief from a court
of competent jurisdiction: breach of any obligation of confidentiality;
infringement, misappropriation, or misuse of any intellectual property right;
any other claim where interim relief from the court is sought to prevent serious
and irreparable injury to one of the parties or to others.

                                   ARTICLE III

                                  MISCELLANEOUS

                  Section 3.1 Limitation of Liability. IN NO EVENT SHALL ANY
MEMBER OF THE EMC GROUP OR MCDATA GROUP BE LIABLE TO ANY OTHER MEMBER OF THE EMC
GROUP OR MCDATA GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR
PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
(INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED,
HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S
INDEMNIFICATION OBLIGATIONS FOR LIABILITIES AS SET FORTH IN THE INDEMNIFICATION
AND INSURANCE MATTERS AGREEMENT.

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                  Section 3.2 Entire Agreement. This Agreement, the Ancillary
Agreements and the Exhibits and Schedules referenced or attached hereto and
thereto constitute the entire agreement between the parties with respect to the
subject matter hereof and thereof and shall supersede all prior written and oral
and all contemporaneous oral agreements and understandings with respect to the
subject matter hereof and thereof.

                  Section 3.3 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York
as to all matters regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable thereto. The parties submit to the
jurisdiction of the federal and state courts of the Borough of Manhattan in the
city of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.

                  Section 3.4 Actions Necessary to Effectuate Obligations Under
this Agreement. McDATA agrees to cause the Persons in the McDATA Group and EMC
agrees to cause the Persons in the EMC Group to take such actions as may be
necessary for such person to comply with its obligations under this Agreement.

                  Section 3.5 Termination.

                           (a) Termination. This Agreement and all Ancillary
Agreements may be terminated and the Distribution abandoned at any time prior to
the IPO Closing Date by and in the sole discretion of EMC without the approval
of McDATA. This Agreement may be terminated at any time after the IPO Closing
Date and before the Distribution Date by mutual consent of EMC and McDATA. In
the event of termination pursuant to this Section 3.5(a), no party shall have
any liability of any kind to the other party except as provided by Section
3.5(b) below.

                           (b) Survival. The provisions in Section 2.2(c) and
2.2(f) shall survive the termination of this Agreement.

                  Section 3.6 Notices. Notices, offers, requests or other
communications required or permitted to be given by either party pursuant to the
terms of this Agreement shall be given in writing to the respective parties to
the following addresses:

                  if to EMC:

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<PAGE>   15
                               EMC Corporation
                               171 South Street
                               Hopkinton, Massachusetts 01748-9103
                               Attention: Vice President of Business Development
                               cc:       Office of the General Counsel
                               Fax: (508) 497-6915

                  if to McDATA:

                               McDATA Corporation
                               310 Interlocken Parkway
                               Broomfield, CO 80021
                               Attention: Chief Financial Officer
                               cc:       Corporate Counsel
                               Fax: (303) 465-4996

or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also be
sent by fax, confirmed by first class mail. All notices shall be deemed to have
been given and received on the earlier of actual delivery or three (3) days from
the date of postmark.

                  Section 3.7 Counterparts. This Agreement, including the
Ancillary Agreement and the Exhibits and Schedules hereto and thereto and the
other documents referred to herein or therein, may be executed in counterparts,
each of which shall be deemed to be an original but all of which shall
constitute one and the same agreement.

                  Section 3.8 Binding Effect; Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives and successors, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement. This
Agreement may be enforced separately by each member of the EMC Group and each
member of the McDATA Group. Neither party may assign this Agreement or any
rights or obligations hereunder, without the prior written consent of the other
party, and any such assignment

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<PAGE>   16
shall be void; provided, however, either party may assign this Agreement to a
successor entity in conjunction with such party's reincorporation.

                  Section 3.9 Severability. If any term or other provision of
this Agreement is determined by a court, administrative agency or arbitrator to
be invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.

                  Section 3.10 Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of either party hereto in the
exercise of any right hereunder shall impair such right or be construed to be a
waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

                  Section 3.11 Amendment. No change or amendment will be made to
this Agreement except by an instrument in writing signed on behalf of each of
the parties to such agreement.

                  Section 3.12 Authority. Each of the parties hereto represents
to the other that (a) it has the corporate or other requisite power and
authority to execute, deliver and perform this Agreement, (b) the execution,
delivery and performance of this Agreement by it have been duly authorized by
all necessary corporate or other actions, (c) it has duly and validly executed
and delivered this Agreement, and (d) this Agreement is a legal, valid and
binding obligation, enforceable against it in accordance with its terms subject
to (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and (ii) general equity
principles.

                  Section 3.13 Interpretation. The headings contained in this
Agreement and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Any

                                      -13-
<PAGE>   17
capitalized term used but not otherwise defined therein, shall have the meaning
assigned to such term in this Agreement. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or
Section of this Agreement unless otherwise indicated.

                  Section 3.14 Conflicting Agreements. Except to the extent
superceded hereby or addressed herein or in any Ancillary Agreement, the
provisions of the 1997 Agreements shall continue in full force and effect. In
the event of conflict between this Agreement or any Ancillary Agreement and any
1997 Agreement, the provisions of this Agreement or the Ancillary Agreement, as
applicable, shall prevail.

                                   ARTICLE IV

                                   DEFINITIONS

                  Section 4.1 Affiliated Company. "Affiliated Company" of any
Person means any entity that controls, is controlled by, or is under common
control with such Person. As used herein, "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through ownership of voting
securities or other interests, by contract or otherwise.

                  Section 4.2 Effective Date. "Effective Date " means the date
of the closing of the IPO.

                  Section 4.3 EMC's Auditors. "EMC's Auditors" means EMC's
independent certified public accountants.

                  Section 4.4 EMC Group. "EMC Group" means EMC, each Subsidiary
and Affiliated Company of EMC immediately after the Effective Date and each
Person that becomes a Subsidiary or Affiliate Company of EMC after the Effective
Date, other than in any such instance, any member of the McDATA Group.

                  Section 4.5 Governmental Approvals. "Governmental Approvals"
means any notices, reports or other filings to be made, or any consents,
registrations, approvals, permits or authorizations to be obtained from, any
Governmental Authority.

                                      -14-
<PAGE>   18
                  Section 4.6 Governmental Authority. "Governmental Authority"
shall mean any federal, state, local, foreign or international court,
government, department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority.

                  Section 4.7 Information. "Information" means information,
whether or not patentable or copyrightable, in written, oral, electronic or
other tangible or intangible forms, stored in any medium, including studies,
reports, records, books, contracts, instruments, surveys, discoveries, ideas,
concepts, know-how, techniques, designs, specifications, drawings, blueprints,
diagrams, models, prototypes, samples, flow charts, data, computer data, disks,
diskettes, tapes, computer programs or other software, marketing plans, customer
names, communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.

                  Section 4.8 IPO Closing Date. "IPO Closing Date" means the
date of the closing of the IPO.

                  Section 4.9 McDATA Group. "McDATA Group" means McDATA, each
Subsidiary and Affiliated Company of McDATA immediately after the Effective Date
and each Person that becomes a Subsidiary or Affiliate Company of McDATA after
the Effective Date other than in any such instance EMC or any Subsidiary of EMC
other than McDATA or any Subsidiary of McDATA.

                  Section 4.10 McDATA's Auditors. "McDATA's Auditors" means
McDATA's independent certified public accountants.

                  Section 4.11 Person. "Person" means an individual, a
partnership, a corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.

                  Section 4.12 Record Date. "Record Date" means the close of
business on the date to be determined by the Board of Directors of EMC as the
record date for determining the stockholders of EMC entitled to receive shares
of Class A Stock in the Distribution.

                  Section 4.13 Subsidiary. "Subsidiary" of any Person means a
corporation or other organization whether incorporated or unincorporated of
which at least a

                                      -15-
<PAGE>   19
majority of the securities or interests having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries; provided, however, that no Person that is not directly or
indirectly wholly-owned by any other Person shall be a Subsidiary of such other
Person unless such other Person controls, or has the right, power or ability to
control, that Person.

                                      -16-
<PAGE>   20
         WHEREFORE, the parties have signed this Master Transaction Agreement
effective as of the date first set forth above.

EMC CORPORATION                         MCDATA CORPORATION

By:_________________________________    By:_________________________________

Title:                                  Title:

                                      -17-<PAGE>   1
                                                                    EXHIBIT 10.9

            FORM OF INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

                                     BETWEEN

                                 EMC CORPORATION

                                       AND

                               MCDATA CORPORATION

                      Effective as of ______________, 2000
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                       <C>
ARTICLE I  MUTUAL RELEASES; INDEMNIFICATION........................................................        2

Section 1.1   Release of Pre-Closing Claims........................................................        2
Section 1.2   Indemnification by McDATA............................................................        3
Section 1.3   Indemnification by EMC...............................................................        4
Section 1.4   Indemnification With Respect to Environmental Actions and Conditions.................        4
Section 1.5   Reductions for Insurance Proceeds and Other Recoveries...............................        5
Section 1.6   Procedures for Defense, Settlement and Indemnification of Third Party Claims.........        6
Section 1.7   Additional Matters...................................................................        7
Section 1.8   Survival of Indemnities..............................................................        8

ARTICLE II  INSURANCE MATTERS......................................................................        8

Section 2.1   McDATA Insurance Coverage During the Transition Period...............................        8
Section 2.2   Cooperation and Agreement Not to Release Carriers....................................        9
Section 2.3   McDATA Insurance Coverage After the Insurance Transition Period......................       10
Section 2.4   Responsibilities for Self-insured Obligations........................................       10
Section 2.5   Procedures With Respect to Insured McDATA Liabilities................................       10
Section 2.6   Insufficient Limits of Liability for EMC Liabilities and McDATA Liabilities..........       10
Section 2.7   Cooperation..........................................................................       11
Section 2.8   No Assignment or Waiver..............................................................       11
Section 2.9   No Liability.........................................................................       11
Section 2.10  No Restrictions......................................................................       12
Section 2.11  Further Agreements...................................................................       12

ARTICLE III  MISCELLANEOUS.........................................................................       12

Section 3.1   Entire Agreement.....................................................................       12
Section 3.2   Governing Law........................................................................       12
Section 3.3   Notices..............................................................................       12
Section 3.4   Parties in Interest..................................................................       13
Section 3.5   Other Agreements Evidencing Indemnification Obligations..............................       13
Section 3.6   Counterparts.........................................................................       13
</TABLE>

                                       ii
<PAGE>   3
<TABLE>
<S>                                                                                                       <C>
Section 3.7   Assignment...........................................................................       13
Section 3.8   Severability.........................................................................       13
Section 3.9   Failure or Indulgence Not Waiver Section.............................................       14
Section 3.10  Amendment............................................................................       14
Section 3.11  Authority...........................................................................        14
Section 3.12  Interpretation.......................................................................       14

ARTICLE IV  DEFINITIONS............................................................................       15

Section 4.1   Action...............................................................................       15
Section 4.2   Affiliated Company...................................................................       15
Section 4.3   Ancillary Agreements.................................................................       15
Section 4.4   Assets...............................................................................       15
Section 4.5   Contracts............................................................................       17
Section 4.6   Coverage Amount......................................................................       17
Section 4.7   Distribution.........................................................................       17
Section 4.8   Distribution Date....................................................................       17
Section 4.9   Effective Date.......................................................................       17
Section 4.10  EMC Business.........................................................................       17
Section 4.11  EMC Group............................................................................       17
Section 4.12  EMC Indemnitees......................................................................       18
Section 4.13  Environmental Actions................................................................       18
Section 4.14  Environmental Conditions.............................................................       18
Section 4.15  Environmental Laws...................................................................       18
Section 4.16  Hazardous Materials..................................................................       18
Section 4.17  Indemnitee...........................................................................       18
Section 4.18  Insurance Policies...................................................................       19
Section 4.19  Insurance Proceeds...................................................................       19
Section 4.20  Insurance Transition Period..........................................................       19
Section 4.21  Insured McDATA Liability.............................................................       19
Section 4.22  Intellectual Property................................................................       19
Section 4.23  IPO Liabilities......................................................................       19
Section 4.24  IPO Registration Statement...........................................................       20
Section 4.25  Liabilities..........................................................................       20
Section 4.26  McDATA Balance Sheet.................................................................       20
Section 4.27  McDATA Business......................................................................       20
Section 4.28  McDATA Contract......................................................................       20
Section 4.29  McDATA Covered Parties...............................................................       21
Section 4.30  McDATA Group.........................................................................       21
Section 4.31  McDATA Indemnitees...................................................................       21
</TABLE>

                                       iii
<PAGE>   4
<TABLE>
<S>                                                                                                       <C>
Section 4.32  McDATA Liabilities...................................................................       21
Section 4.33  Person...............................................................................       22
Section 4.34  Release..............................................................................       22
Section 4.35  Subsidiary...........................................................................       22
Section 4.36  Tax Sharing Agreement................................................................       23
Section 4.37  Taxes................................................................................       23
Section 4.38  Third Party Claim....................................................................       23
</TABLE>

                                       iv
<PAGE>   5
                 INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

         This Indemnification and Insurance Matters Agreement (this "Agreement")
is entered into on _________, 2000 between EMC Corporation, a Massachusetts
corporation ("EMC"), and McDATA Corporation, a Delaware corporation ("McDATA").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Article IV below.

                                    RECITALS

         WHEREAS, in connection with a corporate restructuring of McDATA, EMC
and McDATA entered into various agreements (the "1997 Agreements") as of October
1, 1997, relating to the allocation of various assets and liabilities between
EMC and McDATA and as to certain continuing rights and obligations of EMC and
McDATA; and

         WHEREAS, McDATA and EMC currently propose that McDATA sell shares of
its Class B common stock, $.01 par value, to the public in an underwritten
public offering (the "IPO") and

         WHEREAS, EMC currently proposes to distribute to the stockholders of
EMC, approximately six to twelve months after the closing of the IPO, the Class
A common stock, $.01 par value ("Class A Common Stock"), that EMC currently
beneficially owns; and

         WHEREAS, EMC and McDATA have entered into a Master Transaction
Agreement as of May    , 2000 (the "Master Transaction Agreement"), to further
delineate the relationship between EMC and McDATA following the IPO, set forth
certain rights and obligations of EMC and McDATA following the IPO, address
certain matters relating to the Distribution and provide for the execution and
delivery of certain additional agreements in order to facilitate and provide for
the foregoing; and

         WHEREAS, the parties desire to set forth certain agreements regarding
indemnification and insurance;

         NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
<PAGE>   6
                                    ARTICLE I

                        MUTUAL RELEASES; INDEMNIFICATION

         Section 1.1 Release of Pre-Closing Claims.

                  (a) McDATA Release. Except as provided in Section 1.1(c),
effective as of the Effective Date, McDATA does hereby, for itself and as agent
for each member of the McDATA Group, remise, release and forever discharge the
EMC Indemnitees from any and all Liabilities whatsoever, whether at law or in
equity (including any right of contribution), whether arising under any contract
or agreement, by operation of law or otherwise, existing or arising from any
acts or events occurring or failing to occur or alleged to have occurred or to
have failed to occur or any conditions existing or alleged to have existed on or
before the Effective Date, including in connection with the transactions and all
other activities to implement any of the IPO, the Distribution or any of the
transactions contemplated by the Asset Transfer Agreement among EMC, McDATA and
McDATA Holdings Corporation, dated as of October 1, 1997 (the "Asset Transfer
Agreement") and the other agreements entered into by such parties as of such
date in connection with a corporate restructuring of McDATA, the Master
Transaction Agreement and the other agreements concurrently entered into by EMC
and McDATA related thereto (collectively, and together with the Asset Transfer
Agreement, the "Transaction Agreements").

                  (b) EMC Release. Except as provided in Section 1.1(c) and
except as may arise under the Tax Sharing Agreement, effective as of the
Effective Date, EMC does hereby, for itself and as agent for each member of the
EMC Group, remise, release and forever discharge the McDATA Indemnitees from any
and all Liabilities whatsoever, whether at law or in equity (including any right
of contribution), whether arising under any contract or agreement, by operation
of law or otherwise, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Effective Date,
including in connection with the transactions and all other activities to
implement any of the IPO, the Distribution or any of the transactions
contemplated by the Transaction Agreements.

                  (c) No Impairment. Nothing contained in Section 1.1(a) or (b)
shall impair any right of any Person to enforce the Transaction Agreements or
any Ancillary Agreement, in each case in accordance with its terms.

                                       2
<PAGE>   7
                  (d) No Actions as to Released Claims. McDATA agrees, for
itself and as agent for each member of the McDATA Group, not to make any claim
or demand, or commence any Action asserting any claim or demand, including any
claim of contribution or any indemnification, against EMC or any member of the
EMC Group, or any other Person released pursuant to Section 1.1(a), with respect
to any Liabilities released pursuant to Section 1.1(a). EMC agrees, for itself
and as agent for each member of the EMC Group, not to make any claim or demand,
or commence any Action asserting any claim or demand, including any claim of
contribution or any indemnification, against McDATA or any member of the McDATA
Group, or any other Person released pursuant to Section 1.1(b), with respect to
any Liabilities released pursuant to Section 1.1(b).

                  (e) Further Instruments. At any time, at the request of any
other party, each party shall cause each member of its respective Group to
execute and deliver releases reflecting the provisions hereof.

         Section 1.2 Indemnification by McDATA. Except as otherwise provided in
this Agreement, McDATA shall, for itself and as agent for each member of the
McDATA Group, indemnify, defend (or, where applicable, pay the defense costs
for) and hold harmless the EMC Indemnitees from and against any and all
Liabilities that any third party seeks to impose upon the EMC Indemnitees, or
which are imposed upon the EMC Indemnitees, and that relate to, arise out of or
result from any of the following items (without duplication):

                           (i) the McDATA Business, any McDATA Liability or any
         McDATA Contract, except with respect to any Liabilities expressly
         imposed upon any of the EMC Indemnitees pursuant to any McDATA Contract
         to which any of the EMC Indemnitees is a party;

                           (ii) any breach by McDATA or any member of the McDATA
         Group of the Transaction Agreements or any of the Ancillary Agreements;
         and

                           (iii) any IPO Liabilities.

In the event that any member of the McDATA Group makes a payment to the EMC
Indemnitees hereunder, and any of the EMC Indemnitees subsequently diminishes
the Liability on account of which such payment was made, either directly or
through a third-party recovery, EMC will promptly repay (or will procure an EMC

                                       3
<PAGE>   8
Indemnitee to promptly repay) such member of the McDATA Group the amount by
which the payment made by such member of the McDATA Group exceeds the actual
cost of the associated indemnified Liability. This Section 1.2 shall not apply
to any Liability indemnified under Section 1.4.

         Section 1.3 Indemnification by EMC. Except as otherwise provided in
this Agreement, EMC shall, for itself and as agent for each member of the EMC
Group, indemnify, defend (or, where applicable, pay the defense costs for) and
hold harm less the McDATA Indemnitees from and against any and all Liabilities
that any third party seeks to impose upon the McDATA Indemnitees, or which are
imposed upon the McDATA Indemnitees, and that relate to, arise out of or result
from any of the following items (without duplication):

                           (i) the EMC Business or any Liability of the EMC
         Group other than the McDATA Liabilities; and

                           (ii) any breach by EMC or any member of the EMC Group
         of the Transaction Agreements or any of the Ancillary Agreements.

In the event that any member of the EMC Group makes a payment to the McDATA
Indemnitees hereunder, and any of the McDATA Indemnitees subsequently diminishes
the Liability on account of which such payment was made, either directly or
through a third-party recovery, McDATA will promptly repay (or will procure a
McDATA Indemnitee to promptly repay) such member of the EMC Group the amount by
which the payment made by such member of the EMC Group exceeds the actual cost
of the indemnified Liability. This Section 1.3 shall not apply to any Liability
indemnified under Section 1.4.

         Section 1.4 Indemnification With Respect to Environmental Actions and
Conditions.

                  (a) Indemnification by McDATA. McDATA shall, for itself and as
agent for each member of the McDATA Group, indemnify, defend and hold harmless
the EMC Indemnitees from and against any and all Environmental Actions relating
to, arising out of or resulting from Environmental Conditions at any property
owned, leased or used by any member of the McDATA Group.

                  (b) Indemnification by EMC. EMC shall, for itself and as agent
for each member of the EMC Group, indemnify, defend and hold harmless the

                                       4
<PAGE>   9
McDATA Indemnitees from and against any and all Environmental Actions relating
to, arising out of or resulting from Environmental Conditions at any property
owned, leased or used by any member of the EMC Group.

                  (c) Agreement Regarding Payments to Indemnitee. In the event
an Indemnifying Party makes any payment to or on behalf of an Indemnitee with
respect to an Environmental Action for which the Indemnifying Party is obligated
to indemnify under this Section 1.4, and the Indemnitee subsequently receives
any payment from a third party on account of the same financial obligation
covered by the payment made by the Indemnifying Party for that Environmental
Action or otherwise diminishes the financial obligation, the Indemnitee will
promptly pay the Indemnifying Party the amount by which the payment made by the
Indemnifying Party, exceeds the actual cost of the financial obligation.

         Section 1.5 Reductions for Insurance Proceeds and Other Recoveries. The
amount that any party is or may be required to pay to any other Person pursuant
to Section 1.2, 1.3 or 1.4, as applicable, shall be reduced (retroactively or
prospectively) by any Insurance Proceeds or other amounts actually recovered
from third parties by or on behalf of such Indemnitee in respect of the related
loss. The existence of a claim by an Indemnitee for monies from an insurer or
against a third party in respect of any indemnifiable loss shall not, however,
delay any payment pursuant to the indemnification provisions contained herein
and otherwise determined to be due and owing by an Indemnifying Party. Rather,
the Indemnifying Party shall make payment in full of the amount determined to be
due and owing by it against an assignment by the Indemnitee to the Indemnifying
Party of the entire claim of the Indemnitee for Insurance Proceeds or against
such third party. Notwithstanding any other provisions of this Agreement, it is
the intention of the parties that no insurer or any other third party shall be
(i) entitled to a benefit it would not be entitled to receive in the absence of
the foregoing indemnification provisions, or (ii) relieved of the responsibility
to pay any claims for which it is obligated. If an Indemnitee has received the
payment required by this Agreement from an Indemnifying Party in respect of any
indemnifiable loss and later receives Insurance Proceeds or other amounts in
respect of such indemnifiable loss, then such Indemnitee shall hold such
Insurance Proceeds or other amounts in trust for the benefit of the Indemnifying
Party (or Indemnifying Parties) and shall pay to the Indemnifying Party, as
promptly as practicable after receipt, a sum equal to the amount of such
Insurance Proceeds or other amounts received, up to the aggregate amount of any
payments received from the Indemnifying Party pursuant to this Agreement in
respect of such indemnifiable loss (or, if there is more than one Indemnifying
Party, the Indemnitee shall pay each Indemnify-

                                       5
<PAGE>   10
ing Party its proportionate share (based on the payments received from the
Indemnifying Parties) of such Insurance Proceeds).

         Section 1.6 Procedures for Defense, Settlement and Indemnification of
Third Party Claims.

                  (a) Notice of Claims. If an EMC Indemnitee or a McDATA
Indemnitee (as applicable) (an "Indemnitee") shall receive notice or otherwise
learn of the assertion by a Person (including any Governmental Authority) who is
not a member of the EMC Group or the McDATA Group of any claim or of the
commencement by any such Person of any Action (collectively, a "Third Party
Claim") with respect to which a party (an "Indemnifying Party") may be obligated
to provide indemnification to such Indemnitee pursuant to Section 1.2, 1.3 or
1.4, or any other section of the Transaction Agreements or any Ancillary
Agreement (including this Agreement), EMC and McDATA (as applicable) will ensure
that such Indemnitee shall give such Indemnifying Party written notice thereof
within 30 days after becoming aware of such Third Party Claim. Any such notice
shall describe the Third Party Claim in reasonable detail. Notwithstanding the
foregoing, the delay or failure of any Indemnitee or other Person to give notice
as provided in this Section 1.6(a) shall not relieve the related Indemnifying
Party of its obligations under this Article I, except to the extent that such
Indemnifying Party is actually and substantially prejudiced by such delay or
failure to give notice.

                  (b) Defense By Indemnifying Party. An Indemnifying Party will
manage the defense of and may settle or compromise any Third Party Claim. Within
30 days after the receipt of notice from an Indemnitee in accordance with
Section 1.6(a) (or sooner, if the nature of such Third Party Claim so requires),
the Indemnifying Party shall notify the Indemnitee that the Indemnifying Party
will assume responsibility for managing the defense of such Third Party Claim,
which notice shall specify any reservations or exceptions.

                  (c) Defense By Indemnitee. If an Indemnifying Party fails to
assume responsibility for managing the defense of a Third Party Claim, or fails
to notify an Indemnitee that it will assume responsibility as provided in
Section 1.6(a), such Indemnitee may manage the defense of such Third Party
Claim; provided, however, that the Indemnifying Party shall reimburse all such
costs and expenses in the event it is ultimately determined, in accordance with
the procedures governing the Claims Committee, that the Indemnifying Party is
obligated to indemnify the Indemnitee with respect to such Third Party Claim.

                                       6
<PAGE>   11
                  (d) No Settlement By Indemnitee Without Consent. Unless the
Indemnifying Party has failed to manage the defense of the Third Party Claim in
accordance with the terms of this Agreement, no Indemnitee may settle or
compromise any Third Party Claim without the consent of the Indemnifying Party.

                  (e) No Consent to Certain Judgments or Settlements Without
Consent. Notwithstanding any provision of this Section 1.6, no party shall
consent to entry of any judgment or enter into any settlement of a Third Party
Claim without the consent of the other party (such consent not to be
unreasonably withheld) if the effect of such judgment or settlement is to (A)
permit any injunction, declaratory judgment, other order or other nonmonetary
relief to be entered, directly or indirectly, against the other party or (B)
affect the other party in a material fashion due to the allocation of
Liabilities and related indemnities set forth in the Transaction Agreements or
any other Ancillary Agreement.

         Section 1.7 Additional Matters.

                  (a) Cooperation in Defense and Settlement. With respect to any
Third Party Claim that implicates both McDATA and EMC in a material fashion due
to the allocation of Liabilities, responsibilities for management of defense and
related indemnities set forth in the Transaction Agreements or any of the
Ancillary Agreements, the parties agree to cooperate fully and maintain a joint
defense (in a manner that will preserve the attorney-client privilege with
respect thereto) so as to minimize such Liabilities and defense costs associated
therewith. The party that is not responsible for managing the defense of such
Third Party Claims shall, upon reasonable request, be consulted with respect to
significant matters relating thereto and may, if necessary or helpful, retain
counsel to assist in the defense of such claims.

                  (b) Substitution. In the event of an Action in which the
Indemnifying Party is not a named defendant, if either the Indemnitee or the
Indemnifying Party shall so request, the parties shall endeavor to substitute
the Indemnifying Party for the named defendant. If such substitution or addition
cannot be achieved for any reason or is not requested, the rights and
obligations of the parties regarding indemnification and the management of the
defense of claims as set forth in this Article I shall not be altered.

                  (c) Subrogation. In the event of payment by or on behalf of
any Indemnifying Party to or on behalf of any Indemnitee in connection with any
Third Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnitee, in whole or in part based upon whether
the Indemnifying

                                       7
<PAGE>   12
Party has paid all or only part of the Indemnitee's Liability, as to any events
or circumstances in respect of which such Indemnitee may have any right, defense
or claim relating to such Third Party Claim against any claimant or plaintiff
asserting such Third Party Claim or against any other person. Such Indemnitee
shall cooperate with such Indemnifying Party in a reasonable manner, and at the
cost and expense of such Indemnifying Party, in prosecuting any subrogated
right, defense or claim.

                  (d) Not Applicable to Taxes. This Agreement shall not apply to
Taxes (which are covered by the Tax Sharing Agreement).

         Section 1.8 Survival of Indemnities. Subject to Section 3.7, the rights
and obligations of the members of the EMC Group and the McDATA Group under this
Article I shall survive the sale or other transfer by any party of any Assets or
businesses or the assignment by it of any Liabilities or the sale by any member
of the EMC Group or the McDATA Group of the capital stock or other equity
interests of any Subsidiary to any Person.

                                   ARTICLE II

                                INSURANCE MATTERS

         Section 2.1 McDATA Insurance Coverage During the Transition Period.

                  (a) Maintain Comparable Insurance. Throughout the period (the
"Insurance Transition Period") beginning on the Effective Date and ending on the
earlier of (i) the Distribution Date or (ii) such earlier date as to which EMC
has provided at least 90 days prior notice to McDATA (the earlier of (i) or (ii)
being referred to herein as the "Policy Date"), EMC shall, subject to insurance
market conditions and other factors beyond its control, maintain policies of
insurance, including for the benefit of McDATA or any of its Subsidiaries,
directors, officers, employees or other covered parties (collectively, the
"McDATA Covered Parties") which are comparable to those maintained generally by
EMC; provided, however, that if EMC determines that (i) the amount or scope of
such coverage will be reduced to a level materially inferior to the level of
coverage in existence immediately prior to the Insurance Transition Period or
(ii) the retention or deductible level applicable to such coverage, if any, will
be increased to a level materially greater than the levels in existence
immediately prior to the Insurance Transition Period, EMC shall give McDATA
notice of such determination as promptly as practicable. Upon notice of such
determination, McDATA shall be entitled to no less than 90 days to evaluate its

                                       8
<PAGE>   13
options regarding continuance of coverage hereunder and may cancel its interest
in all or any portion of such coverage as of any day within such 90 day period.
Except as provided below, during the Insurance Transition Period, such policies
of insurance shall cover McDATA Covered Parties for liabilities and losses
insured prior to the Policy Date. No notice delivered by EMC to McDATA as to the
Policy Date shall affect the insurance coverage of McDATA prior to the Policy
Date pursuant to policies then in effect.

                  (b) Reimbursement for Premiums. McDATA shall promptly pay or
reimburse EMC, as the case may be, for premium expenses or applicable portions
thereof, and McDATA Covered Parties shall promptly pay or reimburse EMC for any
costs and expenses which EMC may incur in connection with the insurance
coverages maintained pursuant to this Section 2.1, including but not limited to
any subsequent premium adjustments. All payments and reimbursements by McDATA
and McDATA Covered Parties to EMC shall be made within fifteen (15) days after
McDATA's receipt of an invoice from EMC.

         Section 2.2 Cooperation and Agreement Not to Release Carriers. Each of
EMC and McDATA will share such information as is reasonably necessary in order
to permit the other to manage and conduct its insurance matters in an orderly
fashion. Each of EMC and McDATA, at the request of the other, shall cooperate
with and use commercially reasonable efforts to assist the other in recoveries
for claims made under any insurance policy for the benefit of any insured party,
and neither EMC nor McDATA, nor any of their Subsidiaries, shall take any action
which would intentionally jeopardize or otherwise interfere with either party's
ability to collect any proceeds payable pursuant to any insurance policy.
Except as otherwise contemplated by the Transaction Agreements or any Ancillary
Agreement, after the Effective Date, neither EMC nor McDATA shall (and shall
ensure that no member of their respective Groups shall), without the consent of
the other, provide any insurance carrier with a release, or amend, modify or
waive any rights under any such policy or agreement, if such release, amendment,
modification or waiver would adversely affect any rights or potential rights of
any member of the other Group thereunder. However, nothing in this Section 2.2
shall (A) preclude any member of any Group from presenting any claim or from
exhausting any policy limit, (B) require any member of any Group to pay any
premium or other amount or to incur any Liability, or (C) require any member of
any Group to renew, extend or continue any policy in force.

         Section 2.3 McDATA Insurance Coverage After the Insurance Transition
Period. From and after expiration of the Insurance Transition Period, McDATA,
and

                                       9
<PAGE>   14
McDATA alone, shall be responsible for obtaining and maintaining insurance
programs for its risk of loss and such insurance arrangements shall be separate
and apart from EMC's insurance programs. Notwithstanding the foregoing, EMC,
upon the request of McDATA, shall use all commercially reasonable efforts to
assist McDATA in the transition to its own separate insurance programs from and
after the Insurance Transition Period, and shall provide McDATA with any
information that is in the possession of EMC and is reasonably available and
necessary to either obtain insurance coverages for McDATA or to assist McDATA in
preventing unintended self-insurance, in whatever form.

         Section 2.4 Responsibilities for Self-insured Obligations. From and
after the Effective Date, McDATA will reimburse EMC for all amounts which EMC
may be required to pay or assume to exhaust or otherwise satisfy all applicable
self-insured retentions, amounts for fronted policies, deductibles and
retrospective premium adjustments and similar amounts not covered by Insurance
Policies in connection with McDATA Liabilities and Insured McDATA Liabilities.

         Section 2.5 Procedures With Respect to Insured McDATA Liabilities.

                  (a) Reimbursement. McDATA will reimburse EMC for all
out-of-pocket amounts incurred to pursue insurance recoveries from Insurance
Policies for Insured McDATA Liabilities.

                  (b) Management of Claims. The defense of claims, suits or
actions giving rise to potential or actual Insured McDATA Liabilities will be
managed (in conjunction with EMC's insurers, as appropriate) by the party that
would have had responsibility for managing such claims, suits or actions had
such Insured McDATA Liabilities been McDATA Liabilities.

         Section 2.6 Insufficient Limits of Liability for EMC Liabilities and
McDATA Liabilities:

                  (a) Insufficient Limits of Liability. In the event that there
are insufficient limits of liability available under EMC's Insurance Policies in
effect prior to the Policy Date to cover the Liabilities of EMC and/or McDATA
that would otherwise be covered by such Insurance Policies, then to the extent
that other insurance is not available to EMC and/or McDATA for such Liabilities
an adjustment will be made in accordance with the following procedures:

                                       10
<PAGE>   15
                           (i) Each party will be allocated an amount equal to
         their Shared Percentage of the lesser of (A) the available limits of
         liability available under EMC's Insurance Policies in effect prior to
         the Policy Date net of uncollectible amounts attributable to insurer
         insolvencies, and (B) the proceeds received from EMC's Insurance
         Policies if the Liabilities are the subject of disputed coverage claims
         and, following consultation with each other, EMC and/or McDATA agree to
         accept less than full policy limits from EMC's and McDATA's insurers
         (the "Coverage Amount").

                           (ii) A party who receives more than its share of the
         Coverage Amount (the "Overallocated Party") agrees to reimburse the
         other party (the "Underallocated Party") to the extent that the
         Liabilities of the Underallocated Party that would have been covered
         under such Insurance Policies (subject to the limitations of Section
         2.12) is less than the Underallocated Party's share of the Coverage
         Amount.

                           (iii) This Section 2.6(a) shall terminate [three]
         years following the Policy Date; provided, however, that either party
         may extend the three year period applicable to these provisions by up
         to five additional two-year periods, or as otherwise shall be agreed to
         in order to accomplish the allocation objective set forth above and in
         order to have access to any available coverage under the Insurance
         Policies.

         Section 2.7 Cooperation. EMC and McDATA will cooperate with each other
in all respects, and they shall execute any additional documents which are
reasonably necessary, to effectuate the provisions of this Article II.

         Section 2.8 No Assignment Or Waiver. This Agreement shall not be
considered as an attempted assignment of any policy of insurance or as a
contract of insurance and shall not be construed to waive any right or remedy of
any member of the EMC Group in respect of any Insurance Policy or any other
contract or policy of insurance.

         Section 2.9 No Liability. McDATA does hereby, for itself and as agent
for each other member of the McDATA Group, agree that no member of the EMC Group
or any EMC Indemnitee shall have any Liability whatsoever as a result of the
insurance policies and practices of EMC and its Subsidiaries as in effect at any
time prior to the Policy Date, including as a result of the level or scope of
any such

                                       11
<PAGE>   16
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.

         Section 2.10 No Restrictions. Nothing in this Agreement shall be deemed
to restrict any member of the McDATA Group from acquiring at its own expense any
other insurance policy in respect of any Liabilities or covering any period.

         Section 2.11 Further Agreements. The Parties acknowledge that they
intend to allocate financial obligations without violating any laws regarding
insurance, self-insurance or other financial responsibility. If it is determined
that any action undertake pursuant to the Transaction Agreements or any
Ancillary Agreement is violative of any insurance, self-insurance or related
financial responsibility law or regulation, the parties agree to work together
to do whatever is necessary to comply with such law or regulation while trying
to accomplish, as much as possible, the allocation of financial obligations as
intended in the Transaction Agreements and any Ancillary Agreement.

                                   ARTICLE III

                                  MISCELLANEOUS

         Section 3.1 Entire Agreement. The Transaction Agreements the other
Ancillary Agreements and the Exhibits and Schedules attached thereto,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof.

         Section 3.2 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York as
to all matters regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable thereto. The parties submit to the
jurisdiction of the federal and state courts of the Borough of Manhattan in the
city of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.

         Section 3.3 Notices. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effective upon
the earlier of (i) receipt, (ii) personal delivery, (iii) one (1) business day
after being delivered by

                                       12
<PAGE>   17
facsimile (with receipt of appropriate confirmation), (iv) one (1) business day
after being deposited with an overnight courier service or (v) four (4) days
after being deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the attention of the party's General Counsel at the address of its
principal executive office or such other address as a party may request by
notifying the other in writing.

         Section 3.4 Parties In Interest. This Agreement, including the
Schedules and Exhibits hereto, and the other documents referred to herein, shall
be binding upon EMC, EMC's Subsidiaries, McDATA and McDATA's Subsidiaries and
inure solely to the benefit of the McDATA Indemnitees and the EMC Indemnitees
and their respective permitted assigns, and nothing in this Agreement, express
or implied, is intended to confer upon any other Person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.

         Section 3.5 Other Agreements Evidencing Indemnification Obligations.
EMC hereby agrees to execute, for the benefit of any McDATA Indemnitee, such
documents as may be reasonably requested by such McDATA Indemnitee, evidencing
EMC's agreement that the indemnification obligations of EMC set forth in this
Agreement inure to the benefit of and are enforceable by such McDATA Indemnitee.
McDATA hereby agrees to execute, for the benefit of any EMC Indemnitee, such
documents as may be reasonably requested by such EMC Indemnitee, evidencing
McDATA's agreement that the indemnification obligations of McDATA set forth in
this Agreement inure to the benefit of and are enforceable by such EMC
Indemnitee.

         Section 3.6 Counterparts. This Agreement, including the Schedules and
Exhibits hereto, and the other documents referred to herein, may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

         Section 3.7 Assignment. The rights and obligations in this Agreement
may not be assigned or delegated by any party hereto, in whole or in part,
without the express prior written consent of the other party hereto.

         Section 3.8 Severability. If any term or other provision of this
Agreement is determined by a nonappealable decision by a court, administrative
agency or arbitrator to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal

                                       13
<PAGE>   18
or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible.

         Section 3.9 Failure Or Indulgence Not Waiver. No failure or delay on
the part of either party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right.

         Section 3.10 Amendment. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties to this Agreement.

         Section 3.11 Authority. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other action, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.

         Section 3.12 Interpretation. The headings contained in this Agreement
and in the table of contents to this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
Any capitalized term used in the table of contents but not otherwise defined
therein, shall have the meaning assigned to such term in this Agreement. When a
reference is made in this Agreement to an Article or a Section such reference
shall be to an Article or Section of this Agreement unless otherwise indicated.

                                       14
<PAGE>   19
                                   ARTICLE IV

                                   DEFINITIONS

         Section 4.1 Action. "Action" means any demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation by or before any
federal, state, local, foreign or international governmental authority or any
arbitration or mediation tribunal.

         Section 4.2 Affiliated Company. "Affiliated Company" of any Person
means any entity that controls, is controlled by, or is under common control
with such Person. As used herein, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such entity, whether through ownership of voting securities or other
interests, by contract or otherwise.

         Section 4.3 Ancillary Agreements. "Ancillary Agreements" has the
meaning set forth in the Section 2.1 of the Master Transaction Agreement.

         Section 4.4 Assets. "Assets" means assets, properties and rights
(including goodwill), wherever located (including in the possession of vendors
or other third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or financial
statements of any Person, including the following:

                  (a) all accounting and other books, records and files whether
in paper, microfilm, microfiche, computer tape or disc, magnetic tape or any
other form;

                  (b) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment, furniture, office
equipment, automobiles, trucks, aircraft, rolling stock, vessels, motor vehicles
and other transportation equipment, special and general tools, test devices,
prototypes and models and other tangible personal property;

                  (c) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;

                                       15
<PAGE>   20
                  (d) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of a security
interest, lessor, sublessor, lessee, sublessee or otherwise;

                  (e) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person; all bonds, notes, debentures or
other securities issued by any Subsidiary or any other Person; all loans,
advances or other extensions of credit or capital contributions to any
Subsidiary or any other Person; and all other investments in securities of any
Person;

                  (f) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or services, unfilled orders
for the manufacture and sale of products and other contracts, agreements or
commitments;

                  (g) all deposits, letters of credit and performance and surety
bonds;

                  (h) all written technical information, data, specifications,
research and development information, engineering drawings, operating and
maintenance manuals, and materials and analyses prepared by consultants and
other third parties;

                  (i) all Intellectual Property and licenses from third Persons
granting the right to use any Intellectual Property;

                  (j) all computer applications, programs and other software,
including operating software, network software, firmware, middleware, design
software, design tools, systems documentation and instructions;

                  (k) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists, customer and
vendor data, correspondence and lists, product literature, artwork, design,
development and manufacturing files, vendor and customer drawings, formulations
and specifications, quality records and reports and other books, records,
studies, surveys, reports, plans and documents;

                  (l) all prepaid expenses, trade accounts and other accounts
and notes receivables;

                  (m) all rights under contracts or agreements, all claims or
rights against any Person arising from the ownership of any Asset, all rights in
connection

                                       16
<PAGE>   21
with any bids or offers and all claims, choses in action or similar rights,
whether accrued or contingent;

                  (n) all rights under insurance policies and all rights in the
nature of insurance, indemnification or contribution;

                  (o) all licenses (including radio and similar licenses),
permits, approvals and authorizations which have been issued by any governmental
authority;

                  (p) cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and

                  (q) interest rate, currency, commodity or other swap, collar,
cap or other hedging or similar agreements or arrangements.

         Section 4.5 Contracts. "Contracts" means any contract, agreement,
lease, license, sales order, purchase order, instrument or other commitment that
is binding on any Person or any part of its property under applicable law.

         Section 4.6 Coverage Amount. "Coverage Amount" has the meaning set
forth in Section 2.6(a) of this Agreement.

         Section 4.7 Distribution. "Distribution " means the distribution by EMC
of its shares of the Class A Common Stock to the stockholders of EMC.

         Section 4.8 Distribution Date. "Distribution Date " has the meaning set
forth in Section 1.1 of the Master Transaction Agreement.

         Section 4.9 Effective Date. "Effective Date " means the date of the
closing of the IPO.

         Section 4.10 EMC Business. "EMC Business" means any business of EMC
other than the McDATA Business.

         Section 4.11 EMC Group. "EMC Group" means EMC, each Subsidiary and
Affiliated Company of EMC immediately after the Effective Date and each Person
that becomes a Subsidiary or Affiliate Company of EMC after the Effective Date,
other than in any such instance, any member of the McDATA Group.

         Section 4.12 EMC Indemnitees. "EMC Indemnitees" means EMC, each

                                       17
<PAGE>   22
member of the EMC Group and each of their respective directors, officers and
employees.

         Section 4.13 Environmental Actions. "Environmental Actions" means any
notice, claim, act, cause of action, order, decree or investigation by any third
party (including, without limitation, any Governmental Authority) alleging
potential liability (including potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages, damage to
flora or fauna caused by Environmental Conditions, real property damages,
personal injuries or penalties) arising out of, based on or resulting from the
Release of any Hazardous Materials. "Environmental Actions" shall not include
any personal injury claim made by any employee of the McDATA Group or the EMC
Group arising during the course or scope of the employment of such employee for
the EMC Group or for the McDATA Group.

         Section 4.14 Environmental Conditions. "Environmental Conditions" means
the presence in the environment, including the soil, groundwater, surface water
or ambient air, of any Hazardous Material at a level which requires
investigation or remediation (including, without limitation, investigation,
study, health or risk assessment, monitoring, removal, treatment or transport)
under any Environmental Laws.

         Section 4.15 Environmental Laws. "Environmental Laws" means all laws
and regulations of any Governmental Authority with jurisdiction that relate to
the protection of the environment (including ambient air, surface water, ground
water, land surface or subsurface strata) including laws and regulations
relating to the Release of Hazardous Materials, or otherwise relating to the
treatment, storage, disposal, transport or handling of Hazardous Materials, or
to the exposure of any individual to a Release of Hazardous Materials.

         Section 4.16 Hazardous Materials. "Hazardous Materials" means
chemicals, pollutants, contaminants, wastes, toxic substances, radioactive and
biological materials, hazardous substances, petroleum and petroleum products or
any fraction thereof.

         Section 4.17 Indemnitee. "Indemnitee" has the meaning set forth in
Section 1.6(a) hereof.

         Section 4.18 Insurance Policies. "Insurance Policies" means insurance
policies pursuant to which a Person makes a true risk transfer to an insurer.

                                       18
<PAGE>   23
         Section 4.19 Insurance Proceeds. "Insurance Proceeds" means those
monies:

                  (a) received by an insured from an insurance carrier; or

                  (b) paid by an insurance carrier on behalf of the insured;
from Insurance Policies.

         Section 4.20 Insurance Transition Period. "Insurance Transition Period"
has the meaning set forth in Section 2.1 of this Agreement.

         Section 4.21 Insured McDATA Liability. "Insured McDATA Liability" means
any McDATA Liability to the extent that (i) it is covered under the terms of
EMC's Insurance Policies in effect prior to the Policy Date and (ii) McDATA is
not a named insured under, or otherwise entitled to the benefits of, such
Insurance Policies.

         Section 4.22 IPO Liabilities. "IPO Liabilities" means any Liabilities
relating to, arising out of or resulting from any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, with respect to all information contained in any IPO
Registration Statement or any preliminary, final or supplemental prospectus
forming a part of a IPO Registration Statement.

         Section 4.23 Intellectual Property. "Intellectual Property" means all
domestic and foreign patents and patent applications, together with any
continuations, continuations-in-part or divisional applications thereof, and all
patents issuing thereon (including reissues, renewals and re-examinations of the
foregoing); design patents, invention disclosures; mask works; copyrights, and
copyright applications and registrations; web addresses, trademarks, service
marks, trade names, and trade dress, in each case together with any applications
and registrations therefor and all appurtenant goodwill relating thereto; trade
secrets, commercial and technical information, know-how, proprietary or
confidential information, including engineering, production and other designs,
notebooks, processes, drawings, specifications, formulae, and technology;
computer and electronic data processing programs and software (object and source
code), data bases and documentation thereof; inventions (whether patented or
not); utility models; registered designs, certificates of invention and all
other intellectual property under the laws of any country throughout the world.

                                       19
<PAGE>   24
         Section 4.24 IPO Registration Statement. "IPO Registration Statement"
means the registration statement on Form S-1 pursuant to the Securities Act to
be filed with the SEC registering the shares of common stock of McDATA to be
issued in the IPO, together with all amendments thereto.

         Section 4.25 Liabilities. "Liabilities" means all debts, liabilities,
guarantees, assurances, commitments and obligations, whether fixed, contingent
or absolute, asserted or unasserted, matured or unmatured, liquidated or
unliquidated, accrued or not accrued, known or unknown, due or to become due,
whenever or however arising (including, without limitation, whether arising out
of any Contract or tort based on negligence or strict liability) and whether or
not the same would be required by generally accepted principles and accounting
policies to be reflected in financial statements or disclosed in the notes
thereto.

         Section 4.26 McDATA Balance Sheet. "McDATA Balance Sheet" means the
consolidated balance sheet (including the notes thereto) of the McDATA Business
as of March 31, 2000 that is included in the IPO Registration Statement.

         Section 4.27 McDATA Business. "McDATA Business" means the business and
operations of McDATA, as described in the IPO Registration Statement and except
as otherwise expressly provided herein, any terminated, divested or discontinued
businesses or operations that at the time of termination, divestiture or
discontinuation primarily related to the McDATA Business as then conducted.

         Section 4.28 McDATA Contract. "McDATA Contract" means any of the
following:

                  (a) any contract or agreement entered into in the name of, or
expressly on behalf of, any division or business unit of McDATA;

                  (b) any contract or agreement that relates primarily to the
McDATA Business; and

                  (c) any guarantee, indemnity, representation, warranty or
other Liability of any member of the McDATA Group or the EMC Group in respect of
any other McDATA Contract, any McDATA Liability or the McDATA Business
(including guarantees of financing incurred by customers or other third parties
in connection with purchases of products or services from the McDATA Business).

                                       20
<PAGE>   25
         Section 4.29 McDATA Covered Parties. "McDATA Covered Parties" shall
have the meaning set forth in Section 2.1(a) of this Agreement.

         Section 4.30 McDATA Group. "McDATA Group" means McDATA, each Subsidiary
and Affiliated Company of McDATA immediately after the Effective Date and each
Person that becomes a Subsidiary or Affiliate Company of McDATA after the
Effective Date, other than in any such instance EMC and any Subsidiary of EMC
other than McDATA or any Subsidiary of McDATA.

         Section 4.31 McDATA Indemnitees. "McDATA Indemnitees" means McDATA,
each member of the McDATA Group and each of their respective directors, officers
and employees.

         Section 4.32 McDATA Liabilities. "McDATA Liabilities" means the
following Liabilities, except as otherwise provided for in any Ancillary
Agreement or other express agreement of the parties:

                  (a) all Liabilities reflected in the McDATA Balance Sheet,
subject to any discharge of such Liabilities subsequent to the date of the
McDATA Balance Sheet;

                  (b) all Liabilities that were transferred to McDATA in
accordance with the Asset Transfer Agreement among EMC, McDATA and McDATA
Holdings Corporation, dated as of October 1, 1997 (the "Asset Transfer
Agreement"); and

                  (c) all Liabilities which any member of the McDATA Group
incurs or becomes subject to from and after October 1, 1997; and

                  (d) all Liabilities of McDATA under the Master Transaction
Agreement or any of the Ancillary Agreements.

Notwithstanding the foregoing, the McDATA Liabilities shall not include the
Excluded Liabilities set forth on Schedule 1.4 attached to the Asset Transfer
Agreement.

         Section 4.33 Person. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.

                                       21
<PAGE>   26
         Section 4.34 Release. "Release" means any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.

         Section 4.35 Subsidiary. "Subsidiary" of any Person means a corporation
or other organization whether incorporated or unincorporated of which at least a
majority of the securities or interests having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries; provided, however, that no Person that is
not directly or indirectly wholly-owned by any other Person shall be a
Subsidiary of such other Person unless such other Person controls, or has the
right, power or ability to control, that Person.

         Section 4.36 Tax Sharing Agreement. "Tax Sharing Agreement" means the
Amended and Restated Tax Sharing Agreement entered into as of the date hereof.

         Section 4.37 Taxes. "Taxes" has the meaning set forth in the Tax
Sharing Agreement.

         Section 4.38 Third Party Claim. "Third Party Claim" has the meaning set
forth in Section 1.6(a) of this Agreement.

                                       22
<PAGE>   27
         IN WITNESS WHEREOF, each of the parties has caused this Indemnification
and Insurance Matters Agreement to be executed on its behalf by its officers
thereunto duly authorized on the day and year first above written.

                                   EMC CORPORATION

                                   By:________________________________
                                   Name:
                                   Title:

                                   MCDATA CORPORATION

                                   By:________________________________
                                   Name:
                                   Title:

                                       23

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