Document:

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                                                                   Exhibit 10.14

                                                              AGREEMENT NO. ____

                       BROCADE COMMUNICATION SYSTEMS, INC.
                            OEM AND LICENSE AGREEMENT

This BROCADE Communications Systems, Inc. Original Equipment Manufacturer
("OEM") and License Agreement (including the attached terms and conditions and
exhibits, each of which is expressly incorporated herein, collectively the
"AGREEMENT") is entered into as of this 27th day of April, 1999 (the "EFFECTIVE
DATE") by and between Brocade Communications Systems, Inc., a corporation
organized under the laws of the State of California, U.S.A., and having its
principal place of business at 1901 Guadalupe Parkway, San Jose, California
95131, ("BROCADE") and McDATA Corporation ("McDATA"), a Delaware corporation,
and having its principal place of business at 310 Interlocken Parkway,
Broomfield, Colorado 80021.

This Agreement consists of the following:

         The terms and conditions contained in this cover/signature page
         OEM terms and conditions (the "TERMS")
         Exhibit A - Price List
         Exhibit B - Service and Support Requirements
         Exhibit C - Technical Training Program
         Exhibit D - Software License Agreement
         Exhibit E - McDATA Products
         Exhibit F - Settlement Agreement and Mutual Release (dated April 14,
                     1998)
         Exhibit G - ASIC Specifications
         Exhibit H - Brocade - HP - McDATA Support Letter
         Exhibit I - Brocade - McDATA NDA
         Exhibit J - Manufacturing [*] Test Processes
         Exhibit K- Hardware Subassemblies MTBF

IN WITNESS WHEREOF, in consideration of the covenants and other compensation set
forth herein, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto have executed this Agreement as of the Effective Date.

BROCADE: Brocade Communications Corporation   McDATA: McDATA Systems, Inc.

Signature: /s/ Greg Reyes                     Signature: /s/ John F. McDonnell
           --------------------------                    -----------------------
Name:          Greg Reyes                     Name:          John F. McDonnell
      -------------------------------               ----------------------------

Title:       President & CEO                  Title:         President
       ------------------------------                ---------------------------

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                                                           Agreement No.: ______

                      BROCADE COMMUNICATIONS SYSTEMS, INC.
                         OEM AND LICENSE AGREEMENT TERMS

These Terms are effective as of the Effective Date of the Agreement and are made
between BROCADE and McDATA, as identified on the cover/signature page to which
these Terms are attached. BROCADE and McDATA hereby agree as follows:

1.0      DEFINITIONS

1.1      "ASIC Firmware" means the object code [*] versions of BROCADE's
proprietary software used in conjunction with BROCADE's current generation of
Fibre Channel products incorporating the BROCADE ASIC and designated with
version numbers 1.X, and related software design specifications provided to
McDATA pursuant to the Technology License and Development Agreement between the
parties dated November 1, 1996.

1.2      "ASIC Specifications" means the specifications attached hereto as
Exhibit G.

1.3 "BROCADE ASIC" means that generation of BROCADE Felt and McFlannel
application specific integrated circuits ("ASIC") as of April 1, 1998 for the
Felt ASIC, and July 1998 for the McFlannel ASIC, with the LSI Logic part numbers
[*] and [*], respectively.

1.4      "Customers" means the collective reference to End Users and Resellers.

1.5      "Derivative Work(s)" means any work of authorship that is based upon
one or more preexisting works such as a revision, modification, translation,
abridgement, condensation, expansion, or any other form in which such
preexisting works may be recast, transformed, or adapted and which, if prepared
without authorization of the owner of the copyright in such preexisting work,
would constitute a copyright infringement.

1.6      "End User(s)" means McDATA's customers of the Products (as incorporated
into the McDATA Products), which shall only be the ultimate users of a McDATA
Product, and not a reseller, agent, broker or other intermediary in the chain of
distribution.

1.7      "Hardware" means the SilkWorm Motherboard, CPU Board, G_Port Board, and
FL_Port Board offered to McDATA by BROCADE as set forth in Exhibit A.

1.8      "Licensed Software" means the software products set forth in Exhibit A,
in object code only, supporting version numbers 1.x of the ASIC Firmware and
which are pre-installed on all of the applicable Hardware shipped to McDATA
under this Agreement, and which further require a license key specific to an
individual Hardware unit ("Key") to activate the Licensed Software.

1.9      "McDATA Functionality" means McDATA's Intellectual Property Rights (as
defined in Section 13) embodied in the ASIC Specifications, as amended from time
to time by mutual consent, and McDATA's hardware designs, simulation models, and
system architecture specifications embodied in the McDATA Products.

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1.10     "McDATA Product" means the Fibre Channel switches set forth in Exhibit
E which are designed and assembled by McDATA in which the [*] of such switches
are comprised of the Hardware set forth in Exhibit A, in accordance with the
terms set forth in Section 2.2.

1.11     "Prices" means the net amounts charged by BROCADE in relation to the
list of Products offered by BROCADE hereunder. The Prices are attached hereto in
Exhibit A.

1.12     "Products" means the Hardware and Licensed Software offered to McDATA
by BROCADE as set forth in Exhibit A, and any related documentation and manuals
provided by BROCADE, as set forth in Section 2.4.2.

1.13     "Reseller(s)" means any business entity which McDATA utilizes to market
and service the McDATA Products to End Users in accordance with the terms of
this Agreement, including systems integrators, original equipment manufacturers
and distributors.

1.14     "Software License Agreement" means the Software License Agreement, set
forth as Exhibit D, as may be amended by mutual agreement from time to time.

2.0      LICENSES

2.1      GRANT OF LICENSE. Subject to the terms of this Agreement, BROCADE
grants McDATA a non-exclusive, non-transferable, worldwide license to: (a)
market, sell, distribute, sublicense and demonstrate the Products to Customers
solely as incorporated into the McDATA Products set forth in Exhibit E; and (b)
use the Products solely as incorporated into the McDATA Products as reasonably
required in connection with such marketing, sales, distribution and
demonstration.

2.2      NO STANDALONE. McDATA agrees not to market, sell, distribute,
sublicense or demonstrate the Products in standalone form, except that McDATA
shall have the right to distribute spare and field replacement units of the
Hardware solely for use in connection with previously sold units of McDATA
Product.

2.3      PRIVATE LABEL. McDATA shall privately label the Products as
incorporated into the McDATA Products, and may remove the BROCADE branding on
the Products and attach McDATA trademarks or other marks to the Products as the
branding of the Products, except that McDATA shall not remove any of BROCADE's
proprietary copyright, trademark and patent notices without BROCADE's prior
written notice.

2.4      DOCUMENTATION.

2.4.1    DOCUMENTATION TO MCDATA. Promptly following the Effective Date and
concurrent with BROCADE's general release, if any, of the Products, BROCADE will
provide to McDATA BROCADE's standard technical documentation including but not
limited to data sheets, BROCADE Manuals (as defined below) and other manuals
distributed to resellers of the Products (such as technical manuals), all of
which BROCADE will supply in BROCADE's standard electronic format for
incorporating into the McDATA Manuals (as defined below) ("Documentation").
During the term of this Agreement, BROCADE will provide to McDATA updates to the
Documentation, if any, when BROCADE generally makes such updates available to
licensees of the Products.

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2.4.2    DOCUMENTATION LICENSES.

(a)      TECHNICAL DOCUMENTATION. Subject to the terms of this Agreement,
BROCADE hereby grants to McDATA a nonexclusive, nontransferable, worldwide
license to reproduce and use BROCADE's technical documentation provided to
McDATA by BROCADE hereunder, solely for McDATA's internal purposes in connection
with the manufacture, marketing and support of the McDATA Products into which
the Products are incorporated as set forth herein. Modifications to such
technical documentation by McDATA shall require BROCADE's prior written
authorization, which authorization will not be unreasonably withheld.

(b)      MANUALS. Subject to the terms of this Agreement, BROCADE hereby grants
to McDATA a nonexclusive, nontransferable, worldwide license to modify the
BROCADE End User manual(s) (including manual text and layouts) for the Products
("BROCADE Manuals"), subject to BROCADE's written approval as described below,
and to distribute such approved, revised versions of the BROCADE Manuals with
the McDATA Product (the "McDATA Manuals"). BROCADE will review and approve the
McDATA Manuals in writing as to form and content with respect to the Products
prior to their use or distribution. Such approval shall not be unreasonably
withheld and shall be made within [*] following BROCADE's receipt of the
proposed McDATA Manuals. Notwithstanding the foregoing, such approval shall not
be required for (a) changes to content made by McDATA which are consistent with
changes made by McDATA to the McDATA Products (other than changes to the
Products), or (b) changes consistent with McDATA's usage, style or format
guidelines, provided that no such change alters the form, features or
functionality of the Products.

(c)      OWNERSHIP. McDATA agrees that the foregoing licenses do not grant to
McDATA any title or other right of ownership to the Documentation.
Notwithstanding the foregoing, the parties agree that McDATA shall own any
modifications made to the McDATA Manuals

2.4.3    EXPENSES. McDATA is solely responsible for all expenses incurred by
McDATA in modifying, reproducing and using the Documentation.

2.4.4    DOCUMENTATION WARRANTY.

(a)      [*]. BROCADE [*] that the Documentation will be [*]. Except as
expressly provided in this Section 2.4.4(a), BROCADE grants the licenses in
Section 2.4.2 to McDATA hereunder solely on an "AS IS" basis.

(b)      DISCLAIMER. EXCEPT AS OTHERWISE PROHIBITED BY LAW, AND THEN ONLY TO THE
EXTENT SO PROHIBITED, BROCADE DISCLAIMS ALL REPRESENTATIONS, WARRANTIES AND
CONDITIONS, WHETHER EXPRESS, IMPLIED OR STATUTORY, REGARDING THE DOCUMENTATION,
INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR FITNESS FOR A PARTICULAR PURPOSE.

2.5      RESTRICTIONS. Without BROCADE's prior written consent, McDATA will not
do any of the following acts: (a) disassemble, decompile, reverse engineer any
Products, or otherwise reduce the Licensed Software to human-readable form; (b)
copy or otherwise reproduce any Products, in whole or in part; (c) except as
authorized herein, remove, modify or otherwise tamper with notices or legends on
the Products or any labeling on any physical media containing the Licensed
Software; (d) use the Products in any manner to provide service bureau, time

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sharing, or other computer services to third parties, (e) except as set forth
below, create Derivative Works from, adapt, modify, change or enhance the
Products. McDATA's rights in the Products will be limited to those expressly
granted in this Agreement, (f) remove the Licensed Software from the Hardware in
which is it embedded, or (g) authorize third parties to do any of the foregoing.
McDATA agrees to include the foregoing restrictions in its agreements with its
Resellers.

2.6      ASIC LICENSE.

(a)      Right to Purchase. BROCADE grants McDATA the right to purchase, use and
resell the BROCADE ASIC as incorporated into the McDATA Products and not for
resale on a standalone basis, and shall authorize LSI Logic and LSI Logic's
authorized distributors to sell the BROCADE ASIC to McDATA for incorporation
into the McDATA Products, (such right and authorization is herein defined as
"ASIC License") which ASIC License is fully paid-up and irrevocable. The pricing
for such ASIC shall be as established between McDATA and LSI Logic and/or its
distributors.

(b)      [*]. Brocade agrees that within thirty (30) days of the Effective Date
of this Agreement, it will [*] with [*] reasonably acceptable to McDATA, all [*]
and [*] (as defined below) [*], all of which shall be in a [*] form which
generally conforms to industry standards. For the purposes of this Agreement,
the term [*] means [*], and [*] means the [*] required to [*] and [*] the [*],
including [*] and [*]. Upon completion of the final design of the McFlannel
application ASIC, BROCADE will update the [*] to include the [*] and [*] for the
McFlannel ASIC.

(c)      ACCESS TO [*]. Concurrent with BROCADE's [*] of the [*], BROCADE and
McDATA will execute an [*] authorizing said [*] to [*] to McDATA in the event
that: (i) upon receipt of [*] from LSI Logic of the [*], BROCADE will promptly
notify McDATA and work with McDATA to [*] for the [*], (ii) LSI Logic and/or LSI
Logic's authorized distributors fail or refuse to sell such [*] to McDATA,
including as a result of LSI Logic's [*] or [*] (other than as a result of
McDATA's failure to make payments when due or McDATA otherwise breaches its
obligations owed to LSI Logic or LSI Logic's authorized distributors) and,
BROCADE has not, within [*] of receipt of McDATA's written notice of such
refusal to sell by LSI Logic, [*] for McDATA the right to purchase said [*] from
a [*], (iii) the filing by or against BROCADE of bankruptcy proceedings which
have not been dismissed for a period of [*] after the date of filing, or (iv)
solely prior to the release to production of the McFlannel ASIC and solely with
respect to the ASIC Designs and Manufacturing Documentation for the McFlannel
ASIC, the McFlannel ASIC do not [*] to the McFlannel ASIC specifications after
McDATA has provided BROCADE with written notice of such [*] and BROCADE has
failed to remedy such [*] within: (A) [*] of receipt of such written notice, or
(B) if such [*] cannot reasonably be remedied within [*], if BROCADE fails to
provide McDATA, within the stated [*] period, a written plan for specifying a
[*] to such failure which will be completed within the ensuing [*] period (or
longer time period if mutually agreed by the parties), along with demonstrable
evidence that progress has begun with respect to such plan ("[*]"). BROCADE
shall pay all [*] charged by the [*] pursuant to the [*]. Upon the release of
the [*] following a [*], then McDATA shall have the following rights in and to
the [*]:

         (i) McDATA shall have a non-transferable, non-exclusive, right and
         license to complete the development of, or have developed, and to [*],
         or [*], the [*] for incorporation into the McDATA Products. McDATA
         agrees that such [*] shall be used by McDATA solely to complete the
         development of (if applicable) and to [*], sell, maintain and support
         the [*] as incorporated into the McDATA Products. McDATA agrees that

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         BROCADE shall have the right to approve any [*] McDATA may use pursuant
         to this section, which approval shall not be unreasonably withheld by
         BROCADE;

         (ii) McDATA shall not use the [*] and [*] except as provided herein.

         (iii) McDATA will maintain the confidentiality of the proprietary [*]
         and [*] as it would maintain the confidentiality of its own comparable
         information, but in no event with less than reasonable care.

         (iv) McDATA will not, without BROCADE's express written permission make
         or have made, or permit to be made, more [*] of the [*] and/or [*] than
         are necessary for the permissible uses hereunder, and that each such
         necessary [*] shall contain the same notices or legends which appear on
         the [*] of each portion of the [*] and [*].

         (v) BROCADE shall use its reasonable best efforts to assist McDATA in
         securing a [*] between McDATA and any third parties with whom BROCADE
         may have contracts, licenses or other arrangements necessary to the [*]
         of the [*].

         (vi) If McDATA exercises the [*] under this Section 2.6, McDATA agrees
         to [*] BROCADE reasonable [*] for the [*] by McDATA and the amount of
         such [*] shall be subject to the good faith negotiation of the parties.

2.7.     ASIC Firmware License BROCADE grants McDATA an irrevocable, perpetual,
nonexclusive, nontransferable, worldwide fully paid up license to (i) internally
reproduce and modify the [*] version of the ASIC Firmware to compile a
derivative object code version of the ASIC Firmware, (ii) prepare and have
prepared Derivative Works of the ASIC Firmware, and (iii) reproduce, distribute,
sublicense, publicly perform and publicly display such object code version of
the ASIC Firmware only as incorporated into the McDATA Products and not for
resale on a standalone basis. BROCADE will provide each new release of the ASIC
Firmware to McDATA in a mutually agreed format within [*] days after the date of
general commercial availability of such release. Within [*] days of any such
release, BROCADE shall notify McDATA in writing in the form of BROCADE standard
release notes of changes to the [*] of such ASIC Firmware or related software
design specifications resulting from program errors or corrections in relation
to the immediately prior version of the ASIC Firmware; the parties agree that
such BROCADE notification shall not include information regarding modifications
to the ASIC Firmware as a result of custom work performed by BROCADE for third
parties. BROCADE agrees not to incorporate any such custom modifications to the
ASIC Firmware into the versions provided to McDATA to the extent that any such
modifications would affect the base functionality of the ASIC Firmware.

3.0      TERM

The initial term of this Agreement shall commence on the Effective Date, and
shall extend for a period of twenty-four (24) months from the Effective Date
("Initial Term"), unless earlier terminated as set forth herein. This Agreement
may be renewed for subsequent one (1) year terms upon the prior written
agreement of the parties (each a "Renewal Term"). Whether or not the parties
renew this Agreement upon the expiration of the Initial Term or any subsequent
Renewal Term as set forth in the foregoing sentence, the parties agree that this
Agreement shall be deemed to automatically renew for successive three (3) month
periods in the event that McDATA continues to [*]

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Products in the [*] set forth in Section 10.3 hereof ("Product End-of-Life"),
unless otherwise terminated as set forth herein. This Agreement shall always be
interpreted to have a definite term. Neither party has made or shall make any
commitments regarding the duration or renewal of this Agreement beyond those
expressly stated herein.

4.0      TAXES

The parties acknowledge that the Prices do not include duty, sales, use, excise,
import, export, goods and services, value added or similar taxes or duties,
including any penalties and interest thereon, and all government permit and
license fees and customs and similar fees, which BROCADE may incur in respect of
this Agreement, including any costs expended to collect such amounts from McDATA
("Taxes"). McDATA agrees to pay, indemnify and hold BROCADE harmless from all
applicable Taxes (other than taxes based upon BROCADE's net income), unless
McDATA procures and provides to BROCADE an exemption certificate in a form
reasonably acceptable to BROCADE and to the appropriate taxing authority. If
McDATA fails to pay any Taxes as of the original due date therefor and BROCADE
receives any assessment or other notice (collectively, the "Assessment") from
any governmental taxing authority stating that such Taxes are due from BROCADE,
then BROCADE shall give McDATA written notice of the Assessment and McDATA shall
pay the taxing authority.

5.0      ORDERS, CHANGES AND CANCELLATIONS

5.1 SALES FORECAST. During the term of the Agreement, within [*] days after the
beginning of each month, McDATA will submit to BROCADE by facsimile, e-mail or
nationally-recognized overnight delivery service a forecast of its projected
sales and purchases for a one hundred and eighty (180) day rolling period. The
forecasts will include: (a) quantity and type of Product to be sold and
projected delivery dates for the first ninety (90) days of such period, and (b)
the aggregate number of quantity and type of Product to be sold in each of
months four, five and six of such period. Such forecasts shall not be binding on
either party, but shall be made in good-faith.

5.2      ORDERS.

(a)      HARDWARE ORDERS. McDATA will order Hardware by submitting written
purchase orders to BROCADE by facsimile, e-mail or nationally-recognized
overnight delivery service. All orders shall reference this Agreement, state the
quantities, part numbers and descriptions of Hardware ordered, applicable prices
and license fees, requested delivery dates and shipping instructions. All orders
placed by McDATA will be subject to acceptance by BROCADE, as well as to
BROCADE's standard lead times and forecasted requirements. BROCADE shall accept
or reject in writing any purchase orders which were forecasted by McDATA in
accordance with Section 5.1 above within [*] days of receipt of such purchase
orders by BROCADE; BROCADE shall use commercially reasonable efforts to accept
or reject purchase orders which were not forecasted in accordance with Section
5.1 above. All such purchase orders shall be governed by the terms and
conditions of this Agreement. For purposes of this Agreement, the order date
will be the date on which BROCADE receives McDATA's order. BROCADE will use
commercially reasonable efforts to ship the Hardware to McDATA in accordance
with delivery dates specified in the order as accepted by BROCADE.

(b)      LICENSED SOFTWARE ORDERS. McDATA will order Keys to the Licensed
Software by submitting written purchase orders to BROCADE by facsimile, e-mail
or nationally-recognized overnight delivery service. All orders shall reference
this Agreement, state the quantities ordered, and provide the [*] of the

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CPU board(s) for which McDATA seeks to activate the Licensed Software. All such
orders are subject to acceptance by BROCADE. BROCADE shall accept or reject any
such purchase orders in writing within [*] days of receipt of such purchase
orders by BROCADE. All such purchase orders shall be governed by the terms and
conditions of this Agreement.

5.3      HARDWARE ORDER CHANGE OR CANCELLATION BY MCDATA. McDATA may not cancel
or modify its Hardware orders thirty (30) days or less prior to the originally
scheduled shipment date. If McDATA submits to BROCADE a written request to
cancel or modify a Hardware order more than thirty (30) days prior to the
originally scheduled shipment date, BROCADE will make commercially reasonable
efforts to accommodate such requests, subject to written confirmation of receipt
of such request by BROCADE; such confirmation of receipt shall be provided
within [*] days after receipt by BROCADE. In the event of a BROCADE authorized
Hardware order change, it may be necessary for BROCADE to revise the scheduled
shipment date by mutual agreement of the parties.

5.4      CANCELLATION BY BROCADE. With [*] days prior notice, BROCADE reserves
the right to cancel any Hardware orders placed by McDATA and accepted by BROCADE
as set forth above, or to refuse or delay shipment thereof, if McDATA: (a) fails
to make any payment as provided in this Agreement or otherwise agreed to by
BROCADE and McDATA, (b) fails to meet reasonable credit or financial
requirements established by BROCADE, including any limitations on allowable
credit, or (c) otherwise fails to comply with the terms and conditions of this
Agreement.

5.5      CONFLICT. Any terms and conditions of: (a) any McDATA order for
Products, or (b) BROCADE acknowledgment or acceptance which are in addition to
or inconsistent with the terms and conditions of this Agreement will be deemed
stricken and unenforceable under such order, acknowledgment or acceptance.

6.0      PAYMENT TERMS

6.1      PAYMENT. In consideration of the rights granted by BROCADE to McDATA in
Sections 2.6 ("ASIC License") and 2.7 ("ASIC Firmware License"), McDATA shall
pay to BROCADE the following amounts: (a) [*] United States Dollars ([*]) on
April 15, 1998; (b) [*] United States Dollars on each of July 15, 1998, October
15, 1998, January 15, 1999 and April 15, 1999. The parties agree that as of the
Effective Date of this Agreement, [*] United States Dollars ([*]) has been paid
by McDATA in respect of such payment obligations.

6.2      PAYMENT FOR PRODUCTS. McDATA shall pay all invoices net thirty (30)
days after the date of BROCADE's invoice, which BROCADE will issue upon shipment
of the Products for the Hardware or delivery of the Keys for the Licensed
Software.

6.3      LATE PAYMENT. Payments made under this Agreement after their due date
will incur interest at a rate equal to one and one-half percent (1.5%) per month
or the highest rate permitted by applicable law, whichever is lower. In
addition, if McDATA fails to pay any invoice when due, BROCADE may: (i) declare
all amounts owed by McDATA to be immediately due and payable and refuse to
deliver any further Products or Keys until such amounts have been paid (ii)
require C.O.D. payment for Products or Keys ordered, and/or (iii) pursue any
other remedies under this Agreement, at law or in equity available to it.

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6.4      NO SETOFF. McDATA will not setoff or offset against BROCADE's invoices
amounts that McDATA claims are due to it other than for authorized returns and
rejected shipments.

7.0      SHIPMENT AND DELIVERY

7.1      SHIPMENT AND DELIVERY.

(a)      HARDWARE. Delivery will be made F.O.B. BROCADE facility. In the absence
of specific written instructions from McDATA, BROCADE will select the carrier,
but such carrier will not be the agent of BROCADE. Title, risk of loss and/or
damage to Hardware, and responsibility for filing claims with the carrier, will
pass to McDATA on delivery to such carrier. BROCADE will pack all Hardware
shipped in accordance with standard commercial practices. McDATA agrees that it
will be responsible for and pay all shipping, freight and insurance charges
incurred in such shipment.

(b)      LICENSED SOFTWARE. Upon acceptance of an order as set forth in Section
5.2(b) above, BROCADE will promptly deliver the necessary Keys to the Licensed
Software for the specified Worldwide Switch Numbers via E-mail to McDATA. Upon
receipt of each delivery of Keys, McDATA will log the receipt of each Key for
tracking purposes, and will use commercially reasonable best efforts to prevent
unauthorized access to such Keys. Notwithstanding the provisions of Section
5.2(b) and 7.1(b), BROCADE authorizes McDATA to enable the BROCADE software
licensed to third parties through third party purchase orders issued to and
accepted by BROCADE for mutually agreed upon third parties for BROCADE software
installed on McDATA Products sold to such third parties, and McDATA shall [*]
for such software.

7.2      PARTIAL SHIPMENTS. McDATA agrees to accept partial shipments and pay
for Products comprising a partial shipment on the terms set forth above;
provided, however, that BROCADE shall only submit an invoice for Products that
it has actually shipped, unless otherwise agreed to in writing by the parties.

7.3      DELAYED DELIVERY. If delivery of any Products is delayed (i) more than
[*] days on or before December 31, 1999, or (ii) more than [*] days (after
December 31, 1999) following the accepted scheduled delivery date, McDATA may,
at any time prior to delivery by BROCADE of such Products to the transporting
carrier, cancel without penalty that undelivered portion of its purchase order
covering such Products.

7.4      ACCEPTANCE OF PRODUCTS.

(a)      All Products sold under this Agreement shall materially conform to the
standards set forth in Section 15.2, below. McDATA's acceptance of each Product
shall occur upon delivery unless McDATA notifies BROCADE in writing within
thirty (30) days after delivery that such Product does not materially conform to
such standards. Payment for any Product by McDATA shall not reduce the thirty
(30) day period available for inspection and reporting of any material
non-conformance.

(b)      McDATA may inspect and test Products received from BROCADE as set forth
above. BROCADE shall have the right to observe McDATA's inspection and test
procedures.

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(c) In the event that any Product delivered to McDATA does not conform to the
standards in Section 15.2 below, and such non-conformance is not due to freight
damage, damage incurred after receipt by McDATA, or other exclusions in Section
15, McDATA shall immediately notify BROCADE, and request a RMA from BROCADE.
McDATA shall deliver, at its expense, all such non-conforming Products to
BROCADE pursuant to a valid RMA. Upon verification of such non-conformance,
BROCADE will either promptly repair or replace the non-conforming Product within
thirty (30) days of its receipt by BROCADE. Upon receipt of written request from
McDATA, BROCADE may be able to process small amounts of Product on an expedited
basis for an additional fee.

8.0      OTHER AGREEMENTS, PRICING AND MARKETING

8.1      SOFTWARE LICENSE AGREEMENT. McDATA agrees that all Licensed Software
will be distributed to Customers subject to a Software License Agreement
(including warranty statement), along with a McDATA Manual, in a manner which is
(a) no less protective of BROCADE's Intellectual Property Rights in the Licensed
Software than the form attached hereto as Exhibit D, and (b) legally enforceable
in the jurisdictions in which the Licensed Software, as incorporated into the
McDATA Products, is distributed.

8.2      PRICING FREEDOM. McDATA is, and will remain, entirely free to determine
its Customer prices and fees in its own discretion.

8.3      NEGATIVE STATEMENTS. Neither party to this Agreement shall make any
intentionally false, negatively misleading or intentionally misleading remarks
of any kind or nature regarding the products or services of the other party to
its current or potential customers, the press, resellers, suppliers or any other
third party ("Negative Remarks"), and each party to this Agreement shall
expressly inform its employees, contractors, and resellers of such prohibition.
A violation of this section shall be immediately reported to the President of
each of the parties, and such individuals shall take mutually agreed remedial
measures to prevent future occurrences of Negative Remarks. Notwithstanding the
remedial efforts undertaken by either party to prevent such Negative Remarks,
the parties agree that the repeated violation of this Section by either party
shall be deemed to be a material breach of this Agreement.

8.4      VERSIONS. In the event that BROCADE develops any new features or
functionality for (i) of the ASIC Firmware as described in Section 1.1, (ii) the
Licensed Software which supports such ASIC Firmware, or (iii) the Hardware
versions specified in Exhibit A, and BROCADE makes such new features or
functionality generally available to its customers, BROCADE shall offer such new
features or functionality to McDATA under the terms and conditions of this
Agreement at reasonable prices which are mutually agreed to by the parties.

8.5      SUPPORT LETTER. BROCADE and McDATA agree to provide support to
Hewlett-Packard with respect to the McDATA Product and software licensed from
BROCADE related thereto as set forth on Exhibit H.

8.6      REPAIR FACILITIES. BROCADE will maintain facilities to repair or
replace, at BROCADE's sole discretion, the Hardware for a [*] year period,
commencing on the date BROCADE issues a general market End of Life ("EOL")
notice to its customers for the SilkWorm switch with respect to the generation
of such switch applicable to the Hardware subassemblies set forth in Exhibit A.
Upon expiration of the such [*] year period, BROCADE agrees to provide to McDATA
[*] required, as determined by BROCADE, to repair the Hardware subassemblies

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9.0      McDATA OBLIGATIONS

9.1      TRAINING. McDATA agrees to train an appropriate number of its systems
engineering, manufacturing and support personnel on products purchased from
BROCADE according to the Technical Training Program listed in Exhibit C in order
to ensure McDATA can provide adequate support to Customers as set forth in
Exhibit B. From time to time BROCADE may introduce new training courses, and
McDATA agrees to provide ongoing training to its personnel on a periodic basis
to ensure that its personnel are adequately trained. Additional training
materials and updates are available for the fees set forth in Exhibit C.

9.2      PRODUCT CUSTOMER SUPPORT AND SERVICE. McDATA shall provide the
appropriate personnel, facilities and equipment necessary to provide support in
the use of the Products (as incorporated into the McDATA Products) to Customers
as required to: (i) provide BROCADE regular feedback (at least quarterly) on
Customer satisfaction metrics in a manner mutually agreed by the parties, and
(ii) conduct service and support of McDATA's Products. McDATA will have
personnel attend product, sales and service training courses as may be offered
by BROCADE or McDATA from time to time.

9.3      SUPPORT FOR MCFLANNEL ASIC. The parties acknowledge that as of the
Effective Date, the McFlannel ASIC require testing to ensure that such ASIC
conform to the relevant ASIC Specifications. BROCADE agrees to provide
assistance with such McFlannel ASIC testing to ensure substantial conformity
with the ASIC Specifications through [*]. In the event that during such testing
of the McFlannel ASIC, a substantial non-conformity with the ASIC Specifications
is discovered by McDATA and/or BROCADE, the parties agree to meet and jointly
determine a plan of resolution for such non-conformity.

10.0     ENGINEERING CHANGES

10.1     PRODUCT ECO'S BROCADE shall use commercially reasonable efforts to
provide McDATA with [*] days' notice of changes to the Products (including
Licensed Software or drivers) that affect the form, fit or function of the
Products ("Engineering Change Order" or "ECO").

10.2     MANDATORY PRODUCT ECO'S. BROCADE may issue notice of "Mandatory
Changes", which are changes to the Product(s) required to satisfy governmental
environmental, safety or other standards, reliability concerns, or to guarantee
a continuity of supply. BROCADE will make commercially reasonable efforts to
provide McDATA with [*] days prior written notice of Mandatory Changes prior to
implementing such changes, however this period may be reduced if the change
involves safety or reliability, or if otherwise required by law.

10.3     PRODUCT END-OF-LIFE. Upon EOL notification from BROCADE to McDATA for
the Hardware subassemblies and not withstanding any of the provisions in this
section, BROCADE and McDATA will work together to facilitate a mutually agreed
upon EOL plan. Provided that McDATA issues [*] no fewer than the following [*]
of the following Hardware subassemblies per [*]: [*] as set forth in Exhibit A,
and schedules a [*] of all such Hardware subassemblies in such [*] with a
minimum of [*] leadtime for [*], then BROCADE agrees [*] the manufacture, sale
or distribution of any such Product ("End of Life" or "EOL"). The pricing for
Hardware subassemblies purchased at [*] shall be the prices set forth in Exhibit
A in the [*]. In the contrary case, BROCADE shall have the right to provide
McDATA with one hundred eighty (180) days' written notice of intent to EOL any
Product provided to McDATA hereunder. McDATA may place orders for any demand
during the first ninety (90)

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days of such EOL notice for delivery of affected Product(s) prior to the end of
the notice period. To the extent that such orders exceed McDATA's previous
forecast for such Product(s), the orders shall be non-cancelable. BROCADE shall
accept only forecasted orders in the last [*] days of the stated notice period,
and all such orders shall be non-cancelable. In addition, during such notice
period, BROCADE shall have the right, in its sole discretion, to require payment
for Product(s) from McDATA at the time such purchase orders are submitted. If
any component of any of the four Hardware subassembly products set forth on
Exhibit A is declared EOL and independent of McDATA's ability to maintain the
minimum purchase requirement of the affected Hardware subassembly unit, BROCADE
may declare the affected Hardware subassembly product EOL. Within [*] days of
EOL notification from BROCADE ("EOL Notification Period"), McDATA may (i) [*]
for the affected Hardware subassembly component, or (ii) notify BROCADE in
writing that McDATA will [*] for sufficient units of the relevant component from
[*] and arrange for the [*] to the facility designated by BROCADE ("Last Buy
Notification"). Provided that BROCADE receives such Last Buy Notification within
[*] days from the date of BROCADE's EOL notification, the parties will negotiate
in good faith the terms whereby BROCADE would [*] the affected Hardware
subassembly. In no event, however, shall BROCADE be required to resume the
manufacture of an affected Hardware subassembly unit after [*] days from the end
of the EOL Notification Period. BROCADE shall not be obligated to qualify new
components, develop alternative sources or redesign the affected Hardware
subassembly unit.

11.0     CROSS LICENSE AND COVENANT NOT TO SUE

11.1     DEFINITIONS. For the purposes of this Agreement, the following terms
shall have the following definitions:

(a)      "Fibre Channel-based Products" means technology and materials for
switching and interconnect hardware and related software involved with the
development of, operation, management services and software for Fibre Channel
products.

(b)      "BROCADE Know-how" means the designs, techniques, inventions,
practices, methods, knowledge, skill, experience, test data and cost, sales and
manufacturing data relating to the manufacture of Fibre Channel-based Products
developed or acquired by BROCADE or acquired by license or otherwise with a
royalty-free right of sublicense or license as of April 1, 1998, and in the
possession of McDATA as of April 1, 1998.

(c)      "BROCADE Patents" means the existing BROCADE patents and patent
applications as of April 1, 1998 whose claims would be infringed by the
manufacture, use, sale, offer for sale, import or other disposition of Fibre
Channel-based Products; including without limitation all foreign counterparts
issued or issuing on such patents or patent applications. It is understood that
the license set forth in Section 11.2 is not contingent upon actual practice of
the BROCADE Patents during the Patent Term.

(d)      "McDATA Know-how" means the designs, techniques, inventions, practices,
methods, knowledge, skill, experience, test data and cost, sales and
manufacturing data relating to the manufacture of Fibre Channel-based Products
developed or acquired by McDATA or acquired by license or otherwise with a
royalty-free right of sublicense or license as of April 1, 1998, and in the
possession of BROCADE as of April 1, 1998. Notwithstanding the foregoing,
BROCADE acknowledges that McDATA Know-how shall not include McDATA know-how
developed by McDATA or [*] or McDATA know-how received from [*] in relation to
US Patent Application Serial

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Numbers [*] and [*] for products jointly developed by McDATA and [*] or for
products developed by McDATA for [*].

(e)      "McDATA Patents" means, except as to the joint patents between McDATA
and [*] (US Patent Application Serial Numbers [*] and [*]) which patent
applications are directly related to the products jointly developed by McDATA
for [*] referenced in the Agreement between McDATA and BROCADE dated March 26,
1998, the existing McDATA patents and patent applications as of April 1, 1998
whose claims would be infringed by the manufacture, use, sale, offer for sale,
import or other disposition of Fibre Channel-based Products; including without
limitation all foreign counterparts issued or issuing on such patents or patent
applications. It is understood that the license set forth in Section 11.2 is not
contingent upon actual practice of the McDATA Patents during the Patent Term.

(f)      "Patent Term" means the term of the patent cross-license contained in
Section 11.2.

11.2     CROSS-LICENSE AND COVENANT NOT TO SUE. Subject to the terms and
conditions of this Agreement, (i) BROCADE hereby grants to McDATA a perpetual,
non-exclusive, non-transferable, worldwide, royalty-free license, without the
right to sublicense, under the BROCADE Patents and the BROCADE Know-how to make,
use, sell, offer to sell, lease, import and otherwise transfer the Fibre
Channel-based Products and BROCADE covenants that, to the extent that McDATA and
McDATA's customers and distributors exercise the rights expressly granted to
McDATA hereunder, BROCADE will not assert any patent or trade secret rights
against McDATA or its direct or indirect customers, and (ii) McDATA hereby
grants to BROCADE a perpetual, non-exclusive, non-transferable, worldwide,
royalty-free license, without the right to sublicense, under the McDATA Patents
and the McDATA Know-how to make, use, sell, offer to sell, lease, import and
otherwise transfer the Fibre Channel-based Products and McDATA covenants that,
to the extent that BROCADE and BROCADE's customers and distributors exercise the
rights expressly granted herein, McDATA will not assert any patent or trade
secret rights against BROCADE or its direct or indirect customers. For the
purposes of the patent licenses set forth above, "perpetual" shall mean the life
of the applicable patents. Each party shall be responsible for overseeing
compliance with the terms and conditions of this Agreement, and shall be liable
for any breach of its obligations hereunder. Nothing in this Section 11 shall be
construed to obligate either party to disclose any information or materials to
the other party with respect to the patents and know-how of such party, whether
or not in existence on or before April 1, 1998.

11.3     OWNERSHIP

(a)      BROCADE. McDATA acknowledges and agrees that BROCADE is and shall
remain the sole owner of the BROCADE Patents and the BROCADE Know-how and that
McDATA has no rights in or to the BROCADE Patents or the BROCADE Know-how other
than the license set forth herein.

(b)      MCDATA. BROCADE acknowledges and agrees that McDATA is and shall remain
the sole owner of the McDATA Patents and the McDATA Know-how and that BROCADE
has no rights in or to the McDATA Patents or the McDATA Know-how other than the
license set forth herein.

11.4     PROSECUTION EXPENSES. Each party shall be responsible for the payment
of the prosecution expenses related to the patents that such party owns.

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11.5     DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED HEREIN, BROCADE
AND McDATA HEREBY EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES, REPRESENTATIONS OR
CONDITIONS OF ANY KIND OR NATURE, WHETHER EXPRESS, IMPLIED OR STATUTORY,
RELATING TO EACH PARTY'S RESPECTIVE PATENTS AND KNOW-HOW SET FORTH IN THIS
SECTION 11, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT OF THIRD
PARTY RIGHTS. Without limiting the generality of the foregoing, neither BROCADE
nor McDATA warrant the patentability of any information or materials, or the
safety, usefulness or accuracy of any information provided hereunder.

12.0     CONFIDENTIAL INFORMATION AND ADVERTISING

12.1     DEFINITION. "Confidential Information" means: (i) all source code and
all technical or business information furnished in any form or medium, whether
oral, written, graphic or electronic by one party to the other pursuant to this
Agreement, including without limitation all analyses, architecture, code,
concepts, data, designs, discoveries, forecasts, ideas, information, inventions,
know-how, knowledge, layouts, mask works, methodologies, plans, processes,
products, projections, protocols, prototypes, schematics, skills, structure,
techniques, and/or work product, tangible or intangible, whether or not
patentable, and all originals and all copies of any compilations, database,
drawing, file (including on any computer storage media), memoranda, model,
notes, prototype, record, report, software, summary, writing or other materials
whether tangible or not, and whether or not eligible for copyright protection,
or any other information relating to any research project, work in progress,
future development, scientific engineering, manufacturing, marketing or other
business or financial plan relating to either party, its present or future
products, sales, suppliers, customers, employees, investors or business; and
(ii) all other non-public information that the party disclosing the information
(the "Disclosing Party") designates at the time of disclosure as being
confidential, or if disclosed orally or visually is identified as such prior to
disclosure and summarized, in writing, by the Disclosing Party to the receiving
party (the "Recipient") within [*] days of initial disclosure, including without
limitation, the terms and conditions of this Agreement, and information
regarding either party's financial condition, business opportunities, plans for
development of future products or new versions of existing products, know-how,
technology or customers.

12.2     ACCESS TO AND USE OF CONFIDENTIAL INFORMATION. A party receiving
Confidential Information agrees (a) that it shall use the same degree of care
and means that it utilizes to protect its own information of a similar nature,
but in any event not less than reasonable care and means, to prevent the
unauthorized use or the disclosure of such confidential information to third
parties, (b) not to disclose or use any of such Confidential Information for any
purpose except as necessary and consistent with the terms of this Agreement, (c)
to limit the use of and access to such Confidential Information to such
employees and subcontractors who have a need to know such Confidential
Information and have signed legally binding non-disclosure agreements, and (d)
that it will promptly notify the other party in writing of any unauthorized
disclosures and/or use thereof. The aforementioned notice shall include a
detailed description of the circumstances of the unauthorized disclosure or use
and the parties involved therewith.

12.3     EXCLUSIONS. Notwithstanding the foregoing, Confidential Information
does not include information that: (a) is or becomes generally available to the
public other than (i) as a result of a disclosure by Recipient or its employees
or any other person who receives such information in violation of this
Agreement, (b) is or becomes available to Recipient on a non confidential basis
from a source which is entitled to disclose it to Recipient, (c) can be
documented, by adequate written records, was developed by employees or agents of
the Recipient independently

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of and without reference to any information communicated to Recipient by the
Disclosing Party, or (d) is required by law to be disclosed by the Recipient. A
disclosure of Confidential Information (x) in response to a valid order by a
court or other governmental body, (y) otherwise required by law, or (z)
necessary to establish the rights of either party under this Agreement shall not
be considered to be a breach of this Agreement or a waiver of confidentiality
for other purposes; provided however, that the party disclosing such information
shall provide prompt written notice thereof to the other party to enable it to
seek a protective order or otherwise prevent such disclosure.

12.4     INJUNCTIVE RELIEF. In the event of an unauthorized use, distribution or
disclosure of any Confidential Information, the parties agree that the
disclosing party will not have an adequate remedy at law. Therefore, injunctive
or other equitable relief may be appropriate to restrain such use, distribution
or disclosure, threatened or actual.

12.5     ADVERTISING AND RELEASES. Except as may be required by law or
regulation, no news release, material that references this Agreement or the
other party shall be issued by either party without the prior written consent of
the other party.

13.0     PROPRIETARY RIGHTS

Subject to the provisions of Section 11 of this Agreement, the Intellectual
Property Rights in and to the ASIC Firmware, BROCADE ASIC, Licensed Software and
the Products are and will remain the sole and exclusive property of BROCADE and
its suppliers, if any, whether the ASIC Firmware, BROCADE ASIC, and the Products
are separate or combined with any other products. BROCADE's rights under this
Section 13.0 will include, but not be limited to: (i) all copies of the ASIC
Firmware, and the Licensed Software portion of the Products; (ii) all
Intellectual Property Rights in the ASIC Firmware, BROCADE ASIC, and the
Products; and (iii) all modifications to, and Derivative Works based upon, the
BROCADE ASIC and the Products. McDATA shall own all Intellectual Property Rights
in and to the authorized modifications to and Derivative Works based upon the
ASIC as set forth in Section 2.7 and McDATA Functionality. McDATA shall retain
all right, title and interest, including manufacturing control and worldwide
Intellectual Property Rights in and to the McDATA Functionality. For the
purposes of this Agreement, "Intellectual Property Rights" means copyright
rights (including, without limitation, the exclusive right to use, reproduce,
modify, distribute, publicly display and publicly perform the copyrighted work),
trademark rights (including, without limitation, trade names, trademarks,
service marks, and trade dress), patent rights (including, without limitation,
the exclusive right to make, use and sell), trade secrets, moral rights, right
of publicity, authors' rights, contract and licensing rights, goodwill and all
other intellectual property rights as may exist now and/or hereafter come into
existence and all applications, renewals and extensions thereof, regardless of
whether such rights arise under the law of the United States or any other state,
country or jurisdiction. "Moral Rights" means the inalienable right to claim
authorship to or to object to any distortion, mutilation, or other modification
in relation to a work, whether or not such would be prejudicial to the author's
reputation, and any similar right, existing under common or statutory law or any
country in the world or under any treaty, regardless or whether or not such
right is denominated or generally referred to as a "moral right."

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14.0     INDEMNITY

14.1     INFRINGEMENT CLAIMS. BROCADE will indemnify, defend and hold McDATA
harmless from any and all damages, liabilities, costs and expenses finally
awarded against McDATA as a result of any claim, judgment or adjudication
against McDATA which claims that (i) any of the Products, as furnished by
BROCADE under this Agreement, infringes or misappropriates any US patent, any
copyright or trademark, or (ii) the ASIC Firmware infringes any US patent or any
copyright, or (iii) the design of the ASIC, as furnished by BROCADE to LSI
Logic, infringes any US patent or any copyright. If a Product, ASIC Firmware or
the BROCADE ASIC are held in any such suit to infringe and the use of such
Product, ASIC Firmware or BROCADE ASIC is enjoined, BROCADE will have the
option, at its own discretion and expense, to (w) procure for McDATA the right
to continue using such Product, ASIC Firmware or BROCADE ASIC, (x) replace such
Product, ASIC Firmware or BROCADE ASIC with non-infringing Product, ASIC
Firmware or BROCADE ASIC of substantially equivalent quality and purpose, (y)
modify such Product, ASIC Firmware or BROCADE ASIC to make it non-infringing,
provided the modified Product, ASIC Firmware or BROCADE ASIC remains
substantially equivalent in quality and purpose to such Product, ASIC Firmware
or BROCADE ASIC, or (z) terminate the Agreement and return to McDATA the
depreciated value of such Product, ASIC Firmware or BROCADE ASIC based on
straight line depreciation over [*].

14.2     EXCEPTIONS. BROCADE will not be obligated to defend or be liable for
costs and damages to the extent that infringement, or a claim thereof, arises
out of or is related to (a) a modification made to Product, ASIC Firmware or
BROCADE ASIC by McDATA or a third party made in violation of this Agreement, (b)
the combination of a Product, ASIC Firmware or BROCADE ASIC with products or
data not provided by BROCADE, (c) use of other than the latest unmodified
release of Product, ASIC Firmware or BROCADE ASIC made available to McDATA by
BROCADE if such infringement would have been avoided by the use thereof, (d)
McDATA's failure to use or deploy modifications to the ASIC Firmware or Licensed
Software provided to McDATA by BROCADE to avoid infringement, (e) the direct
result of the manufacture of the BROCADE ASIC by LSI Logic. Notwithstanding the
foregoing, the parties acknowledge and agree that BROCADE shall have no
obligation to defend or indemnify McDATA against claims that the Products
infringe the Intellectual Property Rights of third parties pursuant to the
foregoing Section unless McDATA: (x) promptly informs BROCADE of such suit or
proceeding, and furnishes to BROCADE a copy of each communication, notice or
other action relating thereto, (y) gives BROCADE the authority, information and
reasonable assistance necessary to settle or litigate such suit or proceeding,
and (z) does not settle, or agree to settle, any such suit or proceeding without
the prior written permission of BROCADE, which will not be unreasonably withheld
or delayed.

14.3     LIMITATIONS. THE FOREGOING STATES THE ENTIRE LIABILITY OF BROCADE FOR
INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT BY ANY PRODUCT, ASIC FIRMWARE OR
BROCADE ASIC FURNISHED UNDER THIS AGREEMENT.

14.4     MCDATA INDEMNITY. McDATA agrees to defend, indemnify and hold BROCADE
harmless from any and all losses, damages, liabilities, costs and expenses
(including but not limited to reasonable attorneys' fees and costs of
litigation) incurred by BROCADE as a result of any third party claim, regardless
of the form of action, arising from (i) McDATA's misuse or misrepresentation of
the Products or Documentation or Intellectual Property Rights contained therein,
(ii) McDATA's breach of its representations or warranties under this Agreement,
(iii) McDATA's false advertising, intentional wrongdoing, gross negligence, or
product liability arising from the marketing, sale or

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distribution of a McDATA Product, or (iv) McDATA's modifications to the ASIC
Firmware, the BROCADE ASIC or the Products furnished by BROCADE to McDATA
hereunder (if the unmodified version of the information or materials provided by
BROCADE to McDATA would not have so infringed), provided that BROCADE promptly
notifies McDATA of any such claim in writing, gives McDATA sole control of the
defense and all related settlement negotiations, and cooperates with McDATA in
defending or settling any such claim.

15.0     LIMITED WARRANTY AND WARRANTY DISCLAIMER

15.1     MUTUAL WARRANTY. Each party certifies and represents to the other party
that as of the Effective Date, it has full power, right and authority to execute
this Agreement, to fulfill all its rights and obligations herein.

15.2     PRODUCT WARRANTY TO MCDATA. BROCADE warrants to McDATA that the
Products (except for Products which may be refurbished pursuant to Section 15.4)
are new , and that, for a period of [*] months after the date of the shipment of
the Products to McDATA (the "Hardware Warranty Period") (i) the Hardware will
substantially conform to BROCADE's standard manufacturing [*] test processes as
set forth in Exhibit J, and (ii) the Products will be Year 2000 compliant. In
addition, BROCADE warrants to McDATA that for a period of ninety (90) days after
the date of shipment of the Products to McDATA (the "Software Warranty Period")
the Licensed Software will substantially conform to the applicable standard
BROCADE product specifications for the Licensed Software. For the purposes of
this Agreement, "Year 2000 compliant" means that all Products and Documentation
provided to McDATA will correctly interpret and manipulate all date-related
data, when dates are in the 20th and 21st centuries, and that no delivery or
performance of such Products and Documentation shall be materially interrupted
or delayed as a result of the occurrence of or processes driven by dates after
December 31, 1999, provided that the non-BROCADE hardware, software and other
system components with which the Products and Documentation interact, directly
or indirectly (including without limitation the McDATA Products and all other
third party information, materials, components, hardware and software or any
kind), also correctly interpret and manipulate all such date-related data.

15.3     ASIC WARRANTY. BROCADE warrants to McDATA that the design information
furnished to LSI Logic for the manufacture of the BROCADE ASIC shall be
sufficient to enable LSI Logic to manufacture such BROCADE ASIC in substantial
conformance to the ASIC Specifications; provided, however, that nothing in this
Section 15.3 shall be construed to impose responsibility upon BROCADE for
defects in any such BROCADE ASIC introduced by LSI Logic in the course of the
LSI Logic manufacturing process. In the event that McDATA provides BROCADE with
written notice detailing a substantial non-conformity of the BROCADE ASIC with
the ASIC Specifications due to the design thereof and not the manufacture of
such BROCADE ASIC by LSI Logic, BROCADE will use diligent efforts to coordinate
with LSI Logic to remedy any such substantial non-conformity.

15.4     LIMITATIONS TO WARRANTY. McDATA shall notify BROCADE of a failure by
the Product to substantially perform in accordance with the relevant standards
set forth in Section 15.2, as applicable, during the applicable Hardware
Warranty Period or Software Warranty Period. If BROCADE confirms such Product is
defective after McDATA, at McDATA's expense, has returned the Product to a
BROCADE-authorized repair center for inspection, then, BROCADE will at its
election promptly repair or replace any such Product within [*] days of receipt
thereof, at no charge to McDATA. Replacement Product may be either new or
re-manufactured and certified as new (in accordance with BROCADE's standard
manufacturing test processes or, with regard to the Licensed Software, the
applicable specifications). In the event that the Product returned is not
defective, McDATA will be responsible for

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freight costs for return shipment to McDATA. The foregoing warranties shall not
apply to Products that have been (i) damaged by accident through no fault of
BROCADE, Acts of God, shipment, improper installation, abnormal physical or
electrical stress, misuse or misapplication, as determined by BROCADE in its
sole reasonable discretion, or (ii) modified without BROCADE's express written
acceptance of such modification for warranty purposes. BROCADE reserves the
right to charge additional fees for repairs or replacements performed on
Products after the Hardware Warranty Period or Software Warranty Period, as
applicable, has terminated.

15.5     MCDATA'S EXCLUSIVE REMEDY. McDATA acknowledges and agrees that its sole
and exclusive remedy for breach of the limited Product warranties is as set
forth in Section 15.4.

15.6     TITLE WARRANTY. BROCADE warrants that title to all Products and ASIC
Firmware delivered to McDATA by BROCADE shall be free and clear of all liens,
encumbrances or other restrictions.

15.7     DISCLAIMER. THE FOREGOING PRODUCT WARRANTIES IN SECTION 15 ARE IN LIEU
OF, AND BROCADE EXPRESSLY DISCLAIMS, ALL OTHER REPRESENTATIONS, WARRANTIES OR
CONDITIONS, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF NON-INFRINGEMENT OF THIRD PARTY RIGHTS,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.

15.8     [*] WARRANTY In addition to the warranties specified above, BROCADE
warrants all Hardware subassemblies against [*] for a period of [*] years after
date of shipment of the Hardware subassemblies from BROCADE. An epidemic failure
means:

         (i) the occurrence of the [*] the Hardware subassembly [*] more
         frequently that the calculated Mean Time Between Failure ("MTBF"), as
         specified in Exhibit K attached hereto and incorporated herein by
         reference, for that Hardware subassembly within a [*], provided [*] is
         caused by the Hardware subassembly and is not McDATA system or McDATA
         environment induced. In the case of the [*], BROCADE shall [*] of the
         affected Hardware subassembly population (after [*] is identified), as
         long as the [*], as specified in Exhibit K, remains at [*]. BROCADE
         calculates the MTBF for each Hardware subassembly using Belcore
         Specification TR332, Issue 5 parts count method.

         (ii) the occurrence of more than [*] that is considered a hazard class
         2 or above (approved and initialed by both parties) safety incident
         where the customers life or property is damaged due to the [*].

16.0     LIMITATION OF LIABILITY AND INSURANCE

16.1     NUCLEAR, AVIATION OR LIFE SUPPORT APPLICATION. McDATA acknowledges that
Product is not specifically designed, manufactured or intended for use in
connection with the design, construction, maintenance, and/or operation of any
(i) nuclear facility, (ii) aircraft, aircraft communication or aircraft ground
support system, or (iii) life support system. Except as otherwise provided
herein, BROCADE shall not be liable to McDATA, in whole or in part, for any
claims or damages arising from such use, or resale by McDATA to a third party
for such purposes, and McDATA agrees not to sell into nuclear, aviation or life
support application and shall include a provision in its Customer agreement a
statement relating to the Products' inapplicability to such applications.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       18
<PAGE>   19

16.2.    LIMITATION OF LIABILITY.

(a)      EXCEPT FOR BREACHES OF SECTION 12 AND 14, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY, FOR INCIDENTAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, LOSS OF
PROFIT, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE),
PRODUCT LIABILITY OR OTHERWISE, AND WHETHER OR NOT THE PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH LOSS.

(b)      WITHOUT LIMITING THE GENERALITY OF THE FOREGOING SUBSECTION, EITHER
PARTY'S TOTAL LIABILITY (EXCEPT FOR BREACHES OF SECTIONS 12 AND 14) TO THE OTHER
PARTY UNDER THIS AGREEMENT WILL BE LIMITED TO (a) WITH REGARD TO THE PRODUCTS,
[*], OR (b) WITH REGARD TO THE ASIC FIRMWARE OR BROCADE ASIC, [*].

16.3     INSURANCE. Each party agrees during the term of this Agreement to carry
the amount that party deems to be sufficient liability insurance to meet its
indemnification obligations under this Agreement.

17.0     EXPORTATION; GOVERNMENT APPROVAL AND FOREIGN CORRUPT PRACTICES ACT

17.1     EXPORT. McDATA acknowledges that all Products including documentation
and other technical data are subject to export controls imposed by the U.S.
Export Administration Act of 1979, as amended (the "Act"), and the regulations
promulgated thereunder. McDATA warrants and represents to BROCADE that it will
not export or re-export (directly or indirectly) any Products or documentation
or other technical data therefor, in whole or in part, in violation of the Act
and the regulations thereunder. McDATA shall indemnify, defend and hold BROCADE
harmless against any claims for cost, damage, expense or liability arising out
of or in connection with any breach of this Section.

17.2     GOVERNMENT RIGHTS. The Licensed Software is "commercial computer
software" as defined in the applicable provisions of the Federal Acquisition
Regulation (the "FAR") and supplements thereto, including the Department of
Defense ("DoD") FAR Supplements (the "DFARS"). The parties acknowledge that the
Licensed Software was developed entirely at private expense and that no part of
the Licensed Software was first produced in the performance of a Government
contract. If McDATA supplies the Licensed Software to a U.S. Government agency,
in accordance with FAR 12.212 and its successors or DFARS 227.7202 and its
successors, as applicable, McDATA shall license the Licensed Software to the
Government subject to the terms of this Agreement.

17.3     GOVERNMENTAL APPROVAL. If any approval with respect to this Agreement,
or the notification or registration thereof, will be required at any time during
the term of this Agreement, with respect to giving legal effect to this
Agreement in the jurisdiction where McDATA Products are distributed, or with
respect to compliance with exchange regulations or other requirements so as to
assure the right of remittance abroad of U.S. dollars pursuant to this
Agreement, McDATA will immediately take whatever steps may be necessary in this
respect, and any charges incurred in connection therewith will be for the
account of McDATA. McDATA will keep BROCADE currently informed of its efforts in
this connection. BROCADE will be under no obligation to ship Products to McDATA
hereunder until McDATA has provided BROCADE with satisfactory evidence that such
approval, notification or registration is not required or that it has been
obtained.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       19
<PAGE>   20

18.0     DEFAULT AND TERMINATION

18.1     DEFAULT. In addition to any other rights or remedies which may be
available at law or in equity, either party may terminate this Agreement upon
the occurrence of any one of the following:

(a)      In the event of a material breach by either party in the performance of
their obligations hereunder, the party alleging the breach shall give written
notice specifying the nature and extent of the breach to the other party and
such party shall have [*] days thereafter to cure the breach. If the breach is
not cured within the [*] day period, termination shall be come effective on the
[*] day following the written notice;

(b)      In the event of proceedings in bankruptcy or insolvency invoked by or
against either party, or in the event of the appointment of a receiver, or the
making an assignment for the benefit of creditors; or proceedings are commenced
against such party under any bankruptcy, insolvency or debtor's relief law, if
such proceeding is not vacated or set aside within [*] days after the date of
commencement thereof; or

18.2     TERMINATION FOR CONVENIENCE. In the event market conditions change to
the extent that the Product is no longer competitive, McDATA may terminate this
agreement for convenience. In that event, McDATA agrees to provide BROCADE with
[*] days written notice of its intent to terminate for convenience. Further,
McDATA agrees to reasonably compensate BROCADE for work in progress as of the
date of notification.

18.3     EFFECT OF TERMINATION. Upon the expiration or termination of this
Agreement, however arising:

18.3.1   Except for the retention of [*] of the Confidential Information of the
other party solely for support purposes, each party will cease its use of the
Confidential Information of the other party, and will return or destroy, at the
other party's direction, all such Confidential Information and any copies or
portions thereof which are incorporated into documents or archives;

18.3.2   If this Agreement is terminated pursuant to Section 18.1, the payment
of all amounts owed by McDATA to BROCADE as of the effective date of such
expiration or termination shall accelerate, and such payments shall become
payable as of such effective date, whether or not longer payment periods had
originally been established; and

18.3.3   Provided that BROCADE has not terminated this Agreement due to McDATA's
material breach of the terms of this Agreement, McDATA may submit orders for
Products, including without limitation those Products which BROCADE has agreed
not to discontinue pursuant to the terms and conditions set forth in Section
10.3 ("Product End of Life"), which orders are subject to approval by BROCADE in
its sole discretion, provided that McDATA pays BROCADE for such Product(s) at
the time such purchase orders are accepted by BROCADE. The parties agree that
orders submitted as set forth in this Section shall not be considered approved
by BROCADE until and unless BROCADE has notified McDATA of its acceptance of
such order in writing pursuant to Section 5.2 hereof.

18.4     NONEXCLUSIVE REMEDY. The exercise by either party of any remedy under
this Agreement will be without prejudice to its other remedies under this
Agreement or otherwise.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       20
<PAGE>   21

18.5     SURVIVAL. The parties' obligations under Sections 2.4.2(c)
("Ownership"), 2.4.4 ("Documentation Warranty"), 2.5 ("Restrictions"), 2.6
("ASIC License"), 2.7 ("ASIC Firmware License"), 4.0 ("Taxes"), 8.1 ("Software
License Agreement"), 10.2 ("Mandatory Product ECO's"), 11.0 ("Cross License and
Covenant Not to Sue"), 11.3 ("Ownership"), 11.5 ("Disclaimer of Warranties"), 12
("Confidential Information and Advertising"), 13 ("Proprietary Rights"), 14
("Indemnity"), 15 ("Limited Warranty and Warranty Disclaimer"), 16.2
("Limitation of Liability"), 18 ("Default and Termination"), 19 ("General") and
Exhibit D shall survive any termination and/or expiration of this Agreement.

19.0     GENERAL

19.1     ASSIGNMENT. This Agreement will bind and inure to the benefit of each
party's permitted successors and assigns. Neither party may assign this
Agreement, in whole or in part, without the other party's written consent which
consent will not be unreasonably withheld, except that BROCADE may assign its
rights and delegate its duties hereunder in connection with any merger,
reorganization, consolidation, or other business combination, or the sale of all
or substantially all of its assets. Any attempt to assign this Agreement without
such consent will be null and void.

19.2     INDEPENDENT CONTRACTORS. The relationship between BROCADE and McDATA
established by this Agreement is that of independent contractors. No franchise,
joint venture or partnership is established by this Agreement. Neither party
hereunder is the agent, broker, partner, employee, or legal representative of
the other for any purpose, and neither party shall have the right to bind or
otherwise obligate such other party.

19.3     GOVERNING LAW; ATTORNEYS FEES. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California, excluding
its conflicts and choice of law rules, and shall not be construed in accordance
with the United Nations Convention for the International Sale of Goods (CISG).
In the event that any dispute between the parties arises out of or is related to
any of the provisions of this Agreement, and/or the performance or termination
thereof, the prevailing party in any such action shall recover all of its costs,
including reasonable attorneys' fees.

19.4     ARBITRATION. Except with respect to claims for emergency or preliminary
injunctive relief with respect to breach of provisions in Section 11 above or
breach of any Intellectual Property Rights hereunder, any dispute, claim or
controversy arising out of or relating to this Agreement, or the interpretation,
making, performance, breach or termination thereof, shall be finally settled by
binding arbitration in Santa Clara County, California under the Rules of
Arbitration of the American Arbitration Association, by a panel of three
arbitrators reasonably familiar with the technology and business pertaining to
the products covered by this Agreement, appointed in accordance with said Rules.
The arbitration and all pleadings and written evidence shall be in the English
language. Judgment on the award entered by the arbitrator may be entered in any
court having jurisdiction thereof.

19.5     NOTICES. Notices under this Agreement shall be sufficient only if sent
by certified mail or air express, return receipt requested, or other
nationally-recognized delivery service, or personally delivered to a party.
Notice by mail shall be deemed received on actual receipt. Notices to McDATA
shall be sent to the attention of the Contracts Department, and notices to
BROCADE shall be sent to the attention of "Legal Services."

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       21
<PAGE>   22

19.6     NO WAIVER. The failure of either party to enforce any of the provisions
hereof shall not be construed to be a waiver of the right of such party to
thereafter enforce any such provision or any other provision.

19.7     UNENFORCEABLE PROVISIONS. If any term of this Agreement is found to be
illegal or unenforceable, the remaining portions of this Agreement shall remain
in effect, and the parties agree to negotiate in good faith substitute
enforceable terms with similar economic impact on the parties.

19.8     FORCE MAJEURE. Neither party will be responsible for any failure to
perform due to causes beyond its reasonable control (each a "Force Majeure"),
including, but not limited to, acts of God, war, riot, embargoes, acts of civil
or military authorities, denial of or delays in processing of export license
applications, fire, floods, earthquakes, accidents, strikes, or fuel crises,
provided that such party gives prompt written notice thereof to the other party.
The time for performance will be extended for a period equal to the duration of
the Force Majeure, but in no event longer than sixty (60) days.

19.9     MODIFICATIONS. Any amendments and modifications to this Agreement shall
be in writing signed by both parties.

19.10    ENTIRE AGREEMENT. Except as provided in (i) the Non-Disclosure
Agreement executed by and between the parties as of February 23, 1999 set forth
hereto as Exhibit I, (ii) the Memorandum of Understanding executed by and
between the parties as of February 23, 1999, or (iii) the Settlement Agreement
and Mutual Release between the parties dated April 14, 1998 set forth hereto as
Exhibit F, this Agreement is the entire understanding between McDATA and BROCADE
with respect to the subject matter of this Agreement, and supersedes:

(a)      All prior or contemporaneous proposals, whether oral or written, all
negotiations, conversations or discussions between the parties, and industry
custom or past course of dealing, relating to such subject matter,

(b)      The Purchase and License Agreement entered into between the parties on
May 31, 1996,

(c)      The Technology License and Development Agreement entered into between
the parties on November 1, 1996,

(d)      The Software License Agreement entered into between the parties on
October 2, 1998,

(e)      The Mutual Confidentiality and Non-Disclosure Agreement entered into
between the parties on February 12, 1996; and

(f)      The two-page Agreement entered into between the parties on March 26,
1998.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       22
<PAGE>   23

                                    EXHIBIT A

                                   PRICE LIST

SILKWORM SUBASSEMBLIES

                                          [*]        [*]        [*]        [*]
Product Number         Subassembly       Units      Units      Units      Units
--------------         -----------       -----      -----      -----      -----

MD1001                     [*]            [*]        [*]        [*]        [*]

MD1002                     [*]            [*]        [*]        [*]        [*]

MD1003                     [*]            [*]        [*]        [*]        [*]

MD1015                     [*]            [*]        [*]        [*]        [*]

FW-0000000007-0002  Licensed Software         [*] /bundle/motherboard
                    (regardless of number of units)

                    BROCADE WebTools
                    BROCADE SES
                    BROCADE Zoning

-        McDATA acknowledges and agrees that the lead time for forecasted new
         orders as of the Effective Date is sixty (60) days.
-        McDATA agrees that subassemblies are to be ordered in [*] in minimum
         increments of [*].
-        McDATA acknowledges that subassemblies have not been [*].

REPAIR PRICING

         MD1001: [*]
         MD1002  [*]       [*]
         MD1003  [*]       [*]
         MD1015  [*]       [*]

TIME AND MATERIALS

BROCADE will evaluate "Out of Warranty" returns of each of the above Hardware
subassemblies for a fixed evaluation fee of [*] per Hardware subassembly
("Evaluation Fee"). In the event that McDATA authorizes the repair of the
Hardware subassemblies, the applicable Evaluation Fee will be applied toward the
repair cost. In the event the rate of the subassemblies tested to the BROCADE
standard manufacturing [*] process exceed a "No Trouble Found" ("NTF") rate
greater than [*] during any given [*] day period, the Evaluation Fee will be
charged for all subassemblies exceeding the [*] NTF rate for the following [*]
day period. BROCADE will use

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       23
<PAGE>   24

commercially reasonable efforts to repair subassemblies within [*] days of the
receipt of the written or email approval by McDATA of the repair or the quote by
BROCADE. All such repairs will be subject to a [*] (according to the terms and
limitations set forth in Section 15 of this Agreement) from the date of shipment
by BROCADE.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       24
<PAGE>   25

                                    EXHIBIT B

                        SERVICE AND SUPPORT REQUIREMENTS

1.0      SERVICE AND SUPPORT REQUIREMENT

         McDATA will be responsible for working directly with Customers, and
         BROCADE Support will work directly with McDATA to support McDATA
         personnel, as necessary. McDATA represents and warrants that it is
         experienced in, capable of, and staffed to provide, Level 1 and Level 2
         support (as defined below). BROCADE offers training programs for
         BROCADE's standard fees as set forth in this Exhibit B (which may be
         amended from time to time upon written notice) to assist in attaining
         this level of expertise on BROCADE Products. BROCADE Support will
         accept calls for technical assistance only from Level II engineers.

         BROCADE will provide Level 3 support to McDATA (as defined below).

2.0      SUPPORT LEVEL DEFINITIONS

2.1      LEVEL 1 SUPPORT

                  Level 1 support is the first line, direct Customer contact,
                  most likely via a telephone call handling group provided by
                  McDATA.

                  Level One support includes:

                  -        First contact direct Customer interaction
                  -        Information collection and analysis
                  -        Identification of whether the problem is known and
                           has a known solution
                  -        Troubleshooting and problem reproduction
                  -        Problem report administration and tracking

                  The parties agree that Customers shall not have the right to
                  contact BROCADE directly for questions related to the
                  Products.

2.2      LEVEL 2 SUPPORT

                  Level 2 support is "technical support" provided by McDATA
                  personnel. Level 2 support is typically provided by experts in
                  the applicable Product and who serve as the escalation point
                  for Level 1. Level 2 support personnel are expected to resolve
                  all known problems, installation and configuration issues,
                  assist in firmware or driver updates at the Customer site,
                  search BROCADE posted Technical Notes and other technical
                  information supplied that will assist in providing problem
                  resolutions. All pertinent data shall be entered in McDATA's
                  problem tracking database.

                  Should the Level 2 analyst be unable to resolve a problem,
                  either because of lack of expertise, exhausted troubleshooting
                  knowledge, or expiration of the allotted Level 2 resolution
                  time, the Level 2 analyst may escalate the problem to Level 3
                  for resolution. Level 2 personnel of

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       25
<PAGE>   26

                  McDATA will continue to diligently work with Level 3 personnel
                  of BROCADE to accomplish resolution. Level 2 personnel of
                  McDATA will communicate all resolutions back to the Customers.

                  Escalations should be presented to BROCADE engineers in the
                  form of a problem tracking data base record with all pertinent
                  configuration detail and failure information or symptoms
                  documented in detail.

                  In an effort to maintain an efficient support organization and
                  crisp exchange of information, McDATA will limit the number of
                  support personnel ( Level 2) authorized to contact BROCADE
                  (Level 3) to 5 and ensure that these personnel have attended
                  Courses 1, 2, and 3 taught at the BROCADE training facility.

2.3      LEVEL 3 SUPPORT

                  Level 3 support is provided by BROCADE System Engineers (SE)
                  and/or Technical Support Engineers (TSE). Level 3 is the first
                  point of contact for technical issues between BROCADE and
                  McDATA. Once a problem is accepted by BROCADE in its sole
                  discretion for escalation to Level 3, BROCADE is responsible
                  for resolution and will utilize commercially reasonable
                  resources to resolve such problem.

                  Prior to escalating to Level 3, it is expected that McDATA
                  shall provide the following information and documentation: o
                  Any error information from the device connected to the switch
                  and from the switch. o All names and revisions of hardware
                  equipment.

                  -   All firmware revisions of the drivers.
                  -   Any log files from the devices connected to the switch.
                  -   Any trace file from the devices connected to the switch.
                  -   The configuration information of the equipment being used.
                  -   Detailed definition of all steps taken to reproduce and
                      resolve this situation prior to escalation to Level 3.

         Assigned Level 3 support personnel (SE and/or TSE) can be contacted via
         direct dial, email to an established "support" alias, web site
         initiated input, and by calling BROCADE's 1-888-ATFIBRE support number.
         Direct access to BROCADE support personnel will be possible during
         normal BROCADE business hours (8 AM to 5 PM PST, M-F). Emergency
         situations for Severity 1 problems are handled via 7 X 24 pager
         coverage at 1-888-ATFIBRE (1-888-283-4273)

3.0      BROCADE SEVERITY DEFINITIONS AND SUPPORT GOALS

         The goal for initial response time to all telephone support requests is
         [*] or less during normal BROCADE working hours. For after hours
         telephone requests, the goal is [*] or less. The targeted response time
         for requests submitted by other means, such as email, or fax, is
         [*].

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       26
<PAGE>   27

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Severity       Definition                               Service Objection                         Resolution Time
------------------------------------------------------------------------------------------------------------------------
<S>            <C>                                      <C>                                       <C>
1              BROCADE Product is completely            Respond to initial request within 30      Less than 5 days,
               non-functional, or deemed a safety       minutes during normal BROCADE             using commercially
               hazard, situation has high impact on     business hours, and 1 hour for non-       reasonable efforts.
               development or delivery efforts.         business hours.  Resources applied
               Installation problems.                   until a solution or acceptable work-
                                                        around is found.
------------------------------------------------------------------------------------------------------------------------
2              BROCADE Product is functionally          Respond to initial request within 1       Less than 15 days
               impaired, has substantially degraded     (one) hour during normal BROCADE
               performance but is not completely        business hours.  Resources applied
               dysfunctional.  There are no             continuously, during business hours,
               available work-arounds.  Situation       until a solution or work-around is
               has medium impact on customer            found.
               activitiy
------------------------------------------------------------------------------------------------------------------------
3              BROCADE Product or advertised            Resources applied on a priority basis,    Next maintenance
               functionality may be slightly            until a solution or work-around is        release.
               impaired but is operational, has low     found.
               to no impact on customer activity,
               and there are work-arounds
               available.
------------------------------------------------------------------------------------------------------------------------
4              Generic questions, and enhancement       Answer generic questions or provide       Commercially
               requests.                                path to answers within reasonable         reasonable efforts for
                                                        time frames.  The BROCADE web             generic questions.
                                                        site will be the prime repository for     Enhancement
                                                        this type of information.                 requests are
                                                        Enhancement requests will be              processed on a case
                                                        reviewed and implemented in the next      by case basis.
                                                        major release, where feasible, or to
                                                        meet specific commitments made.
------------------------------------------------------------------------------------------------------------------------
</TABLE>

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       27
<PAGE>   28

                                    EXHIBIT C

                           TECHNICAL TRAINING PROGRAM

                            BROCADE TRAINING OUTLINE

--------------------------------------------------------------------------------
                           Course                              Days    Cost per
                                                                        person
--------------------------------------------------------------------------------
1.1   FC & SAN intro:                                            1        [*]
                           Audience: Sales/Marketing/SE's

1.2   Switch intro & features:                                   2        [*]
                           Audience: Sales/Marketing/SE's

1.3   Install/Config/Troubleshoot/Mgmt tools:                    2        [*]
                           Audience: SE's, Tech support

                  FULL COURSE                                    5        [*]

Note: Includes non-reproducible copy of all materials for
each person. Additional binders of training materials may
be purchased from BROCADE.
--------------------------------------------------------------------------------

Courses will be offered at BROCADE's offices in San Jose, CA or at such other
facility notified to McDATA from time to time. A minimum of five (5) students
will be required to register and attend each course, or the course in question
may, at BROCADE's sole option, be canceled. McDATA agrees that it shall pay any
and all travel and lodging expenses related to such training. BROCADE will make
these courses available to Customers, on terms to be negotiated at BROCADE's
then-current rates for Customer training courses.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       28
<PAGE>   29

                                    EXHIBIT D

                       BROCADE SOFTWARE LICENSE AGREEMENT

PLEASE READ THIS END-USER SOFTWARE LICENSE AGREEMENT CAREFULLY BEFORE USING THE
SOFTWARE CONTAINED IN THIS EQUIPMENT.

BY USING THE EQUIPMENT THAT CONTAINS THIS SOFTWARE, YOU ARE CONSENTING TO BE
BOUND BY THIS AGREEMENT. IF YOU DO NOT AGREE TO ALL OF THE TERMS OF THIS
AGREEMENT, PROMPTLY RETURN THE EQUIPMENT AND DO NOT USE THE SOFTWARE OR ALLOW
OTHERS TO USE OR COPY THE SOFTWARE.

SINGLE USER LICENSE. Subject to the terms and conditions of this Agreement,
Brocade Communications Systems, Inc. ("Brocade") and its suppliers grant to
Customer ("CUSTOMER") a personal, non-transferable, nonexclusive license to use
the specific Brocade Software program modules or features which have been
enabled by license keys supplied by Brocade or its authorized distributors and
for which Customer has paid any applicable license fees (collectively, the
"Software"), in object code form only: (i) solely as embedded in Brocade
equipment owned or leased by Customer; and (ii) for key-enabled Software, solely
on the single central processing unit corresponding to the license key(s)
supplied by Brocade or its authorized distributors and to the license fees paid
by Customer.

LIMITATIONS. Except as otherwise expressly provided under this Agreement,
Customer shall have no right, and Customer specifically agrees not to:

(i)      make error corrections to or otherwise modify, edit or adapt the
         Software or create Derivative Works based upon the Software;

(ii)      except as set forth herein, copy the Software, in whole or in part;

(iii)    decompile, reverse engineer, translate, disassemble or otherwise reduce
         the Software to human-readable form;

(iv)     remove the Software from the equipment in which it is embedded; or

(v)      permit third parties to do any of the foregoing.

Only to the extent required by law, if any, Brocade shall provide Customer with
the interface information needed to achieve interoperability between the
Software and another independently created program, upon Customer's request and
upon payment of Brocade's applicable fee. Customer shall observe strict
obligations of confidentiality with respect to such information, using
commercially reasonable efforts and means consistent with high industry
standards.

UPGRADES AND ADDITIONAL COPIES. For purposes of this Agreement, "Software" shall
include (and the terms and conditions of this Agreement shall apply to) any
upgrades, updates, bug fixes or modified versions (collectively, "Upgrades") or
backup copies of the Software licensed or provided to Customer by Brocade or its
authorized

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       29
<PAGE>   30

distributor; provided that Customer has paid the applicable license fees and
holds the corresponding license keys for such copies or Upgrades.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, CUSTOMER HAS NO LICENSE
OR RIGHT TO USE ANY SUCH ADDITIONAL COPIES OR UPGRADES UNLESS (1) CUSTOMER, AT
THE TIME OF ACQUIRING SUCH COPY OR UPGRADE, ALREADY HOLDS A VALID LICENSE AND
THE CORRESPONDING LICENSE KEYS TO THE ORIGINAL SOFTWARE; (2) SUCH ADDITIONAL
COPIES OR UPGRADES ARE USED ONLY ON THE BROCADE EQUIPMENT FOR WHICH THE ORIGINAL
SOFTWARE IS LICENSED; AND (3) CUSTOMER IS THE ORIGINAL END USER PURCHASER OR
LESSEE OF SUCH BROCADE EQUIPMENT. Except as explicitly provided for in the
Limited Warranty section below, Brocade reserves the right to charge additional
fees for such additional copies and Upgrades.

NOTICES OF PROPRIETARY RIGHTS. Customer may make such backup copies of the
Software as may be necessary for Customer's lawful use, provided Customer
affixes to such copies all trademark, copyright, patent, and notices of other
proprietary rights on any such copies, in whatever form, of the Software in the
same form and manner that such notices appear in the Software. Except as
expressly authorized in this Agreement, Customer shall not make any copies or
duplicates of any Software without the prior written permission of Brocade.

PROTECTION OF INFORMATION. Customer agrees that aspects of the Software and
associated documentation, including the specific design and structure of
individual programs, constitute the trade secrets and/or copyrighted material of
Brocade and its Customer shall not disclose, provide, or otherwise make
available such trade secrets or copyrighted material in any form to any third
party without the prior written consent of Brocade. Customer shall implement
reasonable security measures to protect such trade secrets and copyrighted
material. Title to Software and all related documentation shall remain solely
with Brocade.

LIMITED WARRANTY. Brocade warrants that the Software will substantially conform
to its published specifications for a period of ninety (90) days from the later
of receipt of the equipment containing the Software or receipt of access to the
Software. This limited warranty extends only to Customer as the original
licensee. Customer's sole and exclusive remedy and the entire liability of
Brocade and its suppliers under this limited warranty will be, at Brocade or its
service center's option, repair, replacement, or refund of the Software if
reported (or, upon request, returned) to Brocade or its designee within the
stated ninety (90) day period. Except as expressly granted in this Agreement,
the Software is provided AS IS. Brocade does not warrant that the Software is
error free or that Customer will be able to operate the Software without
problems or interruptions. Brocade reserves the right to charge additional fees
for repairs or replacements performed outside of the ninety (90) day limited
warranty period. This warranty does not apply if the Software or the Brocade
equipment in which the Software is embedded (a) is licensed for beta,
evaluation, testing or demonstration purposes for which Brocade does not receive
a license fee, (b) has been altered, except by Brocade, (c) has not been
installed, operated, repaired, or maintained in accordance with instructions
supplied by Brocade, (d) has been subjected to abnormal physical or electrical
stress, misuse, negligence, or accident, or (e) is used in ultra-hazardous
activities.

DISCLAIMER. EXCEPT AS SPECIFIED IN THIS WARRANTY, ALL EXPRESS OR IMPLIED
CONDITIONS, REPRESENTATIONS, AND WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS, SATISFACTORY QUALITY OR ARISING
FROM A

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       30
<PAGE>   31

COURSE OF DEALING, USAGE, OR TRADE PRACTICE, ARE HEREBY EXCLUDED TO THE MAXIMUM
EXTENT ALLOWED BY APPLICABLE LAW.

LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW, IN NO
EVENT WILL BROCADE OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT, OR
DATA, OR FOR SPECIAL, INDIRECT, EXEMPLARY, EXTRAORDINARY, CONSEQUENTIAL,
INCIDENTAL, OR PUNITIVE DAMAGES HOWEVER CAUSED, AND REGARDLESS OF THE THEORY OF
LIABILITY, ARISING OUT OF THE USE OF OR INABILITY TO USE THE SOFTWARE EVEN IF
BROCADE OR ITS SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
IN NO EVENT SHALL BROCADE'S OR ITS SUPPLIERS' LIABILITY TO CUSTOMER, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, EXCEED THE PRICE PAID BY
CUSTOMER. THE FOREGOING LIMITATIONS SHALL APPLY EVEN IF THE ABOVE-STATED
WARRANTY FAILS OF ITS ESSENTIAL PURPOSE. BECAUSE SOME STATES OR JURISDICTIONS DO
NOT ALLOW LIMITATION OR EXCLUSION OF CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE
ABOVE LIMITATION MAY NOT APPLY.

ASSIGNMENT. This Agreement will bind and inure to the benefit of each party's
successors and permitted assigns. Customer may not transfer or assign this
Agreement, in whole or in part, without Brocade's written consent, even if
Customer sells, rents, distributes or leases the equipment for which the
Software is licensed or on which the Software is loaded.

TERM AND TERMINATION. This Agreement is effective until terminated. Customer's
license rights under this Agreement will terminate immediately without notice
from Brocade if Customer fails to comply with any provision of this Agreement.
Upon termination, Customer must destroy all copies of Software and the
corresponding license keys in its possession or control.

CUSTOMER RECORDS. Customer grants to Brocade and its independent accountants the
right to examine Customer's books, records and accounts during Customer's normal
business hours to verify Customer's compliance with this Agreement. In the event
such audit discloses non-compliance with this Agreement, Customer shall promptly
pay to Brocade the appropriate license fees.

EXPORT. Software, including technical data, is subject to U.S. export control
laws, including the U.S. Export Administration Act and its associated
regulations, and may be subject to export or import regulations in other
countries. Customer agrees to comply strictly with all such regulations and
acknowledges that it has the responsibility to obtain licenses to export,
re-export, or import Software.

RESTRICTED RIGHTS. The Software is "commercial computer software" as defined in
the applicable provisions of the Federal Acquisition Regulation (the "FAR") and
supplements thereto, including the Department of Defense ("DoD") FAR Supplements
(the "DFARS"). The parties acknowledge that the Licensed Software was developed
entirely at private expense and that no part of the Licensed Software was first
produced in the performance of a Government contract. If Customer is a U.S.
Government agency, in accordance with FAR 12.212 and its successors or DFARS
227.7202 and its successors, as applicable, the Software is licensed to the
applicable U.S. Government agency subject to the terms of this Agreement.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       31
<PAGE>   32

GENERAL. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, United States of America, as if performed
wholly within the state and without giving effect to the principles of choice or
conflicts of law. If any portion hereof is found to be void or unenforceable,
the remaining provisions of this Agreement shall remain in full force and
effect. This Agreement constitutes the entire agreement between the parties with
respect to the use of the Software.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       32
<PAGE>   33

                                    EXHIBIT E

                                 MCDATA PRODUCTS

All releases and subsets of:

                                       [*]

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       33
<PAGE>   34

                                    EXHIBIT F

                     SETTLEMENT AGREEMENT AND MUTUAL RELEASE

McDATA CORPORATION (McDATA) and BROCADE COMMUNICATIONS SYSTEMS, INC.,
("Brocade") enter into this Mutual Release as of April 14, 1998.

1.       The intent of this settlement agreement and mutual release is to
         release McDATA and Brocade from any and all claims which have been
         brought or could have been brought by either party in two lawsuits
         referenced below.

2.       McDATA has filed an action in the United States District Court for the
         District of Colorado on March 4, 1998, entitled McDATA Corporation v.
         Brocade Communications Systems, Inc., et al., Civil Action No. 98-S-535
         (the "Colorado Action"). Brocade has filed an action in the United
         States District Court for the Northern District of California on March
         20, 1998, entitled Brocade Communications Systems, Inc. v. McDATA
         Corporation, Civil Action No. C98-20259 RWM (the "California Action").
         Both parties have agreed to dismiss with prejudice the Colorado Action
         and the California Action. Each party will bear its own costs for the
         Colorado Action and the California Action, including all attorneys'
         fees.

3.       McDATA, for itself and its legal successors and assigns, agents,
         employees, representatives, officers, directors, parent, subsidiary or
         affiliated corporations, and each of them, hereby releases Brocade and
         its legal successors and assigns, agents, employees, representatives,
         officers, directors, parent, subsidiary, or affiliated corporations,
         and each of them, from and against any and all claims, actions, causes
         of action, liabilities and demands, whether known or unknown, that
         McDATA brought or could have brought in the Colorado Action or the
         California Action (collectively, the "McDATA Claims"). McDATA
         acknowledges that both known and unknown McDATA Claims are covered by
         this Settlement Agreement and Mutual Release, and waives any rights or
         benefits that may arise under California Civil Code section 1542, which
         provides as follows:

                  A general release does not extend to claims which the creditor
                  does not know or suspect to exist in his favor at the time of
                  executing the release, which if known by him must have
                  materially affected his settlement with the debtor.

4.       Brocade, for itself and its legal successors and assigns, agents,
         employees, representatives, officers, directors, parent, subsidiary or
         affiliated corporations, and each of them, hereby releases McDATA and
         its legal successors and assigns, agents, employees, representatives,
         officers, directors, parent, subsidiary, or affiliated corporations,
         and each of them, from and against any and all claims, actions, causes
         of action, liabilities and demands, whether known or unknown, that
         Brocade brought or could have brought in the Colorado Action or the
         California Action (collectively, the "Brocade Claims"). Brocade
         acknowledges that both known and unknown Brocade Claims are covered by
         this Settlement Agreement and Mutual Release, and waives any rights or
         benefits that may arise under California Civil Code section 1542, which
         provides as follows:

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       34
<PAGE>   35

                  A general release does not extend to claims which the creditor
                  does not know or suspect to exist in his favor at the time of
                  executing the release, which if known by him must have
                  materially affected his settlement with the debtor.

5.       Excluded from the operation of this Mutual Release are any continuing
         obligations of the parties in connection with the March 26, 1998
         Agreement, the Technology License and Development Agreement dated as of
         November 1, 1996, and the Purchase and License Agreement dated as of
         May 31, 1996, and any claims arising out of such continuing
         obligations.

6.       This agreement is executed in counterparts.

McDATA Corporation                      Brocade Communications
                                        Systems, Inc.

By: /s/ John F. McDonnell               By: /s/
   -----------------------------            --------------------------

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       35
<PAGE>   36

                                    EXHIBIT G

                               ASIC SPECIFICATIONS

[*]
McDATA has this copy

[*]
McDATA has this copy

[*] and BROCADE will Fed Ex the [*] within [*] of the approval of the agreement.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       36
<PAGE>   37

                                    EXHIBIT H
                                 SUPPORT LETTER

                      BROCADE COMMUNICATIONS SYSTEMS, INC.
                             1901 GUADALUPE PARKWAY
                               SAN JOSE, CA 95131
                                FAX 408-487-8091
                                 APRIL __, 1999

                                 SUPPORT LETTER

McDATA Corporation                  Hewlett-Packard Company
310 Interlocken Parkway             8000 Foothills Blvd.
Broomfield, CO 80021                Roseville, CA 95747

Dear __________________ and __________________:

This letter is a follow-up to our recent communications and sets forth the
general terms under which BROCADE will supply products and support to HP in
connection with HP's use of a certain McDATA switch that incorporates unmodified
BROCADE hardware and software system elements and components, or modifications
approved in writing by BROCADE as defined in Exhibit A (the "ES 2500 Switch").
BROCADE and McDATA will each enter into separate written agreements with HP with
respect to the products and services it will supply based on the parties'
understandings reflected below. This arrangement, of course, is being entered
into by BROCADE voluntarily and without any obligation to do so, solely as an
accommodation to HP and McDATA, and there is no obligation on the part of any of
us to enter into similar arrangements concerning other products or other
customers.

1.       SOFTWARE LICENSE: BROCADE will license specified software applications
         to HP for use in the ES 2500 Switch, in accordance with a mutually
         agreed upon application software license agreement.

2.       BROCADE SUPPORT: BROCADE will provide technical support to HP
         consistent with the attached escalation procedures, Schedule 1, to
         assist HP and McDATA in performing fault isolation and analysis of the
         ES 2500 Switch, and will use reasonable efforts to work with HP and
         McDATA to correct or provide work-arounds for any errors attributable
         to BROCADE. Such support will include BROCADE's using reasonable
         efforts to assist HP and McDATA in supporting the approved
         modifications listed in Schedule 2. BROCADE support will require both
         HP and McDATA to provide BROCADE with the necessary system elements to
         replicate identical configurations in the field. However, BROCADE will
         in no event be held legally or financially liable for any failure to
         identify, isolate, correct or provide work-arounds to any problems or
         deficiencies with the ES 2500 Switch or any modified BROCADE hardware
         or software, regardless of the reasons or circumstances.

3.       MCDATA SUPPORT: McDATA will make available to BROCADE such information
         and equipment (including one or more ES 2500 Switches) at no charge to
         BROCADE as are reasonably necessary for BROCADE to provide the support
         to HP contemplated under the parties' arrangement in an efficient

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       37
<PAGE>   38

         manner. In doing so, McDATA will not disclose to BROCADE any
         confidential information, and BROCADE will have no obligation of
         confidentiality with respect to the information provided. If BROCADE
         requires access to McDATA confidential information, the request must be
         made in writing and be submitted by a Vice President of BROCADE. The
         McDATA confidential information will then be supplied only to a Vice
         President at BROCADE. McDATA confidential information will be protected
         under the terms of the Non-Disclosure Agreement dated February 23,
         1999.

THIS LETTER SERVES AS EXHIBIT D OF THE BROCADE-HP SOFTWARE LICENSE AGREEMENT AND
ALSO AS EXHIBIT H OF THE BROCADE-MCDATA OEM AND LICENSE AGREEMENT.

Please indicate your acceptance of the above terms by signing below and
returning the signed letter to me at your earliest convenience. Please do not
hesitate to call me if you have any questions or concerns.

Sincerely,

Greg Reyes

Agreed to and Accepted:                Agreed to and Accepted:

McDATA Corporation                     Hewlett-Packard Company

By: /s/ John F. McDonnell              By:        /s/     /s/
    ---------------------------            ---------------------------
Name: John F. McDonnell                Name:
      -------------------------              -------------------------
Date: 04/27/99                         Date:
      -------------------------              -------------------------

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       38
<PAGE>   39

                                   SCHEDULE 1

                                       TO
                                 SUPPORT LETTER

                  ESCALATION, SERVICE AND SUPPORT REQUIREMENTS

1.0      SERVICE AND SUPPORT REQUIREMENT

         HP will be responsible for working directly with the End Users. McDATA
         and BROCADE support will work directly with HP to support HP personnel,
         as necessary. HP represents and warrants that it is experienced in,
         capable of, and staffed to provide, Level 1 and Level 2 support (as
         defined below). BROCADE offers regular training programs to assist in
         attaining this level of expertise on BROCADE Products.

         Subject to the terms of the "Support Letter" and the Non-Disclosure
         Agreement dated February 23, 1999, BROCADE and/or McDATA, as
         applicable, will provide Level 3 support (as defined below).
         Specifically, McDATA will be the initial contact for problem isolation
         and escalation, service and support issues from HP, and will be
         specifically responsible for hardware support. BROCADE will be the
         contact for escalation, service and support for BROCADE software issues
         following problem isolation by McDATA or HP.

2.0      SUPPORT LEVEL DEFINITIONS

2.1      LEVEL 1 SUPPORT

         Level 1 support is the first line, direct End User contact, most likely
         via a telephone call handling group provided by HP.

         Level One support includes:
         -        On site service and FRU replacement
         -        First contact, direct McDATA/End User interaction (rephrased,
                  please approve)
         -        Information collection and analysis
         -        Identification of whether the problem is known and has a known
                  solution
         -        Troubleshooting and problem reproduction
         -        Problem report administration and tracking

         The parties agree that End Users shall not have the right to contact
         BROCADE directly for questions related to the Products.

2.2      LEVEL 2 SUPPORT

         Level 2 support is "technical support" provided by HP personnel. Level
         2 support is typically provided by experts in the applicable Product
         and who serve as the escalation point for Level 1. Level 2 support
         personnel are expected to resolve all known problems, installation and
         configuration issues, assist in firmware or driver updates at the End
         User site, search BROCADE and/or McDATA posted Technical

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       39
<PAGE>   40

         Notes and other technical information supplied that will assist in
         providing problem resolutions. All pertinent data shall be entered in
         HP's problem tracking database.

         Should the Level 2 analyst be unable to resolve a problem, either
         because of lack of expertise, exhausted troubleshooting knowledge, or
         expiration of the allotted Level 2 resolution time, the Level 2 analyst
         may escalate the problem to Level 3 for resolution. Level 2 personnel
         of HP will continue to diligently work with Level 3 personnel of
         BROCADE and/or McDATA to accomplish resolution. Level 2 personnel of HP
         will communicate all resolutions back to the End Users.

         Escalations should be presented to BROCADE and/or McDATA engineers in
         the form of a problem tracking data base record with all pertinent
         configuration detail and failure information or symptoms documented in
         detail.

         In an effort to maintain an efficient support organization and crisp
         exchange of information, HP and McDATA will limit the number of support
         personnel (Level 2) authorized to contact BROCADE (Level 3) to 5.

2.3      LEVEL 3 SUPPORT

         Level 3 support for covered software is provided by BROCADE System
         Engineers (SE) and/or Technical Support Engineers (TSE). Level 3 is the
         first point of contact for technical issues between BROCADE and HP or
         McDATA. Once a problem is accepted by BROCADE in its sole discretion
         for escalation to Level 3, BROCADE will utilize commercially reasonable
         resources to resolve such problem within the time frames set forth
         below.

         Prior to escalating to Level 3, it is expected that HP and/or McDATA
         shall provide the following information and documentation:

         -        Any error information from the device connected to the switch
                  and from the switch.
         -        All names and revisions of hardware equipment.
         -        All firmware revisions of the drivers.
         -        Any log files from the devices connected to the switch.
         -        Any trace file from the devices connected to the switch.
         -        The configuration information of the equipment being used.
         -        Any troubleshooting steps already performed.

         Assigned Level 3 support personnel (SE and/or TSE) can be contacted via
         direct dial, email to an established "support" alias, web site
         initiated input, and by calling BROCADE's 1-888-ATFIBRE support number.
         Direct access to BROCADE support personnel will be possible during
         normal BROCADE business hours (8 AM to 5 PM PST, M-F). Emergency
         situations for Severity 1problems are handled via 7 X 24 pager coverage
         at 1-888-ATFIBRE (1-888-283-4273)

3.0      BROCADE SEVERITY DEFINITIONS AND SUPPORT GOALS

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       40
<PAGE>   41

         The goal for initial response time to all telephone support requests is
         [*] or less during normal BROCADE working hours. For after hours
         telephone requests, the goal is [*] or less. The targeted response time
         for requests submitted by other means, such as email, or fax, is [*].

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Severity      Definition                                 Service Objective                             Resolution Time
-----------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                        <C>                                           <C>
1             BROCADE Product is completely non-         Respond to initial request within 30          Less than 5 days,
              functional, or deemed a safety hazard,     minutes during normal BROCADE                 using commercially
              situation has high impact on               business hours, and 1 hour for non-           reasonable efforts.
              development of delivery efforts.           business hours.  Resources applied until a
              Installation problems.                     solution or acceptable work-around is
                                                         found
-----------------------------------------------------------------------------------------------------------------------------
2             BROCADE Product is functionally            Respond to initial request within 1 (one)     Less than 15 days
              impaired, has substantially degraded       hour during normal BROCADE business
              performance but is not completely          hours.  Resources applied continuously,
              dysfunctional.  There are no available     during business hours, until a solution or
              work-arounds.  Situation has medium        work-around is found.
              impact on customer activity.
-----------------------------------------------------------------------------------------------------------------------------
3             BROCADE Product or advertised              Resources applied on a priority basis,        Next maintenance
              functionality may be slightly impaired     until a solution or a work-around is          release.
              but is operational, has low to no impact   found.
              on customer activity, and there are
              work-arounds available.
-----------------------------------------------------------------------------------------------------------------------------
4             Generic questions, and enhancement         Answer generic questions or provide path      Commercially
              requests.                                  to answers within reasonable time             reasonable efforts
                                                         frames.  The BROCADE web site will be         for generic
                                                         the prime repository for this type of         questions.
                                                         information.  Enhancement requests will       Enhancement
                                                         be reviewed and implemented in the next       requests are
                                                         major release, where feasible, or to meet     processed on a case
                                                         specific commitments made.                    by case basis.
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       41
<PAGE>   42

                                   SCHEDULE 2
                                       TO
                                 SUPPORT LETTER

           APPROVED MODIFICATIONS FOR THE HP OEM FIBRE CHANNEL SWITCH

1.   External Loop Back Test
2.   [*]
3.   Remove BROCADE name and BROCADE unique references from SilkWorm
4.   [*]
5.   [*]
6.   Generic SNMP modifications
7.   OEM Logo Set command [*]

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       42
<PAGE>   43

                                    EXHIBIT I

                               MCDATA CORPORATION
               MUTUAL CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
                             (ORGANIZATIONAL LEVEL)

THIS AGREEMENT, by and between McDATA Corporation, hereinafter referred to as
"McDATA", having its principal place of business at 310 Interlocken Parkway,
Broomfield, Colorado 80021-3484 and,

                  Brocade Communication
                  457 E. Evelyn
                  Suite E
                  Sunnyvale, CA 94086

hereinafter referred to as the "Organization", establishes certain terms and
conditions applicable to the parties relative to the protection and
non-disclosure of the confidential information and materials of the parties.

                                    RECITALS

WHEREAS, each party hereto desires to protect its trade secrets, confidential
information and patentable ideas from unnecessary risk of unauthorized
disclosure while at the same time conducting business with the other party, and
the other party is willing to abide by the following covenants,

NOW, THEREFORE, the parties covenant and agree as follows:

1        DEFINITION AND AGREEMENT

1.1      Either party hereto may disclose to the other party (the receiving
         party) certain of its confidential information as defined at Section
         1.2 below. All such confidential information shall remain the property
         of the disclosing party.

1.2      In order to come under the terms of this Agreement, such confidential
         information must either be: (a) disclosed in tangible form clearly
         marked as "confidential", "restricted", "proprietary", or with similar
         wording, or (b) if orally disclosed, as may happen during meetings of
         the parties, within seventy-two hours of such disclosure, disclosing
         party shall deliver to receiving party a letter specifically
         identifying any such confidential information so disclosed and
         indicating that such information is to be treated as confidential under
         this Agreement. Neither party will, without the prior written consent
         of the other, receive or take possession of any books, drawings,
         blueprints, specifications, software (in any media), customer lists,
         data formulations, compositions, reports, letters, memoranda, notes or
         other writings or documents or copies thereof which contain or relate
         to any of the confidential information.

1.3      The receiving party hereby agrees to maintain such confidential
         information in confidence, to protect same with the same degree of care
         as that with which it uses to preserve and safeguard its own
         information of a similar nature and to disclose same only to officers,
         employees and agents of the receiving party who

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       43
<PAGE>   44

         reasonably require same for the purposes hereof and who execute a
         confidentiality and non-disclosure agreement prior to receipt of same.

1.4      Each of the parties represents that it has in force a similar policy
         respecting the protection of its information as described in 1.2
         through 1.3, or will develop and implement a policy substantially
         equivalent to that as contained herein, including the execution of a
         confidentiality and non-disclosure agreement by each officer, employee
         and agent of the receiving party prior to divulging confidential
         information as described in 1.2 above.

1.5      The restrictions and obligations of the parties shall expire five (5)
         years from the date of termination of the party's contacts with the
         other party, and shall not apply to information which:

1.5.1    becomes a matter of general public knowledge; or

1.5.2    is required to be disclosed by the law of any government which has
         jurisdiction over such information; or

1.5.3    was previously known at the time of its receipt from the disclosing
         party without similar restrictions; or

1.5.4    is released by written mutual agreement of the parties; or

1.5.5    is provided by the owner of such information to third parties without
         similar restrictions on disclosure; or

1.5.6    can be documented, by adequate written records, to have been
         independently developed by the receiving party without reference to or
         use of any confidential information.

1.6      Use of such confidential information by the receiving party is limited
         to the use as is appropriate in exploring a potential business
         relationship and the furnishing of such confidential information under
         this Agreement shall not constitute any grant, option or license to the
         receiving party under any patent, copyright or other rights now or
         hereafter held by the party disclosing said confidential information.

1.7      In the event of a breach of this Agreement the parties expressly agree
         that the aggrieved party shall be entitled to (in addition to all other
         remedies available to it under this Agreement, by statute, or
         otherwise) injunctive and/or other equitable relief to secure the
         enforcement of this Agreement, or any part thereof.

2        CHANGES TO AGREEMENT

No provision of this Agreement shall be deemed waived, amended or modified by
either party unless such waiver, amendment or modification is in writing, signed
by the parties. No waiver in any one instance or with respect to any particular
entity shall be deemed to be a waiver in any other instance or with respect to
any other entity.

3        CONTINUING OBLIGATIONS

This Agreement shall be binding upon and inure to the benefit of the parties
hereto, their permitted successors and assigns.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       44
<PAGE>   45

4        MAINTENANCE OF AGREEMENT

If one or more provisions of this Agreement should be invalid, illegal or
unenforceable in any respect, the remaining provisions contained herein shall
not, in any way, be affected or impaired thereby.

5        LEGAL AUTHORITY

This Agreement shall be construed under and governed by the laws of the State of
Colorado as though this Agreement were executed in, by parties who were all
residents of, and were intended to be performed fully in, the State of Colorado.

6        ATTORNEYS' FEES

If any dispute arises between the parties with respect to the matters covered by
this Agreement which leads to a proceeding to resolve such dispute, the
prevailing party in such proceeding shall be entitled to receive its reasonable
attorneys' fees and out-of-pocket costs incurred in connection with such
proceeding, in addition to any other relief it may be awarded.

7        RETURN OF CONFIDENTIAL INFORMATION

Upon request, a receiving party shall destroy or return all confidential
information to the disclosing party.

8        EXPORT

The Parties agree that they will not in any form export, reexport, resell, ship
or divert or cause to be exported, reexported, resold, shipped or diverted,
directly or indirectly, any product or technical data (as defined by the United
States Export Administration Regulations) or Software furnished hereunder or the
direct product of such technical data or Software which, in so doing, would
violate any United States Export Laws or Regulations.

If such technical data of Software or the direct product thereof is covered by
General License GTDR (Technical Data Under Restriction) then such technical data
or Software or the direct product thereof will not be sold or otherwise made
available, directly or indirectly, to or for use by country groups, Q, S, W, Y,
Z, Afghanistan, or the People's Republic of China or such other countries as
specified by the current Export Administration Regulations.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       45
<PAGE>   46

By execution hereof, the parties hereby certify that they have read, understand
and are DULY AUTHORIZED TO EXECUTE THIS AGREEMENT.

Executed and submitted to McDATA             Accepted and effective as
for acceptance:                              of: _____________________

Brocade Communication                        McDATA Corporation
         (Organization)

By: /s/ Seth D. Neiman                       By: /s/ Wo Overstreet
    -------------------------------              -------------------------------
              (signature)                                   (signature)
Name: Seth D. Neiman                         Name: Wo Overstreet
Title: CEO                                   Title: Vice President of Marketing
                                                     and Sales

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       46
<PAGE>   47

                                    EXHIBIT J

                        MANUFACTURING [*] TEST PROCESSES

1.       [*] TEST. BROCADE will perform an [*] test on each subassembly ([*])
         prior to shipping that subassembly to McDATA.

2.       [*] TESTS. BROCADE perform [*] tests on each subassembly ([*]). All
         such [*] tests shall have optical ports cross-connected during
         diagnostics (port 0 to 3; port 2 to 4, etc.). Additional loops of [*]
         and [*] shall be done at [*] test: [*]

3.       [*] TESTS. BROCADE agrees to work diligently to eliminate failures on
         the subassemblies. If the failures persist for [*] days after the date
         of execution of this Agreement, and if McDATA yields can be
         substantially improved by performing a [*] test, then BROCADE shall
         perform the following [*] test on the affected subassemblies:

                  Additional [*] testing shall be set up to run the [*] in a
                  test environment similar to the [*]. [*] test suites shall be
                  agreed upon by both parties within [*] days of execution of
                  this Agreement. All ports will be [*] during such tests. The
                  duration of such tests shall be [*].

4.       TEST CORRELATION FOR FAILED SUBASSEMBLIES.

         a.       For the [*], BROCADE will provide to McDATA a test fixture for
                  performing validation tests on failed [*] and [*]. McDATA
                  shall run a validation test on each failed [*] and [*] on the
                  BROCADE test fixture, using a test suite agreed upon by both
                  parties. If McDATA is unable to validate the failure, McDATA
                  shall put the [*] or [*] back into its stock. If McDATA is
                  able to validate the failure, McDATA will return the validated
                  failed [*] or [*] to BROCADE for repair or replacement.

         b.       McDATA shall return to BROCADE all failed [*]. BROCADE shall
                  run such failed [*] through BROCADE's standard validation
                  test. If such [*] is determined to be No Trouble Found (NTF),
                  then BROCADE shall retest such [*] in McDATA equipment, using
                  McDATA's [*]. If the failure is validated in McDATA equipment,
                  BROCADE shall repair or replace such [*].

         c.       Both parties shall review the test correlation data and
                  process every [*] days to determine if the then-current test
                  correlation process shall be continued or changed.

         d.       Such test correlation process shall apply to [*] and [*]
                  failures.

         * Certain information on this page has been omitted and filed
         separately with the Commission. Confidential treatment has been
         requested with respect to the omitted portions.

                                       47<PAGE>   1
                                                                   EXHIBIT 10.15

                                 LEASE AGREEMENT

                                 BY AND BETWEEN

                     WHLNF REAL ESTATE LIMITED PARTNERSHIP,
                         A DELAWARE LIMITED PARTNERSHIP
                                  ("LANDLORD")

                                       AND

                               MCDATA CORPORATION,
                             A DELAWARE CORPORATION
                                   ("TENANT")

<PAGE>   2

                                 LEASE AGREEMENT
                                    (NNN R&D)

BASIC LEASE INFORMATION

LEASE DATE:               September 12, 1997

LANDLORD:                 WHLNF Real Estate Limited Partnership, a
                          Delaware limited partnership

LANDLORD'S ADDRESS:       c/o Lincoln Property Company Management Services, Inc.
                          101 Lincoln Centre Drive, Fourth Floor
                          Foster City, California  94404-1167

TENANT:                   McDATA Corporation, a Delaware corporation

TENANT'S ADDRESS:         310 Interlocken Parkway
                          Broomfield, Colorado 80021

PREMISES:                 That certain real property more particularly described
                          on EXHIBIT A-1 attached hereto as outlined on the site
                          plan attached hereto as EXHIBIT A-2 ("LAND"), together
                          with all improvements located thereon, including that
                          certain building known as the McDATA Building (the
                          "Building") containing approximately 121,970 rentable
                          square feet of space, and the surface parking areas,
                          driveways, sidewalks, walkways, accessways, land
                          scaping and land surrounding the Building.  The Pre
                          mises are located within that certain business park
                          commonly known as the Interlocken Advanced Tech
                          nology Environment (the "Park").

PREMISES ADDRESS:         310 Interlocken Parkway
                          Broomfield, Colorado 80021

TERM:                     The period commencing on June 17, 1998 ('Com
                          mencement Date"), and expiring on December
                          31, 2003 ("Expiration Date"), subject to
                          extension pursu ant to Addendum 1 to the
                          Lease (the "Term").

                                      -i-

<PAGE>   3

BASE RENT (Sec. 3):          PORTIONS OF TERM                    BASE RENT
                                                                (PER MONTH)

                             JUNE 17, 1998 THROUGH              $124,002.83
                             JUNE 16, 2003

                             JUNE 17, 2003 THROUGH              $150,868.40
                             DECEMBER 31, 2003

SECURITY DEPOSIT (Sec. 4):   FIFTY THOUSAND AND NO/100 DOLLARS ($50,000)

PERMITTED USES (Sec. 9):     THE BUILDING SHALL BE USED BY TENANT FOR: OFFICE,
                             RESEARCH AND DEVELOPMENT, WAREHOUSE AND
                             MANUFACTURING OF COMPUTER EQUIPMENT, BUT ONLY TO
                             THE EXTENT PERMITTED BY APPLICABLE LAWS AND THE
                             CITY OF BROOMFIELD, COLORADO AND ALL AGENCIES AND
                             GOVERNMENTAL AUTHORITIES HAVING JURISDICTION
                             THEREOF.

BROKER (Sec. 38):            LINCOLN PROPERTY COMPANY MANAGEMENT SERVICES,
                             INC.

EXHIBITS:                    EXHIBIT A-1 - LEGAL DESCRIPTION OF PREMISES
                             EXHIBIT A-2 - SITE PLAN OF PREMISES

                             EXHIBIT B - RULES AND REGULATIONS

                             EXHIBIT C - HAZARDOUS MATERIALS DISCLOSURE
                                         CERTIFICATE

                             EXHIBIT D - TENANT CERTIFICATE

ADDENDA:                     ADDENDUM 1:  OPTION TO EXTEND THE LEASE

                                      -ii-

<PAGE>   4

                                TABLE OF CONTENTS

1.       PREMISES..............................................................1

2.       EXPIRED LEASE.........................................................1

3.       RENT..................................................................1

4.       SECURITY DEPOSIT......................................................2

5.       TENANT IMPROVEMENTS...................................................3

6.       ADDITIONAL RENT.......................................................3

7.       UTILITIES.............................................................7

8.       LATE CHARGES..........................................................7

9.       USE OF PREMISES.......................................................8

10.      ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES.................10

11.      REPAIRS AND MAINTENANCE..............................................11

12.      INSURANCE............................................................13

13.      WAIVER OF SUBROGATION................................................16

14.      LIMITATION OF LIABILITY AND INDEMNITY................................16

15.      ASSIGNMENT AND SUBLEASING............................................17

16.      AD VALOREM TAXES.....................................................19

17.      SUBORDINATION........................................................19

18.      RIGHT OF ENTRY.......................................................20

                                     -iii-

<PAGE>   5

19.      ESTOPPEL CERTIFICATE.................................................21

20.      TENANT'S DEFAULT.....................................................21

21.      REMEDIES FOR TENANT'S DEFAULT........................................23

22.      HOLDING OVER.........................................................24

23.      LANDLORD'S DEFAULT...................................................25

24.      PARKING..............................................................25

25.      SALE OF PREMISES.....................................................25

26.      WAIVER...............................................................26

27.      CASUALTY DAMAGE......................................................26

28.      CONDEMNATION.........................................................28

29.      ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS............................28

30.      FINANCIAL STATEMENTS.................................................32

31.      GENERAL PROVISIONS...................................................32

32.      SIGNS................................................................35

33.      MORTGAGEE PROTECTION.................................................35

34.      QUITCLAIM............................................................36

35.      MODIFICATIONS FOR LENDER.............................................36

36.      WARRANTIES OF TENANT.................................................36

37.      COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT......................36

38.      BROKERAGE COMMISSION.................................................37

                                      -iv-

<PAGE>   6

39.      QUIET ENJOYMENT......................................................38

40.      LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED
         OBLIGATIONS..........................................................38

ADDENDUM .....................................................................40

EXHIBITS

EXHIBIT A-1     -     LEGAL DESCRIPTION OF PREMISES
EXHIBIT A-2     -     SITE PLAN OF PREMISES
EXHIBIT B       -     RULES AND REGULATIONS
EXHIBIT C       -     HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE-EXAMPLE
EXHIBIT D       -     TENANT CERTIFICATE

                                      -v-

<PAGE>   7

                                 LEASE AGREEMENT

DATE:       This Lease is made and entered into as of the Lease Date defined in
            the Basic Lease Information. The Basic Lease Information set forth
            on Pages (i)-(iii) (and all defined terms set forth therein) are
            hereby incorporated as part of this Lease, and this Lease and the
            Basic Lease Information are and shall be construed as a single
            instrument.

         1. PREMISES: Landlord hereby leases the Premises to Tenant upon the
terms and conditions contained herein, and for the Term set forth in the Basic
Lease Information. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage of the Building shall
be deemed to be the number of rentable square feet as set forth in the Basic
Lease Information and is not subject to remeasurement or adjustment by Tenant.

         2. EXPIRED LEASE: Landlord and Tenant hereby acknowledge and agree
that, prior to the Commencement Date, Tenant has been in possession of the
Premises pursuant to that certain Lease Agreement dated as of November 16, 1987
by and between Tenant and Landlord's predecessor-in-interest, CG Lot 2
Partnership ("CG"), as amended by that certain Modification of Lease Agreement
by and between Tenant and CG dated as of January 19, 1988, that certain Second
Modification of Lease Agreement by and between Tenant and CG dated as of January
26, 1989 and that certain Third Modification of Lease Agreement by and between
Tenant and Landlord's predecessor-in-interest, SNET Real Estate, Inc. ("SNET"),
dated as of February 25, 1994, (collectively, the "Expired Lease"). Landlord
succeeded to the interests of CG and SNET as landlord under the Expired Lease.
The Expired Lease and any and all subleases and sub- subleases of the Premises
or any portion thereof shall expire on June 16, 1998. Upon the Commencement
Date, the Expired Lease shall have no further force or effect (except for any
provisions contained therein which expressly survive expiration, including the
reconciliation of any prepaid operating expenses and taxes which were made by
Tenant to the Landlord [and to the prior Landlord and transferred to Landlord in
connection with Landlord's purchase of the Premises] with respect to the last
year of such Expired Lease) and this Lease shall govern and control Tenant's
occupancy of the Premises from and after June 17, 1998.

         3. RENT: On the date that Tenant executes this Lease, Tenant shall
deliver to Landlord the original executed Lease, and all insurance certificates
evidencing the insurance required to be obtained by Tenant under Section 12 of
this Lease. Tenant agrees to pay Landlord, without prior notice or demand, or
abatement, offset, deduction or claim, the Base Rent specified in the Basic
Lease Information, payable in advance at Landlord's address specified in the
Basic Lease Information on the Commencement Date and thereafter on the first
(1st) day of each month throughout the balance of the Term of the Lease. In
addition to the Base Rent set forth in the

<PAGE>   8

Basic Lease Information, Tenant shall pay Landlord in advance on the
Commencement Date and thereafter on the first (1st) day of each month throughout
the balance of the Term of this Lease, as Additional Rent, all Operating
Expenses, Tax Expenses and Utility Expenses, all in the manner as specified in
Sections 6 and 7 of this Lease. The term "Rent" whenever used herein refers to
the aggregate of all these amounts. If Landlord permits Tenant to occupy the
Premises without requiring Tenant to pay rental payments for a period of time,
the waiver of the requirement to pay rental payments shall only apply to waiver
of the Base Rent and Tenant shall otherwise perform all other obligations of
Tenant required hereunder. The Rent for any fractional part of a calendar month
at the commencement or termination of the Term of this Lease shall be a prorated
amount of the Rent for a full calendar month based upon a thirty (30) day month.
The prorated Rent shall be paid on the Commencement Date and the first day of
the calendar month in which the date of termination occurs, as the case may be.

         4. SECURITY DEPOSIT: Landlord and Tenant acknowledge and agree that the
security deposit paid by Tenant under the Expired Lease was in the same amount
as the Security Deposit specified in the Basic Lease Information and such
security deposit was transferred to Landlord in connection with Landlord's
purchase of the Premises. Landlord shall retain such security deposit under the
Expired Lease, and upon the Commencement Date, such security deposit shall be
transferred to this Lease as the Security Deposit for the performance by Tenant
of its obligations under this Lease. If, as a result of Landlord's application
of the security deposit under the Expired Lease, the amount of such security
deposit held by Landlord as of the Commencement Date is less than $50,000.00.
Tenant shall, upon the Commencement Date, deliver to Landlord supple mental
funds such that as of the Commencement Date the Security Deposit held by
Landlord under this Lease equals $50,000.00. If Tenant is in default under this
Lease, Landlord may, but without obligation to do so, use the Security Deposit,
or any portion thereof, to cure the default or to compensate Landlord for all
damages sustained by Landlord resulting from Tenant's default. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount specified in the
Basic Lease Information. As soon as practicable after the termination of this
Lease, Landlord shall return the Security Deposit to Tenant, less such amounts
as are reasonably necessary, as determined solely by Landlord, to remedy
Tenant's default(s) hereunder or to otherwise restore the Premises to a clean
and safe condition, reasonable wear and tear excepted. If the cost to restore
the Premises exceeds the amount of the Security Deposit, Tenant shall promptly
deliver to Landlord any and all such excess sums as reasonably determined by
Landlord. Landlord shall not be required to keep the Security Deposit separate
from other funds, and, unless otherwise required by law, Tenant shall not be
entitled to interest on the Security Deposit. In no event or circumstance shall
Tenant have the right to any use of the Security Deposit and, specifically,
Tenant may not use the Security Deposit as a credit or to

                                       -2-

<PAGE>   9

otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.

         5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in its "As
Is" condition, as suitable for Tenant's intended use and as being in good
operating order, condition and repair. Tenant acknowledges and agrees that
neither Landlord nor any of Landlord's agents, representatives or employees has
made any representations as to the suitability, safety, fitness or condition of
the Premises for the conduct of Tenant's business, or Tenant's use of the
Premises, or for any other purpose, including without limitation, any storage
incidental thereto, or for any other purpose, and that neither Landlord nor any
of Landlord's agents, representatives or employees has agreed to undertake any
alterations or construct any improvements to the Premises, except as expressly
provided in this Lease. Any exception to the foregoing provisions must be made
by express written agreement by both parties.

         6. ADDITIONAL RENT: The costs and expenses described in this Section 6
and all other sums, charges, costs and expenses specified in this Lease other
than Base Rent (and other than Utility Expenses which are to be paid directly by
Tenant pursuant to the provisions of Section 7) are to be paid by Tenant to
Landlord as additional rent (collectively, "Additional Rent").

              6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3. Tenant shall pay all Operating Expenses as Additional Rent. The Term
"Operating Expenses" as used herein shall mean the total amounts paid or payable
by Landlord in connection with the ownership, maintenance, repair and operation
of the Premises and all amounts payable by Landlord or assessed against Landlord
or the Premises in connection with the Park (including as may be required under
any Recorded Matters, including, but not limited to, the CC&Rs, as such terms
are defined in Section 9.1 below). These Operating Expenses may include, but are
not limited to:

                   6.1.1 Landlord's cost of repairs to, and maintenance and
replacement of the roof, the roof membrane and the exterior walls of the
Building;

                   6.1.2 Landlord's cost of repairs to, and maintenance and
replacement of, the outside paved area, parking areas, landscaping and other
areas of the Land and snow removal;

                   6.1.3 Landlord's annual cost of insurance insuring against
fire and extended coverage (including, if Landlord elects, "all risk" or
"special purpose" coverage), Landlord's liability insurance and all other
insurance, including, but not limited to, earthquake, flood and/or surface water
endorsements for the Building, and the Premises, rental value insurance against
loss

                                       -3-

<PAGE>   10

of Rent in an amount equal to the amount of Rent for a period of at least six
(6) months commenc ing on the date of loss, and subject to the provisions of
Section 27 below, any deductible;

                   6.1.4 Landlord's cost of: (i) modifications and/or new
improvements to the Premises occasioned by any rules, laws or regulations
effective subsequent to the date on which the Building was originally
constructed; (ii) reasonably necessary replacement improvements to the Premises
after the Commencement Date; and (iii) new improvements to the Premises that
reduce operating costs or improve life/safety conditions, all as reasonably
determined by Landlord, and subject to Tenant's approval which will not be
unreasonably withheld or delayed;

                   6.1.5 Landlord's cost of repair and service contracts for
those repairs and/or services which are Landlord's responsibility to repair
and/or provide pursuant to this Lease, including repair contracts for the roof
and exterior walls, all of which contracts shall be procured by Landlord (but
excluding all repair contracts for the HVAC equipment or any other equipment now
or hereafter in or serving the Building, and all janitorial services, trash and
refuse collection for the Building, which shall be maintained or provided by
Tenant at Tenant's sole cost and expense);

                   6.1.6 Landlord's establishment of reasonable reserves for
replacement and/or repairs of improvements, equipment and supplies to or for the
Premises (but if such reserves are not applied and used by Landlord to pay for
the costs of such replacements and/or repairs, then Tenant shall be entitled to
a reimbursement for the costs of the reserves so paid for by Tenant on an
estimated basis as part of the reconciliation of Operating Expenses pursuant to
Section 6.4 below);

                   6.1.7 Landlord's cost of supplies, equipment, rental
equipment and other similar items used in the operation and/or maintenance of
the Premises;

                   6.1.8 Landlord's cost for the repairs and maintenance items
set forth in Section 11.2 below; and

                   6.1.9 Landlord's cost for the management and administration
of the Premises, including without limitation, a property management fee,
accounting, auditing, billing, salaries for clerical and supervisory employees
(whether located on the Premises or off-site) and all fees, licenses and permits
related to the ownership, operation and management of the Premises in an amount
not to exceed three percent (3%) of the gross annual revenues for the Premises
(as such gross annual revenues shall be estimated by Landlord each calendar year
pursuant to Section 6.3 below, with an annual reconciliation to determine the
actual amount of gross revenues and management fee for such calendar year
pursuant to Section 6.4 below).

                                       -4-

<PAGE>   11

              6.2 TAX EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay to Landlord all "Tax Expenses," which for purposes
hereof shall mean all real property taxes applicable to the Premises, and
including, without limitation, all real property taxes (and increases thereon)
attributable, in Landlord's sole discretion, to any and all alterations, tenant
improvements or other improvements of any kind, which are located within the
Building or on or about the Premises, and all personal property taxes now or
hereafter assessed or levied against the Premises or Tenant's personal property
in, on or about the Premises. The term "Tax Expenses" shall mean and include,
without limitation, any form of tax and assessment (general, special,
supplemental, ordinary or extraordinary), commercial rental tax, payments under
any improve ment bond or bonds, license fees, license tax, business license fee,
rental tax, transaction tax, levy, or penalty imposed by authority having the
direct or indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the
Premises, the Building and/or the Land, as against Landlord's right to rent or
other income therefrom, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the nature
of which was previously included within the definition of real property taxes.
The term "Tax Expenses" shall not include any franchise, estate, inheritance,
net income, or excess profits tax imposed upon Landlord.

              6.3 PAYMENT OF EXPENSES: Landlord shall estimate the Operating
Expenses and Tax Expenses for the calendar year in which the Lease commences.
Commencing on the Commencement Date, one-twelfth (1/12th) of this estimated
amount shall be paid by Tenant to Landlord, as Additional Rent, and thereafter
on the first (1st) day of each month throughout the remaining months of such
calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year during the Term of this Lease and Tenant shall
pay one- twelfth (1/12th) of such estimated amount as Additional Rent hereunder
on the first (1st) day of each month during such calendar year and for each
ensuing calendar year throughout the Term of this Lease (including any
extensions of the Term). Tenant's obligations to pay Operating Expenses and Tax
Expenses shall survive the expiration or earlier termination of this Lease.
Landlord shall provide Tenant with a budget for such expenses at least ninety
(90) days prior to the beginning of each calendar year, or as soon as reasonably
possible thereafter.

              6.4 ANNUAL RECONCILIATION: By April 30th of each calendar year
following the calendar year in which this Lease commences, or as soon thereafter
as reasonably possible. Landlord shall furnish Tenant with an accounting of
actual Operating Expenses and Tax Ex penses. Within thirty (30) days of
Landlord's delivery of such accounting, Tenant shall pay to

                                       -5-

<PAGE>   12

Landlord the amount of any underpayment. Notwithstanding the foregoing, failure
by Landlord to give such accounting by such date (or to provide Tenant with the
budget described in Section 6.3 by the date set forth therein) shall not
constitute a waiver by Landlord of its right to collect any of Tenant's
underpayment at any time Landlord shall credit the amount of any overpayment by
Tenant toward the next estimated monthly installment(s) falling due, or where
the Term of this Lease has expired, refund the amount of overpayment to Tenant.
If the Term of this Lease expires prior to the annual reconciliation of
Operating Expenses and Tax Expenses, Landlord shall have the right to reasonably
estimate such reconciliation of Operating Expenses and Tax Expenses, and if
Landlord determines that an underpayment is due, Tenant hereby agrees that
Landlord shall be entitled to deduct such underpayment from Tenant's Security
Deposit. If Landlord reasonably determines that an overpayment has been made by
Tenant, Landlord shall refund said overpay ment to Tenant as soon as practicable
thereafter. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Operating Expenses and/or Tax Expenses or to otherwise perform such
reconciliation, including without limitation, Landlord's failure to deduct any
portion of any underpayment from Tenant's Security Deposit, shall not constitute
a waiver of Landlord's right to collect any of Tenant's underpayment at any time
during the Term of this Lease or at any time after the expiration of earlier
termination of this Lease.

              6.5 AUDIT: After delivery to Landlord of at least thirty (30) days
prior written notice, Tenant, at its sole cost and expense through any
accountant designated by it) shall have the right to examine and/or audit the
books and records evidencing Operating Expenses and Tax Expenses for the
previous one (1) calendar year, during Landlord's reasonable business hours, but
not more frequently than once during any calendar year. Notwithstanding the
foregoing, Tenant shall have no right to conduct such examination or audit, have
an audit performed by the selected expert as described below, or object to or
otherwise dispute the amount of the Operating Expenses or Tax Expenses payable
by Tenant pursuant to this Section 6, unless Tenant notifies Landlord of such
dispute and causes such examination and audit to be conducted and completed
within six (6) months immediately following Landlord's delivery of the
particular annual reconciliation in question. Notwithstanding any such
examination and/or audit, Tenant shall continue to make payments as required by
any annual reconciliation, provided that such payments may be made under protest
pending completion of the audit and any determination by the selected expert, as
defined below. Any such accountant or accounting firm designated by Tenant may
not be compensated on a contingency fee basis. The results of any such audit
(and any negotiations between the parties related thereto) shall be maintained
strictly confidential by Tenant and its accountant or accounting firm, as the
case may be, and shall not be disclosed, published or otherwise disseminated to
any other party other than to Landlord and its authorized agents. Landlord and
Tenant shall use their best efforts to cooperate in such negotiations and to
promptly resolve any discrepancies between Landlord and Tenant with respect to
Landlord's reconciliation of such costs and expenses. If Landlord disagrees with
the results of such audit, the disagreement

                                       -6-

<PAGE>   13

shall be referred by Landlord for prompt decision by a mutually acceptable
public accountant or other professional consultant and a determination signed by
the selected expert shall be final and binding on both Landlord and Tenant. Any
adjustment required to any previous payment made by Tenant or Landlord by reason
of such decision shall be made within fourteen (14) days after determination is
made by the expert. If the adjustment to be paid to Tenant is greater than five
percent (5%), Landlord will pay the cost of the expert; otherwise Tenant will
pay the cost of the expert.

         7. UTILITIES: Tenant shall contract and pay for all utilities to the
Building and the Premises, including, without limitation, all water, sewer use,
sewer discharge fees, gas, heat, electricity, and telephone supplied to the
Premises, and all connection fees and hook-up charges therefor, together with
any assessments or charges for utility or similar purposes included within any
tax bill for the Premises, including, without limitation, entitlement fees,
allocation unit fees, and/or any similar fees or charges and any penalties
related thereto (collectively, "Utility Expenses"). Tenant acknowledges that the
Premises may become subject to the rationing of utility services or restrictions
on utility use as required by a public utility company, governmental agency or
other similar entity having jurisdiction thereof. Notwithstanding any such
rationing or restrictions on use of any such utility services. Tenant
acknowledges and agrees that its tenancy and occupancy hereunder shall be
subject to such rationing restrictions as may be imposed upon Landlord, Tenant,
the Premises, the Building or the Land, and Tenant shall in no event be excused
or relieved from any covenant or obligation to be kept or performed by Tenant by
reason of any such rationing or restrictions. Tenant further agrees to timely
and faithfully pay, prior to delinquency. any amount, tax, charge, surcharge,
assessment or imposition levied, assessed or imposed upon the Premises, or
Tenant's use and occupancy thereof, or as a result directly or indirectly of any
such rationing or restrictions.

         8. LATE CHARGES: Any and all sums or charges set forth in this Section
8 are considered part of Additional Rent. Tenant acknowledges that late payment
by Tenant to Landlord of Base Rent, Operating Expenses, Tax Expenses, or other
sums due hereunder, will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and
accounting charges, and late charges that may be imposed on Landlord by the
terms of any note secured by and encumbrance against the Premises, and late
charges and penalties due to the late payment of real property taxes on the
Premises. Therefore, if any installment of Rent or any other sum due from Tenant
is not received by Landlord within five (5) days after written notice that the
same is past due, Tenant shall promptly pay to Landlord an additional sum equal
to five percent (5%) of such delinquent amount plus interest on such delinquent
amount at the rate (the "Interest Rate") equal to the LESSER of (i) the prime
rate announced from time to time by the Bank of America plus three percent (3%),
or (ii) the highest

                                       -7-

<PAGE>   14

rate permitted by applicable laws for the time period such payments are
delinquent as a late charge for every month or portion thereof that such sums
remain unpaid. If Tenant delivers to Landlord a check for which there are not
sufficient funds. Landlord may, at its sole option, require Tenant to replace
such check with a cashier's check for the amount of such check and all other
charges payable hereunder. The parties agree that this late charge and the other
charges referenced above represent a fair and reasonable estimate of the costs
that Landlord will incur by reason of late payment by Tenant. Acceptance of any
late charge or other charges shall not constitute a waiver by Landlord of
Tenant's default with respect to the delinquent amount, nor prevent Landlord
from exercising any of the other rights and remedies available to Landlord for
any other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or by electronic funds transfer.

         9. USE OF PREMISES:

              9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND
REGULATIONS: The Premises are to be used solely for the purposes and uses
specified in the Basic Lease Information and for no other uses or purposes
without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed so long as the proposed use (i) does not
involve the use of Hazardous Materials other than as expressly permitted under
the provisions of Section 29 below, (ii) does not violate any zoning or building
restrictions or any other Laws (as defined in this Section 9.1 below), and (iii)
is in compliance with the Recorded Matters (as defined in this Section 9.1
below) as reasonably determined by Landlord. The use of the Premises by Tenant
and its employees, representatives, agents, invitees, licensees, subtenants,
customers or contractors (collectively, "Tenant's Representatives") shall be
subject to, and at all times in compliance with (a) any and all applicable laws,
ordinances, statutes, orders and regulations as same exist from time to time
(collectively, the "Laws"), (b) any and all documents, matters or instruments,
and any supplements thereto, including without limitation, the Covenants, Condi
tions and Restrictions recorded in the County in which the Premises are located
on January 24, 1990 as Film No. 1612, Reception No. 01025034, as amended by
First Amendment recorded on September 18, 1992 as Film No. 1740, Reception No.
01194772, and as further amended by Second Amendment recorded on March 4,1994 as
Film No. 1947 and Reception No. 01402124 (collectively, the "CC&Rs"), which
Tenant hereby acknowledges Tenant has received from Landlord, each of which has
been or hereafter is recorded in any official or public records with respect to
the Premises, the Building, the Land and/or the Park, or any portion thereof
(collec tively, the "Recorded Matters"), and (c) any and all rules and
regulations set forth in EXHIBIT B, attached to and made a part of this Lease,
and any other reasonable rules and regulations promulgated by landlord now or
hereafter enacted relating to parking and the operation of the

                                      -8-

<PAGE>   15

Premises (collectively, the "Rules and Regulations"). Tenant agrees to, and does
hereby, assume full and complete responsibility to ensure that the Premises are
adequate to fully meet the needs and requirements of Tenant's intended
operations of its business within the Building and on or about the Premises, and
Tenant's use of the Premises and that same are in compliance with all applicable
Laws throughout the Term of this Lease. Additionally, Tenant shall be solely
responsible for the payment of all costs, fees and expenses associated with any
modifications, improvements, or alterations to the Premises, Building or the
Land occasioned by the enactment of, or changes to, any Laws arising from
Tenant's use of the Premises or alterations, improve ments or additions made to
the Premises regardless of when such Laws became effective.

              9.2 PROHIBITION ON USES: Tenant shall not use the Premises or
permit anything to be done in or about the Premises nor keep or bring anything
therein which will in any way conflict with any of the requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) or similar body now or hereafter constituted or in any way
increase the existing rate of or affect any policy of fire or other insurance
upon the Building or the Premises or any of its contents, or cause a
cancellation of any insurance policy. No auctions may be held or otherwise
conducted in, on or about the Premises without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other
buildings in the Park, or other persons or businesses in the area, or allow the
Premises to be used for any unlawful or objectionable purpose, as deter mined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of other buildings in the Park;
nor shall Tenant cause maintain or permit any private or public nuisance in, on
or about the Premises, including, but not limited to, any offensive odors,
noises, fumes or vibrations. Tenant shall not damage or deface or otherwise
commit or suffer to be committed any waste in, upon or about the Premises.
Tenant shall not place or store, nor permit any other person or entity to place
or store, any property, equipment, materials, supplies, personal property or any
other items or goods outside of the Building for any period of time, other than
vehicles for parking in the parking areas of the Land and other than the
existing nitrogen tank and trash compactor which are located on the Land, and
other than those other items which may be approved by Landlord. Tenant shall not
permit any animals, including, but not limited to, any household pets, to be
brought or kept in or about the Premises. Tenant shall place no loads upon the
floors, walls, or ceilings in excess of the maximum designated load permitted by
the applicable Uniform Building Code or which may damage the Building or outside
areas, nor place any harmful liquids in the drainage systems; nor dump or store
waste materials, refuse or other such materials, or allow such to remain outside
the Building area, except for any non-hazardous or non-harmful materials which
may be stored in refuse dumpsters or in any enclosed trash areas provided Tenant
shall honor the terms of the CCR's relating to the Premises, the Building, the
Land and/or the Park. Tenant shall honor the

                                       -9-

<PAGE>   16

Rules and Regulations. If Tenant fails to comply with such Laws, the CCR's Rules
and Regula tions and/or the provisions of this Lease, Landlord shall have the
right to collect from Tenant, in addition to all rights and remedies of Landlord
hereunder, Landlord's reasonable costs and expenses, if any, to cure any of such
failures of Tenant, if Landlord, at its sole option, elects to undertake such
cure.

         10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:

              10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any
signs, fixtures, improvements, nor make or permit any other alterations or
additions to the Premises without the prior written consent of Landlord. If any
such alteration or addition is expressly permitted by Landlord, Tenant shall
deliver at least twenty (20) days prior notice to Landlord, from the date Tenant
intends to commence construction, sufficient to enable Landlord to post a Notice
of Non- Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor approved by Landlord in writing, which approval shall not be
unreasonably withheld and shall be provided or refused within ten (10) business
days after Tenant's request therefor, at Tenant's sole expense in compliance
with all applicable Laws (including, but not limited to, the ADA as defined
herein), Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises free from any liens arising out of any work performed, materials
furnished or obligations incurred by or on behalf of Tenant. Notwith standing
the foregoing, Tenant shall not be permitted to make a permit any alterations or
additions to the Premises which affect the structural components of the Building
or of the portions of the Premises exterior to the Building, without the prior
written consent of Landlord, which consent Landlord may withhold in its sole and
absolute discretion.

              10.2 SURRENDER OF PREMISES: Upon the termination of this Lease,
whether by forfeiture, lapse of time or otherwise, or upon the termination of
Tenant's right to possession of the Premises, Tenant will at once surrender and
deliver up the Premises, together with the fixtures (other than trade fixtures),
additions and improvements which Landlord has notified Tenant, in writing, that
Landlord will require Tenant not to remove, to Landlord in as good a condition
and repair as of the date of execution of this Lease (including, but not limited
to, replacing all light bulbs and ballasts not in good working condition),
except for reasonable wear and tear. Reason able wear and tear shall not include
any damage or deterioration to the floors of the Building arising from the use
of forklifts in, on or about the Building (including, without limitation, any
marks or stains of any portion of the floors), and any damage or deterioration
that would have been prevented by proper maintenance by Tenant or Tenant
otherwise performing all of its obligations under this Lease. Upon such
termination of this Lease, Tenant shall remove all tenant signage, trade
fixtures, furniture furnishings, personal property, additions, and other
improve-

                                      -10-

<PAGE>   17

ments unless Landlord requests, in writing, that Tenant not remove some or all
of such fixtures (other than trade fixtures, furniture, furnishings and personal
property), additions or improve ments installed by, or on behalf of, Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures (other than trade fixtures, furniture, furnishings and personal
property), alter ations, additions and other improvements which Landlord shall
require Tenant not to remove from the Premises. Tenant shall repair any damage
caused by the installation or removal of such signs, trade fixtures, furniture,
furnishings, fixtures, additions and improvements which are to be removed from
the Premises by Tenant hereunder. If Landlord fails to notify Tenant at least
twenty (20) days prior to such termination of this Lease, then Tenant shall
remove all tenant signage, alterations, furniture, furnishings, trade fixtures,
additions and other improvements installed in or about the Premises at any time
by, or on behalf of Tenant. Tenant shall ensure that the removal of such items
and the repair of the Premises will be completed prior to such termina tion of
this Lease.

         11. REPAIRS AND MAINTENANCE:

              11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for
those portions of the Premises to be maintained by Landlord, as provided in
Section 11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises in good, clean and safe condition and repair to the
reasonable satisfaction of Landlord, including, but not limited to, repairing
any damage caused by Tenant or Tenant's Representatives and replacing any
property in, on or about the Premises so damaged by Tenant or Tenant's
Representatives. Without limiting the generality of the foregoing, Tenant shall
be solely responsible for (i) providing all janitorial services for the Building
including the refuse and trash removal from the Premises, and (ii) maintaining,
repairing and replacing (a) all mechanical systems, heating, ventilation and air
conditioning units, equipment and systems now or hereafter located in or on the
Building, (b) all plumbing systems and equipment and electrical wiring and
equipment, (c) all interior lighting (including, without limitation, light bulbs
and/or ballasts), (d) all interior and exterior glass, windows, window frames,
window casements, skylights, doors, door frames and door closures, (e) all
roll-up doors, ramps and dock equipment, including without limitation, dock
bumpers, dock plates, dock seals, dock levelers and dock lights, (f) all tenant
signage, (g) lifts for disabled persons serving the Premises, (h) sprinkler
systems, fire protection systems and security systems, and (i) all partitions,
fixtures, equipment, interior painting, and interior demising walls). Tenant
shall procure and maintain, at Tenant's sole cost and expense, repair and
service contracts for those portions of the Premises which Tenant is responsible
for maintaining, repairing and replacing (as set forth above in this Section
11.1), including, but not limited to, the following contracts: (A) the heating,
ventilation and air conditioning systems preventative maintenance and repair
contract(s); and (B) the fire and sprinkler protection services and preventative
maintenance

                                      -11-
<PAGE>   18

and repair contract(s) (including, without limitation, monitoring services)
(collectively, the "Service Contracts"). If Tenant fails to repair and maintain
the Premises as required pursuant to the foregoing provisions of this Section
11.1, Landlord shall have the right, in addition to its other remedies in
Section 11.3 below and elsewhere in this Lease, to require Tenant to enter in to
a new Service Contract for the service which Tenant failed to so perform with a
new service provider, which service provider shall be selected by Tenant from a
list of at least three new service providers delivered by Landlord to Tenant; if
Tenant fails to enter into such new Service Contract with a new service provider
within ten (10) days after Landlord's request, then Landlord may procure and
maintain such Service Contract with a new service provider selected by Landlord,
and Tenant shall reimburse Landlord for the cost thereof in accordance with the
provisions of Section 11.3 below. Tenant shall deliver to Landlord a true and
complete copy of each Service Contract pertaining to HVAC, elevator, and fire,
life safety and sprinkler systems, and any and all renewals or extensions
thereof, and each service report or other summary received by Tenant pursuant to
or in connection with such Service Contracts.

              11.2 LANDLORD'S REIMBURSABLE REPAIR AND MAINTENANCE OBLIGATIONS:
Subject to the provisions of Sections 6 and 27 of this Lease and except for (i)
the obligations of Tenant set forth in Sections 9.1 and 11.1 above, and (ii) the
repairs rendered necessary by the intentional or negligent acts or omissions of
Tenant or any of Tenant's Representatives, Landlord agrees, at Landlord's
expense, subject to reimbursement pursuant to Section 6 above, to keep in good
repair the roof, roof membranes, exterior walls and foundations of the Building
and the structural elements of the Building, exterior lighting, exterior
painting of the Building and underground water and sewer pipes outside the
exterior walls of the Building (however, the cost of maintenance and repair of
the foundations, the roof (other than the roof membranes), the structural
elements of the Building and the underground water and sewer pipes shall not be
included in Operating Expenses or otherwise passed-through to Tenant unless the
same is required due to the negligence or willful misconduct of Tenant or
Tenant's Representatives), and the exterior landscaping (including sprinklers),
surface parking areas, driveways, walkways, accessways and sidewalks of the Land
(collectively, the "Landlord Repair Items"). For purposes of this Section 11.2,
the term "exterior" shall mean exterior to the Building.

              11.3 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE
OBLIGATIONS: Except for normal maintenance and repair of the items described in
Section 11.1 above, Tenant shall have no right of access to or right to install
any device on the roof of the Building nor make any penetrations of the roof of
the Building without the express prior written consent of Landlord. If Tenant
refuses or neglects to repair and maintain the Premises properly as required
herein and to the reasonable satisfaction of Landlord, Landlord may, but without
obligation to do so, at any time make such repairs and/or maintenance without
Landlord having any liability to Tenant for any loss or damage that may accrue
to Tenant's merchandise, fixtures or other property, or to

                                      -12-
<PAGE>   19

Tenant's business by reason thereof, except to the extent any damage is caused
by the willful misconduct or gross negligence of Landlord or its authorized
agents and representatives and is not insured or required to be insured by
Tenant pursuant to this Lease. In the event Landlord makes such repairs and/or
maintenance, upon completion thereof, Tenant shall pay to Landlord, as
additional rent, the Landlord's costs for making such repairs and/or
maintenance, plus twenty percent (20%) for overhead, upon presentation of a bill
therefor. The obligations of Tenant hereunder shall survive the expiration of
the Term of this Lease or the earlier termination thereof. Tenant hereby waives
any right to repair at the expense of Landlord under any applicable Laws now or
hereafter in effect respecting the Premises.

         12. INSURANCE:

              12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and
effect at all times during the Term of this Lease, at Tenant's sole cost and
expense, for the protection of Tenant, Landlord and Landlord's lender(s), as
their interests may appear, policies of insurance issued by a carrier or
carriers reasonably acceptable to Landlord and its lender(s) which afford the
following coverages: (i) worker's compensation; statutory limits; (ii)
employer's liability, as required by law, with a minimum limit of $100,000 per
employee and $500,000 per occurrence; (iii) commercial general liability
insurance (occurrence form) providing coverage against any and all claims for
bodily injury and property damage occurring in, on or about the Premises arising
out of Tenant's and Tenant's Representatives' use and or occupancy of the
Premises. Such insurance shall include coverage for blanket contractual
liability, fire damage, premises, personal injury, completed operations,
products liability, personal and advertising, and a plate-glass rider to provide
coverage for all glass in, on or about the Premises including, without
limitation, skylights. Such insurance shall have a combined single limit of not
less than One Million Dollars ($1,000,000) per occurrence with a Two Million
Dollars ($2,000,000) aggregate limit and excess/umbrella insurance in the amount
of Two Million Dollars ($2,000,000). If Tenant has other locations which it owns
or leases, the policy shall include an aggregate limit per location endorsement.
If necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv) automobile liability insurance: a
combined single limit of not less than $2,000,000 per occurrence and insuring
Tenant against liability for claims arising out of the ownership, maintenance,
or use of any owned, hired or non-owned automobiles; (v) "all risk" or "special
purpose" property insurance, including without limitation, sprinkler leakage
(and damage for flood and earthquake), covering damage to or loss of any of (a)
Tenant's personal property, trade fixtures and inventory located in, on or about
the Premises, and (b) and all systems, equipment, tenant improvements,
alterations, additions located in the Building and interior portions of the
Building, including the heating, ventilation and air conditioning, plumb ing,
life safety, security, electrical or other systems and equipment now or
hereafter located in the Building (but excluding the Landlord Repair Items which
Landlord is required to repair pursuant

                                      -13-
<PAGE>   20

to Section 11.2 above). Such insurance shall be written on a replacement cost
basis (without deduction for depreciation) in an amount equal to one hundred
percent (100%) of the full replacement value of the aggregate of the items
referred to in this subparagraph (v); (vi) business interruption of Tenant,
together with, if the property of Tenant's invitees is to be kept in, on or
about the Premises, warehouser's legal liability or bailee customers insurance
for the full replacement cost of the property belonging to invitees and located
in, on or about the Premises; and (vii) such other insurance as Landlord deems
necessary and prudent or as may otherwise be required by any of Landlord's
lenders or joint venture partners.

              12.2 INSURANCE POLICIES: Insurance required to be maintained by
Tenant shall be written by companies (i) licensed to do business in the State of
Colorado, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "Best's Insurance Reports." Any deductible amounts under any of
the insurance policies required hereunder shall not exceed One Thousand Dollars
($1,000). Tenant shall deliver to Landlord certificates of insurance and true
and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancellable or otherwise subject to modification except after
thirty (30) days prior written notice to the parties named as additional
insureds as required in this Lease (except for cancellation for nonpayment of
premium, in which event cancellation shall not take effect until at least ten
(10) days' notice has been given to Landlord and Landlord's lender(s)). Tenant
shall have the right to provide insurance coverage which it is obligated to
carry pursuant to the terms of this Lease under a blanket insurance policy,
provided such blanket policy expressly affords coverage for the Premises and for
Landlord and Landlord's lender(s) as required by this Lease.

              12.3 ADDITIONAL INSUREDS AND COVERAGE: landlord, any property
management company and/or agent of Landlord for the Premises, the Building or
the Land, and any lender(s) of Landlord having a lien against the Premises shall
be named as additional insureds under all of the policies required in Section
12.1(iii) above. Additionally, such policies shall provide for severability of
interest. All insurance to be maintained by Tenant shall, except for workers'
compensation and employer's liability insurance, be primary, without right of
contribution from insurance maintained by Landlord. Any umbrella/excess
liability policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as primary
insurance. The limits of insurance maintained by Tenant shall not limit Tenant's
liability under this Lease. It is the parties' intention that the insurance to
be procured and maintained by Tenant as required herein shall provide coverage
for any and all

                                      -14-
<PAGE>   21

damage or injury arising from or related to Tenant's operations of its business
and/or Tenant's or Tenant's Representatives' use of the Premises, whether such
events occur within the Building or in any other areas of the Premises. It is
not contemplated or anticipated by the parties that the aforementioned risks of
loss be borne by Landlord's insurance carriers, rather it is contemplated and
anticipated by Landlord and Tenant that such risks of loss be borne by Tenant's
insurance carriers pursuant to the insurance policies procured and maintained by
Tenant as required herein.

              12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the
event Tenant does not purchase the insurance required in this Lease or keep the
same in full force and effect throughout the Term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall promptly pay to Landlord as Additional
Rent, the amount so paid by Landlord, upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
Additional Rent, any and all damages which Landlord may sustain by reason of
Tenant's failure to obtain and maintain such insurance. If Tenant fails to
maintain any insurance required in this lease, Tenant shall be liable for all
losses, damages and costs resulting from such failure.

              12.5 LANDLORD'S INSURANCE: Landlord shall insure the Building and
the Premises during the Term of this Lease against loss or damage due to fire
and other casualties covered within the classification of fire and extended
coverage and "all risk" property insurance, including vandalism coverage and
malicious mischief and sprinkler leakage; provided, however, that
notwithstanding the foregoing, in no event shall Landlord be required to insure
Tenant's personal property, trade fixtures or inventory, or any tenant
improvements, alterations, additions in or on the Building, or any of the
Building's systems or equipment now or hereafter located in or on the Building
or any other items which Tenant is obligated to insure with respect to the
Premises as set forth in Section 12.1 above. Such coverage shall be in such
amounts, from such companies and on such terms and conditions, including
deductible amounts, as Landlord may from time to time determine. Additionally,
at the option of Landlord, such insurance coverage may include the risks of
earthquakes and/or flood damage and additional hazards, a rental loss
endorsement and a one or more loss payee endorsements in favor of the holders of
any mortgages or deeds of trust encumbering the interest of Landlord in the
Building or any portion thereof. Upon inquiry by Tenant, from time to time,
Landlord shall inform Tenant of such coverage carried by Landlord and shall
provide to Tenant a certificate evidencing such property damage insurance
coverage maintained by Landlord. The cost of all insurance maintained by
Landlord with respect to the Premises (including the insurance required under
this Section 12.5) shall be included in Operating Expenses.

                                      -15-
<PAGE>   22

         13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive
their respective rights of recovery against each other for any loss of, or
damage to, either parties' property to the extent that such loss or damage is
insured by an insurance policy required to be in effect at the time of such loss
or damage. Each party shall obtain any special endorsements, if required by its
insurer whereby the insurer waives its rights of subrogation against the other
party. This provision is intended to waive fully, and for the benefit of the
parties hereto, any rights and/or claims which might give rise to a right of
subrogation in favor of any insurance carrier. The coverage obtained by Tenant
pursuant to Section 12 of this Lease shall include, without limitation, a waiver
of subrogation endorsement attached to the certificate of insurance. The
provisions of this Section 13 shall not apply in those instances in which such
waiver of subrogation would invalidate such insurance coverage or would cause
either party's insurance coverage to be voided or otherwise uncollectible.

         14. LIMITATION OF LIABILITY AND INDEMNITY:

              14.1 INDEMNITY: Except to the extent damage resulting from the
sole active gross negligence or willful misconduct of Landlord or Landlord's
authorized representatives, Tenant agrees to protect, defend (with counsel
acceptable to Landlord) and hold Landlord and Landlord's lenders, partners,
members, property management company (if other than Landlord), agents,
directors, officers, employees, representatives, contractors, shareholders,
successors and assigns and each of their respective partners, members,
directors, employees, representatives, agents, contractors, shareholders,
successors and assigns (collectively, the "Indemnitees") harmless and indemnify
the Indemnitees from and against all liabilities, damages, claims, losses,
judgments, charges and expenses (including reasonable attorneys' fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from or in any way related
to, directly or indirectly, (i) Tenant's or Tenant's Representatives' use of the
Premises, (ii) the conduct of Tenant's business, (iii) from any activity, work
or thing done, permitted or suffered by Tenant in, on or about the Premises,
(iv) in any way connected with the Premises or with the improvements or personal
property therein, including, but not limited to, any liability for injury to
person or property of Tenant, Tenant's Representa tives, or third party persons,
and/or (v) Tenant's failure to perform any covenant or obligation of Tenant
under this Lease. Tenant agrees that the obligations of Tenant herein shall
survive the expiration or earlier termination of this Lease.

              14.2 LIMITATION OF LIABILITY: Except to the extent of damage
resulting from the sole active gross negligence or willful misconduct of
Landlord or Landlord's authorized represen tatives, to the fullest extent
permitted by law, Tenant agrees that neither Landlord nor any of Landlord's
lender(s), partners, members, property management company (if other than
Landlord), employees, representatives, legal representatives, successors or
assigns shall at any time or to any

                                      -16-
<PAGE>   23

extent whatsoever by liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises. Tenant shall not, in any
event or circumstance, be permitted to offset or otherwise credit against any
payments of Rent required herein for matters for which Landlord may be liable
hereunder. Landlord and its authorized representatives shall not be liable for
any interference with light or air, or for any latent defect in the Premises or
the Building.

         15. ASSIGNMENT AND SUBLEASING:

              15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assign ment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) and/or Environmental Laws (defined below) beyond
those requirements which are applicable to Tenant, unless the proposed sublessee
or assignee shall (a) first deliver plans and specifications for complying with
such additional requirements and obtain Landlord's written consent thereto, and
(b) comply with all Landlord's conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least thirty (30)
days prior to the proposed commencement of the sublease or assignment (the
"Proposed Effective Date") the following: (i) the name of the proposed assignee
or sublessee; (ii) such information as to such assignee's or sublessee's
financial responsibility and standing as Landlord may reasonably require; and
(iii) the aforementioned plans and specifications, if any. Within ten (10) days
after Landlord's receipt of a written request from Tenant that Tenant seeks to
sublet or assign all or any portion of this Lease or the Premises. Landlord
shall deliver to Tenant a copy of Landlord's standard form of sublease or
assignment agreement (as applicable), which instrument shall be utilized for
each proposed sublease or assignment (as applicable), and such instrument shall
include a provision whereby the assignee or sublessee assumes all of Tenant's
obligations hereunder and agrees to be bound by the terms hereof. As Additional
Rent hereunder, Tenant shall pay to Landlord a fee in the amount of Five Hundred
Dollars ($500) plus Tenant shall reimburse Landlord for actual legal and other
expenses incurred by Landlord in connection with any actual or proposed
assignment or subletting. In the event the sublease or assignment (1) by itself
or taken together with prior sublease(s) or partial assignment(s) covers or
totals, as the case may be, more than twenty-five percent (25%) of the rentable
square feet of the Premises or (2) is

                                      -17-
<PAGE>   24

for a term which by itself or taken together with prior or other subleases or
partial assignments is greater than fifty percent (50%) of the period remaining
in the Term of this Lease as of the time of the Proposed Effective Date, then
Landlord shall have the right to be exercised by giving written notice to
Tenant, to recapture the space described in the sublease or assignment. If such
recapture notice is given, it shall serve to terminate this Lease with respect
to the proposed sublease or assignment space, or, if the proposed sublease or
assignment space covers all the Premises, it shall serve to terminate the entire
Term of this Lease in either case, as of the Proposed Effective Date. However,
no termination of this Lease with respect to part or all of the Premises shall
become effective without the prior written consent, where necessary, of the
holder of each deed of trust encumbering the Premises or any part thereof. If
this Lease is terminated pursuant to the foregoing with respect to less than the
entire Premises, the Rent shall be adjusted on the basis of the proportion of
square feet retained by Tenant to the square feet originally demised and this
Lease as so amended shall continue thereafter in full force and effect. Each
permitted assignee or sublessee shall assume and be deemed to assume this Lease
and shall be and remain liable jointly and severally with Tenant for payment of
Rent and for the due performance of, and compliance with all the terms,
covenants, conditions and agreements herein contained on Tenant's part to be
performed or complied with, for the Term of this Lease. No assignment or
subletting shall affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), and Tenant
shall not be released from performing any of the terms, covenants and conditions
of the Lease. Tenant hereby acknowledges and agrees that it understands that
Landlord's accounting department may process and accept Rent payments without
verifying that such payments are being made by Tenant, a permitted sublessee or
a permitted assignee in accordance with the provisions of this Lease. Although
such payments may be processed and accepted by such accounting department
personnel, any and all actions or omissions by the personnel of Landlord's
accounting department shall not be considered as acceptance by Landlord of any
proposed assignee or sublessee nor shall such actions or omissions be deemed to
be a substitute for the requirement that Tenant obtain Landlord's prior written
consent to any such subletting or assignment, and any such actions or omissions
by the personnel of Landlord's accounting department shall not be considered as
a voluntary relinquishment by Landlord of any of its rights hereunder nor shall
any voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, in the event Tenant is a corporation, partnership, joint venture, trust
or other entity other than a natural person, any change in the direct or
indirect ownership of Tenant (whether pursuant to one or more transfers) which
results in a change of more than fifty percent (50%) in the direct or indirect
ownership of Tenant shall be deemed to be an assignment within the meaning of
this Section 15 and shall be subject to all the provisions hereof. Any and all
options, first rights of refusal, tenant improvement allowances and other
similar rights granted to Tenant in this Lease, if any, shall not be assignable
by Tenant unless expressly authorized in writing by Landlord.

                                      -18-
<PAGE>   25

              15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the
event of any sublease or assignment of all or any portion of the Premises where
the rent or other consider ation provided for in the sublease or assignment
either initially or over the term of the sublease or assignment exceeds the Rent
or pro rata portion of the Rent, as the case may be, for such space reserved in
the Lease. Tenant shall pay the Landlord monthly, as Additional Rent, at the
same time as the monthly installments of Rent are payable hereunder, fifty
percent (50%) of the excess of each such payment of rent or other consideration
in excess of the Rent called for hereunder.

              15.3 WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.

         16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes
and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and personal property located and/or installed on, in
or about the Premises, and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes are not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.

         17. SUBORDINATION:

              17.1 SUBORDINATION: Subject to Section 17.3 below, this Lease, at
Landlord's option, shall be subject and subordinate to the liens of any
mortgages or deeds of trust and to any ground leases, in any amount or amounts
whatsoever now or hereafter placed on or against the Premises or any portion
thereof, or on or against Landlord's interest or estate therein, without the
necessity of the execution and delivery of any further instruments on the part
of Tenant to effectuate such subordination. If any mortgagee or trustee or
ground lessor shall elect to have this Lease made prior to the lien of its
mortgage or deed of trust or ground lease and shall give written notice thereof
to Tenant, this Lease shall be deemed to be prior to such mortgage or deed of
trust or ground lease, whether this Lease is dated prior or subsequent to the
date of said mortgage or deed of trust or ground lease.

              17.2 SUBORDINATION AGREEMENT: Tenant covenants and agrees to
execute and deliver upon demand, without charge therefor, such further
instruments evidencing such subordi nation of this Lease to the lien of any such
ground leases, mortgages or deeds of trust as may be

                                      -19-
<PAGE>   26

required by Landlord. Tenant covenants and agrees in the event any proceedings
are brought for the foreclosure of any such mortgage, or if any ground or
underlying lease is terminated, to attorn, without any deductions or set-offs
whatsoever, to the purchaser upon any such foreclosure sale, or to the lessor of
such ground or underlying lease, as the case may be, if so requested to do so by
such purchaser or lessor and/or if required to do so pursuant to any
subordination, non-disturbance and attornment agreement executed pursuant to
Section 17.3 below, and to recognize such purchaser or lessor as the lessor
under this Lease, provided such purchaser or lessor agrees not to disturb
Tenant's use, occupancy or quiet enjoyment of the Premises while Tenant is not
in default under this Lease.

              17.3 EXISTING AGREEMENT: Tenant hereby acknowledges that as of the
date on which Landlord and Tenant execute this Lease there is a deed of trust
encumbering, and in force against, the Premises in favor of General Electric
Capital Corporation, a New York corporation (the "Current Lender").
Simultaneously with Tenant's execution of this Lease, Tenant shall sign,
notarize and deliver a subordination, non-disturbance and attornment agreement
substantially in the form of Exhibit D attached hereto. If Landlord at any time
during the Term of this Lease causes the Premises to be encumbered by a new deed
of trust or mortgage pursuant to which the beneficiary of such deed of trust or
mortgage is a party or entity other than the Current Lender, and/or if any party
which acquires, or otherwise succeeds to, Landlord's interest in the Premises
(including without limitation, any ground lessee) encumbers or places a lien
against the Premises with a mortgage, deed of trust or similar security
instrument and the beneficiary thereof requires this Lease to be subordinated to
such encumbrance or lien, Landlord or the successor of Landlord will use
commercially reasonable efforts to provide to Tenant a subordination,
non-disturbance and attornment agreement in form reasonably acceptable to
Landlord or such successor of Landlord, the subject beneficiary and Tenant. If
said subordination, non-disturbance and attornment agreement is required and
agreed upon by the aforesaid parties, Landlord or the successor of Landlord, the
subject beneficiary and Tenant shall cause any such subordination,
non-disturbance and attornment agreement to be executed, acknowledged and
recorded concur rently with, or as soon as practicable after, the execution and
recordation of any such lien, deed of trust or mortgage. In addition to the
foregoing, if Landlord enters into a ground lease with regard to the Premises
and such ground lessee requires this Lease to be subordinated to such ground
lease, the ground lessee and ground lessor will use commercially reasonable
efforts to provide to Tenant a subordination, non-disturbance and attornment
agreement in form reasonably acceptable to such ground lessee, ground lessor,
any beneficiary of ground lessee, and to Tenant.

         18. RIGHT OF ENTRY: Subject to reasonable prior notice to Tenant
(except in emergen cies), Tenant grants Landlord or its agents the right to
enter the Premises at all reasonable times to (i) inspect them; (ii) show the
Premises to prospective purchasers, mortgagees or tenants, or to the ground or
underlying lessors; (iii) post notices of nonresponsibility; (iv) perform
Landlord's repair

                                      -20-
<PAGE>   27

obligations under this Lease with respect to the Premises or the Building; or
(v) perform services required of Landlord. Landlord shall make any such entries
without the abatement of Rent and may take such reasonable steps as required to
accomplish the stated purposes. Landlord shall have the right to use any and all
means landlord deems reasonably necessary to enter the Premises in an emergency.
Tenant hereby waives any claim from damages or for any injury or inconve nience
to or interference with Tenant's business, or any other loss occasioned thereby
except for any claim for any of the foregoing arising out of the sole active
gross negligence or willful misconduct of Landlord or its authorized
representatives.

         19. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if
required by any lender or ground lessor) and deliver to Landlord, within ten
(10) days after Landlord provides such to Tenant, a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification), the date to which the Rent
and other charges are paid in advance, if any, acknowledging that there are not,
to Tenant's knowl edge, any uncured defaults on the part of Landlord hereunder
or specifying such defaults as are claimed, and such other matters as Landlord
may reasonably require. Any such statement may be conclusively relied upon by
Landlord and any prospective purchaser or encumbrancer of the Premises. Tenant's
failure to deliver such statement within such time shall be conclusive upon the
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord's performance; and (c) not more than one month's Rent has been paid in
advance, except in those instances when Tenant pays Rent quarterly in advance
pursuant to Section 8 hereof, then not more than three month's Rent has been
paid in advance. Failure by Tenant to so deliver such certified estoppel
certificate shall be a material default of the provisions of this Lease. Tenant
shall be liable to Landlord, and shall indemnify Landlord from and against any
loss, cost, damage or expense, incidental, consequential, or otherwise
(including court costs and attorneys' fees), arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such certified estoppel certificate.

         20. TENANT'S DEFAULT: The occurrence of any one or more of the
following events shall, at Landlord's option, constitute a material default by
Tenant of the provisions of this Lease:

              20.1 The abandonment of the Premises by Tenant or the vacation of
the Premises by Tenant which would cause any insurance policy to be invalidated
or otherwise lapse. Tenant agrees to notice and service of notice as provided
for in this Lease and waives any right to any other or further notice or service
of notice which Tenant may have under any statute or law now or hereafter in
effect;

                                      -21-
<PAGE>   28

              20.2 The failure by Tenant to make any payment of Rent, Additional
Rent or any other payment required hereunder on the date said payment is due;

              20.3 The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease )(except failure to
make any payment of Rent and/or Additional Rent or any other payment required
hereunder, which shall be governed by the terms of Section 20.2 above, and any
failures to observe, perform or comply with any of the conditions, covenants or
provisions of this Lease referred to in Sections 20.1 and 20.4 through 20.7,
which shall be governed by the terms of those Sections, respectively) and such
failure is not cured within the time period required under this Section 20.3.
Tenant shall not be deemed in breach or default of this Lease unless Tenant
fails within a reasonable time to perform an obligation required to be performed
by Tenant hereunder. For purposes of this provision, a reasonable time to
perform an obligation required to be performed by Tenant hereunder. For purposes
of this provision, a reasonable time shall be fifteen (15) days after receipt by
Tenant of written notice specifying the nature of the obligation Tenant has not
performed; provided, however, that if the nature of Tenant's obligation is such
that more than fifteen (15) days after receipt of written notice, is reasonably
necessary for its performance, then Tenant shall not be in breach or default of
this Lease if performance of such obligation is commenced within such fifteen
(15) day period and thereafter diligently pursued to completion.

              20.4 The making of a general assignment by Tenant for the benefit
of creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of any involun tary
action, the failure to remove or discharge the same within sixty (60) days of
such filing, the appointment of a receiver or other custodian to take possession
of substantially all of Tenant's assets or this leasehold, Tenant's insolvency
or inability to pay Tenant's debts or failure generally to pay Tenant's debts
when due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets. Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;

              20.5 Tenant's use or storage of Hazardous Materials in, on or
about the Premises or the Building other than as expressly permitted by the
provisions of Section 29 below;

              20.6 The making of any material misrepresentation or omission by
Tenant in any materials delivered by or on behalf of Tenant to Landlord pursuant
to this Lease; or

                                      -22-
<PAGE>   29

              20.7 A material adverse change in the financial condition of
Tenant or an affiliated entity of Tenant which may adversely affect Tenant's
ability to perform all or any portion of its obligations under this Lease.

         21. REMEDIES FOR TENANT'S DEFAULT:

              21.1 LANDLORD'S RIGHTS: In the event of Tenant's default under
this Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means, in which case, upon delivery of written notice by Landlord,
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord or
exercise of any other rights or remedies pursuant to this Section 21 shall be
construed as an election to terminate this Lease unless a written notice of such
intention is given to Tenant. If Landlord relets the Premises or any portion
thereof, (i) Tenant shall be liable immediately to Landlord for all costs
Landlord incurs in reletting the Premises or any part thereof, including,
without limitation, broker's commissions, expenses of cleaning, redecorating and
further improving the Premises and other similar costs (collectively, the
"Reletting Costs"), and (ii) the rent received by Landlord from such reletting
shall be applied to the payment of: first, any indebtedness from Tenant to
Landlord other than Base Rent; Operating Expenses and Tax Expenses; second, all
costs including maintenance, incurred by Landlord in reletting; and, third, Base
Rent, Operating Expenses and Tax Expenses, and all other sums due under this
Lease. Any and all of the Reletting Costs shall be fully chargeable to Tenant
and shall not be prorated or otherwise amortized in relation to any new lease
for the Premises or any portion thereof. After deducing the payments referred to
above, any sum remaining from the rental Landlord receives from reletting shall
be held by Landlord and applied in payment of future Rent as Rent becomes due
under this Lease. In no event shall Tenant be entitled to any excess rent
received by Landlord. Reletting may be for a period shorter or longer than the
remaining Term of this Lease. No act by Landlord other than giving written
notice of termination to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises or the appointment of a receiver on Landlord's
initiative to protect Landlord's interest under this Lease shall not constitute
a termination of Tenant's right to possession. So long as this Lease is not
terminated, Landlord shall have the right to remedy any default of Tenant, to
maintain or improve the Premises, to cause a receiver to be appointed to
administer the Premises and new or existing subleases and to add to the Rent
payable hereunder all of Landlord's reasonable costs in so doing, with interest
at the maximum rate permitted by law from the date of such expenditure.

                                      -23-
<PAGE>   30

              21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and
abandons the Premises before the end of the Term, or if Tenant's right to
possession is terminated by Landlord because of a breach or default under this
Lease, then in either such case, Landlord may recover from Tenant all damages
suffered by Landlord as a result of Tenant's failure to perform its obligations
hereunder, including, but not limited to, repayment of past due Rent with
interest at the Interest Rate set forth in Section 8, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the Term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (hereinafter defined) of
the amount by which the Rent then unpaid hereunder for the balance of the Lease
Term exceeds the amount of such loss of Rent for the same period which Tenant
proves could be reasonably avoided by Landlord and in such case, Landlord prior
to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder; provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord may continue this Lease in effect after
Tenant's breach and abandonment and recover Rent as it becomes due and may
enforce all its rights and remedies under this Lease, including the right to
recover the Rent from Tenant as it becomes due hereunder. The "worth at the time
of the award" as utilized herein shall be computed by allowing interest at the
rate of 10 percent (10%) per annum.

              21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and
remedies of Landlord are not exclusive, they are cumulative in addition to any
rights and remedies now or hereafter existing at law, in equity by statute or
otherwise, or to any equitable remedies Landlord may have, and to any remedies
Landlord may have under bankruptcy laws or laws affecting creditor's rights
generally. In addition to all remedies set forth above, if Tenant materially
defaults under this Lease, any and all Base Rent waived by Landlord under
Section 3 above shall be immediately due and payable to Landlord and all options
granted to Tenant hereunder shall automatically terminate, unless otherwise
expressly agreed to in writing by Landlord.

              21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default of
any provision of this Lease shall not be deemed or construed a waiver of any
other default by Tenant hereunder or of any subsequent default of this Lease,
except for the default specified in the waiver.

         22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the Term of this Lease with or without Landlord's consent, Tenant
shall become a tenant from month-to-month upon the terms and provision of this
Lease, provided the monthly Base Rent

                                      -24-
<PAGE>   31

during such hold over period shall be 150% of the Base Rent due on the last
month of the Lease Term, payable in advance on or before the first day of each
month. Acceptance by Landlord of the monthly Base Rent without the additional
fifty percent (50%) increase of Base Rent shall not be deemed or construed as a
waiver by Landlord of any of its rights to collect the increased amount of the
Base Rent as provided herein at any time. Such month-to-month tenancy pursuant
to this Section shall not constitute a renewal or extension for any further
term. All options, if any, granted under the terms of this Lease shall be deemed
automatically terminated and be of no force or effect during said month-to-month
tenancy. Tenant shall continue in possession until such tenancy shall be
terminated by either Landlord or Tenant giving written notice of termination to
the other party at least thirty (30) days prior to the effective date of
termination. This Section shall not be construed as Landlord's permission for
Tenant to hold over. Acceptance of Base Rent by Landlord following expiration or
termination of this Lease shall not constitute a renewal of this Lease.

         23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or
default of this Lease unless Landlord fails within a reasonable time to perform
an obligation required to be performed by Landlord hereunder. For purposes of
this provision, a reasonable time shall not be less than thirty (30) days after
receipt by Landlord of written notice from Tenant specifying the nature of the
obligation Tenant alleges Landlord has not performed; provided, however, that if
the nature of Landlord's obligation is such that more than thirty (30) days,
after receipt of written notice, is reasonably necessary for its performance,
then Landlord shall not be in breach or default of this Lease if performance of
such obligation is commenced within such thirty (30) day period and thereafter
diligently pursued to completion.

         24. PARKING: Tenant shall have the right, during the Term of this
Lease, to use all of the parking spaces available on or about the Premises.

         25. SALE OF PREMISES: In the event of any sale of the Premises or the
Land by Landlord or the cessation otherwise of Landlord's interest therein,
Landlord shall be and is hereby entirely released from any and all of its
obligations to perform or further perform under this Lease and from all
liability hereunder accruing from or after the date of such sale; and the
purchaser, at such sale or any subsequent sale of the Premises shall be deemed,
without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the Landlord
under this Lease accruing from and after the effective date of such sale. For
purposes of this Section 25, the term "Landlord" means only the original
Landlord executing this Lease as of the date on which Tenant executes this
lease. A ground lease or similar long term lease by Landlord of the entire
Premises shall be deemed a sale within the meaning of this Section 25. Tenant
agrees to attorn to such new owner pursuant to the terms and conditions of this
Lease

                                      -25-
<PAGE>   32

(including, any new owner via foreclosure pursuant to the terms of Section 17)
provided such new owner does not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of any of the
provisions of this Lease.

         26. WAIVER: No delay or omission in the exercise of any right or remedy
of Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
default by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such default, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.

         27. CASUALTY DAMAGE:

              27.1 REPAIR OF DAMAGE TO PREMISES BY LANDLORD: If the Premises or
any part thereof shall be damaged by fire, earthquake or other casualty in the
nature of acts of God, Tenant shall give prompt written notice thereof to
Landlord. In the event of any such casualty damage, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Section 27, restore the Landlord Repair Items, and subject to Landlord's
receipt of Tenant's insurance proceeds and/or construction pursuant to the next
sentence, all tenant improvements and systems and equipment of the Building and
other portions of the Premises which are otherwise Tenant's obligation to repair
pursuant to Section 11.1 above (but excluding Tenant's fixtures, furniture,
equipment and personal property). Notwithstanding any other provision of this
Lease, upon the occurrence of any damage to the Premises, Tenant shall assign to
Landlord (or to any party designated by Landlord) all insurance proceeds payable
to Tenant under Tenant's physical damage and property damage insurance required
under Section 12.1(v) of this Lease (excluding, however, proceeds payable with
respect to any damage to Tenant's personal property, trade fixtures and
inventory in or on the Premises). Such restoration by Landlord shall be to
substantially the same condition of such items prior to the casualty, except for
modifications required by zoning and building laws and other laws or by the
holder of a mortgage on the Premises, or the lessor of a ground or underlying
lease with respect to the Premises and/or the Building. If Landlord repairs any
items pursuant to this Section 27.1 and the cost of such repair by Landlord
exceeds the

                                      -26-
<PAGE>   33

amount of insurance proceeds therefor received by Landlord from Landlord's
insurance carrier and Tenant's insurance carrier, as assigned by Tenant as
described above, the cost of such repairs shall be paid by Tenant on a
progress-payment basis during Landlord's repair of the damage. Landlord shall
select the contractors to perform such improvement work. Landlord shall not be
liable for any inconvenience or annoyance to Tenant or its visitors, or injury
to Tenant's business resulting in any way from such damage or the repair
thereof, provided, however, that if such fire or other casualty shall have
damaged the portions of the Premises necessary to Tenant's occu pancy, and if
such damage is not the result of the negligence or willful misconduct of Tenant
or Tenant's Representatives, Landlord shall allow Tenant a proportionate
abatement of Rent during the time and to the extent the Premises are unfit for
occupancy for the purposes permitted under this Lease, and not occupied by
Tenant as a result thereof. In addition, if the Building or any other portion of
the Premises is damaged by fire or other casualty resulting from the intentional
or negligent acts or omissions of Tenant or any of Tenant's Representatives,
Tenant shall be liable to Landlord for the cost and expense of the repair and
restoration of all or any portion of the Building and Premises caused thereby
(including, without limitation, any deductible) to the extent such cost and
expense is not covered by insurance proceeds. In the event the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within thirty
(30) days after the date of notice to Tenant of any such event, whereupon all
rights and obligations shall cease and terminate hereunder except for those
obligations expressly intended to survive any such termination of this Lease.

              27.2 MAJOR DAMAGE TO THE PREMISES; LANDLORD'S OPTION TO REPAIR:
Notwithstanding the terms of Section 27.1 of this Lease, Landlord may elect not
to rebuild and/or restore the Premises and/or the Building and instead terminate
this Lease by notifying Tenant in writing of such termination within ninety (90)
days after the date of damage, such notice to include a termination date giving
Tenant up to ninety (90) days to vacate the Premises, but Landlord may so elect
only if the Building and/or the Premises shall be damaged by fire or other
casualty or cause, and one or more of the following conditions is present: (i)
the repair of such damage cannot, in the reasonable opinion of Landlord's
architect given within such ninety (90) day notice period set forth above, be
completed within one hundred twenty (120) days of the date of damage (when such
repairs are made without the payment of overtime or other premiums); (ii) the
holder of any mortgage on the Building or the Premises or ground lessor with
respect to the Premises shall require that the insurance proceeds or any portion
thereof be used to retire the mortgage debt, or shall terminate the ground
lease, as the case may be; or (iii) the damage is not fully covered, except for
deductible amounts, by Landlord's insurance policies or Tenant's insurance
policies; provided, however, that (A) if Landlord does not elect to terminate
this Lease pursuant to Landlord's termination right as provided above, (B) the
damage constitutes a "Tenant Damage Event" (as defined below), and (C) the
repair of such damage cannot, in the reasonable

                                      -27-
<PAGE>   34

opinion of Landlord's architect, given within such ninety (90) day notice period
set forth above, be completed within one hundred twenty (120) days after the
date of such damage, then Tenant may elect within ten (10) days after Tenant's
receipt of such architect's opinion, to terminate this Lease by written notice
to Landlord effective as of the date of such termination notice. As used herein,
a "Tenant Damage Event" shall mean damage to all or any part of the Building or
the Premises by fire or other casualty, which damage is not the result of the
negligence or willful misconduct of Tenant or any of Tenant's Representatives,
and which damage substantially interferes with Tenant's use of or access to the
Building.

              27.3 WAIVER OF STATUTORY PROVISIONS: The provisions of this Lease,
including this Section 27, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Building or Premises, and any statute or regulation of the State of
Colorado with respect to any rights or obligations concerning damage or
destruction in the absence of an express agreement between the parties, and any
other statute or regulation, now or hereafter in effect, shall have no
application to this Lease or any damage or destruction to all or any part of the
Building or Premises.

         28. CONDEMNATION: If twenty-five percent (25%) or more of the Premises
is condemned by eminent domain, inversely condemned or sold in lieu of
condemnation for any public or quasi-public use or purpose ("Condemned"), the
Tenant or Landlord may terminate this Lease as of the date when Tenant vacates
the Premises in response to such condemnation and Rent shall be adjusted to the
date of termination. Tenant shall not because of such condemnation assert any
claim against Landlord or the condemning authority for any compensation because
of such condemnation, and Landlord shall be entitled to receive the entire
amount of any award without deduction for any estate of interest or other
interest of Tenant. If neither party elects to terminate this Lease, Landlord
shall, if necessary, promptly proceed to restore the Premises or the Building to
substantially its same condition prior to such partial condemnation, allowing
for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as solely determined by Landlord, for the
Rent corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of such partial condemna tion and
restoration. Landlord shall not be required to spend funds for restoration in
excess of the amount received by Landlord as compensation awarded.

         29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:

              29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to
executing this Lease, Tenant has completed, executed and delivered to landlord
Tenant's initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as EXHIBIT C and incorporated
herein by this reference. Tenant covenants, represents and

                                      -28-
<PAGE>   35

warrants to Landlord that the information on the Initial HazMat Certificate is
true and correct and accurately describes and use(s) of Hazardous Materials
which Tenant intends to make and/or use on the Premises subject to obtaining
Landlord's prior written consent and Tenant's compliance with all of the
provisions of this Section 29. Tenant shall, commencing with the date which is
one year from the Commencement Date and continuing every year thereafter,
complete, execute, and deliver to Landlord, a Hazardous Materials Disclosure
Certificate (the "HazMat Certificate") describing Tenant's present use of
Hazardous Materials on the Premises, and any other reasonably necessary
documents as requested by Landlord. The HazMat Certificate required hereunder
shall be in substantially the form as that which is attached hereto as EXHIBIT
C.

              29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the
term Hazardous Materials shall mean and include (a) any hazardous or toxic
wastes, materials or substances, and other pollutant or contaminants, which are
or become regulated by any Environ mental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive character istics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises or any
surrounding property, or poses or threatens to pose a hazard to the health and
safety of persons on the Premises or any surrounding property.

              29.3 PROHIBITION: ENVIRONMENTAL LAWS: Tenant shall not be entitled
to use nor store any Hazardous Materials on, in, or about the Premises or any
portion of the foregoing, without, in each instance, obtaining Landlord's prior
written consent thereto, which consent may be given or withheld in Landlord's
sole discretion. If Landlord consents to any such usage or storage, then Tenant
shall be permitted to use and/or store only those Hazardous Materials that are
necessary for Tenant's business and to the extent disclosed in the HazMat
Certificate and as expressly approved by Landlord in writing, provided that such
usage and storage is only to the extent of the quantities of Hazardous Materials
as specified in the then applicable HazMat Certificate as expressly approved by
Landlord and provided further that such usage and storage is in full compliance
with any and all local, state and federal environmental, health and/or safety-
related laws, statutes, orders, standards, courts' decisions, ordinances, rules
and regulations (as interpreted by judicial and administrative decisions),
decrees, directives, guidelines, permits or permit conditions, currently
existing and as amended, enacted, issued or adopted in the future which are or
become applicable to Tenant or all or any portion of the Premises (collectively,
the "Environmental Laws"). Tenant agrees that any changes to the type and/or
quantities of Hazard ous Materials specified in the most recent HazMat
Certificate may be implemented only with the

                                      -29-
<PAGE>   36

prior written consent of Landlord, which consent may be given or withheld in
Landlord's sole discretion. Tenant shall not be entitled nor permitted to
install any tanks under, on or about the Premises for the storage of Hazardous
Materials without the express written consent of Landlord, which may be given or
withheld in Landlord's sole discretion. Landlord shall have the right at all
times during the Term of this Lease to (i) inspect the Premises, (ii) conduct
tests and investiga tions to determine whether Tenant is in compliance with the
provisions of this Section 29, and (iii) request lists of all Hazardous
Materials used, stored or otherwise located on, under or about any portion of
the Premises. The cost of all such inspections, tests and investigations shall
be borne solely by Tenant, if any contamination is revealed by such inspections,
tests and investiga tions and Landlord reasonably determines that Landlord is
not responsible for such contamina tion. The aforementioned rights granted
herein to Landlord and its representatives shall not create (a) a duty on
Landlord's part to inspect, test, investigate, monitor or otherwise observe the
Premises or the activities of Tenant and Tenant's Representatives with respect
to Hazardous Materials, including without limitation, Tenant's operation, use
and any remediation related thereto, or (b) liability on the part of its
representatives for any use, storage, disposal or remediation of Hazardous
Materials (other than Landlord's), it being understood that Tenant shall be
solely responsible for all liability in connection therewith.

              29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to
Landlord immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises. Tenant, at
its sole cost and expense, covenants and warrants to promptly investigate, clean
up, remove, restore and otherwise remediate (including, without limitation,
preparation of any feasability studies or reports and the performance of any and
all closures) any spill, release, discharge, disposal, emission, migration or
transportation of Hazardous Materials, except to the extent such Hazardous
Materials were brought or caused to be brought in, on or about the Premises by
Landlord, such that the affected portions of the Premises and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on any portion of the Premises or the surrounding property.
Notwithstanding the foregoing, Tenant shall be entitled to respond immediately
to an emergency without first obtaining Landlord's prior written consent.
Tenant, at its sole cost and expense, shall conduct and perform, or cause to be
conducted and performed, all closures as required by any Environmental Laws or
any agencies or other governmental authorities having jurisdiction thereof. If
Tenant fails to so promptly investigate, clean up, remove, restore, provide
closure or otherwise so remediate, Landlord may, but without obligation to do
so, take any and all steps necessary to rectify the same and Tenant shall
promptly reimburse Landlord, upon demand, for all

                                      -30-
<PAGE>   37

costs and expenses to Landlord of performing investigation, clean up, removal,
restoration, closure and remediation work. All such work undertaken by Tenant,
as required herein, shall be performed in such a manner so as to enable Landlord
to make full economic use of the Premises after the satisfactory completion of
such work.

              29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations
as set forth hereinabove, Tenant and Tenant's officers directors agree to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnities harmless from and against any and all claims,
judgments, damages, penalties, fines, liabilities, losses (including, without
limitation, diminution in value of the Premises or any portion thereof, damages
for the loss of or restriction on the use of rentable or usable space and from
any adverse impact of Landlord's marketing of the Premises or any portion
thereof, suits, administrative proceedings and costs (including, but not limited
to, attorneys' and consultant fees and court costs) arising at any time during
or after the Term of this Lease in connection with or related to, directly or
indirectly, the use, presence, transportation, storage, disposal, migration,
removal, spill, release or discharge of Hazardous Materials on, in or about the
Premises or any portion thereof, except to the extent that such Hazardous
Materials were brought or caused to brought on, in or about the Premises by
Landlord. Neither the written consent of Landlord to the presence, use or
storage of Hazardous Materials in, on, under or about any portion of the
Premises, nor the strict compliance by Tenant with all Environmental Laws shall
excuse Tenant and Tenant's officers and directors from its obligations of
indemnification pursuant hereto. Tenant shall not be relieved of its
indemnification obligations under the provisions of this Section 29.5 due to
Landlord's status as either an "owner" or "operator" under any Environmental
Laws.

              29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to
the provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises is not in compliance with the provisions of
this Lease with respect to Hazardous Materials, including without limitation all
Environmental Laws at the expiration or earlier termination of this Lease, then
in Landlord's sole discretion, Landlord may require Tenant to hold over
possession of the Premise until Tenant can surrender the Premises to Landlord in
the condition in which the Premises existed prior to the appearance of such
Hazardous Materials in accordance with the provisions of this Section 29, except
for reasonable wear and tear, including without limitation, the conduct or
performance of any closures as required by any Environmental Laws. The burden of
proof hereunder shall be upon Tenant. For purposes hereof, the term "reasonable
wear and tear" shall not include any deterioration in the condition or
diminution of the value of any portion of the Premises in any manner whatsoever
related to directly, or indirectly, Hazardous Materials. Any such holdover by
Tenant will be with Landlord's consent, will not be terminable by Tenant in any
event or circumstance and will otherwise be subject to the provisions of Section
22 of this Lease.

                                      -31-
<PAGE>   38

         30. FINANCIAL STATEMENTS: Tenant, for the reliance of Landlord, any
lender holding or anticipated to acquire a lien upon the Premises or any portion
thereof, or any prospective purchaser of the Building or the Premises or any
portion thereof, within ten (10) days after Landlord's request therefor, but not
more often than once annually so long as Tenant is not in default of this Lease,
shall deliver to Landlord the then current unaudited condensed financial
statements of Tenant and audited consolidated financial statements of Tenants
parent company which audited consolidated financial statements of Tenant's
parent company shall present fairly the financial condition of Tenant's parent
company at such dates and the result of its operations and changes in its
financial positions for the periods ended on such dates. If an audited financial
statement has not been prepared, Tenant shall provide Landlord with an unaudited
financial statement and/or such other information, the type and form of which
are acceptable to Landlord in Landlord's reasonable discretion, which reflects
the financial condition of Tenant. Any and all options granted to Tenant
hereunder shall be subject to and conditioned upon Landlord's reasonable
approval of Tenant's financial condition at the time of Tenant's exercise of any
such option.

         31. GENERAL PROVISIONS:

              31.1 TIME: Time is of the essence in this Lease and with respect
to each and all of its provisions in which performance is a factor.

              31.2 SUCCESSORS AND ASSIGNS: The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

              31.3 RECORDATION: Tenant shall not record this Lease. Tenant shall
not record a short form memorandum hereof without the prior written consent of
the Landlord.

              31.4 LANDLORD'S PERSONAL LIABILITY: The liability of Landlord
(which, for purposes of this Lease, shall include Landlord and the owner of the
Premises if other than Landlord) to Tenant under this Lease (including as a
result of any default by Landlord under the terms of this Lease) shall be
limited to the actual interest of Landlord and its present or future partners or
members in the Premises, and Tenant agrees to look solely to Landlord's interest
in the Premises for satisfaction of any liability and shall not look to other
assets of Landlord nor seek any recourse against the assets of the individual
partners, members, directors, officers, sharehold ers, agents or employees of
Landlord (including, without limitation, any property management company of
Landlord); it being intended that Landlord and the individual partners, members,
directors, officers, shareholders, agents and employees of Landlord (including,
without limitation,

                                      -32-
<PAGE>   39

any property management company of Landlord) shall not be personally liable in
any manner whatsoever under this Lease, including for any judgment or
deficiency. The liability of Landlord under this Lease is limited to its actual
period of ownership of title to the Premises, and Landlord shall be
automatically released from further performance under this Lease and from all
further liabilities and expenses hereunder upon transfer of Landlord's interest
in the Premises.

              31.5 SEPARABILITY: Any provisions of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provisions hereof and such other provision shall remain in full force and
effect.

              31.6 CHOICE OF LAW: This Lease shall be governed by, and construed
in accordance with the laws of the State of Colorado. The State of Colorado
shall be the sole venue for any disputes between the parties hereto arising
under this Lease, and any actions, proceedings, or counterclaims brought by
either of the parties hereto against the other shall be brought exclusively in
the Colorado courts.

              31.7 ATTORNEYS' FEES: In the event any dispute between the parties
results in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding, and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.

              31.8 ENTIRE AGREEMENT: This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party, that is not in writing and
signed by all parties to this Lease, shall be binding.

              31.9 WARRANTY OF AUTHORITY: On the date that Tenant executes this
Lease, Tenant shall deliver to Landlord an original certificate of status for
Tenant issued by the Colorado Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. Tenant hereby warrants that this Lease
is valid and binding upon Tenant and enforceable against Tenant in accordance
with its terms.

                                      -33-
<PAGE>   40

              31.10 NOTICES: any and all notices and demands required or
permitted to be given hereunder to Landlord shall be in writing and shall be
sent: (a) by United States mail, certified and postage prepaid; or (b) by
personal delivery; or (c) by overnight courier, addressed to WHLNF Real Estate
Limited Partnership, c/o Lincoln Property Company Management Services, Inc., 101
Lincoln Centre Drive, Fourth Floor, Foster City, Colorado 94404-1167, with a
copy to Lincoln Property Company Management Services, Inc., 1401 17th Street,
Suite 550, Denver, Colorado 80202. Any and all notices and demands required or
permitted to be given hereunder to Tenant shall be in writing and shall be sent:
(i) by United States mail, certified and postage prepaid; or (ii) by personal
delivery; or (iii) by overnight courier, all of which shall be addressed to
Contracts Department at the Premises. Notice and/or demand shall be deemed given
upon the third day following deposit in the United States mail as provided in
this Section 31.10 or upon the date personal delivery is made.

              31.11 JOINT AND SEVERAL: If Tenant consists of more than one
person or entity, the obligations of all such persons or entities shall be joint
and several.

              31.12 COVENANTS: Landlord and Tenant covenant to observe and
perform all of the terms and conditions to be observed and performed by such
party under this Lease.

              31.13 WAIVER OF JURY TRIAL: The parties hereto shall and they
hereby do waive trial by jury in any action, proceeding or counterclaim brought
by either of the parties hereto against the other on any matters whatsoever
arising out of or in any way related to this Lease, the relationship of Landlord
and Tenant. Tenant's use or occupancy of the Premises and/or any claim of
injury, loss or damage; any such action, proceeding or counterclaim brought by
either of the parties hereto against the other shall instead proceed by bench
trial in the applicable court, or otherwise as may be ordered by such court.

              31.14 COUNTERCLAIMS: In the event Landlord commences any
proceedings for nonpayment of Rent, Additional Rent, or any other sums or
amounts due hereunder, Tenant shall not interpose any counterclaim of whatever
nature or description in any such proceedings, provided, however, nothing
contained herein shall be deemed or construed as a waiver of the Tenant's right
to assert such claims in any separate action brought by Tenant or the right to
offset the amount of any final judgment owed by Landlord to Tenant.

              31.15 UNDERLINING: The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.

                                      -34-
<PAGE>   41

              31.16 MERGER: The voluntary or other surrender of this Lease by
Tenant, the mutual termination or cancellation hereof by Landlord and Tenant, or
a termination of this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole option of Landlord , (i)
shall terminate all or any existing subleases or subtenancies, or (ii) may
operate as an assignment to Landlord of any or all of such subleases or
subtenancies. Landlord's election of either or both of the foregoing options
shall be exercised by delivery by Landlord of written notice thereof to Tenant
and all known subtenants under any sublease.

         32. SIGNS: All signs and graphics of every kind visible in or from
public view, on the exterior of the Building or on the Land shall be subject to
Landlord's prior written approval and shall be subject to any applicable
governmental laws, ordinances, and regulations and in compli ance with all
Recorded Matters (including, without limitation, the CC&Rs). Tenant shall remove
all such signs and graphics prior to the termination of this Lease. Such
installations and removals shall be made in a manner as to avoid damage or
defacement of the Building or Premises; and Tenant shall repair any and all
damage or defacement, including without limitation, discoloration caused by such
installation or removal. Landlord shall have the right, at its option, to deduct
from the Security Deposit such sums as are reasonably necessary to remove such
signs, including, but not limited to, the costs and expenses associated with any
repairs necessitated by such removal. Notwithstanding the foregoing, in no event
shall any neon, flashing or moving sign(s) be permitted hereunder. Tenant
further agrees to maintain, at Tenant's sole cost and expense, any such sign,
awning, canopy, advertising matter, lettering, decoration currently located on
or about the Premises or other thing as may be placed on or about the Premises
by Tenant and approved by Landlord pursuant to this Section 32 in good condition
and repair at all times.

         33. MORTGAGEE PROTECTION: Upon any default on the part of Landlord,
Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mort gagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than sixty
(60) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such default cannot be cured within such time period, then such additional time
as may be necessary will be given to such beneficiary or mortgagee to effect
such cure so long as such beneficiary or mortgagee has commenced the cure within
the original time period and thereafter diligently pursues such cure to
completion, in which event this Lease shall not be terminated while such cure is
being diligently pursued. Tenant agrees that each lender to whom this Lease has
been assigned by Landlord is an express third party beneficiary hereof. Tenant
shall not make any prepayment of Rent more than one (1) month in advance without
the prior written consent of each such lender, except if Tenant is required to
make quarterly payments of Rent in advance pursuant to the provisions of Section
8 above.

                                      -35-
<PAGE>   42

Tenant waives the collection of any deposit from such lender(s) or any purchaser
at a foreclosure sale of such lender(s)' deed of trust unless the lender(s) or
such purchaser shall have actually received and not refunded the deposit. Tenant
agrees to make all payments under this Lease to the lender with the most senior
encumbrance upon receiving a direction, in writing, to pay said amounts to such
lender. Tenant shall comply with such written direction to pay without determin
ing whether an event of default exists under such lender's loan to Landlord.

         34. QUITCLAIM: Upon any termination of this Lease, Tenant shall, at
Landlord's request, execute, have acknowledged and deliver to Landlord a
quitclaim deed of Tenant's interest in and to the Premises. If Tenant fails to
so deliver to Landlord such a quitclaim deed, Tenant hereby agrees that Landlord
shall have the full authority and right to record such a quitclaim deed signed
only by Landlord and such quitclaim deed shall be deemed conclusive and binding
upon Tenant.

         35. MODIFICATIONS FOR LENDER: If, in connection with obtaining
financing for the Premises or any portion thereof, Landlord's lender shall
request reasonable modification(s) to this Lease as a condition to such
financing, Tenant shall not unreasonably withhold, delay or defer its consent
thereto, provided such modifications do not materially adversely affect Tenant's
rights hereunder or the use, occupancy or quiet enjoyment of Tenant hereunder.

         36. WARRANTIES OF TENANT: Tenant hereby warrants and represents to
Landlord, for the express benefit of Landlord, that Tenant has undertaken
complete and independent evaluation of the risks inherent in the execution of
this Lease and the operation of the Premises for the use permitted hereby, and
that, based upon said independent evaluation, Tenant has elected to enter into
this Lease and hereby assumes all risks with respect thereto. Tenant hereby
further warrants and represents to Landlord, for the express benefit of
Landlord, that in entering into this Lease, Tenant has not relied upon any
statement, fact, promise or representation (whether express or implied, written
or oral) not specifically set forth herein in writing and that any statement,
fact, promise or representation (whether express or implied, written or oral)
made at any time to Tenant, which is not expressly incorporated herein in
writing, is hereby waived by Tenant.

         37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and
Tenant hereby agree and acknowledge that the Premises and/or the Building may be
subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, as the same may
have been in effect during Tenant's occupancy of the Premises under the Expired
Lease, may be in effect on the date of this Lease and may be hereafter modified,
amended or supplemented (collectively, the "ADA").

                                      -36-
<PAGE>   43

Except as otherwise expressly provided in this provision, Tenant shall be
responsible at its sole cost and expense for fully and faithfully complying with
all applicable requirements of the ADA (including without limitation, not
discriminating against any disabled persons in the operation of Tenant's
business in or about the Premises, and offering or otherwise providing auxiliary
aids and services as, and when, required by the ADA) and causing the Premises
and the Building, and all improvements now or hereafter constructed therein or
thereon, to be in compliance with the requirements of the ADA. If any barrier
removal work or other work is required to the Building or the Premises under the
ADA, then such work shall be the responsibility of Tenant and such work shall be
performed by Tenant at the sole cost and expense of Tenant, unless such work
affects the exterior and/or structural components of the Building or portions of
the Premises outside the building, in which case Landlord shall perform the work
and Tenant shall reimburse Landlord for the costs of such work within twenty
(20) days after invoice. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, penalties, judgments,
charges and expenses (including reasonable attorneys' fees, costs of court and
expenses necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant's or Tenant's Representatives' violation or alleged
violation of the ADA and the Building's or the Premises' violation or alleged
violation of the ADA. Tenant agrees that the obligations of Tenant herein shall
survive the expiration or earlier termination of this Lease.

         38. BROKERAGE COMMISSION: Landlord and Tenant each represents and
warrants for the benefit of the other that it has had no dealings with any real
estate broker, agent or finder in connection with the Premises and/or the
negotiation of this Lease, except for the Broker identified in the Basic Lease
Information, and that it knows of no other real estate broker, agent or finder
who is or might be entitled to a real estate brokerage commission or finder's
fee in connection with this Lease or otherwise based upon contracts between the
claimant and Tenant. Each party shall indemnify and hold harmless the other from
and against any and all liabilities or expenses arising out of claims made for a
fee or commission by any real estate broker, agent or finder in connection with
the Premises and this Lease other than Broker, if any, resulting from the
actions of the indemnifying party. Any real estate brokerage commission or
finder's fee payable to the Broker in connection with this Lease shall only be
payable and applicable to the extent of the initial Term of the Lease and to the
extent of the Premises as same exist as of the date on which

                                      -37-
<PAGE>   44

Tenant executes this Lease. Unless expressly agreed to in writing by Landlord
and Broker, no real estate brokerage commission or finder's fee shall be owed
to, or otherwise payable to, the Broker for any renewals or other extensions of
the initial Term of this Lease or for any additional space leased by Tenant
other than the Premises as same exists as of the date on which Tenant executes
this Lease. Tenant further represents and warrants to Landlord that Tenant will
not receive (i) any portion of any brokerage commission or finder's fee payable
to the Broker in connection with this Lease or (ii) any other form of
compensation or incentive from the Broker with respect to this Lease.

         39. QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of
Rent and observing and keeping the covenants, agreements and conditions of this
Lease on its part to be kept, and during the periods that Tenant is not
otherwise in default of any of the terms or provisions of this Lease, and
subject to the rights of any of Landlord's lenders, (i) that Tenant shall and
may peaceably and quietly hold, occupy and enjoy the Premises during the Term of
this Lease, and (ii) neither Landlord, nor any successor or assign of Landlord,
shall disturb Tenant's occupancy or enjoyment of the Premises.

         40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
Notwith standing anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the Interest Rate set forth in Section 8.

                                      -38-
<PAGE>   45

         IN WITNESS WHEREOF, this Lease is executed by the parties as of the
Lease Date referenced on Page (i) of this Lease.

                                     TENANT:

                                     MCDATA CORPORATION,
                                     a Delaware corporation,

                                     By:     /s/ Dee J. Perry
                                        ----------------------------------------
                                         Name: Dee J. Perry
                                              ----------------------------------
                                         Its: CFO & VP Finance and Admin.
                                             -----------------------------------

                                     By:
                                        ----------------------------------------
                                         Name:
                                              ----------------------------------
                                         Its:
                                             -----------------------------------

                                    LANDLORD:

                                    WHLNF REAL ESTATE LIMITED PARTNERSHIP,
                                    a Delaware limited partnership,

                                    By:    Lincoln Property Company Management
                                           Services, Inc., as Manager and Agent
                                           for Landlord

                                           By:   /s/ D. Allen Palmer
                                                 -----------------------
                                           Name: D. Allen Palmer
                                           Its:  Senior Vice President

                                      -39-
<PAGE>   46

                                   ADDENDUM 1

                           OPTION TO EXTEND THE LEASE

         This Addendum 1 is incorporated as a part of that certain Lease
Agreement dated September 12, 1997 (the "Lease"), by and between McDATA
Corporation, a Delaware Corporation ("Tenant"), and WHLNF Real Estate Limited
Partnership, a Delaware limited partnership ("Landlord"), for the leasing of
those certain premises located at 310 Interlocken Parkway, Broomfield, Colorado
as more particularly described in EXHIBIT A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.

         1. GRANT OF EXTENSION OPTION. Subject to the provisions, limitations
and conditions set forth in Paragraph 5 below, Tenant shall have an option
("Option") to extend the Term of the Lease for two (2) consecutive five (5) year
periods (each an "Extended Term").

         2. TENANT'S OPTION NOTICE. If Landlord does not receive written notice
from Tenant of its exercise of this Option on a date which is not more than
three hundred sixty (360) days nor less than two hundred forty (240) days prior
to the end of the initial Term of the Lease, or first Extended Term, as the case
may be, (the "Option Notice"), all rights under this Addendum 1 shall
automatically terminate and shall be of no further force or effect.

         3. ESTABLISHING THE INITIAL MONTHLY BASE RENT FOR THE EXTENDED TERMS.
The initial monthly Base Rent for each of the Extended Terms shall be set in the
following manner: The Consumer Price Index (All Items) for the Denver
Metropolitan Area, published by the United States Department of Labor, Bureau of
Labor Statistics ("Index") which is published three (3) months prior to the
commencement date of the applicable Extended Term ("Extension Index"), shall be
compared with the Index published for the month in which the initial Term
commences ("Beginning Index"). The Beginning Index is hereby defined as June,
1998. If the Extension Index has increased over the Beginning Index, the Base
Rent payable during the applicable Extension Term shall be set by multiplying
the Base Rent of $124,002.83 by a fraction, the numerator of which is the
applicable Extension Index and the denominator of which is the Beginning Index.
As soon as the Base Rent for the applicable Extended Term is

                                      -40-
<PAGE>   47

set, Landlord shall give Tenant notice of the amount of Base Rent for such
Extended Term.

         If the Index is discontinued or revised during the Term, such other
governmental index or computation with which it is replaced shall be used in
order to obtain substantially the same result as would be obtained if the Index
had not been discontinued or revised.

         In no event shall the monthly Base Rent for any Extended Term be less
than the highest monthly Base Rent charged during the initial Term of the Lease,
or the first Extended Term, as the case may be. Upon determination of the
initial monthly Base Rent for the applicable Extended Term in accordance with
the terms outlined above, Landlord and Tenant shall immediately execute, at
Landlord's sole option, either the standard lease agreement then in use by
Landlord, or an Amendment to this Lease. Such new lease agreement or amendment,
as the case may be, shall set forth among other things, the initial monthly Base
Rent for the applicable Extended Term and the actual commencement date and
expiration date of the applicable Extended Term. Tenant shall have no other
right to extend the Term of the Lease under this Addendum 1 unless Landlord and
Tenant otherwise agree in writing.

         4. CONDITION OF PREMISES AND BROKERAGE COMMISSIONS FOR THE EXTENDED
TERMS. If Tenant timely and properly exercises the applicable Option, in strict
accordance with the terms contained herein: (1) Tenant shall accept the
Premises in its then "As-Is" condition and, accordingly, Landlord shall not be
required to perform any additional improvements to the Premises; and (2) Tenant
hereby agrees that it will be solely responsible for any and all brokerage
commissions and finder's fees payable to any broker now or hereafter procured or
hired by Tenant or who otherwise claims a commission based on any act or
statement of Tenant ("Tenant's Broker") in connection with the applicable
Option; and Tenant hereby further agrees that Landlord shall in no event or
circumstance be responsible for the payment of any such commissions and fees to
Tenant's Broker.

         5. LIMITATIONS ON, AND CONDITIONS TO, EXTENSION OPTIONS. At Landlord's
option, all rights of Tenant under any Option shall terminate and be of no force
or effect if any of the following individual events occur or any combination
thereof occur: (1) Tenant is currently in default of any provision of the Lease;
and/or (2) Tenant's financial condition is unacceptable to Landlord at the time
the Option Notice is delivered to Landlord; and/or (3) Tenant has failed to
properly exercise any Option in a timely manner in strict accordance with the
provisions of this Addendum 1; and/or (4)

                                      -41-
<PAGE>   48

Tenant no longer has possession of all or any part of the Premises under the
Lease, or if the Lease has been terminated earlier, pursuant to the terms of the
Lease.

         6. TIME IS OF THE ESSENCE. Time is of the essence with respect to each
and every time period described in this Addendum 1.

                                      -42-
<PAGE>   49

                                   EXHIBIT A-1

                          LEGAL DESCRIPTION OF PREMISES

         This exhibit, entitled "Premises", is and shall constitute EXHIBIT A to
that certain Lease Agreement dated September 23, 1997 ("Lease"), by and between
WHLNF Real Estate Limited Partnership, a Delaware limited partnership
("Landlord") and McDATA Corporation, a Delaware Corporation ("Tenant") for the
leasing of certain premises located in the Interlocken Advanced Technology
Environment at 310 Interlocken Parkway, Broomfield, Colorado (the "Premises").

         The Premises include the Building specified in the Base Lease
Information which has the rentable square footage and has the address specified
in the Base Lease Information. The legal description of the Premises is as
follows:

<PAGE>   50

                                   EXHIBIT A-2

                              SITE PLAN OF PREMISES

<PAGE>   51

                                    EXHIBIT B

                               RULES & REGULATIONS

         This exhibit, entitled "Rules & Regulations", is and shall constitute
EXHIBIT B to that certain Lease Agreement dated September 12, 1997 (the
"Lease"), by and between WHLNF Real Estate Limited Partnership, a Delaware
limited partnership ("Landlord") and McDATA Corporation, a Delaware corporation
("Tenant") for the leasing of certain premises located in the Interlocken
Advanced Technology Environment, 310 Interlocken Parkway, Broomfield, Colorado
(the "Premises"). The terms, conditions and provisions of this EXHIBIT B are
hereby incorporated into and are made a part of the Lease. Any capitalized terms
used herein and not otherwise defined herein shall have the meaning ascribed to
such terms as set forth in the Lease:

1.       No advertisement, picture of sign of any sort shall be displayed on or
         outside the Premises or the Building without the prior written consent
         of Landlord. Landlord shall have the right to remove any such
         unapproved item without notice and at Tenant's expense.

2.       Tenant shall not use any method of heating or air conditioning other
         than that supplied by Landlord without the prior written consent of
         Landlord.

3.       All window coverings installed by Tenant and visible from the outside
         of the Building require the prior written approval of Landlord.

4.       Tenant shall not use, keep or permit to be used or kept any foul or
         noxious gas or substance or any flammable or combustible materials on
         or around the Premises or the Building.

5.       Tenant shall park motor vehicles outside the Premises. Tenant shall not
         unreasonably interfere with traffic flow on or about the surrounding
         property.

6.       Tenant shall not disturb, solicit or canvas any occupant of the
         surrounding property and shall cooperate to prevent same.

7.       Business machines and mechanical equipment belonging to Tenant which
         cause noise or vibration that may be transmitted to the structure of
         the Building, to such a degree as to be objectionable to Landlord,
         shall be placed and maintained

<PAGE>   52

         by Tenant, at Tenant's expense, on vibration eliminators or other
         devices sufficient to eliminate noise or vibration.

8.       All goods, including material used to store goods, delivered to the
         Premises shall be immediately moved into the Building and shall not be
         left outside the Building overnight.

9.       Tractor trailers which must be unhooked or parked with dolly wheels
         beyond the concrete loading areas must use steel plates or wood blocks
         under the dolly wheels to prevent damage to the asphalt paving
         surfaces. No parking or storing of such trailers will be permitted in
         the auto parking areas of the surrounding property or on streets
         adjacent thereto or to the Premises.

10.      Forklifts which operate on asphalt paving areas shall not have solid
         rubber tires and shall only use tires that do not damage the asphalt.

11.      Tenant is responsible for the storage and removal of all trash and
         refuse. All such trash and refuse shall be contained in suitable
         receptacles stored behind screened enclosures at locations approved by
         Landlord.

12.      Tenant shall not store or permit the storage or placement of goods, or
         merchandise or pallets or equipment of any sort outside the Building,
         except for the existing nitrogen tank and trash compactor except for
         those other items which may be approved by Landlord. No displays or
         sales of merchandise shall be allowed in the parking lots or other
         areas of the Premises outside of the Building.

13.      Tenant shall not permit any animals, including, but not limited to, any
         household pets, to be brought or kept in or about the Premises.

14.      Tenant shall not permit any motor vehicles to be washed on any portion
         of the Premises, nor shall Tenant permit mechanical work or maintenance
         of motor vehicles to be performed on any portion of the Premises.

                                      B - 2

<PAGE>   53

                                    EXHIBIT C

                   HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

         Your cooperation in this matter is appreciated. Initially, the
information provided by you in this Hazardous Materials Disclosure Certificate
is necessary for the Landlord (identified below) to evaluate and finalize a
lease agreement with you as Tenant. After a lease agreement is signed by you and
the Landlord (the "Lease Agreement"), on an annual basis in accordance with the
provisions of Section 29 of the signed Lease Agreement, you are to provide an
update to the information initially provided by you in this certificate. The
information contained in the initial Hazardous Materials Disclosure Certificate
and each annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees or ordinances, including, without limitation, court
orders or subpoenas. Any and all capitalized terms used herein, which are not
otherwise herein, shall have the same meaning ascribed to such term in the
signed Lease Agreement. Any questions regarding this certificate should be
directed to, and when completed, the certificate should be delivered to:

Landlord:  WHLNF Real Estate Limited Partnership, a Delaware limited partnership
           c/o Lincoln Property Company Management Services, Inc.
           101 Lincoln Centre Drive, Fourth Floor
           Foster City, California  94404
           Attn:  ______________  Phone:  (415) 571-2200

Name of Prospective Tenant:           McDATA Corporation, a Delaware corporation

Mailing Address:  310 Interlocken Parkway, Broomfield, Colorado

Contact Person, Title and Telephone Number(s): Dee Perry, Chief Financial
Officer (303) 460-4343

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s): Max Romero (303) 460-4275

Address of (Prospective) Premises: 310 Interlocken Parkway, Broomfield, Colorado

Length of (Prospective) Initial Term: approximately 5 years and 6 months

<PAGE>   54

7.       GENERAL INFORMATION

         Describe the initial proposed operations to take place in, on or about
         the Premises, including, without limitation, principal products
         processed, manufactured or assembled services and activities to be
         provided or otherwise conducted. Existing Tenants should describe any
         proposed changes to on-going operations.

8.       USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

         8.1      Will any Hazardous Materials be used, generated, stored or
                  disposed of in, on or about the Premises? Existing Tenants
                  should describe any Hazardous Materials which continue to be
                  used, generated, stored or disposed of in, on or about the
                  Premises.

         Wastes                       Yes [ ]         No [ ]
         Chemical Products            Yes [ ]         No [ ]
         Other                        Yes [ ]         No [ ]

         If Yes is marked, please explain.

         8.2      If Yes is marked in Section 2.1, attach a list of any
                  Hazardous Materials to be used, generated, stored or disposed
                  of in, on or about the Premises, including the applicable
                  hazard class and an estimate of the quantities of such
                  Hazardous Materials at any given time; estimated annual
                  throughput; the proposed location(s) and method of storage
                  (excluding nominal amounts of ordinary household cleaners and
                  janitorial supplies which are not regulated by any
                  Environmental Laws), and the proposed location(s) and method
                  of disposal for each Hazardous Material, including, the
                  estimated frequency, and the proposed contractors or
                  subcontractors. Existing Tenants should attach a list setting
                  forth the information requested above and such list should
                  include actual data from on-going operations and the
                  identification of any variations in such information from the
                  prior year's certificate.

9.       STORAGE TANKS AND SUMPS

         9.1      Is any above or below ground storage of gasoline, diesel,
                  petroleum or other Hazardous Materials in tanks or sumps
                  proposed in, on or about the Premises? Existing Tenants should
                  describe any such actual or proposed activities.

         Yes [ ]               No [ ]

         If yes, please explain:

                                      C - 2

<PAGE>   55

10.      WASTE MANAGEMENT

         10.1     Has your company been issued an EPA Hazardous Waste Generator
                  I.D. Number? Existing Tenants should describe any additional
                  identification numbers issued since the previous certificate.

         Yes [ ]               No [ ]

         10.2     Has your company filed a biennial or quarterly reports as a
                  hazardous waste generator? Existing Tenants should describe
                  any new reports filed.

         Yes [ ]               No [ ]

                  If yes, attach a copy of the most recent report filed.

11.      WASTEWATER TREATMENT AND DISCHARGE

         11.1     Will your company discharge wastewater or other wastes to:

         storm drain?                   sewer?
         surface water?                 no wastewater or other wastes discharged

                  Existing Tenants should indicate any actual discharges. If so,
                      describe the nature of any proposed or actual discharge(s)

         11.2     Will any such wastewater or waste be treated before discharge?

         Yes [ ]               No [ ]

                  If yes, describe the type of treatment proposed to be
                  conducted. Existing Tenants should describe the actual
                  treatment conducted.

12.      AIR DISCHARGES

         12.1     Do you plan for any air filtration systems or stacks to be
                  used in your com pany's operations in, on or about the
                  Premises that will discharge into the air; and will such air
                  emissions be monitored? Existing Tenants should indicate
                  whether or not there are any such air filtration systems or
                  stacks in use in, on or about the Premises which discharge
                  into the air and whether such air emissions are being
                  monitored.

         Yes [ ]               No [ ]

                                      C - 3

<PAGE>   56

                  If yes, please describe:

         12.2     Do you propose to operate any of the following types of
                  equipment, or any other equipment requiring an air emission
                  permit? Existing Tenants should specify any such equipment
                  being operated in, on or about the Premises.

         Spray booth(s)                       Incinerator(s)
         Dip tank(s)                          Other (Please describe)
         Drying oven(s)                       No Equipment Requiring Air Permits

                  If yes, please describe:

13.      HAZARDOUS MATERIALS DISCLOSURES

         13.1     Has your company prepared or will it be required to prepare a
                  Hazardous Materials management plan ("Management Plan")
                  pursuant to Fire Department or other governmental or
                  regulatory agencies' requirements? Existing Tenants should
                  indicate whether or not a Management Plan is required and has
                  been prepared.

         Yes [ ]               No [ ]

                  If yes, attach a copy of the Management Plan. Existing Tenants
                  should attach a copy of any required updates to the Management
                  Plan.

         13.2     Are any of the Hazardous Materials, and in particular
                  chemicals, proposed to be used in your operations in, on or
                  about the Premises regulated under Proposition 65? Existing
                  Tenants should indicate whether or not there are any new
                  Hazardous Materials being so used which are regulated under
                  Proposition 65.

         Yes [ ]               No [ ]

                  If yes, please explain:

14.      ENFORCEMENT ACTIONS AND COMPLAINTS

         14.1     With respect to Hazardous Materials or Environmental Laws, has
                  your com pany ever been subject to any agency enforcement
                  actions, administrative orders, or consent decrees or has your
                  company received requests for informa tion, notice or demand
                  letters, or any other inquiries regarding its operations?
                  Existing Tenants should indicate whether or not any such
                  actions, orders or

                                      C - 4

<PAGE>   57

                  decrees have been, or are in the process of being, undertaken
                  or if any such requests have been received.

         Yes [ ]               No [ ]

                  If yes, describe the actions, orders or decrees and any
                  continuing compliance obligations imposed as a result of these
                  actions, orders or decrees and also describe any requests,
                  notices or demands, and attach a copy of all such documents.
                  Existing Tenants should describe and attach a copy of any new
                  actions, orders, decrees, requests, notices or demands not
                  already delivered to Landlord pursuant to the provisions of
                  Section 29 of the signed Lease Agree ment.

         14.2     Have there ever been, or are there now pending, any lawsuits
                  against your company regarding any environmental or health and
                  safety concerns?

         Yes [ ]               No [ ]

                  If yes, describe any such lawsuits and attach copies of the
                  complaint(s), cross- complaint(s), pleadings and all other
                  documents related thereto as requested by Landlord. Existing
                  Tenants should describe and attach a copy of any new
                  complaint(s), cross-complaint(s), pleadings and other related
                  documents not already delivered to Landlord pursuant to the
                  provisions of Section 29 of the signed Lease Agreement.

         14.3     Have there been any problems or complaints from adjacent
                  tenants, owners or other neighbors at your company's current
                  facility with regard to environmen tal or health and safety
                  concerns? Existing Tenants should indicate whether or not
                  there have been any such problems or complaints from adjacent
                  tenants, owners or other neighbors at, about or near the
                  Premises.

         Yes [ ]               No [ ]

                  If yes, please describe. Existing Tenants should describe any
                  such problems or complaints not already disclosed to Landlord
                  under the provisions of the signed Lease Agreement.

15.      PERMITS AND LICENSES

         15.1     Attach copies of all Hazardous Materials permits and licenses
                  including a Transporter Permit number issued to your company
                  with respect to its pro posed operations in, on or about the
                  Premises, including, without limitation, any wastewater
                  discharge permits, air emissions permits, and use permits or

                                      C - 5

<PAGE>   58

                  approvals. Existing Tenants should attach copies of any new
                  permits and licenses as well as any renewals of permits or
                  licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement, and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's receipt and/or approval of such certificate. Tenant
further agrees that none of the following described acts or events shall be
construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
Term, and any renewals thereof, of the Lease Agreement.

         I (print name) ________________, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.

(PROSPECTIVE) Tenant

McDATA CORPORATION,
a Delaware corporation

By:
     -------------------------------------
     Title:                                 Date:
           -------------------------------       -------------------------------

                                      C - 6

<PAGE>   59

By:
     -------------------------------------
     Title:                                 Date:
           -------------------------------       -------------------------------

                                      C - 7

<PAGE>   60

                                    EXHIBIT D

                               TENANT CERTIFICATE

--------------------------------------------------------------------------------
       Please complete all of the blanks with the appropriate information
--------------------------------------------------------------------------------

LEASED PREMISES:           That certain real property more particularly
                           described on EXHIBIT A attached hereto, together with
                           all improvements located thereon, including that
                           certain building known as the McDATA Building (the
                           "Building") containing approxi mately 121,970
                           rentable square feet of space, and the surface
                           parking areas, driveways, sidewalks, walkways,
                           accessways, landscaping and land surrounding the
                           Building (the "LEASED PREMISES")

LANDLORD/BORROWER:         WHLNF Real Estate Limited Partnership, a Delaware
                           limited partnership (the "LANDLORD")

TENANT:                    McDATA Corporation, a Delaware corporation (the
                           "TENANT")

LEASE                      DATED: September 12, 1997 (the "LEASE") [references
                           herein to "Lease" shall until June 16, 1998, also
                           mean the Expired Lease described in Section 2 of the
                           Lease, pursuant to which Tenant is leasing the Leased
                           Premises until June 16, 1998].

TENANT'S NOTICE ADDRESS:   310 Interlocken Parkway
                           Broomfield, Colorado 80021

DATE:                      September 12, 1997

         GENERAL ELECTRIC CAPITAL CORPORATION ("GECC") has made or is about to
make a loan (the "LOAN") to the Landlord which will be secured by a mortgage or
deed of trust and security agreement (the "DEED OF TRUST"), covering the real
property described on EXHIBIT A and the buildings and improvements located
thereon (collectively, the "REAL PROPERTY"). In connection with the making of
the Loan, GECC has requested that the Tenant complete this Tenant Certificate
with the appropriate information as it pertains to the Tenant's lease and to
agree to the requirements set forth herein.

<PAGE>   61

         The undersigned, Tenant, hereby certifies to and agrees with GECC, as
to the following:

                             ACKNOWLEDGMENT OF LEASE

16.      Tenant has accepted possession of the Leased Premises and the Building,
         the Building contains approximately 121,970 square feet of Rentable
         Area. The term of the Expired Lease will terminate on June 16, 1998.
         The term of the Lease which follows the expiration of the Expired Lease
         is for approximately five (5) years and six (6) months, and shall
         commence on June 17, 1998 as set forth in the Lease, and expire on
         Decem ber 31, 2003 (subject to extension pursuant to Addendum 1
         attached to the Lease).

17.      The minimum monthly Base Rent presently payable under the Lease from
         and after June 17, 1998 will be $124,002.83.

18.      No rent or other sum which is payable under the Lease has been paid by
         or on behalf of Tenant more than one (1) month in advance, except as
         expressly disclosed on EXHIBIT B attached hereto.

19.      The Lease is valid and in full force and effect, and, to the best of
         Tenant's knowledge, neither Landlord nor Tenant is in default
         thereunder, except as expressly disclosed on EXHIBIT C attached hereto.

20.      Any improvements required by the Lease to be made by Landlord have been
         completed to the full satisfaction of Tenant, except as expressly
         disclosed on EXHIBIT D attached hereto.

21.      The Lease has not been assigned, modified, supplemented or amended in
         any way (except as expressly described on EXHIBIT E attached hereto).
         Tenant shall not enter into any assignment, modification, supplement or
         amendment to the Lease without the prior written consent of GECC. The
         Lease constitutes the entire agreement between the parties and there
         are no other agreements (including any letter agreements) between
         Landlord and Tenant concerning the Leased Premises (except as expressly
         described on EXHIBIT E attached hereto). Tenant shall not, without
         obtaining the prior written consent of GECC, (a) prepay any of the
         rents, additional rents or other sums due under the Lease for more than
         one (1) month in advance of the due dates thereof, (b) volun tarily
         surrender the Leased Premises or terminate the Lease without cause, or
         (c) assign the Lease or sublet the Leased Premises other than pursuant
         to the provisions of the Lease.

                                       D-2

<PAGE>   62

                                  SUBORDINATION

22.      The Lease (including, without limitation, all rights to insurance
         proceeds and condem nation awards, any rights of first refusal, options
         to purchase, and any other rights granted to Tenant pursuant to the
         Lease) is, and shall at all times continue to be, subject and
         subordinate in each and every respect, to (a) the Deed of Trust and to
         any and all liens, security interests, rights and any other interest
         created thereby and to any and all increases, renewals, modifications,
         extensions, substitutions, replacements and/or consolidations of the
         Deed of Trust and the Loan, and (b) any additional financing of the
         Real Property or portions thereof provided by GECC and the liens and
         security interests under the documents evidencing and securing such
         additional financing, and to any increases therein or supplements
         thereto.

                                 NON-DISTURBANCE

23.      So long as the Lease is in full force and effect and Tenant is not in
         default in the payment of rent, additional rent, taxes, utility charges
         or other sums payable by Tenant under the terms of the Lease, or under
         any of the other terms, covenants or conditions of the Lease on
         Tenant's part to be performed (beyond the period, if any, specified in
         the Lease within which Tenant may cure such default) (a) Tenant's
         possession of the Leased Premises under the Lease shall not be
         disturbed or interfered with by GECC in the exercise of any of its
         rights under the Deed of Trust, including any foreclosure, and (b) GECC
         will not join Tenant as a party defendant for the purpose of
         terminating Tenant's interest and estate under the Lease in any
         proceeding for foreclosure of the Deed of Trust.

                                   ATTORNMENT

24.      If, at any time GECC (or any person, or such person's successors or
         assigns, who acquire the interest of the Landlord under the Lease
         through foreclosure action of the Deed of Trust, or upon a transfer of
         the Real Property by conveyance in lieu of foreclosure, or otherwise)
         shall succeed to the rights of the Landlord under the Lease as a result
         of a default or event of default under the Mortgage, and if the Tenant
         is not then in default under the Lease (beyond the time permitted
         therein, if any, to cure such default), then (a) the Lease shall not
         terminate, (b) upon receipt by Tenant of written notice of such
         succession, Tenant shall attorn to and recognize such person as succeed
         ing to the rights of the Landlord under the Lease (herein sometimes
         called "SUCCESSOR LANDLORD"), upon the terms and conditions of the
         Lease, and (c) Successor Landlord shall accept such attornment and
         recognize Tenant as the Successor Landlord's tenant under the Lease.
         Upon such attornment and recognition, the Lease shall continue in full
         force and effect as, or as if it were, a direct lease between the
         Successor Landlord and Tenant upon all of the terms, conditions and
         covenants (including any right under the Lease on the part of the
         Tenant to extend the term of the Lease) as are set forth in

                                       D-3

<PAGE>   63

         the Lease and which shall be applicable after such attornment and
         recognition. Notwithstanding anything to the contrary set forth herein,
         GECC or such Successor Landlord shall not be (i) liable for any act or
         omission of any previous landlord, including the Landlord, (ii) subject
         to any offset, defense or counterclaim which Tenant might be entitled
         to assert against any previous landlord, including the Landlord, (iii)
         bound by any payment of rent or additional rent made by the Tenant to
         any previous landlord (including the Landlord) for more than one (1)
         month in advance, unless the same was paid to and received by the
         Successor Landlord, (iv) bound by any amend ment or modification of the
         Lease hereafter made without the written consent of GECC, or (v) liable
         for any deposit that Tenant may have given to any previous landlord
         (including the Landlord) which has not been transferred to the
         Successor Landlord. Further, notwithstanding anything to the contrary
         set forth herein, the liability of GECC for any obligations under the
         Lease shall be limited to GECC's interest in the Real Property. GECC
         shall not have any liability or responsibility under or pursuant to the
         terms of the Lease after it ceases to own an interest in or to the Real
         Property.

25.      The provisions of this Tenant Certificate regarding attornment by
         Tenant shall be self- operative and effective without the necessity of
         execution of any new lease or other document on the part of any party
         hereto or the respective heirs, legal representatives, successors or
         assigns of any such party. Tenant agrees, however, to execute and
         deliver at any time and from time to time, upon the request of GECC or
         of any Succes sor Landlord, any instrument or certificate which, in the
         reasonable judgment of GECC or such Successor Landlord may be necessary
         or appropriate in any such foreclosure proceeding or otherwise to
         evidence such attornmnent, including, if requested, a new lease of the
         Leased Premises on the same terms and conditions as the Lease.

                               HAZARDOUS MATERIALS

26.      Tenant shall neither suffer nor itself manufacture, store, handle,
         transport, dispose of, spill, leak or dump any toxic or hazardous
         waste, waste product or substance (as they may be defined in any
         federal or state statute, rule or regulation pertaining to or governing
         such wastes, waste products or substances) on the Leased Premises or on
         any property in the vicinity of the Leased Premises at any time during
         the term (including any renewal term) of the Lease and during Tenant's
         occupancy of the Leased Premises.

                                     NOTICE

27.      Tenant hereby acknowledges and agrees that: (a) from and after the date
         hereof in the event of any act or omission of Landlord which would give
         Tenant the right, either immediately or after the lapse of time, to
         terminate the Lease or to claim a partial or total eviction. Tenant
         will not exercise any such right (i) until it has given written

                                       D-4

<PAGE>   64

         notice of such act or omission to GECC and (ii) until the expiration of
         thirty (30) days following such giving of notice to GECC in which time
         period GECC shall be entitled to cure any such act or omissions of
         Landlord; (b) Tenant shall send to Landlord all copies of any such
         default, notice or statement under the Lease at the same time such
         notice is sent to Landlord; and (c) if GECC notifies Tenant of a
         default under the Deed of Trust and demands that Tenant pay its rent
         and all other sums due under the Lease to GECC, Tenant shall honor such
         demand and pay its rent and all of the sums due under the Lease
         directly to GECC or as otherwise required pursuant to such notice.

         All notices and other communications from Tenant to GECC shall be in
         writing and shall be delivered or mailed by registered mail, postage
         paid, return receipt requested, or delivered by an overnight courier,
         addressed to GECC at

                    General Electric Capital Corporation
                    13355 Noel Road, Suite 2000
                    One Gallery Tower, LB 54
                    Dallas, TX 75240
                    Attention:  Senior Investment Manager
                    Re:  Loan No.
                                 ------------------------

         or at such other address as GECC, any successor, purchaser or
         transferee shall furnish to the Tenant in writing.

         This Tenant Certificate is being executed and delivered by Tenant to
induce GECC to make the Loan which is to be secured in part by an assignment to
GECC of Landlord's interest in the Lease and with the intent and understanding
that the above statements will be relied upon by GECC. This Tenant Certificate
shall inure to the benefit of and be binding upon the parties hereto, their
successors and permitted assigns, and any purchaser or purchasers at foreclosure
of the Real Property, and their respective heirs, personal representatives,
successors and assigns.

TENANT,

McDATA Corporation,
a Delaware corporation

By:                                          (Please sign name)
    ----------------------------------------
Name:                                        (Please print name)
      --------------------------------------
Title:                                       (Please print title within Company)
       -------------------------------------
Date:                                        (Please print date of execution)
      --------------------------------------

By:                                          (Please sign name)
    ----------------------------------------
Name:                                        (Please print name)
      --------------------------------------

                                       D-5

<PAGE>   65

Title:                                       (Please print title within Company)
       -------------------------------------
Date:                                        (Please print date of execution)
      --------------------------------------

GECC

GENERAL ELECTRIC CAPITAL CORPORATION, a
New York Corporation

By:
     --------------------------------------------
     Its:
         ----------------------------------------
     Title:
           --------------------------------------
     Date:
          ---------------------------------------

                                       D-6

<PAGE>   66

                             EXHIBIT A TO EXHIBIT D

                     LEGAL DESCRIPTION OF THE REAL PROPERTY

        LOT 3, BLOCK 1, INTERLOCKEN FILLING 1 REPLAT, COUNTY OF BOULDER,
                               STATE OF COLORADO

<PAGE>   67

                             EXHIBIT B TO EXHIBIT D

                                  PREPAID RENTS

         Please describe below all rental payments that have been paid to the
Landlord in advance of the due date.

<PAGE>   68

                             EXHIBIT C TO EXHIBIT D

                              OUTSTANDING DEFAULTS

         Please describe any current and on-going default of the Tenant.

         Please describe any current and on-going default of the Landlord.

<PAGE>   69

                             EXHIBIT D TO EXHIBIT D

                            OUTSTANDING IMPROVEMENTS

         Please describe below any improvements that were not completed by
Landlord as required in the Lease or any outstanding sums for tenant improvement
work for which the Landlord was required to but has not reimbursed the Tenant.

<PAGE>   70

                             EXHIBIT E TO EXHIBIT D

                             AMENDMENTS TO THE LEASE

         Please describe below any and all amendments to the Lease (including
any letter agreements).

<PAGE>   71

                            FIRST AMENDMENT TO LEASE

                  This FIRST AMENDMENT TO LEASE ("First Amendment") is made and
entered into effective as of January 11, 1999, by and between WHLNF REAL ESTATE
LIMITED PARTNER SHIP, a Delaware limited partnership ("Landlord"), and MCDATA
CORPORATION, a Delaware corporation ("Tenant").

                                R E C I T A L S :
                                -----------------

                  A. Landlord and Tenant entered into that certain Lease
Agreement dated as of September 12, 1997 for the use and occupancy by Tenant of
certain Premises (as defined in the Lease) located at 310 Interlocken Parkway in
Broomfield, Colorado.

                  B. Landlord and Tenant desire to amend the Lease in certain
respects as hereinafter provided.

                  NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

                  1. CAPITALIZED TERMS. Except as otherwise expressly provided
herein to the contrary, all capitalized terms used in this First Amendment shall
have the same meanings given such terms in the Lease.

                  2. GUARANTY OF LEASE. Concurrently with the execution of this
First Amendment, Tenant shall deliver to Landlord a Guaranty of Lease in the
form of EXHIBIT "A" attached hereto, duly executed by EMC2 Corporation
("Guarantor").

                  3. NOTICES. Tenant's address for notice under Section 31.10 of
the Lease is hereby modified such that copies of all notices sent to Tenant
shall also be sent to Guarantor at the following address:

                           EMC2 Corporation
                           35 Parkwood Drive
                           Hopkinson, Massachusetts 01748-1659
                           Attention:  General Counsel

                  4. CURE OF NON-MONETARY DEFAULTS. Section 20.3 of the Lease
shall be revised so that all references to the phrase "fifteen (15)" in Section
20.3 shall be deleted and replaced with "forty- five (45)."

                  5. CONSENTS. Tenant acknowledges and agrees that
notwithstanding any provision of Article 15 of the Lease to the contrary, it
shall be reasonable for Landlord to withhold its consent

<PAGE>   72

(and Landlord may withhold such consent) to any proposed assignment or sublease
by Tenant of all or any part of the Lease or the Premises until Tenant provides
to Landlord a copy of Guarantor's written consent to such assignment or
sublease. Tenant and Landlord agree that Guarantor shall not be bound to any
lease term extension unless Guarantor has given its prior written approval to
such lease term extension.

                  6. NO FURTHER MODIFICATION. Except as set forth in this First
Amendment, all of the terms and provisions of the Lease shall remain unmodified
and in full force and effect.

                  IN WITNESS WHEREOF, this First Amendment to Lease has been
executed as of the date first above written.

                                  LANDLORD:

                                  WHLNF REAL ESTATE LIMITED
                                  PARTNERSHIP,
                                  a Delaware limited partnership

                                  By: Legacy Partners Commercial, Inc., a Texas
                                      corporation, as Manager and Agent for Land
                                      lord

                                      By:        /s/ D. Allen Palmer
                                               ---------------------
                                      Name:    D. Allen Palmer
                                      Its:     Senior Vice President

                                  TENANT:

                                  MCDATA CORPORATION,
                                  a Delaware corporation

                                  By:  /s/ Dee J. Perry
                                     ----------------------------------
                                      Name:  Dee J. Perry
                                           ----------------------------
                                      Its:   CFO, VP Finance and Admin.
                                          -----------------------------

                                  By:
                                     ----------------------------------
                                      Name:
                                           ----------------------------
                                      Its:
                                          -----------------------------

                                        2

<PAGE>   73

                                    EXHIBIT A

                                GUARANTY OF LEASE

         WHLNF REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
("Landlord"), and MCDATA CORPORATION, a Delaware corporation ("Tenant"), entered
into that certain Lease Agreement dated as of September 12, 1997 as amended by
that certain First Amendment dated as of January 11, 1999 (collectively, the
"Lease"), whereby Landlord leased to Tenant and Tenant leased from Landlord
those certain Premises commonly known as 310 Interlocken Parkway, Broom field,
Colorado 80021. Landlord requires that EMC2 CORPORATION (the "Guarantor")
execute and deliver this Guaranty to Landlord.

         NOW, THEREFORE, in consideration for Guarantor's business affiliation
with Tenant and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

         1. Guarantor hereby absolutely, irrevocably and unconditionally
guaranties for the benefits of Landlord and its successors and assigns until the
Lease expiration date of December 31, 2003, as the same may be extended in
accordance with the provisions of the Approved Amendments (defined below), the
full and timely performance of each and all of the terms, covenants and
obligations of the Lease to be kept and performed by Tenant thereunder,
including, without limitation, payment of all rent, expenses and charges payable
by Tenant thereunder. If Landlord disposes of its interest in the Lease,
"Landlord," as used in this Guaranty, shall mean Landlord's successors in
interest and assigns. Guarantor's obligations hereunder shall not be assigned or
delegated.

         2. Guarantor hereby waives notice of or the giving of its consent to
any amendments which may hereafter be made to the terms of the Lease, but only
with respect to those amendments (collectively, the "Approved Amendments") which
do not materially increase the rent or other existing obligations of the Tenant
under the Lease or otherwise materially adversely affect the existing rights of
the Tenant under the Lease, and this Guaranty shall guarantee the performance of
the Lease as amended by any such Approved Amendments, or any other amendments
consented to by Guarantor; provided, however, no lease term extension shall be
binding on Guarantor unless prior written approval has been made by Guarantor.
In addition, no action which Landlord may take or omit to take in connection
with the Lease and no course of dealing with Tenant or any other person
(including, without limitation, any amendment or waiver of any provisions of the
Lease or any settlement of any amount due under the Lease), shall relieve
Guarantor's obligations hereunder, affect this Guaranty in any way, or afford
Guarantor any recourse against Landlord.

         3. Subject to the notice requirements in the Lease, Guarantor expressly
waives notice of acceptance of this Guaranty, presentment for payment or
performance of the Lease, nonpayment or nonperformance of the Lease, protest and
notice of protest, demand, notice of dishonor, notice of any and all proceedings
to collect amounts due under such agreements and to enforce any security given

<PAGE>   74

therefor, and diligence in collecting sums due under such agreements or any
liability under this Guaranty. Guarantor further waives the following: (a) any
defense by reason of any disability of Tenant; (b) any defense arising out of
the absence, impairment or loss of any right of reimbursement, contribution,
subrogation or any other rights or remedies of Guarantor against Tenant, whether
resulting from Landlord's election to exercise certain rights or remedies it may
have against Tenant, or otherwise; and (c) any defense to the obligations of
Guarantor under this Guaranty arising from any bankruptcy proceedings against
Tenant, including, but not limited to, those arising from Landlord's exercise of
its right to file a claim in such proceedings, or the exercise of any trustee's
powers under Federal Bankruptcy Code Sections 364 and 365. Until all of Tenant's
obligations to Landlord have been discharged in full, Guarantor shall have no
right of subrogation against Tenant or the right to assert any defenses of
Tenant under the Lease.

         4. In the event of any default in the performance of Tenant's
obligations under the Lease, Landlord shall have the right to enforce its rights
under this Guaranty and/or its rights against Tenant, in any order, it being
agreed that all remedies available to Landlord under the Lease and this Guaranty
shall be nonexclusive. Landlord may enforce its rights under this Guaranty
without first proceeding against or joining Tenant or any other person, and
without applying or enforcing any security for the Lease. Guarantor hereby
waives any rights that Guarantor may have to compel Landlord to proceed against
Tenant or against any security from Tenant or to participate in any such
security. Guarantor hereby authorizes Landlord in its sole discretion, with
notice to Guarantor, to exercise any right or remedy which Landlord may have,
even though any rights which Guarantor may have against Tenant or others may be
diminished or destroyed by the exercise or election to exercise any such remedy.

         5. If Landlord is required to enforce Guarantor's obligations by legal
proceedings, Guarantor shall pay to Landlord all costs incurred, including,
without limitation, Landlord's reasonable attorneys' fees and all costs and
other expenses incurred in any collection or attempted collection or in any
negotiations relative to the obligations hereby guaranteed, or in enforcing this
Guaranty against Guarantor.

         6. This Guaranty shall be construed and enforced in accordance with the
laws of the State of Colorado. Guarantor hereby irrevocably consents to the
jurisdiction of the State of Colorado, and agrees that any court of competent
jurisdiction sitting in Denver County, Colorado, shall be an appropriate and
convenient place of venue, and shall be the sole place of venue, to resolve any
dispute with respect to this Guaranty.

         IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day
and year first written above.

        "GUARANTOR"                   EMC2 CORPORATION

                                      By:
                                         ---------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                        2

<PAGE>   75

                                      By:
                                         ---------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                        3

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