SC TO-T

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO
(Rule 14d-100)
Tender Offer Statement Under Section 14(d)(1)
or Section 13(e)(1) of the Securities Exchange Act of 1934

VIXEL CORPORATION
(Name of Subject Company (Issuer))

AVIARY ACQUISITION CORP.,
a wholly-owned subsidiary of Emulex Corporation
and
EMULEX CORPORATION
(Name of Filing Persons (Offeror))

COMMON STOCK, PAR VALUE $.0015 PER SHARE
(Title of Class of Securities)

928552108
(CUSIP Number of Class of Securities)

Randall G. Wick, Esq.
Vice President and General Counsel
3535 Harbor Boulevard
Costa Mesa, CA 92626
714-662-5600
(Name, address and telephone number of
person authorized to receive notices
and communications on behalf of filing persons)

With Copy to:
Gregory C. Smith, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue
Suite 1100
Palo Alto, California 94301
650-470-4500

CALCULATION OF FILING FEE

Transaction Valuation*: $329,649,410 Amount of Filing Fee**: $26,669

*	Estimated for purposes of calculating the filing fee only. This calculation assumes the purchase of 24,696,691 shares of common stock of Vixel Corporation at the tender offer price of $10.00 per share of common stock. The transaction value also assumes the purchase of 2,947,651 shares of Series B convertible preferred stock of Vixel Corporation at the tender offer price of $10.00 per share of preferred stock. The transaction value also includes the offer price of $10.00 less $3.75, which is the average exercise price of outstanding options, multiplied by 7,184,688, the estimated number of options outstanding. The transaction value further includes the offer price of $10.00 less $3.50, which is the average exercise price of outstanding warrants, multiplied by 1,277,183, the number of warrants outstanding.
**	The amount of the filing fee, calculated in accordance with rule 0-11 of the Securities Exchange Act of 1934, as amended, and Fee Advisory #11 for Fiscal Year 2003 issued by the Securities and Exchange Commission on February 21, 2003, equals .008090% of the transaction valuation.
o	Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount previously paid:	Form or registration no.:
Filing Party:	Date Filed:

o Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

x third-party tender offer subject to Rule 14d-1.

o issuer tender offer subject to Rule 13e-4.

o going-private transaction subject to Rule 13e-3.

o amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:

TABLE OF CONTENTS

	ITEM 1. SUMMARY TERM SHEET.
	ITEM 2. SUBJECT COMPANY INFORMATION.
	ITEM 3. IDENTITY AND BACKGROUND OF THE FILING PERSON.
	ITEM 4. TERMS OF THE TRANSACTION.
	ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
	ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
	ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
	ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
	ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
	ITEM 10. FINANCIAL STATEMENTS.
	ITEM 11. ADDITIONAL INFORMATION.
	ITEM 12. EXHIBITS.
	ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
SIGNATURE
EXHIBIT INDEX
EXHIBIT (A)(1)
EXHIBIT (A)(2)
EXHIBIT (A)(3)
EXHIBIT (A)(4)
EXHIBIT (A)(5)
EXHIBIT (A)(6)
EXHIBIT (A)(10)
EXHIBIT (A)(11)
EXHIBIT (A)(12)
EXHIBIT (D)(1)
EXHIBIT (D)(2)
EXHIBIT (D)(3)
EXHIBIT (D)(4)
EXHIBIT (D)(5)
EXHIBIT (D)(6)
EXHIBIT (D)(7)
EXHIBIT (D)(8)
EXHIBIT (D)(9)

     This Tender Offer Statement on Schedule TO (this “Statement”) relates to the offer by Aviary Acquisition Corp., a Delaware corporation (the “Purchaser”) and a wholly owned subsidiary of Emulex Corporation, a Delaware Corporation (“Emulex”), to purchase all the issued and outstanding shares of common stock, par value $.0015 per share, of Vixel Corporation, a Delaware corporation (“Vixel”) (together with any associated preferred stock or other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel and Computershare Trust Company, Inc., as amended from time to time, the “Common Stock”), and all issued and outstanding shares of Series B convertible preferred stock, par value $.001 per share, of Vixel (the “Series B Preferred Stock” and, together with the Common Stock, the “Shares” and each share thereof a “Share”), at a price of $10.00 per Share, net to the seller in cash, without interest thereon (the “Offer Price”). The terms and conditions of the offer are described in the Offer to Purchase, dated October 15, 2003 (the “Offer to Purchase”), a copy of which is attached hereto as Exhibit (a)(1), and the related Letter of Transmittal and the instructions thereto, a copy of which is attached hereto as Exhibit (a)(2) (which, as they may be amended or supplemented from time to time, together constitute the “Offer”).

     Pursuant to General Instruction F to Schedule TO, the information contained in the Offer to Purchase, including all schedules and annexes thereto, is hereby expressly incorporated herein by reference in response to Items 1 through 11 of this Statement and is supplemented by the information specifically provided herein.

ITEM 1. SUMMARY TERM SHEET.

     The information set forth in the section of the Offer to Purchase entitled “Summary Term Sheet” is incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION.

     (a)  The subject company and the issuer of the securities subject to the Offer is Vixel Corporation, a Delaware corporation. Its principal executive office is located at 11911 North Creek Parkway South, Bothell, Washington, 98011 and its telephone number is (425) 806-5509.

     (b)  This Statement relates to the Offer by the Purchaser to purchase all issued and outstanding Shares for $10.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal. The information set forth in the introduction to the Offer to Purchase (the “Introduction”) is incorporated herein by reference.

     (c)  The information concerning the principal market, if any, in which the Shares are traded and certain high and low sales prices for the Common Stock in the principal market in which it is traded is set forth in “Price Range of the Shares; Dividends on the Shares” in the Offer to Purchase and is incorporated herein by reference.

ITEM 3. IDENTITY AND BACKGROUND OF THE FILING PERSON.

     (a), (b), (c) The information set forth in the section of the Offer to Purchase entitled “Certain Information Concerning Emulex and the Purchaser” and Schedule I to the Offer to Purchase is incorporated herein by reference.

ITEM 4. TERMS OF THE TRANSACTION.

     (a)(1)(i) – (viii), (x), (xii) The information set forth in the Introduction and in the sections of the Offer to Purchase entitled “Terms of the Offer,” “Acceptance for Payment and Payment for Shares,” “Procedure for Tendering Shares,” “Withdrawal Rights,” “Certain United States Federal Income Tax Consequences” and “Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act Registration; Margin Regulations” is incorporated herein by reference.

     (a)(1)(ix), (xi) Not applicable.

     (a)(2)(i) – (v), (vii) The information set forth in the Introduction and in the sections of the Offer to Purchase entitled “Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act Registration; Margin Regulations,” “Certain United States Federal Income Tax Consequences,” “Background of the Offer,” “Purpose of the Offer; Plans for Vixel; Other Matters” and “The Merger Agreement and Other Agreements” is incorporated herein by reference.

     (a)(2)(vi) Not applicable.

ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

2

     (a), (b) The information set forth in the sections of the Offer to Purchase entitled “Certain Information Concerning Emulex and the Purchaser,” “Background of the Offer,” “Purpose of the Offer; Plans for Vixel; Other Matters” and “The Merger Agreement and Other Agreements” is incorporated herein by reference.

ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

     (a), (c)(1), (3-7) The information set forth in the Introduction and in the sections of the Offer to Purchase entitled “Purpose of the Offer; Plans for Vixel; Other Matters” and “The Merger Agreement and Other Agreements” is incorporated herein by reference.

     (c)(2) None.

ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

     (a), (b) The information set forth in the section of the Offer to Purchase entitled “Source and Amount of Funds” is incorporated herein by reference.

     (d)  Not applicable.

ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

     The information set forth in the Introduction and in the sections of the Offer to Purchase entitled “Certain Information Concerning Emulex and the Purchaser,” “Background of the Offer” and “The Merger Agreement and Other Agreements” is incorporated herein by reference.

ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

     (a)  The information set forth in the Introduction and in the sections of the Offer to Purchase entitled “Certain Information Concerning Emulex and the Purchaser,” “Background of the Offer” and “The Merger Agreement and Other Agreements” is incorporated herein by reference.

ITEM 10. FINANCIAL STATEMENTS.

     Not applicable.

ITEM 11. ADDITIONAL INFORMATION.

     (a)(1) The information set forth in the sections of the Offer to Purchase entitled “Certain Information Concerning Emulex and the Purchaser” and “The Merger Agreement and Other Agreements” is incorporated herein by reference.

     (a)(2), (3) The information set forth in the sections of the Offer to Purchase entitled “Certain Conditions of the Offer,” “Certain Legal Matters,” and “The Merger Agreement and Other Agreements” is incorporated herein by reference.

     (a)(4) The information set forth in the sections of the Offer to Purchase entitled “Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act Registration; Margin Regulations” and “Certain Legal Matters” is incorporated herein by reference.

     (a)(5) The information set forth in the section of the Offer to Purchase entitled “Certain Legal Matters” is incorporated herein by reference.

     (b)  The information set forth in the Offer to Purchase is incorporated herein by reference.

ITEM 12. EXHIBITS.

(a)(1)	Offer to Purchase dated October 15, 2003
(a)(2)	Form of Letter of Transmittal
(a)(3)	Form of Notice of Guaranteed Delivery
(a)(4)	Form of Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees
(a)(5)	Form of Letter to Clients for Use by Brokers, Dealers, Banks, Trust Companies and Other Nominees
(a)(6)	Form of Guidelines for Certificate of Taxpayer Identification Number on Substitute Form W-9

3

(a)(7)	Joint Press Release issued by Emulex and Vixel on October 8, 2003 (incorporated by reference to the Schedule TO-C filed by Emulex and the Purchaser with the Securities and Exchange Commission on October 8, 2003)
(a)(8)	Transcript of Conference Call by Emulex (incorporated by reference to the Schedule TO-C filed by Emulex and the Purchaser with the Securities and Exchange Commission on October 10, 2003)
(a)(9)	Slide Presentation by Emulex (incorporated by reference to the Schedule TO-C filed by Emulex and the Purchaser with the Securities and Exchange Commission on October 8, 2003)
(a)(10)	Summary Advertisement published in the Wall Street Journal on October 15, 2003
(a)(11)	Press Release issued by Emulex on October 15, 2003
(a)(12)	Complaint, Russell Fink vs. Vixel Corporation, et al., filed on October 9, 2003 in the Superior Court of the State of Washington, County of King
(b)	Not Applicable
(d)(1)	Agreement and Plan of Merger dated as of October 8, 2003 by and among Emulex, the Purchaser and Vixel
(d)(2)	Stockholders Agreement, dated as of October 8, 2003, by and among Emulex, the Purchaser and certain stockholders of Vixel identified therein
(d)(3)	Purchaser Option, dated as of October 8, 2003, by and among Emulex, the Purchaser and Vixel
(d)(4)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and James M. McCluney
(d)(5)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Stuart B. Berman
(d)(6)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Thomas Hughes
(d)(7)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Soogil Stephen Cho
(d)(8)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Brian J. Reed
(d)(9)	Confidentiality Agreement, dated September 2, 2003, by and between Emulex and Vixel
(g)	Not Applicable
(h)	Not Applicable

ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.

     Not applicable.

4

SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

EMULEX CORPORATION
By:	/s/ PAUL F. FOLINO Name: Paul F. Folino Title: Chairman of the Board and Chief Executive Officer
AVIARY ACQUISITION CORP.
By:	/s/ PAUL F. FOLINO Name: Paul F. Folino Title: President and Chief Executive Officer

Date: October 15, 2003

5

EXHIBIT INDEX

EXHIBIT NO.	DOCUMENT
(a)(1)	Offer to Purchase dated October 15, 2003
(a)(2)	Form of Letter of Transmittal
(a)(3)	Form of Notice of Guaranteed Delivery
(a)(4)	Form of Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees
(a)(5)	Form of Letter to Clients for Use by Brokers, Dealers, Banks, Trust Companies and Other Nominees
(a)(6)	Form of Guidelines for Certificate of Taxpayer Identification Number on Substitute Form W-9
(a)(7)	Joint Press Release issued by Emulex and Vixel on October 8, 2003 (incorporated by reference to the Schedule TO-C filed by Emulex and the Purchaser with the Securities and Exchange Commission on October 8, 2003)
(a)(8)	Transcript of Conference Call by Emulex (incorporated by reference to the Schedule TO-C filed by Emulex and the Purchaser with the Securities and Exchange Commission on October 10, 2003)
(a)(9)	Slide Presentation by Emulex (incorporated by reference to the Schedule TO-C filed by Emulex and the Purchaser with the Securities and Exchange Commission on October 8, 2003)
(a)(10)	Summary Advertisement published in the Wall Street Journal on October 15, 2003
(a)(11)	Press Release issued by Emulex on October 15, 2003
(a)(12)	Complaint, Russell Fink vs. Vixel Corporation, et al., filed on October 9, 2003 in the Superior Court of the State of Washington, County of King
(b)	Not Applicable
(d)(1)	Agreement and Plan of Merger dated as of October 8, 2003 by and among Emulex, the Purchaser and Vixel
(d)(2)	Stockholders Agreement, dated as of October 8, 2003, by and among Emulex, the Purchaser and certain stockholders of Vixel identified therein
(d)(3)	Purchaser Option, dated as of October 8, 2003, by and among Emulex, the Purchaser and Vixel
(d)(4)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and James M. McCluney
(d)(5)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Stuart B. Berman
(d)(6)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Thomas Hughes
(d)(7)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Soogil Stephen Cho
(d)(8)	Noncompetition Agreement, dated as of October 8, 2003, by and between Emulex and Brian J. Reed
(d)(9)	Confidentiality Agreement, dated September 2, 2003, by and between Emulex and Vixel
(g)	Not Applicable
(h)	Not Applicable

EX-99.(A)(1)

Exhibit (a)(1)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

(Including the Associated Preferred Stock Purchase Rights)

and

All Outstanding Shares of Series B Convertible Preferred Stock

of

Vixel Corporation

at

$10.00 Net Per Share

by

Aviary Acquisition Corp.

a wholly owned subsidiary of

Emulex Corporation

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, NOVEMBER 12, 2003, UNLESS THE OFFER IS EXTENDED.

     The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of October 8, 2003 (the “Merger Agreement”), by and among Emulex Corporation, a Delaware corporation (“Emulex”), Aviary Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Emulex (the “Purchaser,” “we” or “us”), and Vixel Corporation, a Delaware corporation (“Vixel”).

     The Board of Directors of Vixel has unanimously approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger (each as defined below), and it has also unanimously determined that the terms of the Offer, the Merger and the Merger Agreement are fair to and in the best interests of Vixel’s stockholders and has unanimously recommended that holders of all issued and outstanding shares of common stock, par value $.0015 per share, of Vixel, including the associated preferred stock purchase or other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel and Computershare Trust Company, Inc., as amended from time to time (together, the “Common Stock”), and all issued and outstanding shares of Series B convertible preferred stock, par value $.001 per share, of Vixel (the “Series B Preferred Stock,” and together with the Common Stock, the “Shares” and each share thereof a “Share”), tender their Shares.

     The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer (A) that number of shares of Common Stock which, together with any shares of Common Stock then owned by Emulex or us (without giving effect to shares subject to purchase under the Purchaser Option (as defined below) or the Stockholders Agreement (as defined below)), represents greater than 50.1% of the shares of Common Stock outstanding on a fully diluted basis (excluding the conversion of the Series B convertible preferred stock) and (B) and that number of shares of Series B Preferred Stock which, together with any shares of Series B convertible preferred stock then owned by Emulex or us (without giving effect to shares subject to purchase under the Purchaser Option or the Stockholders Agreement) represents greater than 50.1% of the Series B Preferred Stock outstanding on a fully diluted basis and (2) the satisfaction of certain other conditions as set forth in this Offer to Purchase, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. See Section 14 — “Certain Conditions of the Offer.”

     Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at the addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be directed to the Information Agent. A stockholder also may contact brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Offer.

The Dealer Manager for the Offer is:

Merrill Lynch & Co.

October 15, 2003

IMPORTANT

Any stockholder desiring to tender all or a portion of such stockholder’s Shares must:

1. for Shares that are registered in such stockholder’s name and held as physical certificates:

•  complete and sign the Letter of Transmittal (or a manually signed facsimile) in accordance with the instructions in the Letter of Transmittal;

•  have such stockholder’s signature on the Letter of Transmittal guaranteed if required by Instruction 1 to the Letter of Transmittal; and

•  mail or deliver the Letter of Transmittal (or a manually signed facsimile), the certificates for such Shares and any other required documents to Computershare Trust Company of New York, the Depositary, at its address on the back of this Offer to Purchase.

2. for Shares that are registered in such stockholder’s name and held in book entry form:

•  complete and sign the Letter of Transmittal (or a manually signed facsimile) in accordance with the instructions in the Letter of Transmittal or prepare an Agent’s Message (as defined in the Letter of Transmittal);

•  if using the Letter of Transmittal, have such stockholder’s signature on the Letter of Transmittal guaranteed if required by Instruction 1 of the Letter of Transmittal;

•  deliver an Agent’s Message or the Letter of Transmittal (or a manually signed facsimile) and any other required documents to the Depositary; and

•  transfer the Shares through book-entry transfer into the Depositary’s account.

3. for Shares that are registered in the name of a broker, dealer, bank, trust company or other nominee:

•  Contact the broker, bank, trust company or other nominee and request that the broker, dealer, bank, trust company or other nominee tender the Shares to the Purchaser before the expiration of the Offer.

      The Letter of Transmittal, the certificates for the Shares and any other required documents must be received by the Depositary before the expiration of the Offer, unless the procedures for guaranteed delivery described in Section 3 — “Procedure for Tendering Shares” of this Offer to Purchase are followed.

ii

TABLE OF CONTENTS

EXHIBIT (A)(1)

EXHIBIT (A)(2)

EXHIBIT (A)(3)

EXHIBIT (A)(4)

EXHIBIT (A)(5)

EXHIBIT (A)(6)

EXHIBIT (A)(10)

EXHIBIT (A)(11)

EXHIBIT (A)(12)

EXHIBIT (D)(1)

EXHIBIT (D)(2)

EXHIBIT (D)(3)

EXHIBIT (D)(4)

EXHIBIT (D)(5)

EXHIBIT (D)(6)

EXHIBIT (D)(7)

EXHIBIT (D)(8)

EXHIBIT (D)(9)

TABLE OF CONTENTS

			Page
SUMMARY TERM SHEET				1
INTRODUCTION				6
THE TENDER OFFER				8
	1.	Terms of the Offer		8
	2.	Acceptance for Payment and Payment for Shares		11
	3.	Procedure for Tendering Shares		12
	4.	Withdrawal Rights		14
	5.	Certain United States Federal Income Tax Consequences		15
	6.	Price Range of the Shares; Dividends on the Shares		16
	7.	Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act Registration; Margin Regulations		17
	8.	Certain Information Concerning Vixel		18
	9.	Certain Information Concerning Emulex and the Purchaser		20
	10.	Source and Amount of Funds		21
	11.	Background of the Offer		22
	12.	Purpose of the Offer; Plans for Vixel; Other Matters		24
	13.	The Merger Agreement and Other Agreements		26
	14.	Certain Conditions of the Offer		43
	15.	Certain Legal Matters		45
	16.	Fees and Expenses		47
	17.	Miscellaneous		47
SCHEDULE I — Directors and Executive Officers of Emulex and the Purchaser				49
ANNEX I — Delaware General Corporation Law Appraisal Rights				51

SUMMARY TERM SHEET

Securities Sought:	All outstanding shares of common stock, including the associated preferred stock purchase or other rights, of Vixel Corporation
	and
	All outstanding shares of Series B convertible preferred stock of Vixel Corporation
Price Offered Per Share:	$10.00 net to you in cash, without interest
Scheduled Expiration of Offer:	12:00 midnight, New York City time, on November 12, 2003, unless extended
Purchaser:	Aviary Acquisition Corp., a wholly owned subsidiary of Emulex Corporation
Vixel Board Recommendation:	Vixel’s board of directors unanimously recommends that you accept the offer and tender your shares

      The following are some of the questions you, as a stockholder of Vixel, may have and our answers to those questions. We urge you to carefully read the remainder of this Offer to Purchase and the Letter of Transmittal because the information in this summary is not complete. Additional important information is contained in the remainder of this Offer to Purchase and the Letter of Transmittal.

Who is offering to buy my shares?

      Our name is Aviary Acquisition Corp. We are a Delaware corporation formed by Emulex as its direct, wholly-owned subsidiary for the purpose of acquiring all of the outstanding capital stock of Vixel. See the “Introduction” to this Offer to Purchase and Section 9 — “Certain Information Concerning Emulex and the Purchaser.”

What are the classes and amounts of securities being sought in the offer?

      We are offering to purchase all issued and outstanding shares of common stock of Vixel, including the associated preferred stock purchase or other rights, and all issued and outstanding shares of Series B convertible preferred stock of Vixel. See “Introduction” to this Offer to Purchase and Section 1 — “Terms of the Offer.”

How much are you offering to pay and in what form of payment?

      We are offering to pay $10.00, net to you in cash without interest thereon, for each share of common stock (including the associated preferred stock purchase or other rights) and Series B convertible preferred stock.

Will I have to pay any fees or commissions?

      If you are the record owner of your shares and you tender your shares to us in the offer, you will not have to pay brokerage fees or similar expenses. If you own your shares through a broker or other nominee, and your broker tenders your shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. See the “Introduction” to this Offer to Purchase.

Do you have the financial resources to make payment?

      Yes. To finance the purchase, Emulex will provide us with the funds required to pay for the shares and related fees and expenses from its working capital. Our offer is not contingent on obtaining new sources of financing. See Section 10 — “Source and Amount of Funds.”

Is your financial condition relevant to my decision to tender in the offer?

      Our offer is not subject to any financing condition. Because the form of payment consists solely of cash and all of the funding that will be needed will come from Emulex’s working capital, we do not think our financial condition is relevant to your decision as to whether to tender your shares into our offer. Pursuant to the merger agreement, Emulex has agreed to provide us with funds necessary to consummate our offer and to pay for any outstanding capital stock of Vixel not owned by Emulex, Vixel or us pursuant to any merger of us into Vixel. See Section 10 — “Source and Amount of Funds.”

1

How long do I have to decide whether to tender in the offer?

      You will have at least until 12:00 midnight, New York City time, on Wednesday, November 12, 2003 to decide whether to tender your shares in the offer. If you cannot deliver everything that is required in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure, which is described later in this Offer to Purchase. See Section 1 — “Terms of the Offer” and Section 3 — “Procedure for Tendering Shares.”

Can the offer be extended and under what circumstances?

      Subject to the terms of the merger agreement, we may extend the offer with Vixel’s prior written consent, authorized by Vixel’s board of directors or a duly authorized committee of Vixel’s board of directors.

      Subject to the terms of the merger agreement, we may extend the offer without Vixel’s consent as follows:

•  if, at any scheduled expiration of the offer any of the conditions to our obligation to accept shares for payment has not been satisfied or waived, we may extend the offer for a time period reasonably necessary to permit the condition to be satisfied;

•  if required by any rule, regulation or interpretation of the United States Securities and Exchange Commission or the staff thereof applicable to the offer, we may extend (or re-extend) the offer as so required;

•  we may extend (or re-extend) the offer for an aggregate period of not more than five business days beyond the latest applicable date to which an extension would otherwise be permitted without Vixel’s consent if, as of such date, all of the conditions to our obligations to accept shares for payment are satisfied or waived (where permitted), but the shares of either the common stock or the Series B convertible preferred stock validly tendered and not validly withdrawn pursuant to the offer constitute less than 90% of the then-outstanding shares of the class; and

•  if we increase the offer price, the offer may be extended as required by law in connection therewith.

      We may also elect to immediately accept for payment and promptly purchase shares tendered prior to the expiration of the initial offer period at midnight on November 12, 2003 or such later time as the offer may have been extended and provide a “subsequent offering period” without Vixel’s consent, which would be an additional period of three to twenty business days beginning after the offer expires. During this subsequent offering period, you would be permitted to tender, but not withdraw, your shares and receive $10.00 per share, net to you in cash, without interest. We do not currently intend to provide a subsequent offering period, although we reserve the right to do so.

      See Section 1 — “Terms of the Offer.”

      If we extend the offer past November 12, 2003, each of the directors of Vixel and each of Goldman Sachs Group, Inc. and Goldman Sachs Direct Investment Fund 2000, L.P. would be permitted to withdraw the shares of common stock and Series B convertible preferred stock previously irrevocably tendered by them pursuant to the terms of a Stockholders Agreement, dated October 8, 2003, which they entered into with Emulex and us. These shares represent approximately 11% of the issued and outstanding shares of common stock (assuming the conversion of the Series B convertible preferred stock held by the Goldman Sachs investors and excluding warrants held by the Goldman Sachs investors and stock options that Vixel’s directors may exercise). See Section 13 — “The Merger Agreement and Other Agreements.”

How will I be notified if the offer is extended or a subsequent offering period is provided?

      If we extend the offer or provide for a subsequent offering period, we will inform Computershare Trust Company of New York, the depositary for the offer, and will make a public announcement of the extension, not later than 9:00 a.m., Eastern time, on the business day after the day on which the offer was scheduled to expire. See Section 1 — “Terms of the Offer.”

2

What are the most significant conditions to the offer?

      We are not obligated to purchase any Shares which are validly tendered

•  unless there has been validly tendered and not validly withdrawn prior to the expiration of the offer (1) that number of shares of common stock which, together with any shares of common stock then owned by Emulex, Vixel or us (without giving effect to shares subject to the Purchaser Option Agreement and the Stockholders Agreement described in Section 13 — “The Merger Agreement and Other Agreements”), represents greater than 50.1% of the shares of common stock outstanding on a fully diluted basis (excluding the conversion of the Series B convertible preferred stock) and (2) that number of shares of Series B convertible preferred stock which, together with any shares of Series B preferred stock then owned by Emulex, Vixel or us (again without giving effect to shares subject to the Purchaser Option Agreement and the Stockholders Agreement), represents greater than 50.1% of the Series B convertible preferred stock outstanding on a fully diluted basis (we call this condition the “minimum condition”);

•  if there is any material adverse effect on Vixel as described in Section 13 — “The Merger Agreement and Other Agreements”;

•  if the board of directors of Vixel has withdrawn, modified or changed its recommendation in favor of the merger agreement, our offer or our proposed subsequent merger into Vixel, or if the board of directors of Vixel has recommended or remained neutral in respect of an acquisition proposal by a party other than us or our affiliates or has publicly announced its intention to enter into any agreement or agreement in principle with respect to any third party acquisition proposal;

•  unless and until the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions;

•  if a suit, action or proceeding challenging our acquisition of shares in the offer or our proposed merger into Vixel or otherwise limiting the benefits Emulex expects to receive from its acquisition of Vixel, is pending;

•  if the representations and warranties of Vixel in the merger agreement were not true and correct in all material respects as of October 8, 2003 and are not true and correct in all material respects as of the expiration of the offer; and

•  if Vixel has breached or failed to perform or to comply with any of its material agreements, obligations or covenants in the merger agreement.

      The offer is subject to a number of other conditions. We can waive all conditions to the offer except the minimum condition without Vixel’s consent. See Section 14 — “Certain Conditions to the Offer.”

How do I tender my shares?

      To tender shares, you must deliver the certificates representing your shares, together with a completed Letter of Transmittal, to Computershare Trust Company of New York, the depositary for the offer, not later than the time the tender offer expires. If your shares are held in street name, the shares can be tendered by your nominee through Computershare Trust Company of New York. If you cannot deliver a required item to the depositary by the expiration of the tender offer, you may be able to obtain extra time to do so by having a broker, a bank or other fiduciary which is a member of the Security Transfer Agent Medallion Signature Program guarantee that the missing items will be received by the depositary within three business days. However, the depositary must receive the missing items within that three trading day period or your shares will not be validly tendered. See Section 3 — “Procedure for Tendering Shares.”

3

How do I withdraw previously tendered shares?

      To withdraw shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to Computershare Trust Company of New York, the depositary for the offer, while you still have the right to withdraw the shares. See Section 4 — “Withdrawal Rights.”

Until what time may I withdraw shares that I have tendered?

      You may withdraw shares at any time until the offer has expired. In addition, if we have not agreed to accept your shares for payment by December 14, 2003, you may withdraw them at any time after such time until we accept them for payment. This right to withdraw will not apply to any subsequent offering period. See Section 1 — “Terms of the Offer” and Section 4 — “Withdrawal Rights.”

What does the board of directors of Vixel think of the offer?

      Vixel’s board of directors unanimously determined that $10.00, net to the seller in cash, for each share of Vixel common stock (including the associated preferred stock purchase or other rights) and Vixel Series B convertible preferred stock is fair to, and in the best interests of, you and Vixel. Vixel’s board of directors unanimously recommends that you accept the offer and tender your shares to us in the offer. See “Introduction” to this Offer to Purchase and Section 11 — “Background of the Offer.”

Have any Vixel stockholders agreed to tender their shares?

      Yes. The directors of Vixel, Goldman Sachs Group, Inc. and Goldman Sachs Direct Investment Fund 2000, L.P. have each agreed to tender all shares of common stock and Series B convertible preferred stock held by them into the offer pursuant to the terms of a Stockholders Agreement, dated October 8, 2003, which they entered into with Emulex and us. The shares subject to that agreement represent approximately 11% of the number of shares of common stock that would be outstanding following that conversion (assuming the conversion of the Series B convertible preferred stock held by the Goldman Sachs investors and excluding the warrants held by the Goldman Sachs investors and the stock options the exercisable directors of Vixel). See the “Introduction” to this Offer to Purchase and Section 13 — “The Merger Agreement and Other Agreements.”

If a majority of the shares is tendered and accepted for payment, will Vixel continue as a public company?

      If we merge with and into Vixel, Emulex will own all of the outstanding capital stock of Vixel and Vixel no longer will be publicly owned. Even if the merger does not take place, if we purchase all the tendered shares, there may be so few remaining stockholders and publicly held shares that Vixel’s common stock will no longer be eligible to be traded through a Nasdaq market or on a securities exchange, in which event there may not be a public trading market for Vixel stock and Vixel may cease making filings with the SEC or otherwise being required to comply with the SEC rules relating to publicly held companies. See Section 7 — “Effect of the Offer on the Market for Shares; Stock Listing; Exchange Act Registration; Margin Regulations.”

Will the tender offer be followed by a merger if all Vixel shares are not tendered in the offer?

      If we accept for payment and pay for shares of Vixel, we will be obliged to merge with and into Vixel subject to the terms and conditions of the merger agreement and upon the vote of Vixel’s stockholders, if such vote is required. Vixel will be the surviving corporation in the merger and will become a wholly owned subsidiary of Emulex. In the merger, Vixel stockholders who did not tender their shares will receive $10.00 per share in cash (or any higher price per share which is paid in our offer) in exchange for their shares without any interest thereon. If shares tendered in the offer constitute more than 90% of the outstanding shares of each of Vixel’s common stock and Series B convertible preferred stock, we may be able to effect the merger without convening a meeting of stockholders. Pursuant to the Stockholders Agreement described above, all of the shares of Series B convertible preferred stock are required to be tendered into the offer. There are no appraisal rights available in connection with our offer, but stockholders who have not sold their shares in the offer would have appraisal rights available in connection with the merger under Delaware law if those rights are perfected. See the “Introduction” to this Offer to Purchase.

4

If I decide not to tender, how will the offer affect my shares?

      If you do not tender your shares in the offer and the merger described above takes place, your shares will be cancelled. Unless you exercise appraisal rights under Delaware law (see Section 12 — “Purpose of the Offer; Plans for Vixel; Other Matters”), you will receive the same amount of cash per share that they would have received had they tendered their shares in the offer. Therefore, if the merger takes place, the only difference to you between tendering your shares and not tendering your shares is that you will be paid earlier if you tender your shares and that, in connection with the merger, you may have appraisal rights under Delaware law. If the merger does not take place after the offer closes, however, the number of stockholders and number of shares of Vixel stock which are still in the hands of the public may be so small that there no longer may be an active public trading market (or, possibly, any public trading market) for Vixel common stock. Also, as described above, Vixel may cease making filings with the SEC or otherwise being required to comply with the SEC rules relating to publicly held companies. See the “Introduction” to this Offer to Purchase and Section 7 — “Effect of the Offer on the Market for Shares; Stock Listing; Exchange Act Registration; Margin Regulation.”

What is the market value of my shares as of a recent date?

      On October 8, 2003, the last trading day before we announced the tender offer and the possible subsequent merger, the last sale price of Vixel common stock reported on the Nasdaq National Market was $8.54 per share. On October 14, 2003, the last full day prior to commencement of the offer, the last reported sales price of Vixel common stock on the Nasdaq National Market was $9.93 per share. We advise you to obtain a recent quotation for shares of Vixel common stock in deciding whether to tender your shares. There is no established trading market in Vixel’s Series B convertible preferred stock. See Section 6 — “Price Range of Shares.”

Who can I talk to if I have questions about the tender offer?

      You may call MacKenzie Partners, Inc., the information agent for the offer, at (800) 322-2885 (toll free) or Merrill Lynch & Co., the dealer manager for the offer, at (866) 276-1462 (toll free). See the back cover of this Offer to Purchase for additional information on how to contact our information agent or dealer manager.

5

To the Holders of Common Stock and Series B Convertible Preferred Stock of

VIXEL CORPORATION:

INTRODUCTION

      Aviary Acquisition Corp., a Delaware corporation (the “Purchaser”) and a wholly owned subsidiary of Emulex Corporation., a Delaware corporation (“Emulex”), hereby offers to purchase all issued and outstanding shares of common stock, par value $.0015 per share, of Vixel Corporation, a Delaware corporation (“Vixel”), including any associated preferred stock purchase or other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel and Computershare Trust Company, Inc., as amended from time to time, (together, the “Common Stock”), and all issued and outstanding shares of Series B convertible preferred stock, par value $.001 per share, of Vixel (the “Series B Preferred Stock” and, together with the Common Stock, the “Shares” and each share thereof a “Share”), at a price of $10.00 per Share, net to the seller in cash, without interest thereon upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”).

      The Purchaser is a corporation newly formed by Emulex to effect the Offer and other transactions contemplated by the Merger Agreement (as defined below). Emulex is a leading designer, developer and supplier of a broad line of storage networking host bus adapters, or HBAs, and application specific computer chips that provide connectivity solutions for storage area networks, network attached storage, and redundant array of independent disks storage. HBAs are the data communication products that enable servers to connect to storage networks by offloading communication-processing tasks as information is delivered and sent to the network. Emulex’s common stock is traded on the New York Stock Exchange under the symbol “ELX.” For additional information concerning Emulex and the Purchaser, see Section 9 — “Certain Information Concerning Emulex and the Purchaser.”

      The Offer is being made pursuant to an Agreement and Plan of Merger, dated October 8, 2003 (the “Merger Agreement”), by and among Emulex, the Purchaser and Vixel. Pursuant to the Merger Agreement, as soon as practicable after the completion of the Offer and the satisfaction or waiver, if permissible, of all conditions to the Merger (as defined below), the Purchaser will be merged with and into Vixel with Vixel surviving the Merger as a wholly-owned subsidiary of Emulex (the “Merger”). At the effective time of the Merger, each Share then outstanding (other than Shares owned by Emulex, the Purchaser, Vixel, or by stockholders, if any, who are entitled to and properly exercise appraisal rights under Delaware law) will be converted into the right to receive $10.00 per Share, net to the seller in cash, or any higher price per Share paid in the Offer (such price being referred to herein as the “Offer Price”), without interest thereon. Stockholders who exercise appraisal rights under Delaware law will receive a judicially determined fair value for their Shares, which value could be more or less than the price per Share to be paid in the Merger. (See Section 12 — “Purpose of the Offer; Plans for Vixel; Other Matters.”)

      The Merger Agreement is more fully described in Section 13 — “The Merger Agreement and the Other Agreements.”

      Vixel has informed the Purchaser that, as of September 28, 2003, (1) 24,696,691 shares of Common Stock were issued and outstanding (excluding 1,895,426 shares of Common Stock issued and held in the treasury of Vixel), (2) 2,947,651 shares of Series B Preferred Stock were issued and outstanding, (3) 1,895,426 shares of Common Stock and no shares of Preferred Stock were issued and held in the treasury of Vixel, (4) 7,184,688 shares of Common Stock were reserved for issuance pursuant to outstanding Vixel options, (5) 1,277,183 shares of Common Stock were subject to issuance under Vixel warrants and (6) 114,539 shares of Common Stock were available for issuance in the purchase period ending October 31, 2003 under Vixel’s employee stock purchase plan. Based on the foregoing, and assuming that

6

no Shares were issued after September 28, 2003, the Minimum Condition will be satisfied if at least 17,619,432 shares of Common Stock and at least 1,476,773 shares of Series B Preferred Stock are validly tendered and not withdrawn prior to the expiration of the Offer. If the Minimum Condition is satisfied and the Purchaser accepts for payment the Shares tendered pursuant to the Offer, the Purchaser will be able to elect a majority of the members of Vixel’s board of directors and to effect the Merger without the affirmative vote of any other stockholder of Vixel. See Section 12 — “Purpose of the Offer; Plans for Vixel” and Section 13 — “The Merger Agreement and Other Agreements.”

      The Goldman Sachs Group, Inc. and Goldman Sachs Direct Investment Fund 2000, L.P. (together the “Goldman Sachs Investors”) and each of the directors of Vixel (together with the Goldman Sachs Investors, the “Stockholders” and each, a “Stockholder”) have agreed to tender the shares of Common Stock and Series B Preferred Stock held by them into the offer pursuant to the terms of a Stockholders Agreement, dated October 8, 2003, which they entered into with the Purchaser and Emulex (the “Stockholders Agreement”). The Stockholders Agreement provides for the tender into the Offer of all Shares held by the Stockholders which represent approximately 11% of the issued and outstanding shares of Common Stock (assuming the conversion of Series B Preferred Stock held by the Goldman Sachs Investors and excluding warrants held by the Goldman Sachs Investors and stock options that Vixel’s directors may exercise), including any Shares acquired after the date of the Stockholders Agreement, whether upon the exercise of warrants or options to acquire Shares or otherwise, into the Offer. The Stockholders Agreement is more fully described in Section 13 — “The Merger Agreement and Other Agreements.”

      Tendering stockholders whose Shares are registered in their own names and who tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the sale of Shares pursuant to the Offer. The Purchaser will pay all fees and expenses incurred in connection with the Offer by Computershare Trust Company of New York, which is acting as the Depositary (the “Depositary”), MacKenzie Partners, Inc., which is acting as the Information Agent (the “Information Agent”), and Merrill Lynch & Co., which is acting as dealer manager (the “Dealer Manager”). See Section 16 — “Fees and Expenses.”

      The board of directors of Vixel unanimously determined that the consideration to be paid for each Share in the Offer and the Merger is fair to and in the best interests of Vixel and the holders of the Shares and that the holders of the Shares accept the Offer and tender their Shares to the Purchaser pursuant to the Offer. The board of directors of Vixel by a unanimous vote further determined that the Merger Agreement is advisable and that, following the Offer, Vixel’s stockholders approve and adopt the Merger Agreement and each of the transactions contemplated thereby. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer (A) that number of shares of Common Stock which, together with any shares of Common Stock then owned by Emulex or the Purchaser (without giving effect to shares subject to the Purchaser Option or the Stockholders Agreement (each as described in Section 13 — “The Merger Agreement and Other Agreements”)), represents greater than 50.1% of the shares of Common Stock outstanding on a fully diluted basis (excluding the conversion of the Series B Preferred Stock) and (B) that number of shares of Series B Preferred Stock which, together with any shares of Series B Preferred Stock then owned by Emulex or the Purchaser (also without giving effect to Shares subject to the Purchaser Option or the Stockholders Agreement), represents greater than 50.1% of the Series B Preferred Stock outstanding on a fully diluted basis (the “Minimum Condition”); (2) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and the regulations thereunder (the “HSR Act”) and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions; (3) the representations and warranties of Vixel in the Merger Agreement being true and correct in all material respects as of October 8, 2003 and are true and correct in all material respects as of the expiration of the offer; (4) Vixel not having breached or failed to perform or to comply with any of its material agreements, obligations or covenants in the Merger Agreement or (5) there having been no event, change, occurrence or development, individually or collectively, that is materially adverse to Vixel or that would prevent or materially alter or delay any of the transactions contemplated by the Merger Agreement, including the Offer and Merger.

      Goldman, Sachs & Co. (“Goldman Sachs”), Vixel’s financial advisor, has delivered to Vixel’s board of directors its written opinion, dated October 8, 2003, to the effect that, as of such date, based upon and subject to the considerations and assumptions set forth therein, the $10.00 per share of Common Stock in cash to be received by the holders of shares of Common Stock in the Offer and the Merger is fair from a financial point of view to such holders. The full text of Goldman Sachs’s opinion is set forth as Schedule II to Vixel’s Solicitation/Recommendation Statement on Sched-

7

ule 14D-9 (the “Schedule 14D-9”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which is being mailed to stockholders of Vixel with this Offer to Purchase. Stockholders are urged to read each of the Schedule 14D-9 and such opinion carefully in its entirety.

      Consummation of the Merger is subject to a number of conditions, including the approval and adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding Shares (including the Series B Preferred Stock voting on an as-converted basis), if required by applicable law in order to consummate the Merger. Each share of Series B Preferred Stock is entitled to 0.89 of a vote. See Section 15 — “Certain Legal Matters.” If the Purchaser acquires at least 90% of the outstanding shares of each of the Common Stock and Series B Preferred Stock, the Purchaser would be able to merge with and into Vixel pursuant to the “short-form” merger provisions of the Delaware General Corporation Law (“DGCL”) without prior notice to, or any action by, any other stockholder of Vixel (See Section 12 — “Purpose of the Offer; Plus for Vixel; Other Matters”). In order to facilitate a short-form merger following completion of the Offer, the Purchaser and Emulex entered into a Purchaser Option Agreement, dated October 8, 2003, with Vixel, pursuant to which Vixel granted the Purchaser an irrevocable option (the “Purchaser Option”) to purchase for the Offer Price, shares of Common Stock and/or Series B Preferred Stock, in such relative amounts as determined by the Purchaser in its discretion (subject to the number of authorized shares of Series B Preferred Stock available for issuance), up to 19.9% in the aggregate of the then outstanding shares of Common Stock and Series B Preferred Stock on an as-converted basis (collectively, the “Optioned Shares”). The exercise of the Purchaser Option for Common Stock is conditioned upon the Purchaser and Emulex owning in the aggregate, immediately following such exercise, at least 90% of the outstanding shares of Common Stock. The exercise of the Purchaser Option for Series B Preferred Stock is conditioned upon the Purchaser and Emulex owning in the aggregate, immediately following such exercise, at least 90% of the outstanding Shares of Series B Stock. See Section 13 — “The Merger Agreement and Other Agreements.” Emulex, the Purchaser and Vixel have agreed in the Merger Agreement to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the acceptance and payment for Shares by the Purchaser pursuant to the Offer. See Section 13 — “The Merger Agreement and Other Agreements.”

      Certain U.S. federal tax consequences of the sale of Shares pursuant to the Offer and the conversion of Shares pursuant to the Merger are described in Section 5 — “Certain United States Federal Income Tax Consequences.”

      THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.

THE TENDER OFFER

1.     Terms of the Offer

      Upon the terms and subject to the conditions of the Offer, the Purchaser will accept for payment and pay $10.00 per Share, net to the seller in cash, without interest thereon, for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 4 — “Withdrawal Rights.” The term “Expiration Date” means 12:00 midnight, New York City time, on Wednesday, November 12, 2003 (such date and time, the “Initial Expiration Date”), unless and until, in accordance with the terms of the Merger Agreement, the Purchaser extends the period of time for which the Offer is open, in which event the term “Expiration Date” means the latest time and date at which the Offer, as so extended by the Purchaser, expires.

      The Purchaser may, without the consent of Vixel, extend the Offer, and thereby delay acceptance for payment of, and the payment for, any Shares, by giving oral or written notice of such extension to the Depositary if:

•  any of the conditions to the Purchaser’s obligation to purchase Shares in the Offer are not satisfied or waived, in which case the extension must be limited to a time period reasonably necessary to permit such condition or conditions to be satisfied;

•  any rule, regulation or interpretation of the United States Securities and Exchange Commission (“SEC”) or the staff thereof applicable to the Offer requires that the Offer be extended; or

8

•  all of the conditions to the Purchaser’s obligations to accept Shares for payment are satisfied or waived (where permitted) but sufficient Shares have not been validly tendered and not withdrawn pursuant to the Offer to permit the Merger to be effected without a meeting of Vixel stockholders in accordance with the DGCL, in which case, the extension (or re-extension) must not exceed five business days beyond the latest applicable date that the Offer may be extended pursuant to the preceding two bulleted subparagraphs.

      Subject to the terms of the Merger Agreement, the Purchaser may also extend the Offer with Vixel’s prior written consent, authorized by Vixel’s board of directors or a duly authorized committee of Vixel’s board of directors.

      If the Purchaser extends the offer past November 12, 2003, the Stockholders would be permitted to withdraw the shares of Common Stock and Series B Preferred Stock previously irrevocably tendered by them pursuant to the terms of the Stockholders Agreement. These shares represent approximately 11% of the issued and outstanding shares of Common Stock (assuming the conversion of the Series B Preferred Stock held by the Goldman Sachs Investors and excluding warrants held by the Goldman Sachs Investors and stock options held by the directors of Vixel). See Section 13 — “The Merger Agreement and Other Agreements.”

      If at the Expiration Date all of the conditions to the Offer have been satisfied or waived (if permitted), the Purchaser may elect to provide a subsequent offering period of three to twenty business days (a “Subsequent Offering Period”) in accordance with Rule 14d-11 under the Exchange Act. A Subsequent Offering Period would be an additional period of time following the expiration of the Offer during which stockholders may tender Shares not tendered in the Offer and receive the same per share amount paid in the Offer. During a Subsequent Offering Period, the Purchaser will immediately accept and promptly pay for Shares as they are tendered and tendering stockholders will not have withdrawal rights. The Purchaser cannot elect to provide a Subsequent Offering Period unless the Purchaser announces the results of the Offer no later than 9:00 a.m. New York City time, on the next business day after the Expiration Date and immediately begins the Subsequent Offering Period. The Purchaser does not currently intend to provide a Subsequent Offering Period, although it reserves the right to do so in its own discretion.

      Under no circumstances will interest be paid on the Offer Price for tendered Shares, regardless of any extension of or amendment to the Offer or any delay in paying for such Shares.

      The Purchaser may, at any time and from time to time prior to the expiration of the Offer, waive any condition to the Offer, or modify the terms of the Offer, by giving oral or written notice of such waiver or modification to the Depositary, except that, without the consent of Vixel, the Purchaser may not:

•  reduce the price per Share to be paid in the Offer;

•  change the form of consideration payable in the Offer;

•  decrease the number of Shares subject to the Offer;

•  impose additional conditions to the Offer or amend any existing conditions of the Offer in any manner adverse to the holders of the Shares;

•  extend the Offer other than described in this Section 1 of this Offer to Purchase; or

•  waive or change the Minimum Condition.

      The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition, the expiration or termination of any applicable periods under the HSR Act and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions and the other conditions set forth in Section 14 — “Certain Conditions to the Offer.” If by 12:00 midnight, New York City time, on Wednesday, November 12, 2003 (or any date or time then set as the Expiration Date) any or all of the conditions to the Offer have not been satisfied or waived (where permitted), the Purchaser, subject to the terms of the Merger Agreement and the applicable rules and regulations of the SEC, may:

•  terminate the Offer and not accept for payment or pay for any Shares and return all tendered Shares to tendering stockholders;

9

•  waive any of the unsatisfied conditions other than the Minimum Condition, to the extent permitted by applicable law, and subject to complying with applicable rules and regulations of the SEC and its staff applicable to the Offer, accept for payment and pay for all Shares validly tendered and not withdrawn prior to the Expiration Date;

•  except as set forth above, extend the Offer and, subject to the right of stockholders to withdraw Shares until the Expiration Date, retain the Shares that have been tendered during the period or periods for which the Offer is open or extended; or

•  except as set forth above, amend the offer.

      If the Purchaser extends the Offer, or if the Purchaser (whether before or after its acceptance for payment of Shares) is delayed in its purchase of or payment for Shares or is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser’s rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in Section 4 — “Withdrawal Rights.” However, the ability of the Purchaser to delay the payment for Shares which the Purchaser has accepted for payment is limited by Rule 14e-l(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of holders of securities promptly after the termination or withdrawal of the Offer. Any extension, amendment or termination of the Offer will be followed as promptly as practicable by public announcement thereof, the announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require that material changes be promptly disseminated to holders of the Shares). Without limiting the obligation of the Purchaser under such Rule or the manner in which the Purchaser may choose to make any public announcement, the Purchaser currently intends to make announcements by issuing a press release to the Dow Jones News Service.

      If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. In the SEC’s view, an offer should remain open for a minimum of five business days from the date a material change is first published, sent or given to security holders and that, if material changes are made with respect to information not materially less significant than the offer price and the number of shares being sought, a minimum of ten business days may be required to allow adequate dissemination and investor response. The requirement to extend an offer will not apply to the extent that the number of business days remaining between the occurrence of the change and the then-scheduled expiration date equals or exceeds the minimum extension period that would be required because of such amendment. As used in this Offer to Purchase, “business day” has the meaning set forth in Rule 14d-1 under the Exchange Act.

      As described above, the Purchaser may, subject to certain conditions, elect to provide a Subsequent Offering Period. In a public release, the SEC has expressed the view that the inclusion of a Subsequent Offering Period would constitute a material change to the terms of the Offer requiring the Purchaser to disseminate new information to stockholders in a manner reasonably calculated to inform them of such change sufficiently in advance of the Expiration Date (generally five business days). The SEC, however, has recently stated that such advance notice may not be required under certain circumstances. In the event the Purchaser elects to include a Subsequent Offering Period, it will notify stockholders of Vixel consistent with the requirements of the SEC.

      Vixel has agreed to provide the Purchaser with Vixel’s stockholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed by the Purchaser to record holders of Shares and will be furnished by the Purchaser to brokers, dealers, banks and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency’s security position listing, for subsequent transmittal to beneficial owners of Shares.

10

2.     Acceptance for Payment and Payment for Shares

      Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment) and provided that the Offer has not been terminated as described in Section 1 of this Offer to Purchase, the Purchaser will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn in accordance with Section 4 — “Withdrawal Rights” promptly after the Expiration Date. If the Purchaser includes a Subsequent Offering Period, the Purchaser will immediately accept and promptly pay for Shares as they are tendered during the Subsequent Offering Period. The Purchaser, subject to the Merger Agreement, expressly reserves the right, in its sole discretion, to delay acceptance for payment of or payment for Shares in order to comply in whole or in part with any required regulatory or governmental approvals, including, without limitation, pursuant to the HSR Act and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions (see Section 15 — “Certain Legal Matters”). Any such delays will be effected in compliance with Rule 14e-1(c) of the Exchange Act (relating to a bidder’s obligation to pay for or return tendered securities promptly after the termination or withdrawal of such bidder’s offer). If the Purchaser is delayed in its acceptance for payment of or payment for Shares or is unable to accept for payment or pay for Shares pursuant to the Offer, then, without prejudice to the Purchaser’s rights under the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act) the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to do so as described in Section 4 — “Withdrawal Rights.” See Section 15 — “Certain Legal Matters.”

      In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of:

•  the certificates for such Shares, together with a Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees; or

•  in the case of a transfer effected pursuant to the book-entry transfer procedures described in Section 3 — “Procedure for Tendering Shares,” a Book-Entry Confirmation and either a Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent’s Message as described in Section 3 — “Procedure for Tendering Shares;” and

•  any other required documents.

The per share consideration paid to any holder of any Share pursuant to the Offer will be the highest per share consideration paid to any other holder of any Share pursuant to the Offer.

      For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares properly tendered to the Purchaser and not withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser’s acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to tendering stockholders. Under no circumstances will interest be paid on the Offer Price to be paid by the Purchaser for the Shares, regardless of any extension of the Offer or any delay in making such payment.

      If any tendered Shares are not accepted for payment pursuant to the terms and conditions the Offer for any reason, certificates representing such unpurchased Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares delivered by book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3 — “Procedures for Tendering Shares,” the Depositary will notify the Book-Entry Transfer Facility of the Purchaser’s decision not to accept the Shares and such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable after the expiration or termination of the Offer.

      The Purchaser reserves the right to transfer or assign, in whole or in part, to Emulex or to any affiliate of Emulex, the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer.

11

3. Procedure for Tendering Shares

      Valid Tender. A stockholder must follow one of the following procedures to validly tender Shares pursuant to the Offer:

•  for Shares held as physical certificates (“Share Certificates”), the certificates for tendered Shares, a Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by the Letter of Transmittal must be received by the Depositary at its address set forth on the back cover of this Offer to Purchase prior to the Expiration Date (unless such tender is made during a Subsequent Offering Period, if one was provided);

•  for Shares held in book-entry form, either a Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent’s Message (as defined below), and any other required documents, must be received by the Depositary at its address set forth on the back cover of this Offer to Purchase, and such Shares must be delivered pursuant to the book-entry transfer procedures described below under “Book-Entry Transfer” and a Book-Entry Confirmation (as defined below) must be received by the Depositary, in each case prior to the Expiration Date (unless such tender is made during a Subsequent Offering Period, if one was provided); or

•  the tendering stockholder must comply with the guaranteed delivery procedures described below under “Guaranteed Delivery” prior to the Expiration Date.

      The valid tender of Shares pursuant to one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer.

      Book-Entry Transfer. The Depositary will establish an account or accounts with respect to the Shares at The Depository Trust Company (the “Book-Entry Transfer Facility”) for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility’s systems may make book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account in accordance with the Book-Entry Transfer Facility’s procedure for such transfer. However, although delivery of Shares may be effected through book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility, the properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, or an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date (except with respect to a Subsequent Offering Period, if one is provided), or the tendering stockholder must comply with the guaranteed delivery procedures described below for a valid tender of Shares by book-entry. The confirmation of a book-entry transfer of Shares into a Depositary’s account at the Book-Entry Transfer Facility as described above is referred to in this Offer to Purchase as a “Book-Entry Confirmation.”

      The term “Agent’s Message” means a message, transmitted through electronic means by a Book-Entry Transfer Facility, in accordance with the normal procedures of the Book-Entry Transfer Facility and the Depositary, to and received by the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. The term “Agent’s Message” shall also include any hard copy printout evidencing such message generated by a computer terminal maintained at the Depositary’s office. For Shares to be validly tendered during any Subsequent Offering Period, the tendering stockholder must comply with the foregoing procedures except that the required documents and certificates must be received during the Subsequent Offering Period.

      The method of delivery of Shares, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the election and risk of the tendering stockholder. Delivery of documents to the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility’s procedures does not constitute delivery to the Depositary. Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a Book-Entry Transfer, by Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

12

      Signature Guarantees. No signature guarantee is required on the Letter of Transmittal (1) if the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section 3 includes any participant in the Book-Entry Transfer Facility’s systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered therewith and such registered holder has not completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” on the Letter of Transmittal or (2) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agent Medallion Signature Program, (each, an “Eligible Institution” and, collectively, “Eligible Institutions”). In all other cases, all signatures on Letters of Transmittal must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal. If a Share certificate is registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made, or a Share certificate not tendered or not accepted for payment are to be returned, to a person other than the registered holder of the certificates surrendered, then the tendered Share certificate must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the Share certificate, with the signature(s) on the certificates or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 to the Letter of Transmittal.

      Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and the Share certificates are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such stockholder’s tender may be effected if all the following conditions are met:

•  such tender is made by or through an Eligible Institution;

•  a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, is received by the Depositary, as provided below, prior to the Expiration Date; and

•  the Share certificates (or a Book-Entry Confirmation), in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of a Letter of Transmittal), and any other documents required by the Letter of Transmittal are received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. A “trading day” is any day on which the National Association of Security Dealers Automated Quotation System, Inc. (the “NASDAQ”) is open for business.

      The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail (or if sent by a Book-Entry Transfer Facility, a message transmitted through electronic means in accordance with the usual procedures of the Book-Entry Transfer Facility and the Depositary; provided, however, that if such notice is sent by a Book-Entry Transfer Facility through electronic means, it must state that the Book-Entry Transfer Facility has received an express acknowledgment from the participant on whose behalf such notice is given that such participant has received and agrees to become bound by the form of such notice) to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery made available by the Purchaser.

      Other Requirements. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of (1) Share certificates (or a timely Book-Entry Confirmation), (2) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of a Letter of Transmittal) and (3) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when Share certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid on the Offer Price to be paid by the Purchaser for the Shares, regardless of any extension of the Offer or any delay in making such payment.

      Appointment as Proxy. By executing the Letter of Transmittal (or a facsimile thereof) (or, in the case of a book-entry transfer, an Agent’s Message in lieu of a Letter of Transmittal), the tendering stockholder will irrevocably appoint designees of the Purchaser as such stockholder’s agents and attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder’s rights with

13

respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after the date of this Offer to Purchase. All such proxies will be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon the effectiveness of such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given by such stockholder (and, if given, will not be deemed effective). The designees of the Purchaser will thereby be empowered to exercise all voting and other rights with respect to such Shares and other securities or rights, including, without limitation, in respect of any annual, special or adjourned meeting of Vixel’s stockholders, actions by written consent in lieu of any such meeting or otherwise, as they in their sole discretion deem proper. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser’s acceptance for payment of such Shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares and other related securities or rights, including voting at any meeting of stockholders. The Offer does not constitute a solicitation of proxies, absent a purchase of Shares for any meeting of Vixel stockholders.

      Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares, including questions as to the proper completion or execution of any Letter of Transmittal (or facsimile thereof), Notice of Guaranteed Delivery or other required documents and as to the proper form for transfer of any certificate of Shares, shall be resolved by the Purchaser, in its sole discretion, whose determination shall be final and binding. The Purchaser shall have the absolute right to determine whether to reject any or all tenders not in proper or complete form or to waive any irregularities or conditions, and the Purchaser’s interpretation of the Offer to Purchase, the Letter of Transmittal and the instructions thereto and the Notice of Guaranteed Delivery (including without limitation the determination of whether any tender is complete and proper) shall be final and binding. No tender of Shares will be deemed to have been validly made until all defects or irregularities relating thereto have been cured or waived. None of the Purchaser, Emulex, the Depositary, the Information Agent, the Dealer Manager, Vixel or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.

      Backup Withholding. In order to avoid “backup withholding” of U.S. federal income tax on payments of cash pursuant to the Offer, a stockholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such stockholder’s correct taxpayer identification number (“TIN”) on a Substitute Form W-9, certify under penalties of perjury that such TIN is correct and provide certain other certifications. If a stockholder does not provide such stockholder’s correct TIN or fails to provide the required certifications, the Internal Revenue Service (the “IRS”) may impose a penalty on such stockholder and payment of cash to such stockholder pursuant to the Offer may be subject to backup withholding of 28%. All stockholders surrendering Shares pursuant to the Offer should complete and sign the main signature form and the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to the Purchaser and the Depositary). Certain stockholders (including, among others, all corporations) are not subject to backup withholding. Noncorporate foreign stockholders should complete and sign the main signature form included as part of the Letter of Transmittal and an appropriate Form W-8 (instead of a Form W-9) a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See Instruction 9 to the Letter of Transmittal.

4.     Withdrawal Rights

      Except as provided in this Section 4, or as provided by applicable laws, tenders of Shares are irrevocable.

      Shares tendered pursuant to the Offer may be withdrawn pursuant to the procedures set forth below at any time prior to the Expiration Date and, unless theretofore accepted for payment and paid for by the Purchaser pursuant to the Offer, may also be withdrawn at any time after December 14, 2003.

      For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at its address set forth on the back cover of this Offer to Purchase and must specify the name of the person who tendered the Shares to be withdrawn, the number and type of Shares to be withdrawn and the name of

14

the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If certificates representing Shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates evidencing such Shares and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 — “Procedures for Tendering Shares,” any notice of withdrawal must also specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility’s procedures. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will no longer be considered properly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 3 — “Procedures for Tendering Shares” any time prior to the Expiration Date.

      No withdrawal rights will apply to Shares tendered into a Subsequent Offering Period under Rule 14d-11 of the Exchange Act, and no withdrawal rights apply during a Subsequent Offering Period under Rule 14d-11 with respect to Shares tendered in the Offer and accepted for payment. See Section 1 — “Terms of the Offer.”

      All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, which determination will be final and binding. None of the Purchaser, Emulex, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

      The method for delivery of any documents related to a withdrawal is at the risk of the withdrawing stockholder. Any documents related to a withdrawal will be deemed delivered only when actually received by the Depositary. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

5. Certain United States Federal Income Tax Consequences

      The following is a summary of certain United States federal income tax consequences of the Offer and the Merger to holders of Shares whose Shares are, respectively, sold pursuant to the Offer or converted into the right to receive cash in the Merger. This discussion is for general information purposes only and does not address all aspects of United States federal income taxation that may be relevant to particular holders of Shares in light of their specific investment or tax circumstances. The tax consequences to any particular stockholder may differ depending on that stockholder’s own circumstances and tax position. The discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations issued thereunder, and administrative and judicial interpretations thereof, all as in effect as of the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion applies only to holders who hold Shares as “capital assets” within the meaning of section 1221 of the Code, and does not apply to holders who acquired their Shares pursuant to the exercise of employee stock options or otherwise as compensation. In addition, this discussion does not apply to certain types of holders subject to special tax rules including, but not limited to, non-U.S. persons, insurance companies, tax-exempt organizations, financial institutions, and brokers or dealers, holders who perfect their appraisal rights, if any, or persons who held their Shares as a part of a straddle, hedge, conversion, or other integrated investment. The tax consequences of the Offer and the Merger to holders who hold their shares through a partnership or other pass-through entity generally will depend upon such holder’s status for United States federal income tax purposes.

      Each holder is urged to consult such holder’s tax advisor regarding the specific United States federal, state, local and foreign income and other tax consequences of the Offer and the Merger in light of such holder’s specific tax situation.

      The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes and may also be a taxable transaction under state, local, or foreign tax laws. In general, a holder who receives cash in exchange for Shares pursuant to the Offer or the Merger will recognize gain or loss for United States federal income tax purposes equal to the difference, if any, between the amount of cash received and the holder’s tax basis in the Shares exchanged. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same time and price) exchanged pursuant to the Offer or the Merger. Such gain or loss will generally be capital gain or loss and will generally be long-term capital gain or loss if such Shares have been held for more than one

15

year at the time of disposition. In the case of a tendering noncorporate stockholder, long-term capital gains will generally be eligible for a maximum U.S. federal income tax rate of 15%. The claim of a deduction in respect of a capital loss is subject to limitations.

      A stockholder (other than certain exempt stockholders including, among others, all corporations and certain foreign individuals) that tenders Shares may be subject to backup withholding at a rate equal to the fourth lowest rate applicable to ordinary income of unmarried individuals (under current law, the backup withholding rate is 28%) unless the stockholder provides its TIN and certifies under penalties of perjury that such TIN is correct (or properly certifies that it is awaiting a TIN) and certifies as to no loss of exemption from backup withholding and otherwise complies with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the U.S. federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder by filing a U.S. federal income tax return. A stockholder that does not furnish a required TIN or that does not otherwise establish a basis for an exemption from backup withholding may be subject to a penalty imposed by the IRS. See “Backup Withholding” under Section 3 — “Procedure for Tendering Shares.” Each stockholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding.

6. Price Range of the Shares; Dividends on the Shares

      The Common Stock has been traded through the Nasdaq National Market under the symbol “VIXL” since October 1, 1999. The following table sets forth, for each of the periods indicated, the high and low reported sales price per share of Common Stock on the Nasdaq National Market based on published financial sources.

		High		Low
Year Ended December 31, 2001
	First Quarter	$	4.25	$	1.00
	Second Quarter	$	5.49	$	0.75
	Third Quarter	$	4.71	$	1.14
	Fourth Quarter	$	2.20	$	1.40
Year Ended December 31, 2002
	First Quarter	$	4.35	$	1.69
	Second Quarter	$	4.13	$	1.61
	Third Quarter	$	2.80	$	1.10
	Fourth Quarter	$	2.05	$	1.10
Year Ended December 31, 2003
	First Quarter	$	3.40	$	1.80
	Second Quarter	$	7.35	$	3.01
	Third Quarter	$	9.10	$	5.96
	Fourth Quarter (through October 14, 2003)	$	9.94	$	7.46

      On October 8, 2003, the last full trading day prior to the public announcement of the execution of the Merger Agreement, the last reported sales price of the Common Stock on the Nasdaq National Market was $8.54 per share. On October 14, 2003, the last full trading day prior to the commencement of the Offer, the last reported sales price of the Common Stock on the Nasdaq National Market was $9.93 per share. Stockholders are urged to obtain a current market quotation for the Common Stock.

      No established trading market exists or has existed for the Series B Preferred Stock.

      The Purchaser has been advised by Vixel that, other than required dividends on the Series B Preferred Stock, Vixel has not declared or paid any cash dividends during any of the periods indicated in the above table and that it does not intend to declare or pay any cash dividends in the foreseeable future.

16

      Further, the Merger Agreement provides that, without the prior written consent of Emulex, from the date of the Merger Agreement until the earlier to occur of the termination of the Merger Agreement or the Effective Time, Vixel may not, other than required dividends on the Series B Preferred Stock, declare, set aside, or pay any dividends on or make any other distributions in respect of any of its capital stock.

7. Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act Registration; Margin Regulations

      Market for the Shares. The Purchaser’s purchase of Shares pursuant to the Offer will reduce the number of holders of Common Stock and Series B Preferred Stock. Purchaser’s purchase of Shares in the Offer will also reduce the number of shares of Common Stock that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining shares of Common Stock held by the public. Shares of Series B Preferred Stock are held by only the Goldman Sachs Investors; no established trading market exists or has existed for shares of Series B Common Stock.

      NASDAQ Listing. Depending upon the number of shares of Common Stock purchased pursuant to the Offer, the Common Stock may no longer meet the requirements of the National Association of Securities Dealers, Inc. (the “NASD”) for continued inclusion on the Nasdaq National Market. A security must meet one of two maintenance standards for continued inclusion on the Nasdaq National Market. The first maintenance standard requires that there be at least $10 million in stockholders’ equity, at least 750,000 publicly held shares, a market value of at least $5 million for all publicly held shares, a minimum bid price of $1, at least 400 shareholders of 100 shares or more, and at least two market makers for the shares. The second maintenance standard requires that either (1) the market value of listed securities is at least $50 million or (2) the company has total assets and total revenue of at least $50 million each for the most recently completed fiscal year or two out of the last three most recently completed fiscal years; and, in either case, that there be at least 1.1 million publicly held shares, a market value of at least $15 million for all publicly held shares, a minimum bid price of $1, at least 400 shareholders of 100 shares or more, and at least four market makers for the shares. Shares held directly or indirectly by directors, officers or beneficial owners of more than 10% of the shares are not considered to be publicly held for the purpose of the maintenance standards. If, as a result of the purchase of shares of Common Stock pursuant to the Offer, the Common Stock no longer meets these standards, the quotations for shares of Common Stock on Nasdaq will be discontinued.

      If the Nasdaq National Market and the NASDAQ Smallcap Market were to cease to publish quotations for shares of Common Stock, it is possible that shares of Common Stock would continue to trade in the over-the-counter market and that price or other quotations would be reported by other sources. The extent of the public market for such shares and the availability of such quotations would depend, however, upon such factors as the number of stockholders and/or the aggregate market value of such securities remaining at such time, the interest in maintaining a market in shares of Common Stock on the part of securities firms, the possible termination of registration under the Exchange Act as described below, and other factors.

      Exchange Act Registration. The Common Stock is currently registered under the Exchange Act. Such registration may be terminated upon application of Vixel to the SEC if the Common Stock is neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Common Stock under the Exchange Act, assuming there are no other securities of Vixel subject to registration, would substantially reduce the information required to be furnished by Vixel to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to Vixel, such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement pursuant to Section 14(a) or 14(c) in connection with stockholders’ meetings and the related requirement of furnishing an annual report to stockholders. Furthermore, the ability of “affiliates” of Vixel and persons holding “restricted securities” of Vixel to dispose of such securities pursuant to Rule 144 or Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”), may be impaired or eliminated. The Purchaser intends to seek to cause Vixel to apply for termination of registration of the Common Stock under the Exchange Act as soon after the completion of the Offer as the requirements for such termination are met. If the Nasdaq National Market listing and the Exchange Act registration of the Common Stock are not terminated prior to the Merger, then the Common Stock will be delisted from the Nasdaq National Market and the registration of the Common Stock under the Exchange Act will be terminated following the consummation of the Merger.

17

      Margin Regulations. The shares of Common Stock currently are “margin securities” under the regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which status has the effect, among other things, of allowing brokers to extend credit on the collateral of shares of Common Stock. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, shares of Common Stock would no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers.

8. Certain Information Concerning Vixel

      Vixel is a Delaware corporation with its principal executive office at 11911 North Creek Parkway South, Bothell, Washington, 98011. The telephone number of Vixel at such office is (425) 806-5509. According to its Quarterly Report for the quarterly period ended June 29, 2003 on Form 10-Q, Vixel provides comprehensive Fibre Channel-based technologies and products for data storage solutions and storage networking applications. Vixel’s offerings consist of a variety of new embedded storage switch products as well as its SAN interconnect switch and hub products that connect computers to data storage devices in a network configuration.

      Selected Financial Information. Set forth below is certain selected consolidated financial information with respect to Vixel, excerpted or derived from Vixel’s 2002 Annual Report on Form 10-K, as amended and its Quarterly Reports on Form 10-Q for the six-month period ended June 29, 2003 and June 30, 2002, each as filed with the SEC pursuant to the Exchange Act. More comprehensive financial information is included in such report and in other documents filed by Vixel with the SEC. The following summary is qualified in its entirety by reference to such reports and other documents and all of the financial information (including any related notes) contained therein. Such reports and other documents may be inspected and copies may be obtained from the SEC in the manner set forth below.

      Available Information. Vixel is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is obligated to file reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Information as of particular dates concerning Vixel’s directors and officers, their remuneration, options granted to them, the principal holders of Vixel’s securities and any material interests of such persons in transactions with Vixel is required to be disclosed in proxy statements distributed to Vixel’s stockholders and filed with the SEC. Such reports, proxy statements and other information should be available for inspection at the public reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such information should be obtainable by mail, upon payment of the SEC’s customary charges, by writing to the SEC’s principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC also maintains a website at http://www.sec.gov that contains reports, proxy statements and other information relating to Vixel that have been filed via the EDGAR System.

      The information concerning Vixel contained in this Offer to Purchase, including that set forth below under the caption “Selected Financial Information,” has been furnished by Vixel or has been taken from or based upon publicly available documents and records on file with the SEC and other public sources. Neither Emulex nor the Purchaser assumes responsibility for the accuracy or completeness of the information concerning Vixel contained in such documents and records or for any failure by Vixel to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to Emulex or the Purchaser.

18

Vixel Corporation

Selected Consolidated Financial Information

		Fiscal Year Ended						Six Months Ended
		Dec. 29,			Dec. 30,			June 29,			June 30,
		2002			2001			2003			2002
		(In thousands of dollars, except per share data)
Operating Data:
	Total revenue	$	20,606		$	21,803		$	11,579		$	9,530
	Loss from operations		(10,439	)		(23,524	)		(5,601	)		(4,920	)
	Net loss		(9,688	)		(21,928	)		(5,438	)		(4,552	)
	Net loss per share		(.40	)		(.93	)		(.25	)		(.19	)
Balance Sheet Data (at end of period):
	Total assets		27,485			38,765			27,692			32,721
	Cash and cash equivalents		4,347			5,036			11,889			7,791
	Long-term obligations and noncurrent portion of capital leases		350			184			200			528
	Total stockholders’ equity (deficit)		19,508			28,026			19,703			24,189

      Certain Projections. Prior to entering into the Merger Agreement, representatives of Emulex conducted a due diligence review of Vixel, and in connection with such review received certain internal projections of Vixel’s future operating performance. Vixel has advised Emulex and the Purchaser of certain assumptions, risks and limitations, as described below, and that Vixel does not, as a matter of course, make public any projections as to future performance or earnings beyond the current quarter and the projections set forth below are included in this Offer to Purchase only because this information was provided to Emulex and the Purchaser in connection with the Merger Agreement and the Offer. This information included the following projections of revenues, gross profit and operating income for Vixel for the years ended December 31, 2003 through 2005.

2003 — 2005 Consolidated Income Statements — Highlights

		Fiscal Year Ended
		Dec. 31,			Dec. 31,		Dec. 31,
		2003			2004		2005
		(In thousands of dollars)
Operating Data:
	Total revenue	$	25,994		$	50,848	$	75,000
	Gross Margin		12,855			25,424		39,000
	Gain (loss) from operations		(10,585	)		319		11,200

      Based on an analysis of Vixel’s internal projections and the execution risks inherent in those projections, including the potential delays in OEM product launches of next-generation equipment embedding Vixel’s products, the challenges in obtaining additional OEM design wins for Vixel’s products and the risk of development delays that could impact the availability of Vixel’s products, these projections may be subject to substantial discounting. Any review of these projections without applying a discount for the risks typically associated with the development, marketing and adoption of next-generation storage networking equipment would be inappropriate. Vixel has advised Emulex that Vixel has not formally adopted and incorporated the projections for fiscal years 2004 and 2005 into its board-authorized operating plan.

      Although Emulex and Purchaser were provided with such projections, they did not base their analysis of Vixel on such projections. The projections were not prepared with a view to public disclosure or compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present operations in accordance with U.S. generally accepted accounting principles (“GAAP”), and Vixel’s independent auditors have not examined, compiled or otherwise applied procedures to the projections and accordingly assume no responsibility for them. Vixel has advised Emulex and the Purchaser that its internal financial forecasts (upon which the projections provided to Emulex and the Purchaser were

19

based in part) are, in general, prepared solely for internal use and capital budgeting and other management decisions and are subjective in many respects and thus susceptible to interpretations and periodic revision based on actual experience and business developments.

      The projections also reflect numerous assumptions made by the management of Vixel, including assumptions with respect to industry performance, the market for Vixel’s existing and new products and services, Vixel’s ability to successfully negotiate and consummate potential strategic partnerships for products under development, effective tax rates, interest rates and currency exchange rates, and general business, economic, market and financial conditions and other matters, all of which are difficult to predict, many of which are beyond Vixel’s control, and none of which were subject to approval by Emulex or the Purchaser. These projections do not give effect to the Offer or the potential combined operations of Emulex or any of its affiliates and Vixel or any alterations that Emulex or any of its affiliates may make to Vixel’s operations or strategy after the consummation of the Offer. Accordingly, there can be no assurance that the assumptions made in preparing the projections will prove accurate or that any of the projections will be realized.

      It is expected that there will be differences between actual and projected results, and actual results may be materially greater or less than those contained in the projections due to numerous risks and uncertainties, including, but not limited to, the accuracy of Vixel’s information concerning the markets for its products and product candidates, including growth projections; risks and difficulties that Vixel expects to encounter as an early stage company in a rapidly evolving embedded storage connectivity technology market; whether Vixel’s competitors increase sales of their products, implement price reductions or introduce new products; the actual timing and content of submissions to and decisions made by regulatory authorities in the United States, Europe and elsewhere, including decisions regarding marketing authorizations, product pricing and facilities; market acceptance of products in expanded areas of use and in new geographic markets; potential reduction in margin on key products and increases in expenses; the scope, validity and enforceability of patents and other proprietary rights held by third parties and the actual impact of such patents and other rights, if any, on Vixel’s ability to commercialize products; patent and other litigation; the ability to manufacture sufficient quantities of products for development and commercialization activities and to do so in a timely and cost efficient manner; Vixel’s ability to obtain and maintain agreements with suppliers, licensors and sublicensees, and distributors; the ability to attract and retain qualified sales forces; the impact, if any, of war and terrorist activities on the operations and activities of Vixel and third parties, including regulatory authorities; and the risks and uncertainties described in reports filed by Vixel with the SEC under the Exchange Act, including without limitation under the heading “Risk Factors” in Vixel’s 2002 Annual Report on Form 10-K. All projections are forward-looking statements; these and other forward-looking statements are expressly qualified in their entirety by the risks and uncertainties identified above and the cautionary statements contained in Vixel’s 2002 Annual Report on Form 10-K filed with the SEC.

      The inclusion of the projections herein should not be regarded as an indication that any of Emulex, the Purchaser, Vixel or their respective affiliates or representatives considered or consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such. None of Emulex, the Purchaser, Vixel or any of their respective affiliates or representatives has made or makes any representation to any person regarding the ultimate performance of Vixel compared to the information contained in the projections, and none of them undertakes any obligation to update or otherwise revise the projections to reflect circumstances existing after the date such projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the projections are shown to be in error.

      Stockholders are cautioned not to place undue reliance on the financial projections included in this Offer to Purchase.

9. Certain Information Concerning Emulex and the Purchaser

      Emulex and the Purchaser. Emulex is a Delaware corporation. Emulex is a leading designer, developer and supplier of a broad line of storage networking host bus adapters, or HBAs, and application specific computer chips, or ASICs, that provide connectivity solutions for storage area networks, or SANs, network attached storage, or NAS, and redundant array of independent disks, or RAID, storage. HBAs are the data communication products that enable servers to connect to storage networks by offloading communication-processing tasks as information is delivered and sent to the network. Emulex’s products are based on internally developed ASIC and embedded firmware and software technology, and offer support for a wide variety of SAN protocols, configurations, system interfaces and operating systems. Emulex’s principal

20

executive offices are located at 3535 Harbor Blvd., Costa Mesa, California 92626 and its telephone number at that address is (714) 662-5600.

      The Purchaser is a Delaware corporation which was recently formed at the direction of Emulex for the purpose of effecting the Offer and the Merger. Emulex owns all of the outstanding capital stock of the Purchaser. Until immediately prior to the time the Purchaser purchases Shares pursuant to the Offer, it is not anticipated that the Purchaser will have any significant assets or liabilities or engage in any activities other than those incident to the Offer and the Merger. The Purchaser’s principal executive offices are located at 3535 Harbor Blvd., Costa Mesa, California 92626 and its telephone number is (714) 662-5600.

      The name, citizenship, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of the Purchaser and Emulex are set forth in Schedule I hereto.

      None of the persons listed in Schedule I has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. None of the persons listed in Schedule I has, during the past five years, been convicted in a criminal proceeding.

      Pursuant to the Stockholders Agreement and the Purchaser Option, Emulex and the Purchaser may be deemed to beneficially own 10,474,133 shares of Common Stock constituting approximately 28.5% of the total outstanding Common Stock on a fully diluted, as converted basis, assuming the conversion of the Series B Preferred Stock subject to the Stockholders Agreement and the exercise of the Purchaser Option. See Section 13 — “The Merger Agreement and Other Agreements.” Except as set forth elsewhere in this Offer to Purchase or Schedule I hereto.

      Available Information. Pursuant to Rule 14d-3 under the Exchange Act, Emulex and the Purchaser filed with the SEC a Tender Offer Statement on Schedule TO (the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO.

      Additionally, Emulex is subject to the information and reporting requirements of the Exchange Act and is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning Emulex’s business, principal physical properties, capital structure, material pending legal proceedings, operating results, financial condition, directors and officers (including their remuneration and stock options granted to them), the principal holders of Emulex’s securities, any material interests of such persons in transactions with Emulex and certain other matters is required to be disclosed in proxy statements and annual reports distributed to Emulex’s stockholders and filed with the SEC. The Schedule TO and the exhibits thereto, as well as these other reports, proxy statements and other information, may be inspected at the SEC’s public reference library at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such information should be obtainable by mail, upon payment of the SEC’s customary charges, by writing to the SEC’s principal office at 450 Fifth Street, N.W., Washington D.C. 20549. The SEC also maintains a website at http://www.sec.gov that contains reports, proxy statements and other information relating to Emulex that have been filed via the EDGAR System.

10. Source and Amount of Funds

      The Offer is not conditioned upon any financing arrangements. Emulex and Purchaser estimate that the total amount of funds required to consummate the Offer and the Merger will be approximately $330 million, not including related fees and expenses. Emulex has available to it sufficient funds to close the Offer and the Merger, and will cause the Purchaser to have sufficient funds available to close the Offer and the Merger.

      Because the only consideration in the Offer and Merger is cash and the Offer is to purchase all outstanding Shares, and in view of the absence of a financing condition and the amount of consideration payable in relation to the financial capacity of Emulex and its affiliates, the Purchaser believes the financial condition of Emulex and its affiliates is not material to a decision by a holder of Shares whether to sell, tender or hold Shares pursuant to the Offer.

21

11. Background of the Offer

      Emulex continually explores and conducts internal discussions with regard to acquisitions and other strategic corporate transactions that are consistent with its corporate strategies.

      In November 2002, John Runne, Chairman of Vixel’s strategic advisory board, telephoned Paul Folino, chief executive officer of Emulex, to discuss a possible commercial strategic partnership. Preliminary discussions among Mr. Runne and respective representatives of Emulex and Vixel were held in December 2002 and January and February of 2003 regarding strategic partnership opportunities relating to their respective product suites, capabilities and technologies. Based on those conversations, the companies executed a nondisclosure agreement to allow the exchange of confidential information between them in connection with the proposed strategic partnership.

      On March 5, 2003, Mr. Runne contacted Karen Mulvany, executive vice president of business planning and development of Emulex, to suggest the possibility of a business combination involving Emulex and Vixel. Ms. Mulvany indicated a willingness to explore the potential benefits of a business combination involving the two companies, and agreed to meet on March 11, 2003 to further discuss opportunities. On March 11, 2003, Vixel informed Emulex that Vixel was not interested in pursuing a business combination with Emulex at that time but remained open to continued strategic partnership activities, including interoperability development with Emulex.

      From time to time from March 2003 through early June 2003, representatives of the two companies, sometimes including Messrs. Runne and Folino and Ms. Mulvany, held discussions to pursue a strategic partnership and to move forward with interoperability efforts.

      On June 13, 2003, at a meeting between Mr. Folino and James McCluney, chief executive officer of Vixel, Mr. Folino asked Mr. McCluney whether Vixel would be interested in a potential business combination. Mr. McCluney advised Mr. Folino that he would need sufficient time to consider the proposal, and that he would respond following internal discussions, including discussions with Vixel’s board of directors at its then-upcoming regular meeting scheduled for July 29, 2003.

      On June 16, 2003, in preliminary response to Mr. Folino’s proposal at the June 13th meeting, Mr. McCluney telephoned Mr. Folino to express preliminary interest in a possible business combination. Mr. Folino indicated that Emulex would be in a position to initiate discussions following Emulex’s regular meeting of its board of directors scheduled for August 21, 2003. At that point, the parties determined to cease any further discussions regarding a possible business combination pending a determination by the Emulex board of directors at the August 21 meeting to pursue further talks with Vixel.

      During July 2003, representatives of Emulex and Vixel continued to hold discussions to make progress in interoperability development in furtherance of a commercial strategic partnership between the two companies.

      At a regular meeting of the board of directors of Emulex held on August 21, 2003, Ms. Mulvany presented to the board of directors a review of strategic opportunities available to Vixel as part of its ongoing evaluation of changes in the marketplace and opportunities to strengthen its business. These opportunities include, but are not limited to, potential acquisitions or dispositions, collaborations, licensing arrangements or other strategic transactions. In furtherance of this strategy, at the August 21 meeting, the members of the board discussed several potential business combination candidates, including Vixel. Following discussion of the relative merits and risks associated with the various proposed business combinations, the board directed Emulex management to continue to identify and evaluate potential acquisition candidates, and to pursue exploratory discussions with Vixel.

      On August 22, 2003 Mr. McCluney telephoned Mr. Folino to inform him that Vixel had received an offer from a potential third party acquirer. Mr. McCluney inquired as to whether Emulex would be interested in submitting an offer to purchase Vixel. Mr. Folino responded that he needed sufficient time to consider a business combination with Vixel, including, among other things, time for due diligence review of Vixel prior to determining whether Emulex would submit an offer to purchase Vixel. Messrs. McCluney and Folino agreed to continue to talk following further internal evaluation of a potential acquisition of Vixel by Emulex.

      Over the course of the next week, representatives of Emulex conducted due diligence review of Vixel’s publicly-filed documents and initiated a preliminary diligence review of non-public information provided by Vixel to Emulex which was responsive to its due diligence requests.

22

      On August 29, 2003, Emulex delivered to Vixel its formal indication of interest in acquiring Vixel during a conversation among Mr. Mulvaney, Mr. Rockenbach and Kurtis L. Adams, Vixel’s chief financial officer and Mr. Runne. Also on that date, Emulex engaged Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel in connection with the proposed transaction.

      From August 29, 2003 through September 4, 2003, representatives of both companies engaged in technical, financial and legal diligence meetings. The parties also discussed potential strategic synergies of the business combination and various other business terms.

      On September 2, 2003, Emulex and Vixel entered into a confidentiality agreement to allow the exchange of confidential information between them in connection with the proposed business combination, which was subsequently amended, in part, on September 23, 2003.

      On September 4, 2003, Emulex retained Merrill Lynch to act as its financial advisor in the proposed transaction, which engagement was confirmed in writing on September 10, 2003. Also on that date, Messrs. Adams, McCluney, Runne and Reed held an offsite meeting with senior members of Emulex’s management to discuss Vixel’s business.

      On September 5, 2003, Mr. McCluney met with Mr. Folino, at which time, Mr. Folino stated that a term sheet for an acquisition of Vixel would be forthcoming.

      On September 9, 2003, the board of directors of Emulex convened a meeting. Michael Rockenbach, chief financial officer of Emulex and Ms. Mulvany also participated in this meeting. Mr. Rockenbach and Ms. Mulvany reviewed with the directors the status of their discussions with representatives of Vixel regarding the potential business combination and management’s preliminary views with respect to the strategic, structural, economic, operational, legal and other regulatory issues associated with the business combination. The members of the board of directors of Emulex then discussed the proposed transaction. Following discussion, the board of directors of Emulex authorized Emulex’s management to deliver to Vixel a formal offer to purchase Vixel.

      On September 11, 2003, Emulex delivered to Vixel a term sheet which contained an offer to purchase, by means of a tender offer followed by a merger for all untendered shares, all outstanding shares of Vixel at a price of $9.50 per share net in cash, and an exclusivity agreement. The offer required Vixel to respond no later than 5:00 p.m. on September 12, 2003. After providing the term sheet to Vixel, Messrs. McCluney and Adams spoke by telephone with Mr. Folino and Ms. Mulvany to review it.

      On September 12, 2003, Vixel requested an extension of the time within which it must respond to the offer until September 16, 2003. On that same date, Emulex agreed to the request for the extension.

      On September 15, 2003, Mr. McCluney telephoned Ms. Mulvany to request an increase in the offer price in light of a competing offer from another bidder. During that conversation, Mr. McCluney also told Ms. Mulvaney that, because the prices offered by the two bidders were close, Vixel would not be in a position to negotiate exclusively with Emulex. Emulex then delivered to Vixel an offer to purchase all outstanding shares of Vixel at $9.75 per share to be paid net in cash.

      On September 16, 2003, Mr. McCluney telephoned Mr. Folino to request an increase in the then-current offer price. Later that day, Emulex delivered to Vixel an offer to purchase the Shares at $10.00 per Share to be paid net in cash, which was submitted in the form of a revised term sheet and exclusivity agreement.

      On September 18, 2003, the parties executed the exclusivity agreement.

      Over the course of the next several days that followed, representatives of Emulex and Vixel and their respective financial advisors and legal counsel had numerous discussions relating to the proposed terms of the business combination and various diligence items.

      On September 23, 2003, Skadden Arps distributed drafts of the definitive agreements relating to the Offer and the Merger, including, among other things, the Merger Agreement, a form of stockholders agreement and non-competition agreements. Over the course of the next several days that followed, the parties and their respective advisors continued to engage in Emulex’s due diligence review of Vixel in meetings and on telephone conferences, and to negotiate the terms of the definitive agreements.

23

      On October 4, 2003, the board of directors of Emulex convened a meeting. Mr. Rockenbach, Ms. Mulvany, representatives of Merrill Lynch and representatives of Skadden Arps also participated in this meeting. Mr. Rockenbach and Ms. Mulvany reviewed with the directors the status of their discussions with representatives of Vixel regarding the potential business combination and management’s views with respect to the strategic, structural, economic, operational, legal and other regulatory issues associated with the business combination. A representative of Merrill Lynch then reviewed with the board of directors the financial aspects of the proposed transaction. A representative of Skadden Arps also reviewed certain legal aspects of the proposed transaction. The members of the board of directors of Emulex then discussed the proposed transaction. The board of directors of Emulex then formed a special merger committee for the purpose of finalizing the terms of Offer and Merger, and authorizing the execution of definitive agreements, including the Merger Agreement, Purchaser Option Agreement and the Stockholders Agreements. Following discussion, the board of directors of Emulex, subject to the satisfactory negotiation and resolution of then-open issues relating to the terms Merger Agreement, Stockholders Agreements and other definitive documentation, approved the Offer and the Merger.

      From October 4, 2003 through October 8, 2003, there were numerous discussions between legal counsel to the parties to finalize the language of the definitive agreements. Emulex continued its technical, financial and legal due diligence investigation of Vixel’s business and products during this period. Emulex also continued to negotiate the terms of non-competition agreements with certain key employees of Vixel. On October 6, 2003, following an update of the then-current open issues relating to the Offer and the Merger and related discussion, the special merger committee of the board of directors of Emulex approved the Merger Agreement, including the Offer and Merger, the Stockholders Agreement, the Purchaser Option Agreement, and the forms of Non-Competition Agreements and authorized management of Emulex to finalize the definitive documentation.

      After the close of financial markets on the afternoon of October 8, 2003, Emulex and Vixel finalized and executed the definitive Merger Agreement and the purchase option agreement. At the same time, certain stockholders of Vixel signed the Stockholders Agreements, and certain executives of Vixel signed non-competition agreements. A joint press release announcing the transaction was issued immediately after the signing of the definitive Merger Agreement.

12.     Purpose of the Offer; Plans for Vixel; Other Matters

      Purpose of the Offer. The purpose of the Offer is to enable Emulex to acquire control of, and the entire equity interest in, Vixel. The Offer is being made pursuant to the Merger Agreement and is intended to increase the likelihood that the Merger will be effected. The purpose of the Merger is to acquire all outstanding Shares not purchased pursuant to the Offer. The transaction structure includes the Merger in order to ensure the acquisition by Emulex of all the outstanding Shares.

      If the Merger is consummated, Emulex’s common equity interest in Vixel would increase to 100% and Emulex would be entitled to all the benefits resulting from that interest. These benefits include complete management with regard to the future conduct of Vixel’s business and any increase in its value. Similarly, Emulex will also bear the risk of any losses incurred in the operation of Vixel and any decrease in the value of Vixel.

      Vixel stockholders who sell their Shares in the Offer will cease to have any equity interest in Vixel and to participate in any future growth. If the Merger is consummated, the stockholders of Vixel will no longer have an equity interest in Vixel and instead will have only the right to receive cash consideration pursuant to the Merger Agreement. See Section 13 – “The Merger Agreement and Other Agreements.” Similarly, the stockholders of Vixel will not bear the risk of any decrease in the value of Vixel after selling their Shares in the Offer or the subsequent Merger.

      Except as disclosed in this Offer to Purchase, neither Emulex nor the Purchaser has any present plan or proposal that would result in the acquisition by any person of additional securities of Vixel, or the disposition of securities of Vixel, an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Vixel or its subsidiary or the sale or transfer of a material amount of assets of Vixel or its subsidiary. After the purchase of the Shares by the Purchaser pursuant to the Offer, Emulex may appoint its representatives to the board of directors of Vixel in proportion to its ownership of the outstanding Shares, as described below under the caption “Vixel’s Board of Directors” in Section 13 — “The Merger Agreement and Other Agreements.” Following completion of the Offer and the Merger, Emulex intends to operate Vixel as a subsidiary of Emulex under the direction of Emulex’s management. Emulex will continue to evaluate and review Vixel and its business, assets, corporate structure, capitalization, operations, properties, policies, management

24

and personnel with a view toward determining how optimally to realize any potential benefits which arise from the rationalization of the operations of Vixel with those of the other business units and subsidiaries of Emulex. Such evaluation and review is ongoing and is not expected to be completed until after the consummation of the Offer and Merger. If, as and to the extent that Emulex acquires control of Vixel, Emulex will complete such evaluation and review of Vixel and will determine what, if any, changes would be desirable in light of the circumstances and the strategic business portfolio which then exist. Such changes could include, among other things, restructuring Vixel through changes in Vixel’s business, corporate structure, certificate of incorporation, by-laws, capitalization or management or could involve consolidating and streamlining certain operations and reorganizing other businesses and operations. Accordingly, Emulex and the Purchaser reserve the right to change their plans and intentions at any time, as they deem appropriate.

      Emulex, Purchaser or an affiliate of Emulex may, following the consummation or termination of the Offer, seek to acquire additional Shares through open market purchases, privately negotiated transactions, a tender offer or exchange offer or otherwise, upon such terms and at such prices as they will determine, which may be more of less than the price paid in the Offer.

      Stockholder Approval. Under the DGCL, the approval of the Vixel board of directors and the affirmative vote of the holders of a majority of the outstanding Shares (including the Series B Preferred Stock voting on an as-converted basis) are required to adopt and approve the Merger Agreement and the Merger. Vixel has represented in the Merger Agreement that the execution and delivery of the Merger Agreement by Vixel and the consummation by Vixel of the transactions contemplated by the Merger Agreement have been duly authorized by all necessary corporate action on the part of Vixel, subject to the approval of the Merger by Vixel’s stockholders if required in accordance with the DGCL. In addition, Vixel has represented that the affirmative vote of the holders of a majority of the outstanding Shares (including the Series B Preferred Stock voting on an as-converted basis) is the only vote of the holders of any class or series of Vixel’s capital stock necessary to approve the Merger, and no vote of any class or series of Vixel’s capital stock is necessary to approve any of the transactions contemplated by the Merger Agreement other than the Merger. Each share of Series B Preferred Stock shall be entitled to 0.89 of a vote. Therefore, unless the Merger is consummated pursuant to the Short-Form Merger (as defined below) provisions under the DGCL described below (in which case no further corporate action by the Vixel stockholders will be required to complete the Merger), the only remaining required corporate action of Vixel will be the approval of the Merger Agreement and the transactions contemplated thereby by the affirmative vote of the holders of a majority of the outstanding Shares (including the Series B Preferred Stock voting on an as-converted basis). Vixel has agreed to duly call, give notice of, convene and hold a special meeting of its stockholders to consider and take action upon the approval and adoption of the Merger Agreement and the approval of the Merger as soon as reasonably practicable following the acceptance for payment and purchase of Shares by Purchaser pursuant to the Offer for the purpose of considering and taking action upon the Merger Agreement. Emulex has agreed to vote, or cause to be voted, all of the Shares then owned by it, Purchaser or any of its other subsidiaries in favor of the approval of the Merger and the adoption of this Agreement. In the event that Emulex, Purchaser and Emulex’s other subsidiaries and affiliates acquire in the aggregate at least a majority of the outstanding Shares (including the Series B Preferred Stock voting on an as-converted basis) (which would be the case if the Minimum Condition is satisfied and the Purchaser were to accept for payment Shares tendered in the Offer), they would have the ability to effect the Merger without the affirmative votes of any other Vixel stockholders.

      Short-Form Merger. Section 253 of the DGCL provides that, if a corporation owns at least 90% of the outstanding shares of each class of another corporation, the corporation holding such stock may merge itself into such corporation without any action or vote on the part of the board of directors or the stockholders of such other corporation (such merger, a “Short-Form Merger”). In the event that Emulex, the Purchaser and any other subsidiaries of Emulex acquire in the aggregate at least 90% of the outstanding Shares, pursuant to the Offer or otherwise, then, at the election of Emulex, a Short-Form Merger could be effected without any approval of the Vixel board of directors or the stockholders of Vixel, subject to compliance with the provisions of Section 253 of the DGCL. Even if Emulex and the Purchaser do not own 90% of the outstanding Shares following consummation of the Offer, Emulex and the Purchaser could exercise the Purchaser Option described in Section 13 – “The Merger Agreement and Other Agreements” or seek to purchase additional shares in the open market or otherwise in order to reach the 90% threshold and employ a Short-Form Merger. The per-share consideration paid for any Shares so acquired may be greater or less than that paid in the Offer. Emulex presently intends to effect a Short-Form Merger if permitted to do so under the DGCL.

25

      Going Private Transactions. The SEC has adopted Rule 13e-3 under the Exchange Act which is applicable to certain “going private” transactions and which may under certain circumstances be applicable to the Merger or another business combination following the purchase of Shares pursuant to the Offer in which the Purchaser seeks to acquire the remaining Shares not held by it. The Purchaser believes that Rule 13e-3 will not be applicable to the Merger because it is anticipated that the Merger will be effected within one year following the consummation of the Offer and, in the Merger, stockholders will receive the same price per Share as paid in the Offer. Rule 13e-3 requires, among other things, that certain financial information concerning Vixel and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders be filed with the SEC and disclosed to stockholders prior to consummation of the transaction.

      Appraisal Rights. Holders of the Shares do not have appraisal rights in connection with the Offer. However, if the Merger is consummated, holders of the Shares at the Effective Time will have certain rights pursuant to the provisions of Section 262 of the DGCL, including the right to dissent and demand appraisal of, and to receive payment in cash of the fair value of their Shares. Dissenting Vixel stockholders who comply with the applicable statutory procedures will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the merger) and to receive payment of such fair value in cash, together with a fair rate of interest thereon, if any. Any such judicial determination of the fair value of the Shares could be based upon factors other than, or in addition to, the price per Share to be paid in the Merger or the market value of the Shares. The value so determined could be more or less than the price per Share to be paid in the Merger.

      THE FOREGOING SUMMARY OF THE APPRAISAL RIGHTS OF STOCKHOLDERS SEEKING APPRAISAL RIGHTS UNDER THE DGCL DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE UNDER THE DGCL. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL. IF A SHAREHOLDER WITHDRAWS OR LOSES HIS RIGHT TO APPRAISAL, SUCH HOLDER’S SHARES WILL BE AUTOMATICALLY CONVERTED INTO, AND REPRESENT ONLY THE RIGHT TO RECEIVE, THE MERGER CONSIDERATION, WITHOUT INTEREST.

13.     The Merger Agreement and Other Agreements.

Merger Agreement

      The following summary of certain provisions of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement itself, which is incorporated herein by reference. A copy of the Merger Agreement has been filed by Emulex and the Purchaser, pursuant to Rule 14d-3 under the Exchange Act, as Exhibit (d)(1) to the Tender Offer Statement on Schedule TO (together with any amendments, supplements, schedules, annexes and exhibits thereto, the “Schedule TO”). The Merger Agreement may be examined and copies may be obtained at the places and in the manner set forth in Section 8 — “Certain Information Concerning Vixel.” Stockholders and other interested parties should read the Merger Agreement in its entirety for a more complete description of the provisions summarized below. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Merger Agreement.

      The Offer. The Merger Agreement provides for the making of the Offer. The terms of the Offer are described in Section 1 — “Terms of the Offer.” The obligation of the Purchaser to accept for payment and pay for Shares tendered pursuant to the Offer is subject to the satisfaction of the Minimum Condition and certain other conditions described in Section 14 — “Certain Conditions of the Offer.”

      The Merger. The Merger Agreement provides that, following the consummation of the Offer, subject to the terms and conditions thereof, at the effective time of the Merger:

•  the Purchaser will be merged with and into Vixel and, as a result of the Merger, the separate corporate existence of the Purchaser will cease,

•  Vixel will be the successor or surviving corporation (sometimes referred to as the “Surviving Corporation”) in the Merger and will continue to be governed by the laws of the State of Delaware,

26

•  the separate corporate existence of Vixel, with all its rights, privileges, immunities, powers and franchises, will continue unaffected by the Merger, and

•  Vixel will succeed to and assume all the rights and obligations of the Purchaser.

      The respective obligations of Emulex and the Purchaser, on the one hand, and Vixel, on the other hand, to effect the Merger are subject to the satisfaction on or prior to the closing of the merger of each of the following conditions:

•  the Merger Agreement will have been approved and adopted by the requisite vote of the holders of the Shares, to the extent required by Vixel’s certificate of incorporation and the DGCL, in order to consummate the Merger;

•  no law will have been enacted or promulgated by any United States or other governmental entity which prohibits the consummation of the Merger, and there will be no order or injunction of a court of competent jurisdiction in effect preventing the consummation of the Merger;

•  the Purchaser will have purchased, or caused to be purchased, the Shares pursuant to the Offer, unless its failure to purchase the Shares is a result of a breach of its obligation to accept for payment or pay for Shares validly tendered pursuant to the Offer in violation of the terms of the Offer or the Merger Agreement and

•  the applicable waiting period under the HSR Act and any comparable provisions under any applicable foreign pre-merger notification laws or regulations will have expired or been terminated.

      At the effective time of the Merger each issued and outstanding share of Purchaser common stock will be converted into one fully paid and nonassessable share of common stock of the Surviving Corporation. Each Share that is owned by Vixel as treasury stock and each Share owned by Emulex, the Purchaser or any other wholly-owned subsidiary of Emulex will be automatically cancelled and no consideration will be delivered in exchange therefor, and each issued and outstanding Share will be converted into the right to receive the price per Share paid in the Offer, without interest. From and after the effective time of the Merger, none of the Shares will be outstanding and will automatically be cancelled, and each holder of a certificate representing any Shares will cease to have any rights with respect thereto, except the right to receive the price per Share paid in the Offer therefor, without interest thereon upon the surrender of such certificate.

      Vixel Option Plans. As of the effective time of the Merger, each outstanding stock option, stock equivalent right or right to acquire Shares (a “Vixel Option” or “Vixel Options”) granted under Vixel’s Amended and Restated 1995 Stock Option Plan, 1999 Equity Incentive Plan (as amended), 2000 Non-Officer Equity Incentive Plan and 1999 Employee Stock Purchase Plan (the “Vixel ESPP”) (collectively, the “Option Plans”), whether or not then exercisable or vested, will (without any action on the part of Vixel) automatically be converted into an option to purchase Emulex common stock, par value $.10 per share (“Emulex Common Stock”). Each Vixel Option so converted will continue to have, and be subject to, similar terms and conditions (including vesting schedule) as are currently applicable to Vixel Option, except that, as of the effective time of the Merger, each Vixel Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Emulex Common Stock equal to the product of the number of shares of Common Stock that were issuable upon exercise of the Vixel Option immediately prior to the effective time of the Merger multiplied by the Option Exchange Ratio (defined below), rounded to the nearest whole number, and the per share exercise price for the shares of Emulex Common Stock issuable upon exercise of such Vixel Option so converted will be equal to the quotient determined by dividing the exercise price per share of Common Stock at which such Vixel Option was exercisable immediately prior to the effective time of the Merger by the Option Exchange Ratio, rounded up to the nearest whole cent. “Option Exchange Ratio” means the quotient determined by dividing the price per Share paid in the Offer by the average closing prices of Emulex Common Stock on the New York Stock Exchange, Inc. (“NYSE”) Composite Transaction Tape for the five business day period ending two days prior the effective time of the Merger. Notwithstanding the foregoing, the conversion of any Vixel Options which are “incentive stock options,” within the meaning of Section 422 of the Code, into options to purchase Emulex Common stock will be made so as not to constitute a “modification” of such Vixel Options within the meaning of Section 424 of the Code.

      As of the effective time of the Merger, except as provided above, all rights under any provision of the Option Plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of Vixel or any subsidiary of Vixel will be cancelled. Vixel agrees that, upon completion of the existing Offering (as defined in the Vixel ESPP), Vixel will not permit a new Offering to commence under the Vixel ESPP without the prior written consent of Emulex. Emulex agreed to reserve for issuance a sufficient number of shares of

27

Emulex Common Stock for delivery upon the exercise of assumed Vixel Options and to file a registration statement on Form S-8 under the Exchange Act (or any successor or other appropriate forms) with respect to the shares of Emulex Common Stock subject to any assumed Vixel Options.

      Vixel Warrants. If permitted under the terms of the applicable governing instruments, each holder of an outstanding warrant to purchase shares of Common Stock will have the right to receive, in lieu of the shares of Common Stock theretofore issuable upon exercise of such warrant, an amount per share equal to the excess of the price per Share paid in the Offer over the exercise price per share of such warrant; provided, however, that to the extent the foregoing is not permissible under the terms of any Vixel warrant, the warrant will, at the effective time of the Merger, be deemed to constitute a warrant to acquire, upon payment of the aggregate exercise price of such warrant, and otherwise on the same terms and conditions as were applicable under such warrant prior to the effective time of the Merger, the aggregate price per Share paid in the Offer, without interest thereon, that the holder of such warrant would have been entitled to receive had such holder exercised the warrant in full immediately prior to the effective time of the Merger.

      Vixel’s Board of Directors. The Merger Agreement provides that, effective upon the purchase of and payment for any Shares by Emulex or the Purchaser or any of their affiliates pursuant to the Offer, Emulex will be entitled to elect or designate that number of directors, rounded up to the next whole number, on Vixel’s board of directors as is equal to the product of the total number of directors on Vixel’s board of directors multiplied by the percentage that the aggregate number of Shares beneficially owned by the Purchaser, Emulex and any of their affiliates bears to the total number of Shares then outstanding. Vixel will, upon Emulex’s request, use all reasonable efforts either to promptly increase the size of Vixel’s board of directors or promptly secure the written resignations of that number of its incumbent directors, or both, as is necessary to enable Emulex’s designees to be so elected or designated to Vixel’s board of directors, and will use all reasonable efforts to cause Emulex’s designees to be so elected or designated at such time. At such time, Vixel will also, upon Emulex’s request, cause persons elected or designated by Emulex to constitute the same percentage (rounded up to the next whole number) as is on Vixel’s board of directors of each committee of Vixel’s board of directors, each board of directors (or similar body) of each Vixel subsidiary, and each committee (or similar body) of each such board of directors, in each case only to the extent permitted by applicable law or the rules of any stock exchange on which Vixel Common Stock is listed or traded.

      In the event that Emulex’s designees are elected or designated to Vixel’s board of directors, then, until the effective time of the Merger, Vixel will cause its board of directors to have at least two directors who were directors on October 8, 2003, including at least two directors who are independent directors for purposes of the continued listing requirements of Nasdaq (the “Independent Directors”), provided, however, that if any Independent Director is unable to serve due to death or disability, the remaining Independent Director(s) will be entitled to elect or designate another person (or persons) who served as a director on October 8, 2003 to fill such vacancy, and such person (or persons) will be deemed to be an Independent Director. If no Independent Director then remains, the other directors will designate two persons who were directors on October 8, 2003 (or, in the event there will be less than two directors available to fill such vacancies as a result of such persons’ deaths, disabilities or refusals to serve, such smaller number of persons who were directors on October 8, 2003) to fill such vacancies and such persons will be deemed Independent Directors. If Emulex’s designees constitute a majority of Vixel Board of Directors after the Purchaser’s acceptance for payment of Shares pursuant to the Offer and prior to the effective time of the Merger, then the affirmative vote of a majority of the Independent Directors (or if only one exists, then the vote of such Independent Director) will be required to take any of the following actions:

•  amend or terminate the Merger Agreement by Vixel;

•  exercise or waive any of Vixel’s rights, benefits or remedies under the Merger Agreement, if such action would substantially and adversely affect holders of Shares other than Emulex or the Purchaser;

•  amend the Certificate of Incorporation or Bylaws of Vixel if such action would substantially and adversely affect holders of Shares other than Emulex or the Purchaser; or

•  take any other action of Vixel board of directors under or in connection with the Merger Agreement if such action would substantially and adversely affect holders of Shares other than Emulex or the Purchaser; provided, however, that if there are no Independent Directors as a result of such persons’ deaths, disabilities or refusal to serve, then such actions may be effected by a 66 2/3% vote of the entire Vixel Board of Directors. The Independent Directors

28

have the authority to retain such counsel and other advisors at the expense of Vixel as determined appropriate by a majority of the Independent Directors.

      Stockholders’ Meeting; Merger Without a Meeting of Stockholders. Pursuant to the Merger Agreement, if required by applicable law in order to consummate the Merger, Vixel will promptly:

•  duly call, give notice of, convene and hold a special meeting of its stockholders to consider the approval and adoption of the Merger Agreement and the approval of the Merger (the “Special Meeting”) as soon as reasonably practicable following the acceptance for payment and purchase of Shares by the Purchaser pursuant to the Offer for the purpose of considering and taking action upon the Merger Agreement;

•  prepare and file with the SEC under the Exchange Act a preliminary proxy or information statement relating to the Merger and the Merger Agreement and use all reasonable efforts to obtain and furnish the information required to be included by the SEC in the definitive proxy or information statement (the “Proxy Statement”) and, after Emulex and its counsel have had a reasonable opportunity to review and comment on the Proxy Statement, respond promptly to any comments made by the SEC with respect to the preliminary proxy or information statement and cause the Proxy Statement to be mailed to its stockholders as promptly as practicable;

•  include in the Proxy Statement the unanimous recommendation of Vixel Board of Directors that stockholders of Vixel vote in favor of the approval of the Merger and the approval and adoption of the Merger Agreement and

•  use all reasonable efforts to solicit from holders of Shares proxies in favor of the Merger and take all other action reasonably necessary or advisable to secure the approval of stockholders required by the DGCL and any other applicable law and Vixel’s certificate of incorporation and bylaws (if applicable) to effect the Merger.

      The Merger Agreement provides that Emulex will vote, or cause to be voted, all of the Shares then owned by it, the Purchaser or any of its other subsidiaries in favor of the approval of the Merger and adoption of the Merger Agreement.

      Notwithstanding Vixel’s obligations under the Merger Agreement in respect of the Special Meeting, in the event Emulex and the Purchaser acquire at least 90% of the outstanding shares of each class of capital stock of Vixel entitled to vote on the Merger, Emulex and the Purchaser will cause the Merger to become effective as soon as practicable after such acquisition without a meeting of the stockholders of Vixel, in accordance with Section 253 of the DGCL.

      Interim Operations; Covenants. Until the earlier of the termination of the Merger Agreement pursuant to its terms or the effective time of the Merger, Vixel and each of its subsidiaries has agreed to, except to the extent that Emulex otherwise consents in writing, carry on its business in the usual, regular and ordinary course, in substantially the same manner as previously conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers, employees and contractors and preserve its relationships with customers, suppliers, licensors, licensees, and others with which it has business dealings.

      Pursuant to the Merger Agreement, without the prior written consent of Emulex, during the period from the date of the Merger Agreement and continuing until the earlier of its termination or the effective time of the Merger, Vixel will not do any of the following and will not permit its subsidiaries to do any of the following (except as may be expressly contemplated or specifically permitted by the Merger Agreement):

•  waive any stock repurchase rights, accelerate (other than pursuant to the terms of Vixel Options in effect on October 8, 2003), amend or change the period of vesting or exercisability of Vixel Options or restricted stock, or reprice Vixel Options granted under the Option Plans or any other plan, program or arrangement or authorize cash payments in exchange for any Vixel Options granted under any of such plans or exercise any authority under the Option Plans or any Vixel employee plan (as defined in the Merger Agreement) to accelerate any vesting or exercise of any Vixel Option;

•  adopt a plan of complete or partial liquidation, dissolution, merger, acquisition, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);

29

•  grant any severance, bonus or termination pay to any employee, officer or director except non-discretionary pay pursuant to written agreements in effect, or policies existing, on October 8, 2003 and as previously disclosed in writing to Emulex, or adopt any new severance, retention or change in control plan, policy or arrangement;

•  transfer or license to any person or entity or otherwise extend, amend, modify, permit to lapse or fail to preserve any of Vixel intellectual property rights material to Vixel’s business as presently conducted or proposed to be conducted, other than nonexclusive licenses in the ordinary course of business consistent with past practice, or disclose to any person who has not entered into a confidentiality agreement any trade secrets;

•  other than required dividends on the Series B Preferred Stock, declare, set aside, or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;

•  purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Vixel or its subsidiaries, or any instrument or security that consists of a right to acquire such shares except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;

•  except for grants of Vixel Options pursuant to written commitments in effect on October 8, 2003 and to new hires in the ordinary course of business and consistent with past practice (not to exceed 100,000 shares of Common Stock in the aggregate to employees that are not officers or directors), issue or sell, or authorize the issuance or sale of, pledge or otherwise encumber any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of shares of Common Stock upon the exercise of Vixel Options or Vixel warrants which are outstanding on the date hereof and other than pursuant to the Vixel ESPP consistent with the terms thereof;

•  cause, permit or propose any amendments to its certificate of incorporation, bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);

•  acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Vixel or enter into any joint ventures, strategic partnerships or alliances;

•  sell, transfer, lease, license, mortgage, pledge, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of Vixel;

•  incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Vixel, enter into any “keep well” or other agreement to maintain any financial statement condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables consistent with past practice or pursuant to existing credit facilities as in effect on the date hereof in the ordinary course of business;

•  adopt or amend any Vixel employee plan, pay, or incur an obligation or commitment to pay, any special bonus or special remuneration to any director, officer, consultant or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants other than increases to employees who are not directors or affiliates in the ordinary course of business, consistent with past practice or make any loans to any of its officers, directors, employees, affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to a Vixel employee plan or otherwise;

•  pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of Vixel or any of its subsidiaries of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice;

30

•  modify, amend or terminate any material contracts, agreements, indemnities, guarantees, notes, bonds, mortgages, liens, indentures, leases, licenses or other instruments or obligations of the Company and its subsidiaries (each a “Vixel Agreement”) or waive, release or assign any material rights or claims thereunder, other than any such modification, amendment or termination of any such material contract or any such waiver, release or arrangement thereunder in the ordinary course of business consistent with past practice;

•  modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality agreement or non-competition agreement to which Vixel is a party.

•  pay, discharge, satisfy or settle any pending or threatened adverse third party claims, suits, actions, liabilities or other obligations, other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of Vixel;

•  commence, join or make an appeal with respect to any action, claim, suit, arbitration, litigation or other proceeding for money damage or other relief against any third party (other than Emulex or the Purchaser) before any court or governmental or other regulatory or administrative agency or commission in any jurisdiction, other than ordinary course collections claims for accounts receivable due and payable to Vixel or any of its subsidiaries not exceeding $50,000 in the aggregate or which would result in any restrictions on its operations or which relates to the Merger Agreement or the transactions contemplated by the Merger Agreement;

•  enter into any contract which involves payments or commitments or results in potential liability in excess of $100,000 in any consecutive twelve month period, or, in cases where Vixel or a subsidiary of Vixel is the party responsible for such payment, commitment or liability which is not terminable upon thirty days notice other than in the ordinary course of business consistent with past practice;

•  permit any insurance policy naming it as a beneficiary or a loss payee to be cancelled or terminated without notice to and consent by Emulex;

•  revalue any of its assets or make any change in accounting methods, principles or practices, except as required by GAAP after notice to Emulex;

•  delay or postpone the payment of accounts payable or other liabilities other than in the ordinary course of business;

•  make or change any election relating to taxes, adopt or change any accounting method relating to taxes, enter into any closing agreement relating to taxes, file any amended tax return, settle or consent to any claim or assessment relating to taxes, incur any obligation to make any payment of, or in respect of, any taxes, except in the ordinary course of business, or agree to extend or waive the statutory period of limitations for the assessment or collection of taxes;

•  fail to make in a timely manner any filings with the SEC required under the Securities Act of 1933, as amended or the Exchange Act or the rules and regulations promulgated thereunder;

•  except as required by applicable law or GAAP, make any change in its accounting principles, practices or methods after notice to Emulex;

•  take any action that would or is reasonably likely to result in any of the conditions to the Merger (described above) or any of the conditions to the Offer described in Section 3 — “Certain Conditions to the Offer” not being satisfied, or would make any representation or warranty of Vixel contained in the Merger Agreement inaccurate in any material respect at, or as of any time prior to, the effective time of the Merger, or that would materially impair the ability of Vixel to consummate the Merger in accordance with the terms of the Merger Agreement or materially delay such consummation;

•  enter into any agreement or commitment the effect of which would be to grant to a third party following the Merger any actual or potential right or license of any material intellectual property rights owned by Emulex or any of its subsidiaries, in each case, other than the Surviving Corporation or any of its successors;

•  take any action to exempt or make any person (other than Emulex or the Purchaser) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;

31

•  redeem the preferred stock or other rights (the “Rights”) associated with the Common Stock pursuant to the Rights Agreement, dated as of November 15, 2000 between Vixel and Computershare Trust Company, Inc., as amended from time to time (the “Rights Agreement”) or amend, waive any rights under or otherwise modify or terminate the Rights Agreement in connection with an Acquisition Proposal (as defined below) by any person other than Emulex or the Purchaser or render the Rights Agreement inapplicable to any Acquisition Proposal by any person other than Emulex or the Purchaser unless, and only to the extent that, Vixel is required to do so by a court of competent jurisdiction; or

•  enter into any written agreement, contract, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose, in writing or otherwise or announce an intention to do any of the foregoing.

      No Solicitation. Each of Vixel and its Representatives (as defined below) has ceased and caused to be terminated all existing solicitations, initiations, encouragements, discussions, negotiations and communications with any persons or group with respect to any offer or proposal relating to any transaction or series of related transactions other than the Transactions involving:

•  any acquisition or purchase from Vixel by any person or group of more than a 15% interest in the total outstanding voting securities of Vixel or any tender offer or exchange offer that if consummated would result in any person or group beneficially owning 15% or more of the total outstanding voting securities of Vixel;

•  any merger, consolidation, business combination or similar transaction involving Vixel;

•  any sale, lease, exchange, transfer, license, acquisition or disposition of more than 15% of the assets of Vixel; or

•  any recapitalization, restructuring, liquidation or dissolution of Vixel.

      An offer or proposal relating to any of the foregoing transactions is referred to in this Offer to Purchase and the Merger Agreement as an “Acquisition Proposal.” Except as provided in below, from October 8, 2003 until the earlier of termination of the Merger Agreement or the effective time of the Merger, Vixel will not and will not authorize or permit its officers, directors, employees, investment bankers, attorneys, accountants or other agents or those of its subsidiaries (collectively, “Representatives”) to directly or indirectly

•  initiate, solicit or knowingly encourage, or knowingly take any action (other than the issuance of the joint press release or filings with the SEC permitted by the Merger Agreement), to facilitate the making of, any offer or proposal which constitutes or is reasonably likely to lead to any Acquisition Proposal,

•  enter into any agreement with respect to any Acquisition Proposal (other than a confidentiality agreement with terms no less favorable to Vixel than those contained in the Confidentiality Agreement, dated September 2, 2003, entered into between Emulex and Vixel, as amended (the “Confidentiality Agreement”),

•  in the event of an unsolicited Acquisition Proposal for Vixel, engage in negotiations or discussions with, or provide any non-public information or data to, any person or group (other than Emulex or any of its affiliates or representatives) relating to any Acquisition Proposal, or

•  grant any waiver or release under any standstill or other agreement.

      Notwithstanding the foregoing, Vixel may furnish non-public information to any person or group pursuant to a Confidentiality Agreement and may negotiate and participate in discussions and negotiations with such person or group concerning an Acquisition Proposal if, but only if:

•  such Acquisition Proposal provides for consideration to be received by the holders of all, but not less than all, of the issued and outstanding Shares (a “Takeover Proposal”);

•  such person or group has on an unsolicited basis, and in the absence of any violation of the no solicitation covenant in the Merger Agreement by Vixel or its Representatives, submitted a bona fide written proposal to Vixel relating to any such Takeover Proposal which at least a majority of the full board of directors of Vixel determines in good faith, after receiving advice from a nationally recognized investment banking firm and its outside legal counsel, involves consideration to the holders of the Shares that is, or is reasonably likely to lead to a proposal that is, more favorable from a financial point of view to Vixel’s stockholders than the consideration offered pursuant to the Offer, is reasonably capable of being completed and which is not conditioned upon obtaining additional financing, in each

32

case taking into account, among other things, conditions to consummation, required regulatory approvals and the fees payable to Emulex hereunder, and

•

in the good faith opinion of the Vixel board of directors, only after consultation with outside legal counsel to Vixel, providing such information or access or engaging in such discussions or negotiations is in the best interests of Vixel and its stockholders and the failure to provide such information or access or to engage in such discussions or negotiations would cause the Vixel board of directors to violate its fiduciary duties to Vixel’s stockholders under applicable law.

      A Takeover Proposal which satisfies clauses each of the foregoing bulleted paragraphs is referred to in this Offer to Purchase and the Merger Agreement as a “Superior Proposal.”

      Vixel agrees that it will promptly, and in any event within 48 hours following receipt of an Acquisition Proposal, and prior to providing any person or group with any material non-public information, notify Emulex orally and in writing of such Acquisition Proposal, which notice shall disclose the identity of the other party and the material terms of the Acquisition Proposal. Vixel will promptly, and in any event within 24 hours following a determination by the Vixel board of directors that a Takeover Proposal is a Superior Proposal or is reasonably likely to lead to a Superior Proposal, notify Emulex of such determination. Vixel also will promptly provide to Emulex any material non-public information regarding Vixel provided to any other person or group which was not previously provided to Emulex, such additional information to be provided no later than the date of provision of such information to such other person or group.

      Except as set forth in the no solicitation covenant of the Merger Agreement, neither the Vixel board of directors nor any committee thereof will:

•  withdraw or modify, or propose to withdraw or modify, in a manner adverse to Emulex, the Purchaser or the transactions contemplated by the Merger Agreement, the approval, or recommendation by the Vixel board of directors or any committee thereof in favor of the Offer, the Merger Agreement or the Merger,

•  approve or recommend or propose to approve or recommend any Acquisition Proposal of any person or group other than Emulex and the Purchaser or

•  enter into any agreement with respect to any Acquisition Proposal of any person or group other than Emulex and the Purchaser (other than a confidentiality agreement with terms no less favorable to Vixel than the Confidentiality Agreement).

      Notwithstanding the foregoing, prior to the time of acceptance for payment of Shares in the Offer, Vixel’s board of directors may (subject to the terms of this and the following sentence) withdraw or modify its approval or recommendation in favor of the Offer, the Merger Agreement or the Merger, approve or recommend a Superior Proposal, or enter into an agreement with respect to a Superior Proposal (and make any amendments to the Rights Agreement necessary thereto), in each case, only after the third business day following Vixel’s delivery to Emulex of written notice advising Emulex that Vixel’s board of directors has received a Superior Proposal (the “Superior Proposal Notice”), specifying the material terms and conditions of such Superior Proposal, identifying the person or group making such Superior Proposal and advising Emulex that Vixel intends to approve or recommend a Superior Proposal or enter into an agreement with respect to a Superior Proposal (specifying which course of action Vixel intends to take); provided, however, that Vixel will not enter into an agreement with respect to a Superior Proposal unless it also terminates the Merger Agreement.

      Vixel may terminate the Merger Agreement and enter into an acquisition agreement or other similar agreement (each, an “Acquisition Agreement”) with respect to such Superior Proposal at any time three business days following delivery to Emulex of a Superior Proposal Notice; provided, that:

•  neither Vixel nor its Representatives is in material breach of the non-solicitation covenant of the Merger Agreement,

•  during the three business day period following Vixel’s delivery to Emulex of a Superior Proposal Notice, Emulex shall have the right to propose adjustments in the terms and conditions of the Merger Agreement and Vixel shall have caused its financial and legal advisors to negotiate with Emulex in good faith such proposed adjustments in the terms and conditions of the Merger Agreement, and

33

•  upon the expiration of the three business day period following Vixel’s delivery to Emulex of a Superior Proposal Notice, Vixel delivers to Emulex (1) a written notice of termination of the Merger Agreement, and (2) pays the Termination Fee (as defined in below) plus the Expense Fee (as defined below), as the same may have been estimated by Emulex in good faith prior to the date of such delivery (subject to the $1.0 million limitation on actual out-of-pocket expenses incurred by Emulex and the Purchaser in connection with the Offer, the Merger and the Merger Agreement and to an adjustment payment between the parties upon Emulex’s definitive determination of such expenses).

      Indemnification and Insurance. Emulex agrees that or a period of six years after the effective time of the Merger, it will cause the Surviving Corporation to fulfill and honor in all respects the obligations of Vixel pursuant to any indemnification agreements between Vixel and its present and former directors and officers (the “Indemnified Parties”) dated prior to October 8, 2003 and any indemnification provisions under Vixel’s certificate of incorporation or bylaws as in effect on October 8, 2003. The certificate of incorporation and bylaws of the Surviving Corporation will contain provisions with respect to exculpation and indemnification that are at least as favorable to the Indemnified Parties as those contained in the certificate of incorporation and bylaws of Vixel as in effect on October 8, 2003, which provisions will not be amended, repealed or otherwise modified for a period of six years from the effective time of the Merger in any manner that would adversely affect the rights thereunder of the Indemnified Parties.

      For a period of six years after the effective time of the Merger, Emulex will, at its election, either:

•  cause the Surviving Corporation to use its commercially reasonable efforts to maintain in effect, if available, directors’ and officers’ liability insurance covering those persons who are currently covered by Vixel’s directors’ and officers’ liability insurance policy on terms comparable to those applicable to the directors and officers of Vixel or

•  obtain, or permit Vixel to obtain, a six year “tail” insurance policy that provides coverage substantially similar to the coverage provided under Vixel’s directors’ and officers’ liability insurance covering those persons who are currently covered by Vixel’s directors’ and officers’ liability insurance policy on terms comparable to those applicable to the directors and officers of Vixel;

provided, however, that in no event will the Surviving Corporation be required to expend in excess of one hundred twenty-five percent (125%) of the annual premium currently paid by Vixel for such coverage (or such coverage as is available for such one hundred twenty-five percent (125%) of such annual premium).

      Confidentiality; Access to Information. Emulex and the Purchaser agree to hold any information which is non-public in confidence, subject to customary limitations, and, in the event the Merger Agreement is terminated for any reason, Emulex or the Purchaser shall promptly return or destroy such information.

      Vixel will afford Emulex and its Representatives reasonable access during normal business hours to the properties, books, analysis, projections, plans, systems, contracts, commitments, records, personnel offices and other facilities of Vixel and its subsidiaries during the period prior to the effective time of the Merger to obtain all information concerning the business, including the status of product development efforts, properties, results of operations and personnel of Vixel and use all reasonable efforts to make available at all reasonable times during normal business hours to Emulex and its Representatives, the appropriate individuals (including management personnel, attorneys, accountants and other professionals) for discussion of Vixel’s business, properties, prospects and personnel as Emulex may reasonably request. Vixel will provide its consent and to execute suitable confidentiality agreements allowing Vixel’s third party suppliers, strategic partners and customers to meet with and hold discussions with representatives of Emulex. During such period, Vixel will (and will cause each of Vixel’s subsidiaries to), subject to any limitations imposed by law with respect to records of employees, furnish promptly to Emulex and the Purchaser a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal securities laws and all other information concerning its business, properties and personnel as Emulex or the Purchaser may reasonably request.

      Public Disclosure. Emulex, the Purchaser and Vixel will not disseminate any press release or other announcement concerning the Merger, the Offer or the Merger Agreement or the other transactions contemplated by the Merger Agreement to any third party or to the employees of Vixel without the prior written consent of each of the other parties to the Merger Agreement, which consent shall not be unreasonably withheld.

34

      Reasonable Efforts; Notification. Subject to the express provisions of the no solicitation covenant and upon the terms and subject to the conditions set forth in the Merger Agreement, each of the parties agrees to use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by the Merger Agreement, including complying in all material respects with all applicable laws and with all rules and regulations of any governmental entity, using all reasonable efforts to accomplish the following:

•  the taking of all reasonable acts necessary to cause the Minimum Condition and all the conditions to the Merger (described above) and all conditions to the Offer described in Section 3 — “Certain Conditions to the Offer” to be satisfied and to consummate and make effective the Offer, the Merger and the other Transactions;

•  the obtaining of all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from governmental entities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with governmental entities, if any) and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any governmental entity;

•  the obtaining of all necessary consents, approvals or waivers from third parties;

•  the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement, including seeking to have any stay or temporary restraining order entered by any court or other governmental entity vacated or reversed if there is a reasonable possibility that defending such actions would result in their dismissal, removal, elimination or termination; and

•  the execution or delivery of any additional instruments necessary to consummate the Transactions, and to carry out fully the purposes of, the Merger Agreement.

      In connection with and without limiting the foregoing, Vixel and its board of directors will, if any state takeover statute or similar statute or regulation is or becomes applicable to the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement, use all reasonable efforts to ensure that the Merger and the other transactions contemplated by the Merger Agreement may be consummated as promptly as practicable on the terms contemplated by the Merger Agreement and otherwise to minimize the effect of such statute or regulation on the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement. Notwithstanding anything in the Merger Agreement to the contrary, nothing in the Merger Agreement will be deemed to require Emulex, the Purchaser or any subsidiary or affiliate thereof to take or agree to take any Action of Divestiture (as defined below) which would be reasonably expected either to materially and adversely impact the benefits expected to be derived by Emulex as a result of the transactions contemplated hereby or to have a Material Adverse Effect (defined below) on the business of Vixel and its subsidiaries as currently conducted or as contemplated to be conducted on a combined basis with the business of Emulex and its subsidiaries following the Merger. For purposes of the Merger Agreement and this Offer to Purchase, an “Action of Divestiture” means:

•  making proposals, executing or carrying out agreements or submitting to any applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, judgment, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any governmental entity (a “Legal Requirement”) providing for the license, sale or other disposition or holding separate (through the establishment of a trust or otherwise) of any assets or categories of assets of Emulex, any of its affiliates or Vixel or the holding separate of the shares of Common Stock or Series B Preferred Stock or imposing or seeking to impose any limitation on the ability of Emulex or any of its subsidiaries or affiliates to conduct their business or own such assets or to acquire, hold or exercise full rights of ownership of the shares of the Common Stock or Series B Preferred Stock or

•  otherwise taking any step to avoid or eliminate any impediment which may be asserted under any Legal Requirement governing competition, monopolies or restrictive trade practices.

35

      In case at any time after the effective time of the Merger any further action is necessary or desirable to carry out the purposes of the Merger Agreement, the proper officers and directors of Vixel, Emulex and the Purchaser shall use all reasonable efforts to take, or cause to be taken, all such necessary actions.

      Vixel is obligated to give prompt notice to Emulex of:

•  any representation or warranty made by Vixel in the Merger Agreement that is untrue or inaccurate in any material respect at any time from the date hereof to the effective time of the Merger;

•  any condition to the Offer that is unsatisfied in any material respect at any time from October 8, 2003 to the date the Purchaser purchases Shares pursuant to the Offer (except to the extent it refers to a specific date);

•  any change or event having or which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (defined below) on Vixel and

•  any material failure of Vixel or any Representative to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under the Merger Agreement or the Purchaser Option.

      Litigation. Vixel will give Emulex the opportunity to participate in the defense of any litigation (other than where the Emulex or the Purchaser is an adverse party) against Vixel and/or any of its subsidiaries and/or any of their respective directors relating to the transactions contemplated by the Merger Agreement.

      Employee Benefits. Emulex will, from and after the effective time of the Merger,

•  until such time as employees of Vixel are covered by or participating in Emulex’s medical, dental, life and short-and long-term disability insurance and 401(k) plans, comply with Vixel’s medical, dental, life, short- and long-term disability insurance and 401(k) plans in accordance with their terms to the extent not inconsistent with applicable law;

•  provide employees of Vixel who remain as employees of the Surviving Corporation with employee benefit plans which are no less favorable in the aggregate than those provided to similarly situated employees of Emulex;

•  provide employees of Vixel who remain as employees of the Surviving Corporation credit for years of service with Vixel or any of its subsidiaries prior to the effective time of the Merger for the purpose of eligibility and vesting pursuant to Emulex’s plans and policies (but not for accrual of benefits to the extent that such credit would result in a duplication of benefits) and

•  cause any and all pre-existing condition limitations (to the extent such limitations did not apply to a pre-existing condition under comparable Vixel employee plans) and eligibility waiting periods under group health plans of Emulex to be waived with respect to former employees of Vixel who remain as employees of the Surviving Corporation (and their eligible dependents) and who become participants in similar group health plans of Emulex or the Surviving Corporation.

      Former employees of Vixel who remain as employees of the Surviving Corporation will also be given credit for any deductible or co-payment amounts paid in respect of the plan year of Emulex in which the effective time of the Merger occurs, to the extent, following the effective time of the Merger, they participate in any of Emulex’s plans during such plan year for which deductibles or co-payments are required. Emulex or its subsidiaries are not prevented from amending, modifying or terminating any Vixel employee plans, or other contracts, arrangements, commitments or understandings.

      Representations and Warranties. Pursuant to the Merger Agreement, Vixel has made customary representations and warranties to Emulex and the Purchaser with respect to, among other things, its organization, standing and power; its capitalization; its authority relative to the Transactions; the validity of the Merger Agreement and the Purchaser Option, approvals by its board of directors; the vote of its stockholders required to approve the Merger; consents and approvals necessary for it to consummate the Transactions; its financial statements and public filings; the conduct of its business; its liabilities; litigation involving it; restrictions on its business activities; governmental authority to hold and operate its properties required for its business; its real and personal property; its technology and intellectual property; environmental matters; its taxes; its employee benefit plans and employees; potential conflicts of interest; its insurance; its legal

36

compliance; its minute books; its provision of complete copies of materials requested by Emulex and its counsel; its brokers’ and finders’ fees; its customers and suppliers; its material contracts; third party consents and notices required under Vixel Agreements necessary for its consummation of any of the transactions contemplated by the Merger Agreement; its product releases; its design wins; its orders, commitments and returns; its support, maintenance and warranty obligations; its inventory; its accounts receivable; the information contained in any proxy statement (and any amendment or supplement) relating to any meeting of its stockholders in connection with the Merger; the information contained herein and provided to it for its inclusion in its Schedule 14D-9; the opinion of its financial advisor; its personnel; its Rights Agreement; the absence of certain questionable payments by it; and the completeness of each of the foregoing representations and warranties.

      Certain representations and warranties in the Merger Agreement made by Vixel are qualified as to “materiality” or “Material Adverse Effect.” For purposes of the Merger Agreement and this Offer to Purchase, the term “Material Adverse Effect” with respect to any entity or group of entities means any event, change, occurrence or development, individually or together with other events, changes, occurrences or developments that is materially adverse to the condition (financial or otherwise), properties, assets (including intangible assets), prospects, liabilities, business, operations or results of operations of such entity and its subsidiaries, taken as a whole, or would prevent or materially alter or delay any of the transactions contemplated by the Merger Agreement except, for each of the foregoing, to the extent that no such event, change, occurrence or development results solely from changes in general economic or market conditions, or from changes affecting the industry generally in which the party operates and which do not affect such party disproportionately; provided, that a Material Adverse Effect does not include an event, change, occurrence or development arising out of or resulting from actions contemplated by the parties in connection with the Merger Agreement or that is directly attributable to the announcement, pendency or performance of the Merger Agreement or the transactions contemplated hereby (excluding any litigation brought by stockholders or others in connection therewith).

      Pursuant to the Merger Agreement, Emulex has made customary representations and warranties to Vixel with respect to, among other things, its corporate existence; its authority to enter into the Merger Agreement and consummate the transactions contemplated by the Merger Agreement; consents and approvals necessary to consummate the transactions contemplated by the Merger Agreement, information that each of Emulex and the Purchaser may provide in any proxy statement (and any amendment or supplement) relating to any meeting of its stockholders in connection with the Merger; information that each of Emulex and the Purchaser has provided in the Offer Documents filed by Emulex and the Purchaser in accordance with the Exchange Act; Purchaser’s financial ability to consummate the Offer and its and its affiliates and associates not being an “interested stockholder” within the meaning of Section 203 of the DGCL.

      None of the representations and warranties contained in the Merger Agreement or in any schedule, instrument or other document delivered pursuant to the Merger Agreement shall survive the effective time of the Merger. Only the covenants and exhibits in the Merger Agreement that by their terms survive the effective time of the Merger and the general provisions of Article IX of the Merger Agreement survive the effective time of the Merger.

      Termination; Fees. The Merger Agreement may be terminated and the transactions contemplated by the Merger Agreement may be abandoned at any time before the effective time of the Merger, whether before or after stockholder approval thereof:

•  by mutual written consent duly authorized by the board of directors of Emulex and the board of directors of Vixel; or

•  by either Emulex or Vixel

—  if a court of competent jurisdiction or other governmental entity issued an order, decree or ruling or taken any other action (including the failure to have taken an action), in each case having the effect of permanently restraining, enjoining or otherwise prohibiting any of the transactions contemplated by the Merger Agreement or

—  if the Purchaser has not accepted and paid for the Shares pursuant to the Offer by December 31, 2003 (the “Termination Date”);

37

      provided, however, that the right to terminate the Merger Agreement pursuant to this bulleted subparagraph is not available to any party whose action or failure to fulfill any obligation under the Merger Agreement has been the principal cause of, or resulted in, the failure of the Offer to be consummated by such date; or

•  by Emulex if the Minimum Condition is not satisfied by the Initial Expiration Date (including any extensions thereof); provided, however, that Emulex is not entitled to terminate the Merger Agreement pursuant to this bulleted subparagraph if it or the Purchaser is in material breach of its representations and warranties, covenants or other agreements under the Merger Agreement and such breach has been the cause of, or resulted in, such failure to satisfy the Minimum Condition; or

•  by Emulex if

—  prior to the purchase of Shares pursuant to the Offer, there has been a material breach by Vixel of any representation, warranty, covenant or agreement set forth in the Merger Agreement, which breach is reasonably likely to result in any condition to the Offer not being satisfied and such breach has not been cured or such condition has not been satisfied within 30 days after the receipt of notice thereof or such breach is not reasonably capable of being cured or such condition is not reasonably capable of being satisfied within such period or

—  due to an occurrence or circumstance that would result in a failure to satisfy any condition to the Offer set forth in “Section 3. Certain Conditions to the Offer” of this Offer to Purchase, the Purchaser (1) failed to commence the Offer within 60 days following the date of the Merger Agreement, (2) allowed the Offer to terminate without having accepted any Shares for payment thereunder or (3) failed to accept Shares for payment pursuant to the Offer prior to the Termination Date, unless such action or inaction under clauses (1), (2) or (3) shall have been principally caused by or resulted from the failure of either of Emulex or the Purchaser to perform, in any material respect, any of its covenants or agreements contained in the Merger Agreement, or the breach by Emulex of any of its representations or warranties contained in the Merger Agreement; or

•  by Emulex, at any time prior to the purchase of the Shares pursuant to the Offer, if

—  Vixel’s board of directors withdrew, modified, or changed its approval or recommendation in favor of the Merger Agreement or the Offer in a manner adverse to Emulex or the Purchaser,

—  Vixel’s board of directors or any committee thereof approved or recommended any Acquisition Proposal,

—  a tender or exchange offer relating to its securities was commenced by a person unaffiliated with Emulex and it has not sent to its security holders pursuant to Rule 14e-2 promulgated under the Exchange Act, within 10 business days after such tender or exchange offer is first published, sent or given, a statement disclosing that Vixel Board of Directors recommends rejection of such tender or exchange offer or

—  Vixel violated or breached in any material respect any of its obligations under the no solicitation covenant of the Merger Agreement,

unless there has been a material breach by Emulex or the Purchaser of any representation, warranty, covenant or agreement contained in the Merger Agreement except to the extent such breach, together with all such breaches, does not and would not be likely to have a material adverse effect on Emulex’s or the Purchaser’s ability to consummate the Offer or the Merger; or

•  by Vixel if

—  prior to the purchase of Shares pursuant to the Offer that would represent a majority of the Shares on a Fully Diluted Basis, there has been a material breach by Emulex or the Purchaser of any representation, warranty, covenant or agreement contained in the Merger Agreement except to the extent such breach, together with all such breaches, does not and would not be likely to have a material adverse effect on Emulex’s or the Purchaser’s ability to consummate the Offer or the Merger (and such breach has not been cured or such condition has not been satisfied within 30 days after the receipt of notice thereof or such breach is not reasonably capable of being cured or such condition is not reasonably capable of being satisfied with such period); or

38

—  due to an occurrence or circumstance that would result in a failure to satisfy any condition to the Offer described in Section 14 — “Certain Conditions to the Offer” of this Offer to Purchase, the Purchaser shall have (1) failed to commence the Offer within 60 days following the date of the Merger Agreement, (2) allowed the Offer to terminate without having accepted any Shares for payment hereunder or (3) failed to accept Shares for payment pursuant to the Offer prior to the Termination Date, unless such action or inaction under clauses (1), (2) or (3) shall have been principally caused by or resulted from the failure of Vixel to perform, in any material respect, any of its covenants or agreements contained in the Merger Agreement, or the material breach by Vixel of any of its representations or warranties contained in the Merger Agreement; or

•  by Vixel under the non-solicitation provision of the Merger Agreement.

      Effect of Termination

      In the event of the termination of the Merger Agreement, written notice thereof shall forthwith be given to the other party or parties specifying the provision of the Merger pursuant to which such termination is made, and the Merger Agreement shall forthwith become null and void and there shall be no liability on the part of Emulex, the Purchaser or Vixel (or any of their Representatives) except as provided below, which shall survive the termination of the Merger Agreement and nothing in the Merger Agreement shall relieve any party from liability for any material breach of the Merger Agreement.

      If Emulex shall have terminated the Merger Agreement, at any time prior to the purchase of the Shares pursuant to the Offer, because

•  Vixel’s board of directors withdrew, modified, or changed its approval or recommendation in favor of the Merger Agreement or the Offer in a manner adverse to Emulex or the Purchaser,

•  Vixel’s board of directors or any committee thereof approved or recommended any Acquisition Proposal,

•  a tender or exchange offer relating to its securities has been commenced by a person unaffiliated with Emulex and it shall not have sent to its security holders pursuant to Rule 14e-2 promulgated under the Exchange Act, within 10 business days after such tender or exchange offer is first published, sent or given, a statement disclosing that Vixel Board of Directors recommends rejection of such tender or exchange offer or

•  Vixel violated or breached in any material respect any of its obligations under the non-solicitation covenant of the Merger Agreement, unless there has been a material breach by Emulex or the Purchaser of any representation, warranty, covenant or agreement contained in the Merger Agreement except to the extent such breach, together with all such breaches, does not and would not be likely to have a material adverse effect on Emulex’s or the Purchaser’s ability to consummate the Offer or the Merger

then Vixel will pay to Emulex promptly, but in no event later than two business days after the date of such termination a termination fee of $9.3 million (the “Termination Fee”), plus an amount equal to the actual out-of-pocket expenses (including, without limitation, legal, accounting and investment banking fees, if any, and disbursements) incurred by Emulex and the Purchaser in connection with the Offer, the Merger and the Merger Agreement up to an aggregate amount of $1.0 million (the “Expense Fee”); provided, that in respect of a termination arising from the events described in the first three bulleted subparagraphs above, one-half of the aggregate Termination Fee and Expense Fees otherwise payable in cash may, at the election of Vixel, instead by paid pursuant to a promissory note in the form attached to the Merger Agreement secured by Vixel’s inventory, equipment, tangible personal property, general intangibles (including intellectual property rights), chattel paper and deposit accounts, which note shall be executed and delivered within the time periods otherwise provided herein (the “Termination Fee Note”).

      If Vixel terminated the Merger Agreement under the non-solicitation covenant of the Merger Agreement, then Vixel must pay to Emulex immediately prior thereto or concurrent therewith the Termination Fee and the Expense Fee; provided, that one-half of the Termination Fee and Expense Fees otherwise payable in cash may, at the election of Vixel, instead by paid pursuant to the Termination Fee Note.

      If Emulex terminated the Merger Agreement because the Purchaser has not accepted and paid for the Shares pursuant to the Offer by December 31, 2003 or because, prior to the purchase of Shares pursuant to the Offer, there has been a material breach by Vixel of any representation, warranty, covenant or agreement set forth in the Merger

39

Agreement, which breach is reasonably likely to result in any condition to the Offer described in Section 14 — “Certain Conditions of the Offer” of this Offer to Purchase not being satisfied and such breach has not been cured or such condition has not been satisfied within 30 days after the receipt of notice thereof or such breach is not reasonably capable of being cured or such condition is not reasonably capable of being satisfied within such period and

•  prior to the termination of the Merger Agreement a bona fide Acquisition Proposal has been publicly announced or shall have become publicly known and not withdrawn and

•  within 12 months following the date of the Merger Agreement an Acquisition Proposal with any party other than Emulex and the Purchaser is announced or consummated,

Vixel shall pay to Emulex the Termination Fee and the Expense Fee promptly, but in no event later than two business days after the earlier of the announcement of the Acquisition Agreement or the consummation of the acquisition; provided, however, that one-half of the aggregate Termination Fee and Expense Fee otherwise payable in cash may, at the election of Vixel, instead be paid pursuant to the Termination Fee Note, which note shall be executed and delivered within the time periods otherwise provided herein. For the purposes of this subparagraph, the term “Acquisition Proposal” has the meaning set forth in above, except that the percentages set forth in such provision shall be changed to 50%, and except that any recapitalization, restructuring, liquidation or dissolution of Vixel will not be deemed to be an Acquisition Proposal.

      Fees and Expenses. Except as provided in Section above, all fees, costs and expenses incurred in connection with the Merger Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses whether or not the Merger is consummated; provided, however, that Emulex and Vixel will share equally all fees and expenses, other than attorneys’ and accountants fees and expenses, incurred in relation to the printing and filing with the SEC of this Offer to Purchase and the related Letter of Transmittal, the 14D-9 and Proxy Statement (including any preliminary materials related thereto) and any amendments or supplements thereto, and the filing of any documents required under the HSR Act.

Stockholders Agreement

      The following summary of certain provisions of the Stockholders Agreement is qualified in its entirety by reference to the Stockholders Agreement itself, which is incorporated herein by reference and a copy of which has been filed with the SEC as Exhibit (d)(2) to the Schedule TO. Stockholders and other invested parties should read the Stockholders Agreement in its entirety for a more complete description of the provisions summarized below.

      As a condition and inducement to Emulex’s and the Purchaser’s willingness to enter into the Merger Agreement, each director of Vixel and each of Goldman Sachs Group, Inc. and Goldman Sachs Direct Investment Fund 2000, L.P. (the “Goldman Sachs Investors” and, together with Vixel’s directors, the “Stockholders” and each, a “Stockholder”) entered into a Stockholders Agreement, dated as of October 8, 2003, with Emulex and the Purchaser (the “Stockholders Agreement”). The Stockholders Agreement provides for the tender into the Offer of all Shares held by the Stockholders which represent all of the outstanding Shares of Series B Preferred Stock and approximately 11% of the issued and outstanding shares of Common Stock (assuming the conversion of the Series B Preferred Stock held by Goldman Sachs Investors and excluding warrants that Goldman Sachs may exercise for 859,056 shares of Common Stock and stock options that Vixel’s directors may exercise for up to 456,666 shares of Common Stock) and, in addition, requires that Stockholders tender Shares acquired after the date of the Stockholders Agreement, whether upon the exercise of warrants or options to acquire Shares or otherwise. Shares subject to the Stockholders Agreement must be validly tendered into the Offer as promptly as practicable, and in any event no later than the fifth business day, following the commencement of the Offer (except for those Shares issued upon the exercise of options, warrants or other rights to acquire shares of Common Stock or Series B Preferred Stock after such date, which shall be validly tendered, or caused to be validly tendered, as promptly as practicable following such exercise) and receipt of the applicable tender offer documentation. The Stockholders may not withdraw any Shares so tendered unless this Agreement is terminated or the Offer is terminated or has expired without the Purchaser purchasing all Shares validly tendered in the Offer and not withdrawn. Notwithstanding the foregoing, each Stockholder may decline to tender, or may withdraw, any and all of such Stockholders’ Shares if, without the consent of such Stockholder, the Purchaser amends the Offer to reduce the Offer Price, reduces the number of Shares subject to the Offer, changes the form of consideration payable in the Offer or amends or modifies any term or condition of the Offer in a manner adverse to the stockholders of Vixel (other than insignificant changes or amendments

40

or other than to waive any condition other than the Minimum Condition). Under the Stockholders Agreement, the Goldman Sachs Investors retain the option and right to instruct the tender agent to take all steps necessary to convert their shares into Common Stock at any time prior to the purchase of such shares in the Offer.

      Prior to the termination of the Stockholders Agreement and except as otherwise provided therein, each of the Stockholders will not:

•  transfer, assign, sell, gift-over, pledge, hypothecate, encumber or otherwise dispose of, or consent to any of the foregoing (“Transfer”), any or all of the Shares, options, warrants or other rights to acquire Common Stock or Series B Preferred Stock or any right or interest therein;

•  enter into any contract, option or other agreement, arrangement or understanding with respect to any Transfer;

•  grant any proxy, power-of-attorney or other authorization or consent with respect to any of the Shares;

•  deposit any of the Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any of the Shares or

•  take any other action that would in any way restrict, limit or interfere with the performance of such Stockholder’s obligations hereunder or the transactions contemplated hereby or make any representation or warranty of such Stockholder untrue or incorrect.

      Each Stockholder will during the time the Stockholders Agreement is in effect, at any meeting of the stockholders of Vixel (a “Vixel Stockholders’ Meeting”), however called, and at every adjournment or postponement thereof:

•  appear at the meeting or otherwise cause his or its Shares to be counted as present thereat for purposes of establishing a quorum;

•  vote, or execute consents in respect of, his or its Shares, or cause his or its Shares to be voted, or consents to be executed in respect thereof, in favor of the approval and adoption of the Merger Agreement (including any revised or amended Merger Agreement that has been agreed to by Vixel) and the Merger, and any action required in furtherance thereof and

•  vote, or execute consents in respect of, his or its Shares, or cause his or its Shares to be voted, or consents to be executed in respect thereof, against any agreement or transaction relating to any Acquisition Proposal (other than as proposed by Emulex or the Purchaser) or any amendment of Vixel’s certificate of incorporation or bylaws or other proposal, action or transaction involving Vixel or any of its subsidiaries or any of its stockholders, which amendment or other proposal, action or transaction that could reasonably be expected to prevent or materially impede or delay the consummation of the Offer or Merger or the other transactions contemplated by the Merger Agreement or the consummation of the transactions contemplated by this Agreement or to deprive Emulex of any material portion of the benefits anticipated by Emulex to be received from the consummation of the Merger or the other transactions or the transactions contemplated by the Stockholders Agreement, or change in any manner the voting rights of Common Stock or Series B Preferred Stock (collectively, “Frustrating Transactions”) presented to the stockholders of Vixel (regardless of any recommendation of the board of directors of Vixel) or in respect of which vote or consent of the Stockholder is requested or sought, unless such transaction has been approved in advance by Emulex or the Purchaser.

      As security for the Stockholders’ voting obligations, each of the Stockholders irrevocably constituted and appointed Emulex, Paul F. Folino and its or his designees as his or its attorney and proxy in accordance with the DGCL, with full power of substitution and resubstitution, to cause the Stockholder’s shares to be counted as present at any Vixel stockholders meetings, to vote his or its Shares at any Vixel stockholders meeting, however called, and to execute consents in respect of his or its Shares as and to the extent provided in the Stockholders Agreement relating to the voting of the Shares. The terms “Acquisition Proposal” and “Takeover Proposal” as used in the Stockholders Agreement have the meanings ascribed to them in the Merger Agreement.

      The Stockholders Agreement, and all rights and obligations of the parties thereunder, will terminate immediately upon the termination of the Merger Agreement by Emulex or otherwise upon the earlier to occur of (1) termination of the Merger Agreement by Vixel and (2) November 13, 2003.

41

The Purchaser Option Agreement

      The following summary of certain provisions of the Purchaser Option Agreement is qualified in its entirety by reference to the Purchaser Option Agreement itself, which is incorporated herein by reference and a copy of which has been filed with the SEC as Exhibit (d)(3) to the Schedule TO. Stockholders and other invested parties should read the Purchaser Option Agreement in its entirety for a more complete description of the provisions summarized below.

      A condition and inducement to Emulex’s and Purchaser’s willingness to enter into the Merger Agreement, Vixel entered into a Purchaser Option Agreement, dated October 8, 2003 (the “Purchaser Option Agreement”), by and between Emulex, Purchaser and Vixel, pursuant to which Vixel granted Purchaser an irrevocable option (the “Purchaser Option”) to purchase for the Offer Price, shares of Common Stock and/or Series B Preferred Stock, in such relative amounts as shall be determined by Purchaser in its discretion (subject to the number of authorized shares of Series B Preferred Stock available for issuance), up to 19.9% in the aggregate of the then outstanding shares of Common Stock and Series B Preferred Stock on an as-converted basis (collectively, the “Optioned Shares”). Purchaser’s exercise of the Purchaser Option for Common Stock is conditioned upon Purchaser and Emulex owning in the aggregate, immediately following such exercise, at least 90% of the outstanding shares of Common Stock. Purchaser’s exercise of the Purchaser Option for Series B Preferred Stock is conditioned upon Purchaser and Emulex owning in the aggregate, immediately following such exercise, at least 90% of the outstanding Shares of Series B Stock.

      The Purchaser Option provides that Purchaser will pay for the Optioned Shares upon exercise of the Purchaser Option by delivering to Vixel the aggregate price for the par value of the Optioned Shares so purchased in official bank check or by wire transfer to a bank designated in writing by Vixel and by delivering to Vixel a promissory note of Purchaser substantially in the form attached to the Purchaser Option Agreement for the balance of the exercise price.

Noncompetition Agreements

      The following summary of certain provisions of the Noncompetition Agreements (as defined below) is qualified in its entirety by reference to the Noncompetition Agreements themselves, which are incorporated herein by reference and copies of which have been filed with the SEC as Exhibits (d)(4) through (d)(8) to the Schedule TO. Stockholders and other interested parties should read the Noncompetition Agreements in their entirety for a more complete description of the provisions summarized below.

      Each of Jim McCluney, Thomas Hughes, Stuart Berman, Soogil Cho and Brian Reed (the “Executives” or individually an “Executive”) has entered into a noncompetition agreement with Emulex which is contingent upon the consummation of the Merger and the receipt of an offer of employment from Emulex following the effective time of the Merger. Such agreements were entered into as an inducement to Emulex and Purchaser to consummate the transactions contemplated by the Merger Agreement and with the knowledge that no other consideration has been offered to or received by an Executive. Pursuant to the terms of the noncompetition agreements, each Executive has agreed that during the period commencing at the effective time of the Merger and ending one year following the termination of such Executive’s employment, and subject to exceptions for certain passive investments, he or she will not: (1) engage in a competing business (as such term is defined in such Executive’s noncompetition agreement) or otherwise hold any interest in a competing business; or (2) solicit employees, customers and suppliers of Emulex. Notwithstanding the foregoing, if any Executive is terminated without cause (as such term is defined in the noncompetition agreement), the restrictive covenants shall terminate upon the expiration of severance payments to such Executive.

Confidentiality Agreement

      The following summary of certain provisions of the Confidentiality Agreement (as defined below) is qualified in its entirety by reference to the Confidentiality Agreement itself, which is incorporated herein by reference and a copy of which has been filed with the SEC as Exhibit (d)(9) to the Schedule TO. Stockholders and other interested parties should read the Confidentiality Agreement in its entirety for a more complete description of the provisions summarized below.

      Emulex and Vixel entered into a confidentiality agreement on September 2, 2003, which was amended on September 23, 2003 (the “Confidentiality Agreement”). The Confidentiality Agreement contains customary provisions pursuant to which, among other matters, the parties agreed, subject to certain exceptions, to keep confidential all

42

nonpublic information regarding the disclosing party which is furnished to the receiving party (the “Evaluation Material”), and to use the Evaluation Material, or notes, summaries, or other material derived therefrom solely for the purpose of evaluating a possible transaction involving Vixel and Emulex. Either party may, at any time, elect to terminate the other’s access to the Evaluation Material. Upon such termination, the receiving party must return all Evaluation Material disclosed under the Confidentiality Agreement or certify its destruction. The Confidentiality Agreement will remain in effect for three years. For a period of 18 months after the date of the Confidentiality Agreement, neither party may acquire any security of the other without the written consent of the other party. The September 23, 2003 amendment provides that neither party will, subject to certain exceptions, solicit for employment any executive officer of the other party or any other employee of the other party who became known to them in connection with proposed transaction.

14.     Certain Conditions of the Offer

      Conditions of the Offer. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Merger Agreement. These agreements may be examined, and copies obtained, in the manner set forth in Section 8 — “Certain Information Concerning Vixel.” Notwithstanding any other provisions of the Offer, and in addition to (and not in limitation of) Purchaser’s rights to extend and amend the Offer at any time in its sole discretion (subject to the provisions of the Merger Agreement), Purchaser is not required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and may delay the acceptance for payment of or, subject to the restriction referred to above, the payment for, any validly tendered Shares unless the Minimum Condition has been satisfied. Furthermore, notwithstanding any other provisions of the Offer, Purchaser shall not be required to accept for payment or pay for any validly tendered Shares if, at the scheduled expiration date (i) any applicable waiting periods under the HSR Act and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions have not expired or terminated prior to termination of the Offer, or (ii) any of the following events shall occur and be continuing:

•  there shall have been or be pending any suit, action or proceeding by any governmental entity or any third party against Purchaser, Emulex, Vixel or any Vixel subsidiary

  —  seeking to prohibit or impose any material limitations on Emulex’s or Purchaser’s ownership or operation (or that of any of their respective subsidiaries or affiliates) of all or any portion of their or Vixel’s or Vixel subsidiaries’ businesses or assets, or to compel Emulex or Purchaser or their respective subsidiaries or affiliates to dispose of or hold separate any material portion of the business or assets of Vixel or Emulex or their respective subsidiaries,

  —  challenging the acquisition by Emulex or Purchaser of any Shares pursuant to the Offer, seeking to delay, restrain or prohibit the making or consummation of the Offer, the exercise of the Purchaser Option or the Merger or the performance of any of the other transactions contemplated by the Merger Agreement, or seeking to obtain any damages in connection with the Offer, the Merger or any transaction contemplated by the Merger Agreement from Vixel that are material in relation to Vixel and Vixel’s subsidiaries taken as a whole or from Emulex or Purchaser that are material in relation to Vixel and Vixel’s subsidiaries taken as a whole,

  —  seeking to impose limitations on the ability of Purchaser, or render Purchaser unable, to accept for payment, pay for or purchase some or all of the Shares pursuant to the Offer, the Purchaser Option, the Stockholder Agreement or the Merger,

  —  seeking to impose material limitations on the ability of Purchaser or Emulex effectively to exercise full rights of ownership of the Shares, including, without limitation, the right to vote the Shares purchased by it on all matters properly presented to Vixel’s stockholders, or

  —  seeking to require divestiture by Emulex or any of its subsidiaries or affiliates of any Shares;

•  there is any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or deemed applicable, pursuant to an authoritative interpretation by or on behalf of a government entity, to the Offer, the Merger or any other transaction contemplated by the Merger Agreement, or any other action shall be taken by

43

	any governmental entity, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in the immediately preceding bulleted subparagraphs;
•	there shall have occurred and be continuing any suspension of payments in respect of banks in the United States (whether or not mandatory);
•	any of the representations and warranties of Vixel contained in the Merger Agreement shall not be true and correct in all material respects (other than representations and warranties qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date of the Merger Agreement and as of the date of any scheduled expiration of the Offer, except for representations and warranties that relate to a specific date or time (which need only be true and correct in all material respects as of such date or time) and except for the representations and warranties made by Vixel in respect of its capitalization (which shall be true and correct in all respects other than de minimis variations with respect to the number of securities outstanding, not to exceed 5,000 Shares and shares issuable under the Vixel Options, the Vixel ESPP and outstanding Vixel warrants);
•	since the date of this Agreement, there shall have occurred any events or changes which have had, or which are reasonably expected to have or constitute, individually or in the aggregate, a Material Adverse Effect on Vixel;
•	Vixel’s board of directors or any committee thereof shall have

  —  withdrawn, or modified or changed in a manner adverse to the transactions contemplated by the Merger Agreement, to Emulex or to Purchaser (including by amendment of the Schedule 14D-9), its recommendation in favor of the Offer, the Merger Agreement, or the Merger or shall have failed to make such favorable recommendation,

  —  approved or recommended any third party Acquisition Proposal or entered into or publicly announced its intention to enter into any agreement or agreement in principle with respect to any third party Acquisition Proposal,

  —  resolved or publicly proposed to do any of the foregoing or

  —  taken a neutral position or made no recommendation with respect to a third party Acquisition Proposal after a reasonable amount of time (and in no event more than 10 business days following receipt thereof) has elapsed for Vixel Board of Directors or any committee thereof to review and make a recommendation with respect thereto;

•  Vixel has breached or failed, in any material respect, to perform or to comply with any material agreement, obligation or covenant to be performed or complied with by it under the Merger Agreement;

•  Purchaser has failed to receive a certificate executed by Vixel’s Chief Executive Officer or President on behalf of Vixel, dated as of the scheduled expiration of the Offer, to the effect that the conditions set forth in each of the foregoing bulleted subparagraphs relating to

  —  the accuracy of Vixel’s representations and warranties,

  —  a Material Adverse Effect on Vixel,

  —  Vixel’s recommendation in favor of the Offer, the Merger Agreement, or the Merger and against any third party Acquisition Proposal or Vixel’s entering into or publicly announcing its intention to enter into any agreement or agreement in principle with respect to any third party Acquisition Proposal, and

  —  Vixel’s breach or failure to perform any material agreement, obligation or covenant under the Merger Agreement

      have not occurred;

•  any party to any Stockholder Agreement other than the Purchaser and Emulex is in breach of or has failed to perform any of its covenants or agreements under such agreement or is in breach of any of its representations and warranties in such agreement at the Initial Expiration Date unless the Minimum Condition has been satisfied as of the Initial Expiration Date;

44

•  all consents, permits and approvals of governmental authorities shall not have been obtained;

•  the Rights shall have become exercisable; or

•  the Merger Agreement has been terminated in accordance with its terms.

      The foregoing conditions are for the sole benefit of Emulex and Purchaser, may be asserted by Emulex or Purchaser regardless of the circumstances (including any action or omission by Emulex or any of its affiliates) giving rise to such condition and, except for the Minimum Condition, may be waived by Emulex or Purchaser in whole or in part at any time and from time to time and in the sole discretion of Emulex or Purchaser, subject in each case to the terms of the Merger Agreement. The failure by Emulex or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and, each such right shall be deemed an ongoing right which may be asserted at any time and from time to time.

15.     Certain Legal Matters

      Except as described in this Section 15 — “Certain Legal Matters,” based on information provided by Vixel, none of Vixel, Purchaser or Emulex is aware of any license or regulatory permit that appears to be material to the business of Vixel that might be adversely affected by the Purchaser’s acquisition of shares as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required for the acquisition and ownership of the shares by the Purchaser as contemplated herein. Should any such approval or other action be required, the Purchaser and Emulex presently contemplate that such approval or other action will be sought, except as described below under “State Takeover Laws.” While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of or payment for shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to obtain any such approval or other action might not result in consequences adverse to Vixel’s business or that certain parts of Vixel’s business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any shares tendered. See Section 14 — “Certain Conditions to the Offer” for certain conditions to the Offer, including conditions with respect to governmental actions.

      State Takeover Statutes. A number of states have adopted laws and regulations that purport to apply to attempts to acquire corporations that are incorporated in such states, or whose business operations have substantial economic effects in such states, or which have substantial assets, security holders, employees, principal executive offices or principal places of business in such states. In Edgar v. MITE Corp., the Supreme Court of the United States (the “Supreme Court”) invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there.

      Emulex and the Purchaser do not believe that the antitakeover laws and regulations of any state will by their terms apply to the Offer and the Merger, and neither Emulex nor the Purchaser has attempted to comply with any state antitakeover statute or regulation. Vixel represented and warranted to Emulex and the Purchaser that certain actions taken by Vixel’s board of directors constitute approval of the Offer, the Merger and each other transaction contemplated by the Merger Agreement by the Vixel board of directors under Section 203 of the DGCL, and that no other state takeover statute is applicable to the Offer, the Merger or any other transaction contemplated by the Merger Agreement. Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer, the Merger or any other transaction contemplated by the Merger and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state antitakeover statute is applicable to the Offer, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, Purchaser might be required to file certain information with, or to receive approvals from, the relevant state

45

authorities, and Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer or may be delayed in consummating the Offer. In such case, Purchaser may not be obligated to accept for payment, or pay for, any Shares tendered pursuant to the Offer. See Section 14 — “Conditions to the Offer.”

      Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the “DOJ”) and the Federal Trade Commission (the “FTC”) and certain waiting period requirements have been satisfied.

      The waiting period under the HSR Act with respect to the Offer and the Merger will expire at 11:59 p.m., New York City time, on the fifteenth day after the date Emulex’s form was filed unless early termination of the waiting period is granted. However, the DOJ or the FTC may extend the waiting period by requesting additional information or documentary material from Emulex or Vixel. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Emulex with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Emulex. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the DOJ or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser need not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act (and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions) with respect to the Offer have been satisfied. See Section 14 — “Conditions to The Offer.”

      The FTC and the DOJ frequently scrutinize the legality under the Antitrust Laws (as defined below) of transactions such as the Purchaser’s acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser’s acquisition of Shares, either or both the DOJ or the FTC could take such action under the Antitrust Laws as it or they deems or deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Emulex or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the Antitrust Laws under certain circumstances. Based upon an examination of information provided by Vixel relating to the businesses in which Emulex and Vixel are engaged, Emulex and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the Antitrust Laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 — “Conditions to The Offer” for certain conditions to the Offer, including conditions with respect to litigation and certain government actions.

      As used in this Offer to Purchase, “Antitrust Laws” shall mean and include the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, and all other Federal and state statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

      In addition to the United States, the antitrust and competition laws of other countries may apply to the Offer and the Merger and additional filings and notifications may be required. Emulex and Vixel are reviewing whether any such filings are required and intend to make such filings promptly to the extent required.

      Federal Reserve Board Regulations. Regulations G, U and X (the “Margin Regulations”) of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. All financing for the Offer has been structured so as to be in full compliance with the Margin Regulations.

      Litigation. On October 9, 2003, Russell Fink filed a complaint in the Superior Court of the State of Washington, King County against Vixel and Robert Q. Cordell II, Jami K. Nachtsheim, Charles A. Haggerty, Robert S. Messina, James M. McCluney, Peter J. Perrone, Timothy M. Spicer and certain unnamed individuals (collectively, the “Vixel

46

Parties”). The action was brought individually and as a putative class action on behalf of all holders of Shares other than the Vixel parties and their affiliates. The complaint alleges, among other matters, that the Vixel Parties breached their fiduciary duties to holders of Shares by putting their personal interests ahead of the interests of holders of Shares and by failing to disclose certain information to holders of Shares. The complaint seeks to enjoin the Offer and the have the Merger Agreement declared unlawful.

      The foregoing description of the complaint is qualified in its entirety by reference to the complaint itself, which is an exhibit to the Schedule TO that Emulex and the Purchaser have filed with the SEC. Copies of the Schedule TO together with all exhibits thereto, including the complaint, may be obtained and examined as set forth in Section 9 — “Certain Information Concerning Emulex and the Purchaser.”

      The absence of any pending third party actions against Vixel seeking to delay or prohibit the consummation of the Offer or the Merger is a condition to the Purchaser’s obligation to accept for payment and pay for Shares tendered pursuant to the Offer.

16. Fees and Expenses

      Except as set forth below, neither Emulex nor the Purchaser will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of shares pursuant to the Offer.

      Merrill Lynch has acted as financial advisor to Emulex in connection with this transaction and is acting as Dealer Manager in connection with the Offer. Emulex has agreed to pay Merrill Lynch customary compensation for its services as financial advisor and will reimburse Merrill Lynch for its reasonable out-of-pocket expenses incurred in connection with its engagement as a financial advisor and Dealer Manager. Emulex has also agreed to indemnify Merrill Lynch and related persons against certain liabilities and expenses in connection with its engagement as financial advisor and Dealer Manager, including certain liabilities under federal securities laws.

      The Purchaser has retained MacKenzie Partners, Inc. to act as the Information Agent and Computershare Trust Company of New York to act as the Depositary in connection with the Offer. Such firms each will receive reasonable and customary compensation for their services. The Purchaser has also agreed to reimburse each such firm for certain reasonable out-of-pocket expenses and to indemnify each such firm against certain liabilities in connection with their services, including certain liabilities under federal securities laws.

      The Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than the Information Agent) for making solicitations or recommendations in connection with the Offer. Brokers, dealers, banks and trust companies will be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding material to their customers.

17. Miscellaneous

      The Offer is being made to all holders of shares other than Vixel. The Purchaser is not aware of any jurisdiction in which the making of the Offer or the tender of shares in connection therewith would not be in compliance with the laws of such jurisdiction. If the Purchaser becomes aware of any jurisdiction in which the making of the Offer would not be in compliance with applicable law, the Purchaser will make a good faith effort to comply with any such law. If, after such good faith effort, the Purchaser cannot comply with any such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of shares residing in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of the Purchaser by Merrill Lynch & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

      NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF EMULEX OR THE PURCHASER NOT CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

47

      Emulex and Purchaser have filed with the SEC the Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 under the Exchange Act, together with the exhibits thereto, furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, Vixel has filed the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits thereto, setting forth its recommendation and furnishing certain additional related information. Such Schedule and any amendments thereto, including exhibits, may be examined and copies may be obtained in the manner set forth in Section 8 – “Certain Information Concerning Vixel.”

Aviary Acquisition Corp.,

a wholly owned subsidiary of

Emulex Corporation

October 15, 2003

48

SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF EMULEX AND THE PURCHASER

      The names of the directors and executive officers of Emulex Corporation and Aviary Acquisition Corp. and their present principal occupations or employment and material employment history for the past five years are set forth below. Unless otherwise indicated, each director and executive officer has been so employed for a period in excess of five years. Unless otherwise indicated, each individual is a citizen of the United States, his business address is 3535 Harbor Boulevard, Costa Mesa, California 92626.

Emulex Corporation

Name	Position and Principal Occupation
Paul F. Folino	Chairman of the Board and Chief Executive Officer
Kirk D. Roller	President and Chief Operating Officer
Ronald P. Quagliara	Chief Technology Officer
William F. Gill	Executive Vice President, Worldwide Sales
Sadie A. Herrera	Executive Vice President, Human Resources
Karen Mulvany	Executive Vice President, Business Planning and Development
Michael J. Rockenbach	Executive Vice President, Chief Financial Officer, Secretary and Treasurer
Michael E. Smith	Executive Vice President, Worldwide Marketing
Fred B. Cox	Director, Chairman Emeritus of Emulex
Michael P. Downey	Director of Emulex, Chairman of the Board of Artisoft, Inc.
Bruce C. Edwards	Director of Emulex, President and Chief Executive Officer of Powerwave Technologies, Inc.
Robert H. Goon	Director of Emulex, Attorney
Don M. Lyle	Director of Emulex, Principal of Technology Management Company

      Mr. Folino joined Emulex in May 1993 as president and chief executive officer and as a director, and in July 2002 was promoted to chairman of the board and chief executive officer.

      Mr. Roller joined Emulex in April 1998 as vice president, worldwide sales. Mr. Roller was promoted to chief operating officer in December 2000, and to president and chief operating officer in July 2002.

      Mr. Quagliara joined Emulex in March 1995 as vice president, research and development. Mr. Quagliara was promoted to president, IP storage networking group in December 2000, and to chief technical officer in July 2002.

      Mr. Gill joined Emulex in January 2000 as vice president, OEM sales and in December 2000, was promoted to executive vice president worldwide sales. The year before joining Emulex, Mr. Gill was director, business development for Pinnacle Multimedia (12637 South 265 West, #300, Draper, UT 84020), a developer of training management software. From 1994 to 1999, he held various senior sales positions with 3Com and U.S. Robotics (605 North 5600 West, Salt Lake City, UT 84124).

      Ms. Herrera joined Emulex in 1988 as benefits administrator, and was promoted to vice president, human resources in May 1995 and executive vice president, human resources in December 2000.

      Ms. Mulvany joined Emulex as vice president, business planning and development in March 2000 and was promoted to executive vice president, business planning and development in December 2000. Prior to joining Emulex, Ms. Mulvany consulted for Emulex and various other technology companies since 1991 in the areas of investor relations, mergers and acquisitions, strategic planning and corporate finance.

49

      Mr. Rockenbach joined Emulex in 1991 and has served as executive vice president and chief financial officer since December 2000.

      Mr. Smith joined Emulex in October 1998 as senior director of Fibre Channel marketing and was promoted to vice president, Fibre Channel marketing in June 1999, then to vice president, worldwide marketing in August 1999 and subsequently to executive vice president worldwide marketing in December 2000.

      Mr. Cox is a founder of Emulex and has served as a director since its inception in 1979 and served as Chairman of the Board until July 2002 at which time he was named Chairman Emeritus. Mr. Cox served as Emulex’s Chief Executive Officer from its inception until he retired in October 1990.

      Mr. Downey has served as a director of Emulex since February 1994 and is Chairman of the Audit Committee. From 1986 to 1997, Mr. Downey served as the senior financial executive of Nellcor Puritan Bennett (4280 Hacienda Drive, Pleasanton, CA 94588) and one of its predecessors, a manufacturer of medical instruments. Mr. Downey serves as Chairman of the Board of Artisoft Inc. (5 Cambridge Center, Cambridge, MA 02142), a developer of software-based phone systems, and served as its interim President and Chief Executive Officer from March 2000 to July 2000.

      Mr. Edwards was appointed as a director of Emulex on May 18, 2000. Since February 1996, he has served as President, Chief Executive Officer and as a director of Powerwave Technologies, Inc., a developer of wireless communications products. Mr. Edwards’ current business address is 1801 East Street, Andrew Place, Santa Ana, California 92705.

      Mr. Goon has served as a director of Emulex since its inception in 1979. He has been engaged in the practice of law for 38 years. From before 1995 until October 1999, he was a partner in the law firm of Jeffer, Mangels, Butler & Marmaro LLP (2121 Avenue of the Stars, Los Angeles, CA 90067). Since November 1999, he has been a sole practitioner. Mr. Goon has also been a director of Coastcast Corporation (3025 East Victoria Street, Rancho Dominguez, CA 90221) since December 1999, a manufacturer of investment-cast golf clubheads and medical devices, and of Artisoft, Inc. (5 Cambridge Center, Cambridge, MA 02142).

      Mr. Lyle has served as a director of Emulex since February 1994 and is Chairman of the Compensation Committee. Since 1983 he has served as an independent consultant to various computer and venture capital companies and as a principal of Technology Management Company, a management consulting firm specializing in high technology companies. Mr. Lyle also serves as a member of the Board of Directors of several private companies.

Aviary Acquisition Corp.

Name	Position and Principal Occupation
Paul F. Folino	President, Chief Executive Officer and Director of Aviary Acquisition Corp.; Chairman of the Board and Chief Executive Officer of Emulex
Michael J. Rockenbach	Secretary, Treasurer and Director of Aviary Acquisition Corp.; Executive Vice President, Chief Financial Officer, Secretary and Treasurer of Emulex

      Mr. Folino is the President, Chief Executive Officer and a Director of Aviary Acquisition Corp. Also, Mr. Folino joined Emulex in May 1993 as president and chief executive officer and as a director, and in July 2002 was promoted to chairman of the board and chief executive officer.

      Mr. Rockenbach is the Secretary, Treasurer and a Director of Aviary Acquisition Corp. Mr. Rockenbach joined Emulex in 1991 and has served as executive vice president and chief financial officer since December 2000.

50

ANNEX I

DELAWARE GENERAL CORPORATION LAW

APPRAISAL RIGHTS

Section 262.     Appraisal Rights.

      (a) Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to Section 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a stock corporation and also a member of record of a nonstock corporation; the words “stock” and “share” mean and include what is ordinarily meant by those words and also membership or membership interest of a member of a nonstock corporation; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in one or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.

      (b) Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to Section 251 (other than a merger effected pursuant to Section 251(g) of this title), Section 252, Section 254, Section 257, Section 258, Section 263 or Section 264 of this title:

      (1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of Section 251 of this title.

      (2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to Sections 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except:

      a.     Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;

      b.     Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders;

      c.     Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or

      d.     Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs a., b. and c. of this paragraph.

      (3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under Section 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.

51

      (c) Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as is practicable.

      (d) Appraisal rights shall be perfected as follows:

      (1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or

      (2) If the merger or consolidation was approved pursuant to Section 228 or Section 253 of this title, each constituent corporation, either before the effective date of the merger or consolidation or within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section; provided that, if the notice is given on or after the effective date of the merger or consolidation, such notice shall be given by the surviving or resulting corporation to all such holders of any class or series of stock of a constituent corporation that are entitled to appraisal rights. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.

      (e) Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) hereof and who is otherwise entitled to appraisal rights, may file a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any

52

stockholder shall have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder’s written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) hereof, whichever is later.

      (f) Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.

      (g) At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.

      (h) After determining the stockholders entitled to an appraisal, the Court shall appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. In determining the fair rate of interest, the Court may consider all relevant factors, including the rate of interest which the surviving or resulting corporation would have had to pay to borrow money during the pendency of the proceeding. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, permit discovery or other pretrial proceedings and may proceed to trial upon the appraisal prior to the final determination of the stockholder entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.

      (i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Interest may be simple or compound, as the Court may direct. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.

      (j) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.

      (k) From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive

53

payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just.

      (l) The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation hall have the status of authorized and unissued shares of the surviving or resulting corporation.

54

      Facsimile copies of the Letter of Transmittal, properly completed and duly signed, will be accepted. The Letter of Transmittal, certificates for shares and any other required documents should be sent or delivered by each stockholder of Vixel or his broker, dealer, commercial bank, trust company or other nominee to the Depositary, at one of the addresses set forth below.

The Depositary for the Offer is:

By Mail:

Computershare Trust Company
of New York
Wall Street Station
P.O. Box 1010
New York, NY 10268-1010 By Facsimile Transmission:

For Eligible Institutions Only:
(212) 701-7636

For Confirmation Only Telephone:
(212) 701-7600 By Hand or Overnight Courier:

Computershare Trust Company
of New York
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005

      Questions and requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification on Substitute Form W-9 may be directed to the Information Agent at the location and telephone number set forth below. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.

The Information Agent for the Offer is:

105 Madison Avenue

New York, NY 10016

(212) 929-5500 (call collect)

or

CALL TOLL-FREE (800) 322-2885

E-MAIL: proxy@mackenziepartners.com

The Dealer Manager for the Offer is:

Merrill Lynch & Co.

4 World Financial Center

New York, New York 10080

CALL TOLL-FREE (866) 276-1462

EX-99.(A)(2)

Exhibit (a)(2)

LETTER OF TRANSMITTAL

To Tender Shares of

Common Stock

(Including the Associated Preferred Stock Purchase Rights)

and

Series B Convertible Preferred Stock

of

Vixel Corporation

At

$10.00 Net Per Share

Pursuant to the Offer to Purchase

Dated October 15, 2003

by

Aviary Acquisition Corp.

a wholly owned subsidiary of

Emulex Corporation

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON NOVEMBER 12, 2003, UNLESS THE OFFER IS EXTENDED.

The Depositary for the Offer is:

By Mail:

Computershare Trust Company
of New York
Wall Street Station
P.O. Box 1010
New York, NY 10268-1010 By Facsimile Transmission:

For Notice of Guaranteed Delivery
For Eligible Institutions Only:
(212) 701-7636

For Confirmation Only Telephone:
(212) 701-7600 By Hand or Overnight Courier:

Computershare Trust Company
of New York
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005

     Delivery of this Letter of Transmittal to an address, or transmission of instructions via a facsimile number, other than as set forth above, does not constitute a valid delivery. You must sign this Letter of Transmittal in the appropriate space provided therefor and complete the Substitute Form W-9. The instructions set forth in this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed.

     This Letter of Transmittal is to be used by stockholders of Vixel Corporation either if certificates for Shares (as defined below) are to be forwarded herewith or, unless an Agent’s Message (as defined in Section 3 of the Offer to Purchase (as defined below)) is utilized, if delivery of Shares (as defined below) is to be made by book-entry transfer to an account maintained by the Depositary at the Book-Entry Transfer Facility (as defined in, and pursuant to the procedures set forth in, Section 3 of the Offer to Purchase). Stockholders who deliver Shares by book-entry transfer are referred to herein as “Book-Entry Shareholders” and other stockholders are referred to herein as “Certificate Shareholders.” Stockholders whose certificates for Shares are not immediately available or who cannot deliver either the certificates for, or a Book Entry Confirmation (as defined in the Offer to Purchase) with respect to their Shares, and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in the Offer to Purchase) must tender their Shares in accordance with the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2.

     Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

DESCRIPTION OF SHARES TENDERED
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as name(s)	Share Tendered
appear(s) on Share Certificate(s))	(Attach additional signed list if necessary)
		Total Number of
		Shares
	Common Stock	Represented By	Number of
	Certificate	Share	Shares
	Number(s)*	Certificate(s)*	Tendered**

1.1

DESCRIPTION OF SHARES TENDERED
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as name(s)	Shares Tendered
appear(s) on Share Certificate(s))	(Attach additional signed list if necessary)
	Series B	Total Number of
	Convertible	Shares
	Preferred Stock	Represented By	Number of
	Certificate	Share	Shares
	Number(s)*	Certificate(s)*	Tendered**
	Total Shares
* Need not be completed if transfer is made by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares described above are being tendered. See Instruction 4.

o  CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

Name of Tendering Institution

Account Number

Transaction Code Number

o  CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:

Name(s) of Registered Owner(s)

Date of Execution of Notice of Guaranteed Delivery

Name of Institution that Guaranteed Delivery

If delivered by book-entry transfer check box:     o

Account Number

Transaction Code Number

o  CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.

Number of Shares represented by the lost or destroyed certificates

2

SPECIAL PAYMENT INSTRUCTIONS

(See Instructions 1, 5, 6 and 7)

   To be completed ONLY if the check for the purchase price of Shares tendered and accepted for payment and/or certificates for Shares not tendered or not accepted for payment is/are to be issued in the name of someone other than the undersigned.

Issue:

o Check

o Certificate(s) to:

Name

(Please Print)

Address

(Include Zip Code)

(Tax Identification or Social Security Number)

SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 1, 5, 6 and 7)

   To be completed ONLY if the check for the purchase price of Shares tendered and accepted for payment and/or certificates for Shares not tendered or not accepted for payment is/are to be sent to someone other than the undersigned or to the undersigned at an address other than that above.

Issue:

o Check

o Certificate(s) to:

Name

(Please Print)

Address

(Include Zip Code)

(Tax Identification or Social Security Number)

3

NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS

Ladies and Gentlemen:

      The undersigned hereby tenders to Aviary Acquisition Corp., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Emulex Corporation, a Delaware corporation (“Emulex”), the above described shares of common stock, par value $0.0015 per share, of Vixel Corporation (“Vixel”), including all associated preferred stock purchase rights and other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel and Computershare Trust Company, Inc., as amended from time to time (together, the “Common Stock”), and the above described shares of Series B convertible preferred stock, par value $0.001 per share, of Vixel (the “Series B Preferred Stock” and, together with the Common Stock, the “Shares” and each a “Share”), upon the terms and subject to the conditions set forth in Purchaser’s Offer to Purchase, dated October 15, 2003 (the “Offer to Purchase”), and this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the “Offer”), receipt of which is hereby acknowledged.

      Upon the terms of the Offer, subject to, and effective upon acceptance for payment of, and payment for, the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser, all right, title and interest in securities or rights issued in respect thereof on or after the date of the Offer to Purchase and irrevocably constitutes and appoints Computershare Trust Company of New York (the “Depositary”), the true and lawful agent and attorney-in-fact of the undersigned, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to the full extent of the undersigned’s rights with respect to such Shares (and any such other Shares or securities or of the undersigned’s rights with respect to such Shares (and any such other Shares or securities or rights) (a) to deliver certificates for such Shares (and any such other Shares or securities or rights) or transfer ownership of such Shares (and any such other Shares or securities or rights) on the account books maintained by the Book-Entry Transfer Facility together, in any such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Purchaser, (b) to present such Shares (and any such other Shares or securities or rights) for transfer on Vixel’s books and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other Shares or securities or rights), all in accordance with the terms and subject to the conditions of the Offer.

      The undersigned represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after the date of the Offer to Purchase) and, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good title thereto, free and clear of all liens, restrictions, claims and encumbrances and the same will not be subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents deemed necessary or desirable by the Depositary or Purchaser to complete the sale, assignment and transfer of the tendered Shares (and any such other Shares or other securities or rights).

      All authority conferred or agreed to be conferred in this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Except as stated in the Offer to Purchase, this tender of Shares hereby is irrevocable.

      The undersigned hereby irrevocably appoints the designees of the Purchaser, and each of them, and any other designees of the Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to vote at any annual, special or adjourned meeting of Vixel’s stockholders or otherwise in such manner, to execute any written consent concerning any matter, and to otherwise act as each such attorney-in-fact and proxy or his, her or its substitute shall in his, her or its sole discretion deem proper with respect to the Shares tendered hereby that have been accepted for payment by the Purchaser prior to the time any such action is taken and with respect to which the undersigned is entitled to vote (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after the date of the Offer to Purchase). This appointment is effective when, and only to the extent that, the Purchaser accepts for payment such Shares as provided in the Offer to Purchase. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney, proxies and consents given by the undersigned

4

with respect to such Shares (and any such other Shares or securities or rights) will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective) by the undersigned with respect to such Shares.

      The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in the Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms and conditions of any such extension or amendment). Without limiting the foregoing, if the price to be paid in the Offer is amended in accordance with the Merger Agreement, the price to be paid to the undersigned will be the amended price notwithstanding the fact that a different price is stated in this Letter of Transmittal. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, the Purchaser may not be required to accept for payment any of the Shares tendered hereby. All questions as to validity, form and eligibility of any tender of Shares hereby will be determined by Parent (which may delegate power in whole or in part to the Depositary) and such determination shall be final and binding.

      The undersigned understands that payment for tendered Shares will be made as promptly as practicable after the surrender of Certificate(s) representing the Shares is made in acceptable form.

      Unless otherwise indicated herein under “Special Payment Instructions,” please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under “Description of Shares Tendered.” In the event that both the “Special Delivery Instructions” and the “Special Payment Instructions” are completed, please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and/or return such certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that the Purchaser has no obligation pursuant to the “Special Payment Instructions” to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares so tendered.

5

IMPORTANT

SHAREHOLDERS(S) SIGN HERE

(Also complete Substitute Form W-9 set forth herein)

(Signature(s) of Stockholder(s))

(Signature(s) of Stockholder(s))

Must be signed by registered holder(s) exactly as name(s) appear(s) on certificate(s) for the Shares or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following and see Instruction 5.

Dated: ______________________________ , 2003

Name(s)

(Please Print)

Capacity (Full Title)

Address

(Including Zip Code)

Daytime Area Code and Telephone Number

Employer Identification or Social Security Number

                                                      (See Substitute Form W-9 contained herein)

IF REQUIRED — GUARANTEE OF SIGNATURE(S)

(See Instruction 1 and 5)

Authorized Signature

Name

(Please Print)

Title

(Please Print)

Name of Firm

Address

(Include Zip Code)

Daytime Area Code and Telephone Number

Dated: ______________________________ , 2003

6

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

      1.     Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal if (a) this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Instruction, includes any participant in the Book-Entry Transfer Facility’s system whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith and such registered holder has not completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” on this Letter of Transmittal or (b) the Shares tendered herewith are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agent Medallion Program, or any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (such institution, an “Eligible Institution”). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.

      2.     Requirements of Tender. This Letter of Transmittal is to be completed by stockholders either if certificates are to be forwarded herewith or, unless an Agent’s Message (as defined below) is utilized, if delivery of Shares is to be made pursuant to the procedures for book-entry transfer set forth in Section 3 of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to the Offer, either (a) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), together with any required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message, and any other required documents, must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date (as defined in the Offer to Purchase) and either certificates for the tendered Shares must be received by the Depositary at one of such addresses or the Shares must be delivered pursuant to the procedures for book-entry transfer set forth herein (and a Book-Entry Confirmation (as defined in the Offer to Purchase) must be received by the Depositary), in each case, prior to the Expiration Date, or (b) the tendering stockholder must comply with the guaranteed delivery procedures set forth below and in Section 3 of the Offer to Purchase.

      Stockholders whose certificates for Shares are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary or complete the procedures for book-entry transfer prior to the Expiration Date may tender their Shares by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant to such procedures, (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary prior to the Expiration Date and (c) either (i) the certificates for tendered Shares together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), and any required signature guarantees, and any other required documents must be received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery or (ii) in the case of a book-entry transfer effected pursuant to the book-entry transfer procedures described in the Offer to Purchase, either a properly completed and duly executed Letter of Transmittal (or facsimile thereof), and any required signature guarantees, or an Agent’s Message, and any other required documents, must be received by the Depositary, such Shares must be delivered pursuant to the book-entry transfer procedures and a Book-Entry Confirmation must be received by the Depositary, in each case within three trading days after the date of execution of such Notice of Guaranteed Delivery. A “trading day” is any day on which the Nasdaq Stock Market is open for business.

      “Agent’s Message” means a message, transmitted through electronic means by a Book-Entry Transfer Facility, in accordance with the normal procedures of the Book-Entry Transfer Facility and Depositary to and received by the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of this Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. The term “Agent’s Message” shall also include any hard copy printout evidencing such message generated by a computer terminal maintained at the Depositary’s office.

      The method of delivery of Shares, this Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the election and risk of the tendering stockholder. Delivery of documents to the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility’s procedures does

7

not constitute delivery to the Depositary. Shares will be deemed delivered only when actually received by the Depositary. If delivery is by mail, registered mail, with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

      No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Shares for payment.

      3.     Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto.

      4.     Partial Tenders (Applicable to Certificate Stockholders Only). If fewer than all the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares that are to be tendered in the box entitled “Number of Shares Tendered.” In any such case, new certificate(s) for the remainder of the Shares that were evidenced by the old certificate(s) will be sent to the registered holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the acceptance for payment of, and payment for, the Shares tendered herewith. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

      5.     Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Certificate(s) without any change whatsoever.

      If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

      If any tendered Shares are registered in different names on several Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Certificates.

      If this Letter of Transmittal or any Certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority so to act must be submitted.

      When this Letter of Transmittal is signed by the registered owner(s) of the Shares listed and transmitted hereby, no endorsements of Certificates or separate stock powers are required unless payment is to be made to or Certificates for Shares not tendered or accepted for payment are to be issued to a person other than the registered owner(s). Signatures on such Certificates or stock powers must be guaranteed by an Eligible Institution.

      If the Certificates for Shares are registered in the name of a person other than the signer of this Letter of Transmittal, or if payment is to be made or Certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered holder of the certificates surrendered, the tendered Certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) or owner(s) appear(s) on the Certificates, with the signature(s) on the Certificate(s) or stock power(s) guaranteed as aforesaid. See Instruction 1.

      6.     Stock Transfer Taxes. The Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if Certificate(s) for Shares not tendered or accepted for payment are to be registered in the name of, any person(s) other than the registered owner(s), or if tendered Certificate(s) are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner(s) or the other person(s)) payable on account of the transfer will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted.

      Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates listed in this Letter of Transmittal.

      7.     Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or certificates for Shares not accepted for payment are to be returned to, a person other than the signer of this Letter of Transmittal or if a

8

check is to be sent and/or such certificates are to be returned to a person other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed.

      8.     Waiver of Conditions. The Purchaser reserves the absolute right in its sole discretion to waive any of the specified conditions (other than the Minimum Condition (as defined in the Offer to Purchase), which may be waived only with the consent of the board of directors of Vixel) of the Offer, in whole or in part, in the case of any Shares tendered.

      9.     Backup Withholding. In order to avoid backup withholding of U.S. federal income tax on payments of cash pursuant to the Offer, a stockholder tendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such stockholder’s correct taxpayer identification number (“TIN”), certify under penalties of perjury that such TIN is correct, and provide certain other certifications by completing the Substitute Form W-9 included in this Letter of Transmittal. If a stockholder does not provide such stockholder’s correct TIN or fails to provide the required certifications, the Internal Revenue Service (the “IRS”) may impose a penalty on such stockholder and payment of cash to such stockholder pursuant to the Offer may be subject to backup withholding of 28%. All stockholders tendering Shares pursuant to the Offer should complete and sign the main signature form and the Substitute Form W-9 to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to the Purchaser and the Depositary).

      Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the Federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return.

      The stockholder is required to give the Depositary the TIN (i.e., social security number or employer identification number) of the record owner of the Shares. If the Shares are held in more than one name or are not in the name of the actual owner, consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional guidance on which number to report.

      If you do not have a TIN, consult the W-9 Guidelines for instructions on applying for a TIN, write “Applied For” in the space for the TIN in Part 1 of the Substitute Form W-9, and sign and date the Substitute W-9 and the Certificate of Awaiting Taxpayer Identification Number set forth herein. If you do not provide your TIN to the Depository within 60 days, backup withholding will begin and continue until you furnish your TIN to the Depository. Note: Writing “Applied For” on the form means that you have already applied for a TIN or that you intend to apply for one in the near future.

      Certain stockholders (including, among others, all corporations, individual retirement accounts and certain foreign individuals and entities) are not subject to backup withholding. Noncorporate foreign stockholders should complete and sign the main signature form and the appropriate Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for more instructions.

      10.     Requests for Assistance or Additional Copies. Questions and requests for assistance may be directed to MacKenzie Partners, Inc., the Information Agent or Merrill Lynch & Co., the Dealer Manager, at their respective addresses listed below. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be obtained from the Information Agent or from brokers, dealers, banks, trust companies or other nominees.

      11.     Lost, Destroyed or Stolen Certificates. If any certificate representing Shares has been lost, destroyed or stolen, the stockholder should promptly notify the Depositary by checking the appropriate box on this Letter of Transmittal and indicating the number of Shares so lost, destroyed or stolen, or call the Transfer Agent for the Shares, Computershare Trust Company, Inc., at (303) 262-0600. The stockholder will then be instructed by the Transfer Agent as to the steps that must be taken in order to replace the Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed.

      IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), PROPERLY COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY SIGNATURE GUARANTEES, OR, IN THE

9

CASE OF A BOOK-ENTRY TRANSFER, AN AGENT’S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY.

10

TO BE COMPLETED BY ALL SURRENDERING STOCKHOLDERS OF SECURITIES

PAYER’S NAME: U.S. Stock Transfer Corporation
SUBSTITUTE FORM W-9 Department of the Treasury Internal Revenue Service	Part I — Taxpayer Identification Number — For All Accounts ENTER YOUR TIN IN THE BOX AT RIGHT. (For most individuals, this is your social security number. If you do not have a TIN, see Obtaining a Number in the enclosed Guidelines). CERTIFY BY SIGNING AND DATING BELOW. Note: If the account is in more than one name, see the chart in the enclosed Guidelines to determine which number to give the payer.	Social Security Number OR Employer Identification Number (If awaiting TIN, write “Applied For”)
	Part II — For Payees Exempt from Backup Withholding, see the enclosed Guidelines and complete as instructed therein.
Payer’s Request for Taxpayer Identification Number (TIN)	Part III — Certification — Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), (2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien). Certification Instructions — You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because you failed to report all interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.) The Internal Revenue Service does not require your consent to any provision of this document other than the certification required to avoid backup withholding.
	Signature  Date

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE “APPLIED FOR”

IN PART I OF THE SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

      I certify under the penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number to the Depositary, 28% of all reportable payments made to me will be withheld, but will be refunded to me if I provide a certified tax payer identification number within 60 days.

SIGNATURE DATE

NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.

11

      Questions and requests for assistance may be directed to the Dealer Manager or the Information Agent at the locations and telephone numbers set forth below. Additional copies of the Offer to Purchase, Letter of Transmittal and other tender offer materials may be directed at the Information Agent at the locations and telephone numbers set forth below.

The Information Agent for the Offer is:

105 Madison Avenue

New York, New York 10016

proxy@mackenziepartners.com

(212) 929-5500 (call collect)

or

Toll-Free (800) 322-2885

The Dealer Manager for the Offer is:

Merrill Lynch & Co.

4 World Financial Center

New York, New York 10080

CALL TOLL-FREE (866) 276-1462

12 EX-99.(A)(3) 5 f93445toexv99wxayx3y.htm EXHIBIT (A)(3)

Exhibit (a)(3)

NOTICE OF GUARANTEED DELIVERY

FOR TENDER OF SHARES OF

Common Stock

(Including the Associated Preferred Stock Purchase Rights)

and

Series B Convertible Preferred Stock

of

Vixel Corporation

at

$10.00 Net Per Share

Pursuant to the Offer to Purchase

Dated October 15, 2003

to

Aviary Acquisition Corp.

A Wholly Owned Subsidiary of

Emulex Corporation

(Not to be used for Signature Guarantees)

     This Notice of Guaranteed Delivery, or a form substantially equivalent hereto, must be used to accept the Offer (as defined below) if certificates representing shares of common stock, par value $0.0015 per share, of Vixel Corporation (“Vixel”), a Delaware corporation, including the associated preferred stock purchase rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, by and between Vixel and Computershare Trust Company, Inc., as amended from time to time (together, the “Common Stock”) or certificates representing shares of Series B convertible preferred stock, par value $0.001 per share, of Vixel (the “Series B Preferred Stock” and, together with the Common Stock, the “Shares,” and each a “Share”), are not immediately available, if the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all required documents to reach Computershare Trust Company of New York (the “Depositary”) prior to the Expiration Date (as defined in the Offer to Purchase). This form may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary AND MUST INCLUDE A GUARANTEE BY AN ELIGIBLE INSTITUTION (as defined in the Offer to Purchase). See Section 3 of the Offer to Purchase.

The Depositary for the Offer is:

By Mail:

Computershare Trust Company
of New York
Wall Street Station
P.O. Box 1010
New York, NY 10268-1010 By Facsimile Transmission:

For Notice of Guaranteed Delivery
For Eligible Institutions Only:
(212) 701-7636

For Confirmation Only
Telephone:
(212) 701-7600 By Hand or Overnight Courier:

Computershare Trust Company
of New York
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005

     DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN ONE SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN THE FACSIMILE NUMBER SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.

     THIS NOTICE OF GUARANTEED DELIVERY TO THE DEPOSITARY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.

     THE GUARANTEE INCLUDED HEREIN MUST BE COMPLETED.

Ladies and Gentlemen:

      The undersigned represents that the undersigned owns and hereby tenders to Aviary Acquisition Corp., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary of Emulex Corporation, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 15, 2003 (the “Offer to Purchase”), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”), receipt of which is hereby acknowledged, the number of Shares set forth below, all pursuant to the guaranteed delivery procedures set forth in the Offer to Purchase.

Name(s) of Record Holder(s):

Number of Shares of Common Stock Tendered:

Certificate Number(s) (if available):

(please print)

Number of Shares of Series B Preferred Stock Tendered:

Certificate Number(s) (if available):

Address(es):

(Zip Code)

o     Check if securities will be tendered by book-entry transfer

Name of Tendering Institution:

Area Code and Telephone No.(s):

Signature(s):

Account No.:

Transaction Code No.:

Dated: ______________________________ , 2003

2

GUARANTEE

(Not to be used for signature guarantee)

      The undersigned, a financial institution that is a participant in the Security Transfer Agent Medallion Program, or any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees to deliver to the Depositary either the certificates representing the Shares tendered hereby, in proper form for transfer, or to deliver Shares pursuant to the procedure for book-entry transfer into the Depositary’s account at The Depository Trust Company (the “Book-Entry Transfer Facility”), in any such case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees or an Agent’s Message (as defined in the Offer to Purchase), and any other documents required by the Letter of Transmittal, all within three trading days after the date hereof.

      The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the properly completed and duly executed Letter of Transmittal (or facsimile thereof) or an Agent’s Message and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.

Name of Firm:

Address:

(Zip Code)

Area Code and Tel. No.

(Authorized Signature)

Name:

(Please type or print)

Title:

Dated: ______________________________ , 2003

NOTE:  DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

3 EX-99.(A)(4) 6 f93445toexv99wxayx4y.htm EXHIBIT (A)(4)

Exhibit (a)(4)

OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

(Including the Associated Preferred Stock Purchase Rights)

and

All Outstanding Shares of Series B Convertible Preferred Stock

of

Vixel Corporation

at

$10.00 Net Per Share

Pursuant to the Offer to Purchase

Dated October 15, 2003

by

Aviary Acquisition Corp.

a wholly owned subsidiary of

Emulex Corporation

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, NOVEMBER 12, 2003, UNLESS THE OFFER IS EXTENDED.

     To Brokers, Dealers, Banks, Trust Companies and other Nominees:

      We have been appointed by Aviary Acquisition Corp., a Delaware corporation (the “Purchaser”) and a wholly owned subsidiary of Emulex Corporation, a Delaware corporation (“Emulex”), and Emulex to act as Dealer Manager in connection with the Purchaser’s offer to purchase all outstanding shares of common stock, par value $0.0015 per share, of Vixel Corporation, a Delaware corporation (“Vixel”), including all preferred stock purchase rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, by and between Vixel and Computershare Trust Company, Inc., as amended from time to time (together, the “Common Stock”), and all outstanding shares of Series B convertible preferred stock, par value $0.001 per share, of Vixel (the “Series B Preferred Stock,” and together with the Common Stock, the “Shares”) at $10.00 per share, net to the seller in cash (the “Offer Price”), without interest thereon, upon the terms and subject to the conditions set forth in the Purchaser’s Offer to Purchase dated October 15, 2003 (the “Offer to Purchase”), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”).

      Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.

      Enclosed herewith are copies of the following documents:

      1.     Offer to Purchase dated October 15, 2003;

      2.     Letter of Transmittal to be used by stockholders of Vixel in accepting the Offer (manually signed facsimile copies of the Letter of Transmittal may be used to tender the Shares);

      3.     The Letter to Stockholders of Vixel from the President and Chief Executive Officer of Vixel accompanied by Vixel’s Solicitation/ Recommendation Statement on Schedule 14D-9;

      4.     A printed form of letter that may be sent to your clients for whose account you hold Shares in your name or in the name of a nominee, with space provided for obtaining such clients’ instructions with regard to the Offer;

      5.     Notice of Guaranteed Delivery with respect to Shares;

      6.     Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and

      7.     Return envelope addressed to Computershare Trust Company of New York, as the Depositary.

      THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (A) THERE BEING VALIDLY TENDERED AND NOT VALIDLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (1) THAT NUMBER OF SHARES OF COMMON STOCK WHICH, TOGETHER WITH ANY SHARES OF COMMON STOCK THEN OWNED BY EMULEX OR PURCHASER (WITHOUT GIVING EFFECT TO SHARES SUBJECT TO PURCHASE UNDER THE PURCHASER OPTION (AS DESCRIBED IN THE OFFER TO PURCHASE) OR THE STOCKHOLDERS AGREEMENT (AS DESCRIBED IN THE OFFER TO PURCHASE)), REPRESENTS GREATER THAN 50.1% OF THE SHARES OF COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS (EXCLUDING THE CONVERSION OF THE SERIES B PREFERRED STOCK) AND (2) THAT NUMBER OF SHARES OF SERIES B PREFERRED STOCK WHICH, TOGETHER WITH ANY SHARES OF SERIES B PREFERRED STOCK THEN OWNED BY EMULEX OR PURCHASER (WITHOUT GIVING EFFECT TO SHARES SUBJECT TO PURCHASE UNDER THE PURCHASER OPTION OR THE STOCKHOLDERS AGREEMENT), REPRESENTS GREATER THAN 50.1% OF THE SERIES B PREFERRED STOCK OUTSTANDING ON A FULLY DILUTED BASIS AND (B) THE SATISFACTION OF CERTAIN OTHER CONDITIONS CONTAINED IN THE OFFER TO PURCHASE, INCLUDING THE EXPIRATION OR TERMINATION OF ANY REQUISITE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED.

      We urge you to contact your clients promptly. Please note that the Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on November 12, 2003, unless extended. The Board of Directors of Vixel has unanimously approved and adopted the Merger Agreement (as defined herein) and the transactions contemplated thereby and determined that the Offer and the Merger (as defined herein) are advisable and fair to and in the best interests of Vixel and its stockholders. Accordingly, the Board of Directors of Vixel unanimously recommends that the stockholders tender their Shares pursuant to the Offer.

      The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of October 8, 2003 (the “Merger Agreement”), by and among Emulex, the Purchaser and Vixel pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into Vixel, with Vixel surviving the Merger as a wholly owned subsidiary of Emulex (the “Merger”). At the effective time of the Merger, each outstanding Share (other than Shares owned by Emulex, the Purchaser or Vixel or any subsidiary of Emulex or by stockholders, if any, who are entitled to and properly exercise appraisal rights under Delaware law) will be converted into the right to receive the price per Share paid pursuant to the Offer in cash, without interest thereon, as set forth in the Merger Agreement and as described in the Offer to Purchase. The Merger Agreement provides that the Purchaser may assign any or all of its rights and obligations (including the right to purchase Shares in the Offer) to Emulex, to Emulex and one or more direct or indirect wholly owned subsidiaries of Emulex, or to one or more direct or indirect wholly owned subsidiaries of Emulex.

      In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) Share Certificates (or a timely Book-Entry Confirmation) (as defined in the Offer to Purchase), (b) a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees (or, in the case of a book-entry transfer effected pursuant to the procedures set forth in Section 3 of the Offer to Purchase, an Agent’s Message (as defined in the Offer to Purchase) in lieu of a Letter of Transmittal) and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when Share certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid on the purchase price to be paid by the Purchaser for the Shares, regardless of any extension of the Offer or any delay in making such payment.

      Neither of the Purchaser or Emulex will pay any fees or commissions to any broker or dealer or other person (other than the Dealer Manager, as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed by the Purchaser upon request for customary mailing and handling expenses incurred by you in forwarding the enclosed Offering materials to your customers.

2

      Questions may be directed to us as Dealer Manager at our address and telephone number set forth on the back cover of the enclosed Offer to Purchase. Requests for additional copies of the enclosed materials may be directed to MacKenzie Partners, Inc., the Information Agent, at the address appearing on the back page of the Offer to Purchase.

Very truly yours,

Merrill Lynch & Co.

       NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, EMULEX, THE DEPOSITARY, THE DEALER MANAGER OR THE INFORMATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.

3 EX-99.(A)(5) 7 f93445toexv99wxayx5y.htm EXHIBIT (A)(5)

Exhibit (a)(5)

OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

(Including the Associated Preferred Stock Purchase Rights)

and

All Outstanding Shares of Series B Convertible Preferred Stock

of

Vixel Corporation

At

$10.00 Net Per Share

Pursuant to the Offer to Purchase

Dated October 15, 2003

by

Aviary Acquisition Corp.

a wholly owned subsidiary of

Emulex Corporation

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON NOVEMBER 12, 2003, UNLESS THE OFFER IS EXTENDED.

October 15, 2003

To Our Clients:

      Enclosed for your consideration is an Offer to Purchase dated October 15, 2003 (the “Offer to Purchase”) and the related Letter of Transmittal (which, together with amendments or supplements thereto, collectively constitute the “Offer”) relating to the Offer by Aviary Acquisition Corp., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary of Emulex Corporation, a Delaware corporation (“Emulex”), to purchase all outstanding shares of common stock, par value $0.0015 per share, of Vixel Corporation, a Delaware corporation (“Vixel”), together with any associated preferred stock purchase or other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel and Computershare Trust Company, Inc. as amended from time to time (together, the “Common Stock”) and all outstanding shares of Series B convertible preferred stock, par value $0.001 per share, of Vixel (the “Series B Preferred Stock,” and together with the Common Stock, the “Shares,” and each a “Share”), at a purchase price of $10.00 per Share, net to seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer.

      Also enclosed is the Letter to Stockholders from the President and Chief Executive Officer of Vixel accompanied by Vixel’s Solicitation/ Recommendation Statement on Schedule 14D-9.

      WE (OR OUR NOMINEES) ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES FOR OUR ACCOUNT.

      We request instructions as to whether you wish to tender any of or all the Shares held by us for your account pursuant to the terms and conditions set forth in the Offer.

      Your attention is directed to the following:

      1.     The offer price is $10.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions of the Offer.

      2.     The Offer is being made for all outstanding Shares.

      3.     Vixel’s board of directors has unanimously approved the Offer, the Merger (as defined below), and the Merger Agreement (as defined below) and determined that the terms of each are fair to, and in the best interests of, Vixel’s stockholders. Accordingly, Vixel’s board of directors recommends that the stockholders accept the Offer and tender their Shares pursuant to the Offer.

      4.     The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of October 8, 2003 (the “Merger Agreement”), by and among Emulex, the Purchaser and Vixel pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into Vixel with Vixel surviving the merger as a wholly owned subsidiary of Emulex (the “Merger”). At the effective time of the Merger, each outstanding Share (other than Shares owned by Emulex, the Purchaser, Vixel or any wholly-owned subsidiary of Emulex or Vixel) will be converted into the right to receive the price per Share paid pursuant to the Offer in cash, without interest, as set forth in the Merger Agreement and described in the Offer to Purchase. The Merger Agreement provides that the Purchaser may assign any or all of its rights and obligations (including the right to purchase Shares in the Offer) to Emulex, to Emulex and one or more direct or indirect wholly owned subsidiaries of Emulex, or to one or more direct or indirect wholly owned subsidiaries of Emulex.

      5.     THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, NOVEMBER 12, 2003 (THE “EXPIRATION DATE”), UNLESS THE OFFER IS EXTENDED BY THE PURCHASER, IN WHICH EVENT THE TERM “EXPIRATION DATE” SHALL MEAN THE LATEST TIME AT WHICH THE OFFER, AS SO EXTENDED BY THE PURCHASER, WILL EXPIRE.

      6.     The Offer is conditioned upon, among other things, (a) there being validly tendered and not validly withdrawn prior to the expiration of the Offer (1) that number of Shares of Common Stock, which, together with any shares of Common Stock then owned by Emulex or Purchaser (without giving effect to shares subject to purchase under the Purchaser Option (as described in the Offer to Purchase) or the Stockholders Agreement (as described in the Offer to Purchase)), represents greater than 50.1% of the shares of Common Stock outstanding on a fully diluted basis (excluding the conversion of the Series B Preferred Stock) and (2) that number of shares of Series B Preferred Stock which, together with any shares of Series B Preferred Stock then owned by Emulex or Purchaser (without giving effect to Shares subject to purchase under the Purchaser Option or the Stockholders Agreement), represents greater than 50.1% of the series B Preferred Stock outstanding on a fully diluted basis, (b) the satisfaction of certain other conditions set forth in the Offer to Purchase, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

      7.     Tendering stockholders will not be obligated to pay brokerage fees or commissions to the Depositary or the Information Agent or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. However, federal income tax backup withholding (currently 28%), may be required, unless an exemption is provided or unless the required taxpayer identification information is provided. See Instruction 9 of the Letter of Transmittal.

      Your instructions to us should be forwarded promptly to permit us to submit a tender on your behalf prior to the Expiration Date.

      If you wish to have us tender any of or all the Shares held by us for your account, please so instruct us by completing, executing, detaching and returning to us the instruction form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the detachable part hereof. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE.

2

      Payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by Computershare Trust Company of New York (the “Depositary”) of (a) Share certificates (or a timely Book-Entry Confirmation) (as defined in the Offer to Purchase), (b) a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), with any required signature guarantees (or, in the case of a book-entry transfer effected pursuant to the procedures set forth in Section 3 of the Offer to Purchase, an Agent’s Message (as defined in the Offer to Purchase) in lieu of a Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for Share certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.

      The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction or any administrative or judicial action pursuant thereto. However, the Purchaser may, in its discretion, take such action as it deems necessary to make the Offer in any jurisdiction and extend the Offer to holders of such Shares in such jurisdiction. In any jurisdiction where the securities, Blue Sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by Merrill Lynch & Co., which is acting as the dealer manager, or by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

3

INSTRUCTIONS WITH RESPECT TO THE

OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

(Including the Associated Preferred Stock Purchase Rights)

and

All Outstanding Shares of Series B Preferred Stock

of

Vixel Corporation

by

Aviary Acquisition Corp.

a Wholly Owned Subsidiary of

Emulex Corporation

         The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase of Aviary Acquisition Corp., dated October 15, 2003 (the “Offer to Purchase”), and the related Letter of Transmittal relating to shares of common stock, par value $0.0015 per share of Vixel Corporation, a Delaware corporation (“Vixel”) (including the associated preferred stock purchase or other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel and Computershare Trust Company, Inc. as amended from time to time) and the shares of Series B convertible preferred stock, par value $0.001 per share, of Vixel (collectively, the “Shares,” and each a “Share”).

      This will instruct you to tender the number of Shares indicated below held by you for the account of the undersigned, on the terms and subject to the conditions set forth in the Offer to Purchase and related Letter of Transmittal.

NUMBER OF SHARES TO BE TENDERED:(1)	SIGN HERE
------------------------------------------------ Shares	(Signature(s)) Please Type or Print Names(s) Please Type or Print Address(es) Area Code and Telephone Number Tax Identification Number or Social Security Number
Dated: ------------------------------------, 2003

(1)  Unless otherwise indicated, it will be assumed that all your Shares are to be tendered.

EX-99.(A)(6) 8 f93445toexv99wxayx6y.htm EXHIBIT (A)(6)

Exhibit (a)(6)

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

      GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR. — Social Security numbers have nine digits separated by two hyphens, e.g., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen, e.g., 00-0000000. The table below will help determine the number to give the payor.

		Give the name*
		SOCIAL SECURITY
For this type of account:		number of —
1.	An individual’s account	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.	a. A revocable savings trust account (in which grantor is also trustee)	The grantor-trustee(1)
	b. Any “trust‘ account that is not a legal or valid trust under state law	The actual owner(1)
5.	Sole proprietorship account	The owner(3)
6.	A valid trust, estate, or pension trust	The legal entity (do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title)(4)
7.	Corporate account	The corporation
8.	Religious, charitable, or educational organization account	The organization
9.	Partnership account held in the name of the business	The partnership
10.	Association, club, or other tax-exempt organization	The organization
11.	A broker or registered nominee	The broker or nominee
12.	Account with the Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments	The public entity

* If you are an individual, you must generally enter the name shown on your social security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, enter your first name, the last name shown on your social security card, and your new last name.

(1)	List first and circle the name of the person whose number you furnish.
(2)	Circle the minor’s name and furnish the minor’s social security number.
(3)	Show the name of the owner. If the owner does not have an employer identification number, furnish the owner’s social security number.
(4)	List first and circle the name of the legal trust, estate or pension trust.

NOTE:     If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Page 2

Obtaining a Number

If you do not have a taxpayer identification number (or “TIN”) or you do not know your number, obtain form SS-5, Application for a Social Security Number Card (for resident individuals), Form SS-4, Application for Employer Identification Number (for businesses and all other entities), Form W-7 for International Taxpayer Identification Number (for alien individuals required to file U.S. tax returns). You may obtain Form SS-5 from your local Social Security Administration Office and Forms SS-4 and W-7 from the IRS by calling 1-800-TAX-FORM (1-800-829-3676) or from the IRS’s Internet Web Site at www.irs.gov.

To complete the Substitute Form W-9, if you do not have a taxpayer identification number, write “Applied For” in the space for the taxpayer identification number in Part 1, sign and date the Form, and give it to the requester. Generally, you will then have 60 days to obtain a taxpayer identification number and furnish it to the requester. If the payor does not receive your TIN within 60 days, backup withholding, if applicable, will begin and will continue until you furnish your TIN to the payor. Note: Writing “Applied For” means that you have already applied for a TIN OR that you intend to apply for one soon.

Payees Exempt from Backup Withholding Penalties

Payees specifically exempted from backup withholding on ALL payments include the following:*

•  An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).

•  The United States or any agency or instrumentality thereof.

•  A State, the District of Columbia, a possession of the United States, or any political subdivision or instrumentality thereof.

•  A foreign government or a political subdivision, agency or instrumentality thereof.

•  An international organization or any agency or instrumentality thereof.

Payments of dividends and patronage dividends not generally subject to backup withholding include the following:

•  Payments to nonresident aliens subject to withholding under section 1441.

•  Payments to partnerships not engaged in a trade or business in the United States and which have at least one nonresident partner.

•  Payments of patronage dividends where the amount received is not paid in money.

•  Payments made by certain foreign organizations.

Payments of interest not generally subject to backup withholding include the following:

•  Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if (i) this interest is $600 or more, (ii) the interest is paid in the course of the payor’s trade or business and (iii) you have not provided your correct taxpayer identification number to the payor.

•  Payments of tax-exempt interest (including exempt-interest dividends under section 852).

•  Payments described in section 6049(b)(5) to non-resident aliens.

•  Payments on tax-free covenant bonds under section 1451.

•  Payments made by certain foreign organizations.

*  Unless otherwise noted herein, all references below to section numbers or to regulations are references to the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder.

Exempt payees described above should file a Substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” IN PART 2, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYOR.

Certain payments other than interest, dividends and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A.

Privacy Act Notices. Section 6109 requires you to give your correct TIN to persons who must file information returns with the IRS to report interest, dividends and certain other payments. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The IRS also may provide this information to the Department of Justice for civil and criminal litigation, and to cities, states and the District of Columbia to carry out their tax laws.

You must provide your TIN to the payor whether or not you are required to file a tax return. Payors must generally withhold 28% of taxable interest, dividends, and certain other payments to a payee who does not give a TIN to a payor. Certain penalties also may apply.

Penalties

(1) Penalty for Failure to Furnish Taxpayer Identification Number. — If you fail to furnish your taxpayer identification number to a payor, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Statements With Respect to Withholding. — If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) Criminal Penalty for Falsifying Information. — If you falsify certifications or affirmations, you are subject to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(A)(10) 9 f93445toexv99wxayx10y.txt EXHIBIT (A)(10) EXHIBIT (a)(10) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase, dated October 15, 2003 (the "Offer to Purchase"), and the related Letter of Transmittal and any amendments or supplements to the Offer to Purchase or Letter of Transmittal. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction or any administrative or judicial action pursuant thereto. However, the Purchaser (as defined below) may, in its discretion, take such action as it deems necessary to make the Offer in any jurisdiction and extend the Offer to holders of such Shares in such jurisdiction. In any jurisdiction where securities, Blue Sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser (as defined below) by Merrill Lynch & Co., which is acting as the dealer manager (the "Dealer Manager"), or by one or more registered brokers or dealers licensed under the laws of such jurisdiction. NOTICE OF OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) AND ALL OUTSTANDING SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK OF VIXEL CORPORATION AT $10.00 NET PER SHARE BY AVIARY ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF EMULEX CORPORATION Aviary Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Emulex Corporation, a Delaware corporation ("Emulex"), is offering to purchase all issued and outstanding shares of common stock, par value $.0015 per share, of Vixel Corporation, a Delaware corporation ("Vixel"), including the associated preferred stock or other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel and Computershare Trust Company, Inc., as amended from time to time (together, the "Common Stock"), and all issued and outstanding shares of Series B convertible preferred stock, par value $.001 per share, of Vixel (the "Series B Preferred Stock," and together with the Common Stock, the "Shares" and each share thereof a "Share"), at a price of $10.00 per Share, net to the seller in cash (the "Offer Price"), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Tendering stockholders who have Shares registered in their names and who tender directly to Computershare Trust Company of New York, which is acting as the depositary (the "Depositary"), will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the sale of Shares pursuant to the Offer. Stockholders who hold their Shares through a broker, bank or other nominee should consult such institution as to whether it charges any service fees. The Purchaser will pay all fees and expenses of the Depositary, the Dealer Manager, and MacKenzie Partners, Inc., which is acting as the information agent (the "Information Agent"), incurred in connection with the Offer. The Purchaser is offering to acquire all Shares as a first step in acquiring the entire equity interest in Vixel. Following consummation of the Offer, the Purchaser intends to seek representation on Vixel's Board of Directors and to seek to have Vixel consummate the merger described below. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, NOVEMBER 12, 2003, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT VALIDLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (A) THAT NUMBER OF SHARES OF COMMON STOCK WHICH, TOGETHER WITH ANY SHARES OF COMMON STOCK THEN OWNED BY EMULEX OR THE PURCHASER (WITHOUT GIVING EFFECT TO SHARES SUBJECT TO PURCHASE UNDER THE PURCHASER OPTION (AS DEFINED BELOW) OR THE STOCKHOLDERS AGREEMENT (AS DEFINED BELOW)), REPRESENTS GREATER THAN 50.1% OF THE SHARES OF COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS (EXCLUDING THE CONVERSION OF THE SERIES B PREFERRED STOCK) AND (B) THAT NUMBER OF SHARES OF SERIES B PREFERRED STOCK WHICH, TOGETHER WITH ANY SHARES OF SERIES B PREFERRED STOCK THEN OWNED BY EMULEX OR THE PURCHASER (WITHOUT GIVING EFFECT TO SHARES SUBJECT TO PURCHASE UNDER THE PURCHASER OPTION OR THE STOCKHOLDERS AGREEMENT), REPRESENTS GREATER THAN 50.1% OF THE SERIES B PREFERRED STOCK OUTSTANDING ON A FULLY DILUTED BASIS AND (2) THE SATISFACTION OF CERTAIN OTHER CONDITIONS AS CONTAINED IN THE OFFER TO PURCHASE, INCLUDING THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of October 8, 2003 (the "Merger Agreement"), by and among Emulex, the Purchaser and Vixel, pursuant to which, as soon as practicable after the completion of the Offer and satisfaction or waiver of all conditions to the Merger (as defined below), the Purchaser will be merged with and into Vixel and the separate corporate existence of the Purchaser will thereupon cease. The merger of the Purchaser with and into Vixel, as effected pursuant to the immediately preceding sentence, is referred to herein as the "Merger." At the effective time of the Merger (the "Effective Time"), each Share (other than Shares held by Vixel as treasury stock, Shares held by Emulex, the Purchaser or any other wholly owned subsidiary of Emulex and Shares held by a holder who has not voted in favor of the Merger or consented thereto in writing and who complies with Section 262 of the Delaware General Corporation Law ("Delaware Law")) will be canceled and retired and converted into the right to receive the $10.00 per Share (or any greater amount per Share paid pursuant to the Offer) in cash, without interest. THE BOARD OF DIRECTORS OF VIXEL HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF THE OFFER, THE MERGER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF VIXEL'S STOCKHOLDERS AND HAS UNANIMOUSLY RECOMMENDED THAT THE HOLDERS OF SUCH SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. As a condition and inducement to Emulex's and the Purchaser's willingness to enter into the Merger Agreement, certain stockholders of Vixel (each a "Stockholder") entered into a Stockholders Agreement, dated as of October 8, 2003, with Emulex and the Purchaser (the "Stockholders Agreement"). The Stockholders Agreement provides for the tender into the Offer of all Shares held by the Stockholders, which as of September 28, 2003 represented approximately 11% of the issued and outstanding shares of Common Stock (assuming the conversion of the Series B Preferred Stock held by certain Stockholders and excluding warrants and stock options that certain Stockholders may exercise for 859,058 shares and up to 456,666 shares, respectively, of Common Stock), including any Shares acquired after the date of the Stockholders Agreement, whether upon the exercise of warrants or options to acquire Shares or otherwise. The Stockholder Agreement also requires the Stockholders to vote such Shares (1) in favor of approval and adoption of the Merger Agreement (as the same may have been amended or revised) and any action required in furtherance thereof, (2) against any agreement or transaction to an acquisition proposal other than as proposed by Emulex or the Purchaser and (3) against any proposal, action or transaction that would prevent, or materially impede or delay, the consummation of the Offer or Merger. Shares subject to the Stockholders Agreement, and warrants and stock options held by the Stockholders, are also subject to certain restrictions on transfer under the Stockholders Agreement. Also as a condition and inducement to Emulex's and the Purchaser's willingness to enter into the Merger Agreement, Vixel entered into a Purchaser Option Agreement, dated October 8, 2003, by and between Emulex, the Purchaser and Vixel, pursuant to which Vixel granted the Purchaser an irrevocable option (the "Purchaser Option") to purchase, for the Offer Price, shares of Common Stock and/or Series B Preferred Stock, in such relative amounts as determined by the Purchaser in its discretion (subject to the number of authorized shares of Series B Preferred Stock available for issuance), up to 19.9% in the aggregate of the then-outstanding shares of Common Stock and Series B Preferred Stock on an "as-converted" basis (collectively, the "Optioned Shares"). The exercise of the Purchaser Option for Common Stock is conditioned upon the Purchaser and Emulex owning in the aggregate, immediately following such exercise, at least 90% of the outstanding shares of Common Stock. The exercise of the Purchaser Option for Series B Preferred Stock is conditioned upon the Purchaser and Emulex owning in the aggregate, immediately following such exercise, at least 90% of the outstanding shares of Series B Preferred Stock. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares properly tendered to the Purchaser and not validly withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from Purchaser and transmitting payment to validly tendering stockholders. Under no circumstances will interest be paid on the Offer Price to be paid by the Purchaser for the Shares, regardless of any extension of the Offer or any delay in making such payment. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary at one of its addresses appearing on the back cover of the Offer to Purchase of (1) certificates representing, or a timely Book-Entry Confirmation with respect to, such Shares into the Depositary's account at the Depositary Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures described in Section 3 -- "Procedure for Tendering Shares" of the Offer to Purchase, (2) a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message (as defined in Section 3 -- "Procedure for Tendering Shares" of the Offer to Purchase), and (3) any other documents required by the Letter of Transmittal. The Purchaser may, without the consent of Vixel, (1) if at any scheduled expiration of the Offer any of the conditions to the Purchaser's obligation to accept Shares for payment shall not be satisfied or waived, extend the Offer beyond the Expiration Date (defined below) for a time period reasonably necessary to permit such condition to be satisfied, (2) extend the Offer for any period required by any rule, regulation or interpretation of the United States Securities and Exchange Commission, or the staff thereof, applicable to the Offer or (3) extend (or re-extend) the Offer for an aggregate period of not more than five business days beyond the latest applicable date that would otherwise be permitted under clause (1) or (2) of this sentence, if, as of such date, all of the conditions to the Purchaser's obligations to accept Shares for payment are satisfied or waived, but there shall not have been validly tendered and not withdrawn pursuant to the Offer that number of Shares necessary on a fully diluted basis to permit the Merger to be effected without a meeting of Vixel's stockholders in accordance with Delaware law. The Purchaser may, without the consent of Vixel, also extend the Offer in accordance with Rule 14d-11 under the Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Offer Price may be increased and the Offer may be extended to the extent required by law in connection with such increase, in each case without the consent of Vixel. The term "Expiration Date" shall mean 12:00 midnight, New York City time, on November 12, 2003, unless and until the Purchaser extends the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. Any extension, amendment or termination of the Offer will be followed as promptly as practicable by public announcement thereof, the announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rule 14d-4(c) under the Exchange Act. Shares tendered pursuant to the Offer may be withdrawn (pursuant to the procedures set forth below) at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after December 14, 2003 unless such Shares have been accepted for payment as provided in the Offer to Purchase. No withdrawal rights will apply to Shares tendered into a subsequent offering period under Rule 14d-11 of the Exchange Act and no withdrawal rights apply during a "subsequent offering period" under Rule 14d-11 with respect to Shares tendered in the Offer and accepted for payment. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at its address set forth on the back cover of the Offer to Purchase and must specify the name of the person who tendered the Shares to be withdrawn, the number and class of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If certificates representing Shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution (a financial institution, including most commercial banks, savings and loan associations and brokerage houses, that is a participant in the Security Transfer Agent's Medallion Program, or any other "eligible guarantor institute," as such term is defined in Rule 17Ad-15 under the Exchange Act), the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as contained in Section 3 -- "Procedure for Tendering Shares" of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's procedures. Withdrawals of tendered Shares may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 3 -- "Procedure for Tendering Shares" of the Offer to Purchase any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, and its determination will be final and binding. The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. Stockholders should consult with their tax advisors as to the particular tax consequences of the Offer and the Merger to them, including the applicability and effect of the Alternative Minimum Tax and any state, local or foreign income and other tax laws and of changes in such tax laws. For a more complete description of certain U.S. federal income tax consequences of the Offer and the Merger see Section 5 -- "Certain United States Federal Income Tax Consequences" of the Offer to Purchase. The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. Vixel has provided the Purchaser with Vixel's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and other relevant documents will be mailed by the Purchaser to record holders of Shares, and will be furnished by the Purchaser to brokers, dealers, banks and similar persons whose names, or the names of whose nominees, appear on the stockholder lists, or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers as set forth below. Requests for additional copies of the Offer to Purchase, Letter of Transmittal and other tender offer documents may be directed to the Information Agent at its address and telephone number set forth below, and copies will be furnished at the Purchaser's expense. The Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than to the Dealer Manager, Depositary and the Information Agent) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: (MACKENZIE PARTNERS, INC. LOGO) 105 Madison Avenue New York, New York 10016 (212) 929-5500 (Call Collect) or CALL TOLL-FREE (800) 322-2885 E-mail: proxy@mackenziepartners.com The Dealer Manager for the Offer is: MERRILL LYNCH & CO. Four World Financial Center New York, New York 10080 (866) 276-1462 (Call Collect) October 15, 2003 EX-99.(A)(11) 10 f93445toexv99wxayx11y.txt EXHIBIT (A)(11) Exhibit (a)(11) [EMULEX LOGO] FOR IMMEDIATE RELEASE Investor Contact: Michael J. Rockenbach Press Contact: Robin Austin Chief Financial Officer Sr. Manager, Public (714) 513-8213 Relations (714) 513-8152 EMULEX COMMENCES TENDER OFFER FOR ACQUISITION OF VIXEL AT $10.00 PER SHARE ------------------------------------------------ COSTA MESA, CALIF., OCTOBER 15, 2003 - Emulex Corporation (NYSE:ELX) announced today that Aviary Acquisition Corp., its wholly-owned subsidiary, has commenced a cash tender offer for all of the outstanding shares of Vixel Corporation (NASDAQ:VIXL) for $10.00 net per share. Emulex and Vixel announced on October 8th that the two companies had signed a definitive agreement for Emulex to acquire Vixel in an all cash tender offer. Vixel is a leading supplier of embedded switch ASICs and subsystems for the storage networking market. Vixel's embedded switch solutions will diversify Emulex's storage networking product line and deliver opportunities to accelerate Emulex's revenue growth by tapping into the emerging market for embedded storage switching solutions. The board of directors of Vixel has unanimously approved the acquisition and recommends that Vixel's stockholders tender their Vixel shares in the offer. In addition, certain stockholders of Vixel have agreed to tender shares representing approximately 11% of the fully diluted common stock in support of the transaction. Following completion of the tender offer, Emulex intends to merge its acquisition subsidiary with and into Vixel to acquire all Vixel shares not tendered in the offer. Any remaining Vixel stockholders will receive the same cash price paid in the tender offer. The tender offer is subject to regulatory approvals and certain closing conditions, including the tender of a majority of shares of capital stock of Vixel on a fully-diluted basis and expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended. Emulex Launches Tender Offer for Vixel Shares October 15, 2003 Page 2 Unless the offer is extended, the offer and withdrawal rights will expire at midnight New York time on November 12, 2003. Questions and requests for assistance may be directed to MacKenzie Partners, Inc., the Information Agent for the tender offer, at 212-929-5500 (collect) or 800-322-2885 (toll-free) or to Merrill Lynch & Co., the Dealer Manager for the tender offer, at 866-276-1462 (toll-free). ABOUT EMULEX Emulex Corporation is the world's largest supplier and developer of storage networking host bus adapters. Corporate headquarters are located in Costa Mesa, California. News releases and other information about Emulex Corporation are available at www.emulex.com. ABOUT VIXEL Vixel Corporation is a leading provider and innovator of embedded storage connectivity technologies for storage solution providers. Vixel's embedded storage switching and storage networking products have been deployed by leading solution providers such as HP, Apple, Network Appliance, Fujitsu, NEC, Xyratex, Sun Microsystems, Avid Technologies and BlueArc. To find out more about Vixel, visit www.vixel.com. ADDITIONAL INFORMATION This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of any class of stock of Vixel Corporation. On October 15, 2003 Emulex Corporation and its acquisition subsidiary, Aviary Acquisition Corp., commenced a tender offer for all of the outstanding shares of common stock (including associated preferred stock purchase rights) and shares of Series B convertible preferred stock of Vixel Corporation at $10.00 per share. This tender offer is scheduled to expire at midnight New York time on November 12, 2003, unless it is extended as provided in the related offer to purchase. Emulex Corporation and Aviary Acquisition Corp. will file with the Securities and Exchange Commission a tender offer statement on Schedule TO and related exhibits, including the offer to purchase, letter of transmittal, and other related documents. Shareholders should read the offer to purchase and the tender offer statement on Schedule TO and related exhibits because they contain important Emulex Launches Tender Offer for Vixel Shares October 15, 2003 Page 3 information. By the close of the business day on Wednesday, October 15, 2003, shareholders can obtain these documents free of charge from the Securities and Exchange Commission's web site at www.sec.gov, or from Emulex, either at its web site at www.emulex.com or by directing a request to Emulex Corporation, 3535 Harbor Boulevard, Costa Mesa, California 92626, Attention: Investor Relations. -------------------- This news release refers to various products and companies by their trade names. In most, if not all, cases these designations are claimed as trademarks or registered trademarks by their respective companies. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release contains forward-looking statements, including statements about: the potential acquisition of Vixel by Emulex, revenue growth and earnings per share objectives, and the potential synergies and benefits of the anticipated acquisition. The reader is cautioned that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include, among others: the willingness of Vixel shareholders to tender their shares in the tender offer and the number and timing of shares tendered; the receipt of regulatory and third party consents to the extent required for the acquisition; and satisfaction of the various closing conditions. Furthermore, these factors include the fact that the economy generally, and the technology and storage segments specifically, have recently been in a state of uncertainty making it difficult to determine if past experience is a good guide to the future and making it impossible to determine if markets will grow or shrink in the short term. These and other factors which could cause actual results to differ materially from those in the forward-looking statements are also discussed in reports filed by Emulex and Vixel with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, including under the heading "Risk Factors" in Vixel's 2002 Annual Report on Form 10-K, as amended, and in Emulex's 2003 Annual Report on Form 10-K and in quarterly reports on Form 10-Q filed by Vixel and Emulex in 2003. We caution investors not to place undue reliance on the forward-looking statements contained in this press release. These statements speak only as of the date of this press release, and we undertake no obligation to update or revise the statements, risks or reasons. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. # # # EX-99.(A)(12) 11 f93445toexv99wxayx12y.txt EXHIBIT (A)(12) EXHIBIT (e)(22) SUPERIOR COURT OF THE STATE OF WASHINGTON COUNTY OF KING AT SEATTLE ) RUSSELL FINK, On Behalf of Himself and ) Case No. All Others Similarly Situated, ) COMPLAINT BASED UPON BREACH Plaintiff, ) OF FIDUCIARY DUTY ) vs. ) ) VIXEL CORPORATION, ROBERT Q. ) CORDELL II, JAMI K. NACHTSHEIM, ) CHARLES A. HAGGERTY, ROBERT S. ) MESSINA, JAMES M. McCLUNEY, PETER ) J. PERRONE, TIMOTHY M. SPICER and ) DOES 1-25, inclusive, ) ) Defendants. ) ) - --------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 - Fax: 206/839-0728 Plaintiff, by his attorneys, alleges as follows: SUMMARY OF THE ACTION 1. This is a stockholder class action brought by plaintiff on behalf of the holders of Vixel Corporation ("Vixel" or the "Company") common stock against Vixel and its directors arising out of their attempts to provide certain Vixel insiders and directors with preferential treatment in connection with their efforts to complete the sale of Vixel to Emulex Corp. (the "Acquisition") and senior Vixel management who are jointly concealing the Company's third quarter 2003 ("Q3 2003") financial results.(1) This action seeks equitable relief only. 2. In pursuing the unlawful plan to sell Vixel, each of the defendants violated applicable law by directly breaching and/or aiding the other defendants' breaches of their fiduciary duties of loyalty, due care, independence, good faith and fair dealing. In fact, the individual defendants spent substantial effort tailoring the structural terms of the Acquisition to meet the specific needs of Emulex Corp. ("Emulex") and senior Vixel management. In essence, the proposed Acquisition by Emulex and senior Vixel management is the product of a hopelessly flawed process that was designed to ensure the sale of Vixel to one buying group, and one buying group only, on terms preferential to Emulex and senior Vixel management and to subvert the interests of plaintiff and the other public stockholders of Vixel. JURISDICTION AND VENUE 3. This Court has jurisdiction over defendants because they conduct business in Washington and/or are citizens of Washington. This action is not removable. - ---------------------------- (1) The Company's Q3 2003 ended September 30, 2003. COMPLAINT BASED UPON BREACH OF FIDUCIARY DUTY - 1 OF 11 [Milberg Weiss Bershad Hynes & Lerach LLP Letterhead] 4. Venue is proper in this Court because the conduct at issue took place and had an effect in this County. In addition, certain defendants reside in this County. PARTIES 5. Plaintiff Russell Fink is, and at all times relevant hereto was, a shareholder of Vixel. 6. Defendant Vixel is based in Washington. Vixel provides technologies and products for data storage solutions and storage networking applications. The Company's products utilize the Fibre Channel protocol, which is an American National Standards Institute ("ANSI") defined standard for the transfer of information between computers and storage devices and within storage devices. The Company's products consist of a variety of new embedded storage switch products, as well as its storage area networking ("SAN") products that connect computers to data storage devices in a network configuration. 7. Defendant Robert Q. Cordell II ("Cordell") is a director of the Company. 8. Defendant Jami K. Nachtscheim ("Nachtscheim") is a director of the Company. 9. Defendant Charles A. Haggerty ("Haggerty") is a director of the Company. 10. Defendant Robert S. Messina ("Messina") is a director of the Company. 11. Defendant James M. McCluney ("McCluney") is the President, CEO and is a director of the Company. 12. Defendant Peter J. Perrone ("Perrone") is the Series B Director of the Company. 13. Defendant Timothy M. Spicer ("Spicer") is a director of the Company. 14. The defendants named above in Paragraphs 7-13 are sometimes collectively referred to herein as the "Individual Defendants." 15. The true names and capacities of defendants sued herein under Wash. CR 10(a)(2) as Does 1 through 25, inclusive, are presently unknown to plaintiff, who therefore sues these COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 2 of 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 - Fax. 206/839-0728 defendants by such fictitious names. Plaintiff will seek to amend this Complaint and include these Doe defendants' true names and capacities when they are ascertained. Each of the fictitiously named defendants is responsible in some manner for the conduct alleged herein. DEFENDANTS' FIDUCIARY DUTIES 16. In accordance with their duties of loyalty, care and good faith, the defendants, as directors and/or officers of Vixel, are obligated to refrain from: (a) participating in any transaction where the directors' or officers' loyalties are divided; (b) participating in any transaction where the directors or officers receive or are entitled to receive a personal financial benefit not equally shared by the public shareholders of the corporation; and/or (c) unjustly enriching themselves at the expense or to the detriment of the public shareholders. 17. Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the sale of Vixel, violated the fiduciary duties owed to plaintiff and the other public shareholders of Vixel, including their duties of loyalty, good faith and independence, insofar as they stood on both sides of the transaction and engaged in self-dealing and obtained for themselves personal benefits, including personal financial benefits not shared equally by plaintiff or the Class. 18. Because the Individual Defendants have breached their duties of loyalty, good faith and independence in connection with the sale of Vixel, the burden of proving the inherent or entire fairness of the Acquisition, including all aspects of its negotiation and structure, is placed upon the Individual Defendants as a matter of law. COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 3 of 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 - Fax: 206/839-0728 CLASS ACTION ALLEGATIONS 19. Plaintiff brings this action on his own behalf and as a class action pursuant to Wash. C.R. 23 on behalf of all holders of Vixel stock who are being and will be harmed by defendants' actions described below (the "Class"). Excluded from the Class are defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any defendant. 20. This action is properly maintainable as a class action. 21. The Class is so numerous that joinder of all members is impracticable. According to Vixel's Securities and Exchange Commission ("SEC") filings, there are more than 24 million shares of Vixel common stock outstanding. 22. There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following: (a) whether defendants have breached their fiduciary duties of undivided loyalty, independence or due care with respect to plaintiff and the other members of the Class in connection with the Acquisition; (b) whether the Individual Defendants are engaging in self-dealing in connection with the Acquisition; (c) whether the Individual Defendants are unjustly enriching themselves and other insiders or affiliates of Vixel; (d) whether defendants have breached any of their other fiduciary duties to plaintiff and the other members of the Class in connection with the Acquisition, including the duties of good faith, diligence, honesty and fair dealing; COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 4 of 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 - Fax. 206/839-0728 (e) whether the defendants, in bad faith and for improper motives, have impeded or erected barriers to discourage other offers for the Company or its assets; and (f) whether plaintiff and the other members of the Class would suffer irreparable injury were the transactions complained of herein consummated. 23. Plaintiff's claims are typical of the claims of the other members of the Class and plaintiff does not have any interests adverse to the Class. 24. Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature and will fairly and adequately protect the interests of the Class. 25. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class. 26. Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. 27. Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole. THE ACQUISITION 28. On September 30, 2003, the Company's Q3 2003 ended. Defendants knew that if they disclosed these results to the market prior to the acquisition announcement such disclosure would have a material impact on the price of the Company's shares causing Emulex to pay a higher COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 5 of 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 - Fax: 206/839-0728 price. Thus, instead of disclosing the results, defendants concealed them in order to cap the price of the Company's shares with the acquisition announcement. 29. On October 8, 2003, the Company issued a press release entitled "Emulex agrees to buy Vixel for about $310 mln cash." The release stated in part: Emulex Corp., a maker of adapters used in data storage, said on Wednesday it agreed to buy Vixel Corp. for about $310 million in cash, adding storage switching products and technologies. Costa Mesa, California-based Emulex said it will acquire Bothell, Washington-based Vixel for $10 per share in cash, representing a 17 percent premium to Vixel's closing stock price of $8.54 on Wednesday. The acquisition of Vixel, which is also a supplier of application-specific integrated circuits and subsystems for the storage networking market, gives Emulex Vixel's line of InSpeed embedded storage switching products. Paul Folino, chairman and chief executive of Emulex, said in a statement that those operations will complement Emulex's existing business model and its own technology used in storage networks. Vixel has about 115 employees, half of whom are engineers, and who will move to Emulex, company executives said on a conference call. Executives declined to comment on specific plans for remaining Vixel employees. Associated with the acquisition, Emulex expects to find about $1.8 million in expense savings. Emulex also affirmed guidance for its first quarter ending in September that it gave in August and September. It said then it expects revenue of $82 million to $85 million and net income of as much as 21 cents a share. Excluding items, it said, it expected earnings per share of as much as 23 cents. Emulex said it expects the acquisition to close in November, subject to regulatory approvals and certain other conditions. Emulex said the acquisition is structured as a cash tender offer for all of the shares of Vixel. 30. Notably, Emulex disclosed its own projection in this release but Vixel's remained concealed. 31. By reason of their positions with Vixel, the Individual Defendants are in possession of non-public information concerning the financial condition and prospects of Vixel, and especially Milberg Weiss Bershad Hynes & Lerach LLP COMPLAINT BASED UPON BREACH 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 OF FIDUCIARY DUTY - 6 of 11 Telephone: 206/839-0730 + Fax: 206/839-0728 the true value and expected increased future value of Vixel and its assets, which they have not disclosed to Vixel's public stockholders. Moreover, despite their duty to act reasonably and in the best interests of plaintiff and the Class, the defendants have clear and material conflicts of interest and are acting to better their own interests at the expense of Vixel's public shareholders. 32. The proposed sale is wrongful, unfair and harmful to Vixel's public stockholders, and represents an effort by defendants to aggrandize their own financial position and interests at the expense of and to the detriment of Class members. The Acquisition is an attempt to deny plaintiff and the other members of the Class their rights while usurping the same for the benefit of Emulex and senior Vixel management on unfair terms. 33. In light of the foregoing, the Individual Defendants must, as their fiduciary obligations require: - disclose the Company's Q3 2003 results;(2) - act independently so that the interests of Vixel's public stockholders will be protected, including, but not limited to, the retention of truly independent advisors and/or the appointment of a truly independent Special Committee; and - adequately ensure that no conflicts of interest exist between defendants' own interests and their fiduciary obligation to maximize stockholder value or, if such conflicts exist, to ensure that all conflicts be resolved in the best interests of Vixel's public stockholders. CAUSE OF ACTION CLAIM FOR BREACH OF FIDUCIARY DUTIES 34. Plaintiff repeats and realleges each allegation set forth herein. - ------------------------ 2 This quarter ended more than a week prior to the announcement of the Acquisition. COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 7 OF 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 - Fax: 206/839-0728 35. The defendants have violated fiduciary duties of care, loyalty, candor and independence owned under Delaware law to the public shareholders of Vixel and have acted to put their personal interests ahead of the interests of Vixel's shareholders. 36. By the acts, transactions and courses of conduct alleged herein, defendants, individually and acting as a part of a common plan, are attempting to advance their interests at the expense of plaintiff and other members of the Class. 37. The Individual Defendants have violated their fiduciary duties by simultaneously seeking to acquire the Company without regard to the fairness of the transaction to Vixel's shareholders and simultaneously concealing the Company's Q3 2003 financial results. Defendant Vixel directly breached and/or aided and abetted the other defendants' breaches of fiduciary duties owed to plaintiff and the other holders of Vixel stock. 38. As demonstrated by the allegations above, the Individual Defendants failed to exercise the care required, and breached their duties of loyalty, good faith, candor and independence owed to the shareholders of Vixel because, among other reasons: (a) they failed to properly value Vixel; and (b) they ignored or did not protect against the numerous conflicts of interest resulting from their own interrelationships or connection with the Acquisition. 39. Because the Individual Defendants dominate and control the business and corporate affairs of Vixel, and are in possession of private corporate information concerning Vixel's assets, business and future prospects, there exists an imbalance and disparity of knowledge and economic power between them and the public shareholders of Vixel which makes it inherently unfair for them to pursue any proposed transaction wherein they will reap disproportionate benefits. COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 8 of 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 Fax: 206/839-0728 40. By reason of the foregoing acts, practices and course of conduct, the defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward plaintiff and the other members of the Class. 41. As a result of the actions of defendants, plaintiff and the Class will suffer irreparable injury as a result of defendants' self dealing. 42. Unless enjoined by this Court, the defendants will continue to breach their fiduciary duties owed to plaintiff and the Class, and may consummate the proposed Acquisition which will exclude the Class from its fair share of Vixel's valuable assets and businesses, and/or benefit them in the unfair manner complained of herein, all to the irreparable harm of the Class, as aforesaid. 43. Defendants are engaging in self-dealing, are not acting in good faith toward plaintiff and the other members of the Class, and have breached and are breaching their fiduciary duties owed to the members of the Class. 44. Unless the proposed Acquisition is enjoined by the Court, defendants will continue to breach their fiduciary duties owed to plaintiff and the members of the Class, will not engage in arm's-length negotiations on the Acquisition terms, and will not supply to Vixel's minority stockholders sufficient information to enable them to cast informed votes on the proposed Acquisition and may consummate the proposed Acquisition, all to the irreparable harm of the members of the Class. 45. Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court's equitable powers can plaintiff and the Class be fully protected from the immediate and irreparable injury which defendants' actions threaten to inflict. COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 9 of 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 * Fax: 206/839-0728 PRAYER FOR RELIEF WHEREFORE, plaintiff demands preliminary and permanent injunctive relief in his favor and in favor of the Class and against defendants as follows: A. Declaring that this action is properly maintainable as a class action; B. Directing defendants to disclose the Company's Q3 2003 financial results; C. Declaring and decreeing that the Acquisition agreement was entered into in breach of the fiduciary duties of the defendants and is therefore unlawful and unenforceable; D. Enjoining defendants, their agents, counsel, employees and all persons acting in concert with them from consummating the Acquisition, unless and until the Company adopts and implements a procedure or process to obtain the highest possible price for shareholders; E. Rescinding, to the extent already implemented, the Acquisition or any of the terms thereof; F. Awarding plaintiff the costs and disbursements of this action, including reasonable attorneys' and experts' fees; and G. Granting such other and further equitable relief as this Court may deem just and proper. DATED: October 9, 2003 MILBERG WEISS BERSHAD HYNES & LERACH LLP LORI G. FELDMAN (WSBA 29096) TAMARA J. DRISCOLL (WSBA 29212) /s/ Tamara J. Driscoll ------------------------------- TAMARA J. DRISCOLL 1001 Fourth Avenue, Suite 2550 Seattle, WA 98154 Telephone: 206/839-0730 206/839-0728 (fax) COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 10 of 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 * Fax: 206/839-0728 MILBERG WEISS BERSHAD HYNES & LERACH LLP WILLIAM S. LERACH DARREN J. ROBBINS 401 B Street, Suite 1700 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) ROBBINS UMEDA & FINK, LLP MARC M. UMEDA BRADLEY R. MATHEWS 1010 Second Avenue, Suite 2360 San Diego, CA 92101 Telephone: 619/525-3990 619/525-3991 (fax) Attorneys for Plaintiff COMPLAINT BASED UPON BREACH Milberg Weiss Bershad Hynes & Lerach LLP OF FIDUCIARY DUTY - 11 OF 11 1001 Fourth Avenue, Suite 2550, Seattle, WA 98154 Telephone: 206/839-0730 - Fax: 206/839-0728 EX-99.(D)(1) 12 f93445toexv99wxdyx1y.txt EXHIBIT (D)(1) EXHIBIT (d)(1) AGREEMENT AND PLAN OF MERGER BY AND AMONG EMULEX CORPORATION AVIARY ACQUISITION CORP. AND VIXEL CORPORATION DATED AS OF OCTOBER 8, 2003 INDEX OF DEFINED TERMS Acquisition Agreement.......................................................44 Acquisition Proposal........................................................42 Action of Divestiture.......................................................46 affiliates..................................................................54 Agreement....................................................................1 Appointment Time.............................................................5 Assignee....................................................................56 Audit.......................................................................26 Balance Sheet Date..........................................................18 Certificate of Merger........................................................7 Certificates................................................................10 Closing......................................................................7 Closing Date.................................................................7 COBRA.......................................................................28 Code........................................................................26 Common Stock.................................................................1 Company......................................................................1 Company Agreement...........................................................33 Company Authorizations......................................................21 Company Balance Sheet.......................................................18 Company Board of Directors...................................................1 Company Capital Stock.......................................................14 Company Disclosure Letter...................................................13 Company Employee Plans......................................................27 Company ESPP................................................................11 Company Financials..........................................................18 Company Intellectual Property Rights........................................22 Company Option..............................................................11 Company Options.............................................................11 Company SEC Reports.........................................................17 Company Technology..........................................................22 Company Trademarks..........................................................22 Company Warrants............................................................12 Computer Software...........................................................22 Confidentiality Agreement...................................................43 Copyrights..................................................................22 Current Annual Premium Amount...............................................48 DGCL.........................................................................1 Dissenting Shares...........................................................11 Effective Time...............................................................7 Encumbrances................................................................15 Environmental Claims........................................................25 Environmental Laws..........................................................25 ERISA.......................................................................27 ERISA Affiliate.............................................................27 Exchange Act.................................................................2 Expense Fee.................................................................52 Fully Diluted Basis..........................................................3 GAAP........................................................................18 Governmental Entity.........................................................17 group.......................................................................54 HSR Act.....................................................................17 Indebtedness................................................................15 Indemnified Parties.........................................................47 Independent Directors........................................................5 Initial Expiration Date......................................................2 Intellectual Property Rights................................................22 IRS.........................................................................28 knowledge...................................................................54 Legal Requirement...........................................................47 License Agreements..........................................................22 Material Adverse Effect.....................................................54 Materials of Environmental Concern..........................................24 Merger.......................................................................6 Merger Agreement.............................................................3 Merger Consideration.........................................................9 Minimum Condition............................................................3 Nasdaq.......................................................................5 Non-Competition Agreements...................................................2 NYSE........................................................................12 Offer........................................................................1 Offer Documents..............................................................4 Offer Price..................................................................1 Offer to Purchase............................................................3 Option Exchange Ratio.......................................................12 Option Plans................................................................11 Parent.......................................................................1 Parent Common Stock.........................................................11 Patents.....................................................................22 Paying Agent.................................................................9 Payment Fund.................................................................9 person......................................................................55 Preferred Stock.............................................................14 Proxy Statement..............................................................8 Purchaser....................................................................1 Purchaser Common Stock.......................................................9 Purchaser Option.............................................................2 Real Property...............................................................21 Registered Company IP.......................................................22 Regulation M-A...............................................................4 Representatives.............................................................42 Rights.......................................................................1 Rights Agreement.............................................................1 Schedule 14D-9...............................................................4 Schedule TO..................................................................4 SEC..........................................................................3 Section 16 Affiliate........................................................13 Securities Act..............................................................17 Series A Preferred Stock....................................................14 Series B Preferred Stock.....................................................1 Shares.......................................................................1 Special Meeting..............................................................7 Stockholder..................................................................1 Stockholders Agreements......................................................1 subsidiary..................................................................55 Superior Proposal...........................................................43 Surviving Corporation........................................................6 Takeover Proposal...........................................................43 Tax.........................................................................26 Tax Authority...............................................................26 Tax Returns.................................................................27 Taxes.......................................................................26 Technology..................................................................22 Termination Date............................................................50 Termination Fee.............................................................52 the business of.............................................................54 Trade Secrets...............................................................22 Trademarks..................................................................22 Transactions................................................................55 Voting Debt.................................................................15 WARN Act....................................................................30 TABLE OF CONTENTS Page ARTICLE I THE OFFER AND THE MERGER.........................................2 1.1 The Offer............................................................2 1.2 Company Actions......................................................4 1.3 Directors............................................................5 1.4 The Merger...........................................................6 1.5 Effective Time.......................................................7 1.6 Closing..............................................................7 1.7 Directors and Officers of the Surviving Corporation..................7 1.8 Subsequent Actions...................................................7 1.9 Stockholders' Meeting................................................7 1.10 Merger Without Meeting of Stockholders...............................8 ARTICLE II CONVERSION OF SECURITIES........................................9 2.1 Conversion of Capital Stock..........................................9 2.2 Exchange of Certificates.............................................9 2.3 Dissenting Shares...................................................11 2.4 Stock Option and Other Plans........................................11 2.5 Company Warrants....................................................12 2.6 Section 16..........................................................13 2.7 Withholding.........................................................13 2.8 Transfer Taxes......................................................13 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................13 3.1 Organization, Standing and Power....................................14 3.2 Capitalization......................................................14 3.3 Authorization; Validity of Agreement; Company Action................16 3.4 Board Approvals.....................................................16 3.5 Required Vote.......................................................17 3.6 Consents and Approvals; No Violations...............................17 3.7 SEC Filings; Company Financial Statements...........................17 3.8 Absence of Certain Changes..........................................19 3.9 Absence of Undisclosed Liabilities..................................20 3.10 Litigation..........................................................20 3.11 Restrictions on Business Activities.................................21 3.12 Governmental Authorization..........................................21 3.13 Real and Personal Property..........................................21 3.14 Technology and Intellectual Property................................22 3.15 Environmental Matters...............................................24 3.16 Taxes...............................................................25 3.17 Employee Benefit Plans..............................................27 3.18 Certain Agreements Affected by the Merger...........................29 3.19 Employee Matters....................................................29 3.20 Potential Conflict of Interest......................................31 3.21 Insurance...........................................................31 3.22 Compliance With Laws................................................32 3.23 Minute Books........................................................32 3.24 Complete Copies of Materials........................................32 3.25 Brokers' and Finders' Fees..........................................32 3.26 Customers and Suppliers.............................................32 3.27 Material Contracts..................................................33 3.28 Third Party Consents................................................33 3.29 Product Releases....................................................33 3.30 Company Design Wins.................................................33 3.31 Orders, Commitments and Returns.....................................34 3.32 Support, Maintenance and Warranty Obligations.......................34 3.33 Inventory...........................................................34 3.34 Accounts Receivable.................................................34 3.35 Information in the Proxy Statement..................................34 3.36 Information in the Offer Documents and the Schedule 14D-9...........35 3.37 Opinion of Financial Advisor........................................35 3.38 Personnel...........................................................35 3.39 Rights Agreement....................................................35 3.40 Absence of Questionable Payments....................................36 3.41 Representations Complete............................................36 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT.......................36 4.1 Corporate Existence.................................................36 4.2 Corporate Authorization.............................................36 4.3 Consents and Approvals; No Violations...............................36 4.4 Information in the Proxy Statement..................................37 4.5 Information in the Offer Documents..................................37 4.6 Financing...........................................................37 4.7 DGCL 203............................................................37 ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME.............................37 5.1 Conduct of Business by the Company..................................37 5.2 No Solicitation.....................................................42 ARTICLE VI ADDITIONAL AGREEMENTS..........................................44 6.1 Confidentiality; Access to Information..............................44 6.2 Public Disclosure...................................................45 6.3 Reasonable Efforts; Notification....................................45 6.4 Indemnification.....................................................47 6.5 Litigation..........................................................48 6.6 Interim Directors...................................................48 6.7 Resignation of Directors............................................48 6.8 Rights Agreement....................................................48 6.9 Benefit Plans.......................................................48 6.10 Guarantee of Performance............................................49 ARTICLE VII CONDITIONS....................................................49 7.1 Conditions to Obligations of Each Party to Effect the Merger........49 ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER............................50 8.1 Termination.........................................................50 8.2 Effect of Termination...............................................51 8.3 Fees and Expenses...................................................52 ARTICLE IX GENERAL PROVISIONS.............................................53 9.1 Non-Survival of Representations and Warranties......................53 9.2 Extension; Waiver...................................................53 9.3 Notices.............................................................53 9.4 Interpretation; Certain Defined Terms...............................54 9.5 Counterparts........................................................55 9.6 Entire Agreement; Third Party Beneficiaries.........................55 9.7 Severability........................................................55 9.8 Other Remedies; Specific Performance................................56 9.9 Governing Law; Venue................................................56 9.10 Rules of Construction...............................................56 9.11 Assignment..........................................................56 9.12 Amendment and Modification..........................................57 9.13 No Waiver...........................................................57 9.14 Waiver of Jury Trial................................................57 INDEX OF EXHIBITS Exhibit A Form of Stockholders Agreement Exhibit B Form of Purchaser Option Agreement Exhibit C Form of Non-Competition Agreement Exhibit D Form of Certificate of Incorporation of Surviving Corporation Exhibit E Forms of Termination Fee Note and Security Agreement AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), is entered into as of October 8, 2003 by and among Emulex Corporation, a Delaware corporation ("Parent"), Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent ("Purchaser"), and Vixel Corporation, a Delaware corporation (the "Company"). RECITALS A. The Board of Directors of each of Parent, Purchaser and the Company has approved, and deems it advisable and in the best interests of its respective stockholders to consummate, the acquisition of the Company by Parent upon the terms and subject to the conditions set forth herein. B. In furtherance thereof, it is proposed that Purchaser commence a cash tender offer (as it may be amended from time to time as permitted by this Agreement, the "Offer") to acquire (i) all shares of the issued and outstanding common stock, par value $.0015 per share (the "Common Stock"), of the Company (together with any associated preferred stock or other rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 15, 2000, between the Company and Computer Share Trust Company, Inc. (as the same has been amended through the date hereof, the "Rights Agreement")) and (ii) all shares of the issued and outstanding Series B convertible preferred stock, par value $.001 per share (the "Series B Preferred Stock" and, together with the Common Stock and the associated Rights, the "Shares"), for $10.00 per Share, net to the seller thereof in cash (such price, or any such higher price per Share as may be paid in the Offer, referred to herein as the "Offer Price"), subject to the terms and conditions of this Agreement. C. The Board of Directors of each of Parent, Purchaser and the Company has approved this Agreement, the Purchaser Option (as defined in Recital F) and the Transactions (as defined in Section 9.4(h)), including the Merger (as defined in Section 1.4) following the Offer in accordance with the Delaware General Corporation Law ("DGCL") and upon the terms and subject to the conditions set forth herein. Such approval of this Agreement, the Purchaser Option and the Transactions, including the Merger, by the Board of Directors of the Company (the "Company Board of Directors") was unanimous. D. The Company Board of Directors has unanimously determined that the consideration to be paid for each Share in the Offer and the Merger is fair to and in the best interests of the Company and the holders of such Shares and has recommended that the holders of such Shares accept the Offer and tender their Shares pursuant to the Offer and has further unanimously determined that this Agreement is advisable and recommended that, following the Offer, the stockholders of the Company approve and adopt this Agreement and each of the Transactions upon the terms and subject to the conditions set forth herein. E. Contemporaneously with the execution and delivery of this Agreement, and as a condition and inducement to Parent's and Purchaser's willingness to enter into this Agreement, certain stockholders of the Company (each, a "Stockholder") are entering into a Stockholders Agreement (the "Stockholders Agreement") in the form attached hereto as Exhibit A, pursuant to 1 which each such Stockholder has agreed, among other things, to tender his, her or its Shares in the Offer and to grant Parent a proxy with respect to the voting of such Shares in favor of the Merger upon the terms and subject to the conditions set forth therein. F. As a condition and further inducement to Parent and Purchaser to enter into this Agreement and incur the obligations set forth herein, concurrently with the execution and delivery of this Agreement, Purchaser and the Company are entering into a Stock Option Agreement in the form of Exhibit B hereto (the "Purchaser Option"), pursuant to which, among other things, the Company has granted Purchaser an option to purchase certain newly-issued shares of Common Stock and Series B Preferred Stock, subject to certain conditions. G. In addition, contemporaneously with the execution and delivery of this Agreement, and as a condition and inducement to Parent's and Purchaser's willingness to enter into this Agreement, certain employees of the Company are entering into Non-Competition Agreements with Parent in the forms attached hereto as Exhibit C (collectively, the "Non-Competition Agreements"). H. The Company, Parent and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with the Offer, the Merger and the other Transactions. NOW, THEREFORE, in consideration of the foregoing and the respective covenants, agreements, representations and warranties set forth herein, the parties agree as follows: ARTICLE I THE OFFER AND THE MERGER 1.1 The Offer. (a) Provided that this Agreement shall not have been terminated in accordance with Section 8.1 and none of the events set forth in Annex I hereto shall have occurred and be continuing, Purchaser shall commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the "Exchange Act")) the Offer as promptly as practicable on or after October 15, 2003 and the Offer shall remain open at least twenty (20) business days (as defined in Rule 14d-1(g)(3) of the Exchange Act) from commencement of the Offer (the "Initial Expiration Date"). The obligation of Purchaser to accept for payment and to pay for any Shares validly tendered and not withdrawn prior to the expiration of the Offer (as it may be extended in accordance with requirements of this Section 1.1(a)) shall be subject only to (i) there being validly tendered and not withdrawn prior to the expiration of the Offer (x) that number of shares of Common Stock which, together with any shares of Common Stock then owned by Parent or Purchaser (without giving effect to shares subject to purchase under the Purchaser Option or the Stockholders Agreements), represents greater than 50.1% of the shares of Common Stock outstanding on a Fully Diluted Basis and (y) there being validly tendered and not withdrawn prior to the expiration of the Offer that number of shares of Series B Preferred Stock which, together with any shares of Series B Preferred then owned by Parent or Purchaser (without giving effect to 2 shares subject to purchase under the Purchaser Option or the Stockholders Agreements), represents greater than 50.1% of the Series B Preferred Stock outstanding on a Fully Diluted Basis (clauses (x) and (y) together, the "Minimum Condition"); and (ii) the other conditions set forth in Annex I hereto. As used in this Agreement, "Fully Diluted Basis" shall refer, with respect to the Common Stock, to the number of shares of Common Stock issued and outstanding at any time after taking into account all shares of Common Stock issuable upon the conversion of convertible securities (other than the shares of Series B Preferred Stock) or upon the exercise of any options, warrants or other rights to purchase shares of Common Stock (whether or not exercised or converted at the time of determination) and, with respect to the Series B Preferred Stock, to the number of shares of Series B Preferred Stock issued and outstanding at any time after taking into account all shares of Series B Preferred Stock issuable upon the conversion of convertible securities or upon the exercise of any options, warrants or other rights to purchase shares of Series B Preferred Stock (whether or not converted at the time of determination). Subject to the prior satisfaction of the Minimum Condition and the prior satisfaction or waiver by Parent or Purchaser of the other conditions of the Offer set forth in Annex I hereto, Purchaser shall consummate the Offer in accordance with its terms and accept for payment and pay for all Shares tendered and not withdrawn promptly following the acceptance of Shares for payment pursuant to the Offer. The Offer shall be made by means of an offer to purchase (the "Offer to Purchase") that contains the terms set forth in this Agreement, the Minimum Condition and the other conditions set forth in Annex I hereto. Parent expressly reserves the right to waive any of such conditions, to increase the Offer Price and to make any other changes in the terms of the Offer; provided, however, that Purchaser shall not, and Parent shall cause Purchaser not to, waive the Minimum Condition, decrease the Offer Price, change the form of consideration payable in the Offer, decrease the number of Shares sought in the Offer, impose additional conditions to the Offer, extend the Offer beyond the Initial Expiration Date except as set forth below, or amend any other condition of the Offer in any manner adverse to the holders of the Shares, in each case without the prior written consent of the Company (such consent to be authorized by the Company Board of Directors or a duly authorized committee thereof). Notwithstanding the foregoing, Purchaser may, without the consent of the Company, (i) if, at any scheduled expiration of the Offer any of the conditions to Purchaser's obligation to accept Shares for payment shall not be satisfied or waived, extend the Offer beyond the Initial Expiration Date for a time period reasonably necessary to permit such condition to be satisfied, (ii) extend the Offer for any period required by any rule, regulation or interpretation of the United States Securities and Exchange Commission ("SEC"), or the staff thereof, applicable to the Offer or (iii) extend (or re-extend) the Offer for an aggregate period of not more than five (5) business days beyond the latest applicable date that would otherwise be permitted under clause (i) or (ii) of this sentence, if, as of such date, all of the conditions to Purchaser's obligations to accept Shares for payment are satisfied or waived, but there shall not have been validly tendered and not withdrawn pursuant to the Offer that number of Shares necessary on a Fully Diluted Basis to permit the Merger to be effected without a meeting of the Company's stockholders in accordance with the DGCL. Purchaser may, without the consent of the Company, extend the Offer in accordance with Rule 14d-11 under the Exchange Act. In addition, the Offer Price may be increased and the Offer may be extended to the extent required by law in connection with such increase, in each case without the consent of the Company. (b) As soon as practicable after the date the Offer is commenced, Parent and Purchaser shall file with the SEC, pursuant to Regulation M-A under the Exchange Act 3 ("Regulation M-A"), a Tender Offer Statement on Schedule TO with respect to the Offer (together with all amendments, supplements and exhibits thereto, the "Schedule TO"). The Schedule TO shall include the summary term sheet required under Regulation M-A and, as exhibits, the Offer to Purchase and a form of letter of transmittal and summary advertisement (collectively, together with any amendments and supplements thereto, the "Offer Documents"). The Company hereby consents to the inclusion in the Offer Documents of the recommendation referred to in clause (c) of Section 3.4 and the approval of the Board of Directors referred to in Section 3.4. Parent and Purchaser agree to take all steps necessary to cause the Offer Documents to be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Parent and Purchaser, on the one hand, and the Company, on the other hand, agree to promptly correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect or as otherwise required by law. Parent and Purchaser further agree to take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given a reasonable opportunity to review the Schedule TO before it is filed with the SEC. In addition, Parent and Purchaser agree to provide the Company and its counsel with any comments, whether written or oral, that Parent, Purchaser or their counsel may receive from time to time from the SEC or its staff with respect to the Offer Documents promptly after receipt of such comments, and any written or oral responses thereto. 1.2 Company Actions. (a) On the date the Offer is commenced, the Company shall, in a manner that complies with Rule 14d-9 under the Exchange Act, file with the SEC a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with all amendments, supplements and exhibits thereto, the "Schedule 14D-9") which shall, subject to the provisions of Section 5.2, contain the recommendation referred to in clause (c) of Section 3.4 and the approval of the Board of Directors referred to in Section 3.4. The Company further agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. The Company, on the one hand, and Parent and Purchaser, on the other hand, agree to promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect or as otherwise required by law. The Company agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to holders of the Shares, in each case as and to the extent required by applicable federal securities laws. Parent, Purchaser and their counsel shall be given the opportunity to review and comment on the Schedule 14D-9 and any amendment thereto before it is filed with the SEC. In addition, the Company agrees to provide Parent, Purchaser and their counsel in writing with any comments, whether written or oral, that the Company or its counsel may receive from time to time from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments, and to consult with Parent, Purchaser and their counsel prior to responding to any such comments, either in written or oral form. (b) In connection with the Offer, the Company shall promptly furnish or cause to be furnished to Parent or Purchaser mailing labels, security position listings and all available 4 listings and computer files containing the names and addresses of the record holders of the Shares as of a recent date, and shall promptly furnish Parent or Purchaser with such information and assistance (including, but not limited to, lists of holders of the Shares, updated periodically, and their addresses, mailing labels and lists of security positions) as Parent or Purchaser or their agent(s) may reasonably request. 1.3 Directors. (a) Effective upon the purchase of and payment for any Shares by Parent or Purchaser or any of their affiliates pursuant to the Offer (the "Appointment Time"), Parent shall be entitled to elect or designate such number of directors, rounded up to the next whole number, on the Company Board of Directors as is equal to the product of the total number of directors on the Company Board of Directors (giving effect to the directors elected or designated by Parent pursuant to this sentence) multiplied by the percentage that the aggregate number of Shares beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by Purchaser, Parent and any of their affiliates bears to the total number of Shares then outstanding. The Company shall, upon Parent's request, use all reasonable efforts to promptly increase the size of the Company Board of Directors, including by amending the Bylaws of the Company if necessary so as to increase the size of the Company Board of Directors, or use all reasonable efforts to promptly secure the written resignations of such number of its incumbent directors, or both, as is necessary to enable Parent's designees to be so elected or designated to the Company Board of Directors, and shall use all reasonable efforts to cause Parent's designees to be so elected or designated at the Appointment Time. At the Appointment Time, the Company shall, upon Parent's request, also use all reasonable efforts to cause persons elected or designated by Parent to constitute the same percentage (rounded up to the next whole number) as is on the Company Board of Directors of (i) each committee of the Company Board of Directors; (ii) each board of directors (or similar body) of each Company subsidiary; and (iii) each committee (or similar body) of each such board, in each case only to the extent permitted by applicable law or the rules of any stock exchange or trading market on which the Company's common stock is listed or traded. The Company shall promptly upon execution of this Agreement take all actions required pursuant to such Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder in order to fulfill its obligations under this Section 1.3(a), including, but not limited to, mailing to stockholders (together with the Schedule 14D-9) the information required by Section 14(f) and Rule 14f-l as is necessary to enable Parent's designees to be elected or designated to the Company Board of Directors. Parent or Purchaser shall supply the Company information with respect to either of them and their nominees, officers, directors and affiliates to the extent required by Section 14(f) and Rule 14f-l. The provisions of this Section 1.3(a) are in addition to and shall not limit any rights that any of Purchaser, Parent or any of their respective affiliates may have as a holder or beneficial owner of Shares as a matter of law with respect to the election of directors or otherwise. (b) In the event that Parent's designees are elected or designated to the Company Board of Directors, then, until the Effective Time (as defined in Section 1.5), the Company shall cause the Company Board of Directors to have at least two (2) directors who are directors on the date hereof including at least two (2) directors, or such other number as may be required by the rules of the Nasdaq Stock Market, Inc. (the "Nasdaq"), who are independent directors for purposes of the continued listing requirements of Nasdaq (the "Independent Directors"); 5 provided, however, that if any Independent Director is unable to serve due to death or disability, the remaining Independent Director(s) shall be entitled to elect or designate another person (or persons) who serves as a director on the date hereof to fill such vacancy, and such person (or persons) shall be deemed to be an Independent Director for purposes of this Agreement. If no Independent Director then remains, the other directors shall designate two (2) persons, or such other number as may be required by the rules of the Nasdaq, who are directors on the date hereof (or, in the event there shall be less than two (2) directors, or such other number as may be required by the rules of the Nasdaq, available to fill such vacancies as a result of such persons' deaths, disabilities or refusals to serve, such smaller number of persons who are directors on the date hereof) to fill such vacancies and such persons shall be deemed Independent Directors for purposes of this Agreement. Notwithstanding anything in this Agreement to the contrary, if Parent's designees constitute a majority of the Company Board of Directors after the acceptance for payment of Shares pursuant to the Offer and prior to the Effective Time, then the affirmative vote of a majority of the Independent Directors (or if only one exists, then the vote of such Independent Director) shall be required to (i) amend or terminate this Agreement by the Company; (ii) exercise or waive any of the Company's rights, benefits or remedies hereunder, if such action would materially and adversely affect holders of Shares other than Parent or Purchaser; (iii) amend the Certificate of Incorporation or Bylaws of the Company if such action would materially and adversely affect holders of Shares other than Parent or Purchaser; or (iv) take any other action of the Company Board of Directors under or in connection with this Agreement if such action would materially and adversely affect holders of Shares other than Parent or Purchaser; provided, however, that if there shall be no Independent Directors as a result of such persons' deaths, disabilities or refusal to serve, then such actions may be effected by a 66-2/3% vote of the entire Company Board of Directors. The Independent Directors shall have the authority to retain such counsel and other advisors at the expense of the Company as determined appropriate by a majority of the Independent Directors. 1.4 The Merger. (a) Subject to the terms and conditions of this Agreement, at the Effective Time, the Company and Purchaser shall consummate a merger (the "Merger") in accordance with the DGCL pursuant to which (i) Purchaser shall be merged with and into the Company and the separate corporate existence of Purchaser shall thereupon cease; (ii) the Company shall be the successor or surviving corporation in the Merger and shall continue to be governed by the laws of the State of Delaware; (iii) the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger; and (iv) the Company shall succeed to and assume all the rights and obligations of Purchaser. The corporation surviving the Merger is sometimes hereinafter referred to as the "Surviving Corporation." The Merger shall have the effects set forth in the DGCL. (b) The Certificate of Incorporation of the Surviving Corporation shall be amended in the Merger to read substantially as set forth on Exhibit D hereto. (c) The Bylaws of Purchaser, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation, except as to the name of the Surviving Corporation, until thereafter amended as provided by the DGCL, the Certificate of Incorporation of the Surviving Corporation and such Bylaws. 6 1.5 Effective Time. Parent, Purchaser and the Company shall cause an appropriate certificate of merger or certificate of ownership and merger (the "Certificate of Merger") to be executed and filed on the Closing Date (as defined in Section 1.6) (or on such other date as Parent and the Company may agree) with the Secretary of State of the State of Delaware as provided in the DGCL. The Merger shall become effective at the time and on the date on which the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or such time and date as is agreed upon by the parties and specified in the Certificate of Merger, such time and date hereinafter referred to as the "Effective Time." 1.6 Closing. The closing of the Merger (the "Closing") will take place at 9:00 a.m. (California time) on a date to be specified by the parties, such date to be no later than the second business day after satisfaction or waiver of all of the conditions set forth in Article VII (the "Closing Date"), at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Avenue, Suite 1100, Palo Alto, California 94301, unless another date or place is agreed to in writing by the parties hereto. 1.7 Directors and Officers of the Surviving Corporation. The directors of Purchaser immediately prior to the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation and the officers of Purchaser immediately prior to the Effective Time shall, from and after the Effective Time, be officers of the Surviving Corporation, in each case until their respective successors shall have been duly elected, designated or qualified, or until their earlier death, resignation or removal in accordance with the Surviving Corporation's Certificate of Incorporation and Bylaws. 1.8 Subsequent Actions. If at any time after the Effective Time the Surviving Corporation shall determine, in its sole discretion, or shall be advised, that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of either of the Company or Purchaser acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger or otherwise to carry out this Agreement, then the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of either the Company or Purchaser, all such deeds, bills of sale, instruments of conveyance, assignments and assurances and to take and do, in the name and on behalf of each such corporation or otherwise, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title or interest in, to and under such rights, properties or assets in the Surviving Corporation or otherwise to carry out this Agreement. 1.9 Stockholders' Meeting. (a) If required by applicable law in order to consummate the Merger, the Company, acting through the Company Board of Directors, shall promptly, in accordance with applicable law and the Company's Certificate of Incorporation and Bylaws: (i) duly call, give notice of, convene and hold a special meeting of its stockholders to consider and take action upon the approval and adoption of this Agreement and the approval of the Merger (the "Special Meeting") as soon as reasonably 7 practicable following the acceptance for payment and purchase of Shares by Purchaser pursuant to the Offer for the purpose of considering and taking action upon this Agreement; (ii) prepare and file with the SEC under the Exchange Act a preliminary proxy or information statement relating to the Merger and this Agreement and use all reasonable efforts to obtain and furnish the information required to be included by the SEC in the Proxy Statement (as hereinafter defined) and, after Parent and its counsel shall have had a reasonable opportunity to review and comment on the Proxy Statement, respond promptly to any comments made by the SEC with respect to the preliminary proxy or information statement and cause a definitive proxy or information statement (the "Proxy Statement") to be mailed to its stockholders as promptly as practicable; (iii) include in the Proxy Statement the unanimous recommendation of the Company Board of Directors that stockholders of the Company vote in favor of the approval of the Merger and the approval and adoption of this Agreement; (iv) use all reasonable efforts to solicit from holders of Shares proxies in favor of the Merger and take all other action reasonably necessary or, in the reasonable opinion of Parent and Purchaser, advisable to secure the approval of stockholders required by the DGCL and any other applicable law and the Company's Certificate of Incorporation and Bylaws (if applicable) to effect the Merger; provided, that the obligations set forth in clauses (iii) and (iv) of this Section 1.9(a) shall be subject to Sections 1.10 and 5.2; and (v) at or prior to the Closing, deliver to Parent a certificate of its corporate secretary setting forth the voting results from the Special Meeting. (b) Parent agrees to vote, or cause to be voted, all of the Shares then owned by it, Purchaser or any of its other subsidiaries in favor of the approval of the Merger and the adoption of this Agreement. 1.10 Merger Without Meeting of Stockholders. Notwithstanding Section 1.9, in the event that Parent or Purchaser shall acquire at least ninety percent (90%) of the outstanding shares of each class of capital stock of the Company entitled to vote on the Merger, pursuant to the Offer or otherwise, the parties hereto agree that, subject to Article VII, Parent and Purchaser shall take, or cause to be taken, all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such acquisition, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL. 8 ARTICLE II CONVERSION OF SECURITIES 2.1 Conversion of Capital Stock. As of the Effective Time, by virtue of the Merger and without any action on the part of the holders of any shares of common stock, par value $0.01 per share, of Purchaser ("Purchaser Common Stock"): (a) Purchaser Common Stock. Each issued and outstanding share of Purchaser Common Stock shall be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation. (b) Cancellation of Treasury Stock and Parent-Owned Stock. All Shares that are owned by the Company as treasury stock and any Shares owned by Parent, Purchaser or any other wholly-owned subsidiary of Parent shall automatically be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor. (c) Conversion of Shares. Each issued and outstanding Share (other than Shares to be cancelled in accordance with Section 2.1(b) and other than Dissenting Shares (as defined in Section 2.3(a))) shall be converted into the right to receive the Offer Price, payable to the holder thereof in cash, without interest and subject to withholding in accordance with Section 2.7 (the "Merger Consideration"). From and after the Effective Time, all such Shares shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration therefor upon the surrender of such certificate in accordance with Section 2.2. 2.2 Exchange of Certificates. (a) Paying Agent. Parent shall designate a bank or trust company reasonably acceptable to the Company to act as agent for the holders of Shares in connection with the Merger (the "Paying Agent") and to receive the funds to which holders of Shares shall become entitled pursuant to Section 2.1(c). Promptly after the Effective Time, Parent or Purchaser shall deposit, or cause to be deposited, with the Paying Agent cash in immediately available next-day funds in an amount equal to the aggregate Merger Consideration (the "Payment Fund"). For purposes of determining the amount of Merger Consideration to be so deposited, Parent and Purchaser shall assume that no stockholder of the Company will perfect any right to appraisal of his, her or its Shares. Such funds shall be invested by the Paying Agent as directed by Parent or the Surviving Corporation, in its sole discretion, pending payment thereof by the Paying Agent to the holders of the Shares. In the event the cash in the Payment Fund shall be insufficient to fully satisfy all of the payment obligations to be made by the Paying Agent thereunder, then Parent and the Surviving Corporation shall promptly deposit cash in the Payment Fund in an amount which is equal to the deficiency. Earnings from such investments shall be the sole and exclusive property of Parent and the Surviving Corporation, and no part of such earnings shall accrue to the benefit of holders of Shares. 9 (b) Exchange Procedures. Promptly after the Effective Time, the Paying Agent shall mail to each holder of record of a certificate or certificates, which immediately prior to the Effective Time represented outstanding Shares (the "Certificates"), whose shares were converted pursuant to Section 0 into the right to receive the Merger Consideration (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent and shall be in such form and have such other provisions as Parent may reasonably specify); and (ii) instructions for effecting the surrender of the Certificates in exchange for payment of the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed and properly completed, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration, without interest, for each Share formerly represented by such Certificate and the Certificate so surrendered shall forthwith be cancelled. Until surrendered as contemplated by this Section 2.2, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration in cash as contemplated by this Section 2.2, without interest thereon, and shall not evidence any interest in, or any right to exercise the rights of a stockholder or other equity holder of the Company or the Surviving Corporation. Notwithstanding the foregoing, any surrendered Certificate that represents Dissenting Shares shall be returned to the person surrendering such Certificate. (c) Transfer Books; No Further Ownership Rights in Shares. At the Effective Time, there shall be no further registration of transfers of Shares on the records of the Company. From and after the Effective Time, the holders of Certificates evidencing ownership of Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares, except as otherwise provided for herein or by applicable law. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Article II. (d) Termination of Fund; No Liability. At any time following one (1) year after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) made available to the Paying Agent and not disbursed (or for which disbursement is pending subject only to the Paying Agent's routine administrative procedures) to holders of Certificates, and thereafter such holders shall be entitled to look only to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) only as general creditors thereof with respect to the Merger Consideration payable upon due surrender of their Certificates, without any interest thereon. Notwithstanding the foregoing, none of Parent, the Surviving Corporation or the Paying Agent shall be liable to any holder of a Certificate for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law to the extent that such law requires such delivery. (e) Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such person of a bond in such amount as Parent may reasonably direct as indemnity against any claim that may be made 10 against it with respect to such Certificate, the Paying Agent shall pay in exchange for such lost, stolen or destroyed Certificate the applicable Merger Consideration with respect thereto. 2.3 Dissenting Shares. (a) Notwithstanding anything in this Agreement to the contrary, Shares outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing and who complies with Section 262 of the DGCL (the "Dissenting Shares") shall not be converted into a right to receive the Merger Consideration, unless such holder fails to perfect or withdraws or otherwise loses his, her or its right to appraisal. From and after the Effective Time, a stockholder who has properly exercised such appraisal rights shall not have any rights of a stockholder of the Company or the Surviving Corporation with respect to such Shares, except those provided under Section 262 of the DGCL. A holder of Dissenting Shares shall be entitled to receive payment of the appraised value of such Shares held by him or her in accordance with Section 262 of the DGCL, unless, after the Effective Time, such holder fails to perfect or withdraws or loses his, her or its right to appraisal, in which case such Shares shall be converted into and represent only the right to receive the Merger Consideration, without interest thereon, upon surrender of the Certificate or Certificates representing such Shares pursuant to Section 2.2. (b) The Company shall give Parent (i) prompt notice of any written demands for appraisal of any Shares, attempted withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company relating to rights of appraisal and (ii) the opportunity to participate in the conduct of all negotiations and proceedings with respect to demands for appraisal under the DGCL. Except with the prior written consent of Parent, the Company shall not voluntarily make any payment with respect to any demands for appraisal or settle or offer to settle any such demands for appraisal. 2.4 Stock Option and Other Plans. (a) As of the Effective Time, each outstanding stock option, stock equivalent right or right to acquire Shares (a "Company Option" or "Company Options") granted under the Company's Amended and Restated 1995 Stock Option Plan, 1999 Equity Incentive Plan (as amended), 2000 Non-Officer Equity Incentive Plan and 1999 Employee Stock Purchase Plan ("Company ESPP") (collectively, the "Option Plans"), whether or not then exercisable or vested, shall (without any action on the part of the Company) automatically be converted into an option to purchase Parent common stock, par value $.01 per share ("Parent Common Stock"), in accordance with this Section 2.4(a). Each Company Option so converted shall continue to have, and be subject to, similar terms and conditions (including vesting schedule) as are currently applicable to each such Company Option, except that, as of the Effective Time, (i) each Company Option shall be exercisable (or shall become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Option Exchange Ratio (defined below), rounded to the nearest whole number, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such Company Option so converted shall be equal to the quotient determined by dividing the exercise price per share of Common Stock at which such Company 11 Option was exercisable immediately prior to the Effective Time by the Option Exchange Ratio, rounded up to the nearest whole cent. As used in this Agreement, "Option Exchange Ratio" means the quotient determined by dividing the Merger Consideration by the average closing prices of Parent Common Stock on the New York Stock Exchange, Inc. ("NYSE") Composite Transaction Tape for the five business day period ending two days prior the Effective Time. Notwithstanding the foregoing, the conversion of any Company Options which are "incentive stock options," within the meaning of Section 422 of the Code, into options to purchase Parent Common stock shall be made so as not to constitute a "modification" of such Company Options within the meaning of Section 424 of the Code. (b) (i) As of the Effective Time, except as provided in this Section 2.4, all rights under any provision of the Option Plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any subsidiary of the Company shall be cancelled. The Company shall take all action necessary to ensure that, as of and after the Effective Time, except as provided in this Section 2.4, no person shall have any right under the Option Plans or any other plan, program or arrangement with respect to equity securities of the Company, the Surviving Corporation or any subsidiary thereof and (ii) upon completion of the existing Offering (as defined in the Company ESPP), the Company shall not permit a new Offering to commence under the Company ESPP without the prior written consent of Parent. (c) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon the exercise of Company Options assumed in accordance with Section 2.4(a). Promptly after the Effective Time, Parent shall file a registration statement on Form S-8 (or any successor or other appropriate forms) with respect to the shares of Parent Common Stock subject to any assumed Company Options. (d) At or before the Effective Time, the Company shall cause to be effected any necessary amendments to the Option Plans to give effect to the foregoing provisions of this Section 2.4. 2.5 Company Warrants. If permitted under the terms of the applicable governing instruments, the Company shall take all necessary action such that, at the Effective Time, each holder of an outstanding warrant to purchase shares of Common Stock (collectively, the "Company Warrants") shall have the right to receive, in lieu of the shares of Common Stock theretofore issuable upon exercise of such Company Warrant, an amount per share equal to the excess of the Merger Consideration over the exercise price per share of such Company Warrant; provided, however, that to the extent the foregoing is not permissible under the terms of any such Company Warrant, each such Company Warrant shall, at the Effective Time, be deemed to constitute a warrant to acquire, upon payment of the aggregate exercise price of such Company Warrant, and otherwise on the same terms and conditions as were applicable under such Company Warrant prior to the Effective Time, the aggregate Merger Consideration that the holder of such Company Warrant would have been entitled to receive pursuant to Article II of this Agreement had such holder exercised such Company Warrant in full immediately prior to the Effective Time. The Company shall deliver to each holder of a Company Warrant timely notice of the Merger in accordance with the provisions thereof. The Company shall take all necessary actions to provide that as of the Effective Time no holder of a Company Warrant will 12 have the right to receive shares of common stock of the Surviving Corporation upon the exercise of any Company Warrant. 2.6 Section 16. Parent, the Surviving Corporation and the Company shall each take all such steps as may be required to provide that, with respect to each Section 16 Affiliate (as defined below), (a) the transactions contemplated by this section, and (b) any other dispositions of Company equity securities (including derivative securities) or other acquisitions of Parent equity securities (including derivative securities) in connection with this Agreement, shall be exempt under Rule 16b-3 promulgated under the Exchange Act, in accordance with the terms and conditions set forth in that certain No-Action Letter, dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate, Meagher & Flom LLP. For purposes of this Agreement, "Section 16 Affiliate" shall mean each individual who (a) immediately prior to the Effective Time is a director or officer of the Company or (b) at the Effective Time will become a director or officer of Parent or the Surviving Corporation. 2.7 Withholding. The Surviving Corporation, the Paying Agent, and Parent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Shares such amounts as the Surviving Corporation, the Paying Agent, or Parent has determined is required to be deducted and withheld with respect to the making of such payment under any provision of Federal, state, local or foreign tax law. To the extent that amounts are so withheld by the Surviving Corporation, the Paying Agent, or Parent such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares in respect of which such deduction and withholding was made by the Surviving Corporation, the Paying Agent, or Parent, as the case may be. 2.8 Transfer Taxes. If payment of the Offer Price payable to a holder of Shares pursuant to the Offer or the Merger is to be made to a person other than the person in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the person requesting such payment shall have paid all transfer and other Taxes required by reason of the issuance to a person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of Parent that such Tax either has been paid or is not applicable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as disclosed in that section of the letter of even date herewith delivered by the Company to Parent and Purchaser prior to the execution and delivery of this Agreement (the "Company Disclosure Letter") corresponding to the section of this Agreement to which any of the following representations or warranties pertain, the Company represents and warrants to Parent and Purchaser as set forth below. Each exception set forth in the Company Disclosure Letter is identified by reference to, or has been grouped under a heading referring to, a specific individual section of this Agreement and relates only to such section except where it is readily apparent from the text that such disclosure is relevant to such other sections. 13 3.1 Organization, Standing and Power. (a) The Company and each of its subsidiaries is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each of the Company and its subsidiaries has all corporate power and all governmental licenses, authorizations, permits, consents and approvals to own, lease and operate its properties and to carry on its business as now being conducted and as currently proposed to be conducted. The Company and each of its subsidiaries is duly qualified to do business as a foreign corporation where the character of the property owned or leased by it or the business conduct or nature of its activities makes such qualification necessary and is in good standing in each applicable jurisdiction. Section 3.1(b) of the Company Disclosure Letter sets forth the name, jurisdiction of incorporation and outstanding capital of each Company subsidiary and the jurisdictions in which the Company and each of its subsidiaries is qualified to do business. (b) The Company has delivered to Parent a true and correct copy of the Certificate of Incorporation and Bylaws, or other equivalent charter documents, as applicable, of the Company and each of its subsidiaries, each as amended to date. Neither the Company nor any of its subsidiaries is in violation of any of the provisions of its Certificate of Incorporation or Bylaws or equivalent charter documents, as applicable. Except for the entities identified in Section 3.1(b) of the Company Disclosure Letter, the Company does not directly or indirectly own any equity or similar interest in, or any interest convertible or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity. 3.2 Capitalization. (a) The authorized capital stock of the Company consists of (i) 60,000,000 shares of Common Stock, and (ii) 5,000,000 shares of preferred stock, par value $.001 per share ("Preferred Stock" ), of which 600,000 are designated as Series A Junior Participating Preferred Stock (the "Series A Preferred Stock") and 4,400,000 are designated as the Series B Preferred Stock (the Series B Preferred Stock together with the Series A Preferred Stock and the Common Stock, the "Company Capital Stock"). As of the close of business on September 28, 2003, (i) 24,696,691 shares of Common Stock were issued and outstanding (excluding 1,895,426 shares of Common Stock issued and held in the treasury of the Company), (ii) no shares of Series A Preferred Stock were issued and outstanding, (iii) 2,947,651 shares of Series B Preferred Stock were issued and outstanding, (iv) 1,895,426 shares of Common Stock and no shares of Preferred Stock were issued and held in the treasury of the Company, (v) 7,184,688 shares of Common Stock were reserved for issuance pursuant to outstanding Company Options, (vi) 1,277,183 shares of Common Stock were subject to issuance under Company Warrants and (vii) 114,539 shares of Common Stock were available for issuance in the purchase period ending October 31, 2003 under the Company ESPP. All of the outstanding shares of Company Capital Stock are, and all shares of Company Capital Stock which may be issued pursuant to the exercise of outstanding Company Options and Company Warrants will be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and non-assessable. The rights, preferences and privileges of the Preferred Stock are as set forth in the Certificate of Incorporation of the Company and in the Certificate of Designation for each of the Series A 14 Preferred Stock and Series B Preferred Stock. None of the outstanding securities of the Company has been issued in violation of any federal or state securities laws. (b) Except as set forth above, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive or similar rights, bonds, debentures, notes or other indebtedness having general voting rights or debt convertible into securities having such rights ("Voting Debt") or subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company obligating the Company to issue, transfer or sell or cause to be issued, transferred, sold or repurchased any options or shares of capital stock or Voting Debt of, or other equity interest in, the Company or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment and (iii) there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any Company Capital Stock, or other capital stock of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any other entity. All of the outstanding capital stock of each subsidiary of the Company is owned directly or indirectly by the Company and each such share owned by the Company or any of its subsidiaries, is free and clear of all liens, charges, security interests, options, claims, mortgages, pledges, assessments, charges, adverse claims, rights of others or restrictions (whether on voting, sale, transfer, disposition or otherwise) or other encumbrances or restrictions of any nature whatsoever whether imposed by agreement, understanding, law or equity, or any conditional sale contract, title retention contract or other contract to give or refrain from giving any of the foregoing ("Encumbrances") and is validly issued, fully paid and nonassessable. There are no outstanding options, rights or agreements of any kind relating to the issuance, sale or transfer of any capital stock or other equity securities of such Company subsidiary to any person other than the Company. (c) There are no voting trusts or other agreements or understandings to which the Company is a party with respect to the voting of the Company Capital Stock. (d) Following the Effective Time, no holder of Company Options or Company Warrants will have any right to receive shares of common stock of the Surviving Corporation upon exercise of Company Options or Company Warrants. (e) Except as disclosed in Section 3.2(e) of the Company Disclosure Letter, no Indebtedness of the Company contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by the Company, or (iii) the ability of the Company to grant any lien on its properties or assets. As used in this Agreement, "Indebtedness" means (i) all indebtedness for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (ii) any other indebtedness that is evidenced by a note, bond, debenture or similar instrument, (iii) all obligations under financing leases, (iv) all obligations in respect of acceptances issued or created, (v) all liabilities secured by any lien on any property and (vi) all guarantee obligations. 15 (f) Section 3.2(f) of the Company Disclosure Letter lists all Company Options outstanding as of the date hereof, the name of the holder of each Company Option, the date of grant and the exercise price of such Company Option, the number of shares of Common Stock as to which such Company Option has vested, the vesting schedule for such Company Option, a summary of any acceleration provisions or milestones, and whether the exercisability of such Company Option will be accelerated in any way by the Transactions, and indicates the extent of acceleration, if any. Since July 30, 2003, the Company has not granted any Company Options to officers or directors of the Company. (g) No agreement or understanding requires consent or approval from the holder of any Company Option or Company Warrant to effectuate the terms of this Agreement. The Company has previously provided true and complete copies of each Company Warrant to Parent. 3.3 Authorization; Validity of Agreement; Company Action. The Company has the requisite power and authority to enter into this Agreement and the Purchaser Option and to consummate the Transactions. The execution and delivery of this Agreement (including the exhibits hereto) and the Purchaser Option and the consummation of the Transactions have each been duly authorized by all necessary corporate action on the part of the Company, subject only to the approval and adoption of this Agreement and approval of the Merger by the Company's stockholders. Each of this Agreement and the Purchaser Option has been duly executed and delivered by the Company and, assuming due and valid authorization, execution and delivery thereof by Parent and Purchaser, constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except to the extent that enforceability may be limited by the effect, if any, of (i) any applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting the enforcement of creditors' rights generally, and (ii) general principles of equity, regardless of whether such enforceability is considered in a proceeding at law or in equity. 3.4 Board Approvals. The Company Board of Directors, at a meeting duly called and held, has unanimously (a) determined that each of this Agreement, the Purchaser Option, the Offer and the Merger are fair to and in the best interests of the Company and the holders of the Shares, (b) duly and validly approved and taken all corporate action required to be taken by the Company Board of Directors to authorize the consummation of the Transactions, (c) recommended that the holders of Shares accept the Offer, tender their Shares to Purchaser pursuant to the Offer, and (d) determined that this Agreement is advisable and recommended that, following the Offer, the stockholders of the Company approve and adopt this Agreement and each of the Transactions, and none of the aforesaid actions by the Company Board of Directors has been amended, rescinded or modified. The action taken by the Company Board of Directors constitutes approval of the Transactions (including each of the Offer and the Merger) by the Company Board of Directors under Section 203 of the DGCL, and no other state takeover statute is applicable to the Transactions. 3.5 Required Vote. Assuming the accuracy of Parent's representations set forth in Section 4.7, the affirmative vote of the holders of a majority of the outstanding Shares (including the Series B Preferred Stock voting on an as-converted basis) is the only vote of the holders of any class or series of the Company's capital stock necessary to approve the Merger, and no vote of any class or series of the Company's capital stock is necessary to approve any of the 16 Transactions other than the Merger. Each share of Series B Preferred shall be entitled to 0.89 of a vote. 3.6 Consents and Approvals; No Violations. The execution, delivery and performance of this Agreement and the Purchaser Option by the Company do not, and the consummation of the Transactions or compliance by the Company with any of the provisions hereof or thereof will not, conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under (a) any provision of the Certificate of Incorporation or Bylaws, or other equivalent charter documents, as applicable, of the Company or any of its subsidiaries (b) any Company Agreement (as defined in Section 3.27) or (c) any material permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or any of its properties or assets. No notice to, filing with, and no permit, authorization, consent or approval of, any arbitrator, court, nation, government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial regulatory or administrative functions of, or pertaining to, government (a "Governmental Entity"), or any private third party (including, without limitation, consents from parties to any Company Agreement is necessary for the consummation by the Company of the Transactions, except for (a) compliance with any applicable requirements of the Exchange Act, (b) any filings that may be required under the DGCL and appropriate documents with relevant authorities of other states which the Company and/or its subsidiaries are qualified to do business in connection with the Merger, (c) the filing with the SEC and/or the Nasdaq of (i) the Schedule 14D-9, (ii) the Proxy Statement if stockholder approval is required by law and (iii) such reports under Section 13(a) of the Exchange Act as may be required in connection with this Agreement, the Purchaser Option, the Stockholder Agreement and the Transactions, (d) such filings and approvals as may be required by any applicable state securities, blue sky or takeover laws, filings, permits, authorizations, consents and approvals as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions, (e) the consents listed on Section 3.6 of the Company Disclosure Letter, and (f) such other consents, authorizations, filings, approvals and registrations which if not obtained or made would not be material to the Company or Parent or have a material effect on the ability of the parties hereto to consummate the Offer and the Merger within the time frame in which the Offer and the Merger would otherwise be consummated in the absence of the need for such consent, approval, order, authorization, registration, declaration or filing. 3.7 SEC Filings; Company Financial Statements. (a) The Company has filed all forms, reports, schedules, statements and other documents required to be filed by the Company with the SEC since October 1, 1999 under the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act") and has made available to Parent such forms, reports and documents in the form filed with the SEC. All such required forms, reports and documents (including those that the Company may file subsequent to the date hereof) are referred to herein as the "Company SEC Reports." As of their respective dates, the Company SEC Reports (i) complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC thereunder applicable to such Company SEC Reports and 17 (ii) did not at the time they were filed (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact or disclose any matter or proceeding required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. None of the Company's subsidiaries is required to file any forms, reports or other documents with the SEC or similar regulatory body. Between the date of this Agreement and the Closing Date, the Company will timely file with the SEC all documents required to be filed by it under the Exchange Act. (b) Each of the consolidated financial statements (including, in each case, any related notes thereto) contained in the Company SEC Reports (the "Company Financials"), including each Company SEC Report filed after the date hereof until the Closing, (i) was prepared from, are in accordance with and accurately reflect in all material respects, the Company's books and records as of the times and for the periods referred to therein, (ii) complied in all material respects with the published rules and regulations of the SEC with respect thereto, (iii) was prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited interim financial statements, as may be permitted by the SEC on Form 10-Q under the Exchange Act), (iv) fairly presented the consolidated financial position of the Company and its subsidiaries as at the respective dates thereof and the consolidated results of the Company's operations and cash flows for the periods indicated, except that the unaudited interim financial statements may not contain footnotes and were or are subject to normal and recurring year-end adjustments and (v) was prepared from and in accordance with the Company's books and records. The balance sheet of the Company contained in the Company SEC Reports as of June 29, 2003 (the "Balance Sheet Date") as filed with the SEC before the date hereof is hereinafter referred to as the "Company Balance Sheet." (c) The Company has heretofore furnished to Parent and Purchaser a complete and correct copy of any amendments or modifications, which have not yet been filed with the SEC but which are required to be filed, to agreements, documents or other instruments which previously had been filed by the Company with the SEC pursuant to the Securities Act or the Exchange Act. All public announcements in a news release issued by the Dow Jones news service, PR Newswire or any equivalent service made by the Company since the Balance Sheet Date did not and will not contain any untrue statement of a material fact or omit to state a material fact or disclose any matter or proceeding required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) Section 3.7(d) of the Company Disclosure Letter sets forth a complete list of all effective registration statements filed on Form S-3 or Form S-8 or otherwise relying on Rule 415 under the Securities Act. (e) The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 promulgated under the Exchange Act) designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Chief Executive Officer and Chief Financial Officer. To the Company's knowledge, there are no significant deficiencies or material weaknesses in the design 18 or operation of Company's internal controls which could adversely affect Company's ability to record, process, summarize and report financial data. To the Company's knowledge, there is no fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls. 3.8 Absence of Certain Changes. Except as disclosed in Section 3.8 of the Company Disclosure Letter, from the Balance Sheet Date to the date hereof, the Company and its subsidiaries have not: (a) suffered any Material Adverse Effect or any event or change which is reasonably expected to have or constitute a Material Adverse Effect; (b) incurred any liabilities or obligations (absolute, accrued, contingent or otherwise), except items incurred in the ordinary course of business and consistent with past practice, which exceed $150,000 in the aggregate; (c) paid, discharged or satisfied any claims, liabilities or obligations (absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities and obligations reflected or reserved against in the Company Balance Sheet or incurred in the ordinary course of business and consistent with past practice since the Balance Sheet Date; (d) permitted or allowed any of their properties or assets (real, personal or mixed, tangible or intangible) to be subjected to any Encumbrances, except for liens for current taxes not yet due or liens the incurrence of which would not be reasonably expected to have a Material Adverse Effect on the Company; (e) cancelled any debts or waived any claims or rights of material value; (f) sold, transferred, or otherwise disposed of any of their material properties or assets (real, personal or mixed, tangible or intangible), except in the ordinary course of business, consistent with past practice; (g) granted any increase in the compensation or benefits of any director, officer, employee or consultant of the Company or its subsidiaries (including any such increase pursuant to any bonus, pension, profit sharing or other plan or commitment) or any increase in the compensation or benefits payable or to become payable to any director, officer, employee or consultant of the Company or its subsidiaries, except in the case of employees other than officers of the Company or its subsidiaries for such increases in compensation or benefits made in the ordinary course of business, consistent with past practice; (h) made any change in severance policy or practices; (i) made any capital expenditure or acquired any property, plant and equipment for a cost in excess of $100,000 in the aggregate; (j) other than required dividends on the Series B Preferred Stock, declared, paid or set aside for payment any dividend or other distribution (whether in cash, stock or property) in 19 respect of their respective capital stock or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of capital stock or other securities of the Company or its subsidiaries; (k) (i) made any changes in any of the accounting methods used by it materially affecting its assets, liabilities or business, except for such changes required by GAAP; or (ii) made or changed any election relating to Taxes, adopted or changed any accounting method relating to Taxes, entered into any closing agreement relating to Taxes, filed any amended Tax Return, settled or consented to any claim or assessment relating to Taxes, incurred any obligation to make any payment of, or in respect of, any Taxes, except in the ordinary course of business, or agreed to extend or waive the statutory period of limitations for the assessment or collection of Taxes; (l) paid, loaned, modified or advanced any amount to, or sold, transferred or leased any material properties or assets (real, personal or mixed, tangible or intangible) to, or entered into any agreement or arrangement with, any of their respective officers, directors or stockholders or any affiliate or associate of any of their officers, directors or stockholders except for directors' fees, expense reimbursements in the ordinary course and compensation to officers at rates not inconsistent with the Company or its subsidiaries' past practice; (m) written-down the value of any inventory (including write-downs by reason of shrinkage or mark-down) or written off as uncollectible any notes or accounts receivable, except for write-downs and write-offs in the ordinary course of business consistent with past practice nor is any such write-down required; (n) suffered any impairment of any material Company Intellectual Property Rights (as defined in Section 3.14(a)) or any material adverse change in any material Intellectual Property Rights licensed from a third party, in each case, other than in the ordinary course of business consistent with past practice, or disposed of or disclosed (except as necessary in the conduct of its business) to a third party any Trade Secrets owned by the Company or its subsidiaries; (o) granted, issued, accelerated, paid, accrued or agreed to pay or make any accrual or arrangement for payments or benefits pursuant to, or adopted or amended, any Company Employee Plans except those made in the ordinary course of business consistent with past practice; or (p) agreed, whether in writing or otherwise, to take any action described in this Section 3.8. 3.9 Absence of Undisclosed Liabilities. Except (a) as disclosed in the Company Balance Sheet and (b) for liabilities and obligations incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date, neither the Company nor any Company subsidiary has incurred any material liabilities or obligations of any nature, whether or not accrued, contingent or otherwise required by GAAP to be recognized or disclosed on a consolidated balance sheet of the Company or in the notes thereto. 3.10 Litigation. Except as disclosed in the Company SEC Reports filed prior to the date hereof, there is no private or governmental action, suit, proceeding, claim, arbitration or 20 investigation pending before any agency, court or tribunal, foreign or domestic or, to the knowledge of the Company, threatened against the Company or its subsidiaries any of their properties or any of their officers or directors (in their capacities as such). There is no judgment, decree or order against the Company or any of its subsidiaries or, to the knowledge of the Company, any of their directors or officers (in their capacities as such), that could prevent, enjoin, or materially alter or delay any of the Transactions, or that would reasonably be expected to have a Material Adverse Effect on the Company. Except as disclosed in the Company SEC Reports filed prior to the date hereof, there is no litigation that the Company or any of its subsidiaries has pending against other parties. The descriptions of all litigation in the Company SEC Reports are accurate in all material respects. 3.11 Restrictions on Business Activities. There is no agreement, judgment, injunction, order or decree binding upon the Company or its subsidiaries which has or could reasonably be expected to have the effect of prohibiting or impairing any current business practice of the Company or its subsidiaries, any acquisition of property by the Company or its subsidiaries or the conduct of business by the Company or its subsidiaries as currently conducted. 3.12 Governmental Authorization. The Company and its subsidiaries have obtained each federal, state, county, local or foreign governmental consent, license, permit, grant, or other authorization of a Governmental Entity (a) pursuant to which the Company or any of its subsidiaries currently operates or holds any interest in any of its properties or (b) that is required for the operation of the business of the Company or any of its subsidiaries or the holding of any such interest ((a) and (b) are herein collectively called "Company Authorizations"), and all of such Company Authorizations are in full force and effect, except where the failure to obtain or have any such Company Authorizations would not reasonably be expected to have a Material Adverse Effect on the Company. 3.13 Real and Personal Property. (a) Neither the Company nor any Company subsidiary owns any real property. Section 3.13(a) of the Company Disclosure Letter sets forth a complete list of all real property leased by the Company and the Company subsidiaries (the "Real Property"), the term of each related lease, and the monthly or annual rent and other commitments related thereto. Except as disclosed in Section 3.13(a) of the Company Disclosure Letter, the Company is not a party to any lease, assignment or similar arrangement under which the Company is a lessor, assignor or otherwise makes available for use by any third party any portion of the Real Property. (b) The Company and its subsidiaries own, or hold under valid leases, free and clear of all Encumbrances, all personal property, plants, machinery and equipment necessary for the conduct of the business of the Company and the Company subsidiaries. (c) The property and equipment of the Company and each of its subsidiaries that are used in the operations of business are in good operating condition and repair, subject to normal wear and tear. All properties used in the operations of the Company are reflected in the Company Balance Sheet to the extent GAAP requires the same to be reflected. 21 3.14 Technology and Intellectual Property. (a) Definitions. The following terms shall have the meanings set forth below. "Company Intellectual Property Rights" means all Intellectual Property Rights in the Registered Company IP and all other Intellectual Property Rights in the Company Technology and Company Trademarks other than third party Intellectual Property Rights. "Company Technology" means all Technology used, or held for use, in the business of the Company and its subsidiaries, as currently conducted or contemplated to be conducted. "Company Trademarks" means all Trademarks used, or held for use, in the business of the Company and its subsidiaries, as currently conducted or contemplated to be conducted. "Computer Software" means all computer programs (whether in source code or object code form), databases, compilations and documentation (including, without limitation, user, operator and training manuals) related to the foregoing. "Copyrights" means U.S. and foreign copyrights (whether registered or unregistered). "Intellectual Property Rights" means all rights in or under Copyrights, Patents, Trade Secrets, and Trademarks. "License Agreements" means all agreements to which the Company or one of its subsidiaries is a party or otherwise bound, under which the Company or one of its subsidiaries is granting or is granted any Intellectual Property Right. "Patents" means all U.S. and foreign patents and patent applications. "Registered Company IP" means all (i) Patents, (ii) registered Copyrights and Copyright applications, and (iii) registered Trademarks and Trademark applications, in which the Company or any one of its subsidiaries has an ownership interest. "Technology" means all processes, formulae, algorithms, data, models, plans, methodologies, theories, ideas, techniques, discoveries, disclosures, inventions, Computer Software, information or know-how. "Trademarks" means all U.S. and foreign trademarks, service marks, trade names, designs, logos, slogans, and internet domain names. "Trade Secrets" means trade secrets as defined in the Uniform Trade Secrets Act. (b) Section 3.14(b) of the Company Disclosure Letter sets forth a true and complete list of all Registered Company IP and Internet domain names registered in the name of the Company or one of its subsidiaries. 22 (c) The Company or one of its subsidiaries is listed in the records of the appropriate U.S., state or foreign agency as the sole owner of record for each item of Registered Company IP. Subject to the rights and interests granted to third parties in the License Agreements, the Company or one of its subsidiaries owns all right, title and interest in and to the Registered Company IP, and owns all other Company Intellectual Property Rights, free and clear of all Encumbrances. The Registered Company IP is subsisting in full force and effect and, to the knowledge of the Company, has not been cancelled, expired or abandoned, and, to the knowledge of the Company, the Company Intellectual Property Rights are valid and enforceable. (d) With respect to any Patents that are included in the Registered Company IP: (i) each has been prosecuted in material compliance with all applicable rules, policies and procedures of the U.S. Patent and Trademark Office or applicable foreign agency; and (ii) neither the Company nor any of its subsidiaries is aware of any prior art or other facts that could render any of the claims in the patents invalid or unenforceable. (e) Section 3.14(e) of the Company Disclosure Letter sets forth a true and complete list of all material License Agreements, except for off-the-shelf software. Each License Agreement is valid and binding on the Company and its subsidiaries and, to the knowledge of the Company, each other party thereto and enforceable in accordance with its terms. Except as stated in Section 3.14(e) of the Company Disclosure Letter, none of the License Agreements grants any third party exclusive rights to or under any Company Intellectual Property Rights or the right to sublicense any Company Intellectual Property Rights. The Company and its subsidiaries are in compliance with, and have not breached any term of any of such License Agreements and, to the knowledge of the Company, all other parties to such License Agreements are in compliance with, and have not breached any term of, such License Agreements. (f) Except as disclosed in Section 3.14(f) of the Company Disclosure Letter, neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with any Intellectual Property Rights of a third party, received any offers for a license to a third party patent, or obtained a written opinion of counsel relating to a third party patent. To the knowledge of the Company, there is no reasonable basis to allege that the Company or any of its subsidiaries has infringed upon, violated, misappropriated or is infringing upon, violating or misappropriating an Intellectual Property Right of a third party. (g) Except as disclosed in Section 3.14(g) of the Company Disclosure Letter, neither the Company nor any of its subsidiaries has provided to a third party any notice of infringement of or conflict with any Company Intellectual Property Rights. Except as disclosed in Section 3.14(g) of the Company Disclosure Letter, to the knowledge of the Company, no person has infringed upon, violated, misappropriated or is infringing upon, violating or misappropriating any of the Company Intellectual Property Rights. (h) Except as disclosed in the Company SEC Reports filed prior to the date hereof, to the knowledge of the Company, there is no pending or threatened claim, suit, arbitration or other adversarial proceeding before any court, agency, arbitral tribunal, or registration authority in any jurisdiction: (i) involving the Company Intellectual Property Rights; (ii) alleging that the Company or any of its subsidiaries is or may be infringing upon, violating or 23 misappropriating an Intellectual Property Right of a third party; or (iii) challenging the ownership, use, validity, enforceability or registrability of any Company Intellectual Property Rights. (i) To the knowledge of the Company, no material Trade Secret of the Company has been disclosed or authorized to be disclosed to any third party in violation of confidentiality obligations to the Company, or its subsidiaries taken as a whole, and no party to a nondisclosure agreement with the Company is in breach or default thereof. The Company has taken reasonable measures, consistent with customary industry practice, to protect, preserve and maintain the secrecy of its Trade Secrets. (j) Except as disclosed in Section 3.14(j) of the Company Disclosure Letter, there are no settlements, forbearances to sue, consents, judgments, injunctions, releases, waivers, orders or similar obligations, other than the License Agreements, that: (i) restrict any Company Intellectual Property Rights or; (ii) restrict the conduct of the business of the Company in order to accommodate Intellectual Property Rights of a third party; or (iii) grant third parties any rights under Company Intellectual Property Rights. (k) All current and former employees and consultants of the Company and its subsidiaries have executed an agreement that assigns to the Company or one of its subsidiaries their Intellectual Property Rights in the work product developed pursuant to their employment or relationship with the Company or any of its subsidiaries. No current or former director, officer or employee of the Company will, after giving effect to the Transactions, own any of the Company Intellectual Property Rights. (l) The execution of, the delivery of, the consummation of the Transactions contemplated by, and the performance of the Company's obligations under, this Agreement will not result in any material loss or impairment of the Company Intellectual Property Rights or any Intellectual Property Rights licensed to the Company. (m) Neither the Company nor any of its subsidiaries has used or will use before the purchase of the Shares pursuant to the Offer any of the prior inventions disclosed in the Proprietary Information and Inventions Agreements of its employees, except for those inventions that were acquired in connection with the merger with Arcxel Technologies, Inc., and, to the Company's knowledge, no employees of the Company or any of its subsidiaries have improperly brought to the Company or used at the Company any confidential information from their prior employers. 3.15 Environmental Matters. (a) The Company and its subsidiaries are in compliance in all material respects with federal, state, local and foreign laws and regulations relating to pollution or protection or preservation of human health or the environment, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of toxic or hazardous substances or hazardous waste, petroleum and petroleum products, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon, or lead or lead-based paints or materials ("Materials of Environmental Concern"), or otherwise relating to the generation, storage, containment (whether above ground or underground), disposal, transport or handling of Materials of Environmental Concern, or the preservation of the environment or mitigation of 24 adverse effects thereon (collectively, "Environmental Laws"), and including, but not limited to, compliance with any permits or other governmental authorizations or the terms and conditions thereof, except where noncompliance would not reasonably be expected to have a Material Adverse Effect on the Company; (b) neither the Company nor any of its subsidiaries has received any communication or notice, whether from a governmental authority or otherwise, alleging any violation of or noncompliance with any Environmental Laws by the Company or any of its subsidiaries or for which the any of them is responsible, and there is no pending or, to the Company's knowledge, threatened claim, action, investigation or notice by any person or entity alleging potential liability for investigatory, cleanup or governmental response costs, or natural resources or property damages, or personal injuries, attorneys' fees or penalties relating to (i) the presence, or release into the environment, of any Materials of Environmental Concern at any location owned or operated by the Company or any of its subsidiaries, now or in the past, or (ii) any violation, or alleged violation, of any Environmental Law (collectively, "Environmental Claims"), except where such notices, communications or Environmental Claims would not reasonably be expected to have a Material Adverse Effect on the Company; and (c) to the Company's knowledge, there are no past or present facts or circumstances that are reasonably likely to form the basis of any Environmental Claim against the Company or any Company subsidiary or against any person or entity whose liability for any Environmental Claim the Company or such Company subsidiary have retained or assumed either contractually or by operation of law, except where such Environmental Claim, if made, would not reasonably be expected to have a Material Adverse Effect on the Company. 3.16 Taxes. (a) The Company and each of its subsidiaries (i) have duly filed (or there have been filed on their behalf) with the appropriate Tax Authorities all material Tax Returns (as hereinafter defined) required to be filed by them, and such Tax Returns are true, correct and complete in all material respects, and (ii) have duly paid in full (or there has been paid on their behalf), or have established reserves (in accordance with GAAP) as reflected on the Financial Statements, all material Taxes that are due and payable. (b) There are no material liens for Taxes upon any property or assets of the Company or any of its subsidiaries, except for liens for Taxes not yet due or for which adequate reserves have been established in accordance with GAAP. (c) No material Federal, state, local or foreign Audits are pending with regard to any material Taxes or material Tax Returns of the Company or any of its subsidiaries and, to the best knowledge of the Company and its subsidiaries, no such Audit is threatened. (d) The Federal income Tax Returns of the Company and each of its subsidiaries have been examined by the Internal Revenue Service (or the applicable statutes of limitation for the assessment of Taxes for such periods have expired) for all periods through and including December 31, 2002, and as of the date hereof no material adjustments have been asserted as a result of such examinations which have not been (x) resolved and fully paid, or (y) reserved on the Financial Statements in accordance with GAAP. 25 (e) Neither the Company nor any of its subsidiaries is a party to any agreement providing for the allocation, indemnification, or sharing of Taxes. (f) Neither the Company nor any of its subsidiaries has been a member of any "affiliated group" (as defined in Section 1504(a) of the Code) other than the affiliated group of which Company is the "parent" and is not subject to Treas. Reg. 1.1502-6 (or any similar provision under foreign, state, or local law) for any period other than in connection with the affiliated group of which the company is the "parent." (g) Neither the Company nor any of its subsidiaries is or has been a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. (h) The Company has delivered or made available to Parent and Purchaser complete and accurate copies of each of (i) all Audit reports, letter rulings, technical advice memoranda and similar documents issued by a Tax Authority relating to Taxes due from or with respect to the Company or any of its subsidiaries and (ii) all closing agreements entered into by the Company or any of its subsidiaries with any Tax Authority, in each case existing on the date hereof. (i) Neither the Company nor any of its subsidiaries has received notice of any claim made by an authority in a jurisdiction where it does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. (j) Neither the Company nor any of its subsidiaries has made any change in Tax elections. (k) Neither the Company nor any of its subsidiaries has waived any statutory period of limitations for the assessment of any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency, in each case, which is currently outstanding, nor is any request to so waive or extend currently outstanding. No power of attorney granted by the Company or any of its subsidiaries with respect to Taxes is currently in force. (l) The United States Federal and state "net operating loss" of the Company and its subsidiaries through the date of the last filed applicable Tax Return is set forth on Section 3.16(l) of the Company Disclosure Letter. As of the date of this Agreement, there are no material limitations on the ability of the Company to utilize United States Federal and state "net operating losses" pursuant to Section 382 of the Code or similar state tax laws. (m) "Audit" means any audit, assessment, or other examination relating to Taxes by any Tax Authority or any judicial or administrative proceedings relating to Taxes. "Code" means the Internal Revenue Code of 1986, as amended. "Tax" or "Taxes" means all Federal, state, local, and foreign taxes, and other assessments of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax, or penalties applicable thereto, imposed by any Tax Authority. "Tax Authority" means the Internal Revenue Service and any other domestic or foreign governmental authority responsible for the administration of any Taxes. "Tax Returns" mean all Federal, state, local, and foreign tax returns, declarations, statements, reports, schedules, forms, and information returns and any amendments thereto. 26 3.17 Employee Benefit Plans. (a) Section 3.17 of the Company Disclosure Letter lists, with respect to the Company, any of its subsidiaries and any trade or business (whether or not incorporated) which is treated as a single employer with the Company within the meaning of Section 414(b), (c), (m) or (o) of the Code (an "ERISA Affiliate"), (i) all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), (ii) each loan to a non-officer employee in excess of $10,000, loans to officers and directors and any stock option, stock purchase, phantom stock, stock appreciation right, supplemental retirement, severance, sabbatical, medical, dental, vision care, disability, employee relocation, cafeteria benefit (Code Section 125) or dependent care (Code Section 129), life insurance or accident insurance plans, programs, agreements or arrangements, (iii) all bonus, pension, profit sharing, savings, deferred compensation or incentive plans, programs, agreements or arrangements, (iv) other fringe or employee benefit plans, programs, agreements or arrangements of the Company or any of its subsidiaries and (v) any current or former employment, change of control, retention or executive compensation or severance agreements, written or otherwise, as to which unsatisfied obligations of the Company or any of its subsidiaries of greater than $10,000 remain for the benefit of, or relating to, any present or former employee, consultant or director of the Company or any of its subsidiaries (together, the "Company Employee Plans" ). (b) The Company has delivered to Parent a copy of each of the Company Employee Plans and related material plan documents (including trust documents, insurance policies or contracts, employee booklets, summary plan descriptions and other authorizing documents, and any material employee communications relating thereto) and has, with respect to each Company Employee Plan which is subject to ERISA reporting requirements, provided copies of the Form 5500 reports filed for the last three (3) plan years. Any Company Employee Plan intended to be qualified under Section 401(a) of the Code has either obtained from the IRS a favorable determination letter as to its qualified status under the Code, including all amendments to the Code effected by the Tax Reform Act of 1986, or has applied to the IRS for such a determination letter prior to the expiration of the requisite period under applicable Treasury Regulations or IRS pronouncements in which to apply for such determination letter and to make any amendments necessary to obtain a favorable determination or has been established under a standardized prototype plan for which an IRS opinion letter has been obtained by the plan sponsor and is valid as to the adopting employer. The Company has also delivered to Parent the most recent IRS determination, notification, advisory, or opinion letter issued with respect to each such Company Employee Plan, and, to the Company's knowledge, nothing has occurred since the issuance of each such letter which could reasonably be expected to cause the loss of the tax-qualified status of any Company Employee Plan subject to Code Section 401(a). (c) There has been no "prohibited transaction," as such term is defined in Section 406 of ERISA and Section 4975 of the Code, with respect to any Company Employee Plan. Each Company Employee Plan has been administered in accordance with its terms and in compliance with the requirements prescribed by any and all statutes, rules and regulations (including ERISA and the Code), except as would not be reasonably expected to have, in the aggregate, a Material Adverse Effect on the Company, and the Company and each of its subsidiaries or ERISA Affiliates have performed all obligations required to be performed by them under, are not in any material respect in default under or violation of, and have no 27 knowledge of any material default or violation by any other party to, any of the Company Employee Plans. Neither the Company nor any of its subsidiaries or ERISA Affiliates is subject to any liability or penalty under Sections 4976 through 4980 of the Code or ERISA with respect to any of the Company Employee Plans. All contributions and premiums required to be made by the Company or any of its subsidiaries or ERISA Affiliates to any Company Employee Plan have been made on or before their due dates. Each Company Employee Plan can be amended, terminated or otherwise discontinued in accordance with its terms. With respect to each Company Employee Plan subject to ERISA as either an employee pension benefit plan within the meaning of Section 3(2) of ERISA or an employee welfare benefit plan within the meaning of Section 3(1) of ERISA, the Company has prepared in good faith and timely filed all requisite material governmental reports (which, to the Company's knowledge, were true and correct as of the date filed) and has properly and timely filed and distributed or posted all material notices and reports to employees required to be filed, distributed or posted with respect to each such Company Employee Plan. No suit, administrative proceeding, action or other litigation has been brought, or to the best knowledge of the Company is threatened, against or with respect to any such Company Employee Plan, including any audit or inquiry by the Internal Revenue Service (the "IRS") or United States Department of Labor other than routine claims for benefits. (d) With respect to each Company Employee Plan, the Company, each Company subsidiary and their respective ERISA Affiliates have complied with (i) the applicable health care continuation and notice provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the regulations (including proposed regulations) thereunder, (ii) the applicable requirements of the Family Medical and Leave Act of 1993 and the regulations thereunder, and (iii) the applicable requirements of the Health Insurance Portability and Accountability Act of 1996 and the regulations (including proposed regulations) thereunder, except where the failure to comply with the applicable requirements of such laws and regulations would not be reasonably expected to have a Material Adverse Effect on the Company. (e) The consummation of the Transactions will not (i) entitle any current or former employee, director or consultant of the Company or any of its subsidiaries or any ERISA Affiliates to severance benefits or any other payment, except as expressly provided in this Agreement, or (ii) except as disclosed in Section 3.17(e) of the Company Disclosure Letter, accelerate the time of payment or vesting of Company Options, or increase the amount of compensation due any such employee, director or consultant. (f) No amounts payable under any of the Company Employee Plans or any other contract, agreement or arrangement with respect to which the Company or any of its subsidiaries may have any liability could fail to be deductible for federal income tax purposes by virtue of Section 162(m) or Section 280G of the Code. None of the Company Employee Plans contains any provision requiring a gross-up pursuant to Section 280G of the Code or similar tax provisions. (g) No Company Employee Plan provides benefits, including without limitation death or medical benefits (whether or not insured), with respect to current or former employees of the Company, its subsidiaries or any ERISA Affiliate after retirement or other termination of service (other than (i) coverage mandated by applicable laws, (ii) death benefits or retirement benefits under any "employee pension benefit plan," as that term is defined in Section 3(2) of 28 ERISA, or (iii) benefits, the full direct cost of which is borne by the current or former employee (or beneficiary thereof)). (h) There has been no amendment to, written interpretation or announcement (whether or not written) by the Company or any of its subsidiaries or any ERISA Affiliates relating to, or change in participation or coverage under, any Company Employee Plan which would increase the expense of maintaining such Plan above the level of expense incurred with respect to that Plan for the most recent fiscal quarter included in the Company Financials. (i) Neither the Company nor any of its subsidiaries or any ERISA Affiliate currently maintains, sponsors, participates in or contributes to, nor have they ever maintained, established, sponsored, participated in, or contributed to, any employee pension benefit plan (within the meaning of Section 3(2) of ERISA) which is subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code. (j) Neither the Company nor any of its subsidiaries or any ERISA Affiliate is a party to, or has ever made any contribution to or otherwise incurred any obligation to contribute to, any "multiemployer plan" as defined in Section 3(37) of ERISA. (k) Section 3.17(k) of the Company Disclosure Schedule sets forth for each Company Option, where applicable, the performance targets, design wins, thresholds or other measurement pursuant to which vesting or exercise of such option is contingent. 3.18 Certain Agreements Affected by the Merger. Except as disclosed in Section 3.18 of the Company Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of the Transactions will (a) result in any payment (including, without limitation, severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any officer, director or employee of the Company or any of its subsidiaries, (b) materially increase any benefits under the Company Employee Plans or (c) result in the acceleration of the time of payment or vesting of any such benefits. No payment which will or may be made by the Company or any of its subsidiaries to any employee will be characterized as an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code. 3.19 Employee Matters. (a) There are no actions, suits, claims, charges, labor disputes, grievances or controversies pending, or to the Company's knowledge, threatened involving the Company or any of its subsidiaries and any of their respective employees or former employees. To the Company's knowledge, no Governmental Entity responsible for the enforcement of labor or employment laws intends to conduct an investigation with respect to or relating to the Company or any of its subsidiaries and no such investigation is in progress. To the Company's knowledge, no employee of the Company or any of its subsidiaries has violated any employment contract, nondisclosure agreement or noncompetition agreement by which such employee is bound due to such employee being employed by the Company or any of its subsidiaries and disclosing to the Company or any such subsidiary or using Trade Secrets of any other person. There has been: (i) no labor union organizing or attempting to organize any employees of the Company or any of its subsidiaries into one or more collective bargaining units; and (ii) no labor 29 dispute, strike, work slowdown, work stoppage or lock out or other collective labor action by or with respect to any employees of the Company or any of its subsidiaries pending, or, to the Company's knowledge, threatened against or affecting the Company or any of its subsidiaries. Neither the Company nor any of its subsidiaries is a party to, or bound by, any collective bargaining agreements or other agreement with any labor organization applicable to the employees of the Company or any of its subsidiaries and no such agreement is currently being negotiated. (b) Each of the Company and its subsidiaries (i) is in compliance in all material respects with all applicable laws respecting employment and employment practices, terms and conditions of employment, health and safety and wages and hours, and is not engaged in any unfair labor practice, (ii) has withheld all amounts required by law or by agreement to be withheld from the wages, salaries and other payments to employees, (iii) is not liable in any material respect for any arrears of wages or any Taxes or any penalty for failure to comply with any of the foregoing and (iv) is not liable for any material payment to any trust or other fund or to any governmental or administrative authority, with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the ordinary course of business and consistent with past practice). (c) To the Company's knowledge, no employee of the Company or any of its subsidiaries has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable law involving the Company or any of its subsidiaries. Neither the Company nor any of its subsidiaries nor any officer, employee, contractor, subcontractor or agent of the Company or any such subsidiary of the Company has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company or any of its subsidiaries in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. Section 1514A(a). (d) Since June 30, 2000, neither the Company nor any of its subsidiaries has effectuated (i) a "plant closing" as defined in the Worker Adjustment and Retraining Notification Act ("WARN Act"), affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the Company or any of its subsidiaries or (ii) a "mass layoff" (as defined in the WARN Act) affecting any site of employment or facility of the Company or any of its subsidiaries; nor has the Company or any of its subsidiaries been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any state, local or foreign law or regulation similar to the WARN Act. To the Company's knowledge, neither the Company's nor any of its subsidiaries' employees has suffered an "employment loss" (as defined in the WARN Act) in the ninety (90) days prior to the date of this Agreement. (e) Section 3.19(e) of the Company Disclosure Letter contains a true and complete list of (i) the names of all directors and elected and appointed officers of each of the Company and its subsidiaries, together with such person's position or function, annual base salary and incentives or bonus arrangement, and (ii) the number of shares of Company Common Stock owned beneficially or of record, or both, by each such person and the family relationships, if any, among such persons. As of the date hereof, no key employee, director or officer of the 30 Company or any of its subsidiaries has given notice to the Company, nor, except as provided in Section 6.7, is the Company otherwise aware of any information that would lead it to reasonably believe, that any such person will or may cease to be engaged by the Company or applicable subsidiary of the Company for any reason prior to the Effective Time. 3.20 Potential Conflict of Interest. Except as set forth in the Company SEC Reports filed prior to the date hereof or as disclosed in Section 3.20 of the Company Disclosure Letter, since December 31, 2002, there have been no transactions, agreements, arrangements or understandings between the Company or any subsidiary of the Company, on the one hand, and their respective affiliates, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act. Except as set forth in the Company SEC Reports filed prior to the date hereof, no officer of the Company or any Company subsidiary owns, directly or indirectly, any interest in (excepting not more than one percent (1%) stock holdings for investment purposes in securities of publicly-held and traded companies) or is an officer, director, employee or consultant of any person which is a competitor, lessor, lessee, customer or supplier of the Company; and no officer or director of the Company or any Company subsidiary (a) owns, directly or indirectly, in whole or in part, any Intellectual Property which the Company or any Company subsidiary is using or the use of which is necessary for the business of the Company or any Company subsidiary, (b) has any claim, charge, action or cause of action against the Company or any Company subsidiary, except for immaterial claims for accrued vacation pay, accrued benefits under any Company Employee Plans and similar matters and agreements existing on the date hereof, (c) has made, on behalf of the Company or any of its subsidiaries, any payment or commitment to pay any commission, fee or other amount to, or to purchase or obtain or otherwise contract to purchase or obtain any goods or services from, any other person of which any officer or director of the Company or any Company subsidiary, or, to the Company's knowledge, a relative of any of the foregoing, is a partner or stockholder (except stock holdings solely for investment purposes in securities of publicly held and traded companies) or (d) owes any money to the Company or any of its subsidiaries (except for reimbursement of advances in the ordinary course of business consistent with past practice). 3.21 Insurance. The Company and each of its subsidiaries has policies of insurance and bonds of the type and in amounts customarily carried by persons conducting businesses or owning assets similar to those of the Company and each of its subsidiaries. Section 3.21 of the Company Disclosure Letter contains an accurate summary of the material terms of all material policies of fire, liability, workmen's compensation, director and officer and other forms of insurance owned or held by the Company. All such policies and other forms of insurance are in full force and effect, all premiums with respect thereto covering all periods up to and including the date of the Closing have been paid, and no notice of cancellation or termination has been received with respect to any such policy or other form of insurance. There is no material claim pending under any such policies as to which coverage has been questioned, denied or disputed by any underwriter of such policies or other forms of insurance. Such policies or other forms of insurance are sufficient for compliance with all requirements of law and of all agreements to which the Company is a party, are valid, outstanding and enforceable, provide adequate insurance coverage for the normal risks incident to the business of the Company and its assets, will remain in full force and effect through the respective dates set forth in the Company Disclosure Letter without the payment of additional premiums (other than existing policy premiums payable in installments), and will not in any way be affected by, or terminate or lapse 31 by reason of, the Transactions. Section 3.21 of Company Disclosure Letter identifies all risks which the Company, its Board of Directors or officers have designated as being self insured (other than applicable deductibles or retentions). The Company has not been refused any insurance with respect to its assets or operations, nor has its coverage been limited, by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance during the last two years. 3.22 Compliance With Laws. The Company and its subsidiaries have complied in a timely manner and in all material respects with all laws, rules and regulations, ordinances, judgments, decrees, orders, writs and injunctions of all United States federal, state, local, foreign governments and agencies thereof which affect the business, properties or assets of the Company and its subsidiaries, except for instances of possible noncompliance that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company, and no notice, charge, claim, action or assertion has been received by the Company or any of its subsidiaries or has been filed, commenced or, to the Company's knowledge, threatened against the Company or any of its subsidiaries alleging any violation of any of the foregoing, except for instances of possible noncompliance that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company. All licenses, permits and approvals required under such laws, rules and regulations are in full force and effect except where the failure to be in full force and effect would not reasonably be expected to have a Material Adverse Effect on the Company. 3.23 Minute Books. The minute books of the Company and its subsidiaries made available to Parent contain a complete and accurate summary of all meetings of directors and stockholders or actions by written consent from October 1, 1999 through the date of this Agreement, and reflect all material transactions referred to in such minutes accurately. 3.24 Complete Copies of Materials. The Company has delivered or made available true and complete copies of each document which has been requested by Parent or its counsel in connection with their legal and accounting review of the Company and its subsidiaries. 3.25 Brokers' and Finders' Fees. The Company has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders' fees or agents' commissions or investment bankers' fees or any similar charges in connection with this Agreement or any Transaction other than Goldman, Sachs & Co., pursuant to a letter dated August 19, 2003, a copy of which has been delivered to Parent. 3.26 Customers and Suppliers. No single customer which individually accounted for more than 4% of the Company's gross revenues during the 12-month period preceding the date hereof, and no single supplier of the Company or its subsidiaries, has canceled or otherwise terminated, or has advised the Company that it intends to cancel or otherwise terminate, its relationship with the Company or its subsidiaries. Except as disclosed in Section 3.26 of the Company Disclosure Letter, no single customer which individually accounted for more than 4% of the Company's gross revenues during the 12-month period preceding the date hereof decreased materially its use of the services or products of the Company or its subsidiaries or advised the Company that it intends to decrease materially its use of the services or products of the Company and its subsidiaries. No single supplier of the Company or its subsidiaries has, 32 during the 12-month period preceding the date hereof, decreased materially its services or supplies to the Company or its subsidiaries or has advised the Company that it intends to decrease materially its services or supplies to the Company or its subsidiaries. Neither the Company nor any of its subsidiaries has breached, so as to provide a benefit to the Company and any such subsidiary that was not intended by the parties, any agreement with, or engaged in any fraudulent conduct with respect to, any customer or supplier of the Company or any of its subsidiaries. 3.27 Material Contracts. Section 3.27 of the Company Disclosure Letter sets forth a true and complete list of (i) all material contracts, agreements, indemnities, guarantees, notes, bonds, mortgages, liens, indentures, leases, licenses or other instruments or obligations of the Company and its subsidiaries (each a "Company Agreement") (including any agreement required to be filed as an Exhibit to an Annual Report on form 10-K of the Company pursuant to Item 601(b)(10) of Regulation S-K of the Securities Act) entered into by the Company or any Company subsidiary since December 31, 2002 and all amendments to any Company Agreements included as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and (ii) all non-competition agreements imposing restrictions on the ability of the Company or any Company subsidiary to conduct business in any jurisdiction or territory. True, correct and complete copies of all such material Company Agreements have been delivered to Parent. Each Company Agreement that is required to be listed in Section 3.27 of the Company Disclosure Letter is valid, binding and enforceable and is in full force and effect and there are no defaults, events of default or, to the knowledge of the Company, allegations of default thereunder. Each of the Company and its subsidiaries has in all material respects performed the obligations required to be performed by it and is entitled to the benefits under each Company Agreement except such benefits as that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. 3.28 Third Party Consents. Section 3.28 of the Company Disclosure Letter lists all Company Agreements that require notices, authorizations, consents or approvals that are necessary for the consummation by the Company of any of the Transactions and identifies each Company Agreement which, if no notice is given or no authorization, consent or approval is obtained, would reasonably be expected to have a Material Adverse Effect on Parent's ability to operate the business of the Company and its subsidiaries in the same manner as the business was operated by the Company and its subsidiaries prior to the Effective Time. 3.29 Product Releases. The Company has provided Parent a schedule of product releases, which schedule is attached as Section 3.29 of the Company Disclosure Letter. The Company has a good faith reasonable belief that it can achieve the release of products on the schedule described in Section 3.29 of the Company Disclosure Letter and is not currently aware of any change in its circumstances or other fact that has occurred that would cause it to believe that it will be unable to meet such release schedule. 3.30 Company Design Wins. Section 3.30 of the Company Disclosure Letter sets forth a true and complete list of design wins by the Company or any of its subsidiaries as of the date of the this Agreement, whether publicly disclosed or not, specifying for each design win, the name of the customer and the relevant product or products. As of the date of this Agreement, for each design win listed in Section 3.30 of the Company Disclosure Letter: (i) neither the Company nor 33 any of its subsidiaries has any reason to believe that the relevant product or products will not be developed and issued for production, and (ii) no customer listed on Section 3.30 of the Company Disclosure Schedule has canceled or otherwise terminated, or has advised the Company that such customer intends to cancel or otherwise terminate, the design win relating to such customer. 3.31 Orders, Commitments and Returns. As of the date of this Agreement, there are no claims against the Company to return in excess of an aggregate of $300,000 of merchandise by reason of alleged overshipments, defective merchandise or otherwise, or of merchandise in the hands of customers under an understanding that such merchandise would be returnable. 3.32 Support, Maintenance and Warranty Obligations. Section 3.32 of the Company Disclosure Letter sets forth, as of September 28, 2003, the approximate installed base of the Company's products, the key customers that have purchased the products and the warranty reserves for warranty obligations of the Company and its subsidiaries as of September 28, 2003. 3.33 Inventory. The inventories shown on the Company Financials or thereafter acquired by the Company, consisted of items of a quantity and quality usable or salable in the ordinary course of business (other than slow-moving, obsolete or unusable items which are adequately reserved for in the Company Financials to reflect realizable value). Since the Balance Sheet Date, the Company has continued to replenish inventories in a normal and customary manner consistent with past practices. The Company has not received written or oral notice that it will experience in the foreseeable future any material difficulty in obtaining, in the desired quantity and quality and at a reasonable price and upon reasonable terms and conditions, the raw materials, supplies or component products required for the manufacture, assembly or production of its products. The values at which inventories are carried reflect the inventory valuation policy of the Company, which is consistent with its past practice and in accordance with generally accepted accounting principles applied on a consistent basis. Since the Balance Sheet Date, due provision was made on the books of the Company in the ordinary course of business consistent with past practices, to provide for all slow-moving, obsolete, or unusable inventories to their estimated useful or scrap values and such inventory reserves are adequate to provide for such slow-moving, obsolete or unusable inventory and inventory shrinkage. As of September 28, 2003, the aggregate value of the inventory of the Company in the distribution channel does not exceed the average aggregate value of the inventory of the Company in the distribution channel over the past four quarters. 3.34 Accounts Receivable. Subject to any reserves set forth in the Company Financials, the accounts receivable shown in the Company Financials represent bona fide claims against debtors for sales and other charges, and are not subject to discount except for normal cash and immaterial trade discounts. The amount carried for doubtful accounts and allowances disclosed in the Company Financials is reasonably adequate and consistent with the Company's past practice. 3.35 Information in the Proxy Statement. The Proxy Statement, if any (and any amendment thereof and supplement thereto), at the date mailed to the Company's stockholders and at the time of any meeting of Company stockholders to be held in connection with the Merger, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the 34 circumstances under which they are made, not misleading, except that no representation is made by the Company with respect to statements made therein based on information supplied in writing by Parent or Purchaser expressly for inclusion in the Proxy Statement. The Proxy Statement will comply in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. 3.36 Information in the Offer Documents and the Schedule 14D-9. The information supplied by the Company expressly for inclusion or incorporation by reference in the Offer Documents or the Schedule 14D-9 will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Schedule 14D-9 will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published or sent or given to the Company's stockholders, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except that the Company makes no representation or warranty with respect to statements made in the Schedule 14D-9 based on information furnished by Parent or Purchaser expressly for inclusion therein. 3.37 Opinion of Financial Advisor. The Company has received the written opinion of Goldman, Sachs & Co. to the effect that, as of the date of such opinion, the consideration to be received by the holders of the Company's Common Stock in the Offer and the Merger was fair from a financial point of view to such stockholders. 3.38 Personnel. Section 3.38 of the Company Disclosure Letter sets forth a true and complete list of (a) the names and current salaries of all directors and elected and appointed officers of each of the Company and its subsidiaries, and (b) the number of shares of Company Common Stock owned beneficially or of record, or both, by each such person and the family relationships, if any, among such persons. 3.39 Rights Agreement. The Company and the Board of Directors of the Company have amended the Rights Agreement and have taken and will maintain in effect all further necessary action (a) to prevent any Right issued or issuable under the Rights Agreement from becoming exercisable by virtue of this Agreement, the Purchaser Option, the Stockholder Agreement, the Offer, the Merger and the other Transactions and (b) to ensure that (i) neither Parent nor Purchaser nor any of their "Affiliates" (as defined in the Rights Agreement) or "Associates" (as defined in the Rights Agreement) is considered to be an "Acquiring Person" (as defined in the Rights Agreement) and (ii) the provisions of the Rights Agreement, including the occurrence of a Distribution Date (as defined in the Rights Agreement), are not and shall not be triggered by reason of the announcement or consummation of the Offer, the Merger, the execution of this Agreement, the Purchaser Option or the Stockholder Agreement or the announcement or consummation of any other Transaction. Prior to the termination of this Agreement, the Company shall not terminate, amend or modify the Rights Agreement in any manner other than as contemplated by this Agreement. The Company has made available to Parent a complete and correct copy of the Rights Agreement as amended and supplemented to the date of this Agreement. 35 3.40 Absence of Questionable Payments. Neither the Company nor any of its subsidiaries nor any director, officer, agent, employee or other person acting on behalf of the Company or any of its subsidiaries, has used any corporate or other funds for unlawful contributions, payments, gifts, or entertainment, or made any unlawful expenditures relating to political activity to government officials or others or established or maintained any unlawful or unrecorded funds in violation of Section 30A of the Exchange Act. Neither the Company nor any subsidiary of the Company nor any current director, officer, agent, employee or other person acting on behalf of the Company or any subsidiary of the Company, has accepted or received any unlawful contributions, payments, gifts, or expenditures. The Company is in compliance with the provisions of Section 13(b) of the Exchange Act. 3.41 Representations Complete. None of the representations or warranties made by the Company herein or in any Schedule hereto, including the Company Disclosure Letter, or in any certificate furnished by the Company pursuant to this Agreement, when all such documents are read together in their entirety, contains or will contain upon the consummation of the Offer any untrue statement of a material fact, or omits or will omit upon the consummation of the Offer to state any material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT Parent represents and warrants to the Company as follows: 4.1 Corporate Existence. Each of Parent and Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser was formed solely for the purpose of engaging in the Transactions and has not engaged in any business activities or conducted any operations other than in connection with the Transactions. 4.2 Corporate Authorization. The execution, delivery and performance by each of Parent and Purchaser of this Agreement and the consummation by Parent and Purchaser of the Transactions are within each of Parent and Purchaser's corporate powers and have been duly authorized by all necessary corporate action. This Agreement has been duly executed by each of Parent and Purchaser and, assuming due authorization, execution and delivery of this Agreement by the Company, this Agreement constitutes a valid and binding agreement of each of Parent and Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights, and to general equity principles. 4.3 Consents and Approvals; No Violations. None of the execution, delivery or performance of this Agreement by Parent or Purchaser, the consummation by Parent or Purchaser of the Transactions, or compliance by Parent or Purchaser with any of the provisions hereof will (a) conflict with or result in any breach of any provision of the Certificate of 36 Incorporation or Bylaws of Parent or Purchaser, (b) require any filing by Parent or Purchaser with, or permit, authorization, consent or approval of, any Governmental Entity (except for (i) compliance with any applicable requirements of the Exchange Act, (ii) any filing pursuant to the DGCL, (iii) filings, permits, authorizations, consents and approvals as may be required under the HSR Act and comparable merger and notifications, laws or regulations of foreign jurisdictions, (iv) the filing or deemed filing with the SEC and the Nasdaq of (x) the Schedule TO, (y) the Proxy Statement, if stockholder approval is required by law, and (z) such reports under Section 13(a) of the Exchange Act as may be required in connection with this Agreement and the Transactions, or (iv) such filings and approvals as may be required by any applicable state securities, blue sky or takeover laws), or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Parent, any of its subsidiaries, or any of their properties or assets, except in the case of clauses (b) or (c) such violations, breaches or defaults which would not, individually or in the aggregate, impair in any material respect the ability of each Parent and Purchaser to perform its obligations under this Agreement, as the case may be, or prevent the consummation of any the Transactions. 4.4 Information in the Proxy Statement. The information supplied by Parent or Purchaser in writing expressly for inclusion or incorporation by reference in the Proxy Statement (or any amendment thereof or supplement thereto) will not, at the date mailed to stockholders and at the time of the meeting of stockholders to be held in connection with the Merger, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading. 4.5 Information in the Offer Documents. The Offer Documents will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published or sent or given to Company stockholders, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except that Parent and Purchaser make no representation or warranty with respect to information furnished by the Company expressly for inclusion in the Offer Documents. 4.6 Financing. Purchaser has, and will have available to it upon the consummation of the Offer, sufficient funds to consummate the Transactions contemplated by this Agreement, including payment in full for all Shares validly tendered into the Offer or outstanding at the Effective Time (and all related fees and expenses). 4.7 DGCL 203. At no time during the three (3) years prior to the date hereof was Parent or any of its affiliates or associates an "interested stockholder" of the Company within the meaning of and as defined in Section 203 of the DGCL. ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME 5.1 Conduct of Business by the Company. 37 (a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and Taxes when due subject to good faith disputes over such debts, pay or perform other material obligations when due, and use all reasonable efforts to (i) preserve intact its present business organization, (ii) keep available the services of its present officers, employees and contractors and (iii) preserve its relationships with customers, suppliers, licensors, licensees, and others with which it has business dealings. (b) Without limiting the generality of the foregoing, without the prior written consent of Parent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following: (i) waive any stock repurchase rights, accelerate (other than pursuant to the terms of Company Options in effect as of the date hereof), amend or change the period of vesting or exercisability of Company Options or restricted stock, or reprice Company Options granted under the Option Plans or any other plan, program or arrangement or authorize cash payments in exchange for any Company Options granted under any of such plans or exercise any authority under the Option Plans or any Company Employee Plan to accelerate any vesting or exercise of any Company Option; (ii) adopt a plan of complete or partial liquidation, dissolution, merger, acquisition, consolidation, restructuring, recapitalization or other reorganization (other than the Merger); (iii) grant any severance, bonus or termination pay to any employee, officer or director except non-discretionary pay pursuant to written agreements in effect, or policies existing, on the date hereof and as previously disclosed in writing to Parent, or adopt any new severance, retention or change in control plan, policy or arrangement; (iv) transfer or license to any person or entity or otherwise extend, amend, modify, permit to lapse or fail to preserve any of the Company Intellectual Property Rights material to the Company's business as presently conducted or proposed to be conducted, other than nonexclusive licenses in the ordinary course of business consistent with past practice, or disclose to any person who has not entered into a confidentiality agreement any Trade Secrets; (v) other than required dividends on the Series B Preferred Stock, declare, set aside, or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; 38 (vi) purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, or any instrument or security that consists of a right to acquire such shares except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof; (vii) except for grants of Company Options pursuant to written commitments in effect on the date hereof and to new hires in the ordinary course of business and consistent with past practice (not to exceed 100,000 shares of Common Stock in the aggregate to employees that are not officers or directors), issue or sell, or authorize the issuance or sale of, pledge or otherwise encumber any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of shares of Common Stock upon the exercise of Company Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP consistent with the terms thereof; (viii) cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries); (ix) acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint ventures, strategic partnerships or alliances; (x) sell, transfer, lease, license, mortgage, pledge, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company; (xi) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of the foregoing other than (x) in connection with the financing of ordinary course trade payables consistent with past practice or (y) pursuant to existing credit facilities as in effect on the date hereof in the ordinary course of business; (xii) adopt or amend any Company Employee Plan, pay, or incur an obligation or commitment to pay, any special bonus or special remuneration to any director, officer, consultant or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, 39 employees or consultants other than increases to employees who are not directors or affiliates in the ordinary course of business, consistent with past practice or make any loans to any of its officers, directors, employees, affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to a Company Employee Plan or otherwise; (xiii) pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company or any of its subsidiaries of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; (xiv) modify, amend or terminate any Company Agreement, or waive, release or assign any material rights or claims thereunder, other than any such modification, amendment or termination of any such material contract or any such waiver, release or arrangement thereunder in the ordinary course of business consistent with past practice; (xv) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality agreement or non-competition agreement to which the Company is a party. (xvi) pay, discharge, satisfy or settle any pending or threatened adverse third party claims, suits, actions, liabilities or other obligations (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company; (xvii) commence, join or make an appeal with respect to any action, claim, suit, arbitration, litigation or other proceeding for money damage or other relief against any third party (other than Parent or Purchaser) before any court or governmental or other regulatory or administrative agency or commission in any jurisdiction, other than ordinary course collections claims for accounts receivable due and payable to the Company or any of its subsidiaries not exceeding $50,000 in the aggregate or which would result in any restrictions on its operations or which relates to this Agreement or the Transactions; (xviii) enter into any contract which involves payments or commitments or results in potential liability in excess of $100,000 in any consecutive twelve (12) month period, or, in cases where the Company or a subsidiary of the Company is the party responsible for such payment, commitment or liability which is not terminable upon thirty (30) days notice other than in the ordinary course of business consistent with past practice; (xix) permit any insurance policy naming it as a beneficiary or a loss payee to be cancelled or terminated without notice to and consent by Parent; 40 (xx) revalue any of its assets or make any change in accounting methods, principles or practices, except as required by GAAP after notice to Parent; (xxi) delay or postpone the payment of accounts payable or other liabilities other than in the ordinary course of business; (xxii) make or change any election relating to Taxes, adopt or change any accounting method relating to Taxes, enter into any closing agreement relating to Taxes, file any amended Tax Return, settle or consent to any claim or assessment relating to Taxes, incur any obligation to make any payment of, or in respect of, any Taxes, except in the ordinary course of business, or agree to extend or waive the statutory period of limitations for the assessment or collection of Taxes; (xxiii) fail to make in a timely manner any filings with the SEC required under the Securities or the Exchange Act or the rules and regulations promulgated thereunder; (xxiv) except as required by applicable law or GAAP, make any change in its accounting principles, practices or methods after notice to Parent; (xxv) take any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII or any of the conditions to the Offer set forth in Annex I not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (xxvi) enter into any agreement or commitment the effect of which would be to grant to a third party following the Merger any actual or potential right or license of any material Intellectual Property Rights owned by Parent or any of its subsidiaries, in each case, other than the Surviving Corporation or any successor thereto; (xxvii) take any action to exempt or make any person (other than Parent or Purchaser) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation; (xxviii) redeem the Rights or amend, waive any rights under or otherwise modify or terminate the Rights Agreement in connection with an Acquisition Proposal by any person other than Parent or Purchaser or render the Rights Agreement inapplicable to any Acquisition Proposal by any person other than Parent or Purchaser unless, and only to the extent that, the Company is required to do so by a court of competent jurisdiction; or (xxix) enter into any written agreement, contract, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose, in writing or otherwise or announce an intention to do any of the foregoing. 41 5.2 No Solicitation. (a) Each of the Company and its Representatives (as defined below) has ceased and caused to be terminated all existing solicitations, initiations, encouragements, discussions, negotiations and communications with any persons or entities with respect to any offer or proposal relating to any transaction or series of related transactions other than the Transactions involving: (i) any acquisition or purchase from the Company by any person or group (as defined in Section 9.4(c)) of more than a fifteen percent (15%) interest in the total outstanding voting securities of the Company or any tender offer or exchange offer that if consummated would result in any person or group beneficially owning fifteen percent (15%) or more of the total outstanding voting securities of the Company; (ii) any merger, consolidation, business combination or similar transaction involving the Company; (iii) any sale, lease, exchange, transfer, license, acquisition or disposition of more than fifteen percent (15%) of the assets of the Company; or (iv) any recapitalization, restructuring, liquidation or dissolution of the Company (each, an "Acquisition Proposal"). Except as provided in Section 5.2(b), from the date of this Agreement until the earlier of termination of this Agreement or the Effective Time, the Company shall not and shall not authorize or permit its officers, directors, employees, investment bankers, attorneys, accountants or other agents or those of its subsidiaries (collectively, "Representatives") to directly or indirectly (i) initiate, solicit or knowingly encourage, or knowingly take any action (other than the issuance of the joint press release under Section 6.2 or filings with the SEC permitted by this Agreement), to facilitate the making of, any offer or proposal which constitutes or is reasonably likely to lead to any Acquisition Proposal, (ii) enter into any agreement with respect to any Acquisition Proposal (other than a confidentiality agreement entered into in compliance with the terms of Section 5.2(b)), (iii) in the event of an unsolicited Acquisition Proposal for the Company, engage in negotiations or discussions with, or provide any non-public information or data to, any person or group (other than Parent or any of its affiliates or representatives) relating to any Acquisition Proposal, or (iv) grant any waiver or release under any standstill or other agreement. Any violation of the foregoing restrictions by any of the Company's Representatives, whether or not such Representative is so authorized and whether or not such Representative is purporting to act on behalf of the Company or otherwise, shall be deemed to be a material breach of this Agreement by the Company. Notwithstanding the foregoing, nothing contained in this Section 5.2 or any other provision hereof shall prohibit the Company or the Company Board of Directors from (i) taking and disclosing to the Company's stockholders its position with respect to any tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 and Item 1012(a) of Regulation M-A promulgated under the Exchange Act, or (ii) making such disclosure to the Company's stockholders (including withdrawing or modifying, in a manner adverse to the Transactions contemplated by this Agreement, the approval or recommendation by the Company Board of Directors or any committee thereof in favor of the Offer, this Agreement or the Merger) as in the good faith judgment of the Company Board of Directors, only after receipt of advice from outside legal counsel to the Company that such disclosure is required under applicable law and that the failure to make such disclosure is reasonably likely to cause the Company Board of Directors to violate its fiduciary duties to the Company 's stockholders under applicable law, is required. (b) Notwithstanding the foregoing or any other provision of this Agreement, prior to the acceptance of Shares pursuant to the Offer, the Company may furnish non-public information to any person or group pursuant to a confidentiality agreement with terms no less 42 favorable to the Company than those contained in the confidentiality agreement, dated September 2, 2003, entered into between Parent and the Company (as amended through the date hereof, the "Confidentiality Agreement"), and may negotiate and participate in discussions and negotiations with such person or group concerning an Acquisition Proposal if, but only if, (i) (x) such Acquisition Proposal provides for consideration to be received by the holders of all, but not less than all, of the issued and outstanding Shares (a "Takeover Proposal"); (y) such person or group has on an unsolicited basis, and in the absence of any violation of this Section 5.2 by the Company or its Representatives, submitted a bona fide written proposal to the Company relating to any such Takeover Proposal which at least a majority of the full Board of Directors of the Company determines in good faith, after receiving advice from a nationally recognized investment banking firm and its outside legal counsel, involves consideration to the holders of the Shares that is, or is reasonably likely to lead to a proposal that is, more favorable from a financial point of view to the Company's stockholders than the consideration offered pursuant to the Offer, is reasonably capable of being completed and which is not conditioned upon obtaining additional financing, in each case taking into account, among other things, conditions to consummation, required regulatory approvals and the fees payable to Parent hereunder, and (z) in the good faith opinion of the Company Board of Directors, only after consultation with outside legal counsel to the Company, providing such information or access or engaging in such discussions or negotiations is in the best interests of the Company and its stockholders and the failure to provide such information or access or to engage in such discussions or negotiations would cause the Company Board of Directors to violate its fiduciary duties to the Company's stockholders under applicable law (a Takeover Proposal which satisfies clauses (x), (y) and (z) being referred to herein as a "Superior Proposal"). The Company shall promptly, and in any event within forty-eight (48) hours following receipt of an Acquisition Proposal, and prior to providing any person or group with any material non-public information, notify Parent orally and in writing of such Acquisition Proposal, which notice shall disclose the identity of the other party and the material terms of such Acquisition Proposal. The Company shall promptly, and in any event within twenty-four (24) hours following a determination by the Company Board of Directors that a Takeover Proposal is a Superior Proposal or is reasonably likely to lead to a Superior Proposal, notify Parent of such determination. The Company shall promptly provide to Parent any material non-public information regarding the Company provided to any other person or group which was not previously provided to Parent, such additional information to be provided no later than the date of provision of such information to such other person or group. (c) Except as set forth in this Section 5.2, neither the Company Board of Directors nor any committee thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to the Transactions contemplated by this Agreement, Parent or Purchaser, the approval, or recommendation by the Company Board of Directors or any committee thereof in favor of the Offer, this Agreement or the Merger, (ii) approve or recommend or propose to approve or recommend any Acquisition Proposal of any person or group other than Parent and Purchaser or (iii) enter into any agreement with respect to any Acquisition Proposal of any person or group other than Parent and Purchaser (other than a confidentiality agreement entered into in compliance with the terms of Section 5.2(b)). Notwithstanding the foregoing or any other provision of this Agreement, prior to the time of acceptance for payment of Shares in the Offer, the Company Board of Directors may (subject to the terms of this and the following sentence) withdraw or modify its approval or recommendation in favor of the Offer, this Agreement or the Merger, approve or recommend a 43 Superior Proposal, or enter into an agreement with respect to a Superior Proposal (and make any amendments to the Rights Agreement necessary thereto), in each case, only after the third business day following the Company's delivery to Parent of written notice advising Parent that the Company Board of Directors has received a Superior Proposal, specifying the material terms and conditions of such Superior Proposal, identifying the person or group making such Superior Proposal and advising Parent that the Company intends to approve or recommend a Superior Proposal or enter into an agreement with respect to a Superior Proposal (specifying which course of action the Company intends to take); provided, however, that the Company shall not enter into an agreement with respect to a Superior Proposal unless the Company shall also terminate this Agreement in compliance with Section 5.2(d). Any such withdrawal, modification or change of the recommendation of the Company Board of Directors, the approval or recommendation or proposed approval or recommendation of any Superior Proposal or the entry by the Company into any agreement with respect to any Superior Proposal shall not change the approval of the Company Board of Directors for purposes of causing any state takeover statute or other state law to be inapplicable to the Transactions. (d) The Company may terminate this Agreement and enter into an acquisition agreement or other similar agreement (each, an "Acquisition Agreement") with respect to such Superior Proposal pursuant to Section 8.1(g) at any time three (3) business days following delivery of the notice referenced in Section 5.2(c); provided, that (i) neither the Company nor its Representatives is in material breach of this Section 5.2, (ii) during the three (3) business day period following the Company's delivery to Parent of the written notice described in Section 5.2(c), Parent shall have the right to propose adjustments in the terms and conditions of this Agreement and the Company shall have caused its financial and legal advisors to negotiate with Parent in good faith such proposed adjustments in the terms and conditions of this Agreement, and (iii) upon the expiration of the three (3) business day period following the Company's delivery to Parent of the written notice described in Section 5.2(c), the Company delivers to Parent (x) a written notice of termination of this Agreement pursuant to this Section 5.2(d), and (y) pays the Termination Fee (as defined in Section 8.2(b)) plus the Expense Fee (as defined in Section 8.2(b)), as the same may have been estimated by Parent in good faith prior to the date of such delivery (subject to the limitations of Section 8.2(b) and to an adjustment payment between the parties upon Parent's definitive determination of such expenses) as set forth in Section 8.2. ARTICLE VI ADDITIONAL AGREEMENTS 6.1 Confidentiality; Access to Information. (a) The parties acknowledge that the Company and Parent have previously executed the Confidentiality Agreement. Unless otherwise required by law or regulation (including Nasdaq or NYSE rules) or pursuant to the terms and provisions of the Confidentiality Agreement or this Agreement, Parent and the Purchaser will hold any information which is non-public in confidence in accordance with the terms of the Confidentiality Agreement and, in the event this Agreement is terminated for any reason, Parent or the Purchaser shall promptly return or destroy such information in accordance with the Confidentiality Agreement. 44 The Company will afford Parent and its Representatives reasonable access during normal business hours to the properties, books, analysis, projections, plans, systems, contracts, commitments, records, personnel offices and other facilities of the Company and its subsidiaries during the period prior to the Effective Time to obtain all information concerning the business, including the status of product development efforts, properties, results of operations and personnel of the Company and use all reasonable efforts to make available at all reasonable times during normal business hours to Parent and its Representatives, the appropriate individuals (including management personnel, attorneys, accountants and other professionals) for discussion of the Company's business, properties, prospects and personnel as Parent may reasonably request. The Company agrees to provide its consent and to execute suitable confidentiality agreements allowing the Company's third party suppliers, strategic partners and customers to meet with and hold discussions with representatives of Parent. During such period, the Company shall (and shall cause each of the Company's subsidiaries to), subject to any limitations imposed by law with respect to records of employees, furnish promptly to Parent and the Purchaser (i) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal securities laws and (ii) all other information concerning its business, properties and personnel as Parent or the Purchaser may reasonably request. No information or knowledge obtained by Parent in any investigation pursuant to this Section 6.1 will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Merger. (b) Notwithstanding anything to the contrary contained in this Agreement or the Confidentiality Agreement, the parties (and each employee, representative or other agent of the parties) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated hereby beginning on the earliest of (i) the date of the public announcement by the parties of discussions relating to the Transactions, (ii) the date of public announcement by the parties of the Transactions hereby or (iii) the date of the execution of this Agreement; provided, however, that nothing in this Section 6.1(b) shall permit either party (or any employee, representative or agent thereof) to disclose (i) any information that is not necessary to understand the tax treatment and tax structure of such transactions (including the identity of the parties and any information that could lead another to determine the identity of the parties) or (ii) any other information to the extent that such disclosure could result in a violation of any federal or state securities law. 6.2 Public Disclosure. The initial press release concerning the Offer and the Merger shall be a joint press release and, thereafter, neither Parent, Purchaser nor the Company will disseminate any press release or other announcement concerning the Merger, the Offer or this Agreement or the other Transactions contemplated by this Agreement to any third party or to the employees of the Company without the prior written consent of each of the other parties hereto, which consent shall not be unreasonably withheld; provided, however, that the Company and Parent may file a copy of this Agreement and the related agreements as exhibits to a Current Report on Form 8-K filed in connection with the announcement of this Agreement. The parties have agreed to the text of the joint press release announcing the execution of this Agreement. 6.3 Reasonable Efforts; Notification. 45 (a) Subject to the express provisions of Section 5.2 hereof and upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other Transactions, including complying in all material respects with all applicable laws and with all rules and regulations of any Governmental Entity, using all reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to cause the Minimum Condition and all the conditions set forth in Article VII and in Annex I hereto to be satisfied and to consummate and make effective the Offer, the Merger and the other Transactions, (ii) the obtaining of all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Entities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Entity, (iii) the obtaining of all necessary consents, approvals or waivers from third parties, (iv) the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed if there is a reasonable possibility that defending such actions would result in their dismissal, removal, elimination or termination, and (v) the execution or delivery of any additional instruments necessary to consummate the Transactions, and to carry out fully the purposes of, this Agreement. In connection with and without limiting the foregoing, the Company and its Board of Directors shall, if any state takeover statute or similar statute or regulation is or becomes applicable to the Merger, this Agreement or any of the other Transactions, use all reasonable efforts to ensure that the Merger and the other Transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Merger, this Agreement and the other Transactions. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall be deemed to require Parent, Purchaser or any subsidiary or affiliate thereof to take or agree to take any Action of Divestiture (as defined below) which would be reasonably expected either to materially and adversely impact the benefits expected to be derived by Parent as a result of the transactions contemplated hereby or to have a Material Adverse Effect on the business of the Company and its subsidiaries as currently conducted or as contemplated to be conducted on a combined basis with the business of Parent and its subsidiaries following the Merger. For purposes of this Agreement, an "Action of Divestiture" shall mean (i) making proposals, executing or carrying out agreements or submitting to any applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, judgment, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity (a "Legal Requirement") providing for the license, sale or other disposition or holding separate (through the establishment of a trust or otherwise) of any assets or categories of assets of Parent, any of its affiliates or the Company or the holding separate of the shares of Common Stock or Series B Preferred Stock or imposing or seeking to impose any limitation on the ability of Parent or any of its subsidiaries or affiliates to conduct their business or own such assets or to acquire, hold or exercise full rights of ownership of the 46 shares of the Common Stock or Series B Preferred Stock or (ii) otherwise taking any step to avoid or eliminate any impediment which may be asserted under any Legal Requirement governing competition, monopolies or restrictive trade practices. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of the Company, Parent and Purchaser shall use all reasonable efforts to take, or cause to be taken, all such necessary actions. (b) The Company shall give prompt notice to Parent of (i) any representation or warranty made by the Company in this Agreement that is untrue or inaccurate in any material respect at any time from the date hereof to the Effective Time (ii) any condition set forth in Annex I that is unsatisfied in any material respect at any time from the date hereof to the date the Purchaser purchases Shares pursuant to the Offer (except to the extent it refers to a specific date), (iii) any change or event having or which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and (iv) any material failure of the Company or any Representative to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement or the Purchaser Option. 6.4 Indemnification. (a) For a period of six (6) years after the Effective Time, Parent will cause the Surviving Corporation to fulfill and honor in all respects the obligations of the Company pursuant to any indemnification agreements, dated prior to the date hereof and set forth in Section 6.4(a) the Company Disclosure Letter, between the Company and its present and former directors and officers (the "Indemnified Parties") and any indemnification provisions under the Company's Certificate of Incorporation or Bylaws as in effect on the date hereof. The Certificate of Incorporation and Bylaws of the Surviving Corporation will contain provisions with respect to exculpation and indemnification that are at least as favorable to the Indemnified Parties as those contained in the Certificate of Incorporation and Bylaws of the Company as in effect on the date hereof, which provisions will not be amended, repealed or otherwise modified for a period of six (6) years from the Effective Time in any manner that would adversely affect the rights thereunder of the Indemnified Parties. (b) For a period of six (6) years after the Effective Time, Parent will, at its election, either (i) cause the Surviving Corporation to use its commercially reasonable efforts to maintain in effect, if available, directors' and officers' liability insurance covering those persons who are currently covered by the Company's directors' and officers' liability insurance policy on terms comparable to those applicable to the directors and officers of the Company or (ii) obtain, or permit the Company to obtain, a six (6) year "tail" insurance policy that provides coverage substantially similar to the coverage provided under the Company's directors' and officers' liability insurance covering those persons who are currently covered by the Company's directors' and officers' liability insurance policy on terms comparable to those applicable to the directors and officers of the Company; provided, however, that in no event will the Surviving Corporation be required to expend in excess of one hundred twenty-five percent (125%) of the annual premium currently paid by the Company for such coverage (the "Current Annual Premium Amount") (or such coverage as is available for such one hundred twenty-five percent (125%) of 47 such annual premium). The Current Annual Premium Amount is set forth on Section 6.4(b) of the Company Disclosure Letter. (c) This Section 6.4 shall survive the consummation of the Merger, is intended to benefit the Company, the Surviving Corporation and each indemnified party, shall be binding on all successors and assigns of the Surviving Corporation and Parent, and shall be enforceable by the Indemnified Parties. 6.5 Litigation. The Company shall give Parent the opportunity to participate in the defense of any litigation (other than where the Parent or Purchaser is an adverse party) against the Company and/or any of its subsidiaries and/or any of their respective directors relating to the Transactions. 6.6 Interim Directors. Pursuant to Section 1.3(b), the Company shall use all reasonable efforts to cause a sufficient number of its current directors to continue as Independent Directors of the Company until the Effective Time. 6.7 Resignation of Directors. Prior to the Effective Time, the Company shall cause each member of its Board of Directors and every member of the Board of Directors of each subsidiary of the Company not designated by Parent pursuant to Section 1.3, to execute and deliver a letter effectuating his or her voluntary resignation as a director of the Board of Directors of the Company and each of its subsidiaries effective immediately prior to the Effective Time. 6.8 Rights Agreement. The Company has amended the Rights Agreement and shall take such further action as may be necessary under the Rights Agreement to render the Rights Agreement inapplicable to the negotiation and execution of this Agreement, the Purchaser Option, the Stockholder Agreement, the Offer, the Merger and any other Transaction. As soon as practicable on or after the date hereof, but in any event no later than two (2) business days, the Company shall register the Rights on Form 8-A and list the Rights for trading on the Nasdaq. 6.9 Benefit Plans. Parent shall, from and after the Effective Time, (i) until such time as employees of the Company are covered by or participating in Parent's medical, dental, life and short- and long-term disability insurance and 401(k) plans, comply with the Company's medical, dental, life, short- and long-term disability insurance and 401(k) plans in accordance with their terms to the extent not inconsistent with applicable law, (ii) provide employees of the Company who remain as employees of the Surviving Corporation with employee benefit plans which are no less favorable in the aggregate than those provided to similarly situated employees of Parent, (iii) provide employees of the Company who remain as employees of the Surviving Corporation credit for years of service with the Company or any of its subsidiaries prior to the Effective Time for the purpose of eligibility and vesting pursuant to Parent's plans and policies (but not for accrual of benefits to the extent that such credit would result in a duplication of benefits), and (iv) cause any and all pre-existing condition limitations (to the extent such limitations did not apply to a pre-existing condition under comparable Company Employee Plans) and eligibility waiting periods under group health plans of Parent to be waived with respect to former employees of the Company who remain as employees of the Surviving Corporation (and their eligible dependents) and who become participants in similar group health plans of Parent or the 48 Surviving Corporation. Former employees of the Company who remain as employees of the Surviving Corporation shall also be given credit for any deductible or co-payment amounts paid in respect of the plan year of Parent in which the Effective Time occurs, to the extent, following the Effective Time, they participate in any of Parent's plans during such plan year for which deductibles or co-payments are required. Nothing in this Section 6.9 shall be interpreted as preventing Parent or its subsidiaries from amending, modifying or terminating any Company Employee Plans, or other contracts, arrangements, commitments or understandings. 6.10 Guarantee of Performance. Parent hereby guarantees the payment and performance by Purchaser of all of its obligations under this Agreement. ARTICLE VII CONDITIONS 7.1 Conditions to Obligations of Each Party to Effect the Merger. The respective obligations of each party to this Agreement to effect the Merger shall be subject to the satisfaction or written waiver at or prior to the Closing Date of the following conditions: (a) Stockholder Approval. The Merger and this Agreement shall have been approved and adopted by the requisite vote of the holders of the Shares, to the extent required pursuant to the requirements of the Certificate of Incorporation and the DGCL. (b) Statutes; Court Orders. No statute, rule or regulation shall have been enacted or promulgated by any Governmental Entity which prohibits the consummation of the Merger, and there shall be no order or injunction of a court of competent jurisdiction in effect preventing consummation of the Merger. (c) Purchase of Shares in Offer. Purchaser shall have purchased, or caused to be purchased, Shares pursuant to the Offer; provided, however, that this condition shall be deemed to have been satisfied with respect to the obligation of Parent and Purchaser to effect the Merger if Purchaser fails to accept for payment or pay for Shares validly tendered pursuant to the Offer in violation of the terms of the Offer or of this Agreement. (d) HSR Approval. The applicable waiting period under the HSR Act and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions shall have expired or been terminated. 49 ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER 8.1 Termination. This Agreement may be terminated and the Transactions may be abandoned at any time before the Effective Time, whether before or after stockholder approval thereof: (a) by mutual written consent duly authorized by the Board of Directors of Parent and the Board of Directors of the Company; or (b) by either Parent or the Company (i) if a court of competent jurisdiction or other Governmental Entity shall have issued an order, decree or ruling or taken any other action (including the failure to have taken an action), in each case having the effect of permanently restraining, enjoining or otherwise prohibiting any of the Transactions or (ii) if Purchaser has not accepted and paid for the Shares pursuant to the Offer by December 31, 2003 (the "Termination Date"); provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(b) shall not be available to any party whose action or failure to fulfill any obligation under this Agreement has been the principal cause of, or resulted in, the failure of the Offer to be consummated by such date; or (c) by Parent if the Minimum Condition shall not have been satisfied by the Initial Expiration Date (including any extensions thereof); provided, however, that Parent shall not be entitled to terminate this Agreement pursuant to this Section 8.1(c) if it or Purchaser is in material breach of its representations and warranties, covenants or other agreements under this Agreement and such breach has been the cause of, or resulted in, such failure to satisfy the Minimum Condition; or (d) by Parent if (i) prior to the purchase of Shares pursuant to the Offer, there has been a material breach by the Company of any representation, warranty, covenant or agreement set forth in this Agreement, which breach is reasonably likely to result in any condition set forth in Annex I not being satisfied and such breach has not been cured or such condition has not been satisfied within thirty (30) days after the receipt of notice thereof or such breach is not reasonably capable of being cured or such condition is not reasonably capable of being satisfied within such period or (ii) due to an occurrence or circumstance that would result in a failure to satisfy any condition set forth in Annex I hereto, Purchaser shall have (x) failed to commence the Offer within sixty (60) days following the date of this Agreement, (y) allowed the Offer to terminate without having accepted any Shares for payment thereunder or (z) failed to accept Shares for payment pursuant to the Offer prior to the Termination Date, unless such action or inaction under clauses (x), (y) or (z) shall have been principally caused by or resulted from the failure of either of Parent or Purchaser to perform, in any material respect, any of its covenants or agreements contained in this Agreement, or the breach by Parent of any of its representations or warranties contained in this Agreement; or (e) by Parent, at any time prior to the purchase of the Shares pursuant to the Offer, if (i) the Company Board of Directors shall have withdrawn, modified, or changed its approval or recommendation in favor of this Agreement or the Offer in a manner adverse to 50 Parent or Purchaser, (ii) the Company Board of Directors or any committee thereof shall have approved or recommended any Acquisition Proposal, (iii) a tender or exchange offer relating to its securities shall have been commenced by a person unaffiliated with Parent and it shall not have sent to its security holders pursuant to Rule 14e-2 promulgated under the Exchange Act, within ten (10) business days after such tender or exchange offer is first published, sent or given, a statement disclosing that the Company Board of Directors recommends rejection of such tender or exchange offer or (iv) the Company shall have violated or breached in any material respect any of its obligations under Section 5.2, unless there has been a material breach by Parent or Purchaser of any representation, warranty, covenant or agreement contained in this Agreement except to the extent such breach, together with all such breaches, does not and would not be likely to have a material adverse effect on Parent's or Purchaser's ability to consummate the Offer or the Merger; or (f) by the Company if (i) prior to the purchase of Shares pursuant to the Offer that would represent a majority of the Shares on a Fully Diluted Basis, there has been a material breach by Parent or Purchaser of any representation, warranty, covenant or agreement contained in this Agreement except to the extent such breach, together with all such breaches, does not and would not be likely to have a material adverse effect on Parent's or Purchaser's ability to consummate the Offer or the Merger (and such breach has not been cured or such condition has not been satisfied within thirty (30) days after the receipt of notice thereof or such breach is not reasonably capable of being cured or such condition is not reasonably capable of being satisfied with such period); or (ii) due to an occurrence or circumstance that would result in a failure to satisfy any condition set forth in Annex I hereto, Purchaser shall have (x) failed to commence the Offer within sixty (60) days following the date of this Agreement, (y) allowed the Offer to terminate without having accepted any Shares for payment hereunder or (z) failed to accept Shares for payment pursuant to the Offer prior to the Termination Date, unless such action or inaction under clauses (x), (y) or (z) shall have been principally caused by or resulted from the failure of the Company to perform, in any material respect, any of its covenants or agreements contained in this Agreement, or the material breach by the Company of any of its representations or warranties contained in this Agreement; or (g) by the Company pursuant to Section 5.2(d). 8.2 Effect of Termination. (a) In the event of the termination of this Agreement as provided in Section 8.1, written notice thereof shall forthwith be given to the other party or parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become null and void and there shall be no liability on the part of Parent, Purchaser or the Company (or any of their representatives), except (i) as set forth in this Section 8.2, Section 8.3 and Article IX, each of which shall survive the termination of this Agreement and (ii) nothing herein shall relieve any party from liability for any material breach of this Agreement. (b) If (i) Parent shall have terminated this Agreement pursuant to Section 8.1(e) or (ii) the Company shall have terminated this Agreement pursuant to Section 8.1(g), then the Company shall pay to Parent promptly, but in no event later than two (2) business days after the date of such termination if pursuant to Section 8.1(e), or immediately prior thereto or concurrent 51 therewith if pursuant to Section 8.1(g), a termination fee of $9.3 million (the "Termination Fee"), plus an amount equal to the actual out-of-pocket expenses (including, without limitation, legal, accounting and investment banking fees, if any, and disbursements) incurred by Parent and Purchaser in connection with the Offer, the Merger and this Agreement up to an aggregate amount of $1.0 million (the "Expense Fee"); provided, however, that in the event of termination pursuant to Section 8.1(e)(i), (ii), or (iii) or 8.1(g), one-half of the aggregate Termination Fee and Expense Fees (as the same may have been estimated by Parent in good faith prior to the time such payment is due, with an adjustment payment in cash upon Parent's definitive determination of the Expense Fee) otherwise payable in cash may, at the election of the Company, instead be paid pursuant to a promissory note and security agreement in the forms attached hereto as Exhibit E, which note shall be executed and delivered within the time periods otherwise provided herein. (c) If Parent shall have terminated this Agreement pursuant to Section 8.1(b)(ii) or 8.1(d)(i) and (i) prior to the termination of this Agreement a bona fide Acquisition Proposal shall have been publicly announced or shall have become publicly known and not withdrawn and (ii) within twelve (12) months following the date of this Agreement an Acquisition Proposal with any party other than Parent and Purchaser is announced or consummated, the Company shall pay to Parent the Termination Fee and the Expense Fee promptly, but in no event later than two (2) business days after the earlier of the announcement of the Acquisition Agreement or the consummation of the acquisition; provided, however, that one-half of the aggregate Termination Fee and Expense Fee (as the same may have been estimated by Parent in good faith prior to the time such payment is due, with an adjustment payment in cash upon Parent's definitive determination of the Expense Fee) otherwise payable in cash may, at the election of the Company, instead be paid pursuant to a promissory note and security agreement in the forms attached hereto as Exhibit E, which note shall be executed and delivered within the time periods otherwise provided herein. For the purposes of this Section 8.2(c), the term "Acquisition Proposal" shall have the meaning set forth in Section 5.2(a), except that the percentages set forth in such provision shall be changed to 50%, and except that the events described in clause (iv) thereof shall not be deemed to be Acquisition Proposals. (d) Except as provided above, the Company shall pay the Termination Fee and the Expense Fee to Parent in cash by wire transfer in immediately available funds to such account as Parent may designate to the Company in writing. 8.3 Fees and Expenses. Except as provided in Section 8.2, all fees, costs and expenses incurred in connection with this Agreement and the Transactions contemplated hereby shall be paid by the party incurring such expenses whether or not the Merger is consummated; provided, however, that Parent and the Company shall share equally all fees and expenses, other than attorneys' and accountants fees and expenses, incurred in relation to the printing and filing with the SEC of the Offer Documents, 14D-9 and Proxy Statement (including any preliminary materials related thereto) and any amendments or supplements thereto, and the filing of any documents required under the HSR Act. 52 ARTICLE IX GENERAL PROVISIONS 9.1 Non-Survival of Representations and Warranties. None of the representations and warranties contained in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Effective Time, and only the covenants and exhibits that by their terms survive the Effective Time and this Article IX shall survive the Effective Time. 9.2 Extension; Waiver. At any time prior to the Effective Time any party hereto may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right. 9.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice): (a) if to Parent or Purchaser: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attention: Randall G. Wick Vice President, General Counsel Telephone: (714) 662-5600 Facsimile: (714) 641-0172 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue, Suite 1100 Palo Alto, California 94301 Attention: Gregory C. Smith Telephone: (650) 470-4500 Facsimile: (650) 470-4570 (b) if to the Company: Vixel Corporation 11911 North Creek Parkway South 53 Bothell, Washington 98011 Attention: Kurtis L. Adams Chief Financial Officer Telephone: (425) 806-4528 Facsimile: (425) 806-4001 with a copy to: Heller Ehrman White & McAuliffe LLP 701 5th Avenue, Suite 6100 Seattle, Washington 98104 Attention: David Wilson Telephone: (206) 447-0900 Facsimile: (206) 447-0849 9.4 Interpretation; Certain Defined Terms. (a) When a reference is made in this Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement unless otherwise indicated. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. The words "include," "includes" and "including" when used herein shall be deemed in each case to be followed by the words "without limitation." The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. When reference is made herein to "the business of" an entity, such reference shall be deemed to include the business of all direct and indirect subsidiaries of such entity. (b) For purposes of this Agreement, "affiliates" shall have the meaning set forth in Rule 12b-2 of the Exchange Act. (c) For purposes of this Agreement, the term "group" shall have the meaning set forth under Section 13(d) of the Exchange Act and the rules and regulations thereunder. (d) For purposes of this Agreement, the term "knowledge" means (i) with respect to any natural person, the actual knowledge of such person, and (ii) with respect to any corporation or entity, the actual knowledge of such party's officers and directors provided that such persons shall have made due and diligent inquiry of those employees of such party whom such officers and directors reasonably believe would have actual knowledge of the matters represented. (e) For purposes of this Agreement, any reference to a "Material Adverse Effect" with respect to any entity or group of entities means any event, change, occurrence or development, individually or together with other events, changes, occurrences or developments that (i) is materially adverse to the condition (financial or otherwise), properties, assets (including intangible assets), prospects, liabilities, business, operations or results of operations of such entity and its subsidiaries, taken as a whole, or (ii) would prevent or materially alter or delay any of the Transactions except, for each of (i) and (ii) above, to the extent that no such 54 event, change, occurrence or development results solely from changes in general economic or market conditions, or from changes affecting the industry generally in which the party operates and which do not affect such party disproportionately; provided, that a Material Adverse Effect shall not include an event, change, occurrence or development arising out of or resulting from actions contemplated by the parties in connection with this Agreement or that is directly attributable to the announcement, pendency or performance of this Agreement or the transactions contemplated hereby (excluding any litigation brought by stockholders or others in connection therewith). (f) For purposes of this Agreement, the term "person" shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity. (g) For purposes of this Agreement, a "subsidiary" of a specified entity will be any corporation, partnership, limited liability company, joint venture or other legal entity of which the specified entity (either alone or through or together with any other subsidiary) owns, directly or indirectly, fifty percent (50%) or more of the stock or other equity or partnership interests the holders of which are generally entitled to vote for the election of the Board of Directors or other governing body of such corporation or other legal entity. Reference to the subsidiaries of an entity shall be deemed to include all direct and indirect subsidiaries of such entity. (h) For purposes of this Agreement, "Transactions" shall mean all of the transactions contemplated in this Agreement, including the Offer, the Merger, the Purchaser Option, the Stockholder Agreement, the Non-Competition Agreements and the transactions contemplated thereunder. 9.5 Counterparts. This Agreement may be executed in two or more counterparts, and by facsimile, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. 9.6 Entire Agreement; Third Party Beneficiaries. This Agreement and the exhibits, documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Company Disclosure Letter (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, it being understood that the provisions of this Agreement shall supersede any conflicting provisions of the Confidentiality Agreement; and (b) are not intended to confer upon any other person any rights or remedies hereunder, except as specifically provided in Section 6.4. 9.7 Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as 55 reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. 9.8 Other Remedies; Specific Performance. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. 9.9 Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof; provided, however, that the laws of the respective jurisdictions of incorporation of each of the parties shall govern the relative rights, obligations, powers, duties and other internal affairs of such party and its board of directors. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of this Agreement or any of the Transactions; (b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it shall not bring any action relating to this Agreement or any of the Transactions in any court other than the Delaware Court of Chancery or a federal court sitting in the State of Delaware. 9.10 Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. 9.11 Assignment. This Agreement shall not be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that the Purchaser may assign, in its sole discretion and without the consent of any other party, any or all of its rights, interests and obligations hereunder to (a) Parent, (b) to Parent and one or more direct or indirect wholly-owned subsidiaries of Parent, or (c) to one or more direct or indirect wholly-owned subsidiaries of Parent (each, an "Assignee"); provided, however, that, to the extent required by Section 251 of the DGCL in order for this Agreement, with such rights assigned, to be valid from and after such assignment, such assignment shall be effective only after (a) an appropriate amendment to this Agreement to effectuate such assignment shall have been executed by the parties hereto and any such Assignee and (b) such amendment, or this Agreement as so amended, shall have received all approvals required by the DGCL. Subject to the preceding sentence, but without relieving any party hereto of any obligation hereunder, this 56 Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 9.12 Amendment and Modification. Subject to applicable law and as otherwise provided in the Agreement, this Agreement may be amended, modified and supplemented in any and all respects, whether before or after any vote of the stockholders of the Company contemplated hereby, by written agreement of the parties hereto, by action taken by their respective Boards of Directors or equivalent governing bodies, but, after the purchase of Shares pursuant to the Offer, no amendment shall be made which decreases the Merger Consideration and, after the approval of this Agreement by the stockholders, no amendment shall be made which by law requires further approval by such stockholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 9.13 No Waiver. No failure or delay on the part of any party hereto in the exercise of any right hereunder will impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor will any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. 9.14 Waiver of Jury Trial. EACH OF PARENT, THE COMPANY AND PURCHASER HEREBY IRREVOCABLY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENT OR ACTION RELATED HERETO OR THERETO. [REST OF PAGE INTENTIONALLY LEFT BLANK] 57 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized respective officers as of the date first written above. EMULEX CORPORATION By: /s/ Paul Folino ------------------------- Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer AVIARY ACQUISITION CORP. By: /s/ Paul Folino ------------------------- Name: Paul Folino Title: President and Chief Executive Officer VIXEL CORPORATION By: /s/ James M. McCluney ------------------------- Name: James McCluney Title: President and Chief Executive Officer ANNEX I Notwithstanding any other provisions of the Offer, and in addition to (and not in limitation of) Purchaser's rights to extend and amend the Offer at any time in its sole discretion (subject to the provisions of the Merger Agreement), Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser's obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and may delay the acceptance for payment of or, subject to the restriction referred to above, the payment for, any validly tendered Shares unless the Minimum Condition shall have been satisfied. Furthermore, notwithstanding any other provisions of the Offer, Purchaser shall not be required to accept for payment or pay for any validly tendered Shares if, at the scheduled expiration date (i) any applicable waiting periods under the HSR Act and any comparable provisions under any applicable pre-merger notification laws or regulations of foreign jurisdictions have not expired or terminated prior to termination of the Offer, or (ii) any of the following events shall occur and be continuing: (a) there shall have been or be pending any suit, action or proceeding by any Governmental Entity or any third party against Purchaser, Parent, the Company or any Company subsidiary (i) seeking to prohibit or impose any material limitations on Parent's or Purchaser's ownership or operation (or that of any of their respective subsidiaries or affiliates) of all or any portion of their or the Company's or the Company subsidiaries' businesses or assets, or to compel Parent or Purchaser or their respective subsidiaries or affiliates to dispose of or hold separate any material portion of the business or assets of the Company or Parent or their respective subsidiaries, (ii) challenging the acquisition by Parent or Purchaser of any Shares pursuant to the Offer, seeking to delay, restrain or prohibit the making or consummation of the Offer, the exercise of the Purchaser Option or the Merger or the performance of any of the other Transactions contemplated by this Agreement, or seeking to obtain any damages in connection with the Offer, the Merger or any Transaction contemplated by this Agreement from the Company that are material in relation to the Company and the Company's subsidiaries taken as a whole or from Parent or Purchaser that are material in relation to the Company and the Company's subsidiaries taken as a whole, (iii) seeking to impose limitations on the ability of Purchaser, or render Purchaser unable, to accept for payment, pay for or purchase some or all of the Shares pursuant to the Offer, the Purchaser Option, the Stockholder Agreement or the Merger, (iv) seeking to impose material limitations on the ability of Purchaser or Parent effectively to exercise full rights of ownership of the Shares, including, without limitation, the right to vote the Shares purchased by it on all matters properly presented to the Company's stockholders, or (v) seeking to require divestiture by Parent or any of its subsidiaries or affiliates of any Shares; (b) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or deemed applicable, pursuant to an authoritative interpretation by or on behalf of a Government Entity, to the Offer, the Merger or any other Transaction, or any other action shall be taken by any Governmental Entity, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; Annex Page 1 of 3 (c) there shall have occurred and be continuing any suspension of payments in respect of banks in the United States (whether or not mandatory); (d) any of the representations and warranties of the Company contained in this Agreement shall not be true and correct in all material respects (other than representations and warranties qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date of this Agreement and as of the date of any scheduled expiration of the Offer, except for representations and warranties that relate to a specific date or time (which need only be true and correct in all material respects as of such date or time) and except for the representations and warranties in Section 3.2 (which shall be true and correct in all respects other than de minimis variations with respect to the number of securities outstanding, not to exceed 5,000 Shares and shares issuable under the Company Options, the ESPP and outstanding Company Warrants); (e) since the date of this Agreement, there shall have occurred any events or changes which have had, or which are reasonably expected to have or constitute, individually or in the aggregate, a Material Adverse Effect on the Company; (f) the Company Board of Directors or any committee thereof shall have (i) withdrawn, or modified or changed in a manner adverse to the Transactions, to the Parent or to Purchaser (including by amendment of the Schedule 14D-9), its recommendation in favor of the Offer, the Merger Agreement, or the Merger or shall have failed to make such favorable recommendation, (ii) approved or recommended any third party Acquisition Proposal or entered into or publicly announced its intention to enter into any agreement or agreement in principle with respect to any third party Acquisition Proposal, (iii) resolved or publicly proposed to do any of the foregoing; or (iv) taken a neutral position or made no recommendation with respect to a third party Acquisition Proposal after a reasonable amount of time (and in no event more than ten (10) business days following receipt thereof) has elapsed for the Company Board of Directors or any committee thereof to review and make a recommendation with respect thereto. (g) the Company shall have breached or failed, in any material respect, to perform or to comply with any material agreement, obligation or covenant to be performed or complied with by it under this Agreement; (h) Purchaser shall have failed to receive a certificate executed by the Company's Chief Executive Officer or President on behalf of the Company, dated as of the scheduled expiration of the Offer, to the effect that the conditions set forth in paragraphs (d), (e), (f) and (g) of this Annex I have not occurred; (i) any party to any Stockholder Agreement other than the Purchaser and Parent shall be in breach of or have failed to perform any of its covenants or agreements under such agreement or shall be in breach of any of its representations and warranties in such agreement at the Initial Expiration Date unless the Minimum Condition has been satisfied as of the Initial Expiration Date; (j) all consents, permits and approvals of Governmental Authorities shall not have been obtained; Annex Page 2 of 3 (k) the Rights shall have become exercisable; or (l) the Merger Agreement shall have been terminated in accordance with its terms. The foregoing conditions are for the sole benefit of Parent and Purchaser, may be asserted by Parent or Purchaser regardless of the circumstances (including any action or omission by Parent or any of its affiliates) giving rise to such condition and, except for the Minimum Condition, may be waived by Parent or Purchaser in whole or in part at any time and from time to time and in the sole discretion of Parent or Purchaser, subject in each case to the terms of this Agreement. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and, each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. The capitalized terms used in this Annex I shall have the meanings set forth in the Agreement to which it is annexed, except that the term "Merger Agreement" shall be deemed to refer to the Agreement to which this Annex I is annexed. Annex Page 3 of 3 EXHIBIT A STOCKHOLDERS AGREEMENT FILED AS EXHIBIT (D)(2) TO THE SCHEDULE TO, DATED OCTOBER 15, 2003, BY EMULEX CORPORATION. A-1 EXHIBIT B PURCHASER OPTION AGREEMENT FILED AS EXHIBIT (D)(3) TO THE SCHEDULE TO, DATED OCTOBER 15, 2003, BY EMULEX CORPORATION. B-1 EXHIBIT C-1 NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of October 8, 2003, by and between Emulex Corporation, a California corporation (the "COMPANY") and [James M. McCluney] [Stuart B. Berman] ("EXECUTIVE"), a shareholder and executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL"). RECITALS A. Vixel and the Company are engaged in the business of providing technologies and products for the storage networking infrastructure business, including HBAs, fabric switches and storage networking semiconductor components that are embedded in HBAs, fabric switches and storage appliances (including, but not limited to, storage arrays, network attached storage, tape libraries and virtualization appliances) that are contained in existing products of or products under development by either the Company or Vixel (the "BUSINESS"); B. Executive is a stockholder and an executive officer of Vixel and accordingly has acquired confidential and proprietary information relating to the Business and the operation of Vixel; C. Executive's covenant not to compete, as reflected in this Agreement, is an essential part of the transactions described in the Agreement and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and among Emulex Corporation, a Delaware corporation and the Company's parent corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to which, among other things, the Sub will be merged with and into Vixel (the "MERGER"); D. Executive holds a substantial number of stock options of Vixel that will continue to vest and shall be exercisable for shares of common stock of the Company following the Merger and therefore has a material economic interest in the consummation of the Merger. E. In order to protect the goodwill related to the Business and as a condition of, and an inducement to, the Company entering into the Merger Agreement, Executive has agreed to the noncompetition and nonsolicitation covenants and the confidentiality agreements provided in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and to induce the Company to consummate the transactions contemplated by the Merger Agreement, the receipt and sufficiency of which are hereby acknowledged, and with the knowledge that no other good or valuable consideration has been offered to or received by Executive in connection with the execution of this Agreement, Executive hereby covenants and agrees as follows: C1-1 1. Effectiveness of Agreement. This Agreement is conditioned upon the occurrence of the (i) Closing (as that term is defined in the Merger Agreement) and (ii) the offer of employment to Executive by the Company or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement shall be null and void ab initio should the Merger not be consummated for any reason or should the Employment Commencement not occur. This Agreement will terminate in the event of and concurrent with a termination of the Merger Agreement in accordance with its terms. 2. Noncompetition. (a) Executive and the Company agree that due to the nature of Executive's association with Vixel, Executive has confidential and proprietary information relating to the business and operations of Vixel and the Company (all references to the "Company" hereinafter shall include Vixel, which shall be the surviving corporation in the Merger). Executive acknowledges that such information is of extreme importance to the business of the Company and will continue to be so after the Merger and that disclosure of such confidential information to others or the unauthorized use of such information by others would cause substantial loss and harm to the Company. Executive and the Company also agree that Executive will continue to acquire, and will assist in developing, confidential and proprietary information relating to the Business following the Merger by reason of his employment with the Company. (b) Executive and the Company further agree that the market for the Business is intensely competitive and that the Company engages in the Business throughout the United States, Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (c) (i) Subject to subparagraph (ii) below, during the period commencing at the Effective Time of the Merger and ending one (1) year following the termination of Executive's employment with the Company (including, without limitation, voluntary resignation by such Executive or termination at the request of the Company) (the "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in the Business Area (as defined below), engage, directly or indirectly, in any in any capacity whatsoever (whether as an officer, director, stockholder, owner, proprietor, partner, member, co-owner, investor, employee, trustee, manager, consultant, independent contractor, co-venturer, financier, agent, representative or otherwise), in a Competing Business (as defined below), or otherwise hold any interest in a Competing Business; provided, however, that Executive may own, directly or indirectly, solely as a passive investment, securities of any entity traded on any national securities exchange if Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, "beneficially own" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 1.0% or more of any class of securities of such Competing Business. (ii) In the event that the employment of Executive is terminated by the Company without Cause (as defined herein) within one (1) year of the Effective Time, then the Restricted Period shall terminate on the expiration of severance payments to Executive. C1-2 (d) "COMPETING BUSINESS" as used herein, means any individual, corporation, partnership, limited partnership, limited liability company, trust (business or otherwise), institution, foundation, pool, plan or other entity or organization (other than the Company) which engages or proposes to engage in the Business. (e) "BUSINESS AREA" as used herein, means each state within the United States of America as well as each country, state, province and territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (f) "CAUSE" as used herein shall mean: (i) any misappropriation or embezzlement by Executive of the property of the Company or any of its affiliates or other act of fraud or material misconduct by Executive against the Company or any of its affiliates; (ii) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony or any criminal act involving moral turpitude; (iii) a breach by Executive of any provision of this Agreement; (iv) the failure, refusal or neglect by Executive to perform faithfully the duties and obligations customary to his office; (v) the habitual non-performance or incompetent performance by Executive of the duties or responsibilities customary to his office; (vi) misconduct by Executive, including insubordination, in respect of the duties or obligations customary to his office; and (vii) any intentional or grossly negligent act by Executive having the effect of materially injuring the business or reputation of the Company or any of its affiliates. No activities covered by item (iv), (v) and (vi) will be deemed to be "Cause" unless the Company has notified Executive of the prohibited activity in writing and Executive has failed to cease such activity within thirty (30) days. 3. Nonsolicitation of the Purchaser and Company Employees. During the Restricted Period, Executive shall not, without the prior written consent of the Company, directly or indirectly solicit, request, cause or induce any person who is at the time an employee of or a consultant of the Company to leave the employ of or otherwise terminate such person's relationship with the Company. 4. Nonsolicitation of Customers or Suppliers. During the Restricted Period, Executive shall not, directly or indirectly: (i) solicit, induce or attempt to induce any customer, client or supplier of the Company to cease doing business in whole or in part with the Company; or (ii) attempt to limit or interfere with any business engagement or relationship existing between the Company and any third party. 5. Confidentiality. Executive agrees that, upon the Closing, he will execute the Company's standard proprietary information and invention assignment agreement (the "Employee Invention and Non-Disclosure Agreement"), the form of which is attached as Annex A, and will abide by all of its terms. 6. Injunctive Relief. The parties agree that the remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from the conduct which would constitute a breach of this Agreement. Nothing herein contained shall be construed as prohibiting the Company from C1-3 pursuing any other remedies available to it or them for such breach or threatened breach, including, without limitation, the recovery of damages from Executive. 7. Reasonableness and Enforceability of Covenants. The parties expressly agree that the character, duration and geographical scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not limited to, Executive's position of confidence and trust as an executive officer of Vixel as well as his employment with the Company after the Closing. Moreover, if any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the character, duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 8. Severability. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state, country or jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 9. Construction. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard to principles of conflicts or choice of laws. 10. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each party hereto. No breach of any covenant, agreement, warranty or representation shall be deemed waived unless expressly waived in writing by the party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. 11. Entire Agreement. This Agreement, together with the Merger Agreement and the documents, instruments and other agreements contemplated by or referred to therein and the Employee Invention and Non-Disclosure Agreement, contains the entire understanding of the parties relating to the subject matter hereof, supersedes all prior and contemporaneous agreements and understandings relating to the subject matter hereof and shall not be amended except by a written instrument signed by each of the parties hereto. 12. Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which, when taken as a whole, shall constitute one and the same instrument. 13. Section Headings. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. C1-4 14. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the consent of the other parties; provided, however, that the Company may assign its rights hereunder, without the consent of Executive, to any entity that acquires or succeeds to the Business. 15. Further Assurances. From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or two business days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to the Company: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attn: Randall G. Wick Vice President, General Counsel Telephone No.: (714) 662-5600 Facsimile No.: (714) 641-0172 (b) if to Executive: c/o Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Telephone No.: (425) 806-4528 Facsimile No.: (425) 806-4001 17. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Merger Agreement. C1-5 IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition Agreement as of the date first above written. EMULEX CORPORATION By: ________________________________________ Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer ____________________________________________ [James M. McCluney][Stuart B. Berman] C1-6 ANNEX A [EMULEX LOGO] EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT This Employee Creation and Non-Disclosure Agreement (this "Agreement") is entered into between Emulex Corporation ("Emulex") and the undersigned Employee. In consideration of employment or continued employment by Emulex and the mutual promises contained in this Agreement, Employee and Emulex agree as follows: Definition of Terms. 1.1 Creation. "Creation" means every idea, concept, invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, formula, algorithm, literary or graphical or audiovisual work or sound recording, mask work, or computer program of any kind, whether or not subject to patent, copyright, mask work right, or similar protection. 1.2 Create. "Create" means invent, develop, devise, conceive, discover, create, first reduce to practice, write, or fix in a tangible medium of expression. 1.3 Confidential Information. "Confidential Information" means all Creations, data, information, know-how, process parameters, fabrication techniques, technical plans, documentation, customer lists, price lists, supplier lists, business plans, marketing plans, financial information, and the like, in whatever form or medium, and whether or not designated or marked "Confidential" or the like, which: (1) relate to the business of Emulex, and (a) have not been disclosed by Emulex to, or (b) are not generally known to, the general public or to Emulex's trade or industry; or (2) are received by Emulex from a third party under an obligation of confidentiality to the third party. 1.4 Emulex. "Emulex" includes Emulex Corporation, a Delaware corporation, all of its subsidiaries, and all joint ventures and partnerships of which such corporation and/or any of such subsidiaries is a member, partner, or participant. Confidential Information. 2.1 Acknowledgement by Employee. Employee acknowledges that during Employee's employment with Emulex, Employee may be given access to, become acquainted with, or develop Confidential Information. 2.2 No Use or Disclosure. Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not created or developed by Employee) at any time or in any manner, except as required in the course of employment with Emulex. Employee acknowledges that, except as set forth on an exhibit attached by Employee to this Agreement, Employee is not a party to any agreement with any other entity which either (1) restricts Employee's use or disclosure of any information gained or learned by Employee from the entity or while employed by the entity, or (2) otherwise relates to Employee's use or disclosure of any confidential information or trade secrets of the entity. Employee represents that no entity has asserted or is asserting that Employee has breached any of the terms or provisions of any of the agreements listed on the attached exhibit. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. 2.3 Restriction on Documents and Equipment. All Confidential Information, documents, and equipment relating to the business of Emulex, whether prepared by Employee or otherwise coming into Employee's possession, are the exclusive property of Emulex, and must not be removed from any of its premises except as required in the course of employment with Emulex. All such Confidential Information, documents, and equipment C1-7 shall be promptly returned by Employee to Emulex upon the request of Emulex, and on any termination of Employee's employment with Emulex. 2.4 No Disclosure or Use from Others. Employee shall not disclose to Emulex or use on behalf of Emulex any confidential information or trade secrets obtained from other entities, and shall not bring confidential information or trade secrets of other entities onto Emulex's premises. Creations. 3.1 Disclosure and Assignment of Creations. Employee shall promptly inform and disclose to Emulex all Creations which Employee Creates (either alone or with others) while in the employment of Emulex, if the Creations: (1) relate, at the time Created, to the business of Emulex or to any actual or demonstrably anticipated research or development work of Emulex; or (2) result from any work performed by Employee for Emulex; or (3) were Created utilizing any of Emulex's equipment, supplies, facilities, time, or Confidential Information. ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE PROPERTY OF EMULEX. 3.2 Governmental Rights. Employee acknowledges that Emulex has entered or may enter into agreements with agencies of the United States government, and that Emulex may be subject to laws and regulations which impose obligations, restrictions, and limitations on Emulex with respect to Creations which may be acquired by Emulex or which may be conceived or developed by employees, consultants, and other agents rendering services to Emulex. Employee shall be bound by all such obligations, restrictions, and limitations applicable to any Creation of Employee. Employee also shall take any and all further action which may be required to discharge such obligations and to comply with such restrictions and limitations. Employee further shall assign to Emulex all of Employee's rights in any Creation of Employee if Emulex is required to grant those rights to the United States government or any agencies of the United States government. 3.3 Employee's Assistance. Employee agrees to assist Emulex in obtaining and/or maintaining patents, copyrights, mask work rights, and similar rights to any Creations assigned by Employee to Emulex if Emulex, in its sole discretion, requests such assistance. Employee shall sign all documents and do all other things deemed necessary by Emulex, at Emulex's expense, to obtain and/or maintain such rights, to assign them to Emulex, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. If Emulex requires Employee's assistance under this Paragraph after termination of employment with Emulex, Employee will be compensated for time actually spent in providing assistance at Employee's hourly pay rate at the date of Employee's termination. 3.4 Appointment of Agent. Employee irrevocably appoints the President of Emulex to act as Employee's agent and attorney-in-fact to perform all acts necessary to obtain and/or maintain patents, copyrights, mask work rights, and similar rights, to any Creations assigned by Employee to Emulex under this Agreement if (1) Employee refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest and shall survive the death or disability of Employee. 3.5 Further Disclosure. Employee shall promptly disclose to Emulex, in confidence, (1) all Creations of any kind which Employee Creates while employed by Emulex, and (2) all patent applications filed by C1-8 Employee within one (1) year after termination of employment with Emulex. Employee agrees that any application for a patent, copyright registration, mask work registration, or similar right filed within one (1) year after termination of employment with Emulex shall be presumed to relate to a Creation of Employee Created during employment at Emulex, unless Employee can prove otherwise. 3.6 Records. Employee shall keep complete, accurate, and authentic information and records on all Creations in the manner and form requested by Emulex. The information and records, and all copies of them, shall be the exclusive property of Emulex. Employee shall promptly surrender the information and records upon the request of Emulex, and on any termination of Employee's employment with Emulex. 3.7 Compliance with Labor Code. THIS AGREEMENT DOES NOT APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870 OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." Restrictions on Employee. 4.1 No Conflicting Competition. While employed by Emulex, Employee shall not in any manner (whether as an employee, consultant, or otherwise) perform services for, or have an ownership interest in (other than less than one percent (1%) of a publicly-held company), any entity that competes with Emulex or any employment or business which is otherwise in conflict with Employee's employment relationship with Emulex. 4.2 No Competitive Planning. While employed by Emulex, Employee shall not undertake any planning for any outside business activity (1) competitive with the work which Employee performs for Emulex, or (2) competitive with the profit unit of Emulex for which Employee works. 4.3 No Hiring of Other Employees. While employed by Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ, or assist or encourage others in employing or attempting to employ (whether as an employee, consultant, or otherwise), any of Emulex's other employees who work in any area in which Employee has been significantly engaged on behalf of Emulex. 4.4 No Use of Confidential Information. While employed by Emulex, and for 1 year afterward, Employee shall not enter into any other employment (whether as an employee, consultant, or otherwise) in which the duties of such other employment would require Employee to disclose or use any Confidential Information. 4.5 No Conflicting Agreements. Employee represents that Employee has no agreements with or obligations to any other party that would interfere with Employee's compliance with this Agreement. 4.6 Subsequent Employment. Employee agrees that Emulex may notify anyone as to the existence and provisions of this Agreement. C1-9 Pre-existing Creations. 5.1 Representation of Coverage and Grant of License. Except for those Creations (if any) specifically reserved by Employee in an attachment to this Agreement, Employee represents that there are no Creations owned wholly or in part by Employee, or controlled directly or indirectly by Employee, which Employee considers to be reserved and excluded from the scope of this Agreement. Employee grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license on any and all non-reserved Creations of Employee. 5.2 Preservation of Confidence. In order to preserve Employee's proprietary rights in any unpatented or unpublished reserved Creations, Emulex shall keep in confidence all information provided by Employee pertaining to any reserved Creation, unless the information: (1) is already known to or in the possession of Emulex; (2) is or becomes publicly known through no wrongful act of Emulex; (3) is rightfully received by Emulex from a third party without breach of any obligation to Employee; (4) is approved for release by written authorization of Employee; (5) is distributed or made available to others by Employee without restriction as to use or disclosure; or (6) is developed independently by Emulex through persons not involved with information received by Emulex from Employee. 5.3 License from Use. Notwithstanding the reservation of a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while employed by Emulex, or (2) permits the use of a reserved Creation by another employee of Emulex, and does not have a prior written agreement with Emulex pertaining to such use, then Employee thereby grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license to that Creation (provided that the reserved Creation is owned wholly or in part by Employee, or is within the direct or indirect control of Employee at the time of employment). 5.4 Right of First Refusal. With respect to any reserved Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right of first refusal to purchase or license such Creations (unless otherwise licensed to Emulex by any other terms of this Agreement) on terms at least as favorable as offered to any other purchaser or licensee while Employee is employed by Emulex. General Provisions. 6.1 Attorneys' Fees. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the prevailing party shall be entitled to recover (in addition to any other relief awarded or granted) his, her, or its reasonable costs and expenses (including attorneys' fees) incurred in the proceeding and any appeal therefrom. 6.2 Entire Agreement. This Agreement, including all referenced attachments, constitutes the complete and final agreement between the parties, and supersedes all prior negotiations, agreements, and understandings between the parties concerning its subject matter. 6.3 Successors and Assigns. This Agreement is intended to benefit and is binding on (1) the successors and assigns of Emulex, and (2) the heirs and legal successors of Employee. 6.4 Separate Enforcement of Provisions. If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall be enforced to the extent possible. 6.5 Governing Law. The validity, construction, and performance of this Agreement is governed by the laws of the State of California. 6.6 Right to Relief. If Employee breaches or threatens to breach any provision of this Agreement, in addition to any other rights and remedies Emulex may have, Emulex shall be entitled to temporary and permanent injunctive relief to prevent the breach or threatened breach without the necessity of proving actual damages or posting any bond or undertaking. C1-10 6.7 Waiver and Amendment. No waiver, amendment, or modification of this Agreement shall be effective unless in writing and signed by the party against whom the waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of the right, power, or remedy. No waiver of any term, condition, or breach of this Agreement shall be construed as a waiver of any other term, condition, or breach. Effective Date. This Agreement, no matter when signed by Employee, is effective from the first date of Employee's employment with Emulex, and shall survive the termination of Employee's employment with Emulex. At Will Employment. Unless specifically provided differently in a separate written agreement signed by an authorized agent of Emulex, Employee acknowledges and agrees that Employee's employment by Emulex is now and will continue to be throughout his or her employment with Emulex "AT WILL," and can be terminated at any time by Emulex for any reason, with or without good cause, and with or without prior warning or notice. Acknowledgment of Reading. Employee acknowledges that Employee has read and understands this Agreement, and has received a copy of it. AGREED: EMULEX CORPORATION ______________________________ By:___________________________ Employee's signature ______________________________ ______________________________ Employee's Name Name Dated:________________________ ______________________________ Title Dated:________________________ C1-11 EXHIBIT C-2 NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of October 8, 2003, by and between Emulex Corporation, a California corporation (the "COMPANY") and [Name of Executive] ("EXECUTIVE"), a shareholder and executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL"). RECITALS A. Vixel is engaged in the business of providing technologies and products for the storage networking infrastructure business, fabric switches and storage networking semiconductor components that are embedded in fabric switches and storage appliances (including, but not limited to, storage arrays, network attached storage, tape libraries and virtualization appliances) that are contained in existing products of or products under development by Vixel (the "BUSINESS"); provided, that if Executive accepts an offer of employment with the Company following the Merger, the definition of Business shall also include the preceding Business of the Company as well as Vixel, including HBAs. B. Executive is a stockholder and an executive officer of Vixel and accordingly has acquired confidential and proprietary information relating to the Business and the operation of Vixel; C. Executive's covenant not to compete, as reflected in this Agreement, is an essential part of the transactions described in the Agreement and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and among Eagle Corporation, a Delaware corporation and the Company's parent corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to which, among other things, the Sub will be merged with and into Vixel (the "MERGER"); D. Executive holds a substantial number of stock options of Vixel that will continue to vest and shall be exercisable for shares of common stock of the Company following the Merger and therefore has a material economic interest in the consummation of the Merger. E. In order to protect the goodwill related to the Business and as a condition of, and an inducement to, the Company entering into the Merger Agreement, Executive has agreed to the noncompetition and nonsolicitation covenants and the confidentiality agreements provided in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and to induce the Company to consummate the transactions contemplated by the Merger Agreement, the receipt and sufficiency of which are hereby acknowledged, and with the knowledge that no other good or valuable consideration has been offered to or received by Executive in connection with the execution of this Agreement, Executive hereby covenants and agrees as follows: C2-1 1. Effectiveness of Agreement. This Agreement is conditioned upon the occurrence of the (i) Closing (as that term is defined in the Merger Agreement) and (ii) a bone fide offer of employment to Executive by the Company or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement shall be null and void ab initio should the Merger not be consummated for any reason or should the Employment Commencement not occur. This Agreement will terminate in the event of and concurrent with a termination of the Merger Agreement in accordance with its terms. 2. Noncompetition. (a) Executive and the Company agree that due to the nature of Executive's association with Vixel, Executive has confidential and proprietary information relating to the business and operations of Vixel and the Company (all references to the "Company" hereinafter shall include Vixel, which shall be the surviving corporation in the Merger). Executive acknowledges that such information is of extreme importance to the business of the Company and will continue to be so after the Merger and that disclosure of such confidential information to others or the unauthorized use of such information by others would cause substantial loss and harm to the Company. Executive and the Company also agree that Executive will continue to acquire, and will assist in developing, confidential and proprietary information relating to the Business following the Merger by reason of his employment with the Company. (b) Executive and the Company further agree that the market for the Business is intensely competitive and that the Company engages in the Business throughout the United States, Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (c) (i) Subject to subparagraph (ii) below, during the period commencing at the Effective Time of the Merger and ending one (1) year following the termination of Executive's employment with the Company (including, without limitation, voluntary resignation by such Executive or termination at the request of the Company) (the "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in the Business Area (as defined below), engage, directly or indirectly, in any in any capacity whatsoever (whether as an officer, director, stockholder, owner, proprietor, partner, member, co-owner, investor, employee, trustee, manager, consultant, independent contractor, co-venturer, financier, agent, representative or otherwise), in a Competing Business (as defined below), or otherwise hold any interest in a Competing Business; provided, however, that Executive may own, directly or indirectly, solely as a passive investment, securities of any entity traded on any national securities exchange if Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, "beneficially own" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 1.0% or more of any class of securities of such Competing Business. (ii) In the event that the employment of Executive is terminated by the Company without Cause (as defined herein) within one (1) year of the Effective Time, then the Restricted Period shall terminate on the expiration of severance payments to Executive. C2-2 (d) "COMPETING BUSINESS" as used herein, means any individual, corporation, partnership, limited partnership, limited liability company, trust (business or otherwise), institution, foundation, pool, plan or other entity or organization (other than the Company) which engages or has publicly announced that it proposes to engage in the Business. (e) "BUSINESS AREA" as used herein, means each state within the United States of America as well as each country, state, province and territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (f) "CAUSE" as used herein shall mean: (i) any misappropriation or embezzlement by Executive of the property of the Company or any of its affiliates or other act of fraud or material misconduct by Executive against the Company or any of its affiliates; (ii) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony or any criminal act involving moral turpitude; (iii) a breach by Executive of any provision of this Agreement; (iv) the failure, refusal or neglect by Executive to perform faithfully the duties and obligations customary to his office; (v) the habitual non-performance or incompetent performance by Executive of the duties or responsibilities customary to his office; (vi) misconduct by Executive, including insubordination, in respect of the duties or obligations customary to his office; and (vii) any intentional or grossly negligent act by Executive having the effect of materially injuring the business or reputation of the Company or any of its affiliates. No activities covered by item (iv), (v) and (vi) will be deemed to be "Cause" unless the Company has notified Executive of the prohibited activity in writing and Executive has failed to cease such activity within thirty (30) days. 3. Nonsolicitation of the Purchaser and Company Employees. During the Restricted Period, Executive shall not, without the prior written consent of the Company, directly or indirectly solicit, request, cause or induce any person who is at the time an employee of or a consultant of the Company to leave the employ of or otherwise terminate such person's relationship with the Company. 4. Nonsolicitation of Customers or Suppliers. During the Restricted Period, Executive shall not, directly or indirectly: (i) solicit, induce or attempt to induce any customer, client or supplier of the Company to cease doing business in whole or in part with the Company; or (ii) attempt to limit or interfere with any business engagement or relationship existing between the Company and any third party. 5. Confidentiality. Executive agrees that, upon the Closing, he will execute the Company's standard proprietary information and invention assignment agreement (the "Employee Invention and Non-Disclosure Agreement"), the form of which is attached as Annex A, and will abide by all of its terms. 6. Injunctive Relief. The parties agree that the remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from the conduct which would constitute a breach of this Agreement. Nothing herein contained shall be construed as prohibiting the Company from C2-3 pursuing any other remedies available to it or them for such breach or threatened breach, including, without limitation, the recovery of damages from Executive. 7. Reasonableness and Enforceability of Covenants. The parties expressly agree that the character, duration and geographical scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not limited to, Executive's position of confidence and trust as an executive officer of Vixel as well as his employment with the Company after the Closing. Moreover, if any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the character, duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 8. Severability. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state, country or jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 9. Construction. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard to principles of conflicts or choice of laws. 10. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each party hereto. No breach of any covenant, agreement, warranty or representation shall be deemed waived unless expressly waived in writing by the party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. 11. Entire Agreement. This Agreement, together with the Merger Agreement and the documents, instruments and other agreements contemplated by or referred to therein and the Employee Invention and Non-Disclosure Agreement, contains the entire understanding of the parties relating to the subject matter hereof, supersedes all prior and contemporaneous agreements and understandings relating to the subject matter hereof and shall not be amended except by a written instrument signed by each of the parties hereto. 12. Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which, when taken as a whole, shall constitute one and the same instrument. 13. Section Headings. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. C2-4 14. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the consent of the other parties; provided, however, that the Company may assign its rights hereunder, without the consent of Executive, to any entity that acquires or succeeds to the Business. 15. Further Assurances. From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or two business days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to the Company: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attn: Randall G. Wick Vice President, General Counsel Telephone No.: (714) 662-5600 Facsimile No.: (714) 641-0172 (b) if to Executive: c/o Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Telephone No.: (425) 806-4528 Facsimile No.: (425) 806-4001 17. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Merger Agreement. C2-5 IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition Agreement as of the date first above written. EMULEX CORPORATION By: ________________________________ Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer ____________________________________ [NAME OF EXECUTIVE] C2-6 ANNEX A [EMULEX LOGO] EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT This Employee Creation and Non-Disclosure Agreement (this "Agreement") is entered into between Emulex Corporation ("Emulex") and the undersigned Employee. In consideration of employment or continued employment by Emulex and the mutual promises contained in this Agreement, Employee and Emulex agree as follows: Definition of Terms. 1.1 Creation. "Creation" means every idea, concept, invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, formula, algorithm, literary or graphical or audiovisual work or sound recording, mask work, or computer program of any kind, whether or not subject to patent, copyright, mask work right, or similar protection. 1.2 Create. "Create" means invent, develop, devise, conceive, discover, create, first reduce to practice, write, or fix in a tangible medium of expression. 1.3 Confidential Information. "Confidential Information" means all Creations, data, information, know-how, process parameters, fabrication techniques, technical plans, documentation, customer lists, price lists, supplier lists, business plans, marketing plans, financial information, and the like, in whatever form or medium, and whether or not designated or marked "Confidential" or the like, which: (1) relate to the business of Emulex, and (a) have not been disclosed by Emulex to, or (b) are not generally known to, the general public or to Emulex's trade or industry; or (2) are received by Emulex from a third party under an obligation of confidentiality to the third party. 1.4 Emulex. "Emulex" includes Emulex Corporation, a Delaware corporation, all of its subsidiaries, and all joint ventures and partnerships of which such corporation and/or any of such subsidiaries is a member, partner, or participant. Confidential Information. 2.1 Acknowledgement by Employee. Employee acknowledges that during Employee's employment with Emulex, Employee may be given access to, become acquainted with, or develop Confidential Information. 2.2 No Use or Disclosure. Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not created or developed by Employee) at any time or in any manner, except as required in the course of employment with Emulex. Employee acknowledges that, except as set forth on an exhibit attached by Employee to this Agreement, Employee is not a party to any agreement with any other entity which either (1) restricts Employee's use or disclosure of any information gained or learned by Employee from the entity or while employed by the entity, or (2) otherwise relates to Employee's use or disclosure of any confidential information or trade secrets of the entity. Employee represents that no entity has asserted or is asserting that Employee has breached any of the terms or provisions of any of the agreements listed on the attached exhibit. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. 2.3 Restriction on Documents and Equipment. All Confidential Information, documents, and equipment relating to the business of Emulex, whether prepared by Employee or otherwise coming into Employee's possession, are the exclusive property of Emulex, and must not be removed from any of its premises except as required in the course of employment with Emulex. All such Confidential Information, documents, and equipment C2-7 shall be promptly returned by Employee to Emulex upon the request of Emulex, and on any termination of Employee's employment with Emulex. 2.4 No Disclosure or Use from Others. Employee shall not disclose to Emulex or use on behalf of Emulex any confidential information or trade secrets obtained from other entities, and shall not bring confidential information or trade secrets of other entities onto Emulex's premises. Creations. 3.1 Disclosure and Assignment of Creations. Employee shall promptly inform and disclose to Emulex all Creations which Employee Creates (either alone or with others) while in the employment of Emulex, if the Creations: (1) relate, at the time Created, to the business of Emulex or to any actual or demonstrably anticipated research or development work of Emulex; or (2) result from any work performed by Employee for Emulex; or (3) were Created utilizing any of Emulex's equipment, supplies, facilities, time, or Confidential Information. ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE PROPERTY OF EMULEX. 3.2 Governmental Rights. Employee acknowledges that Emulex has entered or may enter into agreements with agencies of the United States government, and that Emulex may be subject to laws and regulations which impose obligations, restrictions, and limitations on Emulex with respect to Creations which may be acquired by Emulex or which may be conceived or developed by employees, consultants, and other agents rendering services to Emulex. Employee shall be bound by all such obligations, restrictions, and limitations applicable to any Creation of Employee. Employee also shall take any and all further action which may be required to discharge such obligations and to comply with such restrictions and limitations. Employee further shall assign to Emulex all of Employee's rights in any Creation of Employee if Emulex is required to grant those rights to the United States government or any agencies of the United States government. 3.3 Employee's Assistance. Employee agrees to assist Emulex in obtaining and/or maintaining patents, copyrights, mask work rights, and similar rights to any Creations assigned by Employee to Emulex if Emulex, in its sole discretion, requests such assistance. Employee shall sign all documents and do all other things deemed necessary by Emulex, at Emulex's expense, to obtain and/or maintain such rights, to assign them to Emulex, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. If Emulex requires Employee's assistance under this Paragraph after termination of employment with Emulex, Employee will be compensated for time actually spent in providing assistance at Employee's hourly pay rate at the date of Employee's termination. 3.4 Appointment of Agent. Employee irrevocably appoints the President of Emulex to act as Employee's agent and attorney-in-fact to perform all acts necessary to obtain and/or maintain patents, copyrights, mask work rights, and similar rights, to any Creations assigned by Employee to Emulex under this Agreement if (1) Employee refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest and shall survive the death or disability of Employee. 3.5 Further Disclosure. Employee shall promptly disclose to Emulex, in confidence, (1) all Creations of any kind which Employee Creates while employed by Emulex, and (2) all patent applications filed by Employee within one (1) year after termination of employment with Emulex. Employee agrees that any application C2-8 for a patent, copyright registration, mask work registration, or similar right filed within one (1) year after termination of employment with Emulex shall be presumed to relate to a Creation of Employee Created during employment at Emulex, unless Employee can prove otherwise. 3.6 Records. Employee shall keep complete, accurate, and authentic information and records on all Creations in the manner and form requested by Emulex. The information and records, and all copies of them, shall be the exclusive property of Emulex. Employee shall promptly surrender the information and records upon the request of Emulex, and on any termination of Employee's employment with Emulex. 3.7 Compliance with Labor Code. THIS AGREEMENT DOES NOT APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870 OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." Restrictions on Employee. 4.1 No Conflicting Competition. While employed by Emulex, Employee shall not in any manner (whether as an employee, consultant, or otherwise) perform services for, or have an ownership interest in (other than less than one percent (1%) of a publicly-held company), any entity that competes with Emulex or any employment or business which is otherwise in conflict with Employee's employment relationship with Emulex. 4.2 No Competitive Planning. While employed by Emulex, Employee shall not undertake any planning for any outside business activity (1) competitive with the work which Employee performs for Emulex, or (2) competitive with the profit unit of Emulex for which Employee works. 4.3 No Hiring of Other Employees. While employed by Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ, or assist or encourage others in employing or attempting to employ (whether as an employee, consultant, or otherwise), any of Emulex's other employees who work in any area in which Employee has been significantly engaged on behalf of Emulex. 4.4 No Use of Confidential Information. While employed by Emulex, and for 1 year afterward, Employee shall not enter into any other employment (whether as an employee, consultant, or otherwise) in which the duties of such other employment would require Employee to disclose or use any Confidential Information. 4.5 No Conflicting Agreements. Employee represents that Employee has no agreements with or obligations to any other party that would interfere with Employee's compliance with this Agreement. 4.6 Subsequent Employment. Employee agrees that Emulex may notify anyone as to the existence and provisions of this Agreement. C2-9 Pre-existing Creations. 5.1 Representation of Coverage and Grant of License. Except for those Creations (if any) specifically reserved by Employee in an attachment to this Agreement, Employee represents that there are no Creations owned wholly or in part by Employee, or controlled directly or indirectly by Employee, which Employee considers to be reserved and excluded from the scope of this Agreement. Employee grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license on any and all non-reserved Creations of Employee. 5.2 Preservation of Confidence. In order to preserve Employee's proprietary rights in any unpatented or unpublished reserved Creations, Emulex shall keep in confidence all information provided by Employee pertaining to any reserved Creation, unless the information: (1) is already known to or in the possession of Emulex; (2) is or becomes publicly known through no wrongful act of Emulex; (3) is rightfully received by Emulex from a third party without breach of any obligation to Employee; (4) is approved for release by written authorization of Employee; (5) is distributed or made available to others by Employee without restriction as to use or disclosure; or (6) is developed independently by Emulex through persons not involved with information received by Emulex from Employee. 5.3 License from Use. Notwithstanding the reservation of a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while employed by Emulex, or (2) permits the use of a reserved Creation by another employee of Emulex, and does not have a prior written agreement with Emulex pertaining to such use, then Employee thereby grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license to that Creation (provided that the reserved Creation is owned wholly or in part by Employee, or is within the direct or indirect control of Employee at the time of employment). 5.4 Right of First Refusal. With respect to any reserved Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right of first refusal to purchase or license such Creations (unless otherwise licensed to Emulex by any other terms of this Agreement) on terms at least as favorable as offered to any other purchaser or licensee while Employee is employed by Emulex. General Provisions. 6.1 Attorneys' Fees. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the prevailing party shall be entitled to recover (in addition to any other relief awarded or granted) his, her, or its reasonable costs and expenses (including attorneys' fees) incurred in the proceeding and any appeal therefrom. 6.2 Entire Agreement. This Agreement, including all referenced attachments, constitutes the complete and final agreement between the parties, and supersedes all prior negotiations, agreements, and understandings between the parties concerning its subject matter. 6.3 Successors and Assigns. This Agreement is intended to benefit and is binding on (1) the successors and assigns of Emulex, and (2) the heirs and legal successors of Employee. 6.4 Separate Enforcement of Provisions. If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall be enforced to the extent possible. 6.5 Governing Law. The validity, construction, and performance of this Agreement is governed by the laws of the State of California. 6.6 Right to Relief. If Employee breaches or threatens to breach any provision of this Agreement, in addition to any other rights and remedies Emulex may have, Emulex shall be entitled to temporary and permanent injunctive relief to prevent the breach or threatened breach without the necessity of proving actual damages or posting any bond or undertaking. C2-10 6.7 Waiver and Amendment. No waiver, amendment, or modification of this Agreement shall be effective unless in writing and signed by the party against whom the waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of the right, power, or remedy. No waiver of any term, condition, or breach of this Agreement shall be construed as a waiver of any other term, condition, or breach. Effective Date. This Agreement, no matter when signed by Employee, is effective from the first date of Employee's employment with Emulex, and shall survive the termination of Employee's employment with Emulex. At Will Employment. Unless specifically provided differently in a separate written agreement signed by an authorized agent of Emulex, Employee acknowledges and agrees that Employee's employment by Emulex is now and will continue to be throughout his or her employment with Emulex "AT WILL," and can be terminated at any time by Emulex for any reason, with or without good cause, and with or without prior warning or notice. Acknowledgment of Reading. Employee acknowledges that Employee has read and understands this Agreement, and has received a copy of it. AGREED: EMULEX CORPORATION ________________________________ By:_____________________________ Employee's signature ________________________________ ________________________________ Employee's Name Name Dated:__________________________ ________________________________ Title Dated:__________________________ C2-11 EXHIBIT D CERTIFICATE OF INCORPORATION OF Vixel Corporation FIRST: The name of the Corporation is Vixel Corporation (the "Corporation"). SECOND: The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the "GCL"). FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is 10,000 shares, all of which shall be Common Stock, each share having a par value of $0.001. FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders: (1) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. (2) The directors shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the By-Laws of the Corporation. (3) The number of directors of the Corporation shall be as from time to time fixed by, or in the manner provided in, the By-Laws of the Corporation. Election of directors need not be by written ballot unless the By-Laws so provide. (4) The liability of the directors for monetary damages shall be eliminated to the fullest extent under applicable law. Any repeal or modification of this Article FIFTH shall be prospective and shall not affect the rights D-1 under this Article FIFTH in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification. (5) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted. SIXTH: Meetings of stockholders of the Corporation may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation. SEVENTH: The Corporation may indemnify to the fullest extent permitted by law any person (including the representative of such person's estate and such person's successors and assigns) made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he is or was a director, officer or employee of the Corporation or served at any other enterprise as a director, officer or employee at the request of the Corporation, and in relation thereto advance expenses to any such person. Neither any amendment nor repeal of this Article SEVENTH nor the adoption of any provision of the Corporation's Certificate of Incorporation inconsistent with this Article SEVENTH shall eliminate or reduce the effect of this Article SEVENTH in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article SEVENTH, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision. EIGHTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. D-2 EXHIBIT E-1 SECURED PROMISSORY NOTE OF VIXEL CORPORATION [DATE] Reference is hereby made to that certain Agreement and Plan of Merger (the "Merger Agreement") entered into as of October 8, 2003 by and among Emulex Corporation, a Delaware corporation ("Lender"), Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent ("Purchaser"), and Vixel Corporation, a Delaware corporation (the "Borrower"). Capitalized terms used herein, but not defined herein, shall have the respective meanings defined in the Merger Agreement. For value received and pursuant to Section 8.2 of the Merger Agreement, the Borrower hereby promises to pay to the order Lender the principal sum amount equal to [$_____ ($_____)],(1) together with accrued and unpaid interest thereon from the date hereof, in lawful money of the United States of America, on the date that is the earliest to occur of (a) 180 calendar days from the date hereof, (b) the consummation of an acquisition as described in Section 8.2(c) of the Merger Agreement and (c) an Event of Default as provided in Section 5(b) hereof. 1. Interest. The outstanding principal amount of this Note, together with all accrued and unpaid interest thereon, shall bear interest at a rate per annum equal to four percent (4%), compounding annually. Interest shall be calculated on the basis of a year comprised of twelve (12) thirty (30) day months. Payments received by Lender shall be applied first to the payment of accrued but unpaid interest on this Note and then to the reduction of the unpaid principal balance of this Note. 2. Method of Payment. All payments hereunder shall be made to the Lender at the principal office of the Lender or at such other place, or by such other means, as the Lender shall designate to the Borrower in writing. If any payment of principal or interest on this Note is due on a day which is not a Business Day, such payment shall be due on the next succeeding Business Day, and such extension of time shall be taken into account in calculating the amount of interest payable under this Note. "Business Day" means any day other than a Saturday, Sunday or legal holiday in the State of California. 3. Prepayment. The Borrower shall have the right to prepay the principal amount hereof in full or in part and/or any portion of the accrued but unpaid interest then owing, at any time and from time to time, without premium or penalty. Each partial prepayment of this - ------------------------ (1) One-half of the aggregate Termination Fee and Expense Fee (as the same may have been estimated by Parent in good faith prior to the date of this Note, with an adjustment payment in cash upon Parent's definitive determination of the Expense Fee). E1-1 Note shall first be applied to interest accrued through the date of prepayment and then to principal. 4. Security. Pursuant to the Security Agreement, dated on the date hereof (the "Security Agreement"), by and between the Lender and the Borrower, the obligations of the Borrower hereunder are secured by the Collateral (as defined in the Security Agreement), and the holder of this Note is entitled to the Proceeds (as defined in the Security Agreement). 5. Events of Default. (a) Each of the following shall constitute an event of default ("Event of Default") hereunder: (i) the Borrower's failure to observe or perform any material covenant or agreement contained in this Note or the Security Agreement which failure continues for thirty (30) calendar days after receipt by the Borrower of written notice from the Lender of such failure; (ii) any proceeding shall be commenced or any petition shall be filed seeking relief with respect to Borrower under any bankruptcy, insolvency or similar law; (iii) a receiver, trustee, custodian, sequestrator or similar official shall be appointed with respect to Borrower or any of its property; or (iv) the dissolution or termination of existence of the Borrower; or (v) the acceleration of the maturity of any indebtedness of the Borrower for borrowed money having an aggregate principal amount of at least $550,000. (b) Upon the occurrence of an Event of Default, the Lender may at its option by written notice to the Borrower declare this Note and the principal of and accrued interest on this Note and all other charges owing to the Lender to be, and the same shall forthwith become, immediately due and payable; provided, however, that upon the occurrence of an Event of Default set forth in any of clauses (ii), (iii) or (iv) of Section 5(a) above, the entire unpaid principal of and accrued interest on this Note shall automatically become immediately due and payable without the need for any notice to the Borrower or other action or election by Lender, all of which are hereby waived. Upon the occurrence of an Event of Default, the Lender, may, in addition to all rights and remedies available to it at law, exercise any or all of its rights under the Security Agreement. (c) In the event of an Event of Default, the Borrower shall pay on demand, in addition to the principal and interest payable hereunder, all reasonable attorneys' fees and disbursements and court costs incurred by the Lender in connection with the enforcement and collecting this Note. (d) Borrower covenants and agrees that until this Note is paid in full it will promptly after the occurrence of an Event of Default or an event, act or condition that, with notice or lapse of time or both, would constitute an Event of Default, provide Lender with a certificate of the chief executive officer or chief financial officer of Borrower specifying the nature thereof. 6. Representations and Warranties. Borrower hereby represents and warrants to Lender that: (a) it is a duly organized and validly existing corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and E1-2 authority to own and operate its properties, to transact the business in which it is now engaged and to execute and deliver this Note; (b) this Note constitutes the duly authorized, legally valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms; (c) all consents and grants of approval required to have been granted by any person (as such term is defined in the Merger Agreement) in connection with the execution, delivery and performance of this Note have been granted; (d) the execution, delivery and performance by Borrower of this Note do not and will not (i) violate any Legal Requirement, contract or agreement to which it is subject or by which its properties are bound or the charter documents or bylaws of Borrower or (ii) result in the creation of any Encumbrance with respect to the property of Borrower (other than pursuant hereto); (e) there is no private or governmental action, suit, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic or, to the knowledge of the Borrower, threatened against the Borrower or its subsidiaries any of their properties or any of their officers or directors (in their capacities as such). There is no judgment, decree or order against the Borrower or any of its subsidiaries or, to the knowledge of the Borrower, any of their directors or officers (in their capacities as such), that would reasonably be expected to have a Material Adverse Effect on the Borrower; and (f) the security interests in the Collateral granted to Lender under the Security Agreement constitute valid and continuing security interests in the Collateral and upon filing a financing statement naming Borrower as "debtor" and Lender as "secured party" in the appropriate filing offices, the security interests in the Collateral granted to Lender under the Security Agreement will constitute perfected security interests therein superior and prior to all Encumbrances, rights or claims of all other persons, except as set forth in Section 7 hereof. 7. Subordination. (a) For purposes of this Note, "Senior Debt" shall mean any indebtedness of Borrower or any of its subsidiaries (including interest, premium and penalties due from or arising out of such indebtedness or any refinancing thereof) to Silicon Valley Bank pursuant to that certain Loan and Security Agreement, dated September 23, 2003, between Silicon Valley Bank and Borrower (the "SVB Security Agreement"). For purposes of this Note, "Senior Lien" shall mean the security interests now or in the future held by Silicon Valley Bank in Borrower's collateral pursuant to the SVB Security Agreement. (b) The security interests now or in the future held by Lender in the Collateral pursuant to the Security Agreement (the "Junior Liens") are and will be junior and subordinate to the Senior Liens. The subordinations and priorities provided for in this Note are applicable irrespective of the time or order of attachment or perfection of the Senior Liens and the Junior Liens. E1-3 (c) The indebtedness evidenced by this Note, and any renewals or extensions thereof, shall at all times be wholly subordinate and junior in right of payment to any Senior Debt, in the manner and with the force and effect hereafter set forth: (i) In the event of any liquidation, dissolution or winding up of the Borrower, or of any execution, sale, receivership, insolvency, bankruptcy, readjustment, reorganization or other similar proceeding relative to the Borrower or its property, all Senior Debt shall first be irrevocably paid in full before any payment is made upon the indebtedness evidenced by this Note; and in any such event any payment or distribution of any kind or character, whether in cash, property or securities (other than in securities, including equity securities, or other evidences of indebtedness, the payment of which is subordinated to the payment of the Senior Debt then outstanding), which shall be made upon or in respect of this Note shall be applied in payment of the Senior Debt unless and until the Senior Debt shall have been paid or satisfied in full. (ii) In the event that this Note is declared or becomes due and payable because of the occurrence of any Event of Default hereunder under circumstances when the foregoing clause (i) shall not be applicable, the Lender shall be entitled to payments only after there shall first have been paid in full all Senior Debt outstanding at the time this Note so becomes due and payable because of any such event, or payment shall have been provided for in a manner satisfactory to the holders of the Senior Debt. (iii) During the continuance of any default which would permit an acceleration of the maturity of any Senior Debt, no payment of principal or interest shall be made on this Note if written notice of such default (a "Default Notice") has been given to the Borrower by the holders of any Senior Debt. Upon receipt of any Default Notice from the holders of any Senior Debt, Borrower shall forthwith send a copy thereof to the holder of this Note. Any payment or distribution of any kind or character, whether in cash, property or securities, made with respect to this Note after receipt by Borrower of a Default Notice shall be held by the Lender in trust for the benefit of, and shall be paid over to the holders of the Senior Debt for application to the Senior Debt unless and until the Senior Debt shall have been paid or satisfied in full. (iv) No right of the holders of any Senior Debt to enforce subordination as herein provided shall at any time or in any way be affected or impaired by any failure to act on the part of the Borrower or the holders of any Senior Debt, or by any noncompliance by Borrower with any of the terms, provisions and covenants of the Note or the agreement under which it is issued, regardless of any knowledge thereof that the holders of any Senior Debt may have or be otherwise charged with. (v) Borrower agrees, for the benefit of present and future holders of Senior Debt, that in the event that this Note is declared due and payable before its expressed maturity because of the occurrence of an Event of Default E1-4 hereunder, Borrower will give prompt notice in writing of such happening to the holders of the Senior Debt. (d) The foregoing provisions are solely for the purpose of defining the relative rights of the holders of Senior Debt and Senior Liens, on the one hand, and the Lender on the other hand, and nothing herein shall impair, as between the Borrower and the Lender, the obligation of the Borrower which is unconditional and absolute, to pay the principal and interest on the Note in accordance with its terms, nor shall anything herein prevent the Lender from exercising all remedies otherwise permitted by applicable law or hereunder or under the Security Agreement upon default hereunder or under the Security Agreement, subject to the rights of the holders of the Senior Debt and Senior Liens as set forth herein. 8. Recourse. In addition to recourse against the Collateral as provided in the Security Agreement, the Lender shall be entitled to recourse against the Borrower for the payment of any principal of or interest on the Note or for any claim based hereon (including costs of collection). 9. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the choice of laws rules thereof. 10. Loss, Mutilation, Etc. Upon notice from the holder of this Note to the Borrower of the loss, theft, destruction or mutilation of this Note, and upon receipt of an indemnity reasonably satisfactory to the Borrower from the holder of this Note or, in the case of mutilation hereof, upon surrender of the mutilated Note, the Borrower will make and deliver a new note of like tenor in lieu of this Note. 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice): (a) if to Lender: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attention: Randall G. Wick Vice President, General Counsel Telephone: (714) 662-5600 Facsimile: (714) 641-0172 E1-5 and with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue, Suite 1100 Palo Alto, California 94301 Attention: Gregory C. Smith Telephone: (650) 470-4500 Facsimile: (650) 470-4570 (b) if to the Borrower: Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Attention: Kurtis L. Adams Chief Financial Officer Telephone: (425) 806-4528 Facsimile: (425) 806-4001 with a copy to: Heller Ehrman White & McAuliffe LLP 701 Fifth Avenue, Suite 6100 Seattle, Washington 98104 Attention: David Wilson Telephone: (206) 447-0900 Facsimile: (206) 447-0849 12. Waivers. Borrower, to the extent permitted by law, hereby waives presentment, protest, demand for performance and payment, and notice of protest, non-performance and dishonor. 13. Savings Clause. In the event any provisions hereof shall result, for any reason and at any time, in an effective rate of interest that exceeds the limit of the usury or any other law applicable to interest on the indebtedness evidenced hereby, all sums in excess of those lawfully collectible as interest for the period in question shall be (a) applied, to the extent of such excess, against the unpaid principal amount evidenced hereby with the same force and effect as though Lender had agreed to accept such extra payment(s) as a prepayment or (b) if the indebtedness has been fully paid, refunded by Lender to Borrower to the extent of such excess. 14. Transferability. Neither this Note nor any obligation hereunder is assignable by Borrower except by operation of law or with the written consent of the Lender. E1-6 Any purported assignment or other transfer of this Note or any obligation hereunder by Borrower shall be null and void. 15. Successors. The provisions hereof shall be binding upon the legal representatives, successors and permitted assigns of the Borrower and shall inure to the benefit of the Lender, its successors by operation of law and its permitted transferees. A transferee of the Borrower's assets resulting from merger, consolidation or similar transaction and a transferee of all or substantially all of the Borrower's assets as a going concern shall be deemed a successor of the Borrower. [Remainder of Page Left Intentionally Blank] E1-7 IN WITNESS WHEREOF, the Borrower has executed this Note on the date first above written. BORROWER: VIXEL CORPORATION By: ____________________________________ Name: Title: Address: 11911 North Creek Parkway South Bothell, Washington 98011 E1-1 EXHIBIT E-2 SECURITY AGREEMENT SECURITY AGREEMENT, dated as of [Date] (the "Agreement"), by and between Vixel Corporation, a Delaware corporation (the "Borrower"), and Emulex Corporation, a Delaware corporation (the "Secured Party" and together with the Borrower the "Parties"). WHEREAS, the Borrower has agreed to grant a security interest in the Collateral (as defined below) and the Proceeds (as such term is defined in Section 9-102 of the Uniform Commercial Code in force and effect in the State of Delaware (the "UCC")) to the Secured Party to secure the Borrower's obligations under the Secured Promissory Note dated as of the date hereof in the amount of set forth therein (the "Note"), a copy of which is attached as Exhibit A hereto. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows: 1. Grant of Security Interest in Collateral. The Borrower hereby grants to the Secured Party, as security for its obligations to the Secured Party under the Note (the "Obligations"), a security interest in all of the Borrower's inventory, equipment, tangible personal property, general intangibles (including intellectual property rights), chattel paper and deposit accounts (as each such term is defined in Section 9-102 of the UCC) (the "Collateral") and the Proceeds thereof, but not including any equipment subject to an equipment lease in respect of which the lessor has retained a security interest under contract or applicable law. 2. Filing of Financing Statement. The Borrower hereby authorizes the Secured Party to file a financing statement and any amendments thereto, including continuation statements, describing the Collateral and the Proceeds. 3. Borrower's Covenants. a. The Borrower agrees: (i) at any time and from time to time, upon request of the Secured Party, to execute any notice, instrument, document or agreement that the Secured Party shall consider necessary or desirable to create, preserve, continue, perfect or validate any security interest granted hereunder or which the Secured Party may consider necessary or desirable to exercise or enforce its rights hereunder with respect to such security interest, which notice, financing statement, continuation statement, instrument, document or agreement may be filed and/or recorded by the Secured Party at Borrower's expense; and (ii) to give the Secured Party prompt written notice of any E2-1 litigation filed or claim asserted against the Borrower relating to or potentially affecting the Collateral. b. The Borrower agrees to: (i) pay promptly the Obligations secured hereby when due and (ii) pay reasonable attorneys' fees and expenses incurred by the Secured Party in the preservation, realization, enforcement and exercise of its rights, powers and remedies hereunder. 4. Payment of Taxes, Charges, Liens and Assessments. The Borrower agrees to pay, prior to delinquency, all taxes, charges, liens and assessments against the Collateral and the Proceeds, and upon the failure of the Borrower to do so, the Secured Party shall be entitled to do so, with any such payments thereafter to be deemed Obligations of the Borrower to the Secured Party, due and payable immediately without demand and secured by the Collateral and the Proceeds, subject to all of the terms and conditions of this Agreement. 5. Powers of Secured Party. The Borrower appoints the Secured Party (or a designee thereof) his true attorney in fact to perform any of the following powers, which are coupled with an interest, are irrevocable until termination of this Agreement and may be exercised from time to time by the Secured Party' officers and employees, or any of them, whether or not the Borrower is in default: (a) to perform any obligations of the Borrower hereunder in the Borrower's name or otherwise; (b) to give notice of Secured Party' rights with respect to the Collateral and to enforce such rights; (c) to release security; (d) to resort to security; (e) to prepare, execute, file, record or deliver notes, assignments, schedules, designation statements, financing statements, continuation statements, termination statements, statements of assignment, applications for registration or like papers to perfect, preserve or release the Secured Party's security interest in the Collateral; (f) to verify facts concerning the Collateral by inquiry of obligors thereon, or otherwise, in its own name or fictitious name; (g) after an Event of Default (as defined below), to endorse, collect, deliver and receive payment under instruments for the payment of money constituting or relating to the Collateral; (h) after an Event of Default, to preserve or release the interest evidenced by chattel paper to which the Secured Party is entitled hereunder and to endorse and deliver evidences of title incidental thereto; and (j) to do all acts and things and execute all documents in the name of the Borrower otherwise, deemed by the Secured Party as necessary and proper in connection with the preservation, perfection or enforcement of its rights hereunder. E2-2 6. Events of Default; Remedies. a. An Event of Default (as defined in the Note) under the Note shall constitute an event of default ("Event of Default") hereunder. b. Upon the occurrence of an Event of Default, the Secured Party may, in addition to all rights under the UCC, exercise any or all of its rights hereunder including, the right to take possession of the Collateral, and for that purpose the Secured Party may enter upon any premises on which the Collateral or any part of it may be situated and remove it. The Secured Party may require Borrower to make the Collateral available to the Secured Party at a place to be designated by the Secured Party which is reasonably convenient to both Parties. Borrower shall pay the Secured Party's reasonable expenses of retaking, holding, preparing for sale and selling the Collateral and shall include, without limitation, the Secured Party's reasonable attorneys' fees and expenses. The Secured Party shall have the right to set off such expenses against any proceeds of any disposition by the Secured Party of any of the Collateral. 7. No Waiver. The failure of the Secured Party to exercise any right or remedy under this Agreement or the Note, or delay by the Secured Party in exercising same, will not operate as a waiver thereof. No waiver by the Secured Party will be effective unless and until it is in writing and signed by the Secured Party. No waiver of any condition or performance will operate as a waiver of any subsequent condition or obligation. The Secured Party shall have no obligation to resort to the Collateral or any other security which is or may become available to it. 8. Miscellaneous. a. This Agreement, any amendments or replacement hereof, and the legality, validity and performance of the terms hereof, shall be governed by and enforced and construed in accordance with the laws of the State of Delaware without regard to conflicts of laws and principles thereof except to the extent that the UCC provides for the application of the law of any other jurisdiction. b. This Agreement and the rights, powers and duties set forth herein shall be binding upon the Borrower, its agents, representatives and successors and shall inure to the benefit of the Secured Party and its successors and permitted assigns and, in the event of any transfer or assignment of rights by the Secured Party, the rights and privileges herein conferred upon the Secured Party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This Agreement E2-3 and the rights and privileges herein conferred upon the Secured Party may not be assigned by the Secured Party without the consent of the Borrower except in connection with a permitted assignment of the Note. c. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any applicable law shall not effect the validity or enforceability of any other provisions hereof. d. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice): (a) if to Lender: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attention: Randall G. Wick Vice President, General Counsel Telephone: (714) 662-5600 Facsimile: (714) 641-0172 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue, Suite 1100 Palo Alto, California 94301 Attention: Gregory C. Smith Telephone: (650) 470-4500 Facsimile: (650) 470-4570 E2-4 (b) if to the Borrower: Vixel Corporation 1911 North Creek Parkway South Bothell, Washington 98011 Attention: Kurtis L. Adams Chief Financial Officer Telephone: (425) 806-4528 Facsimile: (425) 806-4001 with a copy to: Heller Ehrman White & McAuliffe LLP 701 Fifth Avenue, Suite 6100 Seattle, Washington 98104 Attention: David Wilson Telephone: (206) 447-0900 Facsimile: (206) 450-0849 e. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same document. f. This Agreement and the security interest hereunder shall terminate upon the full and final performance of all Obligations of the Borrower. At such time, the Secured Party shall promptly reassign to the Borrower all of the Collateral hereunder which has not been sold, disposed of, retained or applied by the Secured Party in accordance with the terms hereof and shall take all actions reasonably requested by the Borrower to release the Collateral from the security interest granted hereby, including without limitation filing all appropriate UCC termination statements. E2-5 IN WITNESS WHEREOF, the undersigned have caused this Security Agreement to be executed as of the date first written above. BORROWER: VIXEL CORPORATION By: ________________________________ Name: Title: SECURED PARTY: EMULEX CORPORATION By: ________________________________ Name: Title: E2-6 EX-99.(D)(2) 13 f93445toexv99wxdyx2y.txt EXHIBIT (D)(2) EXHIBIT (d)(2) STOCKHOLDERS AGREEMENT THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT"), is entered into as of October 8, by and between Emulex Corporation, a Delaware corporation ("PARENT"), and Aviary Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Parent ("PURCHASER"), on the one hand, and each of the stockholders of Vixel Corporation, a Delaware corporation (the "COMPANY"), set forth on Schedule 1 hereto (each a "STOCKHOLDER" and collectively, the "STOCKHOLDERS"), on the other hand. Capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Merger Agreement (as defined below). R E C I T A L S WHEREAS, each Stockholder is, as of the date hereof, the record and beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "ACT")) of (i) the number of shares of common stock, par value $.0015 per share, of the Company (together with any associated preferred stock or other rights issued pursuant to the Rights Agreement, dated as of November 15, 2000, between the Company and Computer Share Trust Company, Inc. as the same has been amended through the date hereof, the "COMMON STOCK"); (ii) the number of shares of Series B convertible preferred stock, par value $.001 per share, of the Company (the "SERIES B PREFERRED STOCK"); (iii) the number of options to acquire Common Stock (the "COMPANY OPTIONS"); and (iv) the number of warrants to acquire Common Stock (the "COMPANY WARRANTS") set forth opposite the name of such Stockholder on Schedule 1 hereto; and WHEREAS, Parent, Purchaser and the Company have entered into an Agreement and Plan of Merger, dated as of the date hereof (the "MERGER AGREEMENT"), which provides, among other things, for (a) Purchaser to commence a tender offer for all of the issued and outstanding shares of Common Stock and Series B Preferred Stock (the "OFFER") and (b) the merger of Purchaser with and into the Company with the Company continuing as the surviving corporation (the "MERGER"), in each case upon the terms and subject to the conditions set forth in the Merger Agreement; and WHEREAS, as a condition to the willingness of Parent and Purchaser to enter into the Merger Agreement and as an inducement and in consideration therefor, the Stockholders have agreed to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein and in the Merger Agreement, and intending to be legally bound hereby, the parties hereto agree as follows: Section 1. Representations and Warranties of the Stockholders. Each Stockholder hereby represents and warrants to Parent, severally and not jointly, as set forth below: (a) Such Stockholder is the record and beneficial owner (as defined in Rule 13d-3 under the Act) of the shares of Common Stock and/or Series B Preferred Stock set forth opposite his or its name on Schedule 1 to this Agreement (such shares of Common Stock and/or Series B Preferred Stock, together with any Common Stock and Series B Preferred Stock acquired by the Stockholder after the date of this Agreement, whether Shares acquired by way of exercise of Company Options, Company Warrants or other rights to purchase Common Stock or Series B Preferred Stock or by way of dividend, distribution, exchange, merger, consolidation, grant of proxy or otherwise, but excluding shares owned by other Stockholders, all as may be adjusted from time to time pursuant to Section 6 hereof, the "SHARES"). Schedule 1 to this Agreement lists separately all Company Options and Company Warrants issued to such Stockholder. Such Stockholder is the record and beneficial owner of the Company Options and Company Warrants set forth opposite such Stockholder's name on Schedule 1 to this Agreement. (b) Such Stockholder has voting power, power of disposition, power of conversion (in respect of the Series B Preferred Stock) and power to agree to all of the matters regarding such Stockholder set forth in this Agreement, in each case with respect to all of the Shares, with no limitations, qualifications or restrictions on such right. Such Stockholder is not the record or beneficial owner of any securities of the Company on the date hereof other than the Shares and the Company Options and Company Warrants set forth on Schedule 1. (c) Such Stockholder has the legal capacity to execute and deliver this Agreement and to consummate the transactions contemplated hereby regarding such Stockholder. (d) This Agreement has been validly executed and delivered by such Stockholder and, assuming due and valid authorization, execution and delivery thereof by Parent and Purchaser, constitutes the legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. (e) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will result in a violation of, or constitute (with or without due notice or lapse of time or both) a default under, or conflict with, or give rise to any right of termination, cancellation or acceleration under any contract, trust, note, bond, mortgage, indenture, license, agreement, or material contractual restriction or obligation of any kind to which such Stockholder is a party or by which such Stockholder or his or its Shares are bound, which singularly or in the aggregate, would prevent or adversely effect the ability of such Stockholder to perform his or its obligations under this Agreement. The consummation of the transactions contemplated hereby will not violate, or require any consent, approval or notice (except those required under applicable securities laws) under, any provision of any judgment, order, injunction, decree, statute, law, rule or regulation applicable to such Stockholder 2 which, singularly or in the aggregate, would prevent or adversely effect the ability of such Stockholder to perform his or its obligations under this Agreement. (f) In the case of any Stockholder that is a corporation, limited partnership or limited liability company, such Stockholder is an entity duly organized and validly existing under the laws of the jurisdiction in which it is incorporated or constituted, and each such Stockholder has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby regarding such Stockholder, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement. (g) The Shares owned by such Stockholder are now, and at all times during the term hereof will be, held by such Stockholder or by a nominee or custodian for the benefit of such Stockholder, free and clear of all liens, claims, security interests, proxies, voting trusts, agreements, options, rights, understandings or arrangements or any other encumbrances whatsoever on title, transfer or exercise of any rights of a Stockholder in respect of such Shares (collectively, "ENCUMBRANCES"), except for any such Encumbrances arising hereunder, and the transfer of the Shares held by such Stockholders hereunder will effectively vest in Purchaser valid and marketable title to such Shares, free and clear of any Encumbrances. (h) Each Stockholder whose Shares are subject to community property interests under the laws of any relevant jurisdiction has agreed to have executed and delivered to Parent such consents, waivers and approvals as are necessary for the execution of this Agreement and the approval and consummation of the transactions contemplated hereby regarding such Stockholder. (i) Such Stockholder understands and acknowledges that Parent and Purchaser are entering into the Merger Agreement in reliance upon such Stockholder's execution and delivery of this Agreement. Section 2. Representations and Warranties of Parent and Purchaser. Each of Parent and Purchaser hereby represents and warrants to the Stockholders, jointly and severally, as follows: (a) Each of Parent and Purchaser is a corporation duly organized and validly existing under the laws of the State of Delaware, has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement. (b) This Agreement has been duly authorized, executed and delivered by each of Parent and Purchaser and, assuming due and valid authorization, execution and delivery thereof by a Stockholder, constitutes the legal, valid and binding obligation of each of Parent and Purchaser, enforceable by such Stockholder against each of them in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement 3 of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. (c) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will result in a violation of, or constitute (with or without due notice or lapse of time or both) a default under, or conflict with, or give rise to any right of termination, cancellation or acceleration under any material contract, trust, note, bond, mortgage, indenture, license, agreement or contractual restriction or obligation of any kind to which Parent and Purchaser is a party which, singularly or in the aggregate, would prevent or adversely effect the ability of Parent and Purchaser to perform its obligations under this Agreement. The consummation of the transactions contemplated hereby will not violate, or require any consent, approval or notice (except those required under applicable securities laws) under, any provision of any judgment, order, injunction, decree, statute, law, rule or regulation applicable to Parent and Purchaser which, singularly or in the aggregate, would prevent or materially adversely effect the ability of Parent and Purchaser to perform its obligations under this Agreement. Section 3. Tender of the Shares. Each Stockholder hereby agrees that, subject to the terms and conditions of Section 8 hereof, (a) such Stockholder shall validly tender, or cause to be validly tendered, pursuant to and in accordance with the terms of the Offer, his or its Shares into the Offer as promptly as practicable, and in any event no later than the fifth business day, following the commencement of the Offer pursuant to Section 1.1 of the Merger Agreement (except for those Shares issued upon the exercise of Company Options, Company Warrants or other rights to acquire shares of Common Stock or Series B Preferred Stock after such date, which shall be validly tendered, or caused to be validly tendered, as promptly as practicable following such exercise) and receipt of the applicable tender offer documentation and (b) such Stockholder shall not withdraw any Shares so tendered unless this Agreement is terminated or the Offer is terminated or has expired without Purchaser purchasing all Shares validly tendered in the Offer and not withdrawn. Notwithstanding the foregoing, each Stockholder may decline to tender, or may withdraw, any and all of such Stockholders' Shares if, without the consent of such Stockholder, Purchaser amends the Offer to (i) reduce the Offer Price, (ii) reduce the number of Shares subject to the Offer, (iii) change the form of consideration payable in the Offer or (iv) amend or modify any term or condition of the Offer in a manner adverse to the stockholders of the Company (other than insignificant changes or amendments or other than to waive any condition other than the Minimum Condition). Each Stockholder shall give Purchaser at least two (2) business days' prior notice of any withdrawal of its Shares pursuant to the immediately preceding proviso. Notwithstanding anything herein to the contrary, the holders of the Series B Preferred Stock shall retain the option and right to instruct the tender agent to take all steps necessary to convert their shares into Common Stock at any time prior to the Purchase of such shares in the Offer. 4 Section 4. Transfer of the Shares. (a) Prior to the termination of this Agreement and except as otherwise provided herein, each of the Stockholders agrees that it shall not: (i) transfer, assign, sell, gift-over, pledge, hypothecate, encumber or otherwise dispose of, or consent to any of the foregoing ("TRANSFER"), any or all of the Shares, Company Options, Company Warrants or other rights to acquire Common Stock or Series B Preferred Stock or any right or interest therein; (ii) enter into any contract, option or other agreement, arrangement or understanding with respect to any Transfer; (iii) grant any proxy, power-of-attorney or other authorization or consent with respect to any of the Shares; (iv) deposit any of the Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any of the Shares or (v) take any other action that would in any way restrict, limit or interfere with the performance of such Stockholder's obligations hereunder or the transactions contemplated hereby or make any representation or warranty of such Stockholder untrue or incorrect. (b) Each Stockholder agrees, promptly following request of Parent, to surrender to the Company, or to the transfer agent for the Company, certificates evidencing the Shares, and shall cause the Company or the transfer agent for the Company to place the following legend on any and all certificates evidencing the Shares: THE SHARES OF VIXEL CORPORATION [COMMON STOCK] [SERIES B CONVERTIBLE PREFERRED STOCK] REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER PURSUANT TO THAT CERTAIN STOCKHOLDERS AGREEMENT, DATED AS OF OCTOBER 8, 2003, BY AND AMONG EMULEX CORPORATION, AVIARY ACQUISITION CORP. AND CERTAIN STOCKHOLDERS OF VIXEL CORPORATION. ANY TRANSFER OF SUCH SHARES OF VIXEL CORPORATION [COMMON STOCK] [SERIES B CONVERTIBLE PREFERRED STOCK] IN VIOLATION OF THE TERMS AND PROVISIONS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND OF NO EFFECT WHATSOEVER. Section 5. Voting Arrangements; Irrevocable Proxy. (a) Each Stockholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the stockholders of the Company (a "COMPANY STOCKHOLDERS' MEETING"), however called, and at every adjournment or postponement thereof, he, she or it shall (i) appear at the meeting or otherwise cause his or its Shares to be counted as present thereat for purposes of establishing a quorum; (ii) vote, or execute consents in respect of, his or its Shares, or cause his or its Shares to be voted, or consents to be executed in respect thereof, in favor of the approval and adoption of the Merger Agreement (including any revised or amended Merger Agreement that has been agreed to by the Company) and the Merger, and any action required in furtherance thereof and (iii) vote, or execute consents in respect of, his or its Shares, or cause his or its Shares to be voted, or consents to be executed in respect thereof, against (A) any agreement or transaction relating to any Acquisition Proposal (other than as proposed by Parent or Purchaser) or (B) any amendment of the Company's Certificate of Incorporation or Bylaws or other proposal, action or transaction involving the Company or any of its subsidiaries or any of its stockholders, which amendment or other proposal, action or 5 transaction that could reasonably be expected to prevent or materially impede or delay the consummation of the Offer or Merger or the other Transactions or the consummation of the transactions contemplated by this Agreement or to deprive Parent of any material portion of the benefits anticipated by Parent to be received from the consummation of the Merger or the other Transactions or the transactions contemplated by this Agreement, or change in any manner the voting rights of Common Stock or Series B Preferred Stock (collectively, "FRUSTRATING TRANSACTIONS") presented to the stockholders of the Company (regardless of any recommendation of the Board of Directors of the Company) or in respect of which vote or consent of the Stockholder is requested or sought, unless such transaction has been approved in advance by Parent or Purchaser. (b) Subject to the provisions set forth in Section 8 hereof and as security for the Stockholders' obligations under Section 5(a), each of the Stockholders hereby irrevocably constitutes and appoints Parent, Paul F. Folino and its or his designees as his or its attorney and proxy in accordance with the Delaware General Corporation Law (the "DGCL"), with full power of substitution and resubstitution, to cause the Stockholder's shares to be counted as present at any Company Stockholders' Meetings, to vote his or its Shares at any Company Stockholders' Meeting, however called, and to execute consents in respect of his or its Shares as and to the extent provided in Section 5(a). SUBJECT TO THE PROVISIONS SET FORTH IN SECTION 8 HEREOF THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN INTEREST. Each Stockholder hereby agrees not to grant any subsequent proxy or power of attorney with respect to such Stockholder's Shares. (c) Each Stockholder represents that any proxies heretofore given in respect of the Shares, if any, are revocable, and have been revoked. (d) Each Stockholder hereby affirms that the proxy set forth in this Section 5 is given in connection with the execution of the Merger Agreement, and that such proxy is given to secure the performance of the duties of such Stockholder under this Agreement. Such Stockholder hereby further affirms that the proxy is coupled with an interest and, except as set forth in this Section or in Section 8, is intended to be irrevocable in accordance with the provisions of Section 212 of the DGCL. Each Stockholder hereby agrees that, if for any reason the proxy granted herein is not irrevocable (subject to the terms of this Agreement), then such Stockholder agrees to vote his or its Shares in accordance with Section 5(a) above as instructed by Parent in writing. The parties agree that the foregoing is a voting agreement created under Section 218 of the DGCL. Section 6. Certain Events. In the event of any change in the Common Stock, Series B Preferred Stock by reason of a stock dividend, stock split, split-up, recapitalization, reorganization, business combination, consolidation, exchange of shares, or any similar transaction or other change in the capital structure of the Company affecting the Common Stock or Series B Preferred Stock or the acquisition of additional shares of Common Stock, Series B Preferred Stock or other securities or rights of the Company by any Stockholder, this Agreement and the obligations hereunder shall attach 6 to any additional shares of Common Stock, Series B Preferred Stock or other securities or rights of the Company issued to or acquired by each of the Stockholders. Section 7. Further Assurances. Each Stockholder shall, upon request of Parent or Purchaser, execute and deliver any additional documents and take such further actions as may reasonably be deemed by Parent or Purchaser to be necessary or desirable to carry out the provisions hereof and to vest in Parent the power to vote the Shares as contemplated by Section 5. Section 8. Termination. This Agreement, and all rights and obligations of the parties hereunder, shall terminate immediately upon the termination of the Merger Agreement by Parent or otherwise upon the earlier to occur of (a) termination of the Merger Agreement by the Company and (b) November 13, 2003; and provided, however, that Section 9 hereof shall survive any termination of this Agreement. Section 9. Expenses. All fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs and expenses. Section 10. Public Announcements. Each of the Stockholders agrees that it will not issue any press release or otherwise make any public statement with respect to this Agreement or the transactions contemplated hereby or by the Merger Agreement without the prior consent of Parent; provided, however, that such disclosure may be made without obtaining such prior consent if (i) the disclosure is required by law or is required by any regulatory authority, including but not limited to any Governmental Entity, or the Nasdaq National Market and any national securities exchange, trading market or inter-dealer quotation system on which the Shares trade and (ii) the Stockholder making such disclosure has first used all reasonable efforts to consult with Parent about the form and substance of such disclosure. Section 11. Miscellaneous. (a) Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent by a nationally recognized overnight courier service, such as Federal Express (providing proof of delivery), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): If to any of the Stockholders, at the address set forth opposite the name of such Stockholder on Schedule 1 hereto: With a copy to: Heller Ehrman White & McAuliffe LLP 701 Fifth Avenue, Suite 6100 Seattle, Washington 98104-7098 Attention: David R. Wilson Telephone: (206) 447-0900 7 Facsimile: (206) 447-0849 If to Parent or Purchaser, to: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attention: Randall G. Wick Vice President, General Counsel Telephone: (714) 662-5600 Facsimile: (714) 641-0172 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue, Suite 1100 Palo Alto, California 94301 Attention: Gregory C. Smith Telephone: (650) 470-4500 Facsimile: (650) 470-4570 (b) Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (c) Counterparts. This Agreement may be executed manually or by facsimile by the parties hereto in any number of counterparts, each of which shall be considered one and the same agreement. (d) Entire Agreement. This Agreement (together with the Merger Agreement and any other exhibits, annexes, schedules, documents and instruments referred to herein and therein or contemplated thereby or therein) constitutes the entire agreement among the parties with respect to the subject matter hereof and thereof and supersedes all other prior agreements and understandings, both written and oral, among the parties or any of them with respect to the subject matter hereof and thereof. (e) Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of this Agreement or any of the Transactions, (ii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it shall not bring any action relating to this Agreement or any of the Transactions in any court other than a federal or state court sitting in the State of Delaware. 8 (f) Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties except that Parent or Purchaser may assign, in its sole discretion and without the consent of any other party, any or all of their rights, interests and obligations hereunder to each other or to one or more direct or indirect wholly owned subsidiaries of Parent (each, an "ASSIGNEE"). Any such Assignee may thereafter assign, in its sole discretion and without the consent of any other party, any or all of its rights, interests and obligations hereunder to one or more additional Assignees. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns, and the provisions of this Agreement are not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. (g) Severability of Provisions. If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions are fulfilled to the extent possible. (h) Specific Performance. The parties hereto acknowledge that money damages would be an inadequate remedy for any breach of this Agreement by any party hereto, and that the obligations of the parties hereto shall be enforceable by any party hereto through injunctive or other equitable relief. (i) Amendment. No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. (j) Binding Nature. This Agreement is binding upon and is solely for the benefit of the parties hereto and their respective successors, legal representatives and assigns. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 9 IN WITNESS WHEREOF, Parent, Purchaser and the Stockholders have caused this Agreement to be duly executed and delivered as of the date first written above. EMULEX CORPORATION By: /s/ PAUL FOLINO Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer AVIARY ACQUISITION CORP. By: /s/ PAUL FOLINO Name: Paul Folino Title: President and Chief Executive Officer STOCKHOLDERS GOLDMAN SACHS GROUP, INC. By: /s/ JOSEPH P. DISABATO Name: Joseph P. DiSabato Title: Attorney-in-Fact GOLDMAN SACHS DIRECT INVESTMENT FUND 2000, L.P. By: GS Employer Funds 2000 GP, L.L.C., its General Partner By: /s/ JOSEPH P. DISABATO Name: Joseph P. DiSabato Title: Vice President [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT] /s/ ROBERT Q. CORDELL II -------------------------------- Robert Q. Cordell II /s/ CHARLES A. HAGGERTY -------------------------------- Charles A. Haggerty /s/ ROBERT S. MESSINA -------------------------------- Robert S. Messina /s/ JAMI DOVER NACHTSHEIM -------------------------------- Jami Dover Nachtsheim /s/ TIMOTHY M. SPICER -------------------------------- Timothy M. Spicer /s/ PETER R. PERRONE -------------------------------- Peter R. Perrone [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT] SCHEDULE 1

NUMBER OF SHARES OF COMMON STOCK NUMBER OF SHARES NUMBER OF NUMBER OF SHARES BENEFICIALLY OF COMMON STOCKHOLDER NAME SHARES OF OF SERIES B OWNED UNDER COMPANY ISSUABLE UNDER AND ADDRESS COMMON STOCK PREFERRED STOCK OPTIONS COMPANY WARRANTS - ---------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc.; 2,863,524 0 859,058 Goldman Sachs Direct Investment Fund 2000, L.P. 85 Broad Street New York, NY 10004 - -------------------------------------------------------------------------------------------------------- Robert Q. Cordell II* 5,000 0 60,000 0 - -------------------------------------------------------------------------------------------------------- Charles A. Haggerty* 66,666 0 185,000 0 - -------------------------------------------------------------------------------------------------------- Robert S. Messina* 0 0 20,000 0 - -------------------------------------------------------------------------------------------------------- Jami Dover Nachtscheim* 0 0 20,000 0 - -------------------------------------------------------------------------------------------------------- Peter J. Perrone*+ 0 2,863,524 0 859,058 - -------------------------------------------------------------------------------------------------------- Timothy M. Spicer* 221,000 171,666 - --------------------------------------------------------------------------------------------------------

* c/o Vixel Corporation, 11911 North Creek Parkway South, Bothell, Washington 98011 + Includes 2,863,524 shares of Series B Preferred Stock and 859,058 shares of Common Stock issuable under Company Warrants owned by Goldman Sachs Group, Inc. and Goldman Sachs Direct Investment Fund 2000, L.P. EX-99.(D)(3) 14 f93445toexv99wxdyx3y.txt EXHIBIT (D)(3) EXHIBIT (d)(3) PURCHASER OPTION AGREEMENT PURCHASER OPTION AGREEMENT, dated as of October 8, 2003, by and among Emulex corporation, a Delaware corporation ("Parent"), Aviary Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (the "Purchaser"), and Vixel Corporation, a Delaware corporation (the "Company"). WHEREAS, the Company, Parent and the Purchaser are entering into an Agreement and Plan of Merger (the "Merger Agreement") of even date herewith providing for (a) a cash tender offer to purchase any and all outstanding shares of (i) common stock, par value $0.0015 per share of the Company (the "Common Stock"), and (ii) Series B convertible preferred stock, par value $0.001 per share, of the Company (the "Series B Preferred Stock" and, together with the Common Stock, the "Shares") at a price of $ 10.00 per Share, net to the seller in cash without interest thereon, upon the terms and subject to the conditions set forth in the Merger Agreement (the "Offer"); and (b) the merger (the "Merger") of the Purchaser with and into the Company; and WHEREAS, as a condition to the willingness of Parent and the Purchaser to enter into the Merger Agreement and commence the Offer, Parent and Purchaser have requested, and the Company has agreed to grant the Purchaser, the option to purchase, as described herein, authorized but unissued shares of Common Stock and/or Series B Preferred Stock. NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, and for other good and valuable consideration the sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Grant of Option. On the terms and subject to the conditions of this Agreement, the Company hereby grants to the Purchaser an irrevocable option (the "Option") to purchase for the Offer Price, as defined in the Merger Agreement (the "Purchase Price"), shares of Common Stock and/or Series B Preferred Stock, in such relative amounts as shall be determined by Purchaser in its discretion, up to 19.9% in the aggregate of the then outstanding shares of Common Stock and Series B Preferred Stock on as-converted basis (collectively, the "Optioned Shares"); provided, that the number of shares of Series B Preferred Stock issuable under the Option may not exceed the number of authorized shares of Series B Preferred Stock available for issuance. 2. Exercise of Option. Subject to the immediately succeeding sentence, the Option may be exercised by the Purchaser, in whole or in part, at any time or from time to time after Purchaser has purchased Shares pursuant to the Offer and until the earlier of (a) immediately following the Effective Time (as defined in the Merger Agreement) and (b) the termination of the Merger Agreement in accordance with its terms. The exercise of the Option for Common Stock is conditioned upon the Purchaser and the Parent owning in the aggregate, immediately following such exercise, at least 90% of the outstanding shares of Common Stock, and the exercise of the Option for Series B Preferred Stock is conditioned upon the Purchaser and Parent owning in the aggregate, immediately following such exercise, at least 90% of the outstanding shares of Series B Preferred Stock. In the event the Purchaser wishes to exercise the Option, the Purchaser shall give a written notice (the "Notice") to the Company of its intention to exercise the Option, specifying the number of Optioned Shares to be purchased. Such notice shall be delivered to the Company in accordance with the requirements of Section 7(d), and shall specify a date (which may be the date of such notice) not more than ten (10) business days from the date such Notice is given for the purchase of the Optioned Shares. The closing (the "Closing") of the purchase of the Optioned Shares shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Avenue, 11th Floor, Palo Alto, California 94301, or at such other location as the Purchaser shall elect. If any decree, injunction, order, law or regulation shall not permit the purchase of the Optioned Shares to be consummated on the date specified in such Notice, the date for the Closing shall be as soon as practicable following the cessation of such restriction on consummation, but in any event within two (2) business days thereof. 3. Payment and Delivery of Certificate(s). At any Closing hereunder, (a) the Purchaser shall make payment to the Company of the aggregate price for the par value of the Optioned Shares so purchased in official bank check or by wire transfer to a bank designated in writing by the Company; (b) the Purchaser shall deliver to the Company a Promissory Note substantially in the form attached hereto as Exhibit A (the "Note") for the aggregate price for the Optioned Shares so purchased less the amount paid in accordance with clause 3(a); and (c) the Company shall deliver to the Purchaser a certificate or certificates representing the number of Optioned Shares so purchased registered in the name of the Purchaser. Certificates for Optioned Shares delivered at the Closing may be endorsed with a restrictive legend that shall read substantially as follows: "THE SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM." It is understood and agreed that the reference to the resale restrictions of the Securities Act of 1933, as amended (the "Act"), in the above legend shall be removed by delivery of substitute certificate(s) without such reference if Parent shall have delivered to the Company a copy of a letter from the staff of the Securities and Exchange Commission, or an opinion of counsel or other evidence reasonably satisfactory to the Company, to the effect that registration of the future resale of the Optioned Shares is not required and that such legend is not required for purposes of the Act. 2 4. Representations and Warranties of the Company. The Company hereby represents and warrants (such representations and warranties being deemed repeated at and as of any Closing hereunder) to Parent and the Purchaser as follows: (a) Due Incorporation. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to enter into and perform this Agreement. (b) Due Authorization, etc. This Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by a duly authorized officer of the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (c) Company's Capital Stock. The Company has taken all necessary corporate action to authorize and reserve for issuance upon exercise of the Option the Optioned Shares, and at all times from the date hereof through the date of termination of this Agreement will keep reserved for issuance upon exercise of the Option that number of shares of Common Stock that the Purchaser is then entitled to purchase pursuant to the Option. The shares of Common Stock and/or Series B Preferred Stock to be issued upon due exercise, in whole or in part, of the Option shall, when issued, be validly issued, fully-paid and non-assessable, and shall be delivered free and clear of all claims, liens, encumbrances and security interests, including any preemptive right of any of the stockholders of the Company. 5. Representations and Warranties of the Purchaser and Parent. Parent and the Purchaser hereby jointly and severally represent and warrant (such representations and warranties being deemed repeated at and as of any Closing hereunder) to the Company as follows: (a) Due Incorporation. Each of Parent and the Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to enter into and perform this Agreement. (b) Due Authorization, etc. This Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Purchaser and Parent. This Agreement has been duly executed and delivered by a duly authorized officer of the Purchaser and of Parent, and constitutes the valid and binding obligation of the Purchaser and of Parent, enforceable against each in accordance with its terms. 3 (c) Distribution. The Purchaser acknowledges and agrees that the Optioned Shares have not been registered, and that the Company is under no obligation to register, the Optioned Shares under the Act or any state securities laws. The Purchaser is acquiring the Option and will acquire the Optioned Shares to be purchased upon exercise of the Option for its own account and not with a view to the distribution thereof within the meaning of the Act. The foregoing representation and warranty shall be made by any assignee under Section 7(a) and shall be binding upon such assignee. 6. Adjustment Upon Changes in Capitalization. In the event of any change in the shares of the Company's capital stock by reason of any stock dividend, stock split, merger, recapitalization, combination, conversion, exchange of shares, issuance of shares (or agreements or commitments to issue shares) or the like, the number of Optioned Shares subject to the Option and the purchase price per Optioned Share shall be appropriately and equitably adjusted. 7. Miscellaneous. (a) Assignment; Guarantee of the Purchaser's Obligations. This Agreement shall not be assigned by the Purchaser, except to Parent or a wholly-owned subsidiary of Parent, without the prior written consent of the Company. Parent hereby unconditionally guarantees the full and punctual performance by Purchaser of all of the obligations of Purchaser or any of its assignees hereunder and under the Note. In connection with the obligations of Parent under the immediately preceding sentence, Parent hereby waives any and all rights, notices and defenses to which it otherwise would be entitled solely in its capacity as a guarantor under this Agreement or the Note. (b) Amendments. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto. (c) Non-survival of representations, etc. All representations, warranties and agreements in this Agreement shall terminate at the Closing. (d) Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly received if so given) by delivery, by cable, telegram or telex, or by mail (registered or certified mail, postage prepaid, return receipt requested) to the respective parties as follows: 4 If to the Company: Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Attention: Kurtis L. Adams Chief Financial Officer Facsimile: (425) 806-4001 With a copy to: Heller Ehrman White & McAuliffe LLP 701 Fifth Avenue, Suite 6100 Seattle, Washington 98104 Attention: David R. Wilson Facsimile: (206) 447-0849 If to Parent or the Purchaser: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attention: Randall G. Wick Vice President, General Counsel Facsimile: (714) 641-0172 With copies to: Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue, Suite 1100 Palo Alto, California 94301 Attention: Gregory C. Smith Facsimile: (650) 470-4570 or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (e) Governing Law. This Agreement shall be governed by and construed in accordance with the substantive law of the State of Delaware without giving effect to the principles of conflict of laws thereof. (f) Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. 5 (g) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. (h) Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters referred to herein and supersedes all prior agreements or understandings, both written or oral, among the parties, or any of them, with respect to the subject matter hereof. (i) Specific Performance. Purchaser, Parent and the Company each acknowledge and agree that the other would be irreparably damaged in the event any of the provisions of this Agreement were not performed by it in accordance with the specific terms or were otherwise breached. The Company agrees that if for any reason the Company shall have failed to issue Optioned Shares or to perform any of its other obligations under the Agreement, then the Purchaser and Parent shall be entitled to specific performance and injunctive and other equitable relief and the Company agrees to waive any requirement for the securing or posting of a bond in connection with the obtaining of any such injunctive or other equitable relief. This provision is without prejudice to any other rights the Purchaser and Parent may have against the Company for any failure to perform its obligations under this Agreement. [Signature Page Follows] 6 IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused this Purchaser Option Agreement to be duly executed on the day and year first above written. VIXEL CORPORATION By: /s/ JAMES McCLUNEY Name: James McCluney Title: President and Chief Executive Officer AVIARY ACQUISITION CORPORATION By: /s/ PAUL FOLINO Name: Paul Folino Title: President and Chief Executive Officer EMULEX CORPORATION By: /s/ PAUL FOLINO Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer Signature Page to Purchaser Option Agreement EXHIBIT A NON-TRANSFERABLE PROMISSORY NOTE FOR VALUE RECEIVED, Aviary Acquisition Corporation, a Delaware corporation ("the Maker"), hereby promises to pay to Vixel Corporation, a Delaware Corporation, the principal amount of [_________________] ($______)], with no interest, on [insert date that is six months after the date of exercise] by wire transfer of immediately available funds to an account designated by the payee. The amount due hereunder shall be payable in money of the United States of America lawful at such time for the payment of public and private debts. The Maker hereby waives presentment, diligence, protest and demand, notice of protest, demand, dishonor and nonpayment of this Note, and all other notices of any kind in connection with the delivery, acceptance, performance, default or enforcement of this Note. This Note shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of laws thereof. IN WITNESS WHEREOF, the Maker has caused this Note to be executed as of the _____ day of ______, 200__. AVIARY ACQUISITION CORPORATION By: __________________________ Name: Title: EX-99.(D)(4) 15 f93445toexv99wxdyx4y.txt EXHIBIT (D)(4) EXHIBIT (d)(4) NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of October 8, 2003, by and between Emulex Corporation, a California corporation (the "COMPANY") and James M. McCluney ("EXECUTIVE"), a shareholder and executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL"). RECITALS A. Vixel and the Company are engaged in the business of providing technologies and products for the storage networking infrastructure business, including HBAs, fabric switches and storage networking semiconductor components that are embedded in HBAs, fabric switches and storage appliances (including, but not limited to, storage arrays, network attached storage, tape libraries and virtualization appliances) that are contained in existing products of or products under development by either the Company or Vixel (the "BUSINESS"); B. Executive is a stockholder and an executive officer of Vixel and accordingly has acquired confidential and proprietary information relating to the Business and the operation of Vixel; C. Executive's covenant not to compete, as reflected in this Agreement, is an essential part of the transactions described in the Agreement and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and among Emulex Corporation, a Delaware corporation and the Company's parent corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to which, among other things, the Sub will be merged with and into Vixel (the "MERGER"); D. Executive holds a substantial number of stock options of Vixel that will continue to vest and shall be exercisable for shares of common stock of the Company following the Merger and therefore has a material economic interest in the consummation of the Merger. E. In order to protect the goodwill related to the Business and as a condition of, and an inducement to, the Company entering into the Merger Agreement, Executive has agreed to the noncompetition and nonsolicitation covenants and the confidentiality agreements provided in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and to induce the Company to consummate the transactions contemplated by the Merger Agreement, the receipt and sufficiency of which are hereby acknowledged, and with the knowledge that no other good or valuable consideration has been offered to or received by Executive in connection with the execution of this Agreement, Executive hereby covenants and agrees as follows: 1. Effectiveness of Agreement. This Agreement is conditioned upon the occurrence of the (i) Closing (as that term is defined in the Merger Agreement) and (ii) the offer of employment to Executive by the Company or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement shall be null and void ab initio should the Merger not be consummated for any reason or should the Employment Commencement not occur. This Agreement will terminate in the event of and concurrent with a termination of the Merger Agreement in accordance with its terms. 2. Noncompetition. (a) Executive and the Company agree that due to the nature of Executive's association with Vixel, Executive has confidential and proprietary information relating to the business and operations of Vixel and the Company (all references to the "Company" hereinafter shall include Vixel, which shall be the surviving corporation in the Merger). Executive acknowledges that such information is of extreme importance to the business of the Company and will continue to be so after the Merger and that disclosure of such confidential information to others or the unauthorized use of such information by others would cause substantial loss and harm to the Company. Executive and the Company also agree that Executive will continue to acquire, and will assist in developing, confidential and proprietary information relating to the Business following the Merger by reason of his employment with the Company. (b) Executive and the Company further agree that the market for the Business is intensely competitive and that the Company engages in the Business throughout the United States, Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (c) (i) Subject to subparagraph (ii) below, during the period commencing at the Effective Time of the Merger and ending one (1) year following the termination of Executive's employment with the Company (including, without limitation, voluntary resignation by such Executive or termination at the request of the Company) (the "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in the Business Area (as defined below), engage, directly or indirectly, in any in any capacity whatsoever (whether as an officer, director, stockholder, owner, proprietor, partner, member, co-owner, investor, employee, trustee, manager, consultant, independent contractor, co-venturer, financier, agent, representative or otherwise), in a Competing Business (as defined below), or otherwise hold any interest in a Competing Business; provided, however, that Executive may own, directly or indirectly, solely as a passive investment, securities of any entity traded on any national securities exchange if Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, "beneficially own" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 1.0% or more of any class of securities of such Competing Business. (ii) In the event that the employment of Executive is terminated by the Company without Cause (as defined herein) within one (1) year of the Effective Time, then the Restricted Period shall terminate on the expiration of severance payments to Executive. (d) "COMPETING BUSINESS" as used herein, means any individual, corporation, partnership, limited partnership, limited liability company, trust (business or otherwise), institution, foundation, pool, plan or other entity or organization (other than the Company) which engages or proposes to engage in the Business. (e) "BUSINESS AREA" as used herein, means each state within the United States of America as well as each country, state, province and territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (f) "CAUSE" as used herein shall mean: (i) any misappropriation or embezzlement by Executive of the property of the Company or any of its affiliates or other act of fraud or material misconduct by Executive against the Company or any of its affiliates; (ii) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony or any criminal act involving moral turpitude; (iii) a breach by Executive of any provision of this Agreement; (iv) the failure, refusal or neglect by Executive to perform faithfully the duties and obligations customary to his office; (v) the habitual non-performance or incompetent performance by Executive of the duties or responsibilities customary to his office; (vi) misconduct by Executive, including insubordination, in respect of the duties or obligations customary to his office; and (vii) any intentional or grossly negligent act by Executive having the effect of materially injuring the business or reputation of the Company or any of its affiliates. No activities covered by item (iv), (v) and (vi) will be deemed to be "Cause" unless the Company has notified Executive of the prohibited activity in writing and Executive has failed to cease such activity within thirty (30) days. 3. Nonsolicitation of the Purchaser and Company Employees. During the Restricted Period, Executive shall not, without the prior written consent of the Company, directly or indirectly solicit, request, cause or induce any person who is at the time an employee of or a consultant of the Company to leave the employ of or otherwise terminate such person's relationship with the Company. 4. Nonsolicitation of Customers or Suppliers. During the Restricted Period, Executive shall not, directly or indirectly: (i) solicit, induce or attempt to induce any customer, client or supplier of the Company to cease doing business in whole or in part with the Company; or (ii) attempt to limit or interfere with any business engagement or relationship existing between the Company and any third party. 5. Confidentiality. Executive agrees that, upon the Closing, he will execute the Company's standard proprietary information and invention assignment agreement (the "Employee Invention and Non-Disclosure Agreement"), the form of which is attached as Annex A, and will abide by all of its terms. 6. Injunctive Relief. The parties agree that the remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from the conduct which would constitute a breach of this Agreement. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it or them for such breach or threatened breach, including, without limitation, the recovery of damages from Executive. 7. Reasonableness and Enforceability of Covenants. The parties expressly agree that the character, duration and geographical scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not limited to, Executive's position of confidence and trust as an executive officer of Vixel as well as his employment with the Company after the Closing. Moreover, if any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the character, duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 8. Severability. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state, country or jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 9. Construction. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard to principles of conflicts or choice of laws. 10. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each party hereto. No breach of any covenant, agreement, warranty or representation shall be deemed waived unless expressly waived in writing by the party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. 11. Entire Agreement. This Agreement, together with the Merger Agreement and the documents, instruments and other agreements contemplated by or referred to therein and the Employee Invention and Non-Disclosure Agreement, contains the entire understanding of the parties relating to the subject matter hereof, supersedes all prior and contemporaneous agreements and understandings relating to the subject matter hereof and shall not be amended except by a written instrument signed by each of the parties hereto. 12. Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which, when taken as a whole, shall constitute one and the same instrument. 13. Section Headings. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. 14. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the consent of the other parties; provided, however, that the Company may assign its rights hereunder, without the consent of Executive, to any entity that acquires or succeeds to the Business. 15. Further Assurances. From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or two business days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to the Company: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attn: Randall G. Wick Vice President, General Counsel Telephone No.: (714) 662-5600 Facsimile No.: (714) 641-0172 (b) if to Executive: c/o Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Telephone No.: (425) 806-4528 Facsimile No.: (425) 806-4001 17. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Merger Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition Agreement as of the date first above written. EMULEX CORPORATION By: /s/ PAUL FOLINO ------------------------------------------- Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer /s/ JAMES M. McCLUNEY ------------------------------------------- James M. McCluney [SIGNATURE PAGE TO NONCOMPETITION AGREEMENT] ANNEX A [EMULEX LOGO] EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT This Employee Creation and Non-Disclosure Agreement (this "Agreement") is entered into between Emulex Corporation ("Emulex") and the undersigned Employee. In consideration of employment or continued employment by Emulex and the mutual promises contained in this Agreement, Employee and Emulex agree as follows: Definition of Terms. 1.1 Creation. "Creation" means every idea, concept, invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, formula, algorithm, literary or graphical or audiovisual work or sound recording, mask work, or computer program of any kind, whether or not subject to patent, copyright, mask work right, or similar protection. 1.2 Create. "Create" means invent, develop, devise, conceive, discover, create, first reduce to practice, write, or fix in a tangible medium of expression. 1.3 Confidential Information. "Confidential Information" means all Creations, data, information, know-how, process parameters, fabrication techniques, technical plans, documentation, customer lists, price lists, supplier lists, business plans, marketing plans, financial information, and the like, in whatever form or medium, and whether or not designated or marked "Confidential" or the like, which: (1) relate to the business of Emulex, and (a) have not been disclosed by Emulex to, or (b) are not generally known to, the general public or to Emulex's trade or industry; or (2) are received by Emulex from a third party under an obligation of confidentiality to the third party. 1.4 Emulex. "Emulex" includes Emulex Corporation, a Delaware corporation, all of its subsidiaries, and all joint ventures and partnerships of which such corporation and/or any of such subsidiaries is a member, partner, or participant. Confidential Information. 2.1 Acknowledgement by Employee. Employee acknowledges that during Employee's employment with Emulex, Employee may be given access to, become acquainted with, or develop Confidential Information. 2.2 No Use or Disclosure. Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not created or developed by Employee) at any time or in any manner, except as required in the course of employment with Emulex. Employee acknowledges that, except as set forth on an exhibit attached by Employee to this Agreement, Employee is not a party to any agreement with any other entity which either (1) restricts Employee's use or disclosure of any information gained or learned by Employee from the entity or while employed by the entity, or (2) otherwise relates to Employee's use or disclosure of any confidential information or trade secrets of the entity. Employee represents that no entity has asserted or is asserting that Employee has breached any of the terms or provisions of any of the agreements listed on the attached exhibit. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. 2.3 Restriction on Documents and Equipment. All Confidential Information, documents, and equipment relating to the business of Emulex, whether prepared by Employee or otherwise coming into Employee's possession, are the exclusive property of Emulex, and must not be removed from any of its premises except as required in the course of employment with Emulex. All such Confidential Information, documents, and equipment shall be promptly returned by Employee to Emulex upon the request of Emulex, and on any termination of Employee's employment with Emulex. 2.4 No Disclosure or Use from Others. Employee shall not disclose to Emulex or use on behalf of Emulex any confidential information or trade secrets obtained from other entities, and shall not bring confidential information or trade secrets of other entities onto Emulex's premises. Creations. 3.1 Disclosure and Assignment of Creations. Employee shall promptly inform and disclose to Emulex all Creations which Employee Creates (either alone or with others) while in the employment of Emulex, if the Creations: (1) relate, at the time Created, to the business of Emulex or to any actual or demonstrably anticipated research or development work of Emulex; or (2) result from any work performed by Employee for Emulex; or (3) were Created utilizing any of Emulex's equipment, supplies, facilities, time, or Confidential Information. ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE PROPERTY OF EMULEX. 3.2 Governmental Rights. Employee acknowledges that Emulex has entered or may enter into agreements with agencies of the United States government, and that Emulex may be subject to laws and regulations which impose obligations, restrictions, and limitations on Emulex with respect to Creations which may be acquired by Emulex or which may be conceived or developed by employees, consultants, and other agents rendering services to Emulex. Employee shall be bound by all such obligations, restrictions, and limitations applicable to any Creation of Employee. Employee also shall take any and all further action which may be required to discharge such obligations and to comply with such restrictions and limitations. Employee further shall assign to Emulex all of Employee's rights in any Creation of Employee if Emulex is required to grant those rights to the United States government or any agencies of the United States government. 3.3 Employee's Assistance. Employee agrees to assist Emulex in obtaining and/or maintaining patents, copyrights, mask work rights, and similar rights to any Creations assigned by Employee to Emulex if Emulex, in its sole discretion, requests such assistance. Employee shall sign all documents and do all other things deemed necessary by Emulex, at Emulex's expense, to obtain and/or maintain such rights, to assign them to Emulex, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. If Emulex requires Employee's assistance under this Paragraph after termination of employment with Emulex, Employee will be compensated for time actually spent in providing assistance at Employee's hourly pay rate at the date of Employee's termination. 3.4 Appointment of Agent. Employee irrevocably appoints the President of Emulex to act as Employee's agent and attorney-in-fact to perform all acts necessary to obtain and/or maintain patents, copyrights, mask work rights, and similar rights, to any Creations assigned by Employee to Emulex under this Agreement if (1) Employee refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest and shall survive the death or disability of Employee. 3.5 Further Disclosure. Employee shall promptly disclose to Emulex, in confidence, (1) all Creations of any kind which Employee Creates while employed by Emulex, and (2) all patent applications filed by Employee within one (1) year after termination of employment with Emulex. Employee agrees that any application for a patent, copyright registration, mask work registration, or similar right filed within one (1) year after termination of employment with Emulex shall be presumed to relate to a Creation of Employee Created during employment at Emulex, unless Employee can prove otherwise. 3.6 Records. Employee shall keep complete, accurate, and authentic information and records on all Creations in the manner and form requested by Emulex. The information and records, and all copies of them, shall be the exclusive property of Emulex. Employee shall promptly surrender the information and records upon the request of Emulex, and on any termination of Employee's employment with Emulex. 3.7 Compliance with Labor Code. THIS AGREEMENT DOES NOT APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870 OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." Restrictions on Employee. 4.1 No Conflicting Competition. While employed by Emulex, Employee shall not in any manner (whether as an employee, consultant, or otherwise) perform services for, or have an ownership interest in (other than less than one percent (1%) of a publicly-held company), any entity that competes with Emulex or any employment or business which is otherwise in conflict with Employee's employment relationship with Emulex. 4.2 No Competitive Planning. While employed by Emulex, Employee shall not undertake any planning for any outside business activity (1) competitive with the work which Employee performs for Emulex, or (2) competitive with the profit unit of Emulex for which Employee works. 4.3 No Hiring of Other Employees. While employed by Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ, or assist or encourage others in employing or attempting to employ (whether as an employee, consultant, or otherwise), any of Emulex's other employees who work in any area in which Employee has been significantly engaged on behalf of Emulex. 4.4 No Use of Confidential Information. While employed by Emulex, and for 1 year afterward, Employee shall not enter into any other employment (whether as an employee, consultant, or otherwise) in which the duties of such other employment would require Employee to disclose or use any Confidential Information. 4.5 No Conflicting Agreements. Employee represents that Employee has no agreements with or obligations to any other party that would interfere with Employee's compliance with this Agreement. 4.6 Subsequent Employment. Employee agrees that Emulex may notify anyone as to the existence and provisions of this Agreement. Pre-existing Creations. 5.1 Representation of Coverage and Grant of License. Except for those Creations (if any) specifically reserved by Employee in an attachment to this Agreement, Employee represents that there are no Creations owned wholly or in part by Employee, or controlled directly or indirectly by Employee, which Employee considers to be reserved and excluded from the scope of this Agreement. Employee grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license on any and all non-reserved Creations of Employee. 5.2 Preservation of Confidence. In order to preserve Employee's proprietary rights in any unpatented or unpublished reserved Creations, Emulex shall keep in confidence all information provided by Employee pertaining to any reserved Creation, unless the information: (1) is already known to or in the possession of Emulex; (2) is or becomes publicly known through no wrongful act of Emulex; (3) is rightfully received by Emulex from a third party without breach of any obligation to Employee; (4) is approved for release by written authorization of Employee; (5) is distributed or made available to others by Employee without restriction as to use or disclosure; or (6) is developed independently by Emulex through persons not involved with information received by Emulex from Employee. 5.3 License from Use. Notwithstanding the reservation of a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while employed by Emulex, or (2) permits the use of a reserved Creation by another employee of Emulex, and does not have a prior written agreement with Emulex pertaining to such use, then Employee thereby grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license to that Creation (provided that the reserved Creation is owned wholly or in part by Employee, or is within the direct or indirect control of Employee at the time of employment). 5.4 Right of First Refusal. With respect to any reserved Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right of first refusal to purchase or license such Creations (unless otherwise licensed to Emulex by any other terms of this Agreement) on terms at least as favorable as offered to any other purchaser or licensee while Employee is employed by Emulex. General Provisions. 6.1 Attorneys' Fees. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the prevailing party shall be entitled to recover (in addition to any other relief awarded or granted) his, her, or its reasonable costs and expenses (including attorneys' fees) incurred in the proceeding and any appeal therefrom. 6.2 Entire Agreement. This Agreement, including all referenced attachments, constitutes the complete and final agreement between the parties, and supersedes all prior negotiations, agreements, and understandings between the parties concerning its subject matter. 6.3 Successors and Assigns. This Agreement is intended to benefit and is binding on (1) the successors and assigns of Emulex, and (2) the heirs and legal successors of Employee. 6.4 Separate Enforcement of Provisions. If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall be enforced to the extent possible. 6.5 Governing Law. The validity, construction, and performance of this Agreement is governed by the laws of the State of California. 6.6 Right to Relief. If Employee breaches or threatens to breach any provision of this Agreement, in addition to any other rights and remedies Emulex may have, Emulex shall be entitled to temporary and permanent injunctive relief to prevent the breach or threatened breach without the necessity of proving actual damages or posting any bond or undertaking. 6.7 Waiver and Amendment. No waiver, amendment, or modification of this Agreement shall be effective unless in writing and signed by the party against whom the waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of the right, power, or remedy. No waiver of any term, condition, or breach of this Agreement shall be construed as a waiver of any other term, condition, or breach. Effective Date. This Agreement, no matter when signed by Employee, is effective from the first date of Employee's employment with Emulex, and shall survive the termination of Employee's employment with Emulex. At Will Employment. Unless specifically provided differently in a separate written agreement signed by an authorized agent of Emulex, Employee acknowledges and agrees that Employee's employment by Emulex is now and will continue to be throughout his or her employment with Emulex "AT WILL," and can be terminated at any time by Emulex for any reason, with or without good cause, and with or without prior warning or notice. Acknowledgment of Reading. Employee acknowledges that Employee has read and understands this Agreement, and has received a copy of it. AGREED: EMULEX CORPORATION ______________________________ By:___________________________ Employee's signature ______________________________ ______________________________ Employee's Name Name Dated:________________________ ______________________________ Title Dated:________________________ EX-99.(D)(5) 16 f93445toexv99wxdyx5y.txt EXHIBIT (D)(5) EXHIBIT (d)(5) NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of October 8, 2003, by and between Emulex Corporation, a California corporation (the "COMPANY") and Stuart B. Berman ("EXECUTIVE"), a shareholder and executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL"). RECITALS A. Vixel and the Company are engaged in the business of providing technologies and products for the storage networking infrastructure business, including HBAs, fabric switches and storage networking semiconductor components that are embedded in HBAs, fabric switches and storage appliances (including, but not limited to, storage arrays, network attached storage, tape libraries and virtualization appliances) that are contained in existing products of or products under development by either the Company or Vixel (the "BUSINESS"); B. Executive is a stockholder and an executive officer of Vixel and accordingly has acquired confidential and proprietary information relating to the Business and the operation of Vixel; C. Executive's covenant not to compete, as reflected in this Agreement, is an essential part of the transactions described in the Agreement and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and among Emulex Corporation, a Delaware corporation and the Company's parent corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to which, among other things, the Sub will be merged with and into Vixel (the "MERGER"); D. Executive holds a substantial number of stock options of Vixel that will continue to vest and shall be exercisable for shares of common stock of the Company following the Merger and therefore has a material economic interest in the consummation of the Merger. E. In order to protect the goodwill related to the Business and as a condition of, and an inducement to, the Company entering into the Merger Agreement, Executive has agreed to the noncompetition and nonsolicitation covenants and the confidentiality agreements provided in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and to induce the Company to consummate the transactions contemplated by the Merger Agreement, the receipt and sufficiency of which are hereby acknowledged, and with the knowledge that no other good or valuable consideration has been offered to or received by Executive in connection with the execution of this Agreement, Executive hereby covenants and agrees as follows: 1. Effectiveness of Agreement. This Agreement is conditioned upon the occurrence of the (i) Closing (as that term is defined in the Merger Agreement) and (ii) the offer of employment to Executive by the Company or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement shall be null and void ab initio should the Merger not be consummated for any reason or should the Employment Commencement not occur. This Agreement will terminate in the event of and concurrent with a termination of the Merger Agreement in accordance with its terms. 2. Noncompetition. (a) Executive and the Company agree that due to the nature of Executive's association with Vixel, Executive has confidential and proprietary information relating to the business and operations of Vixel and the Company (all references to the "Company" hereinafter shall include Vixel, which shall be the surviving corporation in the Merger). Executive acknowledges that such information is of extreme importance to the business of the Company and will continue to be so after the Merger and that disclosure of such confidential information to others or the unauthorized use of such information by others would cause substantial loss and harm to the Company. Executive and the Company also agree that Executive will continue to acquire, and will assist in developing, confidential and proprietary information relating to the Business following the Merger by reason of his employment with the Company. (b) Executive and the Company further agree that the market for the Business is intensely competitive and that the Company engages in the Business throughout the United States, Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (c) (i) Subject to subparagraph (ii) below, during the period commencing at the Effective Time of the Merger and ending one (1) year following the termination of Executive's employment with the Company (including, without limitation, voluntary resignation by such Executive or termination at the request of the Company) (the "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in the Business Area (as defined below), engage, directly or indirectly, in any in any capacity whatsoever (whether as an officer, director, stockholder, owner, proprietor, partner, member, co-owner, investor, employee, trustee, manager, consultant, independent contractor, co-venturer, financier, agent, representative or otherwise), in a Competing Business (as defined below), or otherwise hold any interest in a Competing Business; provided, however, that Executive may own, directly or indirectly, solely as a passive investment, securities of any entity traded on any national securities exchange if Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, "beneficially own" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 1.0% or more of any class of securities of such Competing Business. (ii) In the event that the employment of Executive is terminated by the Company without Cause (as defined herein) within one (1) year of the Effective Time, then the Restricted Period shall terminate on the expiration of severance payments to Executive. (d) "COMPETING BUSINESS" as used herein, means any individual, corporation, partnership, limited partnership, limited liability company, trust (business or otherwise), institution, foundation, pool, plan or other entity or organization (other than the Company) which engages or proposes to engage in the Business. (e) "BUSINESS AREA" as used herein, means each state within the United States of America as well as each country, state, province and territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (f) "CAUSE" as used herein shall mean: (i) any misappropriation or embezzlement by Executive of the property of the Company or any of its affiliates or other act of fraud or material misconduct by Executive against the Company or any of its affiliates; (ii) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony or any criminal act involving moral turpitude; (iii) a breach by Executive of any provision of this Agreement; (iv) the failure, refusal or neglect by Executive to perform faithfully the duties and obligations customary to his office; (v) the habitual non-performance or incompetent performance by Executive of the duties or responsibilities customary to his office; (vi) misconduct by Executive, including insubordination, in respect of the duties or obligations customary to his office; and (vii) any intentional or grossly negligent act by Executive having the effect of materially injuring the business or reputation of the Company or any of its affiliates. No activities covered by item (iv), (v) and (vi) will be deemed to be "Cause" unless the Company has notified Executive of the prohibited activity in writing and Executive has failed to cease such activity within thirty (30) days. 3. Nonsolicitation of the Purchaser and Company Employees. During the Restricted Period, Executive shall not, without the prior written consent of the Company, directly or indirectly solicit, request, cause or induce any person who is at the time an employee of or a consultant of the Company to leave the employ of or otherwise terminate such person's relationship with the Company. 4. Nonsolicitation of Customers or Suppliers. During the Restricted Period, Executive shall not, directly or indirectly: (i) solicit, induce or attempt to induce any customer, client or supplier of the Company to cease doing business in whole or in part with the Company; or (ii) attempt to limit or interfere with any business engagement or relationship existing between the Company and any third party. 5. Confidentiality. Executive agrees that, upon the Closing, he will execute the Company's standard proprietary information and invention assignment agreement (the "Employee Invention and Non-Disclosure Agreement"), the form of which is attached as Annex A, and will abide by all of its terms. 6. Injunctive Relief. The parties agree that the remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from the conduct which would constitute a breach of this Agreement. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it or them for such breach or threatened breach, including, without limitation, the recovery of damages from Executive. 7. Reasonableness and Enforceability of Covenants. The parties expressly agree that the character, duration and geographical scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not limited to, Executive's position of confidence and trust as an executive officer of Vixel as well as his employment with the Company after the Closing. Moreover, if any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the character, duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 8. Severability. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state, country or jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 9. Construction. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard to principles of conflicts or choice of laws. 10. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each party hereto. No breach of any covenant, agreement, warranty or representation shall be deemed waived unless expressly waived in writing by the party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. 11. Entire Agreement. This Agreement, together with the Merger Agreement and the documents, instruments and other agreements contemplated by or referred to therein and the Employee Invention and Non-Disclosure Agreement, contains the entire understanding of the parties relating to the subject matter hereof, supersedes all prior and contemporaneous agreements and understandings relating to the subject matter hereof and shall not be amended except by a written instrument signed by each of the parties hereto. 12. Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which, when taken as a whole, shall constitute one and the same instrument. 13. Section Headings. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. 14. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the consent of the other parties; provided, however, that the Company may assign its rights hereunder, without the consent of Executive, to any entity that acquires or succeeds to the Business. 15. Further Assurances. From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or two business days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to the Company: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attn: Randall G. Wick Vice President, General Counsel Telephone No.: (714) 662-5600 Facsimile No.: (714) 641-0172 (b) if to Executive: c/o Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Telephone No.: (425) 806-4528 Facsimile No.: (425) 806-4001 17. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Merger Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition Agreement as of the date first above written. EMULEX CORPORATION By: /s/ PAUL FOLINO ---------------------------------------- Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer /s/ STUART B. BERMAN -------------------------------------------- Stuart B. Berman ANNEX A [EMULEX LOGO] EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT This Employee Creation and Non-Disclosure Agreement (this "Agreement") is entered into between Emulex Corporation ("Emulex") and the undersigned Employee. In consideration of employment or continued employment by Emulex and the mutual promises contained in this Agreement, Employee and Emulex agree as follows: Definition of Terms. 1.1 Creation. "Creation" means every idea, concept, invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, formula, algorithm, literary or graphical or audiovisual work or sound recording, mask work, or computer program of any kind, whether or not subject to patent, copyright, mask work right, or similar protection. 1.2 Create. "Create" means invent, develop, devise, conceive, discover, create, first reduce to practice, write, or fix in a tangible medium of expression. 1.3 Confidential Information. "Confidential Information" means all Creations, data, information, know-how, process parameters, fabrication techniques, technical plans, documentation, customer lists, price lists, supplier lists, business plans, marketing plans, financial information, and the like, in whatever form or medium, and whether or not designated or marked "Confidential" or the like, which: (1) relate to the business of Emulex, and (a) have not been disclosed by Emulex to, or (b) are not generally known to, the general public or to Emulex's trade or industry; or (2) are received by Emulex from a third party under an obligation of confidentiality to the third party. 1.4 Emulex. "Emulex" includes Emulex Corporation, a Delaware corporation, all of its subsidiaries, and all joint ventures and partnerships of which such corporation and/or any of such subsidiaries is a member, partner, or participant. Confidential Information. 2.1 Acknowledgement by Employee. Employee acknowledges that during Employee's employment with Emulex, Employee may be given access to, become acquainted with, or develop Confidential Information. 2.2 No Use or Disclosure. Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not created or developed by Employee) at any time or in any manner, except as required in the course of employment with Emulex. Employee acknowledges that, except as set forth on an exhibit attached by Employee to this Agreement, Employee is not a party to any agreement with any other entity which either (1) restricts Employee's use or disclosure of any information gained or learned by Employee from the entity or while employed by the entity, or (2) otherwise relates to Employee's use or disclosure of any confidential information or trade secrets of the entity. Employee represents that no entity has asserted or is asserting that Employee has breached any of the terms or provisions of any of the agreements listed on the attached exhibit. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. 2.3 Restriction on Documents and Equipment. All Confidential Information, documents, and equipment relating to the business of Emulex, whether prepared by Employee or otherwise coming into Employee's possession, are the exclusive property of Emulex, and must not be removed from any of its premises except as required in the course of employment with Emulex. All such Confidential Information, documents, and equipment shall be promptly returned by Employee to Emulex upon the request of Emulex, and on any termination of Employee's employment with Emulex. 2.4 No Disclosure or Use from Others. Employee shall not disclose to Emulex or use on behalf of Emulex any confidential information or trade secrets obtained from other entities, and shall not bring confidential information or trade secrets of other entities onto Emulex's premises. Creations. 3.1 Disclosure and Assignment of Creations. Employee shall promptly inform and disclose to Emulex all Creations which Employee Creates (either alone or with others) while in the employment of Emulex, if the Creations: (1) relate, at the time Created, to the business of Emulex or to any actual or demonstrably anticipated research or development work of Emulex; or (2) result from any work performed by Employee for Emulex; or (3) were Created utilizing any of Emulex's equipment, supplies, facilities, time, or Confidential Information. ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE PROPERTY OF EMULEX. 3.2 Governmental Rights. Employee acknowledges that Emulex has entered or may enter into agreements with agencies of the United States government, and that Emulex may be subject to laws and regulations which impose obligations, restrictions, and limitations on Emulex with respect to Creations which may be acquired by Emulex or which may be conceived or developed by employees, consultants, and other agents rendering services to Emulex. Employee shall be bound by all such obligations, restrictions, and limitations applicable to any Creation of Employee. Employee also shall take any and all further action which may be required to discharge such obligations and to comply with such restrictions and limitations. Employee further shall assign to Emulex all of Employee's rights in any Creation of Employee if Emulex is required to grant those rights to the United States government or any agencies of the United States government. 3.3 Employee's Assistance. Employee agrees to assist Emulex in obtaining and/or maintaining patents, copyrights, mask work rights, and similar rights to any Creations assigned by Employee to Emulex if Emulex, in its sole discretion, requests such assistance. Employee shall sign all documents and do all other things deemed necessary by Emulex, at Emulex's expense, to obtain and/or maintain such rights, to assign them to Emulex, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. If Emulex requires Employee's assistance under this Paragraph after termination of employment with Emulex, Employee will be compensated for time actually spent in providing assistance at Employee's hourly pay rate at the date of Employee's termination. 3.4 Appointment of Agent. Employee irrevocably appoints the President of Emulex to act as Employee's agent and attorney-in-fact to perform all acts necessary to obtain and/or maintain patents, copyrights, mask work rights, and similar rights, to any Creations assigned by Employee to Emulex under this Agreement if (1) Employee refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest and shall survive the death or disability of Employee. 3.5 Further Disclosure. Employee shall promptly disclose to Emulex, in confidence, (1) all Creations of any kind which Employee Creates while employed by Emulex, and (2) all patent applications filed by Employee within one (1) year after termination of employment with Emulex. Employee agrees that any application for a patent, copyright registration, mask work registration, or similar right filed within one (1) year after termination of employment with Emulex shall be presumed to relate to a Creation of Employee Created during employment at Emulex, unless Employee can prove otherwise. 3.6 Records. Employee shall keep complete, accurate, and authentic information and records on all Creations in the manner and form requested by Emulex. The information and records, and all copies of them, shall be the exclusive property of Emulex. Employee shall promptly surrender the information and records upon the request of Emulex, and on any termination of Employee's employment with Emulex. 3.7 Compliance with Labor Code. THIS AGREEMENT DOES NOT APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870 OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." Restrictions on Employee. 4.1 No Conflicting Competition. While employed by Emulex, Employee shall not in any manner (whether as an employee, consultant, or otherwise) perform services for, or have an ownership interest in (other than less than one percent (1%) of a publicly-held company), any entity that competes with Emulex or any employment or business which is otherwise in conflict with Employee's employment relationship with Emulex. 4.2 No Competitive Planning. While employed by Emulex, Employee shall not undertake any planning for any outside business activity (1) competitive with the work which Employee performs for Emulex, or (2) competitive with the profit unit of Emulex for which Employee works. 4.3 No Hiring of Other Employees. While employed by Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ, or assist or encourage others in employing or attempting to employ (whether as an employee, consultant, or otherwise), any of Emulex's other employees who work in any area in which Employee has been significantly engaged on behalf of Emulex. 4.4 No Use of Confidential Information. While employed by Emulex, and for 1 year afterward, Employee shall not enter into any other employment (whether as an employee, consultant, or otherwise) in which the duties of such other employment would require Employee to disclose or use any Confidential Information. 4.5 No Conflicting Agreements. Employee represents that Employee has no agreements with or obligations to any other party that would interfere with Employee's compliance with this Agreement. 4.6 Subsequent Employment. Employee agrees that Emulex may notify anyone as to the existence and provisions of this Agreement. Pre-existing Creations. 5.1 Representation of Coverage and Grant of License. Except for those Creations (if any) specifically reserved by Employee in an attachment to this Agreement, Employee represents that there are no Creations owned wholly or in part by Employee, or controlled directly or indirectly by Employee, which Employee considers to be reserved and excluded from the scope of this Agreement. Employee grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license on any and all non-reserved Creations of Employee. 5.2 Preservation of Confidence. In order to preserve Employee's proprietary rights in any unpatented or unpublished reserved Creations, Emulex shall keep in confidence all information provided by Employee pertaining to any reserved Creation, unless the information: (1) is already known to or in the possession of Emulex; (2) is or becomes publicly known through no wrongful act of Emulex; (3) is rightfully received by Emulex from a third party without breach of any obligation to Employee; (4) is approved for release by written authorization of Employee; (5) is distributed or made available to others by Employee without restriction as to use or disclosure; or (6) is developed independently by Emulex through persons not involved with information received by Emulex from Employee. 5.3 License from Use. Notwithstanding the reservation of a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while employed by Emulex, or (2) permits the use of a reserved Creation by another employee of Emulex, and does not have a prior written agreement with Emulex pertaining to such use, then Employee thereby grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license to that Creation (provided that the reserved Creation is owned wholly or in part by Employee, or is within the direct or indirect control of Employee at the time of employment). 5.4 Right of First Refusal. With respect to any reserved Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right of first refusal to purchase or license such Creations (unless otherwise licensed to Emulex by any other terms of this Agreement) on terms at least as favorable as offered to any other purchaser or licensee while Employee is employed by Emulex. General Provisions. 6.1 Attorneys' Fees. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the prevailing party shall be entitled to recover (in addition to any other relief awarded or granted) his, her, or its reasonable costs and expenses (including attorneys' fees) incurred in the proceeding and any appeal therefrom. 6.2 Entire Agreement. This Agreement, including all referenced attachments, constitutes the complete and final agreement between the parties, and supersedes all prior negotiations, agreements, and understandings between the parties concerning its subject matter. 6.3 Successors and Assigns. This Agreement is intended to benefit and is binding on (1) the successors and assigns of Emulex, and (2) the heirs and legal successors of Employee. 6.4 Separate Enforcement of Provisions. If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall be enforced to the extent possible. 6.5 Governing Law. The validity, construction, and performance of this Agreement is governed by the laws of the State of California. 6.6 Right to Relief. If Employee breaches or threatens to breach any provision of this Agreement, in addition to any other rights and remedies Emulex may have, Emulex shall be entitled to temporary and permanent injunctive relief to prevent the breach or threatened breach without the necessity of proving actual damages or posting any bond or undertaking. 6.7 Waiver and Amendment. No waiver, amendment, or modification of this Agreement shall be effective unless in writing and signed by the party against whom the waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of the right, power, or remedy. No waiver of any term, condition, or breach of this Agreement shall be construed as a waiver of any other term, condition, or breach. Effective Date. This Agreement, no matter when signed by Employee, is effective from the first date of Employee's employment with Emulex and shall survive the termination of Employee's employment with Emulex. At Will Employment. Unless specifically provided differently in a separate written agreement signed by an authorized agent of Emulex, Employee acknowledges and agrees that Employee's employment by Emulex is now and will continue to be throughout his or her employment with Emulex "AT WILL," and can be terminated at any time by Emulex for any reason, with or without good cause, and with or without prior warning or notice. Acknowledgment of Reading. Employee acknowledges that Employee has read and understands this Agreement, and has received a copy of it. AGREED: EMULEX CORPORATION ______________________________ By:___________________________ Employee's signature ______________________________ ______________________________ Employee's Name Name Dated:________________________ ______________________________ Title Dated:________________________ EX-99.(D)(6) 17 f93445toexv99wxdyx6y.txt EXHIBIT (D)(6) EXHIBIT (d)(6) NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of October 8, 2003, by and between Emulex Corporation, a California corporation (the "COMPANY") and Thomas Hughes ("EXECUTIVE"), a shareholder and executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL"). RECITALS A. Vixel is engaged in the business of providing technologies and products for the storage networking infrastructure business, fabric switches and storage networking semiconductor components that are embedded in fabric switches and storage appliances (including, but not limited to, storage arrays, network attached storage, tape libraries and virtualization appliances) that are contained in existing products of or products under development by Vixel (the "BUSINESS"); provided, that if Executive accepts an offer of employment with the Company following the Merger, the definition of Business shall also include the preceding Business of the Company as well as Vixel, including HBAs. B. Executive is a stockholder and an executive officer of Vixel and accordingly has acquired confidential and proprietary information relating to the Business and the operation of Vixel; C. Executive's covenant not to compete, as reflected in this Agreement, is an essential part of the transactions described in the Agreement and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and among Eagle Corporation, a Delaware corporation and the Company's parent corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to which, among other things, the Sub will be merged with and into Vixel (the "MERGER"); D. Executive holds a substantial number of stock options of Vixel that will continue to vest and shall be exercisable for shares of common stock of the Company following the Merger and therefore has a material economic interest in the consummation of the Merger. E. In order to protect the goodwill related to the Business and as a condition of, and an inducement to, the Company entering into the Merger Agreement, Executive has agreed to the noncompetition and nonsolicitation covenants and the confidentiality agreements provided in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and to induce the Company to consummate the transactions contemplated by the Merger Agreement, the receipt and sufficiency of which are hereby acknowledged, and with the knowledge that no other good or valuable consideration has been offered to or received by Executive in connection with the execution of this Agreement, Executive hereby covenants and agrees as follows: 1. Effectiveness of Agreement. This Agreement is conditioned upon the occurrence of the (i) Closing (as that term is defined in the Merger Agreement) and (ii) a bone fide offer of employment to Executive by the Company or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement shall be null and void ab initio should the Merger not be consummated for any reason or should the Employment Commencement not occur. This Agreement will terminate in the event of and concurrent with a termination of the Merger Agreement in accordance with its terms. 2. Noncompetition. (a) Executive and the Company agree that due to the nature of Executive's association with Vixel, Executive has confidential and proprietary information relating to the business and operations of Vixel and the Company (all references to the "Company" hereinafter shall include Vixel, which shall be the surviving corporation in the Merger). Executive acknowledges that such information is of extreme importance to the business of the Company and will continue to be so after the Merger and that disclosure of such confidential information to others or the unauthorized use of such information by others would cause substantial loss and harm to the Company. Executive and the Company also agree that Executive will continue to acquire, and will assist in developing, confidential and proprietary information relating to the Business following the Merger by reason of his employment with the Company. (b) Executive and the Company further agree that the market for the Business is intensely competitive and that the Company engages in the Business throughout the United States, Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (c) (i) Subject to subparagraph (ii) below, during the period commencing at the Effective Time of the Merger and ending one (1) year following the termination of Executive's employment with the Company (including, without limitation, voluntary resignation by such Executive or termination at the request of the Company) (the "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in the Business Area (as defined below), engage, directly or indirectly, in any in any capacity whatsoever (whether as an officer, director, stockholder, owner, proprietor, partner, member, co-owner, investor, employee, trustee, manager, consultant, independent contractor, co-venturer, financier, agent, representative or otherwise), in a Competing Business (as defined below), or otherwise hold any interest in a Competing Business; provided, however, that Executive may own, directly or indirectly, solely as a passive investment, securities of any entity traded on any national securities exchange if Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, "beneficially own" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 1.0% or more of any class of securities of such Competing Business. (ii) In the event that the employment of Executive is terminated by the Company without Cause (as defined herein) within one (1) year of the Effective Time, then the Restricted Period shall terminate on the expiration of severance payments to Executive. (d) "COMPETING BUSINESS" as used herein, means any individual, corporation, partnership, limited partnership, limited liability company, trust (business or otherwise), institution, foundation, pool, plan or other entity or organization (other than the Company) which engages or has publicly announced that it proposes to engage in the Business. (e) "BUSINESS AREA" as used herein, means each state within the United States of America as well as each country, state, province and territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (f) "CAUSE" as used herein shall mean: (i) any misappropriation or embezzlement by Executive of the property of the Company or any of its affiliates or other act of fraud or material misconduct by Executive against the Company or any of its affiliates; (ii) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony or any criminal act involving moral turpitude; (iii) a breach by Executive of any provision of this Agreement; (iv) the failure, refusal or neglect by Executive to perform faithfully the duties and obligations customary to his office; (v) the habitual non-performance or incompetent performance by Executive of the duties or responsibilities customary to his office; (vi) misconduct by Executive, including insubordination, in respect of the duties or obligations customary to his office; and (vii) any intentional or grossly negligent act by Executive having the effect of materially injuring the business or reputation of the Company or any of its affiliates. No activities covered by item (iv), (v) and (vi) will be deemed to be "Cause" unless the Company has notified Executive of the prohibited activity in writing and Executive has failed to cease such activity within thirty (30) days. 3. Nonsolicitation of the Purchaser and Company Employees. During the Restricted Period, Executive shall not, without the prior written consent of the Company, directly or indirectly solicit, request, cause or induce any person who is at the time an employee of or a consultant of the Company to leave the employ of or otherwise terminate such person's relationship with the Company. 4. Nonsolicitation of Customers or Suppliers. During the Restricted Period, Executive shall not, directly or indirectly: (i) solicit, induce or attempt to induce any customer, client or supplier of the Company to cease doing business in whole or in part with the Company; or (ii) attempt to limit or interfere with any business engagement or relationship existing between the Company and any third party. 5. Confidentiality. Executive agrees that, upon the Closing, he will execute the Company's standard proprietary information and invention assignment agreement (the "Employee Invention and Non-Disclosure Agreement"), the form of which is attached as Annex A, and will abide by all of its terms. 6. Injunctive Relief. The parties agree that the remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from the conduct which would constitute a breach of this Agreement. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it or them for such breach or threatened breach, including, without limitation, the recovery of damages from Executive. 7. Reasonableness and Enforceability of Covenants. The parties expressly agree that the character, duration and geographical scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not limited to, Executive's position of confidence and trust as an executive officer of Vixel as well as his employment with the Company after the Closing. Moreover, if any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the character, duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 8. Severability. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state, country or jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 9. Construction. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard to principles of conflicts or choice of laws. 10. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each party hereto. No breach of any covenant, agreement, warranty or representation shall be deemed waived unless expressly waived in writing by the party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. 11. Entire Agreement. This Agreement, together with the Merger Agreement and the documents, instruments and other agreements contemplated by or referred to therein and the Employee Invention and Non-Disclosure Agreement, contains the entire understanding of the parties relating to the subject matter hereof, supersedes all prior and contemporaneous agreements and understandings relating to the subject matter hereof and shall not be amended except by a written instrument signed by each of the parties hereto. 12. Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which, when taken as a whole, shall constitute one and the same instrument. 13. Section Headings. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. 14. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the consent of the other parties; provided, however, that the Company may assign its rights hereunder, without the consent of Executive, to any entity that acquires or succeeds to the Business. 15. Further Assurances. From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or two business days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to the Company: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attn: Randall G. Wick Vice President, General Counsel Telephone No.: (714) 662-5600 Facsimile No.: (714) 641-0172 (b) if to Executive: c/o Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Telephone No.: (425) 806-4528 Facsimile No.: (425) 806-4001 17. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Merger Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition Agreement as of the date first above written. EMULEX CORPORATION By: /s/ PAUL FOLINO ---------------------------------------- Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer /s/ THOMAS HUGHES -------------------------------------------- Thomas Hughes ANNEX A [EMULEX LOGO] EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT This Employee Creation and Non-Disclosure Agreement (this "Agreement") is entered into between Emulex Corporation ("Emulex") and the undersigned Employee. In consideration of employment or continued employment by Emulex and the mutual promises contained in this Agreement, Employee and Emulex agree as follows: Definition of Terms. 1.1 Creation. "Creation" means every idea, concept, invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, formula, algorithm, literary or graphical or audiovisual work or sound recording, mask work, or computer program of any kind, whether or not subject to patent, copyright, mask work right, or similar protection. 1.2 Create. "Create" means invent, develop, devise, conceive, discover, create, first reduce to practice, write, or fix in a tangible medium of expression. 1.3 Confidential Information. "Confidential Information" means all Creations, data, information, know-how, process parameters, fabrication techniques, technical plans, documentation, customer lists, price lists, supplier lists, business plans, marketing plans, financial information, and the like, in whatever form or medium, and whether or not designated or marked "Confidential" or the like, which: (1) relate to the business of Emulex, and (a) have not been disclosed by Emulex to, or (b) are not generally known to, the general public or to Emulex's trade or industry; or (2) are received by Emulex from a third party under an obligation of confidentiality to the third party. 1.4 Emulex. "Emulex" includes Emulex Corporation, a Delaware corporation, all of its subsidiaries, and all joint ventures and partnerships of which such corporation and/or any of such subsidiaries is a member, partner, or participant. Confidential Information. 2.1 Acknowledgement by Employee. Employee acknowledges that during Employee's employment with Emulex, Employee may be given access to, become acquainted with, or develop Confidential Information. 2.2 No Use or Disclosure. Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not created or developed by Employee) at any time or in any manner, except as required in the course of employment with Emulex. Employee acknowledges that, except as set forth on an exhibit attached by Employee to this Agreement, Employee is not a party to any agreement with any other entity which either (1) restricts Employee's use or disclosure of any information gained or learned by Employee from the entity or while employed by the entity, or (2) otherwise relates to Employee's use or disclosure of any confidential information or trade secrets of the entity. Employee represents that no entity has asserted or is asserting that Employee has breached any of the terms or provisions of any of the agreements listed on the attached exhibit. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. 2.3 Restriction on Documents and Equipment. All Confidential Information, documents, and equipment relating to the business of Emulex, whether prepared by Employee or otherwise coming into Employee's possession, are the exclusive property of Emulex, and must not be removed from any of its premises except as required in the course of employment with Emulex. All such Confidential Information, documents, and equipment shall be promptly returned by Employee to Emulex upon the request of Emulex, and on any termination of Employee's employment with Emulex. 2.4 No Disclosure or Use from Others. Employee shall not disclose to Emulex or use on behalf of Emulex any confidential information or trade secrets obtained from other entities, and shall not bring confidential information or trade secrets of other entities onto Emulex's premises. Creations. 3.1 Disclosure and Assignment of Creations. Employee shall promptly inform and disclose to Emulex all Creations which Employee Creates (either alone or with others) while in the employment of Emulex, if the Creations: (1) relate, at the time Created, to the business of Emulex or to any actual or demonstrably anticipated research or development work of Emulex; or (2) result from any work performed by Employee for Emulex; or (3) were Created utilizing any of Emulex's equipment, supplies, facilities, time, or Confidential Information. ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE PROPERTY OF EMULEX. 3.2 Governmental Rights. Employee acknowledges that Emulex has entered or may enter into agreements with agencies of the United States government, and that Emulex may be subject to laws and regulations which impose obligations, restrictions, and limitations on Emulex with respect to Creations which may be acquired by Emulex or which may be conceived or developed by employees, consultants, and other agents rendering services to Emulex. Employee shall be bound by all such obligations, restrictions, and limitations applicable to any Creation of Employee. Employee also shall take any and all further action which may be required to discharge such obligations and to comply with such restrictions and limitations. Employee further shall assign to Emulex all of Employee's rights in any Creation of Employee if Emulex is required to grant those rights to the United States government or any agencies of the United States government. 3.3 Employee's Assistance. Employee agrees to assist Emulex in obtaining and/or maintaining patents, copyrights, mask work rights, and similar rights to any Creations assigned by Employee to Emulex if Emulex, in its sole discretion, requests such assistance. Employee shall sign all documents and do all other things deemed necessary by Emulex, at Emulex's expense, to obtain and/or maintain such rights, to assign them to Emulex, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. If Emulex requires Employee's assistance under this Paragraph after termination of employment with Emulex, Employee will be compensated for time actually spent in providing assistance at Employee's hourly pay rate at the date of Employee's termination. 3.4 Appointment of Agent. Employee irrevocably appoints the President of Emulex to act as Employee's agent and attorney-in-fact to perform all acts necessary to obtain and/or maintain patents, copyrights, mask work rights, and similar rights, to any Creations assigned by Employee to Emulex under this Agreement if (1) Employee refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest and shall survive the death or disability of Employee. 3.5 Further Disclosure. Employee shall promptly disclose to Emulex, in confidence, (1) all Creations of any kind which Employee Creates while employed by Emulex, and (2) all patent applications filed by Employee within one (1) year after termination of employment with Emulex. Employee agrees that any application for a patent, copyright registration, mask work registration, or similar right filed within one (1) year after termination of employment with Emulex shall be presumed to relate to a Creation of Employee Created during employment at Emulex, unless Employee can prove otherwise. 3.6 Records. Employee shall keep complete, accurate, and authentic information and records on all Creations in the manner and form requested by Emulex. The information and records, and all copies of them, shall be the exclusive property of Emulex. Employee shall promptly surrender the information and records upon the request of Emulex, and on any termination of Employee's employment with Emulex. 3.7 Compliance with Labor Code. THIS AGREEMENT DOES NOT APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870 OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." Restrictions on Employee. 4.1 No Conflicting Competition. While employed by Emulex, Employee shall not in any manner (whether as an employee, consultant, or otherwise) perform services for, or have an ownership interest in (other than less than one percent (1%) of a publicly-held company), any entity that competes with Emulex or any employment or business which is otherwise in conflict with Employee's employment relationship with Emulex. 4.2 No Competitive Planning. While employed by Emulex, Employee shall not undertake any planning for any outside business activity (1) competitive with the work which Employee performs for Emulex, or (2) competitive with the profit unit of Emulex for which Employee works. 4.3 No Hiring of Other Employees. While employed by Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ, or assist or encourage others in employing or attempting to employ (whether as an employee, consultant, or otherwise), any of Emulex's other employees who work in any area in which Employee has been significantly engaged on behalf of Emulex. 4.4 No Use of Confidential Information. While employed by Emulex, and for 1 year afterward, Employee shall not enter into any other employment (whether as an employee, consultant, or otherwise) in which the duties of such other employment would require Employee to disclose or use any Confidential Information. 4.5 No Conflicting Agreements. Employee represents that Employee has no agreements with or obligations to any other party that would interfere with Employee's compliance with this Agreement. 4.6 Subsequent Employment. Employee agrees that Emulex may notify anyone as to the existence and provisions of this Agreement. Pre-existing Creations. 5.1 Representation of Coverage and Grant of License. Except for those Creations (if any) specifically reserved by Employee in an attachment to this Agreement, Employee represents that there are no Creations owned wholly or in part by Employee, or controlled directly or indirectly by Employee, which Employee considers to be reserved and excluded from the scope of this Agreement. Employee grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license on any and all non-reserved Creations of Employee. 5.2 Preservation of Confidence. In order to preserve Employee's proprietary rights in any unpatented or unpublished reserved Creations, Emulex shall keep in confidence all information provided by Employee pertaining to any reserved Creation, unless the information: (1) is already known to or in the possession of Emulex; (2) is or becomes publicly known through no wrongful act of Emulex; (3) is rightfully received by Emulex from a third party without breach of any obligation to Employee; (4) is approved for release by written authorization of Employee; (5) is distributed or made available to others by Employee without restriction as to use or disclosure; or (6) is developed independently by Emulex through persons not involved with information received by Emulex from Employee. 5.3 License from Use. Notwithstanding the reservation of a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while employed by Emulex, or (2) permits the use of a reserved Creation by another employee of Emulex, and does not have a prior written agreement with Emulex pertaining to such use, then Employee thereby grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license to that Creation (provided that the reserved Creation is owned wholly or in part by Employee, or is within the direct or indirect control of Employee at the time of employment). 5.4 Right of First Refusal. With respect to any reserved Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right of first refusal to purchase or license such Creations (unless otherwise licensed to Emulex by any other terms of this Agreement) on terms at least as favorable as offered to any other purchaser or licensee while Employee is employed by Emulex. General Provisions. 6.1 Attorneys' Fees. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the prevailing party shall be entitled to recover (in addition to any other relief awarded or granted) his, her, or its reasonable costs and expenses (including attorneys' fees) incurred in the proceeding and any appeal therefrom. 6.2 Entire Agreement. This Agreement, including all referenced attachments, constitutes the complete and final agreement between the parties, and supersedes all prior negotiations, agreements, and understandings between the parties concerning its subject matter. 6.3 Successors and Assigns. This Agreement is intended to benefit and is binding on (1) the successors and assigns of Emulex, and (2) the heirs and legal successors of Employee. 6.4 Separate Enforcement of Provisions. If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall be enforced to the extent possible. 6.5 Governing Law. The validity, construction, and performance of this Agreement is governed by the laws of the State of California. 6.6 Right to Relief. If Employee breaches or threatens to breach any provision of this Agreement, in addition to any other rights and remedies Emulex may have, Emulex shall be entitled to temporary and permanent injunctive relief to prevent the breach or threatened breach without the necessity of proving actual damages or posting any bond or undertaking. 6.7 Waiver and Amendment. No waiver, amendment, or modification of this Agreement shall be effective unless in writing and signed by the party against whom the waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of the right, power, or remedy. No waiver of any term, condition, or breach of this Agreement shall be construed as a waiver of any other term, condition, or breach. Effective Date. This Agreement, no matter when signed by Employee, is effective from the first date of Employee's employment with Emulex, and shall survive the termination of Employee's employment with Emulex. At Will Employment. Unless specifically provided differently in a separate written agreement signed by an authorized agent of Emulex, Employee acknowledges and agrees that Employee's employment by Emulex is now and will continue to be throughout his or her employment with Emulex "AT WILL," and can be terminated at any time by Emulex for any reason, with or without good cause, and with or without prior warning or notice. Acknowledgment of Reading. Employee acknowledges that Employee has read and understands this Agreement, and has received a copy of it. AGREED: EMULEX CORPORATION ______________________________ By:___________________________ Employee's signature ______________________________ ______________________________ Employee's Name Name Dated:________________________ ______________________________ Title Dated:________________________ EX-99.(D)(7) 18 f93445toexv99wxdyx7y.txt EXHIBIT (D)(7) EXHIBIT (d)(7) NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of October 8, 2003, by and between Emulex Corporation, a California corporation (the "COMPANY") and Soogil Stephen Cho ("EXECUTIVE"), a shareholder and executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL"). RECITALS A. Vixel is engaged in the business of providing technologies and products for the storage networking infrastructure business, fabric switches and storage networking semiconductor components that are embedded in fabric switches and storage appliances (including, but not limited to, storage arrays, network attached storage, tape libraries and virtualization appliances) that are contained in existing products of or products under development by Vixel (the "BUSINESS"); provided, that if Executive accepts an offer of employment with the Company following the Merger, the definition of Business shall also include the preceding Business of the Company as well as Vixel, including HBAs. B. Executive is a stockholder and an executive officer of Vixel and accordingly has acquired confidential and proprietary information relating to the Business and the operation of Vixel; C. Executive's covenant not to compete, as reflected in this Agreement, is an essential part of the transactions described in the Agreement and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and among Eagle Corporation, a Delaware corporation and the Company's parent corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to which, among other things, the Sub will be merged with and into Vixel (the "MERGER"); D. Executive holds a substantial number of stock options of Vixel that will continue to vest and shall be exercisable for shares of common stock of the Company following the Merger and therefore has a material economic interest in the consummation of the Merger. E. In order to protect the goodwill related to the Business and as a condition of, and an inducement to, the Company entering into the Merger Agreement, Executive has agreed to the noncompetition and nonsolicitation covenants and the confidentiality agreements provided in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and to induce the Company to consummate the transactions contemplated by the Merger Agreement, the receipt and sufficiency of which are hereby acknowledged, and with the knowledge that no other good or valuable consideration has been offered to or received by Executive in connection with the execution of this Agreement, Executive hereby covenants and agrees as follows: 1. Effectiveness of Agreement. This Agreement is conditioned upon the occurrence of the (i) Closing (as that term is defined in the Merger Agreement) and (ii) a bone fide offer of employment to Executive by the Company or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement shall be null and void ab initio should the Merger not be consummated for any reason or should the Employment Commencement not occur. This Agreement will terminate in the event of and concurrent with a termination of the Merger Agreement in accordance with its terms. 2. Noncompetition. (a) Executive and the Company agree that due to the nature of Executive's association with Vixel, Executive has confidential and proprietary information relating to the business and operations of Vixel and the Company (all references to the "Company" hereinafter shall include Vixel, which shall be the surviving corporation in the Merger). Executive acknowledges that such information is of extreme importance to the business of the Company and will continue to be so after the Merger and that disclosure of such confidential information to others or the unauthorized use of such information by others would cause substantial loss and harm to the Company. Executive and the Company also agree that Executive will continue to acquire, and will assist in developing, confidential and proprietary information relating to the Business following the Merger by reason of his employment with the Company. (b) Executive and the Company further agree that the market for the Business is intensely competitive and that the Company engages in the Business throughout the United States, Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (c) (i) Subject to subparagraph (ii) below, during the period commencing at the Effective Time of the Merger and ending one (1) year following the termination of Executive's employment with the Company (including, without limitation, voluntary resignation by such Executive or termination at the request of the Company) (the "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in the Business Area (as defined below), engage, directly or indirectly, in any in any capacity whatsoever (whether as an officer, director, stockholder, owner, proprietor, partner, member, co-owner, investor, employee, trustee, manager, consultant, independent contractor, co-venturer, financier, agent, representative or otherwise), in a Competing Business (as defined below), or otherwise hold any interest in a Competing Business; provided, however, that Executive may own, directly or indirectly, solely as a passive investment, securities of any entity traded on any national securities exchange if Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, "beneficially own" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 1.0% or more of any class of securities of such Competing Business. (ii) In the event that the employment of Executive is terminated by the Company without Cause (as defined herein) within one (1) year of the Effective Time, then the Restricted Period shall terminate on the expiration of severance payments to Executive. (d) "COMPETING BUSINESS" as used herein, means any individual, corporation, partnership, limited partnership, limited liability company, trust (business or otherwise), institution, foundation, pool, plan or other entity or organization (other than the Company) which engages or has publicly announced that it proposes to engage in the Business. (e) "BUSINESS AREA" as used herein, means each state within the United States of America as well as each country, state, province and territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (f) "CAUSE" as used herein shall mean: (i) any misappropriation or embezzlement by Executive of the property of the Company or any of its affiliates or other act of fraud or material misconduct by Executive against the Company or any of its affiliates; (ii) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony or any criminal act involving moral turpitude; (iii) a breach by Executive of any provision of this Agreement; (iv) the failure, refusal or neglect by Executive to perform faithfully the duties and obligations customary to his office; (v) the habitual non-performance or incompetent performance by Executive of the duties or responsibilities customary to his office; (vi) misconduct by Executive, including insubordination, in respect of the duties or obligations customary to his office; and (vii) any intentional or grossly negligent act by Executive having the effect of materially injuring the business or reputation of the Company or any of its affiliates. No activities covered by item (iv), (v) and (vi) will be deemed to be "Cause" unless the Company has notified Executive of the prohibited activity in writing and Executive has failed to cease such activity within thirty (30) days. 3. Nonsolicitation of the Purchaser and Company Employees. During the Restricted Period, Executive shall not, without the prior written consent of the Company, directly or indirectly solicit, request, cause or induce any person who is at the time an employee of or a consultant of the Company to leave the employ of or otherwise terminate such person's relationship with the Company. 4. Nonsolicitation of Customers or Suppliers. During the Restricted Period, Executive shall not, directly or indirectly: (i) solicit, induce or attempt to induce any customer, client or supplier of the Company to cease doing business in whole or in part with the Company; or (ii) attempt to limit or interfere with any business engagement or relationship existing between the Company and any third party. 5. Confidentiality. Executive agrees that, upon the Closing, he will execute the Company's standard proprietary information and invention assignment agreement (the "Employee Invention and Non-Disclosure Agreement"), the form of which is attached as Annex A, and will abide by all of its terms. 6. Injunctive Relief. The parties agree that the remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from the conduct which would constitute a breach of this Agreement. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it or them for such breach or threatened breach, including, without limitation, the recovery of damages from Executive. 7. Reasonableness and Enforceability of Covenants. The parties expressly agree that the character, duration and geographical scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not limited to, Executive's position of confidence and trust as an executive officer of Vixel as well as his employment with the Company after the Closing. Moreover, if any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the character, duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 8. Severability. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state, country or jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 9. Construction. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard to principles of conflicts or choice of laws. 10. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each party hereto. No breach of any covenant, agreement, warranty or representation shall be deemed waived unless expressly waived in writing by the party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. 11. Entire Agreement. This Agreement, together with the Merger Agreement and the documents, instruments and other agreements contemplated by or referred to therein and the Employee Invention and Non-Disclosure Agreement, contains the entire understanding of the parties relating to the subject matter hereof, supersedes all prior and contemporaneous agreements and understandings relating to the subject matter hereof and shall not be amended except by a written instrument signed by each of the parties hereto. 12. Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which, when taken as a whole, shall constitute one and the same instrument. 13. Section Headings. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. 14. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the consent of the other parties; provided, however, that the Company may assign its rights hereunder, without the consent of Executive, to any entity that acquires or succeeds to the Business. 15. Further Assurances. From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or two business days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to the Company: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attn: Randall G. Wick Vice President, General Counsel Telephone No.: (714) 662-5600 Facsimile No.: (714) 641-0172 (b) if to Executive: c/o Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Telephone No.: (425) 806-4528 Facsimile No.: (425) 806-4001 17. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Merger Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition Agreement as of the date first above written. EMULEX CORPORATION By: /s/ PAUL FOLINO ---------------------------------------- Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer /s/ SOOGIL STEPHEN CHO -------------------------------------------- Soogil Stephen Cho ANNEX A [EMULEX LOGO] EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT This Employee Creation and Non-Disclosure Agreement (this "Agreement") is entered into between Emulex Corporation ("Emulex") and the undersigned Employee. In consideration of employment or continued employment by Emulex and the mutual promises contained in this Agreement, Employee and Emulex agree as follows: Definition of Terms. 1.1 Creation. "Creation" means every idea, concept, invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, formula, algorithm, literary or graphical or audiovisual work or sound recording, mask work, or computer program of any kind, whether or not subject to patent, copyright, mask work right, or similar protection. 1.2 Create. "Create" means invent, develop, devise, conceive, discover, create, first reduce to practice, write, or fix in a tangible medium of expression. 1.3 Confidential Information. "Confidential Information" means all Creations, data, information, know-how, process parameters, fabrication techniques, technical plans, documentation, customer lists, price lists, supplier lists, business plans, marketing plans, financial information, and the like, in whatever form or medium, and whether or not designated or marked "Confidential" or the like, which: (1) relate to the business of Emulex, and (a) have not been disclosed by Emulex to, or (b) are not generally known to, the general public or to Emulex's trade or industry; or (2) are received by Emulex from a third party under an obligation of confidentiality to the third party. 1.4 Emulex. "Emulex" includes Emulex Corporation, a Delaware corporation, all of its subsidiaries, and all joint ventures and partnerships of which such corporation and/or any of such subsidiaries is a member, partner, or participant. Confidential Information. 2.1 Acknowledgement by Employee. Employee acknowledges that during Employee's employment with Emulex, Employee may be given access to, become acquainted with, or develop Confidential Information. 2.2 No Use or Disclosure. Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not created or developed by Employee) at any time or in any manner, except as required in the course of employment with Emulex. Employee acknowledges that, except as set forth on an exhibit attached by Employee to this Agreement, Employee is not a party to any agreement with any other entity which either (1) restricts Employee's use or disclosure of any information gained or learned by Employee from the entity or while employed by the entity, or (2) otherwise relates to Employee's use or disclosure of any confidential information or trade secrets of the entity. Employee represents that no entity has asserted or is asserting that Employee has breached any of the terms or provisions of any of the agreements listed on the attached exhibit. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. 2.3 Restriction on Documents and Equipment. All Confidential Information, documents, and equipment relating to the business of Emulex, whether prepared by Employee or otherwise coming into Employee's possession, are the exclusive property of Emulex, and must not be removed from any of its premises except as required in the course of employment with Emulex. All such Confidential Information, documents, and equipment shall be promptly returned by Employee to Emulex upon the request of Emulex, and on any termination of Employee's employment with Emulex. 2.4 No Disclosure or Use from Others. Employee shall not disclose to Emulex or use on behalf of Emulex any confidential information or trade secrets obtained from other entities, and shall not bring confidential information or trade secrets of other entities onto Emulex's premises. Creations. 3.1 Disclosure and Assignment of Creations. Employee shall promptly inform and disclose to Emulex all Creations which Employee Creates (either alone or with others) while in the employment of Emulex, if the Creations: (1) relate, at the time Created, to the business of Emulex or to any actual or demonstrably anticipated research or development work of Emulex; or (2) result from any work performed by Employee for Emulex; or (3) were Created utilizing any of Emulex's equipment, supplies, facilities, time, or Confidential Information. ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE PROPERTY OF EMULEX. 3.2 Governmental Rights. Employee acknowledges that Emulex has entered or may enter into agreements with agencies of the United States government, and that Emulex may be subject to laws and regulations which impose obligations, restrictions, and limitations on Emulex with respect to Creations which may be acquired by Emulex or which may be conceived or developed by employees, consultants, and other agents rendering services to Emulex. Employee shall be bound by all such obligations, restrictions, and limitations applicable to any Creation of Employee. Employee also shall take any and all further action which may be required to discharge such obligations and to comply with such restrictions and limitations. Employee further shall assign to Emulex all of Employee's rights in any Creation of Employee if Emulex is required to grant those rights to the United States government or any agencies of the United States government. 3.3 Employee's Assistance. Employee agrees to assist Emulex in obtaining and/or maintaining patents, copyrights, mask work rights, and similar rights to any Creations assigned by Employee to Emulex if Emulex, in its sole discretion, requests such assistance. Employee shall sign all documents and do all other things deemed necessary by Emulex, at Emulex's expense, to obtain and/or maintain such rights, to assign them to Emulex, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. If Emulex requires Employee's assistance under this Paragraph after termination of employment with Emulex, Employee will be compensated for time actually spent in providing assistance at Employee's hourly pay rate at the date of Employee's termination. 3.4 Appointment of Agent. Employee irrevocably appoints the President of Emulex to act as Employee's agent and attorney-in-fact to perform all acts necessary to obtain and/or maintain patents, copyrights, mask work rights, and similar rights, to any Creations assigned by Employee to Emulex under this Agreement if (1) Employee refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest and shall survive the death or disability of Employee. 3.5 Further Disclosure. Employee shall promptly disclose to Emulex, in confidence, (1) all Creations of any kind which Employee Creates while employed by Emulex, and (2) all patent applications filed by Employee within one (1) year after termination of employment with Emulex. Employee agrees that any application for a patent, copyright registration, mask work registration, or similar right filed within one (1) year after termination of employment with Emulex shall be presumed to relate to a Creation of Employee Created during employment at Emulex, unless Employee can prove otherwise. 3.6 Records. Employee shall keep complete, accurate, and authentic information and records on all Creations in the manner and form requested by Emulex. The information and records, and all copies of them, shall be the exclusive property of Emulex. Employee shall promptly surrender the information and records upon the request of Emulex, and on any termination of Employee's employment with Emulex. 3.7 Compliance with Labor Code. THIS AGREEMENT DOES NOT APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870 OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." Restrictions on Employee. 4.1 No Conflicting Competition. While employed by Emulex, Employee shall not in any manner (whether as an employee, consultant, or otherwise) perform services for, or have an ownership interest in (other than less than one percent (1%) of a publicly-held company), any entity that competes with Emulex or any employment or business which is otherwise in conflict with Employee's employment relationship with Emulex. 4.2 No Competitive Planning. While employed by Emulex, Employee shall not undertake any planning for any outside business activity (1) competitive with the work which Employee performs for Emulex, or (2) competitive with the profit unit of Emulex for which Employee works. 4.3 No Hiring of Other Employees. While employed by Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ, or assist or encourage others in employing or attempting to employ (whether as an employee, consultant, or otherwise), any of Emulex's other employees who work in any area in which Employee has been significantly engaged on behalf of Emulex. 4.4 No Use of Confidential Information. While employed by Emulex, and for 1 year afterward, Employee shall not enter into any other employment (whether as an employee, consultant, or otherwise) in which the duties of such other employment would require Employee to disclose or use any Confidential Information. 4.5 No Conflicting Agreements. Employee represents that Employee has no agreements with or obligations to any other party that would interfere with Employee's compliance with this Agreement. 4.6 Subsequent Employment. Employee agrees that Emulex may notify anyone as to the existence and provisions of this Agreement. Pre-existing Creations. 5.1 Representation of Coverage and Grant of License. Except for those Creations (if any) specifically reserved by Employee in an attachment to this Agreement, Employee represents that there are no Creations owned wholly or in part by Employee, or controlled directly or indirectly by Employee, which Employee considers to be reserved and excluded from the scope of this Agreement. Employee grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license on any and all non-reserved Creations of Employee. 5.2 Preservation of Confidence. In order to preserve Employee's proprietary rights in any unpatented or unpublished reserved Creations, Emulex shall keep in confidence all information provided by Employee pertaining to any reserved Creation, unless the information: (1) is already known to or in the possession of Emulex; (2) is or becomes publicly known through no wrongful act of Emulex; (3) is rightfully received by Emulex from a third party without breach of any obligation to Employee; (4) is approved for release by written authorization of Employee; (5) is distributed or made available to others by Employee without restriction as to use or disclosure; or (6) is developed independently by Emulex through persons not involved with information received by Emulex from Employee. 5.3 License from Use. Notwithstanding the reservation of a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while employed by Emulex, or (2) permits the use of a reserved Creation by another employee of Emulex, and does not have a prior written agreement with Emulex pertaining to such use, then Employee thereby grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license to that Creation (provided that the reserved Creation is owned wholly or in part by Employee, or is within the direct or indirect control of Employee at the time of employment). 5.4 Right of First Refusal. With respect to any reserved Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right of first refusal to purchase or license such Creations (unless otherwise licensed to Emulex by any other terms of this Agreement) on terms at least as favorable as offered to any other purchaser or licensee while Employee is employed by Emulex. General Provisions. 6.1 Attorneys' Fees. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the prevailing party shall be entitled to recover (in addition to any other relief awarded or granted) his, her, or its reasonable costs and expenses (including attorneys' fees) incurred in the proceeding and any appeal therefrom. 6.2 Entire Agreement. This Agreement, including all referenced attachments, constitutes the complete and final agreement between the parties, and supersedes all prior negotiations, agreements, and understandings between the parties concerning its subject matter. 6.3 Successors and Assigns. This Agreement is intended to benefit and is binding on (1) the successors and assigns of Emulex, and (2) the heirs and legal successors of Employee. 6.4 Separate Enforcement of Provisions. If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall be enforced to the extent possible. 6.5 Governing Law. The validity, construction, and performance of this Agreement is governed by the laws of the State of California. 6.6 Right to Relief. If Employee breaches or threatens to breach any provision of this Agreement, in addition to any other rights and remedies Emulex may have, Emulex shall be entitled to temporary and permanent injunctive relief to prevent the breach or threatened breach without the necessity of proving actual damages or posting any bond or undertaking. 6.7 Waiver and Amendment. No waiver, amendment, or modification of this Agreement shall be effective unless in writing and signed by the party against whom the waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of the right, power, or remedy. No waiver of any term, condition, or breach of this Agreement shall be construed as a waiver of any other term, condition, or breach. Effective Date. This Agreement, no matter when signed by Employee, is effective from the first date of Employee's employment with Emulex, and shall survive the termination of Employee's employment with Emulex. At Will Employment. Unless specifically provided differently in a separate written agreement signed by an authorized agent of Emulex, Employee acknowledges and agrees that Employee's employment by Emulex is now and will continue to be throughout his or her employment with Emulex "AT WILL," and can be terminated at any time by Emulex for any reason, with or without good cause, and with or without prior warning or notice. Acknowledgment of Reading. Employee acknowledges that Employee has read and understands this Agreement, and has received a copy of it. AGREED: EMULEX CORPORATION ______________________________ By:___________________________ Employee's signature ______________________________ ______________________________ Employee's Name Name Dated:________________________ ______________________________ Title Dated:________________________ EX-99.(D)(8) 19 f93445toexv99wxdyx8y.txt EXHIBIT (D)(8) EXHIBIT (d)(8) NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of October 8, 2003, by and between Emulex Corporation, a California corporation (the "COMPANY") and Brian J. Reed ("EXECUTIVE"), a shareholder and executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL"). RECITALS A. Vixel is engaged in the business of providing technologies and products for the storage networking infrastructure business, fabric switches and storage networking semiconductor components that are embedded in fabric switches and storage appliances (including, but not limited to, storage arrays, network attached storage, tape libraries and virtualization appliances) that are contained in existing products of or products under development by Vixel (the "BUSINESS"); provided, that if Executive accepts an offer of employment with the Company following the Merger, the definition of Business shall also include the preceding Business of the Company as well as Vixel, including HBAs. B. Executive is a stockholder and an executive officer of Vixel and accordingly has acquired confidential and proprietary information relating to the Business and the operation of Vixel; C. Executive's covenant not to compete, as reflected in this Agreement, is an essential part of the transactions described in the Agreement and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and among Eagle Corporation, a Delaware corporation and the Company's parent corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to which, among other things, the Sub will be merged with and into Vixel (the "MERGER"); D. Executive holds a substantial number of stock options of Vixel that will continue to vest and shall be exercisable for shares of common stock of the Company following the Merger and therefore has a material economic interest in the consummation of the Merger. E. In order to protect the goodwill related to the Business and as a condition of, and an inducement to, the Company entering into the Merger Agreement, Executive has agreed to the noncompetition and nonsolicitation covenants and the confidentiality agreements provided in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and to induce the Company to consummate the transactions contemplated by the Merger Agreement, the receipt and sufficiency of which are hereby acknowledged, and with the knowledge that no other good or valuable consideration has been offered to or received by Executive in connection with the execution of this Agreement, Executive hereby covenants and agrees as follows: 1. Effectiveness of Agreement. This Agreement is conditioned upon the occurrence of the (i) Closing (as that term is defined in the Merger Agreement) and (ii) a bone fide offer of employment to Executive by the Company or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement shall be null and void ab initio should the Merger not be consummated for any reason or should the Employment Commencement not occur. This Agreement will terminate in the event of and concurrent with a termination of the Merger Agreement in accordance with its terms. 2. Noncompetition. (a) Executive and the Company agree that due to the nature of Executive's association with Vixel, Executive has confidential and proprietary information relating to the business and operations of Vixel and the Company (all references to the "Company" hereinafter shall include Vixel, which shall be the surviving corporation in the Merger). Executive acknowledges that such information is of extreme importance to the business of the Company and will continue to be so after the Merger and that disclosure of such confidential information to others or the unauthorized use of such information by others would cause substantial loss and harm to the Company. Executive and the Company also agree that Executive will continue to acquire, and will assist in developing, confidential and proprietary information relating to the Business following the Merger by reason of his employment with the Company. (b) Executive and the Company further agree that the market for the Business is intensely competitive and that the Company engages in the Business throughout the United States, Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (c) (i) Subject to subparagraph (ii) below, during the period commencing at the Effective Time of the Merger and ending one (1) year following the termination of Executive's employment with the Company (including, without limitation, voluntary resignation by such Executive or termination at the request of the Company) (the "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in the Business Area (as defined below), engage, directly or indirectly, in any in any capacity whatsoever (whether as an officer, director, stockholder, owner, proprietor, partner, member, co-owner, investor, employee, trustee, manager, consultant, independent contractor, co-venturer, financier, agent, representative or otherwise), in a Competing Business (as defined below), or otherwise hold any interest in a Competing Business; provided, however, that Executive may own, directly or indirectly, solely as a passive investment, securities of any entity traded on any national securities exchange if Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, "beneficially own" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 1.0% or more of any class of securities of such Competing Business. (ii) In the event that the employment of Executive is terminated by the Company without Cause (as defined herein) within one (1) year of the Effective Time, then the Restricted Period shall terminate on the expiration of severance payments to Executive. (d) "COMPETING BUSINESS" as used herein, means any individual, corporation, partnership, limited partnership, limited liability company, trust (business or otherwise), institution, foundation, pool, plan or other entity or organization (other than the Company) which engages or has publicly announced that it proposes to engage in the Business. (e) "BUSINESS AREA" as used herein, means each state within the United States of America as well as each country, state, province and territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea and Singapore. (f) "CAUSE" as used herein shall mean: (i) any misappropriation or embezzlement by Executive of the property of the Company or any of its affiliates or other act of fraud or material misconduct by Executive against the Company or any of its affiliates; (ii) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony or any criminal act involving moral turpitude; (iii) a breach by Executive of any provision of this Agreement; (iv) the failure, refusal or neglect by Executive to perform faithfully the duties and obligations customary to his office; (v) the habitual non-performance or incompetent performance by Executive of the duties or responsibilities customary to his office; (vi) misconduct by Executive, including insubordination, in respect of the duties or obligations customary to his office; and (vii) any intentional or grossly negligent act by Executive having the effect of materially injuring the business or reputation of the Company or any of its affiliates. No activities covered by item (iv), (v) and (vi) will be deemed to be "Cause" unless the Company has notified Executive of the prohibited activity in writing and Executive has failed to cease such activity within thirty (30) days. 3. Nonsolicitation of the Purchaser and Company Employees. During the Restricted Period, Executive shall not, without the prior written consent of the Company, directly or indirectly solicit, request, cause or induce any person who is at the time an employee of or a consultant of the Company to leave the employ of or otherwise terminate such person's relationship with the Company. 4. Nonsolicitation of Customers or Suppliers. During the Restricted Period, Executive shall not, directly or indirectly: (i) solicit, induce or attempt to induce any customer, client or supplier of the Company to cease doing business in whole or in part with the Company; or (ii) attempt to limit or interfere with any business engagement or relationship existing between the Company and any third party. 5. Confidentiality. Executive agrees that, upon the Closing, he will execute the Company's standard proprietary information and invention assignment agreement (the "Employee Invention and Non-Disclosure Agreement"), the form of which is attached as Annex A, and will abide by all of its terms. 6. Injunctive Relief. The parties agree that the remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from the conduct which would constitute a breach of this Agreement. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it or them for such breach or threatened breach, including, without limitation, the recovery of damages from Executive. 7. Reasonableness and Enforceability of Covenants. The parties expressly agree that the character, duration and geographical scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not limited to, Executive's position of confidence and trust as an executive officer of Vixel as well as his employment with the Company after the Closing. Moreover, if any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the character, duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 8. Severability. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state, country or jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 9. Construction. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard to principles of conflicts or choice of laws. 10. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each party hereto. No breach of any covenant, agreement, warranty or representation shall be deemed waived unless expressly waived in writing by the party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. 11. Entire Agreement. This Agreement, together with the Merger Agreement and the documents, instruments and other agreements contemplated by or referred to therein and the Employee Invention and Non-Disclosure Agreement, contains the entire understanding of the parties relating to the subject matter hereof, supersedes all prior and contemporaneous agreements and understandings relating to the subject matter hereof and shall not be amended except by a written instrument signed by each of the parties hereto. 12. Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which, when taken as a whole, shall constitute one and the same instrument. 13. Section Headings. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. 14. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the consent of the other parties; provided, however, that the Company may assign its rights hereunder, without the consent of Executive, to any entity that acquires or succeeds to the Business. 15. Further Assurances. From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or two business days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to the Company: Emulex Corporation 3535 Harbor Boulevard Costa Mesa, California 92626 Attn: Randall G. Wick Vice President, General Counsel Telephone No.: (714) 662-5600 Facsimile No.: (714) 641-0172 (b) if to Executive: c/o Vixel Corporation 11911 North Creek Parkway South Bothell, Washington 98011 Telephone No.: (425) 806-4528 Facsimile No.: (425) 806-4001 17. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Merger Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition Agreement as of the date first above written. EMULEX CORPORATION By: /s/ PAUL FOLINO --------------------------------------- Name: Paul Folino Title: Chairman of the Board and Chief Executive Officer /s/ BRIAN J. REED -------------------------------------------- Brian J. Reed ANNEX A [EMULEX LOGO] EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT This Employee Creation and Non-Disclosure Agreement (this "Agreement") is entered into between Emulex Corporation ("Emulex") and the undersigned Employee. In consideration of employment or continued employment by Emulex and the mutual promises contained in this Agreement, Employee and Emulex agree as follows: Definition of Terms. 1.1 Creation. "Creation" means every idea, concept, invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, formula, algorithm, literary or graphical or audiovisual work or sound recording, mask work, or computer program of any kind, whether or not subject to patent, copyright, mask work right, or similar protection. 1.2 Create. "Create" means invent, develop, devise, conceive, discover, create, first reduce to practice, write, or fix in a tangible medium of expression. 1.3 Confidential Information. "Confidential Information" means all Creations, data, information, know-how, process parameters, fabrication techniques, technical plans, documentation, customer lists, price lists, supplier lists, business plans, marketing plans, financial information, and the like, in whatever form or medium, and whether or not designated or marked "Confidential" or the like, which: (1) relate to the business of Emulex, and (a) have not been disclosed by Emulex to, or (b) are not generally known to, the general public or to Emulex's trade or industry; or (2) are received by Emulex from a third party under an obligation of confidentiality to the third party. 1.4 Emulex. "Emulex" includes Emulex Corporation, a Delaware corporation, all of its subsidiaries, and all joint ventures and partnerships of which such corporation and/or any of such subsidiaries is a member, partner, or participant. Confidential Information. 2.1 Acknowledgement by Employee. Employee acknowledges that during Employee's employment with Emulex, Employee may be given access to, become acquainted with, or develop Confidential Information. 2.2 No Use or Disclosure. Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not created or developed by Employee) at any time or in any manner, except as required in the course of employment with Emulex. Employee acknowledges that, except as set forth on an exhibit attached by Employee to this Agreement, Employee is not a party to any agreement with any other entity which either (1) restricts Employee's use or disclosure of any information gained or learned by Employee from the entity or while employed by the entity, or (2) otherwise relates to Employee's use or disclosure of any confidential information or trade secrets of the entity. Employee represents that no entity has asserted or is asserting that Employee has breached any of the terms or provisions of any of the agreements listed on the attached exhibit. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. 2.3 Restriction on Documents and Equipment. All Confidential Information, documents, and equipment relating to the business of Emulex, whether prepared by Employee or otherwise coming into Employee's possession, are the exclusive property of Emulex, and must not be removed from any of its premises except as required in the course of employment with Emulex. All such Confidential Information, documents, and equipment shall be promptly returned by Employee to Emulex upon the request of Emulex, and on any termination of Employee's employment with Emulex. 2.4 No Disclosure or Use from Others. Employee shall not disclose to Emulex or use on behalf of Emulex any confidential information or trade secrets obtained from other entities, and shall not bring confidential information or trade secrets of other entities onto Emulex's premises. Creations. 3.1 Disclosure and Assignment of Creations. Employee shall promptly inform and disclose to Emulex all Creations which Employee Creates (either alone or with others) while in the employment of Emulex, if the Creations: (1) relate, at the time Created, to the business of Emulex or to any actual or demonstrably anticipated research or development work of Emulex; or (2) result from any work performed by Employee for Emulex; or (3) were Created utilizing any of Emulex's equipment, supplies, facilities, time, or Confidential Information. ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE PROPERTY OF EMULEX. 3.2 Governmental Rights. Employee acknowledges that Emulex has entered or may enter into agreements with agencies of the United States government, and that Emulex may be subject to laws and regulations which impose obligations, restrictions, and limitations on Emulex with respect to Creations which may be acquired by Emulex or which may be conceived or developed by employees, consultants, and other agents rendering services to Emulex. Employee shall be bound by all such obligations, restrictions, and limitations applicable to any Creation of Employee. Employee also shall take any and all further action which may be required to discharge such obligations and to comply with such restrictions and limitations. Employee further shall assign to Emulex all of Employee's rights in any Creation of Employee if Emulex is required to grant those rights to the United States government or any agencies of the United States government. 3.3 Employee's Assistance. Employee agrees to assist Emulex in obtaining and/or maintaining patents, copyrights, mask work rights, and similar rights to any Creations assigned by Employee to Emulex if Emulex, in its sole discretion, requests such assistance. Employee shall sign all documents and do all other things deemed necessary by Emulex, at Emulex's expense, to obtain and/or maintain such rights, to assign them to Emulex, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Paragraph are continuing and survive the termination of Employee's employment with Emulex. If Emulex requires Employee's assistance under this Paragraph after termination of employment with Emulex, Employee will be compensated for time actually spent in providing assistance at Employee's hourly pay rate at the date of Employee's termination. 3.4 Appointment of Agent. Employee irrevocably appoints the President of Emulex to act as Employee's agent and attorney-in-fact to perform all acts necessary to obtain and/or maintain patents, copyrights, mask work rights, and similar rights, to any Creations assigned by Employee to Emulex under this Agreement if (1) Employee refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest and shall survive the death or disability of Employee. 3.5 Further Disclosure. Employee shall promptly disclose to Emulex, in confidence, (1) all Creations of any kind which Employee Creates while employed by Emulex, and (2) all patent applications filed by Employee within one (1) year after termination of employment with Emulex. Employee agrees that any application for a patent, copyright registration, mask work registration, or similar right filed within one (1) year after termination of employment with Emulex shall be presumed to relate to a Creation of Employee Created during employment at Emulex, unless Employee can prove otherwise. 3.6 Records. Employee shall keep complete, accurate, and authentic information and records on all Creations in the manner and form requested by Emulex. The information and records, and all copies of them, shall be the exclusive property of Emulex. Employee shall promptly surrender the information and records upon the request of Emulex, and on any termination of Employee's employment with Emulex. 3.7 Compliance with Labor Code. THIS AGREEMENT DOES NOT APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870 OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." Restrictions on Employee. 4.1 No Conflicting Competition. While employed by Emulex, Employee shall not in any manner (whether as an employee, consultant, or otherwise) perform services for, or have an ownership interest in (other than less than one percent (1%) of a publicly-held company), any entity that competes with Emulex or any employment or business which is otherwise in conflict with Employee's employment relationship with Emulex. 4.2 No Competitive Planning. While employed by Emulex, Employee shall not undertake any planning for any outside business activity (1) competitive with the work which Employee performs for Emulex, or (2) competitive with the profit unit of Emulex for which Employee works. 4.3 No Hiring of Other Employees. While employed by Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ, or assist or encourage others in employing or attempting to employ (whether as an employee, consultant, or otherwise), any of Emulex's other employees who work in any area in which Employee has been significantly engaged on behalf of Emulex. 4.4 No Use of Confidential Information. While employed by Emulex, and for 1 year afterward, Employee shall not enter into any other employment (whether as an employee, consultant, or otherwise) in which the duties of such other employment would require Employee to disclose or use any Confidential Information. 4.5 No Conflicting Agreements. Employee represents that Employee has no agreements with or obligations to any other party that would interfere with Employee's compliance with this Agreement. 4.6 Subsequent Employment. Employee agrees that Emulex may notify anyone as to the existence and provisions of this Agreement. Pre-existing Creations. 5.1 Representation of Coverage and Grant of License. Except for those Creations (if any) specifically reserved by Employee in an attachment to this Agreement, Employee represents that there are no Creations owned wholly or in part by Employee, or controlled directly or indirectly by Employee, which Employee considers to be reserved and excluded from the scope of this Agreement. Employee grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license on any and all non-reserved Creations of Employee. 5.2 Preservation of Confidence. In order to preserve Employee's proprietary rights in any unpatented or unpublished reserved Creations, Emulex shall keep in confidence all information provided by Employee pertaining to any reserved Creation, unless the information: (1) is already known to or in the possession of Emulex; (2) is or becomes publicly known through no wrongful act of Emulex; (3) is rightfully received by Emulex from a third party without breach of any obligation to Employee; (4) is approved for release by written authorization of Employee; (5) is distributed or made available to others by Employee without restriction as to use or disclosure; or (6) is developed independently by Emulex through persons not involved with information received by Emulex from Employee. 5.3 License from Use. Notwithstanding the reservation of a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while employed by Emulex, or (2) permits the use of a reserved Creation by another employee of Emulex, and does not have a prior written agreement with Emulex pertaining to such use, then Employee thereby grants to Emulex a royalty-free, non-exclusive, worldwide, irrevocable license to that Creation (provided that the reserved Creation is owned wholly or in part by Employee, or is within the direct or indirect control of Employee at the time of employment). 5.4 Right of First Refusal. With respect to any reserved Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right of first refusal to purchase or license such Creations (unless otherwise licensed to Emulex by any other terms of this Agreement) on terms at least as favorable as offered to any other purchaser or licensee while Employee is employed by Emulex. General Provisions. 6.1 Attorneys' Fees. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the prevailing party shall be entitled to recover (in addition to any other relief awarded or granted) his, her, or its reasonable costs and expenses (including attorneys' fees) incurred in the proceeding and any appeal therefrom. 6.2 Entire Agreement. This Agreement, including all referenced attachments, constitutes the complete and final agreement between the parties, and supersedes all prior negotiations, agreements, and understandings between the parties concerning its subject matter. 6.3 Successors and Assigns. This Agreement is intended to benefit and is binding on (1) the successors and assigns of Emulex, and (2) the heirs and legal successors of Employee. 6.4 Separate Enforcement of Provisions. If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall be enforced to the extent possible. 6.5 Governing Law. The validity, construction, and performance of this Agreement is governed by the laws of the State of California. 6.6 Right to Relief. If Employee breaches or threatens to breach any provision of this Agreement, in addition to any other rights and remedies Emulex may have, Emulex shall be entitled to temporary and permanent injunctive relief to prevent the breach or threatened breach without the necessity of proving actual damages or posting any bond or undertaking. 6.7 Waiver and Amendment. No waiver, amendment, or modification of this Agreement shall be effective unless in writing and signed by the party against whom the waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of the right, power, or remedy. No waiver of any term, condition, or breach of this Agreement shall be construed as a waiver of any other term, condition, or breach. Effective Date. This Agreement, no matter when signed by Employee, is effective from the first date of Employee's employment with Emulex, and shall survive the termination of Employee's employment with Emulex. At Will Employment. Unless specifically provided differently in a separate written agreement signed by an authorized agent of Emulex, Employee acknowledges and agrees that Employee's employment by Emulex is now and will continue to be throughout his or her employment with Emulex "AT WILL," and can be terminated at any time by Emulex for any reason, with or without good cause, and with or without prior warning or notice. Acknowledgment of Reading. Employee acknowledges that Employee has read and understands this Agreement, and has received a copy of it. AGREED: EMULEX CORPORATION ______________________________ By:____________________________ Employee's signature ______________________________ _______________________________ Employee's Name Name Dated:________________________ _______________________________ Title Dated:_________________________ EX-99.(D)(9) 20 f93445toexv99wxdyx9y.txt EXHIBIT (D)(9) EXHIBIT (d)(9) VIXEL 11911 North Creek Parkway South / Bothel / WA / 98011 Phone 425-806-5509 / Fax 425-806-4050 / www.vixel.com CONFIDENTIAL September 2, 2003 Emulex Corporation 3535 Harbor Blvd. Costa Mesa, California 92626-7112 Attention: Karen Mulvany Ladies and Gentlemen: To facilitate the consideration and negotiation of a possible transaction involving Vixel Corporation, a Delaware corporation ("VCo."), and Emulex Corporation, a Delaware corporation ("ECo."),VCo. and ECo. have requested access to certain non-public information regarding the other party and any subsidiary (such party when disclosing such information being the "Disclosing Party" and when receiving such information being the "Receiving Party"). As a condition of being furnished such information, the Receiving Party agrees to treat any information (whether (i) prepared by the Disclosing Party, its Representatives (as defined below) or otherwise, (ii) in written, electronic or other form and (iii) such information is furnished or made available on or after the date hereof) concerning the Disclosing Party or any of its subsidiaries which is furnished or made available to the Receiving Party or any of its Representatives by or on behalf of the Disclosing Party (herein collectively referred to as the "Evaluation Material") in accordance with the provisions of this letter and to take or abstain from taking certain other actions herein set forth. The term "Evaluation Material" shall be deemed to include notes, analyses, compilations, data, studies, interpretations, forecasts, records, memoranda or other documents (collectively, "Documents") or information relating directly or indirectly to the business of the Disclosing Party, any predecessor entity or any subsidiary or other affiliate of the Disclosing Party, or that is prepared by the Disclosing Party or its Representatives which contain, reflect or are based on, in whole or in part, any Evaluation Material. The term "Evaluation Material" does not include Documents or information which (i) is already in the Receiving Party's possession, provided that such information is not known by the Receiving Party to be subject to another confidentiality agreement with or other obligation of secrecy to the Disclosing Party, directly or indirectly, (ii) becomes generally available to the public other than as a result of a disclosure, directly or indirectly, by the Receiving Party or its Representatives in breach of this letter agreement, (iii) becomes available to the Receiving Party from a source other than the Disclosing Party or its Representatives, provided that such source is not known by the Receiving Party to be bound by a confidentiality agreement with or other obligation of secrecy to the Disclosing Party, directly or indirectly, (iv) is independently developed by the employees, agents or Representatives of the Receiving Party without use of the Evaluation Material, or (v) if in writing, is not clearly marked as being confidential or proprietary to the Disclosing Party. The obligations of this letter agreement shall expire three years after the date hereof (the "Confidentiality Period"). The Disclosing Party hereby agrees not to disclose to the Receiving Party any Documents or information, the disclosure or use of which would violate the rights of any third party. The Receiving Party hereby agrees that the Evaluation Material will be used solely for the purpose of evaluating and negotiating a possible transaction between the parties and will not be used, directly or indirectly, to compete with the Disclosing Party or its subsidiaries, and that the Evaluation Material will be kept confidential by the Receiving Party and its Representatives and Page 1 of 5 will be not be disclosed by the Receiving Party or any of its Representatives; provided, however, that (i) the Evaluation Material may be disclosed (A) to the Disclosing Party's Representatives who need to know such information for the sole purpose of evaluating or negotiating any such possible transaction between the parties (it being understood that such Representatives shall be informed by the Receiving Party of the confidential nature of such information and shall be directed by the Receiving Party to treat such information confidentially), and (B) as required (which requirement shall not have been caused by the acts of the Receiving Party or its Representatives) by applicable law, regulation or legal process and only after compliance with the following paragraph and (ii) any disclosure of Evaluation Material may be made if the Disclosing Party consents in writing. The Receiving Party shall be responsible for any breach of this letter agreement by any its Representatives (it being understood that such responsibility shall be in addition to and not by way of limitation of any right or remedy the Disclosing Party may have against the Representatives with respect to such breach). In the event that the Receiving Party or any of its Representatives becomes legally compelled to disclose any of the Evaluation Material or the information referred to in the following paragraph, the Receiving Party shall provide the Disclosing Party with prompt prior written notice of such requirement so that the Disclosing Party may seek a protective order or other appropriate remedy and/or waive in writing compliance with the provisions of this letter agreement. If such protective order or other remedy is not obtained and such a written waiver has not been received from the Disclosing Party that would permit such compelled disclosure, the Receiving Party or its Representatives agree to use reasonable best efforts to disclose only that portion of the Evaluation Material and the information referred to in the following paragraph that it is legally required to be disclosed and to use reasonable best efforts to obtain assurances and otherwise preserve the confidentiality of the Evaluation Material and the information referred to in the following paragraph (including cooperation in good faith with the Disclosing Party, at the Disclosing Party's sole expense, to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Evaluation Material and the information referred to in the following paragraph). In addition, except as required by law or applicable rules and regulations (and in such event, in compliance with the paragraph above regarding its obligations in such event), each of ECo. and VCo. hereby agrees that, without the prior written consent of the other party, neither party will, and will cause its Representatives not to, disclose to any person: (a) the existence of this letter agreement and the identity of the parties hereto; or (b) the fact that investigations, discussions or negotiations are taking place concerning a possible transaction between the parties; or (c) that the Receiving Party or any of its Representatives has received Evaluation Material or Evaluation Material has been made available to it; or (d) any of the terms, conditions or other facts with respect to any such possible transaction, including the status thereof. The term "person" as used in this letter agreement will be interpreted broadly to include the media (electronic, print or otherwise), the Internet, any governmental representative or authority or any corporation, company, partnership, group or other entity or individual. Notwithstanding any other provision of this letter agreement, each party or any of its Representatives may disclose to any and all persons, without limitation of any kind, the tax treatment and any facts that may be relevant to the tax structure of the transactions contemplated by this letter agreement and all materials of any kind (including, but not limited to, opinions or other tax analyses) relating to such tax treatment and tax structure; provided, however, that (i) any such information and materials shall be kept confidential to the extent necessary to comply with any applicable federal and state securities laws, and (ii) disclosure may not be made until the earliest of (A) the date of the public announcement of discussions Page 2 of 5 relating to the possible transaction, (B) the date of the public announcement of the possible transaction, and (C) the date of the execution of a definitive agreement to enter into the transaction (provided further, that the limitation set out in this clause (ii) on the timing of disclosure shall not be construed to limit the ability by each party to this letter agreement to consult any tax advisor (including a tax advisor independent from all other entities involved in the transactions) regarding the tax treatment or tax structure of the transactions). Each party is aware, and will advise its Representatives who are informed as to the matters which are the subject of this letter agreement, that the United States securities laws prohibit any person who has received from an issuer material, non-public information concerning the matters which are the subject of this letter agreement from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. For a period of eighteen months from the date of this letter agreement ("the Standstill Period"), each party will not (and shall cause its Representatives acting on its and its subsidiaries' or affiliates' behalf not to), without the specific prior written consent of the other party, (i) propose to the other party or any other person any transaction involving the parties and/or the other party's security holders and/or any of the other party's securities; (ii) acquire, offer or propose to acquire or agree or seek to acquire, or assist, advise or encourage any other persons in acquiring, offering or proposing to acquire, directly or indirectly, (A) beneficial ownership of the other party or any of the other party's securities, businesses or assets or (B) any contract to sell or option to sell the other party's securities; (iii) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are defined or used in the rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) to vote, or seek to advise or influence any person or entity with respect to the voting of, any voting securities of the other party or any of its subsidiaries; (iv) directly or indirectly form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of the other party or any of its subsidiaries; (v) seek or propose, directly or indirectly, alone or in concert with others, to influence or control the management or policies of the other party or any of its subsidiaries; (vi) directly or indirectly enter into any discussions, negotiations, arrangements or understandings with any other person with respect to any of the foregoing activities or propose any of such activities to any other person; (vii) advise, assist, encourage, act as a financing source for or otherwise invest, directly or indirectly, in any other person in connection with any of the foregoing activities; or (viii) disclose any intention, plan or arrangement inconsistent with any of the foregoing. Each party also agrees that, during the Standstill Period, it or any of its Representatives will not: (i) request the other party or its Representatives, directly or indirectly, to amend or waive any provision of this paragraph (including this sentence) or otherwise take any action inconsistent with any provision of this paragraph (including this sentence); or (ii) take any initiative with respect to the other party or any of its subsidiaries which involves making a public announcement or could require the other party or any of its subsidiaries to make a public announcement regarding (A) such initiative, (B) any of the activities referred to in this paragraph, (C) the possibility of a transaction described in the first sentence of this letter agreement or any similar transaction or (D) the possibility of any person acquiring control of the other party or any of its subsidiaries, whether by means of a business combination or otherwise. Notwithstanding anything to the contrary contained in this letter agreement, if, at any time during the Standstill Period (i) a third party (1) "commences a tender offer" (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934) for at least 50% of the outstanding capital stock of VCo. or (2) commences a proxy contest with respect to the election of any directors of VCo., or (ii) a third party enters into an agreement with VCo. contemplating the acquisition (by way of merger, tender offer or otherwise) of at least 50% Page 3 of 5 of the outstanding voting securities of VCo or all or substantially all of VCo's assets, then (in either of such cases) the restrictions set forth in this paragraph shall immediately terminate and cease to be of any further force and effect. Each party agrees that money damages may not be a sufficient remedy for any breach or threatened breach of this letter agreement by the other party or its Representatives and that the other party shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach or threatened breach, in addition to all other remedies available at law or in equity without the necessity of posting any bond or other security or proving that monetary damages would be an inadequate remedy. Such remedies shall not be deemed to be the exclusive remedies for a breach of this letter agreement but shall be in addition to all other remedies available of law or in equity. Each party agrees that, for a period of eighteen months commencing on the date of this letter agreement, without the prior written consent of the other party, it shall cause its employees, agents or Representatives which have been provided any Evaluation Material not to (or will not assist or encourage others to), directly or indirectly, solicit for employment with it, or any of its subsidiaries, any executive officer employed by the other party or any of its subsidiaries; provided, however, that this paragraph will not prevent either party from causing to be placed any general advertisement or similar notice that is not targeted specifically at employees of the other party or its subsidiaries. Each party agrees that unless and until a definitive agreement between the parties has been executed and delivered, neither party will be under any legal obligation of any kind whatsoever with respect to such a transaction by virtue of this or any written or oral expression with respect to such a transaction by it or any of its Representatives except, in the case of this letter, for the matters specifically agreed to herein. Nothing shall constitute a definitive agreement unless signed by the CEO of ECo. on behalf of ECo. If either party decides that it does not wish to proceed with a transaction or at any time upon the written request of the Disclosing Party for any reason, the Receiving Party shall promptly deliver to the Disclosing Party, or certify the destruction of, all written Evaluation Material and any other written material containing or reflecting any information in the Evaluation Material (whether prepared by the Disclosing Party, its Representatives or otherwise) furnished to the Receiving Party or its Representatives and will not retain any copies, extracts or other reproductions in whole or in part of such written material, except that an archival copy of such Evaluation Material may be retained by attorneys for the parties. All other Evaluation Material shall be destroyed and such destruction shall be certified in writing to the Disclosing Party by an authorized officer supervising such destruction. Notwithstanding any such writing or written notice or such return or destruction of the Evaluation Material, the Disclosing Party and its Representatives will continue to be bound by the obligations of confidentiality and other obligations hereunder for the Confidentiality Period. Each party agrees that, without the prior consent of the other party, it or its Representatives will not contact or communicate with the other party's customers or suppliers to discuss, or request information regarding the possible transaction with the other party. Nothing in this letter agreement shall constitute a grant of authority to the other party to obtain, remove or copy any particular document or items of information regarding the other party or any of its subsidiaries except as provided herein. Page 4 of 5 For purposes of this letter agreement, a party's "Representatives" will be deemed to include each person that is or becomes (i) a subsidiary or other affiliate of such party, or (ii) an officer, director, employee, partner, attorney, advisor, accountant, agent or representative of such party or any of such party's subsidiaries or other affiliates. No provision of this letter agreement may be modified or waived except by means of a written instrument that is validly executed on behalf of both of the parties. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. If any provision of this letter agreement is found to violate any statute, regulation, rule, order or decree of any governmental authority, court, agency or exchange, such invalidity shall not be deemed to affect any other provision hereof or the validity of the remainder of this letter agreement, and such invalid provision shall be deemed deleted to the minimum extent necessary to cure such violation, and failure to comply with such invalid provision shall not be a breach of this letter agreement. Neither this letter agreement nor any of the rights and/or obligations hereunder may be assigned except by statutory merger or by the assignment by a party to a parent corporation owning more than 50% of the voting stock of such party, by either party without the prior written consent of the other party, and any attempted assignment or transfer by either party not in accordance herewith shall be null and void. This letter agreement is for the benefit of each party and its Representatives and their respective successors and permitted assigns. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of California. Very truly yours, VIXEL CORPORATION By: /s/ Kurtis L. Adams ------------------------------------- Kurtis L. Adams, Chief Financial Officer Confirmed and Agreed to as of this __ day of September 2003: EMULEX CORPORATION By: /s/ Paul Folino ------------------------------------ Name: Paul Folino ------------------------------------ Its: Chief Executive Officer ------------------------------------- Page 5 of 5 GRAPHIC 21 f93445tof9344501.gif GRAPHIC begin 644 f93445tof9344501.gif M1TE&.#EAP``E`/?_````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#, M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,` MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9 M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_ MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;, MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9 MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P` M,\P`9LP`F@S$%<`*G#G1FOQ8]B=8N30_LL7JM6A=O!CI)KV+%^K> MM5]!`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`#-3;9 MS((6E"`%:>+`C6S0@QWD8`0S*$(*;I"$()R9_?`SN!+%!H4I),@')3BO&:;0 M,1'4X)Y@2,.T\#"'/;QA"45!2"H>VHYR`SJ@3RI6FB9F1'W?08A?@#@3)CKQ KBA51D_%D5KB86!&+8(R(`XUX%7B%\8P4"6%2V&<%X*'QC6\D(QR;&!``.S\_ ` end GRAPHIC 22 f93445tomackenzi.gif GRAPHIC begin 644 f93445tomackenzi.gif M1TE&.#EA>``C`/<``/______S/__F?__9O__,___`/_,___,S/_,F?_,9O_, M,__,`/^9__^9S/^9F?^99O^9,_^9`/]F__]FS/]FF?]F9O]F,_]F`/\S__\S MS/\SF?\S9O\S,_\S`/\`__\`S/\`F?\`9O\`,_\``,S__\S_S,S_F#)2PH4.'"ZT47!&(E<2'&#-JW#CQFL>'@3RRXLC1"BN1!%><'$FRIC#I5:B"* M@7PNG9K1YK6=*;U>5"@S8461!VVN\#JPIL6!)[V*7%NVHT61-^-ZO*H7@$U6 M@`&/I>D5+-S""6O6)1IWL,FK-H>Z-1Q9)X"DD"'DV0+>V$ M?<-Z#;ZV-N.YR.>Z)AET[\"UK():_X<->#OHXYVG?TR8.7UNVX:+W@3KVG/+ M\.('SM=K?6W/[;(]E!IQ'>V5E$2[30?7<<"!M1Q_65W5U5)_93<3:P()Y1MQ MYSTTG(($=1=931)YIN%:8\EW7$Q9_17=0S5M.%]($@WW'6`S@786@1!%5EI! ME>DT4TB'V00`D46R,II:BJ&'$4+#G219A0+5=)5/D;$EH%K=I;<>0>'9YIJ& MV3?9<8-E)^,<@FE94,VFCA67..A"*9<%XD&G8%&DA1CAG_19UYH M5/TUIV:]@>C78@:IYF6@0;VV7%#WX51H<[?A.&EY//[)XX\RQF<462A5REF( M<^%)TIIE#O]FXTF\S;)Q&:$)*$K_O5< M@48A6ZA>.`T'69RF0>IFG`.&%AA%-\DU'GO6'32:5.$YE5-6ZL)64;I(P9:4 M84CU-*^00F:D7%.OO<03L#>^&UB__A9LL+%?'MS0LJV)M!+`"D?\4GL2`\F@ M=X^2N1%S%;^TG)J6;42B=)LA?%56G0$7IL`+6>1IB$K&^2&91:T$DG:2?K=9 MS:!JM-ND#7\EY9XN[Y66T2UJG.%9%D6E6&P?56<0QVP:C;%!(]&5HI-AC>B?N2W7?WF9-A.R'OZFDZO\O132W8$?R5*@J5$& ML9)5$YXTD&'G?%F`"Q_+DF=6ADK2J=MR7S6HDHZ^F&+*Y=Q=S5[*%Y_LM:I4 M&X3::F0E]&*;%I61E]/UOL85<6JKTL\IW)DTU*XJQ0TLHA&@0L9UF"75Q7W^ M`]?Q)/?`MW0/2\4CD-I0QJ:1/*M[+<+->M!&D:$YY&TQP4G__/>HH;!M0_"! MWLPH)*D/E8!,/"$A4)QB14>\P"+CEXI-$LI"<2@HVZFM*9Q.0(7S4* `V-&`@(`.S\_ ` end -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.(A)(3)

Exhibit (a)(3)

EX-99.(A)(4)

Exhibit (a)(4)

EX-99.(A)(5)

Exhibit (a)(5)

EX-99.(A)(6)

Exhibit (a)(6)

EX-99.(A)(10)

                                                                 EXHIBIT (a)(10)

This announcement is neither an offer to purchase nor a solicitation of an offer
 to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase, dated October 15, 2003 (the "Offer to Purchase"), and
  the related Letter of Transmittal and any amendments or supplements to the
Offer to Purchase or Letter of Transmittal. The Offer is not being made to (nor
    will tenders be accepted from or on behalf of) holders of Shares in any
 jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction or any administrative or
judicial action pursuant thereto. However, the Purchaser (as defined below) may,
 in its discretion, take such action as it deems necessary to make the Offer in
    any jurisdiction and extend the Offer to holders of such Shares in such
   jurisdiction. In any jurisdiction where securities, Blue Sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser (as defined below) by Merrill Lynch
 & Co., which is acting as the dealer manager (the "Dealer Manager"), or by one
     or more registered brokers or dealers licensed under the laws of such
                                 jurisdiction.

                      NOTICE OF OFFER TO PURCHASE FOR CASH
                     ALL OUTSTANDING SHARES OF COMMON STOCK
           (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
                                       AND
         ALL OUTSTANDING SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK
                                       OF
                                VIXEL CORPORATION
                                       AT
                              $10.00 NET PER SHARE
                                       BY
                            AVIARY ACQUISITION CORP.
                          A WHOLLY OWNED SUBSIDIARY OF
                               EMULEX CORPORATION

      Aviary Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Emulex Corporation, a Delaware corporation
("Emulex"), is offering to purchase all issued and outstanding shares of common
stock, par value $.0015 per share, of Vixel Corporation, a Delaware corporation
("Vixel"), including the associated preferred stock or other rights issued
pursuant to the Rights Agreement, dated as of November 15, 2000, between Vixel
and Computershare Trust Company, Inc., as amended from time to time (together,
the "Common Stock"), and all issued and outstanding shares of Series B
convertible preferred stock, par value $.001 per share, of Vixel (the "Series B
Preferred Stock," and together with the Common Stock, the "Shares" and each
share thereof a "Share"), at a price of $10.00 per Share, net to the seller in
cash (the "Offer Price"), without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase and in the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Tendering stockholders who have Shares
registered in their names and who tender directly to Computershare Trust Company
of New York, which is acting as the depositary (the "Depositary"), will not be
obligated to pay brokerage fees or commissions or, except as set forth in the
Letter of Transmittal, transfer taxes on the sale of Shares pursuant to the
Offer. Stockholders who hold their Shares through a broker, bank or other
nominee should consult such institution as to whether it charges any service
fees. The Purchaser will pay all fees and expenses of the Depositary, the Dealer
Manager, and MacKenzie Partners, Inc., which is acting as the information agent
(the "Information Agent"), incurred in connection with the Offer. The Purchaser
is offering to acquire all Shares as a first step in acquiring the entire equity
interest in Vixel. Following consummation of the Offer, the Purchaser intends to
seek representation on Vixel's Board of Directors and to seek to have Vixel
consummate the merger described below.

  THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
      TIME, ON WEDNESDAY, NOVEMBER 12, 2003, UNLESS THE OFFER IS EXTENDED.

      THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT VALIDLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (A) THAT
NUMBER OF SHARES OF COMMON STOCK WHICH, TOGETHER WITH ANY SHARES OF COMMON STOCK
THEN OWNED BY EMULEX OR THE PURCHASER (WITHOUT GIVING EFFECT TO SHARES SUBJECT
TO PURCHASE UNDER THE PURCHASER OPTION (AS DEFINED BELOW) OR THE STOCKHOLDERS
AGREEMENT (AS DEFINED BELOW)), REPRESENTS GREATER THAN 50.1% OF THE SHARES OF
COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS (EXCLUDING THE CONVERSION OF
THE SERIES B PREFERRED STOCK) AND (B) THAT NUMBER OF SHARES OF SERIES B
PREFERRED STOCK WHICH, TOGETHER WITH ANY SHARES OF SERIES B PREFERRED STOCK THEN
OWNED BY EMULEX OR THE PURCHASER (WITHOUT GIVING EFFECT TO SHARES SUBJECT TO
PURCHASE UNDER THE PURCHASER OPTION OR THE STOCKHOLDERS AGREEMENT), REPRESENTS
GREATER THAN 50.1% OF THE SERIES B PREFERRED STOCK OUTSTANDING ON A FULLY
DILUTED BASIS AND (2) THE SATISFACTION OF CERTAIN OTHER CONDITIONS AS CONTAINED
IN THE OFFER TO PURCHASE, INCLUDING THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED.

      The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 8, 2003 (the "Merger Agreement"), by and among Emulex, the
Purchaser and Vixel, pursuant to which, as soon as practicable after the
completion of the Offer and satisfaction or waiver of all conditions to the
Merger (as defined below), the Purchaser will be merged with and into Vixel and
the separate corporate existence of the Purchaser will thereupon cease. The
merger of the Purchaser with and into Vixel, as effected pursuant to the
immediately preceding sentence, is referred to herein as the "Merger." At the
effective time of the Merger (the "Effective Time"), each Share (other than
Shares held by Vixel as treasury stock, Shares held by Emulex, the Purchaser or
any other wholly owned subsidiary of Emulex and Shares held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who
complies with Section 262 of the Delaware General Corporation Law ("Delaware
Law")) will be canceled and retired and converted into the right to receive the
$10.00 per Share (or any greater amount per Share paid pursuant to the Offer) in
cash, without interest.

      THE BOARD OF DIRECTORS OF VIXEL HAS UNANIMOUSLY DETERMINED THAT THE TERMS
OF THE OFFER, THE MERGER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST
INTERESTS OF VIXEL'S STOCKHOLDERS AND HAS UNANIMOUSLY RECOMMENDED THAT THE
HOLDERS OF SUCH SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.

      As a condition and inducement to Emulex's and the Purchaser's willingness
to enter into the Merger Agreement, certain stockholders of Vixel (each a
"Stockholder") entered into a Stockholders Agreement, dated as of October 8,
2003, with Emulex and the Purchaser (the "Stockholders Agreement"). The
Stockholders Agreement provides for the tender into the Offer of all Shares held
by the Stockholders, which as of September 28, 2003 represented approximately
11% of the issued and outstanding shares of Common Stock (assuming the
conversion of the Series B Preferred Stock held by certain Stockholders and
excluding warrants and stock options that certain Stockholders may exercise for
859,058 shares and up to 456,666 shares, respectively, of Common Stock),
including any Shares acquired after the date of the Stockholders Agreement,
whether upon the exercise of warrants or options to acquire Shares or otherwise.
The Stockholder Agreement also requires the Stockholders to vote such Shares (1)
in favor of approval and adoption of the Merger Agreement (as the same may have
been amended or revised) and any action required in furtherance thereof, (2)
against any agreement or transaction to an acquisition proposal other than as
proposed by Emulex or the Purchaser and (3) against any proposal, action or
transaction that would prevent, or materially impede or delay, the consummation
of the Offer or Merger. Shares subject to the Stockholders Agreement, and
warrants and stock options held by the Stockholders, are also subject to certain
restrictions on transfer under the Stockholders Agreement.

      Also as a condition and inducement to Emulex's and the Purchaser's
willingness to enter into the Merger Agreement, Vixel entered into a Purchaser
Option Agreement, dated October 8, 2003, by and between Emulex, the Purchaser
and Vixel, pursuant to which Vixel granted the Purchaser an irrevocable option
(the "Purchaser Option") to purchase, for the Offer Price, shares of Common
Stock and/or Series B Preferred Stock, in such relative amounts as determined by
the Purchaser in its discretion (subject to the number of authorized shares of
Series B Preferred Stock available for issuance), up to 19.9% in the aggregate
of the then-outstanding shares of Common Stock and Series B Preferred Stock on
an "as-converted" basis (collectively, the "Optioned Shares"). The exercise of
the Purchaser Option for Common Stock is conditioned upon the Purchaser and
Emulex owning in the aggregate, immediately following such exercise, at least
90% of the outstanding shares of Common Stock. The exercise of the Purchaser
Option for Series B Preferred Stock is conditioned upon the Purchaser and Emulex
owning in the aggregate, immediately following such exercise, at least 90% of
the outstanding shares of Series B Preferred Stock.

      For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not validly withdrawn as, if and when the Purchaser gives oral or written
notice to the Depositary of the Purchaser's acceptance for payment of such
Shares. Payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the Offer Price therefor with the Depositary, which will act
as agent for tendering stockholders for the purpose of receiving payment from
Purchaser and transmitting payment to validly tendering stockholders. Under no
circumstances will interest be paid on the Offer Price to be paid by the
Purchaser for the Shares, regardless of any extension of the Offer or any delay
in making such payment. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
at one of its addresses appearing on the back cover of the Offer to Purchase of
(1) certificates representing, or a timely Book-Entry Confirmation with respect
to, such Shares into the Depositary's account at the Depositary Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedures described in
Section 3 -- "Procedure for Tendering Shares" of the Offer to Purchase, (2) a
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message (as defined in Section 3 -- "Procedure
for Tendering Shares" of the Offer to Purchase), and (3) any other documents
required by the Letter of Transmittal.

      The Purchaser may, without the consent of Vixel, (1) if at any scheduled
expiration of the Offer any of the conditions to the Purchaser's obligation to
accept Shares for payment shall not be satisfied or waived, extend the Offer
beyond the Expiration Date (defined below) for a time period reasonably
necessary to permit such condition to be satisfied, (2) extend the Offer for any
period required by any rule, regulation or interpretation of the United States
Securities and Exchange Commission, or the staff thereof, applicable to the
Offer or (3) extend (or re-extend) the Offer for an aggregate period of not more
than five business days beyond the latest applicable date that would otherwise
be permitted under clause (1) or (2) of this sentence, if, as of such date, all
of the conditions to the Purchaser's obligations to accept Shares for payment
are satisfied or waived, but there shall not have been validly tendered and not
withdrawn pursuant to the Offer that number of Shares necessary on a fully
diluted basis to permit the Merger to be effected without a meeting of Vixel's
stockholders in accordance with Delaware law. The Purchaser may, without the
consent of Vixel, also extend the Offer in accordance with Rule 14d-11 under the
Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Offer
Price may be increased and the Offer may be extended to the extent required by
law in connection with such increase, in each case without the consent of Vixel.
The term "Expiration Date" shall mean 12:00 midnight, New York City time, on
November 12, 2003, unless and until the Purchaser extends the period of time for
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire.

      Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
accordance with the public announcement requirements of Rule 14d-4(c) under the
Exchange Act.

      Shares tendered pursuant to the Offer may be withdrawn (pursuant to the
procedures set forth below) at any time prior to the Expiration Date.
Thereafter, such tenders are irrevocable, except that they may be withdrawn
after December 14, 2003 unless such Shares have been accepted for payment as
provided in the Offer to Purchase. No withdrawal rights will apply to Shares
tendered into a subsequent offering period under Rule 14d-11 of the Exchange Act
and no withdrawal rights apply during a "subsequent offering period" under Rule
14d-11 with respect to Shares tendered in the Offer and accepted for payment.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of the Offer to Purchase and must
specify the name of the person who tendered the Shares to be withdrawn, the
number and class of Shares to be withdrawn and the name of the registered holder
of the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates representing Shares have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (a financial institution, including most commercial
banks, savings and loan associations and brokerage houses, that is a participant
in the Security Transfer Agent's Medallion Program, or any other "eligible
guarantor institute," as such term is defined in Rule 17Ad-15 under the Exchange
Act), the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer as contained in Section 3 -- "Procedure for Tendering
Shares" of the Offer to Purchase, any notice of withdrawal must also specify the
name and number of the account at the appropriate Book-Entry Transfer Facility
to be credited with the withdrawn Shares and otherwise comply with such
Book-Entry Transfer Facility's procedures. Withdrawals of tendered Shares may
not be rescinded, and any Shares properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in Section 3 --
"Procedure for Tendering Shares" of the Offer to Purchase any time prior to the
Expiration Date. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, and its determination will be final and binding.

      The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for United States federal income tax purposes and may
also be a taxable transaction under applicable state, local or foreign tax laws.
Stockholders should consult with their tax advisors as to the particular tax
consequences of the Offer and the Merger to them, including the applicability
and effect of the Alternative Minimum Tax and any state, local or foreign income
and other tax laws and of changes in such tax laws. For a more complete
description of certain U.S. federal income tax consequences of the Offer and the
Merger see Section 5 -- "Certain United States Federal Income Tax Consequences"
of the Offer to Purchase.

      The information required to be disclosed by paragraph (d)(1) of Rule 14d-6
of the General Rules and Regulations under the Exchange Act is contained in the
Offer to Purchase and is incorporated herein by reference.

      Vixel has provided the Purchaser with Vixel's stockholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
relevant documents will be mailed by the Purchaser to record holders of Shares,
and will be furnished by the Purchaser to brokers, dealers, banks and similar
persons whose names, or the names of whose nominees, appear on the stockholder
lists, or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.

      THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.

      Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
as set forth below. Requests for additional copies of the Offer to Purchase,
Letter of Transmittal and other tender offer documents may be directed to the
Information Agent at its address and telephone number set forth below, and
copies will be furnished at the Purchaser's expense. The Purchaser will not pay
any fees or commissions to any broker or dealer or other person (other than to
the Dealer Manager, Depositary and the Information Agent) for soliciting tenders
of Shares pursuant to the Offer.

                    The Information Agent for the Offer is:

                         (MACKENZIE PARTNERS, INC. LOGO)
                               105 Madison Avenue
                            New York, New York 10016
                          (212) 929-5500 (Call Collect)
                                       or
                          CALL TOLL-FREE (800) 322-2885
                       E-mail: proxy@mackenziepartners.com

                      The Dealer Manager for the Offer is:
                              MERRILL LYNCH & CO.
                           Four World Financial Center
                            New York, New York 10080
                          (866) 276-1462 (Call Collect)

October 15, 2003

EX-99.(A)(11)

                                                                 Exhibit (a)(11)


[EMULEX LOGO]

FOR IMMEDIATE RELEASE

Investor Contact:  Michael J. Rockenbach         Press   Contact: Robin Austin
                   Chief Financial Officer               Sr. Manager, Public
                   (714) 513-8213                        Relations
                                                         (714) 513-8152


   EMULEX COMMENCES TENDER OFFER FOR ACQUISITION OF VIXEL AT $10.00 PER SHARE

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

      COSTA MESA, CALIF., OCTOBER 15, 2003 - Emulex Corporation (NYSE:ELX)
announced today that Aviary Acquisition Corp., its wholly-owned subsidiary, has
commenced a cash tender offer for all of the outstanding shares of Vixel
Corporation (NASDAQ:VIXL) for $10.00 net per share.

      Emulex and Vixel announced on October 8th that the two companies had
signed a definitive agreement for Emulex to acquire Vixel in an all cash tender
offer. Vixel is a leading supplier of embedded switch ASICs and subsystems for
the storage networking market. Vixel's embedded switch solutions will diversify
Emulex's storage networking product line and deliver opportunities to accelerate
Emulex's revenue growth by tapping into the emerging market for embedded storage
switching solutions.

      The board of directors of Vixel has unanimously approved the acquisition
and recommends that Vixel's stockholders tender their Vixel shares in the offer.
In addition, certain stockholders of Vixel have agreed to tender shares
representing approximately 11% of the fully diluted common stock in support of
the transaction.

      Following completion of the tender offer, Emulex intends to merge its
acquisition subsidiary with and into Vixel to acquire all Vixel shares not
tendered in the offer. Any remaining Vixel stockholders will receive the same
cash price paid in the tender offer.

      The tender offer is subject to regulatory approvals and certain closing
conditions, including the tender of a majority of shares of capital stock of
Vixel on a fully-diluted basis and expiration or termination of any waiting
period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
amended.

Emulex Launches Tender Offer for Vixel Shares
October 15, 2003
Page 2

      Unless the offer is extended, the offer and withdrawal rights will expire
at midnight New York time on November 12, 2003. Questions and requests for
assistance may be directed to MacKenzie Partners, Inc., the Information Agent
for the tender offer, at 212-929-5500 (collect) or 800-322-2885 (toll-free) or
to Merrill Lynch & Co., the Dealer Manager for the tender offer, at 866-276-1462
(toll-free).

ABOUT EMULEX

      Emulex Corporation is the world's largest supplier and developer of
storage networking host bus adapters. Corporate headquarters are located in
Costa Mesa, California. News releases and other information about Emulex
Corporation are available at www.emulex.com.

ABOUT VIXEL

      Vixel Corporation is a leading provider and innovator of embedded storage
connectivity technologies for storage solution providers. Vixel's embedded
storage switching and storage networking products have been deployed by leading
solution providers such as HP, Apple, Network Appliance, Fujitsu, NEC, Xyratex,
Sun Microsystems, Avid Technologies and BlueArc. To find out more about Vixel,
visit www.vixel.com.

ADDITIONAL INFORMATION

      This announcement is neither an offer to purchase nor a solicitation of an
offer to sell shares of any class of stock of Vixel Corporation. On October 15,
2003 Emulex Corporation and its acquisition subsidiary, Aviary Acquisition
Corp., commenced a tender offer for all of the outstanding shares of common
stock (including associated preferred stock purchase rights) and shares of
Series B convertible preferred stock of Vixel Corporation at $10.00 per share.
This tender offer is scheduled to expire at midnight New York time on November
12, 2003, unless it is extended as provided in the related offer to purchase.
Emulex Corporation and Aviary Acquisition Corp. will file with the Securities
and Exchange Commission a tender offer statement on Schedule TO and related
exhibits, including the offer to purchase, letter of transmittal, and other
related documents. Shareholders should read the offer to purchase and the tender
offer statement on Schedule TO and related exhibits because they contain
important

Emulex Launches Tender Offer for Vixel Shares
October 15, 2003
Page 3


information. By the close of the business day on Wednesday, October
15, 2003, shareholders can obtain these documents free of charge from the
Securities and Exchange Commission's web site at www.sec.gov, or from Emulex,
either at its web site at www.emulex.com or by directing a request to Emulex
Corporation, 3535 Harbor Boulevard, Costa Mesa, California 92626, Attention:
Investor Relations.

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

This news release refers to various products and companies by their trade names.
In most, if not all, cases these designations are claimed as trademarks or
registered trademarks by their respective companies.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: This press release contains forward-looking statements, including
statements about: the potential acquisition of Vixel by Emulex, revenue growth
and earnings per share objectives, and the potential synergies and benefits of
the anticipated acquisition. The reader is cautioned that a number of important
factors could cause actual results to differ materially from those in the
forward-looking statements. These risks and uncertainties include, among others:
the willingness of Vixel shareholders to tender their shares in the tender offer
and the number and timing of shares tendered; the receipt of regulatory and
third party consents to the extent required for the acquisition; and
satisfaction of the various closing conditions. Furthermore, these factors
include the fact that the economy generally, and the technology and storage
segments specifically, have recently been in a state of uncertainty making it
difficult to determine if past experience is a good guide to the future and
making it impossible to determine if markets will grow or shrink in the short
term. These and other factors which could cause actual results to differ
materially from those in the forward-looking statements are also discussed in
reports filed by Emulex and Vixel with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, including under the
heading "Risk Factors" in Vixel's 2002 Annual Report on Form 10-K, as amended,
and in Emulex's 2003 Annual Report on Form 10-K and in quarterly reports on Form
10-Q filed by Vixel and Emulex in 2003. We caution investors not to place undue
reliance on the forward-looking statements contained in this press release.
These statements speak only as of the date of this press release, and we
undertake no obligation to update or revise the statements, risks or reasons.
All forward-looking statements are expressly qualified in their entirety by this
cautionary statement.

                                      # # #

EX-99.(A)(12)

                                                                 EXHIBIT (e)(22)



                   SUPERIOR COURT OF THE STATE OF WASHINGTON

                                 COUNTY OF KING

                                   AT SEATTLE

                                             )
RUSSELL FINK, On Behalf of Himself and       )    Case No.
All Others Similarly Situated,               )    COMPLAINT BASED UPON BREACH
                              Plaintiff,     )    OF FIDUCIARY DUTY
                                             )
     vs.                                     )
                                             )
VIXEL CORPORATION, ROBERT Q.                 )
CORDELL II, JAMI K. NACHTSHEIM,              )
CHARLES A. HAGGERTY, ROBERT S.               )
MESSINA, JAMES M. McCLUNEY, PETER            )
J. PERRONE, TIMOTHY M. SPICER and            )
DOES 1-25, inclusive,                        )
                                             )
                              Defendants.    )
                                             )
- ---------------------------------------------





                                    Milberg Weiss Bershad Hynes & Lerach LLP
                               1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                  Telephone: 206/839-0730 - Fax: 206/839-0728

     Plaintiff, by his attorneys, alleges as follows:

                             SUMMARY OF THE ACTION

     1. This is a stockholder class action brought by plaintiff on behalf of
the holders of Vixel Corporation ("Vixel" or the "Company") common stock
against Vixel and its directors arising out of their attempts to provide
certain Vixel insiders and directors with preferential treatment in connection
with their efforts to complete the sale of Vixel to Emulex Corp. (the
"Acquisition") and senior Vixel management who are jointly concealing the
Company's third quarter 2003 ("Q3 2003") financial results.(1) This action
seeks equitable relief only.

     2. In pursuing the unlawful plan to sell Vixel, each of the defendants
violated applicable law by directly breaching and/or aiding the other
defendants' breaches of their fiduciary duties of loyalty, due care,
independence, good faith and fair dealing. In fact, the individual defendants
spent substantial effort tailoring the structural terms of the Acquisition to
meet the specific needs of Emulex Corp. ("Emulex") and senior Vixel management.
In essence, the proposed Acquisition by Emulex and senior Vixel management is
the product of a hopelessly flawed process that was designed to ensure the sale
of Vixel to one buying group, and one buying group only, on terms preferential
to Emulex and senior Vixel management and to subvert the interests of plaintiff
and the other public stockholders of Vixel.

                             JURISDICTION AND VENUE

     3. This Court has jurisdiction over defendants because they conduct
business in Washington and/or are citizens of Washington. This action is not
removable.



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

(1)  The Company's Q3 2003 ended September 30, 2003.


COMPLAINT BASED UPON BREACH
OF FIDUCIARY DUTY - 1 OF 11

[Milberg Weiss Bershad Hynes & Lerach LLP Letterhead]

     4. Venue is proper in this Court because the conduct at issue took place
and had an effect in this County. In addition, certain defendants reside in this
County.

                                    PARTIES

     5. Plaintiff Russell Fink is, and at all times relevant hereto was, a
shareholder of Vixel.

     6. Defendant Vixel is based in Washington. Vixel provides technologies and
products for data storage solutions and storage networking applications. The
Company's products utilize the Fibre Channel protocol, which is an American
National Standards Institute ("ANSI") defined standard for the transfer of
information between computers and storage devices and within storage devices.
The Company's products consist of a variety of new embedded storage switch
products, as well as its storage area networking ("SAN") products that connect
computers to data storage devices in a network configuration.

     7. Defendant Robert Q. Cordell II ("Cordell") is a director of the Company.

     8. Defendant Jami K. Nachtscheim ("Nachtscheim") is a director of the
Company.

     9. Defendant Charles A. Haggerty ("Haggerty") is a director of the
Company.

     10. Defendant Robert S. Messina ("Messina") is a director of the
Company.

     11. Defendant James M. McCluney ("McCluney") is the President, CEO and is a
director of the Company.

     12. Defendant Peter J. Perrone ("Perrone") is the Series B Director of the
Company.

     13. Defendant Timothy M. Spicer ("Spicer") is a director of the Company.

     14. The defendants named above in Paragraphs 7-13 are sometimes
collectively referred to herein as the "Individual Defendants."

     15. The true names and capacities of defendants sued herein under Wash. CR
10(a)(2) as Does 1 through 25, inclusive, are presently unknown to plaintiff,
who therefore sues these


COMPLAINT BASED UPON BREACH       Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 2 of 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                 Telephone: 206/839-0730 - Fax. 206/839-0728


defendants by such fictitious names. Plaintiff will seek to amend this
Complaint and include these Doe defendants' true names and capacities when they
are ascertained. Each of the fictitiously named defendants is responsible in
some manner for the conduct alleged herein.

                          DEFENDANTS' FIDUCIARY DUTIES

     16. In accordance with their duties of loyalty, care and good faith, the
defendants, as directors and/or officers of Vixel, are obligated to refrain
from:

          (a) participating in any transaction where the directors' or officers'
loyalties are divided;

          (b) participating in any transaction where the directors or officers
receive or are entitled to receive a personal financial benefit not equally
shared by the public shareholders of the corporation; and/or

          (c) unjustly enriching themselves at the expense or to the detriment
of the public shareholders.

     17. Plaintiff alleges herein that the Individual Defendants, separately
and together, in connection with the sale of Vixel, violated the fiduciary
duties owed to plaintiff and the other public shareholders of Vixel, including
their duties of loyalty, good faith and independence, insofar as they stood on
both sides of the transaction and engaged in self-dealing and obtained for
themselves personal benefits, including personal financial benefits not shared
equally by plaintiff or the Class.

     18. Because the Individual Defendants have breached their duties of
loyalty, good faith and independence in connection with the sale of Vixel, the
burden of proving the inherent or entire fairness of the Acquisition, including
all aspects of its negotiation and structure, is placed upon the Individual
Defendants as a matter of law.

COMPLAINT BASED UPON BREACH       Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 3 of 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                 Telephone: 206/839-0730 - Fax: 206/839-0728


                            CLASS ACTION ALLEGATIONS

     19. Plaintiff brings this action on his own behalf and as a class action
pursuant to Wash. C.R. 23 on behalf of all holders of Vixel stock who are being
and will be harmed by defendants' actions described below (the "Class").
Excluded from the Class are defendants herein and any person, firm, trust,
corporation, or other entity related to or affiliated with any defendant.

     20. This action is properly maintainable as a class action.

     21. The Class is so numerous that joinder of all members is impracticable.
According to Vixel's Securities and Exchange Commission ("SEC") filings, there
are more than 24 million shares of Vixel common stock outstanding.

     22. There are questions of law and fact which are common to the Class and
which predominate over questions affecting any individual Class member. The
common questions include, inter alia, the following:

          (a) whether defendants have breached their fiduciary duties of
undivided loyalty, independence or due care with respect to plaintiff and the
other members of the Class in connection with the Acquisition;

          (b) whether the Individual Defendants are engaging in self-dealing in
connection with the Acquisition;

          (c) whether the Individual Defendants are unjustly enriching
themselves and other insiders or affiliates of Vixel;

          (d) whether defendants have breached any of their other fiduciary
duties to plaintiff and the other members of the Class in connection with the
Acquisition, including the duties of good faith, diligence, honesty and fair
dealing;


COMPLAINT BASED UPON BREACH       Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 4 of 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                 Telephone: 206/839-0730 - Fax. 206/839-0728




          (e) whether the defendants, in bad faith and for improper motives,
have impeded or erected barriers to discourage other offers for the Company or
its assets; and

          (f) whether plaintiff and the other members of the Class would suffer
irreparable injury were the transactions complained of herein consummated.

     23. Plaintiff's claims are typical of the claims of the other members of
the Class and plaintiff does not have any interests adverse to the Class.

     24. Plaintiff is an adequate representative of the Class, has retained
competent counsel experienced in litigation of this nature and will fairly and
adequately protect the interests of the Class.

     25. The prosecution of separate actions by individual members of the Class
would create a risk of inconsistent or varying adjudications with respect to
individual members of the Class which would establish incompatible standards of
conduct for the party opposing the Class.

     26. Plaintiff anticipates that there will be no difficulty in the
management of this litigation. A class action is superior to other available
methods for the fair and efficient adjudication of this controversy.

     27. Defendants have acted on grounds generally applicable to the Class
with respect to the matters complained of herein, thereby making appropriate
the relief sought herein with respect to the Class as a whole.

                                THE ACQUISITION

     28. On September 30, 2003, the Company's Q3 2003 ended. Defendants knew
that if they disclosed these results to the market prior to the acquisition
announcement such disclosure would have a material impact on the price of the
Company's shares causing Emulex to pay a higher


COMPLAINT BASED UPON BREACH       Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 5 of 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                 Telephone: 206/839-0730 - Fax: 206/839-0728


price. Thus, instead of disclosing the results, defendants concealed them in
order to cap the price of the Company's shares with the acquisition
announcement.

     29.  On October 8, 2003, the Company issued a press release entitled
"Emulex agrees to buy Vixel for about $310 mln cash." The release stated in
part:

     Emulex Corp., a maker of adapters used in data storage, said on Wednesday
     it agreed to buy Vixel Corp. for about $310 million in cash, adding storage
     switching products and technologies.

          Costa Mesa, California-based Emulex said it will acquire Bothell,
     Washington-based Vixel for $10 per share in cash, representing a 17 percent
     premium to Vixel's closing stock price of $8.54 on Wednesday.

          The acquisition of Vixel, which is also a supplier of
     application-specific integrated circuits and subsystems for the storage
     networking market, gives Emulex Vixel's line of InSpeed embedded storage
     switching products.

          Paul Folino, chairman and chief executive of Emulex, said in a
     statement that those operations will complement Emulex's existing business
     model and its own technology used in storage networks.

          Vixel has about 115 employees, half of whom are engineers, and who
     will move to Emulex, company executives said on a conference call.
     Executives declined to comment on specific plans for remaining Vixel
     employees.

          Associated with the acquisition, Emulex expects to find about $1.8
     million in expense savings.

          Emulex also affirmed guidance for its first quarter ending in
     September that it gave in August and September. It said then it expects
     revenue of $82 million to $85 million and net income of as much as 21 cents
     a share. Excluding items, it said, it expected earnings per share of as
     much as 23 cents.

          Emulex said it expects the acquisition to close in November, subject
     to regulatory approvals and certain other conditions.

          Emulex said the acquisition is structured as a cash tender offer for
     all of the shares of Vixel.

     30.  Notably, Emulex disclosed its own projection in this release but
Vixel's remained concealed.

     31.  By reason of their positions with Vixel, the Individual Defendants
are in possession of non-public information concerning the financial condition
and prospects of Vixel, and especially


                                   Milberg Weiss Bershad Hynes & Lerach LLP
COMPLAINT BASED UPON BREACH    1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
OF FIDUCIARY DUTY - 6 of 11      Telephone: 206/839-0730 + Fax: 206/839-0728



the true value and expected increased future value of Vixel and its assets,
which they have not disclosed to Vixel's public stockholders. Moreover, despite
their duty to act reasonably and in the best interests of plaintiff and the
Class, the defendants have clear and material conflicts of interest and are
acting to better their own interests at the expense of Vixel's public
shareholders.

     32.  The proposed sale is wrongful, unfair and harmful to Vixel's public
stockholders, and represents an effort by defendants to aggrandize their own
financial position and interests at the expense of and to the detriment of Class
members. The Acquisition is an attempt to deny plaintiff and the other members
of the Class their rights while usurping the same for the benefit of Emulex and
senior Vixel management on unfair terms.

     33.  In light of the foregoing, the Individual Defendants must, as their
fiduciary obligations require:

     -    disclose the Company's Q3 2003 results;(2)

     -    act independently so that the interests of Vixel's public stockholders
          will be protected, including, but not limited to, the retention of
          truly independent advisors and/or the appointment of a truly
          independent Special Committee; and

     -    adequately ensure that no conflicts of interest exist between
          defendants' own interests and their fiduciary obligation to maximize
          stockholder value or, if such conflicts exist, to ensure that all
          conflicts be resolved in the best interests of Vixel's public
          stockholders.

                                CAUSE OF ACTION

                      CLAIM FOR BREACH OF FIDUCIARY DUTIES

     34.  Plaintiff repeats and realleges each allegation set forth herein.

- ------------------------
2    This quarter ended more than a week prior to the announcement of the
Acquisition.

COMPLAINT BASED UPON BREACH          Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 7 OF 11    1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                   Telephone: 206/839-0730 - Fax: 206/839-0728

     35. The defendants have violated fiduciary duties of care, loyalty, candor
and independence owned under Delaware law to the public shareholders of Vixel
and have acted to put their personal interests ahead of the interests of
Vixel's shareholders.

     36. By the acts, transactions and courses of conduct alleged herein,
defendants, individually and acting as a part of a common plan, are attempting
to advance their interests at the expense of plaintiff and other members of the
Class.

     37. The Individual Defendants have violated their fiduciary duties by
simultaneously seeking to acquire the Company without regard to the fairness of
the transaction to Vixel's shareholders and simultaneously concealing the
Company's Q3 2003 financial results. Defendant Vixel directly breached and/or
aided and abetted the other defendants' breaches of fiduciary duties owed to
plaintiff and the other holders of Vixel stock.

     38. As demonstrated by the allegations above, the Individual Defendants
failed to exercise the care required, and breached their duties of loyalty,
good faith, candor and independence owed to the shareholders of Vixel because,
among other reasons:

         (a) they failed to properly value Vixel; and

         (b) they ignored or did not protect against the numerous conflicts of
interest resulting from their own interrelationships or connection with the
Acquisition.

     39. Because the Individual Defendants dominate and control the business
and corporate affairs of Vixel, and are in possession of private corporate
information concerning Vixel's assets, business and future prospects, there
exists an imbalance and disparity of knowledge and economic power between them
and the public shareholders of Vixel which makes it inherently unfair for them
to pursue any proposed transaction wherein they will reap disproportionate
benefits.



COMPLAINT BASED UPON BREACH       Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 8 of 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                  Telephone: 206/839-0730 Fax: 206/839-0728

     40.  By reason of the foregoing acts, practices and course of conduct, the
defendants have failed to exercise ordinary care and diligence in the exercise
of their fiduciary obligations toward plaintiff and the other members of the
Class.

     41.  As a result of the actions of defendants, plaintiff and the Class
will suffer irreparable injury as a result of defendants' self dealing.

     42.  Unless enjoined by this Court, the defendants will continue to breach
their fiduciary duties owed to plaintiff and the Class, and may consummate the
proposed Acquisition which will exclude the Class from its fair share of Vixel's
valuable assets and businesses, and/or benefit them in the unfair manner
complained of herein, all to the irreparable harm of the Class, as aforesaid.

     43.  Defendants are engaging in self-dealing, are not acting in good faith
toward plaintiff and the other members of the Class, and have breached and are
breaching their fiduciary duties owed to the members of the Class.

     44.  Unless the proposed Acquisition is enjoined by the Court, defendants
will continue to breach their fiduciary duties owed to plaintiff and the
members of the Class, will not engage in arm's-length negotiations on the
Acquisition terms, and will not supply to Vixel's minority stockholders
sufficient information to enable them to cast informed votes on the proposed
Acquisition and may consummate the proposed Acquisition, all to the irreparable
harm of the members of the Class.

     45.  Plaintiff and the members of the Class have no adequate remedy at
law. Only through the exercise of this Court's equitable powers can plaintiff
and the Class be fully protected from the immediate and irreparable injury
which defendants' actions threaten to inflict.

COMPLAINT BASED UPON BREACH   Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 9 of 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                              Telephone: 206/839-0730 * Fax: 206/839-0728

                               PRAYER FOR RELIEF

     WHEREFORE, plaintiff demands preliminary and permanent injunctive relief in
his favor and in favor of the Class and against defendants as follows:

     A.   Declaring that this action is properly maintainable as a class action;

     B.   Directing defendants to disclose the Company's Q3 2003 financial
results;

     C.   Declaring and decreeing that the Acquisition agreement was entered
into in breach of the fiduciary duties of the defendants and is therefore
unlawful and unenforceable;

     D.   Enjoining defendants, their agents, counsel, employees and all persons
acting in concert with them from consummating the Acquisition, unless and until
the Company adopts and implements a procedure or process to obtain the highest
possible price for shareholders;

     E.   Rescinding, to the extent already implemented, the Acquisition or any
of the terms thereof;

     F.   Awarding plaintiff the costs and disbursements of this action,
including reasonable attorneys' and experts' fees; and

     G.   Granting such other and further equitable relief as this Court may
deem just and proper.

DATED: October 9, 2003                       MILBERG WEISS BERSHAD
                                              HYNES & LERACH LLP
                                             LORI G. FELDMAN (WSBA 29096)
                                             TAMARA J. DRISCOLL (WSBA 29212)


                                             /s/ Tamara J. Driscoll
                                             -------------------------------
                                                    TAMARA J. DRISCOLL

                                             1001 Fourth Avenue, Suite 2550
                                             Seattle, WA 98154
                                             Telephone: 206/839-0730
                                             206/839-0728 (fax)




COMPLAINT BASED UPON BREACH        Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 10 of 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                  Telephone: 206/839-0730 * Fax: 206/839-0728


                                        MILBERG WEISS BERSHAD
                                         HYNES & LERACH LLP
                                        WILLIAM S. LERACH
                                        DARREN J. ROBBINS
                                        401 B Street, Suite 1700
                                        San Diego, CA 92101
                                        Telephone: 619/231-1058
                                        619/231-7423 (fax)

                                        ROBBINS UMEDA & FINK, LLP
                                        MARC M. UMEDA
                                        BRADLEY R. MATHEWS
                                        1010 Second Avenue, Suite 2360
                                        San Diego, CA 92101
                                        Telephone: 619/525-3990
                                        619/525-3991 (fax)

                                        Attorneys for Plaintiff





COMPLAINT BASED UPON BREACH          Milberg Weiss Bershad Hynes & Lerach LLP
OF FIDUCIARY DUTY - 11 OF 11   1001 Fourth Avenue, Suite 2550, Seattle, WA 98154
                                   Telephone: 206/839-0730 - Fax: 206/839-0728

EX-99.(D)(1)

                                                                  EXHIBIT (d)(1)


                          AGREEMENT AND PLAN OF MERGER

                                  BY AND AMONG

                               EMULEX CORPORATION

                            AVIARY ACQUISITION CORP.

                              AND VIXEL CORPORATION

                           DATED AS OF OCTOBER 8, 2003

                             INDEX OF DEFINED TERMS

Acquisition Agreement.......................................................44
Acquisition Proposal........................................................42
Action of Divestiture.......................................................46
affiliates..................................................................54
Agreement....................................................................1
Appointment Time.............................................................5
Assignee....................................................................56
Audit.......................................................................26
Balance Sheet Date..........................................................18
Certificate of Merger........................................................7
Certificates................................................................10
Closing......................................................................7
Closing Date.................................................................7
COBRA.......................................................................28
Code........................................................................26
Common Stock.................................................................1
Company......................................................................1
Company Agreement...........................................................33
Company Authorizations......................................................21
Company Balance Sheet.......................................................18
Company Board of Directors...................................................1
Company Capital Stock.......................................................14
Company Disclosure Letter...................................................13
Company Employee Plans......................................................27
Company ESPP................................................................11
Company Financials..........................................................18
Company Intellectual Property Rights........................................22
Company Option..............................................................11
Company Options.............................................................11
Company SEC Reports.........................................................17
Company Technology..........................................................22
Company Trademarks..........................................................22
Company Warrants............................................................12
Computer Software...........................................................22
Confidentiality Agreement...................................................43
Copyrights..................................................................22
Current Annual Premium Amount...............................................48
DGCL.........................................................................1
Dissenting Shares...........................................................11
Effective Time...............................................................7
Encumbrances................................................................15
Environmental Claims........................................................25
Environmental Laws..........................................................25
ERISA.......................................................................27

ERISA Affiliate.............................................................27
Exchange Act.................................................................2
Expense Fee.................................................................52
Fully Diluted Basis..........................................................3
GAAP........................................................................18
Governmental Entity.........................................................17
group.......................................................................54
HSR Act.....................................................................17
Indebtedness................................................................15
Indemnified Parties.........................................................47
Independent Directors........................................................5
Initial Expiration Date......................................................2
Intellectual Property Rights................................................22
IRS.........................................................................28
knowledge...................................................................54
Legal Requirement...........................................................47
License Agreements..........................................................22
Material Adverse Effect.....................................................54
Materials of Environmental Concern..........................................24
Merger.......................................................................6
Merger Agreement.............................................................3
Merger Consideration.........................................................9
Minimum Condition............................................................3
Nasdaq.......................................................................5
Non-Competition Agreements...................................................2
NYSE........................................................................12
Offer........................................................................1
Offer Documents..............................................................4
Offer Price..................................................................1
Offer to Purchase............................................................3
Option Exchange Ratio.......................................................12
Option Plans................................................................11
Parent.......................................................................1
Parent Common Stock.........................................................11
Patents.....................................................................22
Paying Agent.................................................................9
Payment Fund.................................................................9
person......................................................................55
Preferred Stock.............................................................14
Proxy Statement..............................................................8
Purchaser....................................................................1
Purchaser Common Stock.......................................................9
Purchaser Option.............................................................2
Real Property...............................................................21
Registered Company IP.......................................................22
Regulation M-A...............................................................4

Representatives.............................................................42
Rights.......................................................................1
Rights Agreement.............................................................1
Schedule 14D-9...............................................................4
Schedule TO..................................................................4
SEC..........................................................................3
Section 16 Affiliate........................................................13
Securities Act..............................................................17
Series A Preferred Stock....................................................14
Series B Preferred Stock.....................................................1
Shares.......................................................................1
Special Meeting..............................................................7
Stockholder..................................................................1
Stockholders Agreements......................................................1
subsidiary..................................................................55
Superior Proposal...........................................................43
Surviving Corporation........................................................6
Takeover Proposal...........................................................43
Tax.........................................................................26
Tax Authority...............................................................26
Tax Returns.................................................................27
Taxes.......................................................................26
Technology..................................................................22
Termination Date............................................................50
Termination Fee.............................................................52
the business of.............................................................54
Trade Secrets...............................................................22
Trademarks..................................................................22
Transactions................................................................55
Voting Debt.................................................................15
WARN Act....................................................................30

                                TABLE OF CONTENTS

                                                                            Page

  ARTICLE I THE OFFER AND THE MERGER.........................................2
  1.1   The Offer............................................................2
  1.2   Company Actions......................................................4
  1.3   Directors............................................................5
  1.4   The Merger...........................................................6
  1.5   Effective Time.......................................................7
  1.6   Closing..............................................................7
  1.7   Directors and Officers of the Surviving Corporation..................7
  1.8   Subsequent Actions...................................................7
  1.9   Stockholders' Meeting................................................7
  1.10  Merger Without Meeting of Stockholders...............................8
  ARTICLE II CONVERSION OF SECURITIES........................................9
  2.1   Conversion of Capital Stock..........................................9
  2.2   Exchange of Certificates.............................................9
  2.3   Dissenting Shares...................................................11
  2.4   Stock Option and Other Plans........................................11
  2.5   Company Warrants....................................................12
  2.6   Section 16..........................................................13
  2.7   Withholding.........................................................13
  2.8   Transfer Taxes......................................................13
  ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................13
  3.1   Organization, Standing and Power....................................14
  3.2   Capitalization......................................................14
  3.3   Authorization; Validity of Agreement; Company Action................16
  3.4   Board Approvals.....................................................16
  3.5   Required Vote.......................................................17
  3.6   Consents and Approvals; No Violations...............................17
  3.7   SEC Filings; Company Financial Statements...........................17
  3.8   Absence of Certain Changes..........................................19
  3.9   Absence of Undisclosed Liabilities..................................20
  3.10  Litigation..........................................................20
  3.11  Restrictions on Business Activities.................................21
  3.12  Governmental Authorization..........................................21
  3.13  Real and Personal Property..........................................21
  3.14  Technology and Intellectual Property................................22
  3.15  Environmental Matters...............................................24
  3.16  Taxes...............................................................25
  3.17  Employee Benefit Plans..............................................27
  3.18  Certain Agreements Affected by the Merger...........................29
  3.19  Employee Matters....................................................29
  3.20  Potential Conflict of Interest......................................31
  3.21  Insurance...........................................................31

  3.22  Compliance With Laws................................................32
  3.23  Minute Books........................................................32
  3.24  Complete Copies of Materials........................................32
  3.25  Brokers' and Finders' Fees..........................................32
  3.26  Customers and Suppliers.............................................32
  3.27  Material Contracts..................................................33
  3.28  Third Party Consents................................................33
  3.29  Product Releases....................................................33
  3.30  Company Design Wins.................................................33
  3.31  Orders, Commitments and Returns.....................................34
  3.32  Support, Maintenance and Warranty Obligations.......................34
  3.33  Inventory...........................................................34
  3.34  Accounts Receivable.................................................34
  3.35  Information in the Proxy Statement..................................34
  3.36  Information in the Offer Documents and the Schedule 14D-9...........35
  3.37  Opinion of Financial Advisor........................................35
  3.38  Personnel...........................................................35
  3.39  Rights Agreement....................................................35
  3.40  Absence of Questionable Payments....................................36
  3.41  Representations Complete............................................36
  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT.......................36
  4.1   Corporate Existence.................................................36
  4.2   Corporate Authorization.............................................36
  4.3   Consents and Approvals; No Violations...............................36
  4.4   Information in the Proxy Statement..................................37
  4.5   Information in the Offer Documents..................................37
  4.6   Financing...........................................................37
  4.7   DGCL 203............................................................37
  ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME.............................37
  5.1   Conduct of Business by the Company..................................37
  5.2   No Solicitation.....................................................42
  ARTICLE VI ADDITIONAL AGREEMENTS..........................................44
  6.1   Confidentiality; Access to Information..............................44
  6.2   Public Disclosure...................................................45
  6.3   Reasonable Efforts; Notification....................................45
  6.4   Indemnification.....................................................47
  6.5   Litigation..........................................................48
  6.6   Interim Directors...................................................48
  6.7   Resignation of Directors............................................48
  6.8   Rights Agreement....................................................48
  6.9   Benefit Plans.......................................................48
  6.10  Guarantee of Performance............................................49
  ARTICLE VII CONDITIONS....................................................49
  7.1   Conditions to Obligations of Each Party to Effect the Merger........49
  ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER............................50
  8.1   Termination.........................................................50

  8.2   Effect of Termination...............................................51
  8.3   Fees and Expenses...................................................52
  ARTICLE IX GENERAL PROVISIONS.............................................53
  9.1   Non-Survival of Representations and Warranties......................53
  9.2   Extension; Waiver...................................................53
  9.3   Notices.............................................................53
  9.4   Interpretation; Certain Defined Terms...............................54
  9.5   Counterparts........................................................55
  9.6   Entire Agreement; Third Party Beneficiaries.........................55
  9.7   Severability........................................................55
  9.8   Other Remedies; Specific Performance................................56
  9.9   Governing Law; Venue................................................56
  9.10  Rules of Construction...............................................56
  9.11  Assignment..........................................................56
  9.12  Amendment and Modification..........................................57
  9.13  No Waiver...........................................................57
  9.14  Waiver of Jury Trial................................................57

                                INDEX OF EXHIBITS

Exhibit A   Form of Stockholders Agreement

Exhibit B   Form of Purchaser Option Agreement

Exhibit C   Form of Non-Competition Agreement

Exhibit D   Form of Certificate of Incorporation of Surviving Corporation

Exhibit E   Forms of Termination Fee Note and Security Agreement

                          AGREEMENT AND PLAN OF MERGER

      THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), is entered into as
of October 8, 2003 by and among Emulex Corporation, a Delaware corporation
("Parent"), Aviary Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Purchaser"), and Vixel Corporation, a Delaware
corporation (the "Company").

                                    RECITALS

      A. The Board of Directors of each of Parent, Purchaser and the Company has
approved, and deems it advisable and in the best interests of its respective
stockholders to consummate, the acquisition of the Company by Parent upon the
terms and subject to the conditions set forth herein.

      B. In furtherance thereof, it is proposed that Purchaser commence a cash
tender offer (as it may be amended from time to time as permitted by this
Agreement, the "Offer") to acquire (i) all shares of the issued and outstanding
common stock, par value $.0015 per share (the "Common Stock"), of the Company
(together with any associated preferred stock or other rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of November 15, 2000, between
the Company and Computer Share Trust Company, Inc. (as the same has been amended
through the date hereof, the "Rights Agreement")) and (ii) all shares of the
issued and outstanding Series B convertible preferred stock, par value $.001 per
share (the "Series B Preferred Stock" and, together with the Common Stock and
the associated Rights, the "Shares"), for $10.00 per Share, net to the seller
thereof in cash (such price, or any such higher price per Share as may be paid
in the Offer, referred to herein as the "Offer Price"), subject to the terms and
conditions of this Agreement.

      C. The Board of Directors of each of Parent, Purchaser and the Company has
approved this Agreement, the Purchaser Option (as defined in Recital F) and the
Transactions (as defined in Section 9.4(h)), including the Merger (as defined in
Section 1.4) following the Offer in accordance with the Delaware General
Corporation Law ("DGCL") and upon the terms and subject to the conditions set
forth herein. Such approval of this Agreement, the Purchaser Option and the
Transactions, including the Merger, by the Board of Directors of the Company
(the "Company Board of Directors") was unanimous.

      D. The Company Board of Directors has unanimously determined that the
consideration to be paid for each Share in the Offer and the Merger is fair to
and in the best interests of the Company and the holders of such Shares and has
recommended that the holders of such Shares accept the Offer and tender their
Shares pursuant to the Offer and has further unanimously determined that this
Agreement is advisable and recommended that, following the Offer, the
stockholders of the Company approve and adopt this Agreement and each of the
Transactions upon the terms and subject to the conditions set forth herein.

      E. Contemporaneously with the execution and delivery of this Agreement,
and as a condition and inducement to Parent's and Purchaser's willingness to
enter into this Agreement, certain stockholders of the Company (each, a
"Stockholder") are entering into a Stockholders Agreement (the "Stockholders
Agreement") in the form attached hereto as Exhibit A, pursuant to


                                       1

which each such Stockholder has agreed, among other things, to tender his, her
or its Shares in the Offer and to grant Parent a proxy with respect to the
voting of such Shares in favor of the Merger upon the terms and subject to the
conditions set forth therein.

      F. As a condition and further inducement to Parent and Purchaser to enter
into this Agreement and incur the obligations set forth herein, concurrently
with the execution and delivery of this Agreement, Purchaser and the Company are
entering into a Stock Option Agreement in the form of Exhibit B hereto (the
"Purchaser Option"), pursuant to which, among other things, the Company has
granted Purchaser an option to purchase certain newly-issued shares of Common
Stock and Series B Preferred Stock, subject to certain conditions.

      G. In addition, contemporaneously with the execution and delivery of this
Agreement, and as a condition and inducement to Parent's and Purchaser's
willingness to enter into this Agreement, certain employees of the Company are
entering into Non-Competition Agreements with Parent in the forms attached
hereto as Exhibit C (collectively, the "Non-Competition Agreements").

      H. The Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer, the Merger and the other Transactions.

      NOW, THEREFORE, in consideration of the foregoing and the respective
covenants, agreements, representations and warranties set forth herein, the
parties agree as follows:

                                    ARTICLE I

                            THE OFFER AND THE MERGER

      1.1 The Offer.

            (a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 and none of the events set forth in Annex I hereto
shall have occurred and be continuing, Purchaser shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(together with the rules and regulations promulgated thereunder, the "Exchange
Act")) the Offer as promptly as practicable on or after October 15, 2003 and
the Offer shall remain open at least twenty (20) business days (as defined in
Rule 14d-1(g)(3) of the Exchange Act) from commencement of the Offer (the
"Initial Expiration Date"). The obligation of Purchaser to accept for payment
and to pay for any Shares validly tendered and not withdrawn prior to the
expiration of the Offer (as it may be extended in accordance with requirements
of this Section 1.1(a)) shall be subject only to (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer (x) that number
of shares of Common Stock which, together with any shares of Common Stock then
owned by Parent or Purchaser (without giving effect to shares subject to
purchase under the Purchaser Option or the Stockholders Agreements), represents
greater than 50.1% of the shares of Common Stock outstanding on a Fully Diluted
Basis and (y) there being validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Series B Preferred Stock which,
together with any shares of Series B Preferred then owned by Parent or Purchaser
(without giving effect to


                                        2

shares subject to purchase under the Purchaser Option or the Stockholders
Agreements), represents greater than 50.1% of the Series B Preferred Stock
outstanding on a Fully Diluted Basis (clauses (x) and (y) together, the "Minimum
Condition"); and (ii) the other conditions set forth in Annex I hereto. As used
in this Agreement, "Fully Diluted Basis" shall refer, with respect to the Common
Stock, to the number of shares of Common Stock issued and outstanding at any
time after taking into account all shares of Common Stock issuable upon the
conversion of convertible securities (other than the shares of Series B
Preferred Stock) or upon the exercise of any options, warrants or other rights
to purchase shares of Common Stock (whether or not exercised or converted at the
time of determination) and, with respect to the Series B Preferred Stock, to the
number of shares of Series B Preferred Stock issued and outstanding at any time
after taking into account all shares of Series B Preferred Stock issuable upon
the conversion of convertible securities or upon the exercise of any options,
warrants or other rights to purchase shares of Series B Preferred Stock (whether
or not converted at the time of determination). Subject to the prior
satisfaction of the Minimum Condition and the prior satisfaction or waiver by
Parent or Purchaser of the other conditions of the Offer set forth in Annex I
hereto, Purchaser shall consummate the Offer in accordance with its terms and
accept for payment and pay for all Shares tendered and not withdrawn promptly
following the acceptance of Shares for payment pursuant to the Offer. The Offer
shall be made by means of an offer to purchase (the "Offer to Purchase") that
contains the terms set forth in this Agreement, the Minimum Condition and the
other conditions set forth in Annex I hereto. Parent expressly reserves the
right to waive any of such conditions, to increase the Offer Price and to make
any other changes in the terms of the Offer; provided, however, that Purchaser
shall not, and Parent shall cause Purchaser not to, waive the Minimum Condition,
decrease the Offer Price, change the form of consideration payable in the Offer,
decrease the number of Shares sought in the Offer, impose additional conditions
to the Offer, extend the Offer beyond the Initial Expiration Date except as set
forth below, or amend any other condition of the Offer in any manner adverse to
the holders of the Shares, in each case without the prior written consent of the
Company (such consent to be authorized by the Company Board of Directors or a
duly authorized committee thereof). Notwithstanding the foregoing, Purchaser
may, without the consent of the Company, (i) if, at any scheduled expiration of
the Offer any of the conditions to Purchaser's obligation to accept Shares for
payment shall not be satisfied or waived, extend the Offer beyond the Initial
Expiration Date for a time period reasonably necessary to permit such condition
to be satisfied, (ii) extend the Offer for any period required by any rule,
regulation or interpretation of the United States Securities and Exchange
Commission ("SEC"), or the staff thereof, applicable to the Offer or (iii)
extend (or re-extend) the Offer for an aggregate period of not more than five
(5) business days beyond the latest applicable date that would otherwise be
permitted under clause (i) or (ii) of this sentence, if, as of such date, all of
the conditions to Purchaser's obligations to accept Shares for payment are
satisfied or waived, but there shall not have been validly tendered and not
withdrawn pursuant to the Offer that number of Shares necessary on a Fully
Diluted Basis to permit the Merger to be effected without a meeting of the
Company's stockholders in accordance with the DGCL. Purchaser may, without the
consent of the Company, extend the Offer in accordance with Rule 14d-11 under
the Exchange Act. In addition, the Offer Price may be increased and the Offer
may be extended to the extent required by law in connection with such increase,
in each case without the consent of the Company.

            (b) As soon as practicable after the date the Offer is commenced,
Parent and Purchaser shall file with the SEC, pursuant to Regulation M-A under
the Exchange Act


                                       3

("Regulation M-A"), a Tender Offer Statement on Schedule TO with respect to the
Offer (together with all amendments, supplements and exhibits thereto, the
"Schedule TO"). The Schedule TO shall include the summary term sheet required
under Regulation M-A and, as exhibits, the Offer to Purchase and a form of
letter of transmittal and summary advertisement (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). The Company hereby
consents to the inclusion in the Offer Documents of the recommendation referred
to in clause (c) of Section 3.4 and the approval of the Board of Directors
referred to in Section 3.4. Parent and Purchaser agree to take all steps
necessary to cause the Offer Documents to be filed with the SEC and disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Parent and Purchaser, on the one hand, and the Company,
on the other hand, agree to promptly correct any information provided by it for
use in the Offer Documents if and to the extent that it shall have become false
or misleading in any material respect or as otherwise required by law. Parent
and Purchaser further agree to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given a reasonable
opportunity to review the Schedule TO before it is filed with the SEC. In
addition, Parent and Purchaser agree to provide the Company and its counsel with
any comments, whether written or oral, that Parent, Purchaser or their counsel
may receive from time to time from the SEC or its staff with respect to the
Offer Documents promptly after receipt of such comments, and any written or oral
responses thereto.

      1.2 Company Actions.

            (a) On the date the Offer is commenced, the Company shall, in a
manner that complies with Rule 14d-9 under the Exchange Act, file with the SEC a
Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together
with all amendments, supplements and exhibits thereto, the "Schedule 14D-9")
which shall, subject to the provisions of Section 5.2, contain the
recommendation referred to in clause (c) of Section 3.4 and the approval of the
Board of Directors referred to in Section 3.4. The Company further agrees to
take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC
and disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company, on the one hand,
and Parent and Purchaser, on the other hand, agree to promptly correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect or as
otherwise required by law. The Company agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Parent, Purchaser and their
counsel shall be given the opportunity to review and comment on the Schedule
14D-9 and any amendment thereto before it is filed with the SEC. In addition,
the Company agrees to provide Parent, Purchaser and their counsel in writing
with any comments, whether written or oral, that the Company or its counsel may
receive from time to time from the SEC or its staff with respect to the Schedule
14D-9 promptly after receipt of such comments, and to consult with Parent,
Purchaser and their counsel prior to responding to any such comments, either in
written or oral form.

            (b) In connection with the Offer, the Company shall promptly furnish
or cause to be furnished to Parent or Purchaser mailing labels, security
position listings and all available


                                       4

listings and computer files containing the names and addresses of the record
holders of the Shares as of a recent date, and shall promptly furnish Parent or
Purchaser with such information and assistance (including, but not limited to,
lists of holders of the Shares, updated periodically, and their addresses,
mailing labels and lists of security positions) as Parent or Purchaser or their
agent(s) may reasonably request.

      1.3 Directors.

            (a) Effective upon the purchase of and payment for any Shares by
Parent or Purchaser or any of their affiliates pursuant to the Offer (the
"Appointment Time"), Parent shall be entitled to elect or designate such number
of directors, rounded up to the next whole number, on the Company Board of
Directors as is equal to the product of the total number of directors on the
Company Board of Directors (giving effect to the directors elected or designated
by Parent pursuant to this sentence) multiplied by the percentage that the
aggregate number of Shares beneficially owned (within the meaning of Rule 13d-3
under the Exchange Act) by Purchaser, Parent and any of their affiliates bears
to the total number of Shares then outstanding. The Company shall, upon Parent's
request, use all reasonable efforts to promptly increase the size of the Company
Board of Directors, including by amending the Bylaws of the Company if necessary
so as to increase the size of the Company Board of Directors, or use all
reasonable efforts to promptly secure the written resignations of such number of
its incumbent directors, or both, as is necessary to enable Parent's designees
to be so elected or designated to the Company Board of Directors, and shall use
all reasonable efforts to cause Parent's designees to be so elected or
designated at the Appointment Time. At the Appointment Time, the Company shall,
upon Parent's request, also use all reasonable efforts to cause persons elected
or designated by Parent to constitute the same percentage (rounded up to the
next whole number) as is on the Company Board of Directors of (i) each committee
of the Company Board of Directors; (ii) each board of directors (or similar
body) of each Company subsidiary; and (iii) each committee (or similar body) of
each such board, in each case only to the extent permitted by applicable law or
the rules of any stock exchange or trading market on which the Company's common
stock is listed or traded. The Company shall promptly upon execution of this
Agreement take all actions required pursuant to such Section 14(f) of the
Exchange Act and Rule 14f-l promulgated thereunder in order to fulfill its
obligations under this Section 1.3(a), including, but not limited to, mailing to
stockholders (together with the Schedule 14D-9) the information required by
Section 14(f) and Rule 14f-l as is necessary to enable Parent's designees to be
elected or designated to the Company Board of Directors. Parent or Purchaser
shall supply the Company information with respect to either of them and their
nominees, officers, directors and affiliates to the extent required by Section
14(f) and Rule 14f-l. The provisions of this Section 1.3(a) are in addition to
and shall not limit any rights that any of Purchaser, Parent or any of their
respective affiliates may have as a holder or beneficial owner of Shares as a
matter of law with respect to the election of directors or otherwise.

            (b) In the event that Parent's designees are elected or designated
to the Company Board of Directors, then, until the Effective Time (as defined in
Section 1.5), the Company shall cause the Company Board of Directors to have at
least two (2) directors who are directors on the date hereof including at least
two (2) directors, or such other number as may be required by the rules of the
Nasdaq Stock Market, Inc. (the "Nasdaq"), who are independent directors for
purposes of the continued listing requirements of Nasdaq (the "Independent
Directors");


                                       5

provided, however, that if any Independent Director is unable to serve due to
death or disability, the remaining Independent Director(s) shall be entitled to
elect or designate another person (or persons) who serves as a director on the
date hereof to fill such vacancy, and such person (or persons) shall be deemed
to be an Independent Director for purposes of this Agreement. If no Independent
Director then remains, the other directors shall designate two (2) persons, or
such other number as may be required by the rules of the Nasdaq, who are
directors on the date hereof (or, in the event there shall be less than two (2)
directors, or such other number as may be required by the rules of the Nasdaq,
available to fill such vacancies as a result of such persons' deaths,
disabilities or refusals to serve, such smaller number of persons who are
directors on the date hereof) to fill such vacancies and such persons shall be
deemed Independent Directors for purposes of this Agreement. Notwithstanding
anything in this Agreement to the contrary, if Parent's designees constitute a
majority of the Company Board of Directors after the acceptance for payment of
Shares pursuant to the Offer and prior to the Effective Time, then the
affirmative vote of a majority of the Independent Directors (or if only one
exists, then the vote of such Independent Director) shall be required to (i)
amend or terminate this Agreement by the Company; (ii) exercise or waive any of
the Company's rights, benefits or remedies hereunder, if such action would
materially and adversely affect holders of Shares other than Parent or
Purchaser; (iii) amend the Certificate of Incorporation or Bylaws of the Company
if such action would materially and adversely affect holders of Shares other
than Parent or Purchaser; or (iv) take any other action of the Company Board of
Directors under or in connection with this Agreement if such action would
materially and adversely affect holders of Shares other than Parent or
Purchaser; provided, however, that if there shall be no Independent Directors as
a result of such persons' deaths, disabilities or refusal to serve, then such
actions may be effected by a 66-2/3% vote of the entire Company Board of
Directors. The Independent Directors shall have the authority to retain such
counsel and other advisors at the expense of the Company as determined
appropriate by a majority of the Independent Directors.

      1.4 The Merger.

            (a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company and Purchaser shall consummate a merger (the
"Merger") in accordance with the DGCL pursuant to which (i) Purchaser shall be
merged with and into the Company and the separate corporate existence of
Purchaser shall thereupon cease; (ii) the Company shall be the successor or
surviving corporation in the Merger and shall continue to be governed by the
laws of the State of Delaware; (iii) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger; and (iv) the Company shall succeed to and
assume all the rights and obligations of Purchaser. The corporation surviving
the Merger is sometimes hereinafter referred to as the "Surviving Corporation."
The Merger shall have the effects set forth in the DGCL.

            (b) The Certificate of Incorporation of the Surviving Corporation
shall be amended in the Merger to read substantially as set forth on Exhibit D
hereto.

            (c) The Bylaws of Purchaser, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation, except as to
the name of the Surviving Corporation, until thereafter amended as provided by
the DGCL, the Certificate of Incorporation of the Surviving Corporation and such
Bylaws.


                                        6

      1.5 Effective Time. Parent, Purchaser and the Company shall cause an
appropriate certificate of merger or certificate of ownership and merger (the
"Certificate of Merger") to be executed and filed on the Closing Date (as
defined in Section 1.6) (or on such other date as Parent and the Company may
agree) with the Secretary of State of the State of Delaware as provided in the
DGCL. The Merger shall become effective at the time and on the date on which the
Certificate of Merger has been duly filed with the Secretary of State of the
State of Delaware or such time and date as is agreed upon by the parties and
specified in the Certificate of Merger, such time and date hereinafter referred
to as the "Effective Time."

      1.6 Closing. The closing of the Merger (the "Closing") will take place at
9:00 a.m. (California time) on a date to be specified by the parties, such date
to be no later than the second business day after satisfaction or waiver of all
of the conditions set forth in Article VII (the "Closing Date"), at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Avenue, Suite 1100,
Palo Alto, California 94301, unless another date or place is agreed to in
writing by the parties hereto.

      1.7 Directors and Officers of the Surviving Corporation. The directors of
Purchaser immediately prior to the Effective Time shall, from and after the
Effective Time, be the directors of the Surviving Corporation and the officers
of Purchaser immediately prior to the Effective Time shall, from and after the
Effective Time, be officers of the Surviving Corporation, in each case until
their respective successors shall have been duly elected, designated or
qualified, or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and Bylaws.

      1.8 Subsequent Actions. If at any time after the Effective Time the
Surviving Corporation shall determine, in its sole discretion, or shall be
advised, that any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation its right, title or interest
in, to or under any of the rights, properties or assets of either of the Company
or Purchaser acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger or otherwise to carry out this Agreement,
then the officers and directors of the Surviving Corporation shall be authorized
to execute and deliver, in the name and on behalf of either the Company or
Purchaser, all such deeds, bills of sale, instruments of conveyance, assignments
and assurances and to take and do, in the name and on behalf of each such
corporation or otherwise, all such other actions and things as may be necessary
or desirable to vest, perfect or confirm any and all right, title or interest
in, to and under such rights, properties or assets in the Surviving Corporation
or otherwise to carry out this Agreement.

      1.9 Stockholders' Meeting.

            (a) If required by applicable law in order to consummate the Merger,
the Company, acting through the Company Board of Directors, shall promptly, in
accordance with applicable law and the Company's Certificate of Incorporation
and Bylaws:

                  (i) duly call, give notice of, convene and hold a special
meeting of its stockholders to consider and take action upon the approval and
adoption of this Agreement and the approval of the Merger (the "Special
Meeting") as soon as reasonably


                                       7

practicable following the acceptance for payment and purchase of Shares by
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon this Agreement;

                  (ii) prepare and file with the SEC under the Exchange Act a
preliminary proxy or information statement relating to the Merger and this
Agreement and use all reasonable efforts to obtain and furnish the information
required to be included by the SEC in the Proxy Statement (as hereinafter
defined) and, after Parent and its counsel shall have had a reasonable
opportunity to review and comment on the Proxy Statement, respond promptly to
any comments made by the SEC with respect to the preliminary proxy or
information statement and cause a definitive proxy or information statement (the
"Proxy Statement") to be mailed to its stockholders as promptly as practicable;

                  (iii) include in the Proxy Statement the unanimous
recommendation of the Company Board of Directors that stockholders of the
Company vote in favor of the approval of the Merger and the approval and
adoption of this Agreement;

                  (iv) use all reasonable efforts to solicit from holders of
Shares proxies in favor of the Merger and take all other action reasonably
necessary or, in the reasonable opinion of Parent and Purchaser, advisable to
secure the approval of stockholders required by the DGCL and any other
applicable law and the Company's Certificate of Incorporation and Bylaws (if
applicable) to effect the Merger; provided, that the obligations set forth in
clauses (iii) and (iv) of this Section 1.9(a) shall be subject to Sections 1.10
and 5.2; and

                  (v) at or prior to the Closing, deliver to Parent a
certificate of its corporate secretary setting forth the voting results from the
Special Meeting.

            (b) Parent agrees to vote, or cause to be voted, all of the Shares
then owned by it, Purchaser or any of its other subsidiaries in favor of the
approval of the Merger and the adoption of this Agreement.

      1.10 Merger Without Meeting of Stockholders. Notwithstanding Section 1.9,
in the event that Parent or Purchaser shall acquire at least ninety percent
(90%) of the outstanding shares of each class of capital stock of the Company
entitled to vote on the Merger, pursuant to the Offer or otherwise, the parties
hereto agree that, subject to Article VII, Parent and Purchaser shall take, or
cause to be taken, all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition, without a
meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL.


                                       8

                                   ARTICLE II

                            CONVERSION OF SECURITIES

      2.1 Conversion of Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holders of any shares of
common stock, par value $0.01 per share, of Purchaser ("Purchaser Common
Stock"):

            (a) Purchaser Common Stock. Each issued and outstanding share of
Purchaser Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.

            (b) Cancellation of Treasury Stock and Parent-Owned Stock. All
Shares that are owned by the Company as treasury stock and any Shares owned by
Parent, Purchaser or any other wholly-owned subsidiary of Parent shall
automatically be cancelled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.

            (c) Conversion of Shares. Each issued and outstanding Share (other
than Shares to be cancelled in accordance with Section 2.1(b) and other than
Dissenting Shares (as defined in Section 2.3(a))) shall be converted into the
right to receive the Offer Price, payable to the holder thereof in cash, without
interest and subject to withholding in accordance with Section 2.7 (the "Merger
Consideration"). From and after the Effective Time, all such Shares shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such Shares
shall cease to have any rights with respect thereto, except the right to receive
the Merger Consideration therefor upon the surrender of such certificate in
accordance with Section 2.2.

      2.2 Exchange of Certificates.

            (a) Paying Agent. Parent shall designate a bank or trust company
reasonably acceptable to the Company to act as agent for the holders of Shares
in connection with the Merger (the "Paying Agent") and to receive the funds to
which holders of Shares shall become entitled pursuant to Section 2.1(c).
Promptly after the Effective Time, Parent or Purchaser shall deposit, or cause
to be deposited, with the Paying Agent cash in immediately available next-day
funds in an amount equal to the aggregate Merger Consideration (the "Payment
Fund"). For purposes of determining the amount of Merger Consideration to be so
deposited, Parent and Purchaser shall assume that no stockholder of the Company
will perfect any right to appraisal of his, her or its Shares. Such funds shall
be invested by the Paying Agent as directed by Parent or the Surviving
Corporation, in its sole discretion, pending payment thereof by the Paying Agent
to the holders of the Shares. In the event the cash in the Payment Fund shall be
insufficient to fully satisfy all of the payment obligations to be made by the
Paying Agent thereunder, then Parent and the Surviving Corporation shall
promptly deposit cash in the Payment Fund in an amount which is equal to the
deficiency. Earnings from such investments shall be the sole and exclusive
property of Parent and the Surviving Corporation, and no part of such earnings
shall accrue to the benefit of holders of Shares.


                                       9

            (b) Exchange Procedures. Promptly after the Effective Time, the
Paying Agent shall mail to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding Shares (the "Certificates"), whose shares were converted pursuant to
Section 0 into the right to receive the Merger Consideration (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent may reasonably specify); and (ii) instructions for
effecting the surrender of the Certificates in exchange for payment of the
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly executed and properly completed,
the holder of such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration, without interest, for each Share formerly represented
by such Certificate and the Certificate so surrendered shall forthwith be
cancelled. Until surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive the Merger Consideration in cash as contemplated by
this Section 2.2, without interest thereon, and shall not evidence any interest
in, or any right to exercise the rights of a stockholder or other equity holder
of the Company or the Surviving Corporation. Notwithstanding the foregoing, any
surrendered Certificate that represents Dissenting Shares shall be returned to
the person surrendering such Certificate.

            (c) Transfer Books; No Further Ownership Rights in Shares. At the
Effective Time, there shall be no further registration of transfers of Shares on
the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided for herein or by applicable law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this Article II.

            (d) Termination of Fund; No Liability. At any time following one (1)
year after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) made available to the Paying Agent and not
disbursed (or for which disbursement is pending subject only to the Paying
Agent's routine administrative procedures) to holders of Certificates, and
thereafter such holders shall be entitled to look only to the Surviving
Corporation (subject to abandoned property, escheat or other similar laws) only
as general creditors thereof with respect to the Merger Consideration payable
upon due surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, none of Parent, the Surviving Corporation or the
Paying Agent shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law to the extent that such law requires
such delivery.

            (e) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such person of a bond in such amount as Parent may
reasonably direct as indemnity against any claim that may be made


                                       10

against it with respect to such Certificate, the Paying Agent shall pay in
exchange for such lost, stolen or destroyed Certificate the applicable Merger
Consideration with respect thereto.

      2.3 Dissenting Shares.

            (a) Notwithstanding anything in this Agreement to the contrary,
Shares outstanding immediately prior to the Effective Time and held by a holder
who has not voted in favor of the Merger or consented thereto in writing and who
complies with Section 262 of the DGCL (the "Dissenting Shares") shall not be
converted into a right to receive the Merger Consideration, unless such holder
fails to perfect or withdraws or otherwise loses his, her or its right to
appraisal. From and after the Effective Time, a stockholder who has properly
exercised such appraisal rights shall not have any rights of a stockholder of
the Company or the Surviving Corporation with respect to such Shares, except
those provided under Section 262 of the DGCL. A holder of Dissenting Shares
shall be entitled to receive payment of the appraised value of such Shares held
by him or her in accordance with Section 262 of the DGCL, unless, after the
Effective Time, such holder fails to perfect or withdraws or loses his, her or
its right to appraisal, in which case such Shares shall be converted into and
represent only the right to receive the Merger Consideration, without interest
thereon, upon surrender of the Certificate or Certificates representing such
Shares pursuant to Section 2.2.

            (b) The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any Shares, attempted withdrawals of such demands and
any other instruments served pursuant to the DGCL and received by the Company
relating to rights of appraisal and (ii) the opportunity to participate in the
conduct of all negotiations and proceedings with respect to demands for
appraisal under the DGCL. Except with the prior written consent of Parent, the
Company shall not voluntarily make any payment with respect to any demands for
appraisal or settle or offer to settle any such demands for appraisal.

      2.4 Stock Option and Other Plans.

            (a) As of the Effective Time, each outstanding stock option, stock
equivalent right or right to acquire Shares (a "Company Option" or "Company
Options") granted under the Company's Amended and Restated 1995 Stock Option
Plan, 1999 Equity Incentive Plan (as amended), 2000 Non-Officer Equity Incentive
Plan and 1999 Employee Stock Purchase Plan ("Company ESPP") (collectively, the
"Option Plans"), whether or not then exercisable or vested, shall (without any
action on the part of the Company) automatically be converted into an option to
purchase Parent common stock, par value $.01 per share ("Parent Common Stock"),
in accordance with this Section 2.4(a). Each Company Option so converted shall
continue to have, and be subject to, similar terms and conditions (including
vesting schedule) as are currently applicable to each such Company Option,
except that, as of the Effective Time, (i) each Company Option shall be
exercisable (or shall become exercisable in accordance with its terms) for that
number of whole shares of Parent Common Stock equal to the product of the number
of shares of Common Stock that were issuable upon exercise of such Company
Option immediately prior to the Effective Time multiplied by the Option Exchange
Ratio (defined below), rounded to the nearest whole number, and (ii) the per
share exercise price for the shares of Parent Common Stock issuable upon
exercise of such Company Option so converted shall be equal to the quotient
determined by dividing the exercise price per share of Common Stock at which
such Company


                                       11

Option was exercisable immediately prior to the Effective Time by the Option
Exchange Ratio, rounded up to the nearest whole cent. As used in this Agreement,
"Option Exchange Ratio" means the quotient determined by dividing the Merger
Consideration by the average closing prices of Parent Common Stock on the New
York Stock Exchange, Inc. ("NYSE") Composite Transaction Tape for the five
business day period ending two days prior the Effective Time. Notwithstanding
the foregoing, the conversion of any Company Options which are "incentive stock
options," within the meaning of Section 422 of the Code, into options to
purchase Parent Common stock shall be made so as not to constitute a
"modification" of such Company Options within the meaning of Section 424 of the
Code.

            (b) (i) As of the Effective Time, except as provided in this Section
2.4, all rights under any provision of the Option Plans and any other plan,
program or arrangement providing for the issuance or grant of any other interest
in respect of the capital stock of the Company or any subsidiary of the Company
shall be cancelled. The Company shall take all action necessary to ensure that,
as of and after the Effective Time, except as provided in this Section 2.4, no
person shall have any right under the Option Plans or any other plan, program or
arrangement with respect to equity securities of the Company, the Surviving
Corporation or any subsidiary thereof and (ii) upon completion of the existing
Offering (as defined in the Company ESPP), the Company shall not permit a new
Offering to commence under the Company ESPP without the prior written consent of
Parent.

            (c) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery upon
the exercise of Company Options assumed in accordance with Section 2.4(a).
Promptly after the Effective Time, Parent shall file a registration statement on
Form S-8 (or any successor or other appropriate forms) with respect to the
shares of Parent Common Stock subject to any assumed Company Options.

            (d) At or before the Effective Time, the Company shall cause to be
effected any necessary amendments to the Option Plans to give effect to the
foregoing provisions of this Section 2.4.

      2.5 Company Warrants. If permitted under the terms of the applicable
governing instruments, the Company shall take all necessary action such that, at
the Effective Time, each holder of an outstanding warrant to purchase shares of
Common Stock (collectively, the "Company Warrants") shall have the right to
receive, in lieu of the shares of Common Stock theretofore issuable upon
exercise of such Company Warrant, an amount per share equal to the excess of the
Merger Consideration over the exercise price per share of such Company Warrant;
provided, however, that to the extent the foregoing is not permissible under the
terms of any such Company Warrant, each such Company Warrant shall, at the
Effective Time, be deemed to constitute a warrant to acquire, upon payment of
the aggregate exercise price of such Company Warrant, and otherwise on the same
terms and conditions as were applicable under such Company Warrant prior to the
Effective Time, the aggregate Merger Consideration that the holder of such
Company Warrant would have been entitled to receive pursuant to Article II of
this Agreement had such holder exercised such Company Warrant in full
immediately prior to the Effective Time. The Company shall deliver to each
holder of a Company Warrant timely notice of the Merger in accordance with the
provisions thereof. The Company shall take all necessary actions to provide that
as of the Effective Time no holder of a Company Warrant will


                                       12

have the right to receive shares of common stock of the Surviving Corporation
upon the exercise of any Company Warrant.

      2.6 Section 16. Parent, the Surviving Corporation and the Company shall
each take all such steps as may be required to provide that, with respect to
each Section 16 Affiliate (as defined below), (a) the transactions contemplated
by this section, and (b) any other dispositions of Company equity securities
(including derivative securities) or other acquisitions of Parent equity
securities (including derivative securities) in connection with this Agreement,
shall be exempt under Rule 16b-3 promulgated under the Exchange Act, in
accordance with the terms and conditions set forth in that certain No-Action
Letter, dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate,
Meagher & Flom LLP. For purposes of this Agreement, "Section 16 Affiliate" shall
mean each individual who (a) immediately prior to the Effective Time is a
director or officer of the Company or (b) at the Effective Time will become a
director or officer of Parent or the Surviving Corporation.

      2.7 Withholding. The Surviving Corporation, the Paying Agent, and Parent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Shares such amounts as the
Surviving Corporation, the Paying Agent, or Parent has determined is required to
be deducted and withheld with respect to the making of such payment under any
provision of Federal, state, local or foreign tax law. To the extent that
amounts are so withheld by the Surviving Corporation, the Paying Agent, or
Parent such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the Shares in respect of which such
deduction and withholding was made by the Surviving Corporation, the Paying
Agent, or Parent, as the case may be.

      2.8 Transfer Taxes. If payment of the Offer Price payable to a holder of
Shares pursuant to the Offer or the Merger is to be made to a person other than
the person in whose name the surrendered Certificate is registered, it shall be
a condition of payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other Taxes required by
reason of the issuance to a person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of Parent
that such Tax either has been paid or is not applicable.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      Except as disclosed in that section of the letter of even date herewith
delivered by the Company to Parent and Purchaser prior to the execution and
delivery of this Agreement (the "Company Disclosure Letter") corresponding to
the section of this Agreement to which any of the following representations or
warranties pertain, the Company represents and warrants to Parent and Purchaser
as set forth below. Each exception set forth in the Company Disclosure Letter is
identified by reference to, or has been grouped under a heading referring to, a
specific individual section of this Agreement and relates only to such section
except where it is readily apparent from the text that such disclosure is
relevant to such other sections.


                                       13

      3.1 Organization, Standing and Power.

            (a) The Company and each of its subsidiaries is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization. Each of the Company and its
subsidiaries has all corporate power and all governmental licenses,
authorizations, permits, consents and approvals to own, lease and operate its
properties and to carry on its business as now being conducted and as currently
proposed to be conducted. The Company and each of its subsidiaries is duly
qualified to do business as a foreign corporation where the character of the
property owned or leased by it or the business conduct or nature of its
activities makes such qualification necessary and is in good standing in each
applicable jurisdiction. Section 3.1(b) of the Company Disclosure Letter sets
forth the name, jurisdiction of incorporation and outstanding capital of each
Company subsidiary and the jurisdictions in which the Company and each of its
subsidiaries is qualified to do business.

            (b) The Company has delivered to Parent a true and correct copy of
the Certificate of Incorporation and Bylaws, or other equivalent charter
documents, as applicable, of the Company and each of its subsidiaries, each as
amended to date. Neither the Company nor any of its subsidiaries is in violation
of any of the provisions of its Certificate of Incorporation or Bylaws or
equivalent charter documents, as applicable. Except for the entities identified
in Section 3.1(b) of the Company Disclosure Letter, the Company does not
directly or indirectly own any equity or similar interest in, or any interest
convertible or exchangeable or exercisable for any equity or similar interest
in, any corporation, partnership, joint venture or other business association or
entity.

      3.2 Capitalization.

            (a) The authorized capital stock of the Company consists of (i)
60,000,000 shares of Common Stock, and (ii) 5,000,000 shares of preferred stock,
par value $.001 per share ("Preferred Stock" ), of which 600,000 are designated
as Series A Junior Participating Preferred Stock (the "Series A Preferred
Stock") and 4,400,000 are designated as the Series B Preferred Stock (the Series
B Preferred Stock together with the Series A Preferred Stock and the Common
Stock, the "Company Capital Stock"). As of the close of business on September
28, 2003, (i) 24,696,691 shares of Common Stock were issued and outstanding
(excluding 1,895,426 shares of Common Stock issued and held in the treasury of
the Company), (ii) no shares of Series A Preferred Stock were issued and
outstanding, (iii) 2,947,651 shares of Series B Preferred Stock were issued and
outstanding, (iv) 1,895,426 shares of Common Stock and no shares of Preferred
Stock were issued and held in the treasury of the Company, (v) 7,184,688 shares
of Common Stock were reserved for issuance pursuant to outstanding Company
Options, (vi) 1,277,183 shares of Common Stock were subject to issuance under
Company Warrants and (vii) 114,539 shares of Common Stock were available for
issuance in the purchase period ending October 31, 2003 under the Company ESPP.
All of the outstanding shares of Company Capital Stock are, and all shares of
Company Capital Stock which may be issued pursuant to the exercise of
outstanding Company Options and Company Warrants will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and non-assessable. The rights, preferences and privileges of the
Preferred Stock are as set forth in the Certificate of Incorporation of the
Company and in the Certificate of Designation for each of the Series A


                                       14

Preferred Stock and Series B Preferred Stock. None of the outstanding securities
of the Company has been issued in violation of any federal or state securities
laws.

            (b) Except as set forth above, as of the date hereof, (i) there are
no shares of capital stock of the Company authorized, issued or outstanding,
(ii) there are no existing options, warrants, calls, preemptive or similar
rights, bonds, debentures, notes or other indebtedness having general voting
rights or debt convertible into securities having such rights ("Voting Debt") or
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of the Company
obligating the Company to issue, transfer or sell or cause to be issued,
transferred, sold or repurchased any options or shares of capital stock or
Voting Debt of, or other equity interest in, the Company or securities
convertible into or exchangeable for such shares or equity interests, or
obligating the Company to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment and
(iii) there are no outstanding contractual obligations of the Company to
repurchase, redeem or otherwise acquire any Company Capital Stock, or other
capital stock of the Company or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any other entity. All of
the outstanding capital stock of each subsidiary of the Company is owned
directly or indirectly by the Company and each such share owned by the Company
or any of its subsidiaries, is free and clear of all liens, charges, security
interests, options, claims, mortgages, pledges, assessments, charges, adverse
claims, rights of others or restrictions (whether on voting, sale, transfer,
disposition or otherwise) or other encumbrances or restrictions of any nature
whatsoever whether imposed by agreement, understanding, law or equity, or any
conditional sale contract, title retention contract or other contract to give or
refrain from giving any of the foregoing ("Encumbrances") and is validly issued,
fully paid and nonassessable. There are no outstanding options, rights or
agreements of any kind relating to the issuance, sale or transfer of any capital
stock or other equity securities of such Company subsidiary to any person other
than the Company.

            (c) There are no voting trusts or other agreements or understandings
to which the Company is a party with respect to the voting of the Company
Capital Stock.

            (d) Following the Effective Time, no holder of Company Options or
Company Warrants will have any right to receive shares of common stock of the
Surviving Corporation upon exercise of Company Options or Company Warrants.

            (e) Except as disclosed in Section 3.2(e) of the Company Disclosure
Letter, no Indebtedness of the Company contains any restriction upon (i) the
prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by
the Company, or (iii) the ability of the Company to grant any lien on its
properties or assets. As used in this Agreement, "Indebtedness" means (i) all
indebtedness for borrowed money or for the deferred purchase price of property
or services (other than current trade liabilities incurred in the ordinary
course of business and payable in accordance with customary practices), (ii) any
other indebtedness that is evidenced by a note, bond, debenture or similar
instrument, (iii) all obligations under financing leases, (iv) all obligations
in respect of acceptances issued or created, (v) all liabilities secured by any
lien on any property and (vi) all guarantee obligations.


                                       15

            (f) Section 3.2(f) of the Company Disclosure Letter lists all
Company Options outstanding as of the date hereof, the name of the holder of
each Company Option, the date of grant and the exercise price of such Company
Option, the number of shares of Common Stock as to which such Company Option has
vested, the vesting schedule for such Company Option, a summary of any
acceleration provisions or milestones, and whether the exercisability of such
Company Option will be accelerated in any way by the Transactions, and indicates
the extent of acceleration, if any. Since July 30, 2003, the Company has not
granted any Company Options to officers or directors of the Company.

            (g) No agreement or understanding requires consent or approval from
the holder of any Company Option or Company Warrant to effectuate the terms of
this Agreement. The Company has previously provided true and complete copies of
each Company Warrant to Parent.

      3.3 Authorization; Validity of Agreement; Company Action. The Company has
the requisite power and authority to enter into this Agreement and the Purchaser
Option and to consummate the Transactions. The execution and delivery of this
Agreement (including the exhibits hereto) and the Purchaser Option and the
consummation of the Transactions have each been duly authorized by all necessary
corporate action on the part of the Company, subject only to the approval and
adoption of this Agreement and approval of the Merger by the Company's
stockholders. Each of this Agreement and the Purchaser Option has been duly
executed and delivered by the Company and, assuming due and valid authorization,
execution and delivery thereof by Parent and Purchaser, constitutes the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except to the extent that enforceability may be
limited by the effect, if any, of (i) any applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights generally, and (ii) general principles of equity, regardless of whether
such enforceability is considered in a proceeding at law or in equity.

      3.4 Board Approvals. The Company Board of Directors, at a meeting duly
called and held, has unanimously (a) determined that each of this Agreement, the
Purchaser Option, the Offer and the Merger are fair to and in the best interests
of the Company and the holders of the Shares, (b) duly and validly approved and
taken all corporate action required to be taken by the Company Board of
Directors to authorize the consummation of the Transactions, (c) recommended
that the holders of Shares accept the Offer, tender their Shares to Purchaser
pursuant to the Offer, and (d) determined that this Agreement is advisable and
recommended that, following the Offer, the stockholders of the Company approve
and adopt this Agreement and each of the Transactions, and none of the aforesaid
actions by the Company Board of Directors has been amended, rescinded or
modified. The action taken by the Company Board of Directors constitutes
approval of the Transactions (including each of the Offer and the Merger) by the
Company Board of Directors under Section 203 of the DGCL, and no other state
takeover statute is applicable to the Transactions.

      3.5 Required Vote. Assuming the accuracy of Parent's representations set
forth in Section 4.7, the affirmative vote of the holders of a majority of the
outstanding Shares (including the Series B Preferred Stock voting on an
as-converted basis) is the only vote of the holders of any class or series of
the Company's capital stock necessary to approve the Merger, and no vote of any
class or series of the Company's capital stock is necessary to approve any of
the


                                       16

Transactions other than the Merger. Each share of Series B Preferred shall be
entitled to 0.89 of a vote.

      3.6 Consents and Approvals; No Violations. The execution, delivery and
performance of this Agreement and the Purchaser Option by the Company do not,
and the consummation of the Transactions or compliance by the Company with any
of the provisions hereof or thereof will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit under (a) any provision of the Certificate
of Incorporation or Bylaws, or other equivalent charter documents, as
applicable, of the Company or any of its subsidiaries (b) any Company Agreement
(as defined in Section 3.27) or (c) any material permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its properties or assets. No notice to,
filing with, and no permit, authorization, consent or approval of, any
arbitrator, court, nation, government, any state or other political subdivision
thereof and any entity exercising executive, legislative, judicial regulatory or
administrative functions of, or pertaining to, government (a "Governmental
Entity"), or any private third party (including, without limitation, consents
from parties to any Company Agreement is necessary for the consummation by the
Company of the Transactions, except for (a) compliance with any applicable
requirements of the Exchange Act, (b) any filings that may be required under the
DGCL and appropriate documents with relevant authorities of other states which
the Company and/or its subsidiaries are qualified to do business in connection
with the Merger, (c) the filing with the SEC and/or the Nasdaq of (i) the
Schedule 14D-9, (ii) the Proxy Statement if stockholder approval is required by
law and (iii) such reports under Section 13(a) of the Exchange Act as may be
required in connection with this Agreement, the Purchaser Option, the
Stockholder Agreement and the Transactions, (d) such filings and approvals as
may be required by any applicable state securities, blue sky or takeover laws,
filings, permits, authorizations, consents and approvals as may be required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and any comparable provisions under any applicable pre-merger
notification laws or regulations of foreign jurisdictions, (e) the consents
listed on Section 3.6 of the Company Disclosure Letter, and (f) such other
consents, authorizations, filings, approvals and registrations which if not
obtained or made would not be material to the Company or Parent or have a
material effect on the ability of the parties hereto to consummate the Offer and
the Merger within the time frame in which the Offer and the Merger would
otherwise be consummated in the absence of the need for such consent, approval,
order, authorization, registration, declaration or filing.

      3.7 SEC Filings; Company Financial Statements.

            (a) The Company has filed all forms, reports, schedules, statements
and other documents required to be filed by the Company with the SEC since
October 1, 1999 under the Exchange Act or the Securities Act of 1933, as amended
(the "Securities Act") and has made available to Parent such forms, reports and
documents in the form filed with the SEC. All such required forms, reports and
documents (including those that the Company may file subsequent to the date
hereof) are referred to herein as the "Company SEC Reports." As of their
respective dates, the Company SEC Reports (i) complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC
thereunder applicable to such Company SEC Reports and


                                       17

(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
or disclose any matter or proceeding required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. None of the Company's subsidiaries is
required to file any forms, reports or other documents with the SEC or similar
regulatory body. Between the date of this Agreement and the Closing Date, the
Company will timely file with the SEC all documents required to be filed by it
under the Exchange Act.

            (b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC Reports (the
"Company Financials"), including each Company SEC Report filed after the date
hereof until the Closing, (i) was prepared from, are in accordance with and
accurately reflect in all material respects, the Company's books and records as
of the times and for the periods referred to therein, (ii) complied in all
material respects with the published rules and regulations of the SEC with
respect thereto, (iii) was prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q under the Exchange Act), (iv) fairly presented the consolidated
financial position of the Company and its subsidiaries as at the respective
dates thereof and the consolidated results of the Company's operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements may not contain footnotes and were or are subject to normal and
recurring year-end adjustments and (v) was prepared from and in accordance with
the Company's books and records. The balance sheet of the Company contained in
the Company SEC Reports as of June 29, 2003 (the "Balance Sheet Date") as filed
with the SEC before the date hereof is hereinafter referred to as the "Company
Balance Sheet."

            (c) The Company has heretofore furnished to Parent and Purchaser a
complete and correct copy of any amendments or modifications, which have not yet
been filed with the SEC but which are required to be filed, to agreements,
documents or other instruments which previously had been filed by the Company
with the SEC pursuant to the Securities Act or the Exchange Act. All public
announcements in a news release issued by the Dow Jones news service, PR
Newswire or any equivalent service made by the Company since the Balance Sheet
Date did not and will not contain any untrue statement of a material fact or
omit to state a material fact or disclose any matter or proceeding required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

            (d) Section 3.7(d) of the Company Disclosure Letter sets forth a
complete list of all effective registration statements filed on Form S-3 or Form
S-8 or otherwise relying on Rule 415 under the Securities Act.

            (e) The Company has established and maintains disclosure controls
and procedures (as defined in Rules 13a-14 and 15d-14 promulgated under the
Exchange Act) designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the Chief
Executive Officer and Chief Financial Officer. To the Company's knowledge, there
are no significant deficiencies or material weaknesses in the design


                                       18

or operation of Company's internal controls which could adversely affect
Company's ability to record, process, summarize and report financial data. To
the Company's knowledge, there is no fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company's internal controls.

      3.8 Absence of Certain Changes. Except as disclosed in Section 3.8 of the
Company Disclosure Letter, from the Balance Sheet Date to the date hereof, the
Company and its subsidiaries have not:

            (a) suffered any Material Adverse Effect or any event or change
which is reasonably expected to have or constitute a Material Adverse Effect;

            (b) incurred any liabilities or obligations (absolute, accrued,
contingent or otherwise), except items incurred in the ordinary course of
business and consistent with past practice, which exceed $150,000 in the
aggregate;

            (c) paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) other than the payment,
discharge or satisfaction in the ordinary course of business and consistent with
past practice of liabilities and obligations reflected or reserved against in
the Company Balance Sheet or incurred in the ordinary course of business and
consistent with past practice since the Balance Sheet Date;

            (d) permitted or allowed any of their properties or assets (real,
personal or mixed, tangible or intangible) to be subjected to any Encumbrances,
except for liens for current taxes not yet due or liens the incurrence of which
would not be reasonably expected to have a Material Adverse Effect on the
Company;

            (e) cancelled any debts or waived any claims or rights of material
value;

            (f) sold, transferred, or otherwise disposed of any of their
material properties or assets (real, personal or mixed, tangible or intangible),
except in the ordinary course of business, consistent with past practice;

            (g) granted any increase in the compensation or benefits of any
director, officer, employee or consultant of the Company or its subsidiaries
(including any such increase pursuant to any bonus, pension, profit sharing or
other plan or commitment) or any increase in the compensation or benefits
payable or to become payable to any director, officer, employee or consultant of
the Company or its subsidiaries, except in the case of employees other than
officers of the Company or its subsidiaries for such increases in compensation
or benefits made in the ordinary course of business, consistent with past
practice;

            (h) made any change in severance policy or practices;

            (i) made any capital expenditure or acquired any property, plant and
equipment for a cost in excess of $100,000 in the aggregate;

            (j) other than required dividends on the Series B Preferred Stock,
declared, paid or set aside for payment any dividend or other distribution
(whether in cash, stock or property) in


                                       19

respect of their respective capital stock or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of capital stock or other
securities of the Company or its subsidiaries;

            (k) (i) made any changes in any of the accounting methods used by it
materially affecting its assets, liabilities or business, except for such
changes required by GAAP; or (ii) made or changed any election relating to
Taxes, adopted or changed any accounting method relating to Taxes, entered into
any closing agreement relating to Taxes, filed any amended Tax Return, settled
or consented to any claim or assessment relating to Taxes, incurred any
obligation to make any payment of, or in respect of, any Taxes, except in the
ordinary course of business, or agreed to extend or waive the statutory period
of limitations for the assessment or collection of Taxes;

            (l) paid, loaned, modified or advanced any amount to, or sold,
transferred or leased any material properties or assets (real, personal or
mixed, tangible or intangible) to, or entered into any agreement or arrangement
with, any of their respective officers, directors or stockholders or any
affiliate or associate of any of their officers, directors or stockholders
except for directors' fees, expense reimbursements in the ordinary course and
compensation to officers at rates not inconsistent with the Company or its
subsidiaries' past practice;

            (m) written-down the value of any inventory (including write-downs
by reason of shrinkage or mark-down) or written off as uncollectible any notes
or accounts receivable, except for write-downs and write-offs in the ordinary
course of business consistent with past practice nor is any such write-down
required;

            (n) suffered any impairment of any material Company Intellectual
Property Rights (as defined in Section 3.14(a)) or any material adverse change
in any material Intellectual Property Rights licensed from a third party, in
each case, other than in the ordinary course of business consistent with past
practice, or disposed of or disclosed (except as necessary in the conduct of its
business) to a third party any Trade Secrets owned by the Company or its
subsidiaries;

            (o) granted, issued, accelerated, paid, accrued or agreed to pay or
make any accrual or arrangement for payments or benefits pursuant to, or adopted
or amended, any Company Employee Plans except those made in the ordinary course
of business consistent with past practice; or

            (p) agreed, whether in writing or otherwise, to take any action
described in this Section 3.8.

      3.9 Absence of Undisclosed Liabilities. Except (a) as disclosed in the
Company Balance Sheet and (b) for liabilities and obligations incurred in the
ordinary course of business consistent with past practice since the Balance
Sheet Date, neither the Company nor any Company subsidiary has incurred any
material liabilities or obligations of any nature, whether or not accrued,
contingent or otherwise required by GAAP to be recognized or disclosed on a
consolidated balance sheet of the Company or in the notes thereto.

      3.10 Litigation. Except as disclosed in the Company SEC Reports filed
prior to the date hereof, there is no private or governmental action, suit,
proceeding, claim, arbitration or


                                       20

investigation pending before any agency, court or tribunal, foreign or domestic
or, to the knowledge of the Company, threatened against the Company or its
subsidiaries any of their properties or any of their officers or directors (in
their capacities as such). There is no judgment, decree or order against the
Company or any of its subsidiaries or, to the knowledge of the Company, any of
their directors or officers (in their capacities as such), that could prevent,
enjoin, or materially alter or delay any of the Transactions, or that would
reasonably be expected to have a Material Adverse Effect on the Company. Except
as disclosed in the Company SEC Reports filed prior to the date hereof, there is
no litigation that the Company or any of its subsidiaries has pending against
other parties. The descriptions of all litigation in the Company SEC Reports are
accurate in all material respects.

      3.11 Restrictions on Business Activities. There is no agreement, judgment,
injunction, order or decree binding upon the Company or its subsidiaries which
has or could reasonably be expected to have the effect of prohibiting or
impairing any current business practice of the Company or its subsidiaries, any
acquisition of property by the Company or its subsidiaries or the conduct of
business by the Company or its subsidiaries as currently conducted.

      3.12 Governmental Authorization. The Company and its subsidiaries have
obtained each federal, state, county, local or foreign governmental consent,
license, permit, grant, or other authorization of a Governmental Entity (a)
pursuant to which the Company or any of its subsidiaries currently operates or
holds any interest in any of its properties or (b) that is required for the
operation of the business of the Company or any of its subsidiaries or the
holding of any such interest ((a) and (b) are herein collectively called
"Company Authorizations"), and all of such Company Authorizations are in full
force and effect, except where the failure to obtain or have any such Company
Authorizations would not reasonably be expected to have a Material Adverse
Effect on the Company.

      3.13 Real and Personal Property.

            (a) Neither the Company nor any Company subsidiary owns any real
property. Section 3.13(a) of the Company Disclosure Letter sets forth a complete
list of all real property leased by the Company and the Company subsidiaries
(the "Real Property"), the term of each related lease, and the monthly or annual
rent and other commitments related thereto. Except as disclosed in Section
3.13(a) of the Company Disclosure Letter, the Company is not a party to any
lease, assignment or similar arrangement under which the Company is a lessor,
assignor or otherwise makes available for use by any third party any portion of
the Real Property.

            (b) The Company and its subsidiaries own, or hold under valid
leases, free and clear of all Encumbrances, all personal property, plants,
machinery and equipment necessary for the conduct of the business of the Company
and the Company subsidiaries.

            (c) The property and equipment of the Company and each of its
subsidiaries that are used in the operations of business are in good operating
condition and repair, subject to normal wear and tear. All properties used in
the operations of the Company are reflected in the Company Balance Sheet to the
extent GAAP requires the same to be reflected.


                                       21

      3.14 Technology and Intellectual Property.

            (a) Definitions. The following terms shall have the meanings set
forth below.

            "Company Intellectual Property Rights" means all Intellectual
Property Rights in the Registered Company IP and all other Intellectual Property
Rights in the Company Technology and Company Trademarks other than third party
Intellectual Property Rights.

            "Company Technology" means all Technology used, or held for use, in
the business of the Company and its subsidiaries, as currently conducted or
contemplated to be conducted.

            "Company Trademarks" means all Trademarks used, or held for use, in
the business of the Company and its subsidiaries, as currently conducted or
contemplated to be conducted.

            "Computer Software" means all computer programs (whether in source
code or object code form), databases, compilations and documentation (including,
without limitation, user, operator and training manuals) related to the
foregoing.

            "Copyrights" means U.S. and foreign copyrights (whether registered
or unregistered).

            "Intellectual Property Rights" means all rights in or under
Copyrights, Patents, Trade Secrets, and Trademarks.

            "License Agreements" means all agreements to which the Company or
one of its subsidiaries is a party or otherwise bound, under which the Company
or one of its subsidiaries is granting or is granted any Intellectual Property
Right.

            "Patents" means all U.S. and foreign patents and patent
applications.

            "Registered Company IP" means all (i) Patents, (ii) registered
Copyrights and Copyright applications, and (iii) registered Trademarks and
Trademark applications, in which the Company or any one of its subsidiaries has
an ownership interest.

            "Technology" means all processes, formulae, algorithms, data,
models, plans, methodologies, theories, ideas, techniques, discoveries,
disclosures, inventions, Computer Software, information or know-how.

            "Trademarks" means all U.S. and foreign trademarks, service marks,
trade names, designs, logos, slogans, and internet domain names.

            "Trade Secrets" means trade secrets as defined in the Uniform Trade
Secrets Act.

            (b) Section 3.14(b) of the Company Disclosure Letter sets forth a
true and complete list of all Registered Company IP and Internet domain names
registered in the name of the Company or one of its subsidiaries.


                                       22

            (c) The Company or one of its subsidiaries is listed in the records
of the appropriate U.S., state or foreign agency as the sole owner of record for
each item of Registered Company IP. Subject to the rights and interests granted
to third parties in the License Agreements, the Company or one of its
subsidiaries owns all right, title and interest in and to the Registered Company
IP, and owns all other Company Intellectual Property Rights, free and clear of
all Encumbrances. The Registered Company IP is subsisting in full force and
effect and, to the knowledge of the Company, has not been cancelled, expired or
abandoned, and, to the knowledge of the Company, the Company Intellectual
Property Rights are valid and enforceable.

            (d) With respect to any Patents that are included in the Registered
Company IP: (i) each has been prosecuted in material compliance with all
applicable rules, policies and procedures of the U.S. Patent and Trademark
Office or applicable foreign agency; and (ii) neither the Company nor any of its
subsidiaries is aware of any prior art or other facts that could render any of
the claims in the patents invalid or unenforceable.

            (e) Section 3.14(e) of the Company Disclosure Letter sets forth a
true and complete list of all material License Agreements, except for
off-the-shelf software. Each License Agreement is valid and binding on the
Company and its subsidiaries and, to the knowledge of the Company, each other
party thereto and enforceable in accordance with its terms. Except as stated in
Section 3.14(e) of the Company Disclosure Letter, none of the License Agreements
grants any third party exclusive rights to or under any Company Intellectual
Property Rights or the right to sublicense any Company Intellectual Property
Rights. The Company and its subsidiaries are in compliance with, and have not
breached any term of any of such License Agreements and, to the knowledge of the
Company, all other parties to such License Agreements are in compliance with,
and have not breached any term of, such License Agreements.

            (f) Except as disclosed in Section 3.14(f) of the Company Disclosure
Letter, neither the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with any Intellectual Property Rights of a third
party, received any offers for a license to a third party patent, or obtained a
written opinion of counsel relating to a third party patent. To the knowledge of
the Company, there is no reasonable basis to allege that the Company or any of
its subsidiaries has infringed upon, violated, misappropriated or is infringing
upon, violating or misappropriating an Intellectual Property Right of a third
party.

            (g) Except as disclosed in Section 3.14(g) of the Company Disclosure
Letter, neither the Company nor any of its subsidiaries has provided to a third
party any notice of infringement of or conflict with any Company Intellectual
Property Rights. Except as disclosed in Section 3.14(g) of the Company
Disclosure Letter, to the knowledge of the Company, no person has infringed
upon, violated, misappropriated or is infringing upon, violating or
misappropriating any of the Company Intellectual Property Rights.

            (h) Except as disclosed in the Company SEC Reports filed prior to
the date hereof, to the knowledge of the Company, there is no pending or
threatened claim, suit, arbitration or other adversarial proceeding before any
court, agency, arbitral tribunal, or registration authority in any jurisdiction:
(i) involving the Company Intellectual Property Rights; (ii) alleging that the
Company or any of its subsidiaries is or may be infringing upon, violating or


                                       23

misappropriating an Intellectual Property Right of a third party; or (iii)
challenging the ownership, use, validity, enforceability or registrability of
any Company Intellectual Property Rights.

            (i) To the knowledge of the Company, no material Trade Secret of the
Company has been disclosed or authorized to be disclosed to any third party in
violation of confidentiality obligations to the Company, or its subsidiaries
taken as a whole, and no party to a nondisclosure agreement with the Company is
in breach or default thereof. The Company has taken reasonable measures,
consistent with customary industry practice, to protect, preserve and maintain
the secrecy of its Trade Secrets.

            (j) Except as disclosed in Section 3.14(j) of the Company Disclosure
Letter, there are no settlements, forbearances to sue, consents, judgments,
injunctions, releases, waivers, orders or similar obligations, other than the
License Agreements, that: (i) restrict any Company Intellectual Property Rights
or; (ii) restrict the conduct of the business of the Company in order to
accommodate Intellectual Property Rights of a third party; or (iii) grant third
parties any rights under Company Intellectual Property Rights.

            (k) All current and former employees and consultants of the Company
and its subsidiaries have executed an agreement that assigns to the Company or
one of its subsidiaries their Intellectual Property Rights in the work product
developed pursuant to their employment or relationship with the Company or any
of its subsidiaries. No current or former director, officer or employee of the
Company will, after giving effect to the Transactions, own any of the Company
Intellectual Property Rights.

            (l) The execution of, the delivery of, the consummation of the
Transactions contemplated by, and the performance of the Company's obligations
under, this Agreement will not result in any material loss or impairment of the
Company Intellectual Property Rights or any Intellectual Property Rights
licensed to the Company.

            (m) Neither the Company nor any of its subsidiaries has used or will
use before the purchase of the Shares pursuant to the Offer any of the prior
inventions disclosed in the Proprietary Information and Inventions Agreements of
its employees, except for those inventions that were acquired in connection with
the merger with Arcxel Technologies, Inc., and, to the Company's knowledge, no
employees of the Company or any of its subsidiaries have improperly brought to
the Company or used at the Company any confidential information from their prior
employers.

      3.15 Environmental Matters. (a) The Company and its subsidiaries are in
compliance in all material respects with federal, state, local and foreign laws
and regulations relating to pollution or protection or preservation of human
health or the environment, including, without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of toxic or
hazardous substances or hazardous waste, petroleum and petroleum products,
asbestos or asbestos-containing materials, polychlorinated biphenyls, radon, or
lead or lead-based paints or materials ("Materials of Environmental Concern"),
or otherwise relating to the generation, storage, containment (whether above
ground or underground), disposal, transport or handling of Materials of
Environmental Concern, or the preservation of the environment or mitigation of


                                       24

adverse effects thereon (collectively, "Environmental Laws"), and including, but
not limited to, compliance with any permits or other governmental authorizations
or the terms and conditions thereof, except where noncompliance would not
reasonably be expected to have a Material Adverse Effect on the Company; (b)
neither the Company nor any of its subsidiaries has received any communication
or notice, whether from a governmental authority or otherwise, alleging any
violation of or noncompliance with any Environmental Laws by the Company or any
of its subsidiaries or for which the any of them is responsible, and there is no
pending or, to the Company's knowledge, threatened claim, action, investigation
or notice by any person or entity alleging potential liability for
investigatory, cleanup or governmental response costs, or natural resources or
property damages, or personal injuries, attorneys' fees or penalties relating to
(i) the presence, or release into the environment, of any Materials of
Environmental Concern at any location owned or operated by the Company or any of
its subsidiaries, now or in the past, or (ii) any violation, or alleged
violation, of any Environmental Law (collectively, "Environmental Claims"),
except where such notices, communications or Environmental Claims would not
reasonably be expected to have a Material Adverse Effect on the Company; and (c)
to the Company's knowledge, there are no past or present facts or circumstances
that are reasonably likely to form the basis of any Environmental Claim against
the Company or any Company subsidiary or against any person or entity whose
liability for any Environmental Claim the Company or such Company subsidiary
have retained or assumed either contractually or by operation of law, except
where such Environmental Claim, if made, would not reasonably be expected to
have a Material Adverse Effect on the Company.

      3.16 Taxes.

            (a) The Company and each of its subsidiaries (i) have duly filed (or
there have been filed on their behalf) with the appropriate Tax Authorities all
material Tax Returns (as hereinafter defined) required to be filed by them, and
such Tax Returns are true, correct and complete in all material respects, and
(ii) have duly paid in full (or there has been paid on their behalf), or have
established reserves (in accordance with GAAP) as reflected on the Financial
Statements, all material Taxes that are due and payable.

            (b) There are no material liens for Taxes upon any property or
assets of the Company or any of its subsidiaries, except for liens for Taxes not
yet due or for which adequate reserves have been established in accordance with
GAAP.

            (c) No material Federal, state, local or foreign Audits are pending
with regard to any material Taxes or material Tax Returns of the Company or any
of its subsidiaries and, to the best knowledge of the Company and its
subsidiaries, no such Audit is threatened.

            (d) The Federal income Tax Returns of the Company and each of its
subsidiaries have been examined by the Internal Revenue Service (or the
applicable statutes of limitation for the assessment of Taxes for such periods
have expired) for all periods through and including December 31, 2002, and as of
the date hereof no material adjustments have been asserted as a result of such
examinations which have not been (x) resolved and fully paid, or (y) reserved on
the Financial Statements in accordance with GAAP.


                                       25

            (e) Neither the Company nor any of its subsidiaries is a party to
any agreement providing for the allocation, indemnification, or sharing of
Taxes.

            (f) Neither the Company nor any of its subsidiaries has been a
member of any "affiliated group" (as defined in Section 1504(a) of the Code)
other than the affiliated group of which Company is the "parent" and is not
subject to Treas. Reg. 1.1502-6 (or any similar provision under foreign, state,
or local law) for any period other than in connection with the affiliated group
of which the company is the "parent."

            (g) Neither the Company nor any of its subsidiaries is or has been a
United States real property holding corporation (as defined in Section 897(c)(2)
of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code.

            (h) The Company has delivered or made available to Parent and
Purchaser complete and accurate copies of each of (i) all Audit reports, letter
rulings, technical advice memoranda and similar documents issued by a Tax
Authority relating to Taxes due from or with respect to the Company or any of
its subsidiaries and (ii) all closing agreements entered into by the Company or
any of its subsidiaries with any Tax Authority, in each case existing on the
date hereof.

            (i) Neither the Company nor any of its subsidiaries has received
notice of any claim made by an authority in a jurisdiction where it does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.

            (j) Neither the Company nor any of its subsidiaries has made any
change in Tax elections.

            (k) Neither the Company nor any of its subsidiaries has waived any
statutory period of limitations for the assessment of any Tax or agreed to any
extension of time with respect to a Tax assessment or deficiency, in each case,
which is currently outstanding, nor is any request to so waive or extend
currently outstanding. No power of attorney granted by the Company or any of its
subsidiaries with respect to Taxes is currently in force.

            (l) The United States Federal and state "net operating loss" of the
Company and its subsidiaries through the date of the last filed applicable Tax
Return is set forth on Section 3.16(l) of the Company Disclosure Letter. As of
the date of this Agreement, there are no material limitations on the ability of
the Company to utilize United States Federal and state "net operating losses"
pursuant to Section 382 of the Code or similar state tax laws.

            (m) "Audit" means any audit, assessment, or other examination
relating to Taxes by any Tax Authority or any judicial or administrative
proceedings relating to Taxes. "Code" means the Internal Revenue Code of 1986,
as amended. "Tax" or "Taxes" means all Federal, state, local, and foreign taxes,
and other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto, imposed by any Tax Authority. "Tax Authority" means the Internal
Revenue Service and any other domestic or foreign governmental authority
responsible for the administration of any Taxes. "Tax Returns" mean all Federal,
state, local, and foreign tax returns, declarations, statements, reports,
schedules, forms, and information returns and any amendments thereto.


                                       26




3.17  Employee Benefit Plans.


      (a) Section 3.17 of the Company Disclosure Letter lists, with respect to
the Company, any of its subsidiaries and any trade or business (whether or not
incorporated) which is treated as a single employer with the Company within the
meaning of Section 414(b), (c), (m) or (o) of the Code (an "ERISA Affiliate"),
(i) all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), (ii) each loan to
a non-officer employee in excess of $10,000, loans to officers and directors and
any stock option, stock purchase, phantom stock, stock appreciation right,
supplemental retirement, severance, sabbatical, medical, dental, vision care,
disability, employee relocation, cafeteria benefit (Code Section 125) or
dependent care (Code Section 129), life insurance or accident insurance plans,
programs, agreements or arrangements, (iii) all bonus, pension, profit sharing,
savings, deferred compensation or incentive plans, programs, agreements or
arrangements, (iv) other fringe or employee benefit plans, programs, agreements
or arrangements of the Company or any of its subsidiaries and (v) any current or
former employment, change of control, retention or executive compensation or
severance agreements, written or otherwise, as to which unsatisfied obligations
of the Company or any of its subsidiaries of greater than $10,000 remain for the
benefit of, or relating to, any present or former employee, consultant or
director of the Company or any of its subsidiaries (together, the "Company
Employee Plans" ).

      (b) The Company has delivered to Parent a copy of each of the Company
Employee Plans and related material plan documents (including trust documents,
insurance policies or contracts, employee booklets, summary plan descriptions
and other authorizing documents, and any material employee communications
relating thereto) and has, with respect to each Company Employee Plan which is
subject to ERISA reporting requirements, provided copies of the Form 5500
reports filed for the last three (3) plan years. Any Company Employee Plan
intended to be qualified under Section 401(a) of the Code has either obtained
from the IRS a favorable determination letter as to its qualified status under
the Code, including all amendments to the Code effected by the Tax Reform Act of
1986, or has applied to the IRS for such a determination letter prior to the
expiration of the requisite period under applicable Treasury Regulations or IRS
pronouncements in which to apply for such determination letter and to make any
amendments necessary to obtain a favorable determination or has been established
under a standardized prototype plan for which an IRS opinion letter has been
obtained by the plan sponsor and is valid as to the adopting employer. The
Company has also delivered to Parent the most recent IRS determination,
notification, advisory, or opinion letter issued with respect to each such
Company Employee Plan, and, to the Company's knowledge, nothing has occurred
since the issuance of each such letter which could reasonably be expected to
cause the loss of the tax-qualified status of any Company Employee Plan subject
to Code Section 401(a).

      (c) There has been no "prohibited transaction," as such term is defined in
Section 406 of ERISA and Section 4975 of the Code, with respect to any Company
Employee Plan. Each Company Employee Plan has been administered in accordance
with its terms and in compliance with the requirements prescribed by any and all
statutes, rules and regulations (including ERISA and the Code), except as would
not be reasonably expected to have, in the aggregate, a Material Adverse Effect
on the Company, and the Company and each of its subsidiaries or ERISA Affiliates
have performed all obligations required to be performed by them under, are not
in any material respect in default under or violation of, and have no




                                       27

knowledge of any material default or violation by any other party to, any of the
Company Employee Plans. Neither the Company nor any of its subsidiaries or ERISA
Affiliates is subject to any liability or penalty under Sections 4976 through
4980 of the Code or ERISA with respect to any of the Company Employee Plans. All
contributions and premiums required to be made by the Company or any of its
subsidiaries or ERISA Affiliates to any Company Employee Plan have been made on
or before their due dates. Each Company Employee Plan can be amended, terminated
or otherwise discontinued in accordance with its terms. With respect to each
Company Employee Plan subject to ERISA as either an employee pension benefit
plan within the meaning of Section 3(2) of ERISA or an employee welfare benefit
plan within the meaning of Section 3(1) of ERISA, the Company has prepared in
good faith and timely filed all requisite material governmental reports (which,
to the Company's knowledge, were true and correct as of the date filed) and has
properly and timely filed and distributed or posted all material notices and
reports to employees required to be filed, distributed or posted with respect to
each such Company Employee Plan. No suit, administrative proceeding, action or
other litigation has been brought, or to the best knowledge of the Company is
threatened, against or with respect to any such Company Employee Plan, including
any audit or inquiry by the Internal Revenue Service (the "IRS") or United
States Department of Labor other than routine claims for benefits.

      (d) With respect to each Company Employee Plan, the Company, each Company
subsidiary and their respective ERISA Affiliates have complied with (i) the
applicable health care continuation and notice provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the regulations
(including proposed regulations) thereunder, (ii) the applicable requirements of
the Family Medical and Leave Act of 1993 and the regulations thereunder, and
(iii) the applicable requirements of the Health Insurance Portability and
Accountability Act of 1996 and the regulations (including proposed regulations)
thereunder, except where the failure to comply with the applicable requirements
of such laws and regulations would not be reasonably expected to have a Material
Adverse Effect on the Company.

      (e) The consummation of the Transactions will not (i) entitle any current
or former employee, director or consultant of the Company or any of its
subsidiaries or any ERISA Affiliates to severance benefits or any other payment,
except as expressly provided in this Agreement, or (ii) except as disclosed in
Section 3.17(e) of the Company Disclosure Letter, accelerate the time of payment
or vesting of Company Options, or increase the amount of compensation due any
such employee, director or consultant.

      (f) No amounts payable under any of the Company Employee Plans or any
other contract, agreement or arrangement with respect to which the Company or
any of its subsidiaries may have any liability could fail to be deductible for
federal income tax purposes by virtue of Section 162(m) or Section 280G of the
Code. None of the Company Employee Plans contains any provision requiring a
gross-up pursuant to Section 280G of the Code or similar tax provisions.

      (g) No Company Employee Plan provides benefits, including without
limitation death or medical benefits (whether or not insured), with respect to
current or former employees of the Company, its subsidiaries or any ERISA
Affiliate after retirement or other termination of service (other than (i)
coverage mandated by applicable laws, (ii) death benefits or retirement benefits
under any "employee pension benefit plan," as that term is defined in Section
3(2) of



                                       28

ERISA, or (iii) benefits, the full direct cost of which is borne by the current
or former employee (or beneficiary thereof)).

      (h) There has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its subsidiaries or any ERISA
Affiliates relating to, or change in participation or coverage under, any
Company Employee Plan which would increase the expense of maintaining such Plan
above the level of expense incurred with respect to that Plan for the most
recent fiscal quarter included in the Company Financials.

      (i) Neither the Company nor any of its subsidiaries or any ERISA Affiliate
currently maintains, sponsors, participates in or contributes to, nor have they
ever maintained, established, sponsored, participated in, or contributed to, any
employee pension benefit plan (within the meaning of Section 3(2) of ERISA)
which is subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA
or Section 412 of the Code.

      (j) Neither the Company nor any of its subsidiaries or any ERISA Affiliate
is a party to, or has ever made any contribution to or otherwise incurred any
obligation to contribute to, any "multiemployer plan" as defined in Section
3(37) of ERISA.

      (k) Section 3.17(k) of the Company Disclosure Schedule sets forth for each
Company Option, where applicable, the performance targets, design wins,
thresholds or other measurement pursuant to which vesting or exercise of such
option is contingent.

      3.18 Certain Agreements Affected by the Merger. Except as disclosed in
Section 3.18 of the Company Disclosure Letter, neither the execution and
delivery of this Agreement nor the consummation of the Transactions will (a)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any officer,
director or employee of the Company or any of its subsidiaries, (b) materially
increase any benefits under the Company Employee Plans or (c) result in the
acceleration of the time of payment or vesting of any such benefits. No payment
which will or may be made by the Company or any of its subsidiaries to any
employee will be characterized as an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code.

      3.19 Employee Matters.

      (a) There are no actions, suits, claims, charges, labor disputes,
grievances or controversies pending, or to the Company's knowledge, threatened
involving the Company or any of its subsidiaries and any of their respective
employees or former employees. To the Company's knowledge, no Governmental
Entity responsible for the enforcement of labor or employment laws intends to
conduct an investigation with respect to or relating to the Company or any of
its subsidiaries and no such investigation is in progress. To the Company's
knowledge, no employee of the Company or any of its subsidiaries has violated
any employment contract, nondisclosure agreement or noncompetition agreement by
which such employee is bound due to such employee being employed by the Company
or any of its subsidiaries and disclosing to the Company or any such subsidiary
or using Trade Secrets of any other person. There has been: (i) no labor union
organizing or attempting to organize any employees of the Company or any of its
subsidiaries into one or more collective bargaining units; and (ii) no labor



                                       29

dispute, strike, work slowdown, work stoppage or lock out or other collective
labor action by or with respect to any employees of the Company or any of its
subsidiaries pending, or, to the Company's knowledge, threatened against or
affecting the Company or any of its subsidiaries. Neither the Company nor any of
its subsidiaries is a party to, or bound by, any collective bargaining
agreements or other agreement with any labor organization applicable to the
employees of the Company or any of its subsidiaries and no such agreement is
currently being negotiated.

      (b) Each of the Company and its subsidiaries (i) is in compliance in all
material respects with all applicable laws respecting employment and employment
practices, terms and conditions of employment, health and safety and wages and
hours, and is not engaged in any unfair labor practice, (ii) has withheld all
amounts required by law or by agreement to be withheld from the wages, salaries
and other payments to employees, (iii) is not liable in any material respect for
any arrears of wages or any Taxes or any penalty for failure to comply with any
of the foregoing and (iv) is not liable for any material payment to any trust or
other fund or to any governmental or administrative authority, with respect to
unemployment compensation benefits, social security or other benefits or
obligations for employees (other than routine payments to be made in the
ordinary course of business and consistent with past practice).

      (c) To the Company's knowledge, no employee of the Company or any of its
subsidiaries has provided or is providing information to any law enforcement
agency regarding the commission or possible commission of any crime or the
violation or possible violation of any applicable law involving the Company or
any of its subsidiaries. Neither the Company nor any of its subsidiaries nor any
officer, employee, contractor, subcontractor or agent of the Company or any such
subsidiary of the Company has discharged, demoted, suspended, threatened,
harassed or in any other manner discriminated against an employee of the Company
or any of its subsidiaries in the terms and conditions of employment because of
any act of such employee described in 18 U.S.C. Section 1514A(a).

      (d) Since June 30, 2000, neither the Company nor any of its subsidiaries
has effectuated (i) a "plant closing" as defined in the Worker Adjustment and
Retraining Notification Act ("WARN Act"), affecting any site of employment or
one or more facilities or operating units within any site of employment or
facility of the Company or any of its subsidiaries or (ii) a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or facility of the
Company or any of its subsidiaries; nor has the Company or any of its
subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
state, local or foreign law or regulation similar to the WARN Act. To the
Company's knowledge, neither the Company's nor any of its subsidiaries'
employees has suffered an "employment loss" (as defined in the WARN Act) in the
ninety (90) days prior to the date of this Agreement.

      (e) Section 3.19(e) of the Company Disclosure Letter contains a true and
complete list of (i) the names of all directors and elected and appointed
officers of each of the Company and its subsidiaries, together with such
person's position or function, annual base salary and incentives or bonus
arrangement, and (ii) the number of shares of Company Common Stock owned
beneficially or of record, or both, by each such person and the family
relationships, if any, among such persons. As of the date hereof, no key
employee, director or officer of the



                                       30

Company or any of its subsidiaries has given notice to the Company, nor, except
as provided in Section 6.7, is the Company otherwise aware of any information
that would lead it to reasonably believe, that any such person will or may cease
to be engaged by the Company or applicable subsidiary of the Company for any
reason prior to the Effective Time.

      3.20 Potential Conflict of Interest. Except as set forth in the Company
SEC Reports filed prior to the date hereof or as disclosed in Section 3.20 of
the Company Disclosure Letter, since December 31, 2002, there have been no
transactions, agreements, arrangements or understandings between the Company or
any subsidiary of the Company, on the one hand, and their respective affiliates,
on the other hand, that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act. Except as set forth in the Company SEC
Reports filed prior to the date hereof, no officer of the Company or any Company
subsidiary owns, directly or indirectly, any interest in (excepting not more
than one percent (1%) stock holdings for investment purposes in securities of
publicly-held and traded companies) or is an officer, director, employee or
consultant of any person which is a competitor, lessor, lessee, customer or
supplier of the Company; and no officer or director of the Company or any
Company subsidiary (a) owns, directly or indirectly, in whole or in part, any
Intellectual Property which the Company or any Company subsidiary is using or
the use of which is necessary for the business of the Company or any Company
subsidiary, (b) has any claim, charge, action or cause of action against the
Company or any Company subsidiary, except for immaterial claims for accrued
vacation pay, accrued benefits under any Company Employee Plans and similar
matters and agreements existing on the date hereof, (c) has made, on behalf of
the Company or any of its subsidiaries, any payment or commitment to pay any
commission, fee or other amount to, or to purchase or obtain or otherwise
contract to purchase or obtain any goods or services from, any other person of
which any officer or director of the Company or any Company subsidiary, or, to
the Company's knowledge, a relative of any of the foregoing, is a partner or
stockholder (except stock holdings solely for investment purposes in securities
of publicly held and traded companies) or (d) owes any money to the Company or
any of its subsidiaries (except for reimbursement of advances in the ordinary
course of business consistent with past practice).

      3.21 Insurance. The Company and each of its subsidiaries has policies of
insurance and bonds of the type and in amounts customarily carried by persons
conducting businesses or owning assets similar to those of the Company and each
of its subsidiaries. Section 3.21 of the Company Disclosure Letter contains an
accurate summary of the material terms of all material policies of fire,
liability, workmen's compensation, director and officer and other forms of
insurance owned or held by the Company. All such policies and other forms of
insurance are in full force and effect, all premiums with respect thereto
covering all periods up to and including the date of the Closing have been paid,
and no notice of cancellation or termination has been received with respect to
any such policy or other form of insurance. There is no material claim pending
under any such policies as to which coverage has been questioned, denied or
disputed by any underwriter of such policies or other forms of insurance. Such
policies or other forms of insurance are sufficient for compliance with all
requirements of law and of all agreements to which the Company is a party, are
valid, outstanding and enforceable, provide adequate insurance coverage for the
normal risks incident to the business of the Company and its assets, will remain
in full force and effect through the respective dates set forth in the Company
Disclosure Letter without the payment of additional premiums (other than
existing policy premiums payable in installments), and will not in any way be
affected by, or terminate or lapse



                                       31

by reason of, the Transactions. Section 3.21 of Company Disclosure Letter
identifies all risks which the Company, its Board of Directors or officers have
designated as being self insured (other than applicable deductibles or
retentions). The Company has not been refused any insurance with respect to its
assets or operations, nor has its coverage been limited, by any insurance
carrier to which it has applied for any such insurance or with which it has
carried insurance during the last two years.

      3.22 Compliance With Laws. The Company and its subsidiaries have complied
in a timely manner and in all material respects with all laws, rules and
regulations, ordinances, judgments, decrees, orders, writs and injunctions of
all United States federal, state, local, foreign governments and agencies
thereof which affect the business, properties or assets of the Company and its
subsidiaries, except for instances of possible noncompliance that individually
or in the aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company, and no notice, charge, claim, action or assertion has
been received by the Company or any of its subsidiaries or has been filed,
commenced or, to the Company's knowledge, threatened against the Company or any
of its subsidiaries alleging any violation of any of the foregoing, except for
instances of possible noncompliance that individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect on the Company. All
licenses, permits and approvals required under such laws, rules and regulations
are in full force and effect except where the failure to be in full force and
effect would not reasonably be expected to have a Material Adverse Effect on the
Company.

      3.23 Minute Books. The minute books of the Company and its subsidiaries
made available to Parent contain a complete and accurate summary of all meetings
of directors and stockholders or actions by written consent from October 1, 1999
through the date of this Agreement, and reflect all material transactions
referred to in such minutes accurately.

      3.24 Complete Copies of Materials. The Company has delivered or made
available true and complete copies of each document which has been requested by
Parent or its counsel in connection with their legal and accounting review of
the Company and its subsidiaries.

      3.25 Brokers' and Finders' Fees. The Company has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any Transaction other than Goldman, Sachs &
Co., pursuant to a letter dated August 19, 2003, a copy of which has been
delivered to Parent.

      3.26 Customers and Suppliers. No single customer which individually
accounted for more than 4% of the Company's gross revenues during the 12-month
period preceding the date hereof, and no single supplier of the Company or its
subsidiaries, has canceled or otherwise terminated, or has advised the Company
that it intends to cancel or otherwise terminate, its relationship with the
Company or its subsidiaries. Except as disclosed in Section 3.26 of the Company
Disclosure Letter, no single customer which individually accounted for more than
4% of the Company's gross revenues during the 12-month period preceding the date
hereof decreased materially its use of the services or products of the Company
or its subsidiaries or advised the Company that it intends to decrease
materially its use of the services or products of the Company and its
subsidiaries. No single supplier of the Company or its subsidiaries has,



                                       32

during the 12-month period preceding the date hereof, decreased materially its
services or supplies to the Company or its subsidiaries or has advised the
Company that it intends to decrease materially its services or supplies to the
Company or its subsidiaries. Neither the Company nor any of its subsidiaries has
breached, so as to provide a benefit to the Company and any such subsidiary that
was not intended by the parties, any agreement with, or engaged in any
fraudulent conduct with respect to, any customer or supplier of the Company or
any of its subsidiaries.

      3.27 Material Contracts. Section 3.27 of the Company Disclosure Letter
sets forth a true and complete list of (i) all material contracts, agreements,
indemnities, guarantees, notes, bonds, mortgages, liens, indentures, leases,
licenses or other instruments or obligations of the Company and its subsidiaries
(each a "Company Agreement") (including any agreement required to be filed as an
Exhibit to an Annual Report on form 10-K of the Company pursuant to Item
601(b)(10) of Regulation S-K of the Securities Act) entered into by the Company
or any Company subsidiary since December 31, 2002 and all amendments to any
Company Agreements included as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2002 and (ii) all non-competition
agreements imposing restrictions on the ability of the Company or any Company
subsidiary to conduct business in any jurisdiction or territory. True, correct
and complete copies of all such material Company Agreements have been delivered
to Parent. Each Company Agreement that is required to be listed in Section 3.27
of the Company Disclosure Letter is valid, binding and enforceable and is in
full force and effect and there are no defaults, events of default or, to the
knowledge of the Company, allegations of default thereunder. Each of the Company
and its subsidiaries has in all material respects performed the obligations
required to be performed by it and is entitled to the benefits under each
Company Agreement except such benefits as that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.

      3.28 Third Party Consents. Section 3.28 of the Company Disclosure Letter
lists all Company Agreements that require notices, authorizations, consents or
approvals that are necessary for the consummation by the Company of any of the
Transactions and identifies each Company Agreement which, if no notice is given
or no authorization, consent or approval is obtained, would reasonably be
expected to have a Material Adverse Effect on Parent's ability to operate the
business of the Company and its subsidiaries in the same manner as the business
was operated by the Company and its subsidiaries prior to the Effective Time.

      3.29 Product Releases. The Company has provided Parent a schedule of
product releases, which schedule is attached as Section 3.29 of the Company
Disclosure Letter. The Company has a good faith reasonable belief that it can
achieve the release of products on the schedule described in Section 3.29 of the
Company Disclosure Letter and is not currently aware of any change in its
circumstances or other fact that has occurred that would cause it to believe
that it will be unable to meet such release schedule.

      3.30 Company Design Wins. Section 3.30 of the Company Disclosure Letter
sets forth a true and complete list of design wins by the Company or any of its
subsidiaries as of the date of the this Agreement, whether publicly disclosed or
not, specifying for each design win, the name of the customer and the relevant
product or products. As of the date of this Agreement, for each design win
listed in Section 3.30 of the Company Disclosure Letter: (i) neither the Company
nor



                                       33

any of its subsidiaries has any reason to believe that the relevant product or
products will not be developed and issued for production, and (ii) no customer
listed on Section 3.30 of the Company Disclosure Schedule has canceled or
otherwise terminated, or has advised the Company that such customer intends to
cancel or otherwise terminate, the design win relating to such customer.

      3.31 Orders, Commitments and Returns. As of the date of this Agreement,
there are no claims against the Company to return in excess of an aggregate of
$300,000 of merchandise by reason of alleged overshipments, defective
merchandise or otherwise, or of merchandise in the hands of customers under an
understanding that such merchandise would be returnable.

      3.32 Support, Maintenance and Warranty Obligations. Section 3.32 of the
Company Disclosure Letter sets forth, as of September 28, 2003, the approximate
installed base of the Company's products, the key customers that have purchased
the products and the warranty reserves for warranty obligations of the Company
and its subsidiaries as of September 28, 2003.

      3.33 Inventory. The inventories shown on the Company Financials or
thereafter acquired by the Company, consisted of items of a quantity and quality
usable or salable in the ordinary course of business (other than slow-moving,
obsolete or unusable items which are adequately reserved for in the Company
Financials to reflect realizable value). Since the Balance Sheet Date, the
Company has continued to replenish inventories in a normal and customary manner
consistent with past practices. The Company has not received written or oral
notice that it will experience in the foreseeable future any material difficulty
in obtaining, in the desired quantity and quality and at a reasonable price and
upon reasonable terms and conditions, the raw materials, supplies or component
products required for the manufacture, assembly or production of its products.
The values at which inventories are carried reflect the inventory valuation
policy of the Company, which is consistent with its past practice and in
accordance with generally accepted accounting principles applied on a consistent
basis. Since the Balance Sheet Date, due provision was made on the books of the
Company in the ordinary course of business consistent with past practices, to
provide for all slow-moving, obsolete, or unusable inventories to their
estimated useful or scrap values and such inventory reserves are adequate to
provide for such slow-moving, obsolete or unusable inventory and inventory
shrinkage. As of September 28, 2003, the aggregate value of the inventory of the
Company in the distribution channel does not exceed the average aggregate value
of the inventory of the Company in the distribution channel over the past four
quarters.

      3.34 Accounts Receivable. Subject to any reserves set forth in the Company
Financials, the accounts receivable shown in the Company Financials represent
bona fide claims against debtors for sales and other charges, and are not
subject to discount except for normal cash and immaterial trade discounts. The
amount carried for doubtful accounts and allowances disclosed in the Company
Financials is reasonably adequate and consistent with the Company's past
practice.

      3.35 Information in the Proxy Statement. The Proxy Statement, if any (and
any amendment thereof and supplement thereto), at the date mailed to the
Company's stockholders and at the time of any meeting of Company stockholders to
be held in connection with the Merger, will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the



                                       34

circumstances under which they are made, not misleading, except that no
representation is made by the Company with respect to statements made therein
based on information supplied in writing by Parent or Purchaser expressly for
inclusion in the Proxy Statement. The Proxy Statement will comply in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.

      3.36 Information in the Offer Documents and the Schedule 14D-9. The
information supplied by the Company expressly for inclusion or incorporation by
reference in the Offer Documents or the Schedule 14D-9 will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The Schedule 14D-9 will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the SEC and on
the date first published or sent or given to the Company's stockholders, will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, except that the Company makes no representation or
warranty with respect to statements made in the Schedule 14D-9 based on
information furnished by Parent or Purchaser expressly for inclusion therein.

      3.37 Opinion of Financial Advisor. The Company has received the written
opinion of Goldman, Sachs & Co. to the effect that, as of the date of such
opinion, the consideration to be received by the holders of the Company's Common
Stock in the Offer and the Merger was fair from a financial point of view to
such stockholders.

      3.38 Personnel. Section 3.38 of the Company Disclosure Letter sets forth a
true and complete list of (a) the names and current salaries of all directors
and elected and appointed officers of each of the Company and its subsidiaries,
and (b) the number of shares of Company Common Stock owned beneficially or of
record, or both, by each such person and the family relationships, if any, among
such persons.

      3.39 Rights Agreement. The Company and the Board of Directors of the
Company have amended the Rights Agreement and have taken and will maintain in
effect all further necessary action (a) to prevent any Right issued or issuable
under the Rights Agreement from becoming exercisable by virtue of this
Agreement, the Purchaser Option, the Stockholder Agreement, the Offer, the
Merger and the other Transactions and (b) to ensure that (i) neither Parent nor
Purchaser nor any of their "Affiliates" (as defined in the Rights Agreement) or
"Associates" (as defined in the Rights Agreement) is considered to be an
"Acquiring Person" (as defined in the Rights Agreement) and (ii) the provisions
of the Rights Agreement, including the occurrence of a Distribution Date (as
defined in the Rights Agreement), are not and shall not be triggered by reason
of the announcement or consummation of the Offer, the Merger, the execution of
this Agreement, the Purchaser Option or the Stockholder Agreement or the
announcement or consummation of any other Transaction. Prior to the termination
of this Agreement, the Company shall not terminate, amend or modify the Rights
Agreement in any manner other than as contemplated by this Agreement. The
Company has made available to Parent a complete and correct copy of the Rights
Agreement as amended and supplemented to the date of this Agreement.



                                       35

      3.40 Absence of Questionable Payments. Neither the Company nor any of its
subsidiaries nor any director, officer, agent, employee or other person acting
on behalf of the Company or any of its subsidiaries, has used any corporate or
other funds for unlawful contributions, payments, gifts, or entertainment, or
made any unlawful expenditures relating to political activity to government
officials or others or established or maintained any unlawful or unrecorded
funds in violation of Section 30A of the Exchange Act. Neither the Company nor
any subsidiary of the Company nor any current director, officer, agent, employee
or other person acting on behalf of the Company or any subsidiary of the
Company, has accepted or received any unlawful contributions, payments, gifts,
or expenditures. The Company is in compliance with the provisions of Section
13(b) of the Exchange Act.

      3.41 Representations Complete. None of the representations or warranties
made by the Company herein or in any Schedule hereto, including the Company
Disclosure Letter, or in any certificate furnished by the Company pursuant to
this Agreement, when all such documents are read together in their entirety,
contains or will contain upon the consummation of the Offer any untrue statement
of a material fact, or omits or will omit upon the consummation of the Offer to
state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading.

                                   ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF PARENT


            Parent represents and warrants to the Company as follows:

      4.1 Corporate Existence. Each of Parent and Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Purchaser was formed solely for the purpose of engaging in
the Transactions and has not engaged in any business activities or conducted any
operations other than in connection with the Transactions.

      4.2 Corporate Authorization. The execution, delivery and performance by
each of Parent and Purchaser of this Agreement and the consummation by Parent
and Purchaser of the Transactions are within each of Parent and Purchaser's
corporate powers and have been duly authorized by all necessary corporate
action. This Agreement has been duly executed by each of Parent and Purchaser
and, assuming due authorization, execution and delivery of this Agreement by the
Company, this Agreement constitutes a valid and binding agreement of each of
Parent and Purchaser, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, and to general equity
principles.

      4.3 Consents and Approvals; No Violations. None of the execution, delivery
or performance of this Agreement by Parent or Purchaser, the consummation by
Parent or Purchaser of the Transactions, or compliance by Parent or Purchaser
with any of the provisions hereof will (a) conflict with or result in any breach
of any provision of the Certificate of



                                       36

Incorporation or Bylaws of Parent or Purchaser, (b) require any filing by Parent
or Purchaser with, or permit, authorization, consent or approval of, any
Governmental Entity (except for (i) compliance with any applicable requirements
of the Exchange Act, (ii) any filing pursuant to the DGCL, (iii) filings,
permits, authorizations, consents and approvals as may be required under the HSR
Act and comparable merger and notifications, laws or regulations of foreign
jurisdictions, (iv) the filing or deemed filing with the SEC and the Nasdaq of
(x) the Schedule TO, (y) the Proxy Statement, if stockholder approval is
required by law, and (z) such reports under Section 13(a) of the Exchange Act as
may be required in connection with this Agreement and the Transactions, or (iv)
such filings and approvals as may be required by any applicable state
securities, blue sky or takeover laws), or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent, any of its
subsidiaries, or any of their properties or assets, except in the case of
clauses (b) or (c) such violations, breaches or defaults which would not,
individually or in the aggregate, impair in any material respect the ability of
each Parent and Purchaser to perform its obligations under this Agreement, as
the case may be, or prevent the consummation of any the Transactions.

      4.4 Information in the Proxy Statement. The information supplied by Parent
or Purchaser in writing expressly for inclusion or incorporation by reference in
the Proxy Statement (or any amendment thereof or supplement thereto) will not,
at the date mailed to stockholders and at the time of the meeting of
stockholders to be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not misleading.

      4.5 Information in the Offer Documents. The Offer Documents will comply in
all material respects with the provisions of applicable federal securities laws
and, on the date filed with the SEC and on the date first published or sent or
given to Company stockholders, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, except that Parent and
Purchaser make no representation or warranty with respect to information
furnished by the Company expressly for inclusion in the Offer Documents.

      4.6 Financing. Purchaser has, and will have available to it upon the
consummation of the Offer, sufficient funds to consummate the Transactions
contemplated by this Agreement, including payment in full for all Shares validly
tendered into the Offer or outstanding at the Effective Time (and all related
fees and expenses).

      4.7 DGCL 203. At no time during the three (3) years prior to the date
hereof was Parent or any of its affiliates or associates an "interested
stockholder" of the Company within the meaning of and as defined in Section 203
of the DGCL.

                                   ARTICLE V

                       CONDUCT PRIOR TO THE EFFECTIVE TIME

5.1 Conduct of Business by the Company.



                                       37




            (a) During the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement pursuant to its terms or
the Effective Time, the Company and each of its subsidiaries shall, except to
the extent that Parent shall otherwise consent in writing, carry on its business
in the usual, regular and ordinary course, in substantially the same manner as
heretofore conducted and in compliance in all material respects with all
applicable laws and regulations, pay its debts and Taxes when due subject to
good faith disputes over such debts, pay or perform other material obligations
when due, and use all reasonable efforts to (i) preserve intact its present
business organization, (ii) keep available the services of its present officers,
employees and contractors and (iii) preserve its relationships with customers,
suppliers, licensors, licensees, and others with which it has business dealings.

            (b) Without limiting the generality of the foregoing, without the
prior written consent of Parent, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, the Company shall not do any of the
following and shall not permit its subsidiaries to do any of the following:

               (i) waive any stock repurchase rights, accelerate (other than
pursuant to the terms of Company Options in effect as of the date hereof), amend
or change the period of vesting or exercisability of Company Options or
restricted stock, or reprice Company Options granted under the Option Plans or
any other plan, program or arrangement or authorize cash payments in exchange
for any Company Options granted under any of such plans or exercise any
authority under the Option Plans or any Company Employee Plan to accelerate any
vesting or exercise of any Company Option;

               (ii) adopt a plan of complete or partial liquidation,
dissolution, merger, acquisition, consolidation, restructuring, recapitalization
or other reorganization (other than the Merger);

               (iii) grant any severance, bonus or termination pay to any
employee, officer or director except non-discretionary pay pursuant to written
agreements in effect, or policies existing, on the date hereof and as previously
disclosed in writing to Parent, or adopt any new severance, retention or change
in control plan, policy or arrangement;

               (iv) transfer or license to any person or entity or otherwise
extend, amend, modify, permit to lapse or fail to preserve any of the Company
Intellectual Property Rights material to the Company's business as presently
conducted or proposed to be conducted, other than nonexclusive licenses in the
ordinary course of business consistent with past practice, or disclose to any
person who has not entered into a confidentiality agreement any Trade Secrets;

               (v) other than required dividends on the Series B Preferred
Stock, declare, set aside, or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;


                                       38

               (vi) purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of the Company or its subsidiaries, or
any instrument or security that consists of a right to acquire such shares
except repurchases of unvested shares at cost in connection with the termination
of the employment relationship with any employee pursuant to stock option or
purchase agreements in effect on the date hereof;

               (vii) except for grants of Company Options pursuant to written
commitments in effect on the date hereof and to new hires in the ordinary course
of business and consistent with past practice (not to exceed 100,000 shares of
Common Stock in the aggregate to employees that are not officers or directors),
issue or sell, or authorize the issuance or sale of, pledge or otherwise
encumber any shares of its capital stock or any other equity securities, or
issue or sell, or authorize the issuance or sale of, any securities convertible
into or options, warrants or rights to purchase or subscribe to, or enter into
or create any contract with respect to the issuance or sale of, any shares of
its capital stock or any other equity securities, or make any other changes in
its capital structure, except for the issuance and sale of shares of Common
Stock upon the exercise of Company Options or Company Warrants which are
outstanding on the date hereof and other than pursuant to the Company ESPP
consistent with the terms thereof;

               (viii) cause, permit or propose any amendments to its Certificate
of Incorporation, Bylaws or other charter documents (or similar governing
instruments of any of its subsidiaries);

               (ix) acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest in or a portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof; or otherwise acquire or
agree to acquire any assets which are material, individually or in the
aggregate, to the business of the Company or enter into any joint ventures,
strategic partnerships or alliances;

               (x) sell, transfer, lease, license, mortgage, pledge, encumber or
otherwise dispose of any properties or assets which are material, individually
or in the aggregate, to the business of the Company;

               (xi) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of the
Company, enter into any "keep well" or other agreement to maintain any financial
statement condition, incur or modify any other material liability or enter into
any arrangement having the economic effect of any of the foregoing other than
(x) in connection with the financing of ordinary course trade payables
consistent with past practice or (y) pursuant to existing credit facilities as
in effect on the date hereof in the ordinary course of business;

               (xii) adopt or amend any Company Employee Plan, pay, or incur an
obligation or commitment to pay, any special bonus or special remuneration to
any director, officer, consultant or employee, or increase the salaries or wage
rates or fringe benefits (including rights to severance or indemnification) of
its directors, officers,



                                       39

employees or consultants other than increases to employees who are not directors
or affiliates in the ordinary course of business, consistent with past practice
or make any loans to any of its officers, directors, employees, affiliates,
agents or consultants or make any change in its existing borrowing or lending
arrangements for or on behalf of any of such persons pursuant to a Company
Employee Plan or otherwise;

               (xiii) pay or agree to pay or make any accrual or arrangement for
payment to any officers, directors, employees or affiliates of the Company or
any of its subsidiaries of any amount relating to unused vacation days, except
payments and accruals made in the ordinary course of business consistent with
past practice;

               (xiv) modify, amend or terminate any Company Agreement, or waive,
release or assign any material rights or claims thereunder, other than any such
modification, amendment or termination of any such material contract or any such
waiver, release or arrangement thereunder in the ordinary course of business
consistent with past practice;

               (xv) modify, amend or terminate, or waive, release or assign any
material rights or claims with respect to any confidentiality agreement or
non-competition agreement to which the Company is a party.

               (xvi) pay, discharge, satisfy or settle any pending or threatened
adverse third party claims, suits, actions, liabilities or other obligations
(whether absolute, accrued, contingent or otherwise), other than the payment,
discharge or satisfaction of any such claims, liabilities or obligations, in the
ordinary course of business consistent with past practice, or of claims,
liabilities or obligations reflected or reserved against in, or contemplated by,
the consolidated financial statements (or the notes thereto) of the Company;

               (xvii) commence, join or make an appeal with respect to any
action, claim, suit, arbitration, litigation or other proceeding for money
damage or other relief against any third party (other than Parent or Purchaser)
before any court or governmental or other regulatory or administrative agency or
commission in any jurisdiction, other than ordinary course collections claims
for accounts receivable due and payable to the Company or any of its
subsidiaries not exceeding $50,000 in the aggregate or which would result in any
restrictions on its operations or which relates to this Agreement or the
Transactions;

               (xviii) enter into any contract which involves payments or
commitments or results in potential liability in excess of $100,000 in any
consecutive twelve (12) month period, or, in cases where the Company or a
subsidiary of the Company is the party responsible for such payment, commitment
or liability which is not terminable upon thirty (30) days notice other than in
the ordinary course of business consistent with past practice;

               (xix) permit any insurance policy naming it as a beneficiary or a
loss payee to be cancelled or terminated without notice to and consent by
Parent;


                                       40

               (xx) revalue any of its assets or make any change in accounting
methods, principles or practices, except as required by GAAP after notice to
Parent;

               (xxi) delay or postpone the payment of accounts payable or other
liabilities other than in the ordinary course of business;

               (xxii) make or change any election relating to Taxes, adopt or
change any accounting method relating to Taxes, enter into any closing agreement
relating to Taxes, file any amended Tax Return, settle or consent to any claim
or assessment relating to Taxes, incur any obligation to make any payment of, or
in respect of, any Taxes, except in the ordinary course of business, or agree to
extend or waive the statutory period of limitations for the assessment or
collection of Taxes;

               (xxiii) fail to make in a timely manner any filings with the SEC
required under the Securities or the Exchange Act or the rules and regulations
promulgated thereunder;

               (xxiv) except as required by applicable law or GAAP, make any
change in its accounting principles, practices or methods after notice to
Parent;

               (xxv) take any action that would or is reasonably likely to
result in any of the conditions to the Merger set forth in Article VII or any of
the conditions to the Offer set forth in Annex I not being satisfied, or would
make any representation or warranty of the Company contained herein inaccurate
in any material respect at, or as of any time prior to, the Effective Time, or
that would materially impair the ability of the Company to consummate the Merger
in accordance with the terms hereof or materially delay such consummation;

               (xxvi) enter into any agreement or commitment the effect of which
would be to grant to a third party following the Merger any actual or potential
right or license of any material Intellectual Property Rights owned by Parent or
any of its subsidiaries, in each case, other than the Surviving Corporation or
any successor thereto;

               (xxvii) take any action to exempt or make any person (other than
Parent or Purchaser) not subject to the provisions of Section 203 of the DGCL or
any other potentially applicable anti-takeover or similar statute or regulation;

               (xxviii) redeem the Rights or amend, waive any rights under or
otherwise modify or terminate the Rights Agreement in connection with an
Acquisition Proposal by any person other than Parent or Purchaser or render the
Rights Agreement inapplicable to any Acquisition Proposal by any person other
than Parent or Purchaser unless, and only to the extent that, the Company is
required to do so by a court of competent jurisdiction; or

               (xxix) enter into any written agreement, contract, commitment or
arrangement to do any of the foregoing, or authorize, recommend, propose, in
writing or otherwise or announce an intention to do any of the foregoing.


                                       41

            5.2 No Solicitation.


               (a) Each of the Company and its Representatives (as defined
below) has ceased and caused to be terminated all existing solicitations,
initiations, encouragements, discussions, negotiations and communications with
any persons or entities with respect to any offer or proposal relating to any
transaction or series of related transactions other than the Transactions
involving: (i) any acquisition or purchase from the Company by any person or
group (as defined in Section 9.4(c)) of more than a fifteen percent (15%)
interest in the total outstanding voting securities of the Company or any tender
offer or exchange offer that if consummated would result in any person or group
beneficially owning fifteen percent (15%) or more of the total outstanding
voting securities of the Company; (ii) any merger, consolidation, business
combination or similar transaction involving the Company; (iii) any sale, lease,
exchange, transfer, license, acquisition or disposition of more than fifteen
percent (15%) of the assets of the Company; or (iv) any recapitalization,
restructuring, liquidation or dissolution of the Company (each, an "Acquisition
Proposal"). Except as provided in Section 5.2(b), from the date of this
Agreement until the earlier of termination of this Agreement or the Effective
Time, the Company shall not and shall not authorize or permit its officers,
directors, employees, investment bankers, attorneys, accountants or other agents
or those of its subsidiaries (collectively, "Representatives") to directly or
indirectly (i) initiate, solicit or knowingly encourage, or knowingly take any
action (other than the issuance of the joint press release under Section 6.2 or
filings with the SEC permitted by this Agreement), to facilitate the making of,
any offer or proposal which constitutes or is reasonably likely to lead to any
Acquisition Proposal, (ii) enter into any agreement with respect to any
Acquisition Proposal (other than a confidentiality agreement entered into in
compliance with the terms of Section 5.2(b)), (iii) in the event of an
unsolicited Acquisition Proposal for the Company, engage in negotiations or
discussions with, or provide any non-public information or data to, any person
or group (other than Parent or any of its affiliates or representatives)
relating to any Acquisition Proposal, or (iv) grant any waiver or release under
any standstill or other agreement. Any violation of the foregoing restrictions
by any of the Company's Representatives, whether or not such Representative is
so authorized and whether or not such Representative is purporting to act on
behalf of the Company or otherwise, shall be deemed to be a material breach of
this Agreement by the Company. Notwithstanding the foregoing, nothing contained
in this Section 5.2 or any other provision hereof shall prohibit the Company or
the Company Board of Directors from (i) taking and disclosing to the Company's
stockholders its position with respect to any tender or exchange offer by a
third party pursuant to Rules 14d-9 and 14e-2 and Item 1012(a) of Regulation M-A
promulgated under the Exchange Act, or (ii) making such disclosure to the
Company's stockholders (including withdrawing or modifying, in a manner adverse
to the Transactions contemplated by this Agreement, the approval or
recommendation by the Company Board of Directors or any committee thereof in
favor of the Offer, this Agreement or the Merger) as in the good faith judgment
of the Company Board of Directors, only after receipt of advice from outside
legal counsel to the Company that such disclosure is required under applicable
law and that the failure to make such disclosure is reasonably likely to cause
the Company Board of Directors to violate its fiduciary duties to the Company 's
stockholders under applicable law, is required.

               (b) Notwithstanding the foregoing or any other provision of this
Agreement, prior to the acceptance of Shares pursuant to the Offer, the Company
may furnish non-public information to any person or group pursuant to a
confidentiality agreement with terms no less


                                       42

favorable to the Company than those contained in the confidentiality agreement,
dated September 2, 2003, entered into between Parent and the Company (as amended
through the date hereof, the "Confidentiality Agreement"), and may negotiate and
participate in discussions and negotiations with such person or group concerning
an Acquisition Proposal if, but only if, (i) (x) such Acquisition Proposal
provides for consideration to be received by the holders of all, but not less
than all, of the issued and outstanding Shares (a "Takeover Proposal"); (y) such
person or group has on an unsolicited basis, and in the absence of any violation
of this Section 5.2 by the Company or its Representatives, submitted a bona fide
written proposal to the Company relating to any such Takeover Proposal which at
least a majority of the full Board of Directors of the Company determines in
good faith, after receiving advice from a nationally recognized investment
banking firm and its outside legal counsel, involves consideration to the
holders of the Shares that is, or is reasonably likely to lead to a proposal
that is, more favorable from a financial point of view to the Company's
stockholders than the consideration offered pursuant to the Offer, is reasonably
capable of being completed and which is not conditioned upon obtaining
additional financing, in each case taking into account, among other things,
conditions to consummation, required regulatory approvals and the fees payable
to Parent hereunder, and (z) in the good faith opinion of the Company Board of
Directors, only after consultation with outside legal counsel to the Company,
providing such information or access or engaging in such discussions or
negotiations is in the best interests of the Company and its stockholders and
the failure to provide such information or access or to engage in such
discussions or negotiations would cause the Company Board of Directors to
violate its fiduciary duties to the Company's stockholders under applicable law
(a Takeover Proposal which satisfies clauses (x), (y) and (z) being referred to
herein as a "Superior Proposal"). The Company shall promptly, and in any event
within forty-eight (48) hours following receipt of an Acquisition Proposal, and
prior to providing any person or group with any material non-public information,
notify Parent orally and in writing of such Acquisition Proposal, which notice
shall disclose the identity of the other party and the material terms of such
Acquisition Proposal. The Company shall promptly, and in any event within
twenty-four (24) hours following a determination by the Company Board of
Directors that a Takeover Proposal is a Superior Proposal or is reasonably
likely to lead to a Superior Proposal, notify Parent of such determination. The
Company shall promptly provide to Parent any material non-public information
regarding the Company provided to any other person or group which was not
previously provided to Parent, such additional information to be provided no
later than the date of provision of such information to such other person or
group.

               (c) Except as set forth in this Section 5.2, neither the Company
Board of Directors nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to the Transactions
contemplated by this Agreement, Parent or Purchaser, the approval, or
recommendation by the Company Board of Directors or any committee thereof in
favor of the Offer, this Agreement or the Merger, (ii) approve or recommend or
propose to approve or recommend any Acquisition Proposal of any person or group
other than Parent and Purchaser or (iii) enter into any agreement with respect
to any Acquisition Proposal of any person or group other than Parent and
Purchaser (other than a confidentiality agreement entered into in compliance
with the terms of Section 5.2(b)). Notwithstanding the foregoing or any other
provision of this Agreement, prior to the time of acceptance for payment of
Shares in the Offer, the Company Board of Directors may (subject to the terms of
this and the following sentence) withdraw or modify its approval or
recommendation in favor of the Offer, this Agreement or the Merger, approve or
recommend a


                                       43

Superior Proposal, or enter into an agreement with respect to a Superior
Proposal (and make any amendments to the Rights Agreement necessary thereto), in
each case, only after the third business day following the Company's delivery to
Parent of written notice advising Parent that the Company Board of Directors has
received a Superior Proposal, specifying the material terms and conditions of
such Superior Proposal, identifying the person or group making such Superior
Proposal and advising Parent that the Company intends to approve or recommend a
Superior Proposal or enter into an agreement with respect to a Superior Proposal
(specifying which course of action the Company intends to take); provided,
however, that the Company shall not enter into an agreement with respect to a
Superior Proposal unless the Company shall also terminate this Agreement in
compliance with Section 5.2(d). Any such withdrawal, modification or change of
the recommendation of the Company Board of Directors, the approval or
recommendation or proposed approval or recommendation of any Superior Proposal
or the entry by the Company into any agreement with respect to any Superior
Proposal shall not change the approval of the Company Board of Directors for
purposes of causing any state takeover statute or other state law to be
inapplicable to the Transactions.

               (d) The Company may terminate this Agreement and enter into an
acquisition agreement or other similar agreement (each, an "Acquisition
Agreement") with respect to such Superior Proposal pursuant to Section 8.1(g) at
any time three (3) business days following delivery of the notice referenced in
Section 5.2(c); provided, that (i) neither the Company nor its Representatives
is in material breach of this Section 5.2, (ii) during the three (3) business
day period following the Company's delivery to Parent of the written notice
described in Section 5.2(c), Parent shall have the right to propose adjustments
in the terms and conditions of this Agreement and the Company shall have caused
its financial and legal advisors to negotiate with Parent in good faith such
proposed adjustments in the terms and conditions of this Agreement, and (iii)
upon the expiration of the three (3) business day period following the Company's
delivery to Parent of the written notice described in Section 5.2(c), the
Company delivers to Parent (x) a written notice of termination of this Agreement
pursuant to this Section 5.2(d), and (y) pays the Termination Fee (as defined in
Section 8.2(b)) plus the Expense Fee (as defined in Section 8.2(b)), as the same
may have been estimated by Parent in good faith prior to the date of such
delivery (subject to the limitations of Section 8.2(b) and to an adjustment
payment between the parties upon Parent's definitive determination of such
expenses) as set forth in Section 8.2.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

      6.1 Confidentiality; Access to Information.

               (a) The parties acknowledge that the Company and Parent have
previously executed the Confidentiality Agreement. Unless otherwise required by
law or regulation (including Nasdaq or NYSE rules) or pursuant to the terms and
provisions of the Confidentiality Agreement or this Agreement, Parent and the
Purchaser will hold any information which is non-public in confidence in
accordance with the terms of the Confidentiality Agreement and, in the event
this Agreement is terminated for any reason, Parent or the Purchaser shall
promptly return or destroy such information in accordance with the
Confidentiality Agreement.


                                       44

The Company will afford Parent and its Representatives reasonable access during
normal business hours to the properties, books, analysis, projections, plans,
systems, contracts, commitments, records, personnel offices and other facilities
of the Company and its subsidiaries during the period prior to the Effective
Time to obtain all information concerning the business, including the status of
product development efforts, properties, results of operations and personnel of
the Company and use all reasonable efforts to make available at all reasonable
times during normal business hours to Parent and its Representatives, the
appropriate individuals (including management personnel, attorneys, accountants
and other professionals) for discussion of the Company's business, properties,
prospects and personnel as Parent may reasonably request. The Company agrees to
provide its consent and to execute suitable confidentiality agreements allowing
the Company's third party suppliers, strategic partners and customers to meet
with and hold discussions with representatives of Parent. During such period,
the Company shall (and shall cause each of the Company's subsidiaries to),
subject to any limitations imposed by law with respect to records of employees,
furnish promptly to Parent and the Purchaser (i) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal securities laws and
(ii) all other information concerning its business, properties and personnel as
Parent or the Purchaser may reasonably request. No information or knowledge
obtained by Parent in any investigation pursuant to this Section 6.1 will affect
or be deemed to modify any representation or warranty contained herein or the
conditions to the obligations of the parties to consummate the Merger.

               (b) Notwithstanding anything to the contrary contained in this
Agreement or the Confidentiality Agreement, the parties (and each employee,
representative or other agent of the parties) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated hereby beginning on the earliest of (i) the date
of the public announcement by the parties of discussions relating to the
Transactions, (ii) the date of public announcement by the parties of the
Transactions hereby or (iii) the date of the execution of this Agreement;
provided, however, that nothing in this Section 6.1(b) shall permit either party
(or any employee, representative or agent thereof) to disclose (i) any
information that is not necessary to understand the tax treatment and tax
structure of such transactions (including the identity of the parties and any
information that could lead another to determine the identity of the parties) or
(ii) any other information to the extent that such disclosure could result in a
violation of any federal or state securities law.

      6.2 Public Disclosure. The initial press release concerning the Offer and
the Merger shall be a joint press release and, thereafter, neither Parent,
Purchaser nor the Company will disseminate any press release or other
announcement concerning the Merger, the Offer or this Agreement or the other
Transactions contemplated by this Agreement to any third party or to the
employees of the Company without the prior written consent of each of the other
parties hereto, which consent shall not be unreasonably withheld; provided,
however, that the Company and Parent may file a copy of this Agreement and the
related agreements as exhibits to a Current Report on Form 8-K filed in
connection with the announcement of this Agreement. The parties have agreed to
the text of the joint press release announcing the execution of this Agreement.

      6.3 Reasonable Efforts; Notification.


                                       45

               (a) Subject to the express provisions of Section 5.2 hereof and
upon the terms and subject to the conditions set forth in this Agreement, each
of the parties agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other Transactions, including complying in all material respects
with all applicable laws and with all rules and regulations of any Governmental
Entity, using all reasonable efforts to accomplish the following: (i) the taking
of all reasonable acts necessary to cause the Minimum Condition and all the
conditions set forth in Article VII and in Annex I hereto to be satisfied and to
consummate and make effective the Offer, the Merger and the other Transactions,
(ii) the obtaining of all necessary actions or non-actions, waivers, consents,
approvals, orders and authorizations from Governmental Entities and the making
of all necessary registrations, declarations and filings (including
registrations, declarations and filings with Governmental Entities, if any) and
the taking of all reasonable steps as may be necessary to avoid any suit, claim,
action, investigation or proceeding by any Governmental Entity, (iii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iv) the defending of any suits, claims, actions, investigations or proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the Transactions, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed if there is a reasonable possibility that defending such
actions would result in their dismissal, removal, elimination or termination,
and (v) the execution or delivery of any additional instruments necessary to
consummate the Transactions, and to carry out fully the purposes of, this
Agreement. In connection with and without limiting the foregoing, the Company
and its Board of Directors shall, if any state takeover statute or similar
statute or regulation is or becomes applicable to the Merger, this Agreement or
any of the other Transactions, use all reasonable efforts to ensure that the
Merger and the other Transactions may be consummated as promptly as practicable
on the terms contemplated by this Agreement and otherwise to minimize the effect
of such statute or regulation on the Merger, this Agreement and the other
Transactions. Notwithstanding anything in this Agreement to the contrary,
nothing in this Agreement shall be deemed to require Parent, Purchaser or any
subsidiary or affiliate thereof to take or agree to take any Action of
Divestiture (as defined below) which would be reasonably expected either to
materially and adversely impact the benefits expected to be derived by Parent as
a result of the transactions contemplated hereby or to have a Material Adverse
Effect on the business of the Company and its subsidiaries as currently
conducted or as contemplated to be conducted on a combined basis with the
business of Parent and its subsidiaries following the Merger. For purposes of
this Agreement, an "Action of Divestiture" shall mean (i) making proposals,
executing or carrying out agreements or submitting to any applicable federal,
state, local, municipal, foreign or other law, statute, constitution, principle
of common law, resolution, ordinance, code, order, judgment, edict, decree,
rule, regulation, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any
Governmental Entity (a "Legal Requirement") providing for the license, sale or
other disposition or holding separate (through the establishment of a trust or
otherwise) of any assets or categories of assets of Parent, any of its
affiliates or the Company or the holding separate of the shares of Common Stock
or Series B Preferred Stock or imposing or seeking to impose any limitation on
the ability of Parent or any of its subsidiaries or affiliates to conduct their
business or own such assets or to acquire, hold or exercise full rights of
ownership of the


                                       46

shares of the Common Stock or Series B Preferred Stock or (ii) otherwise taking
any step to avoid or eliminate any impediment which may be asserted under any
Legal Requirement governing competition, monopolies or restrictive trade
practices. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of the Company, Parent and Purchaser shall use all
reasonable efforts to take, or cause to be taken, all such necessary actions.

               (b) The Company shall give prompt notice to Parent of (i) any
representation or warranty made by the Company in this Agreement that is untrue
or inaccurate in any material respect at any time from the date hereof to the
Effective Time (ii) any condition set forth in Annex I that is unsatisfied in
any material respect at any time from the date hereof to the date the Purchaser
purchases Shares pursuant to the Offer (except to the extent it refers to a
specific date), (iii) any change or event having or which could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company and (iv) any material failure of the Company or any Representative
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this Agreement
or the Purchaser Option.

      6.4 Indemnification.

               (a) For a period of six (6) years after the Effective Time,
Parent will cause the Surviving Corporation to fulfill and honor in all respects
the obligations of the Company pursuant to any indemnification agreements, dated
prior to the date hereof and set forth in Section 6.4(a) the Company Disclosure
Letter, between the Company and its present and former directors and officers
(the "Indemnified Parties") and any indemnification provisions under the
Company's Certificate of Incorporation or Bylaws as in effect on the date
hereof. The Certificate of Incorporation and Bylaws of the Surviving Corporation
will contain provisions with respect to exculpation and indemnification that are
at least as favorable to the Indemnified Parties as those contained in the
Certificate of Incorporation and Bylaws of the Company as in effect on the date
hereof, which provisions will not be amended, repealed or otherwise modified for
a period of six (6) years from the Effective Time in any manner that would
adversely affect the rights thereunder of the Indemnified Parties.

               (b) For a period of six (6) years after the Effective Time,
Parent will, at its election, either (i) cause the Surviving Corporation to use
its commercially reasonable efforts to maintain in effect, if available,
directors' and officers' liability insurance covering those persons who are
currently covered by the Company's directors' and officers' liability insurance
policy on terms comparable to those applicable to the directors and officers of
the Company or (ii) obtain, or permit the Company to obtain, a six (6) year
"tail" insurance policy that provides coverage substantially similar to the
coverage provided under the Company's directors' and officers' liability
insurance covering those persons who are currently covered by the Company's
directors' and officers' liability insurance policy on terms comparable to those
applicable to the directors and officers of the Company; provided, however, that
in no event will the Surviving Corporation be required to expend in excess of
one hundred twenty-five percent (125%) of the annual premium currently paid by
the Company for such coverage (the "Current Annual Premium Amount") (or such
coverage as is available for such one hundred twenty-five percent (125%) of



                                       47

such annual premium). The Current Annual Premium Amount is set forth on Section
6.4(b) of the Company Disclosure Letter.

               (c) This Section 6.4 shall survive the consummation of the
Merger, is intended to benefit the Company, the Surviving Corporation and each
indemnified party, shall be binding on all successors and assigns of the
Surviving Corporation and Parent, and shall be enforceable by the Indemnified
Parties.

      6.5 Litigation. The Company shall give Parent the opportunity to
participate in the defense of any litigation (other than where the Parent or
Purchaser is an adverse party) against the Company and/or any of its
subsidiaries and/or any of their respective directors relating to the
Transactions.

      6.6 Interim Directors. Pursuant to Section 1.3(b), the Company shall use
all reasonable efforts to cause a sufficient number of its current directors to
continue as Independent Directors of the Company until the Effective Time.

      6.7 Resignation of Directors. Prior to the Effective Time, the Company
shall cause each member of its Board of Directors and every member of the Board
of Directors of each subsidiary of the Company not designated by Parent pursuant
to Section 1.3, to execute and deliver a letter effectuating his or her
voluntary resignation as a director of the Board of Directors of the Company and
each of its subsidiaries effective immediately prior to the Effective Time.

      6.8 Rights Agreement. The Company has amended the Rights Agreement and
shall take such further action as may be necessary under the Rights Agreement to
render the Rights Agreement inapplicable to the negotiation and execution of
this Agreement, the Purchaser Option, the Stockholder Agreement, the Offer, the
Merger and any other Transaction. As soon as practicable on or after the date
hereof, but in any event no later than two (2) business days, the Company shall
register the Rights on Form 8-A and list the Rights for trading on the Nasdaq.

      6.9 Benefit Plans. Parent shall, from and after the Effective Time, (i)
until such time as employees of the Company are covered by or participating in
Parent's medical, dental, life and short- and long-term disability insurance and
401(k) plans, comply with the Company's medical, dental, life, short- and
long-term disability insurance and 401(k) plans in accordance with their terms
to the extent not inconsistent with applicable law, (ii) provide employees of
the Company who remain as employees of the Surviving Corporation with employee
benefit plans which are no less favorable in the aggregate than those provided
to similarly situated employees of Parent, (iii) provide employees of the
Company who remain as employees of the Surviving Corporation credit for years of
service with the Company or any of its subsidiaries prior to the Effective Time
for the purpose of eligibility and vesting pursuant to Parent's plans and
policies (but not for accrual of benefits to the extent that such credit would
result in a duplication of benefits), and (iv) cause any and all pre-existing
condition limitations (to the extent such limitations did not apply to a
pre-existing condition under comparable Company Employee Plans) and eligibility
waiting periods under group health plans of Parent to be waived with respect to
former employees of the Company who remain as employees of the Surviving
Corporation (and their eligible dependents) and who become participants in
similar group health plans of Parent or the


                                       48

Surviving Corporation. Former employees of the Company who remain as employees
of the Surviving Corporation shall also be given credit for any deductible or
co-payment amounts paid in respect of the plan year of Parent in which the
Effective Time occurs, to the extent, following the Effective Time, they
participate in any of Parent's plans during such plan year for which deductibles
or co-payments are required. Nothing in this Section 6.9 shall be interpreted as
preventing Parent or its subsidiaries from amending, modifying or terminating
any Company Employee Plans, or other contracts, arrangements, commitments or
understandings.

      6.10 Guarantee of Performance. Parent hereby guarantees the payment and
performance by Purchaser of all of its obligations under this Agreement.

                                  ARTICLE VII

                                   CONDITIONS

      7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction or written waiver at or prior to the
Closing Date of the following conditions:

               (a) Stockholder Approval. The Merger and this Agreement shall
have been approved and adopted by the requisite vote of the holders of the
Shares, to the extent required pursuant to the requirements of the Certificate
of Incorporation and the DGCL.

               (b) Statutes; Court Orders. No statute, rule or regulation shall
have been enacted or promulgated by any Governmental Entity which prohibits the
consummation of the Merger, and there shall be no order or injunction of a court
of competent jurisdiction in effect preventing consummation of the Merger.

               (c) Purchase of Shares in Offer. Purchaser shall have purchased,
or caused to be purchased, Shares pursuant to the Offer; provided, however, that
this condition shall be deemed to have been satisfied with respect to the
obligation of Parent and Purchaser to effect the Merger if Purchaser fails to
accept for payment or pay for Shares validly tendered pursuant to the Offer in
violation of the terms of the Offer or of this Agreement.

               (d) HSR Approval. The applicable waiting period under the HSR Act
and any comparable provisions under any applicable pre-merger notification laws
or regulations of foreign jurisdictions shall have expired or been terminated.


                                       49



                                  ARTICLE VIII

                        TERMINATION, AMENDMENT AND WAIVER

      8.1 Termination. This Agreement may be terminated and the Transactions may
be abandoned at any time before the Effective Time, whether before or after
stockholder approval thereof:

         (a) by mutual written consent duly authorized by the Board of Directors
of Parent and the Board of Directors of the Company; or

         (b) by either Parent or the Company (i) if a court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other action (including the failure to have taken an
action), in each case having the effect of permanently restraining, enjoining or
otherwise prohibiting any of the Transactions or (ii) if Purchaser has not
accepted and paid for the Shares pursuant to the Offer by December 31, 2003 (the
"Termination Date"); provided, however, that the right to terminate this
Agreement pursuant to this Section 8.1(b) shall not be available to any party
whose action or failure to fulfill any obligation under this Agreement has been
the principal cause of, or resulted in, the failure of the Offer to be
consummated by such date; or

         (c) by Parent if the Minimum Condition shall not have been satisfied by
the Initial Expiration Date (including any extensions thereof); provided,
however, that Parent shall not be entitled to terminate this Agreement pursuant
to this Section 8.1(c) if it or Purchaser is in material breach of its
representations and warranties, covenants or other agreements under this
Agreement and such breach has been the cause of, or resulted in, such failure to
satisfy the Minimum Condition; or

         (d) by Parent if (i) prior to the purchase of Shares pursuant to the
Offer, there has been a material breach by the Company of any representation,
warranty, covenant or agreement set forth in this Agreement, which breach is
reasonably likely to result in any condition set forth in Annex I not being
satisfied and such breach has not been cured or such condition has not been
satisfied within thirty (30) days after the receipt of notice thereof or such
breach is not reasonably capable of being cured or such condition is not
reasonably capable of being satisfied within such period or (ii) due to an
occurrence or circumstance that would result in a failure to satisfy any
condition set forth in Annex I hereto, Purchaser shall have (x) failed to
commence the Offer within sixty (60) days following the date of this Agreement,
(y) allowed the Offer to terminate without having accepted any Shares for
payment thereunder or (z) failed to accept Shares for payment pursuant to the
Offer prior to the Termination Date, unless such action or inaction under
clauses (x), (y) or (z) shall have been principally caused by or resulted from
the failure of either of Parent or Purchaser to perform, in any material
respect, any of its covenants or agreements contained in this Agreement, or the
breach by Parent of any of its representations or warranties contained in this
Agreement; or

         (e) by Parent, at any time prior to the purchase of the Shares pursuant
to the Offer, if (i) the Company Board of Directors shall have withdrawn,
modified, or changed its approval or recommendation in favor of this Agreement
or the Offer in a manner adverse to




                                       50



Parent or Purchaser, (ii) the Company Board of Directors or any committee
thereof shall have approved or recommended any Acquisition Proposal, (iii) a
tender or exchange offer relating to its securities shall have been commenced by
a person unaffiliated with Parent and it shall not have sent to its security
holders pursuant to Rule 14e-2 promulgated under the Exchange Act, within ten
(10) business days after such tender or exchange offer is first published, sent
or given, a statement disclosing that the Company Board of Directors recommends
rejection of such tender or exchange offer or (iv) the Company shall have
violated or breached in any material respect any of its obligations under
Section 5.2, unless there has been a material breach by Parent or Purchaser of
any representation, warranty, covenant or agreement contained in this Agreement
except to the extent such breach, together with all such breaches, does not and
would not be likely to have a material adverse effect on Parent's or Purchaser's
ability to consummate the Offer or the Merger; or

         (f) by the Company if (i) prior to the purchase of Shares pursuant to
the Offer that would represent a majority of the Shares on a Fully Diluted
Basis, there has been a material breach by Parent or Purchaser of any
representation, warranty, covenant or agreement contained in this Agreement
except to the extent such breach, together with all such breaches, does not and
would not be likely to have a material adverse effect on Parent's or Purchaser's
ability to consummate the Offer or the Merger (and such breach has not been
cured or such condition has not been satisfied within thirty (30) days after the
receipt of notice thereof or such breach is not reasonably capable of being
cured or such condition is not reasonably capable of being satisfied with such
period); or (ii) due to an occurrence or circumstance that would result in a
failure to satisfy any condition set forth in Annex I hereto, Purchaser shall
have (x) failed to commence the Offer within sixty (60) days following the date
of this Agreement, (y) allowed the Offer to terminate without having accepted
any Shares for payment hereunder or (z) failed to accept Shares for payment
pursuant to the Offer prior to the Termination Date, unless such action or
inaction under clauses (x), (y) or (z) shall have been principally caused by or
resulted from the failure of the Company to perform, in any material respect,
any of its covenants or agreements contained in this Agreement, or the material
breach by the Company of any of its representations or warranties contained in
this Agreement; or

         (g) by the Company pursuant to Section 5.2(d).

8.2 Effect of Termination.

         (a) In the event of the termination of this Agreement as provided in
Section 8.1, written notice thereof shall forthwith be given to the other party
or parties specifying the provision hereof pursuant to which such termination is
made, and this Agreement shall forthwith become null and void and there shall be
no liability on the part of Parent, Purchaser or the Company (or any of their
representatives), except (i) as set forth in this Section 8.2, Section 8.3 and
Article IX, each of which shall survive the termination of this Agreement and
(ii) nothing herein shall relieve any party from liability for any material
breach of this Agreement.

         (b) If (i) Parent shall have terminated this Agreement pursuant to
Section 8.1(e) or (ii) the Company shall have terminated this Agreement pursuant
to Section 8.1(g), then the Company shall pay to Parent promptly, but in no
event later than two (2) business days after the date of such termination if
pursuant to Section 8.1(e), or immediately prior thereto or concurrent


                                       51


therewith if pursuant to Section 8.1(g), a termination fee of $9.3 million (the
"Termination Fee"), plus an amount equal to the actual out-of-pocket expenses
(including, without limitation, legal, accounting and investment banking fees,
if any, and disbursements) incurred by Parent and Purchaser in connection with
the Offer, the Merger and this Agreement up to an aggregate amount of $1.0
million (the "Expense Fee"); provided, however, that in the event of termination
pursuant to Section 8.1(e)(i), (ii), or (iii) or 8.1(g), one-half of the
aggregate Termination Fee and Expense Fees (as the same may have been estimated
by Parent in good faith prior to the time such payment is due, with an
adjustment payment in cash upon Parent's definitive determination of the Expense
Fee) otherwise payable in cash may, at the election of the Company, instead be
paid pursuant to a promissory note and security agreement in the forms attached
hereto as Exhibit E, which note shall be executed and delivered within the time
periods otherwise provided herein.

         (c) If Parent shall have terminated this Agreement pursuant to Section
8.1(b)(ii) or 8.1(d)(i) and (i) prior to the termination of this Agreement a
bona fide Acquisition Proposal shall have been publicly announced or shall have
become publicly known and not withdrawn and (ii) within twelve (12) months
following the date of this Agreement an Acquisition Proposal with any party
other than Parent and Purchaser is announced or consummated, the Company shall
pay to Parent the Termination Fee and the Expense Fee promptly, but in no event
later than two (2) business days after the earlier of the announcement of the
Acquisition Agreement or the consummation of the acquisition; provided, however,
that one-half of the aggregate Termination Fee and Expense Fee (as the same may
have been estimated by Parent in good faith prior to the time such payment is
due, with an adjustment payment in cash upon Parent's definitive determination
of the Expense Fee) otherwise payable in cash may, at the election of the
Company, instead be paid pursuant to a promissory note and security agreement in
the forms attached hereto as Exhibit E, which note shall be executed and
delivered within the time periods otherwise provided herein. For the purposes of
this Section 8.2(c), the term "Acquisition Proposal" shall have the meaning set
forth in Section 5.2(a), except that the percentages set forth in such provision
shall be changed to 50%, and except that the events described in clause (iv)
thereof shall not be deemed to be Acquisition Proposals.

         (d) Except as provided above, the Company shall pay the Termination Fee
and the Expense Fee to Parent in cash by wire transfer in immediately available
funds to such account as Parent may designate to the Company in writing.

      8.3 Fees and Expenses. Except as provided in Section 8.2, all fees, costs
and expenses incurred in connection with this Agreement and the Transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Parent and the Company
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred in relation to the printing and filing with the SEC
of the Offer Documents, 14D-9 and Proxy Statement (including any preliminary
materials related thereto) and any amendments or supplements thereto, and the
filing of any documents required under the HSR Act.

                                       52


                                   ARTICLE IX

                               GENERAL PROVISIONS

      9.1 Non-Survival of Representations and Warranties. None of the
representations and warranties contained in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time, and only the covenants and exhibits that by their terms
survive the Effective Time and this Article IX shall survive the Effective Time.

      9.2 Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (c)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.

      9.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):

                       (a)  if to Parent or Purchaser:

                            Emulex Corporation
                            3535 Harbor Boulevard
                            Costa Mesa, California 92626
                            Attention:  Randall G. Wick
                                        Vice President, General Counsel
                            Telephone: (714) 662-5600
                            Facsimile:  (714) 641-0172

                            with a copy to:

                            Skadden, Arps, Slate, Meagher & Flom LLP
                            525 University Avenue, Suite 1100
                            Palo Alto, California  94301
                            Attention:  Gregory C. Smith
                            Telephone: (650) 470-4500
                            Facsimile:  (650) 470-4570

                       (b)  if to the Company:

                            Vixel Corporation
                            11911 North Creek Parkway South

                                       53


                            Bothell, Washington 98011
                            Attention: Kurtis L. Adams
                                       Chief Financial Officer
                            Telephone: (425) 806-4528
                            Facsimile: (425) 806-4001

                            with a copy to:

                            Heller Ehrman White & McAuliffe LLP
                            701 5th Avenue, Suite 6100
                            Seattle, Washington 98104
                            Attention:  David Wilson
                            Telephone:  (206) 447-0900
                            Facsimile:  (206) 447-0849

9.4 Interpretation; Certain Defined Terms.

         (a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement unless otherwise indicated. The words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.

         (b) For purposes of this Agreement, "affiliates" shall have the meaning
set forth in Rule 12b-2 of the Exchange Act.

         (c) For purposes of this Agreement, the term "group" shall have the
meaning set forth under Section 13(d) of the Exchange Act and the rules and
regulations thereunder.

         (d) For purposes of this Agreement, the term "knowledge" means (i) with
respect to any natural person, the actual knowledge of such person, and (ii)
with respect to any corporation or entity, the actual knowledge of such party's
officers and directors provided that such persons shall have made due and
diligent inquiry of those employees of such party whom such officers and
directors reasonably believe would have actual knowledge of the matters
represented.

         (e) For purposes of this Agreement, any reference to a "Material
Adverse Effect" with respect to any entity or group of entities means any event,
change, occurrence or development, individually or together with other events,
changes, occurrences or developments that (i) is materially adverse to the
condition (financial or otherwise), properties, assets (including intangible
assets), prospects, liabilities, business, operations or results of operations
of such entity and its subsidiaries, taken as a whole, or (ii) would prevent or
materially alter or delay any of the Transactions except, for each of (i) and
(ii) above, to the extent that no such


                                       54


event, change, occurrence or development results solely from changes in general
economic or market conditions, or from changes affecting the industry generally
in which the party operates and which do not affect such party
disproportionately; provided, that a Material Adverse Effect shall not include
an event, change, occurrence or development arising out of or resulting from
actions contemplated by the parties in connection with this Agreement or that is
directly attributable to the announcement, pendency or performance of this
Agreement or the transactions contemplated hereby (excluding any litigation
brought by stockholders or others in connection therewith).

         (f) For purposes of this Agreement, the term "person" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.

         (g) For purposes of this Agreement, a "subsidiary" of a specified
entity will be any corporation, partnership, limited liability company, joint
venture or other legal entity of which the specified entity (either alone or
through or together with any other subsidiary) owns, directly or indirectly,
fifty percent (50%) or more of the stock or other equity or partnership
interests the holders of which are generally entitled to vote for the election
of the Board of Directors or other governing body of such corporation or other
legal entity. Reference to the subsidiaries of an entity shall be deemed to
include all direct and indirect subsidiaries of such entity.

         (h) For purposes of this Agreement, "Transactions" shall mean all of
the transactions contemplated in this Agreement, including the Offer, the
Merger, the Purchaser Option, the Stockholder Agreement, the Non-Competition
Agreements and the transactions contemplated thereunder.

      9.5 Counterparts. This Agreement may be executed in two or more
counterparts, and by facsimile, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.

      9.6 Entire Agreement; Third Party Beneficiaries. This Agreement and the
exhibits, documents and instruments and other agreements among the parties
hereto as contemplated by or referred to herein, including the Company
Disclosure Letter (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the provisions of this Agreement
shall supersede any conflicting provisions of the Confidentiality Agreement; and
(b) are not intended to confer upon any other person any rights or remedies
hereunder, except as specifically provided in Section 6.4.

      9.7 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as


                                       55


reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.

      9.8 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.

      9.9 Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof; provided, however, that the laws of the respective jurisdictions of
incorporation of each of the parties shall govern the relative rights,
obligations, powers, duties and other internal affairs of such party and its
board of directors. Each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the Transactions; (b) agrees that it shall not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court and (c) agrees that it shall not bring any action relating
to this Agreement or any of the Transactions in any court other than the
Delaware Court of Chancery or a federal court sitting in the State of Delaware.

      9.10 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

      9.11 Assignment. This Agreement shall not be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the Purchaser may assign, in
its sole discretion and without the consent of any other party, any or all of
its rights, interests and obligations hereunder to (a) Parent, (b) to Parent and
one or more direct or indirect wholly-owned subsidiaries of Parent, or (c) to
one or more direct or indirect wholly-owned subsidiaries of Parent (each, an
"Assignee"); provided, however, that, to the extent required by Section 251 of
the DGCL in order for this Agreement, with such rights assigned, to be valid
from and after such assignment, such assignment shall be effective only after
(a) an appropriate amendment to this Agreement to effectuate such assignment
shall have been executed by the parties hereto and any such Assignee and (b)
such amendment, or this Agreement as so amended, shall have received all
approvals required by the DGCL. Subject to the preceding sentence, but without
relieving any party hereto of any obligation hereunder, this


                                       56


Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.

      9.12 Amendment and Modification. Subject to applicable law and as
otherwise provided in the Agreement, this Agreement may be amended, modified and
supplemented in any and all respects, whether before or after any vote of the
stockholders of the Company contemplated hereby, by written agreement of the
parties hereto, by action taken by their respective Boards of Directors or
equivalent governing bodies, but, after the purchase of Shares pursuant to the
Offer, no amendment shall be made which decreases the Merger Consideration and,
after the approval of this Agreement by the stockholders, no amendment shall be
made which by law requires further approval by such stockholders without
obtaining such further approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.

      9.13 No Waiver. No failure or delay on the part of any party hereto in the
exercise of any right hereunder will impair such right or be construed to be a
waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor will any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right.

      9.14 Waiver of Jury Trial. EACH OF PARENT, THE COMPANY AND PURCHASER
HEREBY IRREVOCABLY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENT OR ACTION
RELATED HERETO OR THERETO.

                     [REST OF PAGE INTENTIONALLY LEFT BLANK]


                                       57





IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized respective officers as of the date first written above.

                               EMULEX CORPORATION


                               By:     /s/ Paul Folino
                                      -------------------------
                               Name:  Paul Folino
                               Title: Chairman of the Board and
                                      Chief Executive Officer

                               AVIARY ACQUISITION CORP.


                               By:     /s/ Paul Folino
                                      -------------------------
                               Name:  Paul Folino
                               Title: President and Chief Executive Officer

                               VIXEL CORPORATION


                               By:     /s/ James M. McCluney
                                      -------------------------
                               Name:  James McCluney
                               Title: President and Chief Executive Officer



                                     ANNEX I

         Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), Purchaser shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-l(c) under
the Exchange Act (relating to Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any validly tendered Shares unless the
Minimum Condition shall have been satisfied. Furthermore, notwithstanding any
other provisions of the Offer, Purchaser shall not be required to accept for
payment or pay for any validly tendered Shares if, at the scheduled expiration
date (i) any applicable waiting periods under the HSR Act and any comparable
provisions under any applicable pre-merger notification laws or regulations of
foreign jurisdictions have not expired or terminated prior to termination of the
Offer, or (ii) any of the following events shall occur and be continuing:

         (a) there shall have been or be pending any suit, action or proceeding
by any Governmental Entity or any third party against Purchaser, Parent, the
Company or any Company subsidiary (i) seeking to prohibit or impose any material
limitations on Parent's or Purchaser's ownership or operation (or that of any of
their respective subsidiaries or affiliates) of all or any portion of their or
the Company's or the Company subsidiaries' businesses or assets, or to compel
Parent or Purchaser or their respective subsidiaries or affiliates to dispose of
or hold separate any material portion of the business or assets of the Company
or Parent or their respective subsidiaries, (ii) challenging the acquisition by
Parent or Purchaser of any Shares pursuant to the Offer, seeking to delay,
restrain or prohibit the making or consummation of the Offer, the exercise of
the Purchaser Option or the Merger or the performance of any of the other
Transactions contemplated by this Agreement, or seeking to obtain any damages in
connection with the Offer, the Merger or any Transaction contemplated by this
Agreement from the Company that are material in relation to the Company and the
Company's subsidiaries taken as a whole or from Parent or Purchaser that are
material in relation to the Company and the Company's subsidiaries taken as a
whole, (iii) seeking to impose limitations on the ability of Purchaser, or
render Purchaser unable, to accept for payment, pay for or purchase some or all
of the Shares pursuant to the Offer, the Purchaser Option, the Stockholder
Agreement or the Merger, (iv) seeking to impose material limitations on the
ability of Purchaser or Parent effectively to exercise full rights of ownership
of the Shares, including, without limitation, the right to vote the Shares
purchased by it on all matters properly presented to the Company's stockholders,
or (v) seeking to require divestiture by Parent or any of its subsidiaries or
affiliates of any Shares;

         (b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer, the Merger or any other Transaction, or any other action
shall be taken by any Governmental Entity, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;

                                     Annex
                                  Page 1 of 3



         (c) there shall have occurred and be continuing any suspension of
payments in respect of banks in the United States (whether or not mandatory);

         (d) any of the representations and warranties of the Company contained
in this Agreement shall not be true and correct in all material respects (other
than representations and warranties qualified by materiality or Material Adverse
Effect, which shall be true and correct in all respects) as of the date of this
Agreement and as of the date of any scheduled expiration of the Offer, except
for representations and warranties that relate to a specific date or time (which
need only be true and correct in all material respects as of such date or time)
and except for the representations and warranties in Section 3.2 (which shall be
true and correct in all respects other than de minimis variations with respect
to the number of securities outstanding, not to exceed 5,000 Shares and shares
issuable under the Company Options, the ESPP and outstanding Company Warrants);

         (e) since the date of this Agreement, there shall have occurred any
events or changes which have had, or which are reasonably expected to have or
constitute, individually or in the aggregate, a Material Adverse Effect on the
Company;

         (f) the Company Board of Directors or any committee thereof shall have
(i) withdrawn, or modified or changed in a manner adverse to the Transactions,
to the Parent or to Purchaser (including by amendment of the Schedule 14D-9),
its recommendation in favor of the Offer, the Merger Agreement, or the Merger or
shall have failed to make such favorable recommendation, (ii) approved or
recommended any third party Acquisition Proposal or entered into or publicly
announced its intention to enter into any agreement or agreement in principle
with respect to any third party Acquisition Proposal, (iii) resolved or publicly
proposed to do any of the foregoing; or (iv) taken a neutral position or made no
recommendation with respect to a third party Acquisition Proposal after a
reasonable amount of time (and in no event more than ten (10) business days
following receipt thereof) has elapsed for the Company Board of Directors or any
committee thereof to review and make a recommendation with respect thereto.

         (g) the Company shall have breached or failed, in any material respect,
to perform or to comply with any material agreement, obligation or covenant to
be performed or complied with by it under this Agreement;

         (h) Purchaser shall have failed to receive a certificate executed by
the Company's Chief Executive Officer or President on behalf of the Company,
dated as of the scheduled expiration of the Offer, to the effect that the
conditions set forth in paragraphs (d), (e), (f) and (g) of this Annex I have
not occurred;

         (i) any party to any Stockholder Agreement other than the Purchaser and
Parent shall be in breach of or have failed to perform any of its covenants or
agreements under such agreement or shall be in breach of any of its
representations and warranties in such agreement at the Initial Expiration Date
unless the Minimum Condition has been satisfied as of the Initial Expiration
Date;

         (j) all consents, permits and approvals of Governmental Authorities
shall not have been obtained;

                                     Annex
                                  Page 2 of 3


         (k) the Rights shall have become exercisable; or

         (l) the Merger Agreement shall have been terminated in accordance with
its terms.

         The foregoing conditions are for the sole benefit of Parent and
Purchaser, may be asserted by Parent or Purchaser regardless of the
circumstances (including any action or omission by Parent or any of its
affiliates) giving rise to such condition and, except for the Minimum Condition,
may be waived by Parent or Purchaser in whole or in part at any time and from
time to time and in the sole discretion of Parent or Purchaser, subject in each
case to the terms of this Agreement. The failure by Parent or Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and, each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.

         The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
annexed.

                                      Annex
                                   Page 3 of 3


                                                                       EXHIBIT A

                             STOCKHOLDERS AGREEMENT






     FILED AS EXHIBIT (D)(2) TO THE SCHEDULE TO, DATED OCTOBER 15, 2003, BY
EMULEX CORPORATION.






                                      A-1


                                                                       EXHIBIT B

                           PURCHASER OPTION AGREEMENT





     FILED AS EXHIBIT (D)(3) TO THE SCHEDULE TO, DATED OCTOBER 15, 2003, BY
EMULEX CORPORATION.






                                      B-1


                                                                     EXHIBIT C-1

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
October 8, 2003, by and between Emulex Corporation, a California corporation
(the "COMPANY") and [James M. McCluney] [Stuart B. Berman] ("EXECUTIVE"), a
shareholder and executive officer of Vixel Corporation, a Delaware Corporation
("VIXEL").

                                    RECITALS

         A.       Vixel and the Company are engaged in the business of providing
technologies and products for the storage networking infrastructure business,
including HBAs, fabric switches and storage networking semiconductor components
that are embedded in HBAs, fabric switches and storage appliances (including,
but not limited to, storage arrays, network attached storage, tape libraries and
virtualization appliances) that are contained in existing products of or
products under development by either the Company or Vixel (the "BUSINESS");

         B.       Executive is a stockholder and an executive officer of Vixel
and accordingly has acquired confidential and proprietary information relating
to the Business and the operation of Vixel;

         C.       Executive's covenant not to compete, as reflected in this
Agreement, is an essential part of the transactions described in the Agreement
and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and
among Emulex Corporation, a Delaware corporation and the Company's parent
corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to
which, among other things, the Sub will be merged with and into Vixel (the
"MERGER");

         D.       Executive holds a substantial number of stock options of Vixel
that will continue to vest and shall be exercisable for shares of common stock
of the Company following the Merger and therefore has a material economic
interest in the consummation of the Merger.

         E.       In order to protect the goodwill related to the Business and
as a condition of, and an inducement to, the Company entering into the Merger
Agreement, Executive has agreed to the noncompetition and nonsolicitation
covenants and the confidentiality agreements provided in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and to induce the
Company to consummate the transactions contemplated by the Merger Agreement, the
receipt and sufficiency of which are hereby acknowledged, and with the knowledge
that no other good or valuable consideration has been offered to or received by
Executive in connection with the execution of this Agreement, Executive hereby
covenants and agrees as follows:

                                      C1-1


         1.       Effectiveness of Agreement. This Agreement is conditioned upon
the occurrence of the (i) Closing (as that term is defined in the Merger
Agreement) and (ii) the offer of employment to Executive by the Company or any
of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This
Agreement shall be null and void ab initio should the Merger not be consummated
for any reason or should the Employment Commencement not occur. This Agreement
will terminate in the event of and concurrent with a termination of the Merger
Agreement in accordance with its terms.

         2.       Noncompetition.

                  (a)      Executive and the Company agree that due to the
nature of Executive's association with Vixel, Executive has confidential and
proprietary information relating to the business and operations of Vixel and the
Company (all references to the "Company" hereinafter shall include Vixel, which
shall be the surviving corporation in the Merger). Executive acknowledges that
such information is of extreme importance to the business of the Company and
will continue to be so after the Merger and that disclosure of such confidential
information to others or the unauthorized use of such information by others
would cause substantial loss and harm to the Company. Executive and the Company
also agree that Executive will continue to acquire, and will assist in
developing, confidential and proprietary information relating to the Business
following the Merger by reason of his employment with the Company.

                  (b)      Executive and the Company further agree that the
market for the Business is intensely competitive and that the Company engages in
the Business throughout the United States, Europe, Scandinavia, Japan, China,
Taiwan, Thailand, South Korea and Singapore.

                  (c)      (i) Subject to subparagraph (ii) below, during the
         period commencing at the Effective Time of the Merger and ending one
         (1) year following the termination of Executive's employment with the
         Company (including, without limitation, voluntary resignation by such
         Executive or termination at the request of the Company) (the
         "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in
         the Business Area (as defined below), engage, directly or indirectly,
         in any in any capacity whatsoever (whether as an officer, director,
         stockholder, owner, proprietor, partner, member, co-owner, investor,
         employee, trustee, manager, consultant, independent contractor,
         co-venturer, financier, agent, representative or otherwise), in a
         Competing Business (as defined below), or otherwise hold any interest
         in a Competing Business; provided, however, that Executive may own,
         directly or indirectly, solely as a passive investment, securities of
         any entity traded on any national securities exchange if Executive is
         not a controlling person of, or a member of a group which controls,
         such entity and does not, directly or indirectly, "beneficially own"
         (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) 1.0% or more of any class of securities of such Competing
         Business.

                  (ii)     In the event that the employment of Executive is
         terminated by the Company without Cause (as defined herein) within one
         (1) year of the Effective Time, then the Restricted Period shall
         terminate on the expiration of severance payments to Executive.

                                      C1-2


                  (d)      "COMPETING BUSINESS" as used herein, means any
individual, corporation, partnership, limited partnership, limited liability
company, trust (business or otherwise), institution, foundation, pool, plan or
other entity or organization (other than the Company) which engages or proposes
to engage in the Business.

                  (e)      "BUSINESS AREA" as used herein, means each state
within the United States of America as well as each country, state, province and
territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea
and Singapore.

                  (f)      "CAUSE" as used herein shall mean: (i) any
misappropriation or embezzlement by Executive of the property of the Company or
any of its affiliates or other act of fraud or material misconduct by Executive
against the Company or any of its affiliates; (ii) Executive's conviction of or
plea of guilty or nolo contendere to a crime constituting a felony or any
criminal act involving moral turpitude; (iii) a breach by Executive of any
provision of this Agreement; (iv) the failure, refusal or neglect by Executive
to perform faithfully the duties and obligations customary to his office; (v)
the habitual non-performance or incompetent performance by Executive of the
duties or responsibilities customary to his office; (vi) misconduct by
Executive, including insubordination, in respect of the duties or obligations
customary to his office; and (vii) any intentional or grossly negligent act by
Executive having the effect of materially injuring the business or reputation of
the Company or any of its affiliates. No activities covered by item (iv), (v)
and (vi) will be deemed to be "Cause" unless the Company has notified Executive
of the prohibited activity in writing and Executive has failed to cease such
activity within thirty (30) days.

         3.       Nonsolicitation of the Purchaser and Company Employees. During
the Restricted Period, Executive shall not, without the prior written consent of
the Company, directly or indirectly solicit, request, cause or induce any person
who is at the time an employee of or a consultant of the Company to leave the
employ of or otherwise terminate such person's relationship with the Company.

         4.       Nonsolicitation of Customers or Suppliers. During the
Restricted Period, Executive shall not, directly or indirectly: (i) solicit,
induce or attempt to induce any customer, client or supplier of the Company to
cease doing business in whole or in part with the Company; or (ii) attempt to
limit or interfere with any business engagement or relationship existing between
the Company and any third party.

         5.       Confidentiality. Executive agrees that, upon the Closing, he
will execute the Company's standard proprietary information and invention
assignment agreement (the "Employee Invention and Non-Disclosure Agreement"),
the form of which is attached as Annex A, and will abide by all of its terms.

         6.       Injunctive Relief. The parties agree that the remedy at law
for any breach of this Agreement is and will be inadequate, and in the event of
a breach or threatened breach by Executive of any of the provisions of this
Agreement, the Company shall be entitled to seek an injunction restraining
Executive from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting the Company from

                                      C1-3


pursuing any other remedies available to it or them for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive.

         7.       Reasonableness and Enforceability of Covenants. The parties
expressly agree that the character, duration and geographical scope of this
Agreement are reasonable in light of the circumstances as they exist on the date
upon which this Agreement has been executed, including, but not limited to,
Executive's position of confidence and trust as an executive officer of Vixel as
well as his employment with the Company after the Closing. Moreover, if any
court determines that any of the covenants and agreements contained herein, or
any part thereof, is unenforceable because of the character, duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.

         8.       Severability. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         9.       Construction. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Washington, without
regard to principles of conflicts or choice of laws.

         10.      Amendments and Waivers. This Agreement may be modified only by
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.

         11.      Entire Agreement. This Agreement, together with the Merger
Agreement and the documents, instruments and other agreements contemplated by or
referred to therein and the Employee Invention and Non-Disclosure Agreement,
contains the entire understanding of the parties relating to the subject matter
hereof, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument signed by each of the parties hereto.

         12.      Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.

         13.      Section Headings. The headings of each section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.

                                      C1-4


         14.      Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that the Company may assign
its rights hereunder, without the consent of Executive, to any entity that
acquires or succeeds to the Business.

         15.      Further Assurances. From time to time, at the Company's
request and without further consideration, Executive shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.

         16.      Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (a)      if to the Company:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attn: Randall G. Wick
                                 Vice President, General Counsel
                           Telephone No.: (714) 662-5600
                           Facsimile No.: (714) 641-0172

                  (b)      if to Executive:

                           c/o Vixel Corporation
                           11911 North Creek Parkway South
                           Bothell, Washington 98011
                           Telephone No.: (425) 806-4528
                           Facsimile No.: (425) 806-4001

         17.      Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Merger Agreement.

                                      C1-5


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

                                    EMULEX CORPORATION

                                    By: ________________________________________
                                        Name:  Paul Folino
                                        Title: Chairman of the Board and
                                               Chief Executive Officer

                                    ____________________________________________
                                    [James M. McCluney][Stuart B. Berman]

                                      C1-6


                                                                         ANNEX A

[EMULEX LOGO]

                 EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT

         This Employee Creation and Non-Disclosure Agreement (this "Agreement")
is entered into between Emulex Corporation ("Emulex") and the undersigned
Employee. In consideration of employment or continued employment by Emulex and
the mutual promises contained in this Agreement, Employee and Emulex agree as
follows:

                 Definition of Terms.

                  1.1      Creation. "Creation" means every idea, concept,
invention, device, design, apparatus, machine, practice, process, method,
product, composition of matter, improvement, formula, algorithm, literary or
graphical or audiovisual work or sound recording, mask work, or computer program
of any kind, whether or not subject to patent, copyright, mask work right, or
similar protection.

                  1.2      Create. "Create" means invent, develop, devise,
conceive, discover, create, first reduce to practice, write, or fix in a
tangible medium of expression.

                  1.3      Confidential Information. "Confidential Information"
means all Creations, data, information, know-how, process parameters,
fabrication techniques, technical plans, documentation, customer lists, price
lists, supplier lists, business plans, marketing plans, financial information,
and the like, in whatever form or medium, and whether or not designated or
marked "Confidential" or the like, which: (1) relate to the business of Emulex,
and (a) have not been disclosed by Emulex to, or (b) are not generally known to,
the general public or to Emulex's trade or industry; or (2) are received by
Emulex from a third party under an obligation of confidentiality to the third
party.

                  1.4      Emulex. "Emulex" includes Emulex Corporation, a
Delaware corporation, all of its subsidiaries, and all joint ventures and
partnerships of which such corporation and/or any of such subsidiaries is a
member, partner, or participant.

                 Confidential Information.

                  2.1      Acknowledgement by Employee. Employee acknowledges
that during Employee's employment with Emulex, Employee may be given access to,
become acquainted with, or develop Confidential Information.

                  2.2      No Use or Disclosure. Employee shall not use or
disclose (directly or indirectly) any Confidential Information (whether or not
created or developed by Employee) at any time or in any manner, except as
required in the course of employment with Emulex. Employee acknowledges that,
except as set forth on an exhibit attached by Employee to this Agreement,
Employee is not a party to any agreement with any other entity which either (1)
restricts Employee's use or disclosure of any information gained or learned by
Employee from the entity or while employed by the entity, or (2) otherwise
relates to Employee's use or disclosure of any confidential information or trade
secrets of the entity. Employee represents that no entity has asserted or is
asserting that Employee has breached any of the terms or provisions of any of
the agreements listed on the attached exhibit. The obligations of this Paragraph
are continuing and survive the termination of Employee's employment with Emulex.

                  2.3      Restriction on Documents and Equipment. All
Confidential Information, documents, and equipment relating to the business of
Emulex, whether prepared by Employee or otherwise coming into Employee's
possession, are the exclusive property of Emulex, and must not be removed from
any of its premises except as required in the course of employment with Emulex.
All such Confidential Information, documents, and equipment

                                      C1-7


shall be promptly returned by Employee to Emulex upon the request of Emulex, and
on any termination of Employee's employment with Emulex.

                  2.4      No Disclosure or Use from Others. Employee shall not
disclose to Emulex or use on behalf of Emulex any confidential information or
trade secrets obtained from other entities, and shall not bring confidential
information or trade secrets of other entities onto Emulex's premises.

                 Creations.

                  3.1      Disclosure and Assignment of Creations. Employee
shall promptly inform and disclose to Emulex all Creations which Employee
Creates (either alone or with others) while in the employment of Emulex, if the
Creations:

                  (1)      relate, at the time Created, to the business of
                  Emulex or to any actual or demonstrably anticipated research
                  or development work of Emulex; or

                  (2)      result from any work performed by Employee for
                  Emulex; or

                  (3)      were Created utilizing any of Emulex's equipment,
                  supplies, facilities, time, or Confidential Information.

ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK
PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR
HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS
OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE
PROPERTY OF EMULEX.

                  3.2      Governmental Rights. Employee acknowledges that
Emulex has entered or may enter into agreements with agencies of the United
States government, and that Emulex may be subject to laws and regulations which
impose obligations, restrictions, and limitations on Emulex with respect to
Creations which may be acquired by Emulex or which may be conceived or developed
by employees, consultants, and other agents rendering services to Emulex.
Employee shall be bound by all such obligations, restrictions, and limitations
applicable to any Creation of Employee. Employee also shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations. Employee further shall assign to Emulex
all of Employee's rights in any Creation of Employee if Emulex is required to
grant those rights to the United States government or any agencies of the United
States government.

                  3.3      Employee's Assistance. Employee agrees to assist
Emulex in obtaining and/or maintaining patents, copyrights, mask work rights,
and similar rights to any Creations assigned by Employee to Emulex if Emulex, in
its sole discretion, requests such assistance. Employee shall sign all documents
and do all other things deemed necessary by Emulex, at Emulex's expense, to
obtain and/or maintain such rights, to assign them to Emulex, to defend them
from invalidation, and to protect them against infringement by other parties.
The obligations of this Paragraph are continuing and survive the termination of
Employee's employment with Emulex. If Emulex requires Employee's assistance
under this Paragraph after termination of employment with Emulex, Employee will
be compensated for time actually spent in providing assistance at Employee's
hourly pay rate at the date of Employee's termination.

                  3.4      Appointment of Agent. Employee irrevocably appoints
the President of Emulex to act as Employee's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights, mask
work rights, and similar rights, to any Creations assigned by Employee to Emulex
under this Agreement if (1) Employee refuses to perform those acts, or (2) is
unavailable, within the meaning of any applicable laws. Employee acknowledges
that the grant of the foregoing power of attorney is coupled with an interest
and shall survive the death or disability of Employee.

                  3.5      Further Disclosure. Employee shall promptly disclose
to Emulex, in confidence, (1) all Creations of any kind which Employee Creates
while employed by Emulex, and (2) all patent applications filed by

                                      C1-8


Employee within one (1) year after termination of employment with Emulex.
Employee agrees that any application for a patent, copyright registration, mask
work registration, or similar right filed within one (1) year after termination
of employment with Emulex shall be presumed to relate to a Creation of Employee
Created during employment at Emulex, unless Employee can prove otherwise.

                  3.6      Records. Employee shall keep complete, accurate, and
authentic information and records on all Creations in the manner and form
requested by Emulex. The information and records, and all copies of them, shall
be the exclusive property of Emulex. Employee shall promptly surrender the
information and records upon the request of Emulex, and on any termination of
Employee's employment with Emulex.

                  3.7      Compliance with Labor Code. THIS AGREEMENT DOES NOT
APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870
OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S
INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW:

         "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                  (1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or

                  (2) Result from any work performed by the employee for the
employer.

         (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                 Restrictions on Employee.

                  4.1      No Conflicting Competition. While employed by Emulex,
Employee shall not in any manner (whether as an employee, consultant, or
otherwise) perform services for, or have an ownership interest in (other than
less than one percent (1%) of a publicly-held company), any entity that competes
with Emulex or any employment or business which is otherwise in conflict with
Employee's employment relationship with Emulex.

                  4.2      No Competitive Planning. While employed by Emulex,
Employee shall not undertake any planning for any outside business activity (1)
competitive with the work which Employee performs for Emulex, or (2) competitive
with the profit unit of Emulex for which Employee works.

                  4.3      No Hiring of Other Employees. While employed by
Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ,
or assist or encourage others in employing or attempting to employ (whether as
an employee, consultant, or otherwise), any of Emulex's other employees who work
in any area in which Employee has been significantly engaged on behalf of
Emulex.

                  4.4      No Use of Confidential Information. While employed by
Emulex, and for 1 year afterward, Employee shall not enter into any other
employment (whether as an employee, consultant, or otherwise) in which the
duties of such other employment would require Employee to disclose or use any
Confidential Information.

                  4.5      No Conflicting Agreements. Employee represents that
Employee has no agreements with or obligations to any other party that would
interfere with Employee's compliance with this Agreement.

                  4.6      Subsequent Employment. Employee agrees that Emulex
may notify anyone as to the existence and provisions of this Agreement.

                                      C1-9


                 Pre-existing Creations.

                  5.1      Representation of Coverage and Grant of License.
Except for those Creations (if any) specifically reserved by Employee in an
attachment to this Agreement, Employee represents that there are no Creations
owned wholly or in part by Employee, or controlled directly or indirectly by
Employee, which Employee considers to be reserved and excluded from the scope of
this Agreement. Employee grants to Emulex a royalty-free, non-exclusive,
worldwide, irrevocable license on any and all non-reserved Creations of
Employee.

                  5.2      Preservation of Confidence. In order to preserve
Employee's proprietary rights in any unpatented or unpublished reserved
Creations, Emulex shall keep in confidence all information provided by Employee
pertaining to any reserved Creation, unless the information: (1) is already
known to or in the possession of Emulex; (2) is or becomes publicly known
through no wrongful act of Emulex; (3) is rightfully received by Emulex from a
third party without breach of any obligation to Employee; (4) is approved for
release by written authorization of Employee; (5) is distributed or made
available to others by Employee without restriction as to use or disclosure; or
(6) is developed independently by Emulex through persons not involved with
information received by Emulex from Employee.

                  5.3      License from Use. Notwithstanding the reservation of
a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while
employed by Emulex, or (2) permits the use of a reserved Creation by another
employee of Emulex, and does not have a prior written agreement with Emulex
pertaining to such use, then Employee thereby grants to Emulex a royalty-free,
non-exclusive, worldwide, irrevocable license to that Creation (provided that
the reserved Creation is owned wholly or in part by Employee, or is within the
direct or indirect control of Employee at the time of employment).

                  5.4      Right of First Refusal. With respect to any reserved
Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right
of first refusal to purchase or license such Creations (unless otherwise
licensed to Emulex by any other terms of this Agreement) on terms at least as
favorable as offered to any other purchaser or licensee while Employee is
employed by Emulex.

                 General Provisions.

                  6.1      Attorneys' Fees. If any arbitration, litigation, or
other legal proceeding occurs between the parties relating to this Agreement,
the prevailing party shall be entitled to recover (in addition to any other
relief awarded or granted) his, her, or its reasonable costs and expenses
(including attorneys' fees) incurred in the proceeding and any appeal therefrom.

                  6.2      Entire Agreement. This Agreement, including all
referenced attachments, constitutes the complete and final agreement between the
parties, and supersedes all prior negotiations, agreements, and understandings
between the parties concerning its subject matter.

                  6.3      Successors and Assigns. This Agreement is intended to
benefit and is binding on (1) the successors and assigns of Emulex, and (2) the
heirs and legal successors of Employee.

                  6.4      Separate Enforcement of Provisions. If any provision
of this Agreement is held by a court or arbitrator of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
be enforced to the extent possible.

                  6.5      Governing Law. The validity, construction, and
performance of this Agreement is governed by the laws of the State of
California.

                  6.6      Right to Relief. If Employee breaches or threatens to
breach any provision of this Agreement, in addition to any other rights and
remedies Emulex may have, Emulex shall be entitled to temporary and permanent
injunctive relief to prevent the breach or threatened breach without the
necessity of proving actual damages or posting any bond or undertaking.

                                     C1-10


                  6.7      Waiver and Amendment. No waiver, amendment, or
modification of this Agreement shall be effective unless in writing and signed
by the party against whom the waiver, amendment, or modification is sought to be
enforced. No failure or delay by either party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of the right, power, or
remedy. No waiver of any term, condition, or breach of this Agreement shall be
construed as a waiver of any other term, condition, or breach.

                  Effective Date. This Agreement, no matter when signed by
Employee, is effective from the first date of Employee's employment with Emulex,
and shall survive the termination of Employee's employment with Emulex.

                  At Will Employment. Unless specifically provided differently
in a separate written agreement signed by an authorized agent of Emulex,
Employee acknowledges and agrees that Employee's employment by Emulex is now and
will continue to be throughout his or her employment with Emulex "AT WILL," and
can be terminated at any time by Emulex for any reason, with or without good
cause, and with or without prior warning or notice.

                  Acknowledgment of Reading. Employee acknowledges that Employee
has read and understands this Agreement, and has received a copy of it.

AGREED:                                           EMULEX CORPORATION

______________________________                    By:___________________________
Employee's signature

______________________________                    ______________________________
Employee's Name                                   Name

Dated:________________________                    ______________________________
                                                  Title

                                                  Dated:________________________

                                     C1-11


                                                                     EXHIBIT C-2

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
October 8, 2003, by and between Emulex Corporation, a California corporation
(the "COMPANY") and [Name of Executive] ("EXECUTIVE"), a shareholder and
executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL").

                                    RECITALS

         A.       Vixel is engaged in the business of providing technologies and
products for the storage networking infrastructure business, fabric switches and
storage networking semiconductor components that are embedded in fabric switches
and storage appliances (including, but not limited to, storage arrays, network
attached storage, tape libraries and virtualization appliances) that are
contained in existing products of or products under development by Vixel (the
"BUSINESS"); provided, that if Executive accepts an offer of employment with the
Company following the Merger, the definition of Business shall also include the
preceding Business of the Company as well as Vixel, including HBAs.

         B.       Executive is a stockholder and an executive officer of Vixel
and accordingly has acquired confidential and proprietary information relating
to the Business and the operation of Vixel;

         C.       Executive's covenant not to compete, as reflected in this
Agreement, is an essential part of the transactions described in the Agreement
and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and
among Eagle Corporation, a Delaware corporation and the Company's parent
corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to
which, among other things, the Sub will be merged with and into Vixel (the
"MERGER");

         D.       Executive holds a substantial number of stock options of Vixel
that will continue to vest and shall be exercisable for shares of common stock
of the Company following the Merger and therefore has a material economic
interest in the consummation of the Merger.

         E.       In order to protect the goodwill related to the Business and
as a condition of, and an inducement to, the Company entering into the Merger
Agreement, Executive has agreed to the noncompetition and nonsolicitation
covenants and the confidentiality agreements provided in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and to induce the
Company to consummate the transactions contemplated by the Merger Agreement, the
receipt and sufficiency of which are hereby acknowledged, and with the knowledge
that no other good or valuable consideration has been offered to or received by
Executive in connection with the execution of this Agreement, Executive hereby
covenants and agrees as follows:

                                      C2-1



         1.       Effectiveness of Agreement. This Agreement is conditioned upon
the occurrence of the (i) Closing (as that term is defined in the Merger
Agreement) and (ii) a bone fide offer of employment to Executive by the Company
or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This
Agreement shall be null and void ab initio should the Merger not be consummated
for any reason or should the Employment Commencement not occur. This Agreement
will terminate in the event of and concurrent with a termination of the Merger
Agreement in accordance with its terms.

         2.       Noncompetition.

                  (a)      Executive and the Company agree that due to the
nature of Executive's association with Vixel, Executive has confidential and
proprietary information relating to the business and operations of Vixel and the
Company (all references to the "Company" hereinafter shall include Vixel, which
shall be the surviving corporation in the Merger). Executive acknowledges that
such information is of extreme importance to the business of the Company and
will continue to be so after the Merger and that disclosure of such confidential
information to others or the unauthorized use of such information by others
would cause substantial loss and harm to the Company. Executive and the Company
also agree that Executive will continue to acquire, and will assist in
developing, confidential and proprietary information relating to the Business
following the Merger by reason of his employment with the Company.

                  (b)      Executive and the Company further agree that the
market for the Business is intensely competitive and that the Company engages in
the Business throughout the United States, Europe, Scandinavia, Japan, China,
Taiwan, Thailand, South Korea and Singapore.

                  (c)      (i) Subject to subparagraph (ii) below, during the
         period commencing at the Effective Time of the Merger and ending one
         (1) year following the termination of Executive's employment with the
         Company (including, without limitation, voluntary resignation by such
         Executive or termination at the request of the Company) (the
         "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in
         the Business Area (as defined below), engage, directly or indirectly,
         in any in any capacity whatsoever (whether as an officer, director,
         stockholder, owner, proprietor, partner, member, co-owner, investor,
         employee, trustee, manager, consultant, independent contractor,
         co-venturer, financier, agent, representative or otherwise), in a
         Competing Business (as defined below), or otherwise hold any interest
         in a Competing Business; provided, however, that Executive may own,
         directly or indirectly, solely as a passive investment, securities of
         any entity traded on any national securities exchange if Executive is
         not a controlling person of, or a member of a group which controls,
         such entity and does not, directly or indirectly, "beneficially own"
         (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) 1.0% or more of any class of securities of such Competing
         Business.

                  (ii)     In the event that the employment of Executive is
         terminated by the Company without Cause (as defined herein) within one
         (1) year of the Effective Time, then the Restricted Period shall
         terminate on the expiration of severance payments to Executive.

                                      C2-2



                  (d)      "COMPETING BUSINESS" as used herein, means any
individual, corporation, partnership, limited partnership, limited liability
company, trust (business or otherwise), institution, foundation, pool, plan or
other entity or organization (other than the Company) which engages or has
publicly announced that it proposes to engage in the Business.

                  (e)      "BUSINESS AREA" as used herein, means each state
within the United States of America as well as each country, state, province and
territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea
and Singapore.

                  (f)      "CAUSE" as used herein shall mean: (i) any
misappropriation or embezzlement by Executive of the property of the Company or
any of its affiliates or other act of fraud or material misconduct by Executive
against the Company or any of its affiliates; (ii) Executive's conviction of or
plea of guilty or nolo contendere to a crime constituting a felony or any
criminal act involving moral turpitude; (iii) a breach by Executive of any
provision of this Agreement; (iv) the failure, refusal or neglect by Executive
to perform faithfully the duties and obligations customary to his office; (v)
the habitual non-performance or incompetent performance by Executive of the
duties or responsibilities customary to his office; (vi) misconduct by
Executive, including insubordination, in respect of the duties or obligations
customary to his office; and (vii) any intentional or grossly negligent act by
Executive having the effect of materially injuring the business or reputation of
the Company or any of its affiliates. No activities covered by item (iv), (v)
and (vi) will be deemed to be "Cause" unless the Company has notified Executive
of the prohibited activity in writing and Executive has failed to cease such
activity within thirty (30) days.

         3.       Nonsolicitation of the Purchaser and Company Employees. During
the Restricted Period, Executive shall not, without the prior written consent of
the Company, directly or indirectly solicit, request, cause or induce any person
who is at the time an employee of or a consultant of the Company to leave the
employ of or otherwise terminate such person's relationship with the Company.

         4.       Nonsolicitation of Customers or Suppliers. During the
Restricted Period, Executive shall not, directly or indirectly: (i) solicit,
induce or attempt to induce any customer, client or supplier of the Company to
cease doing business in whole or in part with the Company; or (ii) attempt to
limit or interfere with any business engagement or relationship existing between
the Company and any third party.

         5.       Confidentiality. Executive agrees that, upon the Closing, he
will execute the Company's standard proprietary information and invention
assignment agreement (the "Employee Invention and Non-Disclosure Agreement"),
the form of which is attached as Annex A, and will abide by all of its terms.

         6.       Injunctive Relief. The parties agree that the remedy at law
for any breach of this Agreement is and will be inadequate, and in the event of
a breach or threatened breach by Executive of any of the provisions of this
Agreement, the Company shall be entitled to seek an injunction restraining
Executive from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting the Company from

                                      C2-3



pursuing any other remedies available to it or them for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive.

         7.       Reasonableness and Enforceability of Covenants. The parties
expressly agree that the character, duration and geographical scope of this
Agreement are reasonable in light of the circumstances as they exist on the date
upon which this Agreement has been executed, including, but not limited to,
Executive's position of confidence and trust as an executive officer of Vixel as
well as his employment with the Company after the Closing. Moreover, if any
court determines that any of the covenants and agreements contained herein, or
any part thereof, is unenforceable because of the character, duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.

         8.       Severability. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         9.       Construction. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Washington, without
regard to principles of conflicts or choice of laws.

         10.      Amendments and Waivers. This Agreement may be modified only by
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.

         11.      Entire Agreement. This Agreement, together with the Merger
Agreement and the documents, instruments and other agreements contemplated by or
referred to therein and the Employee Invention and Non-Disclosure Agreement,
contains the entire understanding of the parties relating to the subject matter
hereof, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument signed by each of the parties hereto.

         12.      Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.

         13.      Section Headings. The headings of each section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.

                                      C2-4



         14.      Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that the Company may assign
its rights hereunder, without the consent of Executive, to any entity that
acquires or succeeds to the Business.

         15.      Further Assurances. From time to time, at the Company's
request and without further consideration, Executive shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.

         16.      Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (a)      if to the Company:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attn: Randall G. Wick
                                 Vice President, General Counsel
                          Telephone No.: (714) 662-5600
                          Facsimile No.: (714) 641-0172

                  (b)     if to Executive:

                          c/o Vixel Corporation
                          11911 North Creek Parkway South
                          Bothell, Washington 98011
                          Telephone No.: (425) 806-4528
                          Facsimile No.: (425) 806-4001

         17.      Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Merger Agreement.

                                      C2-5



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

                                            EMULEX CORPORATION

                                            By: ________________________________
                                                Name:  Paul Folino
                                                Title: Chairman of the Board and
                                                       Chief Executive Officer

                                            ____________________________________
                                            [NAME OF EXECUTIVE]

                                      C2-6



                                                                         ANNEX A

[EMULEX LOGO]

                 EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT

         This Employee Creation and Non-Disclosure Agreement (this "Agreement")
is entered into between Emulex Corporation ("Emulex") and the undersigned
Employee. In consideration of employment or continued employment by Emulex and
the mutual promises contained in this Agreement, Employee and Emulex agree as
follows:

                 Definition of Terms.

                  1.1      Creation. "Creation" means every idea, concept,
invention, device, design, apparatus, machine, practice, process, method,
product, composition of matter, improvement, formula, algorithm, literary or
graphical or audiovisual work or sound recording, mask work, or computer program
of any kind, whether or not subject to patent, copyright, mask work right, or
similar protection.

                  1.2      Create. "Create" means invent, develop, devise,
conceive, discover, create, first reduce to practice, write, or fix in a
tangible medium of expression.

                  1.3      Confidential Information. "Confidential Information"
means all Creations, data, information, know-how, process parameters,
fabrication techniques, technical plans, documentation, customer lists, price
lists, supplier lists, business plans, marketing plans, financial information,
and the like, in whatever form or medium, and whether or not designated or
marked "Confidential" or the like, which: (1) relate to the business of Emulex,
and (a) have not been disclosed by Emulex to, or (b) are not generally known to,
the general public or to Emulex's trade or industry; or (2) are received by
Emulex from a third party under an obligation of confidentiality to the third
party.

                  1.4      Emulex. "Emulex" includes Emulex Corporation, a
Delaware corporation, all of its subsidiaries, and all joint ventures and
partnerships of which such corporation and/or any of such subsidiaries is a
member, partner, or participant.

                 Confidential Information.

                  2.1      Acknowledgement by Employee. Employee acknowledges
that during Employee's employment with Emulex, Employee may be given access to,
become acquainted with, or develop Confidential Information.

                  2.2      No Use or Disclosure. Employee shall not use or
disclose (directly or indirectly) any Confidential Information (whether or not
created or developed by Employee) at any time or in any manner, except as
required in the course of employment with Emulex. Employee acknowledges that,
except as set forth on an exhibit attached by Employee to this Agreement,
Employee is not a party to any agreement with any other entity which either (1)
restricts Employee's use or disclosure of any information gained or learned by
Employee from the entity or while employed by the entity, or (2) otherwise
relates to Employee's use or disclosure of any confidential information or trade
secrets of the entity. Employee represents that no entity has asserted or is
asserting that Employee has breached any of the terms or provisions of any of
the agreements listed on the attached exhibit. The obligations of this Paragraph
are continuing and survive the termination of Employee's employment with Emulex.

                  2.3      Restriction on Documents and Equipment. All
Confidential Information, documents, and equipment relating to the business of
Emulex, whether prepared by Employee or otherwise coming into Employee's
possession, are the exclusive property of Emulex, and must not be removed from
any of its premises except as required in the course of employment with Emulex.
All such Confidential Information, documents, and equipment

                                      C2-7



shall be promptly returned by Employee to Emulex upon the request of Emulex, and
on any termination of Employee's employment with Emulex.

                  2.4      No Disclosure or Use from Others. Employee shall not
disclose to Emulex or use on behalf of Emulex any confidential information or
trade secrets obtained from other entities, and shall not bring confidential
information or trade secrets of other entities onto Emulex's premises.

                 Creations.

                  3.1      Disclosure and Assignment of Creations. Employee
shall promptly inform and disclose to Emulex all Creations which Employee
Creates (either alone or with others) while in the employment of Emulex, if the
Creations:

                  (1)      relate, at the time Created, to the business of
                  Emulex or to any actual or demonstrably anticipated research
                  or development work of Emulex; or

                  (2)      result from any work performed by Employee for
                  Emulex; or

                  (3)      were Created utilizing any of Emulex's equipment,
                  supplies, facilities, time, or Confidential Information.

ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK
PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR
HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS
OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE
PROPERTY OF EMULEX.

                  3.2      Governmental Rights. Employee acknowledges that
Emulex has entered or may enter into agreements with agencies of the United
States government, and that Emulex may be subject to laws and regulations which
impose obligations, restrictions, and limitations on Emulex with respect to
Creations which may be acquired by Emulex or which may be conceived or developed
by employees, consultants, and other agents rendering services to Emulex.
Employee shall be bound by all such obligations, restrictions, and limitations
applicable to any Creation of Employee. Employee also shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations. Employee further shall assign to Emulex
all of Employee's rights in any Creation of Employee if Emulex is required to
grant those rights to the United States government or any agencies of the United
States government.

                  3.3      Employee's Assistance. Employee agrees to assist
Emulex in obtaining and/or maintaining patents, copyrights, mask work rights,
and similar rights to any Creations assigned by Employee to Emulex if Emulex, in
its sole discretion, requests such assistance. Employee shall sign all documents
and do all other things deemed necessary by Emulex, at Emulex's expense, to
obtain and/or maintain such rights, to assign them to Emulex, to defend them
from invalidation, and to protect them against infringement by other parties.
The obligations of this Paragraph are continuing and survive the termination of
Employee's employment with Emulex. If Emulex requires Employee's assistance
under this Paragraph after termination of employment with Emulex, Employee will
be compensated for time actually spent in providing assistance at Employee's
hourly pay rate at the date of Employee's termination.

                  3.4      Appointment of Agent. Employee irrevocably appoints
the President of Emulex to act as Employee's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights, mask
work rights, and similar rights, to any Creations assigned by Employee to Emulex
under this Agreement if (1) Employee refuses to perform those acts, or (2) is
unavailable, within the meaning of any applicable laws. Employee acknowledges
that the grant of the foregoing power of attorney is coupled with an interest
and shall survive the death or disability of Employee.

                  3.5      Further Disclosure. Employee shall promptly disclose
to Emulex, in confidence, (1) all Creations of any kind which Employee Creates
while employed by Emulex, and (2) all patent applications filed by Employee
within one (1) year after termination of employment with Emulex. Employee agrees
that any application

                                      C2-8



for a patent, copyright registration, mask work registration, or similar right
filed within one (1) year after termination of employment with Emulex shall be
presumed to relate to a Creation of Employee Created during employment at
Emulex, unless Employee can prove otherwise.

                  3.6      Records. Employee shall keep complete, accurate, and
authentic information and records on all Creations in the manner and form
requested by Emulex. The information and records, and all copies of them, shall
be the exclusive property of Emulex. Employee shall promptly surrender the
information and records upon the request of Emulex, and on any termination of
Employee's employment with Emulex.

                  3.7      Compliance with Labor Code. THIS AGREEMENT DOES NOT
APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870
OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S
INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW:

         "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                  (1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or

                  (2) Result from any work performed by the employee for the
employer.

         (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                 Restrictions on Employee.

                  4.1      No Conflicting Competition. While employed by Emulex,
Employee shall not in any manner (whether as an employee, consultant, or
otherwise) perform services for, or have an ownership interest in (other than
less than one percent (1%) of a publicly-held company), any entity that competes
with Emulex or any employment or business which is otherwise in conflict with
Employee's employment relationship with Emulex.

                  4.2      No Competitive Planning. While employed by Emulex,
Employee shall not undertake any planning for any outside business activity (1)
competitive with the work which Employee performs for Emulex, or (2) competitive
with the profit unit of Emulex for which Employee works.

                  4.3      No Hiring of Other Employees. While employed by
Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ,
or assist or encourage others in employing or attempting to employ (whether as
an employee, consultant, or otherwise), any of Emulex's other employees who work
in any area in which Employee has been significantly engaged on behalf of
Emulex.

                  4.4      No Use of Confidential Information. While employed by
Emulex, and for 1 year afterward, Employee shall not enter into any other
employment (whether as an employee, consultant, or otherwise) in which the
duties of such other employment would require Employee to disclose or use any
Confidential Information.

                  4.5      No Conflicting Agreements. Employee represents that
Employee has no agreements with or obligations to any other party that would
interfere with Employee's compliance with this Agreement.

                  4.6      Subsequent Employment. Employee agrees that Emulex
may notify anyone as to the existence and provisions of this Agreement.

                                      C2-9



                 Pre-existing Creations.

                  5.1      Representation of Coverage and Grant of License.
Except for those Creations (if any) specifically reserved by Employee in an
attachment to this Agreement, Employee represents that there are no Creations
owned wholly or in part by Employee, or controlled directly or indirectly by
Employee, which Employee considers to be reserved and excluded from the scope of
this Agreement. Employee grants to Emulex a royalty-free, non-exclusive,
worldwide, irrevocable license on any and all non-reserved Creations of
Employee.

                  5.2      Preservation of Confidence. In order to preserve
Employee's proprietary rights in any unpatented or unpublished reserved
Creations, Emulex shall keep in confidence all information provided by Employee
pertaining to any reserved Creation, unless the information: (1) is already
known to or in the possession of Emulex; (2) is or becomes publicly known
through no wrongful act of Emulex; (3) is rightfully received by Emulex from a
third party without breach of any obligation to Employee; (4) is approved for
release by written authorization of Employee; (5) is distributed or made
available to others by Employee without restriction as to use or disclosure; or
(6) is developed independently by Emulex through persons not involved with
information received by Emulex from Employee.

                  5.3      License from Use. Notwithstanding the reservation of
a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while
employed by Emulex, or (2) permits the use of a reserved Creation by another
employee of Emulex, and does not have a prior written agreement with Emulex
pertaining to such use, then Employee thereby grants to Emulex a royalty-free,
non-exclusive, worldwide, irrevocable license to that Creation (provided that
the reserved Creation is owned wholly or in part by Employee, or is within the
direct or indirect control of Employee at the time of employment).

                  5.4      Right of First Refusal. With respect to any reserved
Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right
of first refusal to purchase or license such Creations (unless otherwise
licensed to Emulex by any other terms of this Agreement) on terms at least as
favorable as offered to any other purchaser or licensee while Employee is
employed by Emulex.

                 General Provisions.

                  6.1      Attorneys' Fees. If any arbitration, litigation, or
other legal proceeding occurs between the parties relating to this Agreement,
the prevailing party shall be entitled to recover (in addition to any other
relief awarded or granted) his, her, or its reasonable costs and expenses
(including attorneys' fees) incurred in the proceeding and any appeal therefrom.

                  6.2      Entire Agreement. This Agreement, including all
referenced attachments, constitutes the complete and final agreement between the
parties, and supersedes all prior negotiations, agreements, and understandings
between the parties concerning its subject matter.

                  6.3      Successors and Assigns. This Agreement is intended to
benefit and is binding on (1) the successors and assigns of Emulex, and (2) the
heirs and legal successors of Employee.

                  6.4      Separate Enforcement of Provisions. If any provision
of this Agreement is held by a court or arbitrator of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
be enforced to the extent possible.

                  6.5      Governing Law. The validity, construction, and
performance of this Agreement is governed by the laws of the State of
California.

                  6.6      Right to Relief. If Employee breaches or threatens to
breach any provision of this Agreement, in addition to any other rights and
remedies Emulex may have, Emulex shall be entitled to temporary and permanent
injunctive relief to prevent the breach or threatened breach without the
necessity of proving actual damages or posting any bond or undertaking.

                                     C2-10



                  6.7      Waiver and Amendment. No waiver, amendment, or
modification of this Agreement shall be effective unless in writing and signed
by the party against whom the waiver, amendment, or modification is sought to be
enforced. No failure or delay by either party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of the right, power, or
remedy. No waiver of any term, condition, or breach of this Agreement shall be
construed as a waiver of any other term, condition, or breach.

                 Effective Date. This Agreement, no matter when signed by
Employee, is effective from the first date of Employee's employment with Emulex,
and shall survive the termination of Employee's employment with Emulex.

                 At Will Employment. Unless specifically provided differently
in a separate written agreement signed by an authorized agent of Emulex,
Employee acknowledges and agrees that Employee's employment by Emulex is now and
will continue to be throughout his or her employment with Emulex "AT WILL," and
can be terminated at any time by Emulex for any reason, with or without good
cause, and with or without prior warning or notice.

                  Acknowledgment of Reading. Employee acknowledges that Employee
has read and understands this Agreement, and has received a copy of it.

AGREED:                                     EMULEX CORPORATION

________________________________            By:_____________________________
Employee's signature

________________________________            ________________________________
Employee's Name                             Name

Dated:__________________________            ________________________________
                                            Title

                                            Dated:__________________________


                                     C2-11



                                                                       EXHIBIT D

                          CERTIFICATE OF INCORPORATION

                                       OF

                                Vixel Corporation

                  FIRST: The name of the Corporation is Vixel Corporation (the
"Corporation").

                  SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at that
address is The Corporation Trust Company.

                  THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of the State of Delaware as set forth in Title 8 of the
Delaware Code (the "GCL").

                  FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 10,000 shares, all of which shall
be Common Stock, each share having a par value of $0.001.

                  FIFTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:

         (1) The business and affairs of the Corporation shall be managed by or
         under the direction of the Board of Directors.

         (2) The directors shall have concurrent power with the stockholders to
         make, alter, amend, change, add to or repeal the By-Laws of the
         Corporation.

         (3) The number of directors of the Corporation shall be as from time to
         time fixed by, or in the manner provided in, the By-Laws of the
         Corporation. Election of directors need not be by written ballot unless
         the By-Laws so provide.

         (4) The liability of the directors for monetary damages shall be
         eliminated to the fullest extent under applicable law. Any repeal or
         modification of this Article FIFTH shall be prospective and shall not
         affect the rights

                                       D-1



         under this Article FIFTH in effect at the time of the alleged
         occurrence of any act or omission to act giving rise to liability or
         indemnification.

         (5) In addition to the powers and authority hereinbefore or by statute
         expressly conferred upon them, the directors are hereby empowered to
         exercise all such powers and do all such acts and things as may be
         exercised or done by the Corporation, subject, nevertheless, to the
         provisions of the GCL, this Certificate of Incorporation, and any
         By-Laws adopted by the stockholders; provided, however, that no By-Laws
         hereafter adopted by the stockholders shall invalidate any prior act of
         the directors which would have been valid if such By-Laws had not been
         adopted.

                  SIXTH: Meetings of stockholders of the Corporation may be held
within or without the State of Delaware, as the By-Laws may provide. The books
of the Corporation may be kept (subject to any provision contained in the GCL)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the By-Laws of the Corporation.

                  SEVENTH: The Corporation may indemnify to the fullest extent
permitted by law any person (including the representative of such person's
estate and such person's successors and assigns) made or threatened to be made a
party to an action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director, officer or
employee of the Corporation or served at any other enterprise as a director,
officer or employee at the request of the Corporation, and in relation thereto
advance expenses to any such person.

Neither any amendment nor repeal of this Article SEVENTH nor the adoption of any
provision of the Corporation's Certificate of Incorporation inconsistent with
this Article SEVENTH shall eliminate or reduce the effect of this Article
SEVENTH in respect of any matter occurring, or any action or proceeding accruing
or arising or that, but for this Article SEVENTH, would accrue or arise, prior
to such amendment, repeal or adoption of an inconsistent provision.

                  EIGHTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.

                                      D-2



                                                                     EXHIBIT E-1

                             SECURED PROMISSORY NOTE

                                       OF

                                VIXEL CORPORATION

[DATE]

                  Reference is hereby made to that certain Agreement and Plan of
Merger (the "Merger Agreement") entered into as of October 8, 2003 by and among
Emulex Corporation, a Delaware corporation ("Lender"), Aviary Acquisition Corp.,
a Delaware corporation and a wholly-owned subsidiary of Parent ("Purchaser"),
and Vixel Corporation, a Delaware corporation (the "Borrower"). Capitalized
terms used herein, but not defined herein, shall have the respective meanings
defined in the Merger Agreement.

                  For value received and pursuant to Section 8.2 of the Merger
Agreement, the Borrower hereby promises to pay to the order Lender the principal
sum amount equal to [$_____ ($_____)],(1) together with accrued and unpaid
interest thereon from the date hereof, in lawful money of the United States of
America, on the date that is the earliest to occur of (a) 180 calendar days from
the date hereof, (b) the consummation of an acquisition as described in Section
8.2(c) of the Merger Agreement and (c) an Event of Default as provided in
Section 5(b) hereof.

                  1.       Interest. The outstanding principal amount of this
Note, together with all accrued and unpaid interest thereon, shall bear interest
at a rate per annum equal to four percent (4%), compounding annually. Interest
shall be calculated on the basis of a year comprised of twelve (12) thirty (30)
day months. Payments received by Lender shall be applied first to the payment of
accrued but unpaid interest on this Note and then to the reduction of the unpaid
principal balance of this Note.

                  2.       Method of Payment. All payments hereunder shall be
made to the Lender at the principal office of the Lender or at such other place,
or by such other means, as the Lender shall designate to the Borrower in
writing. If any payment of principal or interest on this Note is due on a day
which is not a Business Day, such payment shall be due on the next succeeding
Business Day, and such extension of time shall be taken into account in
calculating the amount of interest payable under this Note. "Business Day" means
any day other than a Saturday, Sunday or legal holiday in the State of
California.

                  3.       Prepayment. The Borrower shall have the right to
prepay the principal amount hereof in full or in part and/or any portion of the
accrued but unpaid interest then owing, at any time and from time to time,
without premium or penalty. Each partial prepayment of this

- ------------------------
(1) One-half of the aggregate Termination Fee and Expense Fee (as the same may
    have been estimated by Parent in good faith prior to the date of this Note,
    with an adjustment payment in cash upon Parent's definitive determination
    of the Expense Fee).

                                      E1-1



Note shall first be applied to interest accrued through the date of prepayment
and then to principal.

                  4.       Security. Pursuant to the Security Agreement, dated
on the date hereof (the "Security Agreement"), by and between the Lender and the
Borrower, the obligations of the Borrower hereunder are secured by the
Collateral (as defined in the Security Agreement), and the holder of this Note
is entitled to the Proceeds (as defined in the Security Agreement).

                  5.       Events of Default.

                           (a)      Each of the following shall constitute an
event of default ("Event of Default") hereunder: (i) the Borrower's failure to
observe or perform any material covenant or agreement contained in this Note or
the Security Agreement which failure continues for thirty (30) calendar days
after receipt by the Borrower of written notice from the Lender of such failure;
(ii) any proceeding shall be commenced or any petition shall be filed seeking
relief with respect to Borrower under any bankruptcy, insolvency or similar law;
(iii) a receiver, trustee, custodian, sequestrator or similar official shall be
appointed with respect to Borrower or any of its property; or (iv) the
dissolution or termination of existence of the Borrower; or (v) the acceleration
of the maturity of any indebtedness of the Borrower for borrowed money having an
aggregate principal amount of at least $550,000.

                           (b)      Upon the occurrence of an Event of Default,
the Lender may at its option by written notice to the Borrower declare this Note
and the principal of and accrued interest on this Note and all other charges
owing to the Lender to be, and the same shall forthwith become, immediately due
and payable; provided, however, that upon the occurrence of an Event of Default
set forth in any of clauses (ii), (iii) or (iv) of Section 5(a) above, the
entire unpaid principal of and accrued interest on this Note shall automatically
become immediately due and payable without the need for any notice to the
Borrower or other action or election by Lender, all of which are hereby waived.
Upon the occurrence of an Event of Default, the Lender, may, in addition to all
rights and remedies available to it at law, exercise any or all of its rights
under the Security Agreement.

                           (c)      In the event of an Event of Default, the
Borrower shall pay on demand, in addition to the principal and interest payable
hereunder, all reasonable attorneys' fees and disbursements and court costs
incurred by the Lender in connection with the enforcement and collecting this
Note.

                           (d)      Borrower covenants and agrees that until
this Note is paid in full it will promptly after the occurrence of an Event of
Default or an event, act or condition that, with notice or lapse of time or
both, would constitute an Event of Default, provide Lender with a certificate of
the chief executive officer or chief financial officer of Borrower specifying
the nature thereof.

                  6.       Representations and Warranties. Borrower hereby
represents and warrants to Lender that:

                           (a)      it is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and

                                      E1-2



authority to own and operate its properties, to transact the business in which
it is now engaged and to execute and deliver this Note;

                           (b)      this Note constitutes the duly authorized,
legally valid and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms;

                           (c)      all consents and grants of approval required
to have been granted by any person (as such term is defined in the Merger
Agreement) in connection with the execution, delivery and performance of this
Note have been granted;

                           (d)      the execution, delivery and performance by
Borrower of this Note do not and will not (i) violate any Legal Requirement,
contract or agreement to which it is subject or by which its properties are
bound or the charter documents or bylaws of Borrower or (ii) result in the
creation of any Encumbrance with respect to the property of Borrower (other than
pursuant hereto);

                           (e)      there is no private or governmental action,
suit, proceeding, claim, arbitration or investigation pending before any agency,
court or tribunal, foreign or domestic or, to the knowledge of the Borrower,
threatened against the Borrower or its subsidiaries any of their properties or
any of their officers or directors (in their capacities as such). There is no
judgment, decree or order against the Borrower or any of its subsidiaries or, to
the knowledge of the Borrower, any of their directors or officers (in their
capacities as such), that would reasonably be expected to have a Material
Adverse Effect on the Borrower; and

                           (f)      the security interests in the Collateral
granted to Lender under the Security Agreement constitute valid and continuing
security interests in the Collateral and upon filing a financing statement
naming Borrower as "debtor" and Lender as "secured party" in the appropriate
filing offices, the security interests in the Collateral granted to Lender under
the Security Agreement will constitute perfected security interests therein
superior and prior to all Encumbrances, rights or claims of all other persons,
except as set forth in Section 7 hereof.

                  7.       Subordination.

                           (a)      For purposes of this Note, "Senior Debt"
shall mean any indebtedness of Borrower or any of its subsidiaries (including
interest, premium and penalties due from or arising out of such indebtedness or
any refinancing thereof) to Silicon Valley Bank pursuant to that certain Loan
and Security Agreement, dated September 23, 2003, between Silicon Valley Bank
and Borrower (the "SVB Security Agreement"). For purposes of this Note, "Senior
Lien" shall mean the security interests now or in the future held by Silicon
Valley Bank in Borrower's collateral pursuant to the SVB Security Agreement.

                           (b)      The security interests now or in the future
held by Lender in the Collateral pursuant to the Security Agreement (the "Junior
Liens") are and will be junior and subordinate to the Senior Liens. The
subordinations and priorities provided for in this Note are applicable
irrespective of the time or order of attachment or perfection of the Senior
Liens and the Junior Liens.

                                      E1-3



                           (c)      The indebtedness evidenced by this Note, and
any renewals or extensions thereof, shall at all times be wholly subordinate and
junior in right of payment to any Senior Debt, in the manner and with the force
and effect hereafter set forth:

                                    (i)      In the event of any liquidation,
                  dissolution or winding up of the Borrower, or of any
                  execution, sale, receivership, insolvency, bankruptcy,
                  readjustment, reorganization or other similar proceeding
                  relative to the Borrower or its property, all Senior Debt
                  shall first be irrevocably paid in full before any payment is
                  made upon the indebtedness evidenced by this Note; and in any
                  such event any payment or distribution of any kind or
                  character, whether in cash, property or securities (other than
                  in securities, including equity securities, or other evidences
                  of indebtedness, the payment of which is subordinated to the
                  payment of the Senior Debt then outstanding), which shall be
                  made upon or in respect of this Note shall be applied in
                  payment of the Senior Debt unless and until the Senior Debt
                  shall have been paid or satisfied in full.

                                    (ii)     In the event that this Note is
                  declared or becomes due and payable because of the occurrence
                  of any Event of Default hereunder under circumstances when the
                  foregoing clause (i) shall not be applicable, the Lender shall
                  be entitled to payments only after there shall first have been
                  paid in full all Senior Debt outstanding at the time this Note
                  so becomes due and payable because of any such event, or
                  payment shall have been provided for in a manner satisfactory
                  to the holders of the Senior Debt.

                                    (iii)    During the continuance of any
                  default which would permit an acceleration of the maturity of
                  any Senior Debt, no payment of principal or interest shall be
                  made on this Note if written notice of such default (a
                  "Default Notice") has been given to the Borrower by the
                  holders of any Senior Debt. Upon receipt of any Default Notice
                  from the holders of any Senior Debt, Borrower shall forthwith
                  send a copy thereof to the holder of this Note. Any payment or
                  distribution of any kind or character, whether in cash,
                  property or securities, made with respect to this Note after
                  receipt by Borrower of a Default Notice shall be held by the
                  Lender in trust for the benefit of, and shall be paid over to
                  the holders of the Senior Debt for application to the Senior
                  Debt unless and until the Senior Debt shall have been paid or
                  satisfied in full.

                                    (iv)     No right of the holders of any
                  Senior Debt to enforce subordination as herein provided shall
                  at any time or in any way be affected or impaired by any
                  failure to act on the part of the Borrower or the holders of
                  any Senior Debt, or by any noncompliance by Borrower with any
                  of the terms, provisions and covenants of the Note or the
                  agreement under which it is issued, regardless of any
                  knowledge thereof that the holders of any Senior Debt may have
                  or be otherwise charged with.

                                    (v)      Borrower agrees, for the benefit of
                  present and future holders of Senior Debt, that in the event
                  that this Note is declared due and payable before its
                  expressed maturity because of the occurrence of an Event of
                  Default

                                      E1-4



                  hereunder, Borrower will give prompt notice in writing of such
                  happening to the holders of the Senior Debt.

                           (d)      The foregoing provisions are solely for the
purpose of defining the relative rights of the holders of Senior Debt and Senior
Liens, on the one hand, and the Lender on the other hand, and nothing herein
shall impair, as between the Borrower and the Lender, the obligation of the
Borrower which is unconditional and absolute, to pay the principal and interest
on the Note in accordance with its terms, nor shall anything herein prevent the
Lender from exercising all remedies otherwise permitted by applicable law or
hereunder or under the Security Agreement upon default hereunder or under the
Security Agreement, subject to the rights of the holders of the Senior Debt and
Senior Liens as set forth herein.

                  8.       Recourse. In addition to recourse against the
Collateral as provided in the Security Agreement, the Lender shall be entitled
to recourse against the Borrower for the payment of any principal of or interest
on the Note or for any claim based hereon (including costs of collection).

                  9.       Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the choice of laws rules thereof.

                  10.      Loss, Mutilation, Etc. Upon notice from the holder of
this Note to the Borrower of the loss, theft, destruction or mutilation of this
Note, and upon receipt of an indemnity reasonably satisfactory to the Borrower
from the holder of this Note or, in the case of mutilation hereof, upon
surrender of the mutilated Note, the Borrower will make and deliver a new note
of like tenor in lieu of this Note.

                  11.      Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by commercial delivery service, or sent via telecopy (receipt confirmed) to
the parties at the following addresses or telecopy numbers (or at such other
address or telecopy numbers for a party as shall be specified by like notice):

                           (a)      if to Lender:

                                    Emulex Corporation
                                    3535 Harbor Boulevard
                                    Costa Mesa, California 92626
                                    Attention: Randall G. Wick
                                               Vice President, General Counsel
                                    Telephone: (714) 662-5600
                                    Facsimile: (714) 641-0172

                                      E1-5



                                    and with a copy to:

                                    Skadden, Arps, Slate, Meagher & Flom LLP
                                    525 University Avenue, Suite 1100
                                    Palo Alto, California  94301
                                    Attention: Gregory C. Smith
                                    Telephone: (650) 470-4500
                                    Facsimile: (650) 470-4570

                           (b)      if to the Borrower:

                                    Vixel Corporation
                                    11911 North Creek Parkway South
                                    Bothell, Washington 98011
                                    Attention: Kurtis L. Adams
                                               Chief Financial Officer
                                    Telephone: (425) 806-4528
                                    Facsimile: (425) 806-4001

                                    with a copy to:

                                    Heller Ehrman White & McAuliffe LLP
                                    701 Fifth Avenue, Suite 6100
                                    Seattle, Washington 98104
                                    Attention: David Wilson
                                    Telephone: (206) 447-0900
                                    Facsimile: (206) 447-0849

                  12.      Waivers. Borrower, to the extent permitted by law,
hereby waives presentment, protest, demand for performance and payment, and
notice of protest, non-performance and dishonor.

                  13.      Savings Clause. In the event any provisions hereof
shall result, for any reason and at any time, in an effective rate of interest
that exceeds the limit of the usury or any other law applicable to interest on
the indebtedness evidenced hereby, all sums in excess of those lawfully
collectible as interest for the period in question shall be (a) applied, to the
extent of such excess, against the unpaid principal amount evidenced hereby with
the same force and effect as though Lender had agreed to accept such extra
payment(s) as a prepayment or (b) if the indebtedness has been fully paid,
refunded by Lender to Borrower to the extent of such excess.

                  14.      Transferability. Neither this Note nor any obligation
hereunder is assignable by Borrower except by operation of law or with the
written consent of the Lender.

                                      E1-6



Any purported assignment or other transfer of this Note or any obligation
hereunder by Borrower shall be null and void.

                  15.      Successors. The provisions hereof shall be binding
upon the legal representatives, successors and permitted assigns of the Borrower
and shall inure to the benefit of the Lender, its successors by operation of law
and its permitted transferees. A transferee of the Borrower's assets resulting
from merger, consolidation or similar transaction and a transferee of all or
substantially all of the Borrower's assets as a going concern shall be deemed a
successor of the Borrower.

                  [Remainder of Page Left Intentionally Blank]

                                      E1-7



                  IN WITNESS WHEREOF, the Borrower has executed this Note on the
date first above written.

                                        BORROWER:

                                        VIXEL CORPORATION

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        Address: 11911 North Creek Parkway South
                                                 Bothell, Washington 98011

                                      E1-1



                                                                     EXHIBIT E-2

                               SECURITY AGREEMENT

                  SECURITY AGREEMENT, dated as of [Date] (the "Agreement"), by
and between Vixel Corporation, a Delaware corporation (the "Borrower"), and
Emulex Corporation, a Delaware corporation (the "Secured Party" and together
with the Borrower the "Parties").

                  WHEREAS, the Borrower has agreed to grant a security interest
in the Collateral (as defined below) and the Proceeds (as such term is defined
in Section 9-102 of the Uniform Commercial Code in force and effect in the State
of Delaware (the "UCC")) to the Secured Party to secure the Borrower's
obligations under the Secured Promissory Note dated as of the date hereof in the
amount of set forth therein (the "Note"), a copy of which is attached as Exhibit
A hereto.

                  NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto hereby agree as follows:

1.   Grant of Security Interest in Collateral. The Borrower hereby grants to the
     Secured Party, as security for its obligations to the Secured Party under
     the Note (the "Obligations"), a security interest in all of the Borrower's
     inventory, equipment, tangible personal property, general intangibles
     (including intellectual property rights), chattel paper and deposit
     accounts (as each such term is defined in Section 9-102 of the UCC) (the
     "Collateral") and the Proceeds thereof, but not including any equipment
     subject to an equipment lease in respect of which the lessor has retained a
     security interest under contract or applicable law.

2.   Filing of Financing Statement. The Borrower hereby authorizes the Secured
     Party to file a financing statement and any amendments thereto, including
     continuation statements, describing the Collateral and the Proceeds.

3.   Borrower's Covenants.

     a.   The Borrower agrees: (i) at any time and from time to time, upon
          request of the Secured Party, to execute any notice, instrument,
          document or agreement that the Secured Party shall consider necessary
          or desirable to create, preserve, continue, perfect or validate any
          security interest granted hereunder or which the Secured Party may
          consider necessary or desirable to exercise or enforce its rights
          hereunder with respect to such security interest, which notice,
          financing statement, continuation statement, instrument, document or
          agreement may be filed and/or recorded by the Secured Party at
          Borrower's expense; and (ii) to give the Secured Party prompt written
          notice of any

                                      E2-1



          litigation filed or claim asserted against the Borrower relating to or
          potentially affecting the Collateral.

     b.   The Borrower agrees to: (i) pay promptly the Obligations secured
          hereby when due and (ii) pay reasonable attorneys' fees and expenses
          incurred by the Secured Party in the preservation, realization,
          enforcement and exercise of its rights, powers and remedies hereunder.

4.   Payment of Taxes, Charges, Liens and Assessments. The Borrower agrees to
     pay, prior to delinquency, all taxes, charges, liens and assessments
     against the Collateral and the Proceeds, and upon the failure of the
     Borrower to do so, the Secured Party shall be entitled to do so, with any
     such payments thereafter to be deemed Obligations of the Borrower to the
     Secured Party, due and payable immediately without demand and secured by
     the Collateral and the Proceeds, subject to all of the terms and conditions
     of this Agreement.

5.   Powers of Secured Party. The Borrower appoints the Secured Party (or a
     designee thereof) his true attorney in fact to perform any of the following
     powers, which are coupled with an interest, are irrevocable until
     termination of this Agreement and may be exercised from time to time by the
     Secured Party' officers and employees, or any of them, whether or not the
     Borrower is in default: (a) to perform any obligations of the Borrower
     hereunder in the Borrower's name or otherwise; (b) to give notice of
     Secured Party' rights with respect to the Collateral and to enforce such
     rights; (c) to release security; (d) to resort to security; (e) to prepare,
     execute, file, record or deliver notes, assignments, schedules, designation
     statements, financing statements, continuation statements, termination
     statements, statements of assignment, applications for registration or like
     papers to perfect, preserve or release the Secured Party's security
     interest in the Collateral; (f) to verify facts concerning the Collateral
     by inquiry of obligors thereon, or otherwise, in its own name or fictitious
     name; (g) after an Event of Default (as defined below), to endorse,
     collect, deliver and receive payment under instruments for the payment of
     money constituting or relating to the Collateral; (h) after an Event of
     Default, to preserve or release the interest evidenced by chattel paper to
     which the Secured Party is entitled hereunder and to endorse and deliver
     evidences of title incidental thereto; and (j) to do all acts and things
     and execute all documents in the name of the Borrower otherwise, deemed by
     the Secured Party as necessary and proper in connection with the
     preservation, perfection or enforcement of its rights hereunder.

                                      E2-2



6.   Events of Default; Remedies.

     a.   An Event of Default (as defined in the Note) under the Note shall
          constitute an event of default ("Event of Default") hereunder.

     b.   Upon the occurrence of an Event of Default, the Secured Party may, in
          addition to all rights under the UCC, exercise any or all of its
          rights hereunder including, the right to take possession of the
          Collateral, and for that purpose the Secured Party may enter upon any
          premises on which the Collateral or any part of it may be situated and
          remove it. The Secured Party may require Borrower to make the
          Collateral available to the Secured Party at a place to be designated
          by the Secured Party which is reasonably convenient to both Parties.
          Borrower shall pay the Secured Party's reasonable expenses of
          retaking, holding, preparing for sale and selling the Collateral and
          shall include, without limitation, the Secured Party's reasonable
          attorneys' fees and expenses. The Secured Party shall have the right
          to set off such expenses against any proceeds of any disposition by
          the Secured Party of any of the Collateral.

7.   No Waiver. The failure of the Secured Party to exercise any right or remedy
     under this Agreement or the Note, or delay by the Secured Party in
     exercising same, will not operate as a waiver thereof. No waiver by the
     Secured Party will be effective unless and until it is in writing and
     signed by the Secured Party. No waiver of any condition or performance will
     operate as a waiver of any subsequent condition or obligation. The Secured
     Party shall have no obligation to resort to the Collateral or any other
     security which is or may become available to it.

8.   Miscellaneous.

     a.   This Agreement, any amendments or replacement hereof, and the
          legality, validity and performance of the terms hereof, shall be
          governed by and enforced and construed in accordance with the laws of
          the State of Delaware without regard to conflicts of laws and
          principles thereof except to the extent that the UCC provides for the
          application of the law of any other jurisdiction.

     b.   This Agreement and the rights, powers and duties set forth herein
          shall be binding upon the Borrower, its agents, representatives and
          successors and shall inure to the benefit of the Secured Party and its
          successors and permitted assigns and, in the event of any transfer or
          assignment of rights by the Secured Party, the rights and privileges
          herein conferred upon the Secured Party shall automatically extend to
          and be vested in such transferee or assignee, all subject to the terms
          and conditions hereof. This Agreement

                                      E2-3



          and the rights and privileges herein conferred upon the Secured Party
          may not be assigned by the Secured Party without the consent of the
          Borrower except in connection with a permitted assignment of the Note.

     c.   In the event that any provision of this Agreement is invalid or
          unenforceable under any applicable statute or rule of law, then such
          provision shall be deemed inoperative to the extent that it may
          conflict therewith and shall be modified to conform with such statute
          or rule of law. Any provision hereof which may prove invalid or
          unenforceable under any applicable law shall not effect the validity
          or enforceability of any other provisions hereof.

     d.   All notices and other communications hereunder shall be in writing and
          shall be deemed given if delivered personally or by commercial
          delivery service, or sent via telecopy (receipt confirmed) to the
          parties at the following addresses or telecopy numbers (or at such
          other address or telecopy numbers for a party as shall be specified by
          like notice):

                           (a)      if to Lender:

                                    Emulex Corporation
                                    3535 Harbor Boulevard
                                    Costa Mesa, California 92626
                                    Attention: Randall G. Wick
                                               Vice President, General Counsel
                                    Telephone: (714) 662-5600
                                    Facsimile: (714)  641-0172

                                    with a copy to:

                                    Skadden, Arps, Slate, Meagher & Flom LLP
                                    525 University Avenue, Suite 1100
                                    Palo Alto, California  94301
                                    Attention: Gregory C. Smith
                                    Telephone: (650) 470-4500
                                    Facsimile: (650) 470-4570

                                      E2-4



                           (b)      if to the Borrower:

                                    Vixel Corporation
                                    1911 North Creek Parkway South
                                    Bothell, Washington 98011
                                    Attention: Kurtis L. Adams
                                               Chief Financial Officer
                                    Telephone: (425) 806-4528
                                    Facsimile: (425) 806-4001

                                    with a copy to:

                                    Heller Ehrman White & McAuliffe LLP
                                    701 Fifth Avenue, Suite 6100
                                    Seattle, Washington 98104
                                    Attention: David Wilson
                                    Telephone: (206) 447-0900
                                    Facsimile: (206) 450-0849

     e.   This Agreement may be executed in one or more counterparts, each of
          which shall be deemed an original but all of which shall together
          constitute one and the same document.

     f.   This Agreement and the security interest hereunder shall terminate
          upon the full and final performance of all Obligations of the
          Borrower. At such time, the Secured Party shall promptly reassign to
          the Borrower all of the Collateral hereunder which has not been sold,
          disposed of, retained or applied by the Secured Party in accordance
          with the terms hereof and shall take all actions reasonably requested
          by the Borrower to release the Collateral from the security interest
          granted hereby, including without limitation filing all appropriate
          UCC termination statements.

                                      E2-5



                  IN WITNESS WHEREOF, the undersigned have caused this Security
Agreement to be executed as of the date first written above.

                                            BORROWER:

                                            VIXEL CORPORATION

                                            By: ________________________________
                                            Name:
                                            Title:

                                            SECURED PARTY:

                                            EMULEX CORPORATION

                                            By: ________________________________
                                            Name:
                                            Title:

                                      E2-6

EX-99.(D)(2)

                                                                  EXHIBIT (d)(2)

                             STOCKHOLDERS AGREEMENT

                  THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT"), is entered
into as of October 8, by and between Emulex Corporation, a Delaware corporation
("PARENT"), and Aviary Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Parent ("PURCHASER"), on the one hand, and each of
the stockholders of Vixel Corporation, a Delaware corporation (the "COMPANY"),
set forth on Schedule 1 hereto (each a "STOCKHOLDER" and collectively, the
"STOCKHOLDERS"), on the other hand. Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Merger
Agreement (as defined below).

                                 R E C I T A L S

                  WHEREAS, each Stockholder is, as of the date hereof, the
record and beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "ACT")) of (i) the number of shares of
common stock, par value $.0015 per share, of the Company (together with any
associated preferred stock or other rights issued pursuant to the Rights
Agreement, dated as of November 15, 2000, between the Company and Computer Share
Trust Company, Inc. as the same has been amended through the date hereof, the
"COMMON STOCK"); (ii) the number of shares of Series B convertible preferred
stock, par value $.001 per share, of the Company (the "SERIES B PREFERRED
STOCK"); (iii) the number of options to acquire Common Stock (the "COMPANY
OPTIONS"); and (iv) the number of warrants to acquire Common Stock (the "COMPANY
WARRANTS") set forth opposite the name of such Stockholder on Schedule 1 hereto;
and

                  WHEREAS, Parent, Purchaser and the Company have entered into
an Agreement and Plan of Merger, dated as of the date hereof (the "MERGER
AGREEMENT"), which provides, among other things, for (a) Purchaser to commence a
tender offer for all of the issued and outstanding shares of Common Stock and
Series B Preferred Stock (the "OFFER") and (b) the merger of Purchaser with and
into the Company with the Company continuing as the surviving corporation (the
"MERGER"), in each case upon the terms and subject to the conditions set forth
in the Merger Agreement; and

                  WHEREAS, as a condition to the willingness of Parent and
Purchaser to enter into the Merger Agreement and as an inducement and in
consideration therefor, the Stockholders have agreed to enter into this
Agreement.

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the Merger Agreement,
and intending to be legally bound hereby, the parties hereto agree as follows:

         Section 1. Representations and Warranties of the Stockholders. Each
Stockholder hereby represents and warrants to Parent, severally and not jointly,
as set forth below:

                  (a)      Such Stockholder is the record and beneficial owner
(as defined in Rule 13d-3 under the Act) of the shares of Common Stock and/or
Series B Preferred Stock set forth opposite his or its name on Schedule 1 to
this Agreement (such shares of



Common Stock and/or Series B Preferred Stock, together with any Common Stock and
Series B Preferred Stock acquired by the Stockholder after the date of this
Agreement, whether Shares acquired by way of exercise of Company Options,
Company Warrants or other rights to purchase Common Stock or Series B Preferred
Stock or by way of dividend, distribution, exchange, merger, consolidation,
grant of proxy or otherwise, but excluding shares owned by other Stockholders,
all as may be adjusted from time to time pursuant to Section 6 hereof, the
"SHARES"). Schedule 1 to this Agreement lists separately all Company Options and
Company Warrants issued to such Stockholder. Such Stockholder is the record and
beneficial owner of the Company Options and Company Warrants set forth opposite
such Stockholder's name on Schedule 1 to this Agreement.

                  (b)      Such Stockholder has voting power, power of
disposition, power of conversion (in respect of the Series B Preferred Stock)
and power to agree to all of the matters regarding such Stockholder set forth in
this Agreement, in each case with respect to all of the Shares, with no
limitations, qualifications or restrictions on such right. Such Stockholder is
not the record or beneficial owner of any securities of the Company on the date
hereof other than the Shares and the Company Options and Company Warrants set
forth on Schedule 1.

                  (c)      Such Stockholder has the legal capacity to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby regarding such Stockholder.

                  (d)      This Agreement has been validly executed and
delivered by such Stockholder and, assuming due and valid authorization,
execution and delivery thereof by Parent and Purchaser, constitutes the legal,
valid and binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject to
the discretion of the court before which any proceeding therefor may be brought.

                  (e)      Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will result in a
violation of, or constitute (with or without due notice or lapse of time or
both) a default under, or conflict with, or give rise to any right of
termination, cancellation or acceleration under any contract, trust, note, bond,
mortgage, indenture, license, agreement, or material contractual restriction or
obligation of any kind to which such Stockholder is a party or by which such
Stockholder or his or its Shares are bound, which singularly or in the
aggregate, would prevent or adversely effect the ability of such Stockholder to
perform his or its obligations under this Agreement. The consummation of the
transactions contemplated hereby will not violate, or require any consent,
approval or notice (except those required under applicable securities laws)
under, any provision of any judgment, order, injunction, decree, statute, law,
rule or regulation applicable to such Stockholder

                                       2



which, singularly or in the aggregate, would prevent or adversely effect the
ability of such Stockholder to perform his or its obligations under this
Agreement.

                  (f)      In the case of any Stockholder that is a corporation,
limited partnership or limited liability company, such Stockholder is an entity
duly organized and validly existing under the laws of the jurisdiction in which
it is incorporated or constituted, and each such Stockholder has all requisite
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby regarding such Stockholder, and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement.

                  (g)      The Shares owned by such Stockholder are now, and at
all times during the term hereof will be, held by such Stockholder or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting trusts, agreements, options,
rights, understandings or arrangements or any other encumbrances whatsoever on
title, transfer or exercise of any rights of a Stockholder in respect of such
Shares (collectively, "ENCUMBRANCES"), except for any such Encumbrances arising
hereunder, and the transfer of the Shares held by such Stockholders hereunder
will effectively vest in Purchaser valid and marketable title to such Shares,
free and clear of any Encumbrances.

                  (h)      Each Stockholder whose Shares are subject to
community property interests under the laws of any relevant jurisdiction has
agreed to have executed and delivered to Parent such consents, waivers and
approvals as are necessary for the execution of this Agreement and the approval
and consummation of the transactions contemplated hereby regarding such
Stockholder.

                  (i)      Such Stockholder understands and acknowledges that
Parent and Purchaser are entering into the Merger Agreement in reliance upon
such Stockholder's execution and delivery of this Agreement.

         Section 2. Representations and Warranties of Parent and Purchaser. Each
of Parent and Purchaser hereby represents and warrants to the Stockholders,
jointly and severally, as follows:

                  (a)      Each of Parent and Purchaser is a corporation duly
organized and validly existing under the laws of the State of Delaware, has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement.

                  (b)      This Agreement has been duly authorized, executed and
delivered by each of Parent and Purchaser and, assuming due and valid
authorization, execution and delivery thereof by a Stockholder, constitutes the
legal, valid and binding obligation of each of Parent and Purchaser, enforceable
by such Stockholder against each of them in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement

                                       3



of creditors' rights generally and (ii) the availability of the remedy of
specific performance or injunctive or other forms of equitable relief may be
subject to equitable defenses and would be subject to the discretion of the
court before which any proceeding therefor may be brought.

                  (c)      Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will result in a
violation of, or constitute (with or without due notice or lapse of time or
both) a default under, or conflict with, or give rise to any right of
termination, cancellation or acceleration under any material contract, trust,
note, bond, mortgage, indenture, license, agreement or contractual restriction
or obligation of any kind to which Parent and Purchaser is a party which,
singularly or in the aggregate, would prevent or adversely effect the ability of
Parent and Purchaser to perform its obligations under this Agreement. The
consummation of the transactions contemplated hereby will not violate, or
require any consent, approval or notice (except those required under applicable
securities laws) under, any provision of any judgment, order, injunction,
decree, statute, law, rule or regulation applicable to Parent and Purchaser
which, singularly or in the aggregate, would prevent or materially adversely
effect the ability of Parent and Purchaser to perform its obligations under this
Agreement.

         Section 3. Tender of the Shares. Each Stockholder hereby agrees that,
subject to the terms and conditions of Section 8 hereof, (a) such Stockholder
shall validly tender, or cause to be validly tendered, pursuant to and in
accordance with the terms of the Offer, his or its Shares into the Offer as
promptly as practicable, and in any event no later than the fifth business day,
following the commencement of the Offer pursuant to Section 1.1 of the Merger
Agreement (except for those Shares issued upon the exercise of Company Options,
Company Warrants or other rights to acquire shares of Common Stock or Series B
Preferred Stock after such date, which shall be validly tendered, or caused to
be validly tendered, as promptly as practicable following such exercise) and
receipt of the applicable tender offer documentation and (b) such Stockholder
shall not withdraw any Shares so tendered unless this Agreement is terminated or
the Offer is terminated or has expired without Purchaser purchasing all Shares
validly tendered in the Offer and not withdrawn. Notwithstanding the foregoing,
each Stockholder may decline to tender, or may withdraw, any and all of such
Stockholders' Shares if, without the consent of such Stockholder, Purchaser
amends the Offer to (i) reduce the Offer Price, (ii) reduce the number of Shares
subject to the Offer, (iii) change the form of consideration payable in the
Offer or (iv) amend or modify any term or condition of the Offer in a manner
adverse to the stockholders of the Company (other than insignificant changes or
amendments or other than to waive any condition other than the Minimum
Condition). Each Stockholder shall give Purchaser at least two (2) business
days' prior notice of any withdrawal of its Shares pursuant to the immediately
preceding proviso. Notwithstanding anything herein to the contrary, the holders
of the Series B Preferred Stock shall retain the option and right to instruct
the tender agent to take all steps necessary to convert their shares into Common
Stock at any time prior to the Purchase of such shares in the Offer.

                                       4



         Section 4. Transfer of the Shares.

                  (a)      Prior to the termination of this Agreement and except
as otherwise provided herein, each of the Stockholders agrees that it shall not:
(i) transfer, assign, sell, gift-over, pledge, hypothecate, encumber or
otherwise dispose of, or consent to any of the foregoing ("TRANSFER"), any or
all of the Shares, Company Options, Company Warrants or other rights to acquire
Common Stock or Series B Preferred Stock or any right or interest therein; (ii)
enter into any contract, option or other agreement, arrangement or understanding
with respect to any Transfer; (iii) grant any proxy, power-of-attorney or other
authorization or consent with respect to any of the Shares; (iv) deposit any of
the Shares into a voting trust, or enter into a voting agreement or arrangement
with respect to any of the Shares or (v) take any other action that would in any
way restrict, limit or interfere with the performance of such Stockholder's
obligations hereunder or the transactions contemplated hereby or make any
representation or warranty of such Stockholder untrue or incorrect.

                  (b)      Each Stockholder agrees, promptly following request
of Parent, to surrender to the Company, or to the transfer agent for the
Company, certificates evidencing the Shares, and shall cause the Company or the
transfer agent for the Company to place the following legend on any and all
certificates evidencing the Shares:

THE SHARES OF VIXEL CORPORATION [COMMON STOCK] [SERIES B CONVERTIBLE PREFERRED
STOCK] REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER PURSUANT TO THAT CERTAIN STOCKHOLDERS AGREEMENT, DATED AS OF OCTOBER 8,
2003, BY AND AMONG EMULEX CORPORATION, AVIARY ACQUISITION CORP. AND CERTAIN
STOCKHOLDERS OF VIXEL CORPORATION. ANY TRANSFER OF SUCH SHARES OF VIXEL
CORPORATION [COMMON STOCK] [SERIES B CONVERTIBLE PREFERRED STOCK] IN VIOLATION
OF THE TERMS AND PROVISIONS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND OF NO
EFFECT WHATSOEVER.

         Section 5. Voting Arrangements; Irrevocable Proxy.

                  (a)      Each Stockholder hereby agrees that, during the time
this Agreement is in effect, at any meeting of the stockholders of the Company
(a "COMPANY STOCKHOLDERS' MEETING"), however called, and at every adjournment or
postponement thereof, he, she or it shall (i) appear at the meeting or otherwise
cause his or its Shares to be counted as present thereat for purposes of
establishing a quorum; (ii) vote, or execute consents in respect of, his or its
Shares, or cause his or its Shares to be voted, or consents to be executed in
respect thereof, in favor of the approval and adoption of the Merger Agreement
(including any revised or amended Merger Agreement that has been agreed to by
the Company) and the Merger, and any action required in furtherance thereof and
(iii) vote, or execute consents in respect of, his or its Shares, or cause his
or its Shares to be voted, or consents to be executed in respect thereof,
against (A) any agreement or transaction relating to any Acquisition Proposal
(other than as proposed by Parent or Purchaser) or (B) any amendment of the
Company's Certificate of Incorporation or Bylaws or other proposal, action or
transaction involving the Company or any of its subsidiaries or any of its
stockholders, which amendment or other proposal, action or

                                       5



transaction that could reasonably be expected to prevent or materially impede or
delay the consummation of the Offer or Merger or the other Transactions or the
consummation of the transactions contemplated by this Agreement or to deprive
Parent of any material portion of the benefits anticipated by Parent to be
received from the consummation of the Merger or the other Transactions or the
transactions contemplated by this Agreement, or change in any manner the voting
rights of Common Stock or Series B Preferred Stock (collectively, "FRUSTRATING
TRANSACTIONS") presented to the stockholders of the Company (regardless of any
recommendation of the Board of Directors of the Company) or in respect of which
vote or consent of the Stockholder is requested or sought, unless such
transaction has been approved in advance by Parent or Purchaser.

                  (b)      Subject to the provisions set forth in Section 8
hereof and as security for the Stockholders' obligations under Section 5(a),
each of the Stockholders hereby irrevocably constitutes and appoints Parent,
Paul F. Folino and its or his designees as his or its attorney and proxy in
accordance with the Delaware General Corporation Law (the "DGCL"), with full
power of substitution and resubstitution, to cause the Stockholder's shares to
be counted as present at any Company Stockholders' Meetings, to vote his or its
Shares at any Company Stockholders' Meeting, however called, and to execute
consents in respect of his or its Shares as and to the extent provided in
Section 5(a). SUBJECT TO THE PROVISIONS SET FORTH IN SECTION 8 HEREOF THIS PROXY
AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN INTEREST. Each
Stockholder hereby agrees not to grant any subsequent proxy or power of attorney
with respect to such Stockholder's Shares.

                  (c)      Each Stockholder represents that any proxies
heretofore given in respect of the Shares, if any, are revocable, and have been
revoked.

                  (d)      Each Stockholder hereby affirms that the proxy set
forth in this Section 5 is given in connection with the execution of the Merger
Agreement, and that such proxy is given to secure the performance of the duties
of such Stockholder under this Agreement. Such Stockholder hereby further
affirms that the proxy is coupled with an interest and, except as set forth in
this Section or in Section 8, is intended to be irrevocable in accordance with
the provisions of Section 212 of the DGCL. Each Stockholder hereby agrees that,
if for any reason the proxy granted herein is not irrevocable (subject to the
terms of this Agreement), then such Stockholder agrees to vote his or its Shares
in accordance with Section 5(a) above as instructed by Parent in writing. The
parties agree that the foregoing is a voting agreement created under Section 218
of the DGCL.

         Section 6. Certain Events. In the event of any change in the Common
Stock, Series B Preferred Stock by reason of a stock dividend, stock split,
split-up, recapitalization, reorganization, business combination, consolidation,
exchange of shares, or any similar transaction or other change in the capital
structure of the Company affecting the Common Stock or Series B Preferred Stock
or the acquisition of additional shares of Common Stock, Series B Preferred
Stock or other securities or rights of the Company by any Stockholder, this
Agreement and the obligations hereunder shall attach

                                       6



to any additional shares of Common Stock, Series B Preferred Stock or other
securities or rights of the Company issued to or acquired by each of the
Stockholders.

         Section 7. Further Assurances. Each Stockholder shall, upon request of
Parent or Purchaser, execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Parent or Purchaser to be
necessary or desirable to carry out the provisions hereof and to vest in Parent
the power to vote the Shares as contemplated by Section 5.

         Section 8. Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate immediately upon the termination of
the Merger Agreement by Parent or otherwise upon the earlier to occur of (a)
termination of the Merger Agreement by the Company and (b) November 13, 2003;
and provided, however, that Section 9 hereof shall survive any termination of
this Agreement.

         Section 9. Expenses. All fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees, costs and expenses.

         Section 10. Public Announcements. Each of the Stockholders agrees that
it will not issue any press release or otherwise make any public statement with
respect to this Agreement or the transactions contemplated hereby or by the
Merger Agreement without the prior consent of Parent; provided, however, that
such disclosure may be made without obtaining such prior consent if (i) the
disclosure is required by law or is required by any regulatory authority,
including but not limited to any Governmental Entity, or the Nasdaq National
Market and any national securities exchange, trading market or inter-dealer
quotation system on which the Shares trade and (ii) the Stockholder making such
disclosure has first used all reasonable efforts to consult with Parent about
the form and substance of such disclosure.

         Section 11. Miscellaneous.

                  (a)      Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by a nationally recognized overnight
courier service, such as Federal Express (providing proof of delivery), to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

                  If to any of the Stockholders, at the address set forth
opposite the name of such Stockholder on Schedule 1 hereto:

                  With a copy to:

                  Heller Ehrman White & McAuliffe LLP
                  701 Fifth Avenue, Suite 6100
                  Seattle, Washington  98104-7098
                  Attention:  David R. Wilson
                  Telephone:  (206) 447-0900

                                       7



                  Facsimile:        (206) 447-0849

If to Parent or Purchaser, to:

                  Emulex Corporation
                  3535 Harbor Boulevard
                  Costa Mesa, California 92626
                  Attention:  Randall G. Wick
                              Vice President, General Counsel
                  Telephone:    (714) 662-5600
                  Facsimile:    (714) 641-0172

                  with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  525 University Avenue, Suite 1100
                  Palo Alto, California  94301
                  Attention:   Gregory C. Smith
                  Telephone:   (650) 470-4500
                  Facsimile:   (650) 470-4570

                  (b)      Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

                  (c)      Counterparts. This Agreement may be executed manually
or by facsimile by the parties hereto in any number of counterparts, each of
which shall be considered one and the same agreement.

                  (d)      Entire Agreement. This Agreement (together with the
Merger Agreement and any other exhibits, annexes, schedules, documents and
instruments referred to herein and therein or contemplated thereby or therein)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof and thereof.

                  (e)      Governing Law; Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the principles of conflicts of law thereof. Each of the
parties hereto (i) consents to submit itself to the personal jurisdiction of any
federal court located in the State of Delaware or any Delaware state court in
the event any dispute arises out of this Agreement or any of the Transactions,
(ii) agrees that it shall not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (iii)
agrees that it shall not bring any action relating to this Agreement or any of
the Transactions in any court other than a federal or state court sitting in the
State of Delaware.

                                       8



                  (f)      Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties except that Parent or Purchaser may assign,
in its sole discretion and without the consent of any other party, any or all of
their rights, interests and obligations hereunder to each other or to one or
more direct or indirect wholly owned subsidiaries of Parent (each, an
"ASSIGNEE"). Any such Assignee may thereafter assign, in its sole discretion and
without the consent of any other party, any or all of its rights, interests and
obligations hereunder to one or more additional Assignees. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by, the parties and their respective successors and assigns,
and the provisions of this Agreement are not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.

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

                  (h)      Specific Performance. The parties hereto acknowledge
that money damages would be an inadequate remedy for any breach of this
Agreement by any party hereto, and that the obligations of the parties hereto
shall be enforceable by any party hereto through injunctive or other equitable
relief.

                  (i)      Amendment. No amendment, modification or waiver in
respect of this Agreement shall be effective against any party unless it shall
be in writing and signed by such party.

                  (j)      Binding Nature. This Agreement is binding upon and is
solely for the benefit of the parties hereto and their respective successors,
legal representatives and assigns.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                        9



                  IN WITNESS WHEREOF, Parent, Purchaser and the Stockholders
have caused this Agreement to be duly executed and delivered as of the date
first written above.

                                    EMULEX CORPORATION

                                    By:    /s/ PAUL FOLINO
                                    Name:  Paul Folino
                                    Title: Chairman of the Board and
                                           Chief Executive Officer

                                    AVIARY ACQUISITION CORP.

                                    By:    /s/ PAUL FOLINO
                                    Name:  Paul Folino
                                    Title: President and Chief Executive Officer

                                  STOCKHOLDERS

                                    GOLDMAN SACHS GROUP, INC.

                                    By:    /s/ JOSEPH P. DISABATO
                                    Name:  Joseph P. DiSabato
                                    Title: Attorney-in-Fact

                                    GOLDMAN SACHS DIRECT INVESTMENT
                                    FUND 2000, L.P.

                                    By:    GS Employer Funds 2000 GP, L.L.C.,
                                           its General Partner

                                    By:    /s/ JOSEPH P. DISABATO
                                    Name:  Joseph P. DiSabato
                                    Title: Vice President

                   [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]



                                                /s/ ROBERT Q. CORDELL II
                                                --------------------------------
                                                Robert Q. Cordell II

                                                /s/ CHARLES A. HAGGERTY
                                                --------------------------------
                                                Charles A. Haggerty

                                                /s/ ROBERT S. MESSINA
                                                --------------------------------
                                                Robert S. Messina

                                                /s/ JAMI DOVER NACHTSHEIM
                                                --------------------------------
                                                Jami Dover Nachtsheim

                                                /s/ TIMOTHY M. SPICER
                                                --------------------------------
                                                Timothy M. Spicer

                                                /s/ PETER R. PERRONE
                                                --------------------------------
                                                Peter R. Perrone

                   [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]



                                   SCHEDULE 1



                                                                   NUMBER OF SHARES OF
                                                                       COMMON STOCK       NUMBER OF SHARES
                                 NUMBER OF      NUMBER OF SHARES       BENEFICIALLY          OF COMMON
      STOCKHOLDER NAME           SHARES OF         OF SERIES B     OWNED UNDER COMPANY     ISSUABLE UNDER
        AND ADDRESS             COMMON STOCK     PREFERRED STOCK         OPTIONS          COMPANY WARRANTS
- ----------------------------------------------------------------------------------------------------------
                                                                              
Goldman Sachs Group, Inc.;                            2,863,524                  0               859,058
Goldman Sachs
Direct Investment Fund
2000, L.P.
85 Broad Street
New York, NY 10004
- --------------------------------------------------------------------------------------------------------
Robert Q. Cordell II*                 5,000                   0             60,000                     0
- --------------------------------------------------------------------------------------------------------
Charles A. Haggerty*                 66,666                   0            185,000                     0
- --------------------------------------------------------------------------------------------------------
Robert S. Messina*                        0                   0             20,000                     0
- --------------------------------------------------------------------------------------------------------
Jami Dover Nachtscheim*                   0                   0             20,000                     0
- --------------------------------------------------------------------------------------------------------
Peter J. Perrone*+                        0           2,863,524                  0               859,058
- --------------------------------------------------------------------------------------------------------
Timothy M. Spicer*                  221,000                                171,666
- --------------------------------------------------------------------------------------------------------


*        c/o Vixel Corporation, 11911 North Creek Parkway South, Bothell,
         Washington 98011

+        Includes 2,863,524 shares of Series B Preferred Stock and 859,058
         shares of Common Stock issuable under Company Warrants owned by Goldman
         Sachs Group, Inc. and Goldman Sachs Direct Investment Fund 2000, L.P.

EX-99.(D)(3)

                                                                  EXHIBIT (d)(3)

                           PURCHASER OPTION AGREEMENT

                  PURCHASER OPTION AGREEMENT, dated as of October 8, 2003, by
and among Emulex corporation, a Delaware corporation ("Parent"), Aviary
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
Parent (the "Purchaser"), and Vixel Corporation, a Delaware corporation (the
"Company").

                  WHEREAS, the Company, Parent and the Purchaser are entering
into an Agreement and Plan of Merger (the "Merger Agreement") of even date
herewith providing for (a) a cash tender offer to purchase any and all
outstanding shares of (i) common stock, par value $0.0015 per share of the
Company (the "Common Stock"), and (ii) Series B convertible preferred stock, par
value $0.001 per share, of the Company (the "Series B Preferred Stock" and,
together with the Common Stock, the "Shares") at a price of $ 10.00 per Share,
net to the seller in cash without interest thereon, upon the terms and subject
to the conditions set forth in the Merger Agreement (the "Offer"); and (b) the
merger (the "Merger") of the Purchaser with and into the Company; and

                  WHEREAS, as a condition to the willingness of Parent and the
Purchaser to enter into the Merger Agreement and commence the Offer, Parent and
Purchaser have requested, and the Company has agreed to grant the Purchaser, the
option to purchase, as described herein, authorized but unissued shares of
Common Stock and/or Series B Preferred Stock.

                  NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, and for other good and
valuable consideration the sufficiency of which is hereby acknowledged, the
parties agree as follows:

1.       Grant of Option. On the terms and subject to the conditions of this
         Agreement, the Company hereby grants to the Purchaser an irrevocable
         option (the "Option") to purchase for the Offer Price, as defined in
         the Merger Agreement (the "Purchase Price"), shares of Common Stock
         and/or Series B Preferred Stock, in such relative amounts as shall be
         determined by Purchaser in its discretion, up to 19.9% in the aggregate
         of the then outstanding shares of Common Stock and Series B Preferred
         Stock on as-converted basis (collectively, the "Optioned Shares");
         provided, that the number of shares of Series B Preferred Stock
         issuable under the Option may not exceed the number of authorized
         shares of Series B Preferred Stock available for issuance.

2.       Exercise of Option. Subject to the immediately succeeding sentence, the
         Option may be exercised by the Purchaser, in whole or in part, at any
         time or from time to time after Purchaser has purchased Shares pursuant
         to the Offer and until the earlier of (a) immediately following the
         Effective Time (as defined in the Merger Agreement) and (b) the
         termination of the Merger Agreement in accordance with its terms. The
         exercise of the Option for Common Stock is conditioned upon the
         Purchaser and the Parent owning in the aggregate, immediately following
         such

         exercise, at least 90% of the outstanding shares of Common Stock, and
         the exercise of the Option for Series B Preferred Stock is conditioned
         upon the Purchaser and Parent owning in the aggregate, immediately
         following such exercise, at least 90% of the outstanding shares of
         Series B Preferred Stock. In the event the Purchaser wishes to exercise
         the Option, the Purchaser shall give a written notice (the "Notice") to
         the Company of its intention to exercise the Option, specifying the
         number of Optioned Shares to be purchased. Such notice shall be
         delivered to the Company in accordance with the requirements of Section
         7(d), and shall specify a date (which may be the date of such notice)
         not more than ten (10) business days from the date such Notice is given
         for the purchase of the Optioned Shares. The closing (the "Closing") of
         the purchase of the Optioned Shares shall take place at the offices of
         Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Avenue, 11th
         Floor, Palo Alto, California 94301, or at such other location as the
         Purchaser shall elect. If any decree, injunction, order, law or
         regulation shall not permit the purchase of the Optioned Shares to be
         consummated on the date specified in such Notice, the date for the
         Closing shall be as soon as practicable following the cessation of such
         restriction on consummation, but in any event within two (2) business
         days thereof.

3.       Payment and Delivery of Certificate(s). At any Closing hereunder, (a)
         the Purchaser shall make payment to the Company of the aggregate price
         for the par value of the Optioned Shares so purchased in official bank
         check or by wire transfer to a bank designated in writing by the
         Company; (b) the Purchaser shall deliver to the Company a Promissory
         Note substantially in the form attached hereto as Exhibit A (the
         "Note") for the aggregate price for the Optioned Shares so purchased
         less the amount paid in accordance with clause 3(a); and (c) the
         Company shall deliver to the Purchaser a certificate or certificates
         representing the number of Optioned Shares so purchased registered in
         the name of the Purchaser. Certificates for Optioned Shares delivered
         at the Closing may be endorsed with a restrictive legend that shall
         read substantially as follows:

         "THE SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON
         TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
         AS PERMITTED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
         SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM."

         It is understood and agreed that the reference to the resale
         restrictions of the Securities Act of 1933, as amended (the "Act"), in
         the above legend shall be removed by delivery of substitute
         certificate(s) without such reference if Parent shall have delivered to
         the Company a copy of a letter from the staff of the Securities and
         Exchange Commission, or an opinion of counsel or other evidence
         reasonably satisfactory to the Company, to the effect that registration
         of the future resale of the Optioned Shares is not required and that
         such legend is not required for purposes of the Act.

                                       2



4.       Representations and Warranties of the Company. The Company hereby
         represents and warrants (such representations and warranties being
         deemed repeated at and as of any Closing hereunder) to Parent and the
         Purchaser as follows:

         (a)      Due Incorporation. The Company is a corporation duly
                  organized, validly existing and in good standing under the
                  laws of the State of Delaware and has the requisite corporate
                  power and authority to enter into and perform this Agreement.

         (b)      Due Authorization, etc. This Agreement and the consummation of
                  the transactions contemplated hereby have been duly authorized
                  by all necessary corporate action on the part of the Company.
                  This Agreement has been duly executed and delivered by a duly
                  authorized officer of the Company and constitutes the valid
                  and binding obligation of the Company, enforceable against the
                  Company in accordance with its terms.

         (c)      Company's Capital Stock. The Company has taken all necessary
                  corporate action to authorize and reserve for issuance upon
                  exercise of the Option the Optioned Shares, and at all times
                  from the date hereof through the date of termination of this
                  Agreement will keep reserved for issuance upon exercise of the
                  Option that number of shares of Common Stock that the
                  Purchaser is then entitled to purchase pursuant to the Option.
                  The shares of Common Stock and/or Series B Preferred Stock to
                  be issued upon due exercise, in whole or in part, of the
                  Option shall, when issued, be validly issued, fully-paid and
                  non-assessable, and shall be delivered free and clear of all
                  claims, liens, encumbrances and security interests, including
                  any preemptive right of any of the stockholders of the
                  Company.

5.       Representations and Warranties of the Purchaser and Parent. Parent and
         the Purchaser hereby jointly and severally represent and warrant (such
         representations and warranties being deemed repeated at and as of any
         Closing hereunder) to the Company as follows:

         (a)      Due Incorporation. Each of Parent and the Purchaser is a
                  corporation duly organized, validly existing and in good
                  standing under the laws of the State of Delaware and has the
                  requisite corporate power and authority to enter into and
                  perform this Agreement.

         (b)      Due Authorization, etc. This Agreement and the consummation of
                  the transactions contemplated hereby have been duly authorized
                  by all necessary corporate action on the part of the Purchaser
                  and Parent. This Agreement has been duly executed and
                  delivered by a duly authorized officer of the Purchaser and of
                  Parent, and constitutes the valid and binding obligation of
                  the Purchaser and of Parent, enforceable against each in
                  accordance with its terms.

                                       3



         (c)      Distribution. The Purchaser acknowledges and agrees that the
                  Optioned Shares have not been registered, and that the Company
                  is under no obligation to register, the Optioned Shares under
                  the Act or any state securities laws. The Purchaser is
                  acquiring the Option and will acquire the Optioned Shares to
                  be purchased upon exercise of the Option for its own account
                  and not with a view to the distribution thereof within the
                  meaning of the Act. The foregoing representation and warranty
                  shall be made by any assignee under Section 7(a) and shall be
                  binding upon such assignee.

6.       Adjustment Upon Changes in Capitalization. In the event of any change
         in the shares of the Company's capital stock by reason of any stock
         dividend, stock split, merger, recapitalization, combination,
         conversion, exchange of shares, issuance of shares (or agreements or
         commitments to issue shares) or the like, the number of Optioned Shares
         subject to the Option and the purchase price per Optioned Share shall
         be appropriately and equitably adjusted.

7.       Miscellaneous.

         (a)      Assignment; Guarantee of the Purchaser's Obligations. This
                  Agreement shall not be assigned by the Purchaser, except to
                  Parent or a wholly-owned subsidiary of Parent, without the
                  prior written consent of the Company. Parent hereby
                  unconditionally guarantees the full and punctual performance
                  by Purchaser of all of the obligations of Purchaser or any of
                  its assignees hereunder and under the Note. In connection with
                  the obligations of Parent under the immediately preceding
                  sentence, Parent hereby waives any and all rights, notices and
                  defenses to which it otherwise would be entitled solely in its
                  capacity as a guarantor under this Agreement or the Note.

         (b)      Amendments. This Agreement may not be modified, amended,
                  altered or supplemented except upon the execution and delivery
                  of a written agreement executed by the parties hereto.

         (c)      Non-survival of representations, etc. All representations,
                  warranties and agreements in this Agreement shall terminate at
                  the Closing.

         (d)      Notices. All notices, requests, claims, demands and other
                  communications hereunder shall be in writing and shall be
                  given (and shall be deemed to have been duly received if so
                  given) by delivery, by cable, telegram or telex, or by mail
                  (registered or certified mail, postage prepaid, return receipt
                  requested) to the respective parties as follows:

                                       4



                           If to the Company:

                           Vixel Corporation
                           11911 North Creek Parkway South
                           Bothell, Washington 98011
                           Attention: Kurtis L. Adams
                                      Chief Financial Officer
                           Facsimile: (425) 806-4001

                           With a copy to:

                           Heller Ehrman White & McAuliffe LLP
                           701 Fifth Avenue, Suite 6100
                           Seattle, Washington 98104
                           Attention: David R. Wilson
                           Facsimile: (206) 447-0849

                           If to Parent or the Purchaser:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attention: Randall G. Wick
                                      Vice President, General Counsel
                           Facsimile: (714)  641-0172

                           With copies to:

                           Skadden, Arps, Slate, Meagher & Flom LLP
                           525 University Avenue, Suite 1100
                           Palo Alto, California 94301
                           Attention: Gregory C. Smith
                           Facsimile: (650) 470-4570

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

         (e)      Governing Law. This Agreement shall be governed by and
                  construed in accordance with the substantive law of the State
                  of Delaware without giving effect to the principles of
                  conflict of laws thereof.

         (f)      Counterparts. This Agreement may be executed in several
                  counterparts, each of which shall be an original, but all of
                  which together shall constitute one and the same agreement.

                                       5



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

         (h)      Entire Agreement. This Agreement constitutes the entire
                  agreement among the parties with respect to the matters
                  referred to herein and supersedes all prior agreements or
                  understandings, both written or oral, among the parties, or
                  any of them, with respect to the subject matter hereof.

         (i)      Specific Performance. Purchaser, Parent and the Company each
                  acknowledge and agree that the other would be irreparably
                  damaged in the event any of the provisions of this Agreement
                  were not performed by it in accordance with the specific terms
                  or were otherwise breached. The Company agrees that if for any
                  reason the Company shall have failed to issue Optioned Shares
                  or to perform any of its other obligations under the
                  Agreement, then the Purchaser and Parent shall be entitled to
                  specific performance and injunctive and other equitable relief
                  and the Company agrees to waive any requirement for the
                  securing or posting of a bond in connection with the obtaining
                  of any such injunctive or other equitable relief. This
                  provision is without prejudice to any other rights the
                  Purchaser and Parent may have against the Company for any
                  failure to perform its obligations under this Agreement.

                            [Signature Page Follows]

                                       6



                  IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Purchaser Option Agreement to be duly executed on the day and year
first above written.

                                                VIXEL CORPORATION

                                                By:    /s/ JAMES McCLUNEY
                                                Name:  James McCluney
                                                Title: President and Chief
                                                       Executive Officer

                                                AVIARY ACQUISITION CORPORATION

                                                By:    /s/ PAUL FOLINO
                                                Name:  Paul Folino
                                                Title: President and Chief
                                                       Executive Officer

                                                EMULEX CORPORATION

                                                By:    /s/ PAUL FOLINO
                                                Name:  Paul Folino
                                                Title: Chairman of the Board and
                                                       Chief Executive Officer

                  Signature Page to Purchaser Option Agreement



                                                                       EXHIBIT A

                        NON-TRANSFERABLE PROMISSORY NOTE

         FOR VALUE RECEIVED, Aviary Acquisition Corporation, a Delaware
corporation ("the Maker"), hereby promises to pay to Vixel Corporation, a
Delaware Corporation, the principal amount of [_________________] ($______)],
with no interest, on [insert date that is six months after the date of exercise]
by wire transfer of immediately available funds to an account designated by the
payee. The amount due hereunder shall be payable in money of the United States
of America lawful at such time for the payment of public and private debts.

         The Maker hereby waives presentment, diligence, protest and demand,
notice of protest, demand, dishonor and nonpayment of this Note, and all other
notices of any kind in connection with the delivery, acceptance, performance,
default or enforcement of this Note.

         This Note shall be governed by and construed in accordance with the
laws of the State of Delaware without giving effect to the principles of
conflicts of laws thereof.

         IN WITNESS WHEREOF, the Maker has caused this Note to be executed as of
the _____ day of ______, 200__.

                                                  AVIARY ACQUISITION CORPORATION

                                                  By: __________________________
                                                      Name:
                                                      Title:

EX-99.(D)(4)

                                                                  EXHIBIT (d)(4)

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
October 8, 2003, by and between Emulex Corporation, a California corporation
(the "COMPANY") and James M. McCluney ("EXECUTIVE"), a shareholder and executive
officer of Vixel Corporation, a Delaware Corporation ("VIXEL").

                                    RECITALS

         A.       Vixel and the Company are engaged in the business of providing
technologies and products for the storage networking infrastructure business,
including HBAs, fabric switches and storage networking semiconductor components
that are embedded in HBAs, fabric switches and storage appliances (including,
but not limited to, storage arrays, network attached storage, tape libraries and
virtualization appliances) that are contained in existing products of or
products under development by either the Company or Vixel (the "BUSINESS");

         B.       Executive is a stockholder and an executive officer of Vixel
and accordingly has acquired confidential and proprietary information relating
to the Business and the operation of Vixel;

         C.       Executive's covenant not to compete, as reflected in this
Agreement, is an essential part of the transactions described in the Agreement
and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and
among Emulex Corporation, a Delaware corporation and the Company's parent
corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to
which, among other things, the Sub will be merged with and into Vixel (the
"MERGER");

         D.       Executive holds a substantial number of stock options of Vixel
that will continue to vest and shall be exercisable for shares of common stock
of the Company following the Merger and therefore has a material economic
interest in the consummation of the Merger.

         E.       In order to protect the goodwill related to the Business and
as a condition of, and an inducement to, the Company entering into the Merger
Agreement, Executive has agreed to the noncompetition and nonsolicitation
covenants and the confidentiality agreements provided in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and to induce the
Company to consummate the transactions contemplated by the Merger Agreement, the
receipt and sufficiency of which are hereby acknowledged, and with the knowledge
that no other good or valuable consideration has been offered to or received by
Executive in connection with the execution of this Agreement, Executive hereby
covenants and agrees as follows:



         1. Effectiveness of Agreement. This Agreement is conditioned upon the
occurrence of the (i) Closing (as that term is defined in the Merger Agreement)
and (ii) the offer of employment to Executive by the Company or any of its
affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This Agreement
shall be null and void ab initio should the Merger not be consummated for any
reason or should the Employment Commencement not occur. This Agreement will
terminate in the event of and concurrent with a termination of the Merger
Agreement in accordance with its terms.

         2.       Noncompetition.

                  (a)      Executive and the Company agree that due to the
nature of Executive's association with Vixel, Executive has confidential and
proprietary information relating to the business and operations of Vixel and the
Company (all references to the "Company" hereinafter shall include Vixel, which
shall be the surviving corporation in the Merger). Executive acknowledges that
such information is of extreme importance to the business of the Company and
will continue to be so after the Merger and that disclosure of such confidential
information to others or the unauthorized use of such information by others
would cause substantial loss and harm to the Company. Executive and the Company
also agree that Executive will continue to acquire, and will assist in
developing, confidential and proprietary information relating to the Business
following the Merger by reason of his employment with the Company.

                  (b)      Executive and the Company further agree that the
market for the Business is intensely competitive and that the Company engages in
the Business throughout the United States, Europe, Scandinavia, Japan, China,
Taiwan, Thailand, South Korea and Singapore.

                  (c)      (i) Subject to subparagraph (ii) below, during the
         period commencing at the Effective Time of the Merger and ending one
         (1) year following the termination of Executive's employment with the
         Company (including, without limitation, voluntary resignation by such
         Executive or termination at the request of the Company) (the
         "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in
         the Business Area (as defined below), engage, directly or indirectly,
         in any in any capacity whatsoever (whether as an officer, director,
         stockholder, owner, proprietor, partner, member, co-owner, investor,
         employee, trustee, manager, consultant, independent contractor,
         co-venturer, financier, agent, representative or otherwise), in a
         Competing Business (as defined below), or otherwise hold any interest
         in a Competing Business; provided, however, that Executive may own,
         directly or indirectly, solely as a passive investment, securities of
         any entity traded on any national securities exchange if Executive is
         not a controlling person of, or a member of a group which controls,
         such entity and does not, directly or indirectly, "beneficially own"
         (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) 1.0% or more of any class of securities of such Competing
         Business.

                  (ii)     In the event that the employment of Executive is
         terminated by the Company without Cause (as defined herein) within one
         (1) year of the Effective Time, then the Restricted Period shall
         terminate on the expiration of severance payments to Executive.



                  (d)      "COMPETING BUSINESS" as used herein, means any
individual, corporation, partnership, limited partnership, limited liability
company, trust (business or otherwise), institution, foundation, pool, plan or
other entity or organization (other than the Company) which engages or proposes
to engage in the Business.

                  (e)      "BUSINESS AREA" as used herein, means each state
within the United States of America as well as each country, state, province and
territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea
and Singapore.

                  (f)      "CAUSE" as used herein shall mean: (i) any
misappropriation or embezzlement by Executive of the property of the Company or
any of its affiliates or other act of fraud or material misconduct by Executive
against the Company or any of its affiliates; (ii) Executive's conviction of or
plea of guilty or nolo contendere to a crime constituting a felony or any
criminal act involving moral turpitude; (iii) a breach by Executive of any
provision of this Agreement; (iv) the failure, refusal or neglect by Executive
to perform faithfully the duties and obligations customary to his office; (v)
the habitual non-performance or incompetent performance by Executive of the
duties or responsibilities customary to his office; (vi) misconduct by
Executive, including insubordination, in respect of the duties or obligations
customary to his office; and (vii) any intentional or grossly negligent act by
Executive having the effect of materially injuring the business or reputation of
the Company or any of its affiliates. No activities covered by item (iv), (v)
and (vi) will be deemed to be "Cause" unless the Company has notified Executive
of the prohibited activity in writing and Executive has failed to cease such
activity within thirty (30) days.

         3.       Nonsolicitation of the Purchaser and Company Employees. During
the Restricted Period, Executive shall not, without the prior written consent of
the Company, directly or indirectly solicit, request, cause or induce any person
who is at the time an employee of or a consultant of the Company to leave the
employ of or otherwise terminate such person's relationship with the Company.

         4.       Nonsolicitation of Customers or Suppliers. During the
Restricted Period, Executive shall not, directly or indirectly: (i) solicit,
induce or attempt to induce any customer, client or supplier of the Company to
cease doing business in whole or in part with the Company; or (ii) attempt to
limit or interfere with any business engagement or relationship existing between
the Company and any third party.

         5.       Confidentiality. Executive agrees that, upon the Closing, he
will execute the Company's standard proprietary information and invention
assignment agreement (the "Employee Invention and Non-Disclosure Agreement"),
the form of which is attached as Annex A, and will abide by all of its terms.

         6.       Injunctive Relief. The parties agree that the remedy at law
for any breach of this Agreement is and will be inadequate, and in the event of
a breach or threatened breach by Executive of any of the provisions of this
Agreement, the Company shall be entitled to seek an injunction restraining
Executive from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting the Company from



pursuing any other remedies available to it or them for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive.

         7.       Reasonableness and Enforceability of Covenants. The parties
expressly agree that the character, duration and geographical scope of this
Agreement are reasonable in light of the circumstances as they exist on the date
upon which this Agreement has been executed, including, but not limited to,
Executive's position of confidence and trust as an executive officer of Vixel as
well as his employment with the Company after the Closing. Moreover, if any
court determines that any of the covenants and agreements contained herein, or
any part thereof, is unenforceable because of the character, duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.

         8.       Severability. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         9.       Construction. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Washington, without
regard to principles of conflicts or choice of laws.

         10.      Amendments and Waivers. This Agreement may be modified only by
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.

         11.      Entire Agreement. This Agreement, together with the Merger
Agreement and the documents, instruments and other agreements contemplated by or
referred to therein and the Employee Invention and Non-Disclosure Agreement,
contains the entire understanding of the parties relating to the subject matter
hereof, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument signed by each of the parties hereto.

         12.      Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.

         13.      Section Headings. The headings of each section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.



         14.      Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that the Company may assign
its rights hereunder, without the consent of Executive, to any entity that
acquires or succeeds to the Business.

         15.      Further Assurances. From time to time, at the Company's
request and without further consideration, Executive shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.

         16.      Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (a)      if to the Company:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attn: Randall G. Wick
                                 Vice President, General Counsel
                           Telephone No.: (714) 662-5600
                           Facsimile No.: (714) 641-0172

                  (b)      if to Executive:

                           c/o Vixel Corporation
                           11911 North Creek Parkway South
                           Bothell, Washington 98011
                           Telephone No.: (425) 806-4528
                           Facsimile No.: (425) 806-4001

         17.      Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Merger Agreement.



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

                                 EMULEX CORPORATION

                                 By: /s/ PAUL FOLINO
                                     -------------------------------------------
                                     Name: Paul Folino
                                     Title:  Chairman of the Board and
                                             Chief Executive Officer

                                     /s/ JAMES M. McCLUNEY
                                     -------------------------------------------
                                     James M. McCluney

                  [SIGNATURE PAGE TO NONCOMPETITION AGREEMENT]



                                                                         ANNEX A

      [EMULEX LOGO]

                 EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT

        This Employee Creation and Non-Disclosure Agreement (this "Agreement")
is entered into between Emulex Corporation ("Emulex") and the undersigned
Employee. In consideration of employment or continued employment by Emulex and
the mutual promises contained in this Agreement, Employee and Emulex agree as
follows:

                Definition of Terms.

                  1.1      Creation. "Creation" means every idea, concept,
invention, device, design, apparatus, machine, practice, process, method,
product, composition of matter, improvement, formula, algorithm, literary or
graphical or audiovisual work or sound recording, mask work, or computer program
of any kind, whether or not subject to patent, copyright, mask work right, or
similar protection.

                  1.2      Create. "Create" means invent, develop, devise,
conceive, discover, create, first reduce to practice, write, or fix in a
tangible medium of expression.

                  1.3      Confidential Information. "Confidential Information"
means all Creations, data, information, know-how, process parameters,
fabrication techniques, technical plans, documentation, customer lists, price
lists, supplier lists, business plans, marketing plans, financial information,
and the like, in whatever form or medium, and whether or not designated or
marked "Confidential" or the like, which: (1) relate to the business of Emulex,
and (a) have not been disclosed by Emulex to, or (b) are not generally known to,
the general public or to Emulex's trade or industry; or (2) are received by
Emulex from a third party under an obligation of confidentiality to the third
party.

                  1.4      Emulex. "Emulex" includes Emulex Corporation, a
Delaware corporation, all of its subsidiaries, and all joint ventures and
partnerships of which such corporation and/or any of such subsidiaries is a
member, partner, or participant.

                Confidential Information.

                  2.1      Acknowledgement by Employee. Employee acknowledges
that during Employee's employment with Emulex, Employee may be given access to,
become acquainted with, or develop Confidential Information.

                  2.2      No Use or Disclosure. Employee shall not use or
disclose (directly or indirectly) any Confidential Information (whether or not
created or developed by Employee) at any time or in any manner, except as
required in the course of employment with Emulex. Employee acknowledges that,
except as set forth on an exhibit attached by Employee to this Agreement,
Employee is not a party to any agreement with any other entity which either (1)
restricts Employee's use or disclosure of any information gained or learned by
Employee from the entity or while employed by the entity, or (2) otherwise
relates to Employee's use or disclosure of any confidential information or trade
secrets of the entity. Employee represents that no entity has asserted or is
asserting that Employee has breached any of the terms or provisions of any of
the agreements listed on the attached exhibit. The obligations of this Paragraph
are continuing and survive the termination of Employee's employment with Emulex.

                  2.3      Restriction on Documents and Equipment. All
Confidential Information, documents, and equipment relating to the business of
Emulex, whether prepared by Employee or otherwise coming into Employee's
possession, are the exclusive property of Emulex, and must not be removed from
any of its premises except as required in the course of employment with Emulex.
All such Confidential Information, documents, and equipment



shall be promptly returned by Employee to Emulex upon the request of Emulex, and
on any termination of Employee's employment with Emulex.

                  2.4      No Disclosure or Use from Others. Employee shall not
disclose to Emulex or use on behalf of Emulex any confidential information or
trade secrets obtained from other entities, and shall not bring confidential
information or trade secrets of other entities onto Emulex's premises.

                Creations.

                  3.1      Disclosure and Assignment of Creations. Employee
shall promptly inform and disclose to Emulex all Creations which Employee
Creates (either alone or with others) while in the employment of Emulex, if the
Creations:

                  (1)      relate, at the time Created, to the business of
                  Emulex or to any actual or demonstrably anticipated research
                  or development work of Emulex; or

                  (2)      result from any work performed by Employee for
                  Emulex; or

                  (3)      were Created utilizing any of Emulex's equipment,
                  supplies, facilities, time, or Confidential Information.

ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK
PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR
HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS
OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE
PROPERTY OF EMULEX.

                  3.2      Governmental Rights. Employee acknowledges that
Emulex has entered or may enter into agreements with agencies of the United
States government, and that Emulex may be subject to laws and regulations which
impose obligations, restrictions, and limitations on Emulex with respect to
Creations which may be acquired by Emulex or which may be conceived or developed
by employees, consultants, and other agents rendering services to Emulex.
Employee shall be bound by all such obligations, restrictions, and limitations
applicable to any Creation of Employee. Employee also shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations. Employee further shall assign to Emulex
all of Employee's rights in any Creation of Employee if Emulex is required to
grant those rights to the United States government or any agencies of the United
States government.

                  3.3      Employee's Assistance. Employee agrees to assist
Emulex in obtaining and/or maintaining patents, copyrights, mask work rights,
and similar rights to any Creations assigned by Employee to Emulex if Emulex, in
its sole discretion, requests such assistance. Employee shall sign all documents
and do all other things deemed necessary by Emulex, at Emulex's expense, to
obtain and/or maintain such rights, to assign them to Emulex, to defend them
from invalidation, and to protect them against infringement by other parties.
The obligations of this Paragraph are continuing and survive the termination of
Employee's employment with Emulex. If Emulex requires Employee's assistance
under this Paragraph after termination of employment with Emulex, Employee will
be compensated for time actually spent in providing assistance at Employee's
hourly pay rate at the date of Employee's termination.

                  3.4      Appointment of Agent. Employee irrevocably appoints
the President of Emulex to act as Employee's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights, mask
work rights, and similar rights, to any Creations assigned by Employee to Emulex
under this Agreement if (1) Employee refuses to perform those acts, or (2) is
unavailable, within the meaning of any applicable laws. Employee acknowledges
that the grant of the foregoing power of attorney is coupled with an interest
and shall survive the death or disability of Employee.

                  3.5      Further Disclosure. Employee shall promptly disclose
to Emulex, in confidence, (1) all Creations of any kind which Employee Creates
while employed by Emulex, and (2) all patent applications filed by



Employee within one (1) year after termination of employment with Emulex.
Employee agrees that any application for a patent, copyright registration, mask
work registration, or similar right filed within one (1) year after termination
of employment with Emulex shall be presumed to relate to a Creation of Employee
Created during employment at Emulex, unless Employee can prove otherwise.

                  3.6      Records. Employee shall keep complete, accurate, and
authentic information and records on all Creations in the manner and form
requested by Emulex. The information and records, and all copies of them, shall
be the exclusive property of Emulex. Employee shall promptly surrender the
information and records upon the request of Emulex, and on any termination of
Employee's employment with Emulex.

                  3.7      Compliance with Labor Code. THIS AGREEMENT DOES NOT
APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870
OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S
INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW:

         "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                  (1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or

                  (2) Result from any work performed by the employee for the
employer.

         (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                Restrictions on Employee.

                  4.1      No Conflicting Competition. While employed by Emulex,
Employee shall not in any manner (whether as an employee, consultant, or
otherwise) perform services for, or have an ownership interest in (other than
less than one percent (1%) of a publicly-held company), any entity that competes
with Emulex or any employment or business which is otherwise in conflict with
Employee's employment relationship with Emulex.

                  4.2      No Competitive Planning. While employed by Emulex,
Employee shall not undertake any planning for any outside business activity (1)
competitive with the work which Employee performs for Emulex, or (2) competitive
with the profit unit of Emulex for which Employee works.

                  4.3      No Hiring of Other Employees. While employed by
Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ,
or assist or encourage others in employing or attempting to employ (whether as
an employee, consultant, or otherwise), any of Emulex's other employees who work
in any area in which Employee has been significantly engaged on behalf of
Emulex.

                  4.4      No Use of Confidential Information. While employed by
Emulex, and for 1 year afterward, Employee shall not enter into any other
employment (whether as an employee, consultant, or otherwise) in which the
duties of such other employment would require Employee to disclose or use any
Confidential Information.

                  4.5      No Conflicting Agreements. Employee represents that
Employee has no agreements with or obligations to any other party that would
interfere with Employee's compliance with this Agreement.

                  4.6      Subsequent Employment. Employee agrees that Emulex
may notify anyone as to the existence and provisions of this Agreement.



                Pre-existing Creations.

                  5.1      Representation of Coverage and Grant of License.
Except for those Creations (if any) specifically reserved by Employee in an
attachment to this Agreement, Employee represents that there are no Creations
owned wholly or in part by Employee, or controlled directly or indirectly by
Employee, which Employee considers to be reserved and excluded from the scope of
this Agreement. Employee grants to Emulex a royalty-free, non-exclusive,
worldwide, irrevocable license on any and all non-reserved Creations of
Employee.

                  5.2      Preservation of Confidence. In order to preserve
Employee's proprietary rights in any unpatented or unpublished reserved
Creations, Emulex shall keep in confidence all information provided by Employee
pertaining to any reserved Creation, unless the information: (1) is already
known to or in the possession of Emulex; (2) is or becomes publicly known
through no wrongful act of Emulex; (3) is rightfully received by Emulex from a
third party without breach of any obligation to Employee; (4) is approved for
release by written authorization of Employee; (5) is distributed or made
available to others by Employee without restriction as to use or disclosure; or
(6) is developed independently by Emulex through persons not involved with
information received by Emulex from Employee.

                  5.3      License from Use. Notwithstanding the reservation of
a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while
employed by Emulex, or (2) permits the use of a reserved Creation by another
employee of Emulex, and does not have a prior written agreement with Emulex
pertaining to such use, then Employee thereby grants to Emulex a royalty-free,
non-exclusive, worldwide, irrevocable license to that Creation (provided that
the reserved Creation is owned wholly or in part by Employee, or is within the
direct or indirect control of Employee at the time of employment).

                  5.4      Right of First Refusal. With respect to any reserved
Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right
of first refusal to purchase or license such Creations (unless otherwise
licensed to Emulex by any other terms of this Agreement) on terms at least as
favorable as offered to any other purchaser or licensee while Employee is
employed by Emulex.

                General Provisions.

                  6.1      Attorneys' Fees. If any arbitration, litigation, or
other legal proceeding occurs between the parties relating to this Agreement,
the prevailing party shall be entitled to recover (in addition to any other
relief awarded or granted) his, her, or its reasonable costs and expenses
(including attorneys' fees) incurred in the proceeding and any appeal therefrom.

                  6.2      Entire Agreement. This Agreement, including all
referenced attachments, constitutes the complete and final agreement between the
parties, and supersedes all prior negotiations, agreements, and understandings
between the parties concerning its subject matter.

                  6.3      Successors and Assigns. This Agreement is intended to
benefit and is binding on (1) the successors and assigns of Emulex, and (2) the
heirs and legal successors of Employee.

                  6.4      Separate Enforcement of Provisions. If any provision
of this Agreement is held by a court or arbitrator of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
be enforced to the extent possible.

                  6.5      Governing Law. The validity, construction, and
performance of this Agreement is governed by the laws of the State of
California.

                  6.6      Right to Relief. If Employee breaches or threatens to
breach any provision of this Agreement, in addition to any other rights and
remedies Emulex may have, Emulex shall be entitled to temporary and permanent
injunctive relief to prevent the breach or threatened breach without the
necessity of proving actual damages or posting any bond or undertaking.



                  6.7      Waiver and Amendment. No waiver, amendment, or
modification of this Agreement shall be effective unless in writing and signed
by the party against whom the waiver, amendment, or modification is sought to be
enforced. No failure or delay by either party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of the right, power, or
remedy. No waiver of any term, condition, or breach of this Agreement shall be
construed as a waiver of any other term, condition, or breach.

                Effective Date. This Agreement, no matter when signed by
Employee, is effective from the first date of Employee's employment with Emulex,
and shall survive the termination of Employee's employment with Emulex.

                At Will Employment. Unless specifically provided differently in
a separate written agreement signed by an authorized agent of Emulex, Employee
acknowledges and agrees that Employee's employment by Emulex is now and will
continue to be throughout his or her employment with Emulex "AT WILL," and can
be terminated at any time by Emulex for any reason, with or without good cause,
and with or without prior warning or notice.

                  Acknowledgment of Reading. Employee acknowledges that Employee
has read and understands this Agreement, and has received a copy of it.

AGREED:                                         EMULEX CORPORATION

______________________________                  By:___________________________
Employee's signature

______________________________                  ______________________________
Employee's Name                                 Name

Dated:________________________                  ______________________________
                                                Title


                                                Dated:________________________

EX-99.(D)(5)

                                                               EXHIBIT (d)(5)

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
October 8, 2003, by and between Emulex Corporation, a California corporation
(the "COMPANY") and Stuart B. Berman ("EXECUTIVE"), a shareholder and executive
officer of Vixel Corporation, a Delaware Corporation ("VIXEL").

                                    RECITALS

         A.       Vixel and the Company are engaged in the business of providing
technologies and products for the storage networking infrastructure business,
including HBAs, fabric switches and storage networking semiconductor components
that are embedded in HBAs, fabric switches and storage appliances (including,
but not limited to, storage arrays, network attached storage, tape libraries and
virtualization appliances) that are contained in existing products of or
products under development by either the Company or Vixel (the "BUSINESS");

         B.       Executive is a stockholder and an executive officer of Vixel
and accordingly has acquired confidential and proprietary information relating
to the Business and the operation of Vixel;

         C.       Executive's covenant not to compete, as reflected in this
Agreement, is an essential part of the transactions described in the Agreement
and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and
among Emulex Corporation, a Delaware corporation and the Company's parent
corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to
which, among other things, the Sub will be merged with and into Vixel (the
"MERGER");

         D.       Executive holds a substantial number of stock options of Vixel
that will continue to vest and shall be exercisable for shares of common stock
of the Company following the Merger and therefore has a material economic
interest in the consummation of the Merger.

         E.       In order to protect the goodwill related to the Business and
as a condition of, and an inducement to, the Company entering into the Merger
Agreement, Executive has agreed to the noncompetition and nonsolicitation
covenants and the confidentiality agreements provided in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and to induce the
Company to consummate the transactions contemplated by the Merger Agreement, the
receipt and sufficiency of which are hereby acknowledged, and with the knowledge
that no other good or valuable consideration has been offered to or received by
Executive in connection with the execution of this Agreement, Executive hereby
covenants and agrees as follows:



         1.       Effectiveness of Agreement. This Agreement is conditioned upon
the occurrence of the (i) Closing (as that term is defined in the Merger
Agreement) and (ii) the offer of employment to Executive by the Company or any
of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This
Agreement shall be null and void ab initio should the Merger not be consummated
for any reason or should the Employment Commencement not occur. This Agreement
will terminate in the event of and concurrent with a termination of the Merger
Agreement in accordance with its terms.

         2.       Noncompetition.

                  (a)      Executive and the Company agree that due to the
nature of Executive's association with Vixel, Executive has confidential and
proprietary information relating to the business and operations of Vixel and the
Company (all references to the "Company" hereinafter shall include Vixel, which
shall be the surviving corporation in the Merger). Executive acknowledges that
such information is of extreme importance to the business of the Company and
will continue to be so after the Merger and that disclosure of such confidential
information to others or the unauthorized use of such information by others
would cause substantial loss and harm to the Company. Executive and the Company
also agree that Executive will continue to acquire, and will assist in
developing, confidential and proprietary information relating to the Business
following the Merger by reason of his employment with the Company.

                  (b)      Executive and the Company further agree that the
market for the Business is intensely competitive and that the Company engages in
the Business throughout the United States, Europe, Scandinavia, Japan, China,
Taiwan, Thailand, South Korea and Singapore.

                  (c)      (i) Subject to subparagraph (ii) below, during the
         period commencing at the Effective Time of the Merger and ending one
         (1) year following the termination of Executive's employment with the
         Company (including, without limitation, voluntary resignation by such
         Executive or termination at the request of the Company) (the
         "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in
         the Business Area (as defined below), engage, directly or indirectly,
         in any in any capacity whatsoever (whether as an officer, director,
         stockholder, owner, proprietor, partner, member, co-owner, investor,
         employee, trustee, manager, consultant, independent contractor,
         co-venturer, financier, agent, representative or otherwise), in a
         Competing Business (as defined below), or otherwise hold any interest
         in a Competing Business; provided, however, that Executive may own,
         directly or indirectly, solely as a passive investment, securities of
         any entity traded on any national securities exchange if Executive is
         not a controlling person of, or a member of a group which controls,
         such entity and does not, directly or indirectly, "beneficially own"
         (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) 1.0% or more of any class of securities of such Competing
         Business.

                  (ii)     In the event that the employment of Executive is
         terminated by the Company without Cause (as defined herein) within one
         (1) year of the Effective Time, then the Restricted Period shall
         terminate on the expiration of severance payments to Executive.



                  (d)      "COMPETING BUSINESS" as used herein, means any
individual, corporation, partnership, limited partnership, limited liability
company, trust (business or otherwise), institution, foundation, pool, plan or
other entity or organization (other than the Company) which engages or proposes
to engage in the Business.

                  (e)      "BUSINESS AREA" as used herein, means each state
within the United States of America as well as each country, state, province and
territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea
and Singapore.

                  (f)      "CAUSE" as used herein shall mean: (i) any
misappropriation or embezzlement by Executive of the property of the Company or
any of its affiliates or other act of fraud or material misconduct by Executive
against the Company or any of its affiliates; (ii) Executive's conviction of or
plea of guilty or nolo contendere to a crime constituting a felony or any
criminal act involving moral turpitude; (iii) a breach by Executive of any
provision of this Agreement; (iv) the failure, refusal or neglect by Executive
to perform faithfully the duties and obligations customary to his office; (v)
the habitual non-performance or incompetent performance by Executive of the
duties or responsibilities customary to his office; (vi) misconduct by
Executive, including insubordination, in respect of the duties or obligations
customary to his office; and (vii) any intentional or grossly negligent act by
Executive having the effect of materially injuring the business or reputation of
the Company or any of its affiliates. No activities covered by item (iv), (v)
and (vi) will be deemed to be "Cause" unless the Company has notified Executive
of the prohibited activity in writing and Executive has failed to cease such
activity within thirty (30) days.

         3.       Nonsolicitation of the Purchaser and Company Employees. During
the Restricted Period, Executive shall not, without the prior written consent of
the Company, directly or indirectly solicit, request, cause or induce any person
who is at the time an employee of or a consultant of the Company to leave the
employ of or otherwise terminate such person's relationship with the Company.

         4.       Nonsolicitation of Customers or Suppliers. During the
Restricted Period, Executive shall not, directly or indirectly: (i) solicit,
induce or attempt to induce any customer, client or supplier of the Company to
cease doing business in whole or in part with the Company; or (ii) attempt to
limit or interfere with any business engagement or relationship existing between
the Company and any third party.

         5.       Confidentiality. Executive agrees that, upon the Closing, he
will execute the Company's standard proprietary information and invention
assignment agreement (the "Employee Invention and Non-Disclosure Agreement"),
the form of which is attached as Annex A, and will abide by all of its terms.

         6.       Injunctive Relief. The parties agree that the remedy at law
for any breach of this Agreement is and will be inadequate, and in the event of
a breach or threatened breach by Executive of any of the provisions of this
Agreement, the Company shall be entitled to seek an injunction restraining
Executive from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting the Company from



pursuing any other remedies available to it or them for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive.

         7.       Reasonableness and Enforceability of Covenants. The parties
expressly agree that the character, duration and geographical scope of this
Agreement are reasonable in light of the circumstances as they exist on the date
upon which this Agreement has been executed, including, but not limited to,
Executive's position of confidence and trust as an executive officer of Vixel as
well as his employment with the Company after the Closing. Moreover, if any
court determines that any of the covenants and agreements contained herein, or
any part thereof, is unenforceable because of the character, duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.

         8.       Severability. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         9.       Construction. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Washington, without
regard to principles of conflicts or choice of laws.

         10.      Amendments and Waivers. This Agreement may be modified only by
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.

         11.      Entire Agreement. This Agreement, together with the Merger
Agreement and the documents, instruments and other agreements contemplated by or
referred to therein and the Employee Invention and Non-Disclosure Agreement,
contains the entire understanding of the parties relating to the subject matter
hereof, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument signed by each of the parties hereto.

         12.      Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.

         13.      Section Headings. The headings of each section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.



         14.      Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that the Company may assign
its rights hereunder, without the consent of Executive, to any entity that
acquires or succeeds to the Business.

         15.      Further Assurances. From time to time, at the Company's
request and without further consideration, Executive shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.

         16.      Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (a)      if to the Company:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attn: Randall G. Wick
                                 Vice President, General Counsel
                           Telephone No.: (714) 662-5600
                           Facsimile No.: (714) 641-0172

                  (b)      if to Executive:

                           c/o Vixel Corporation
                           11911 North Creek Parkway South
                           Bothell, Washington 98011
                           Telephone No.: (425) 806-4528
                           Facsimile No.: (425) 806-4001

         17.      Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Merger Agreement.




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

                                    EMULEX CORPORATION

                                    By: /s/ PAUL FOLINO
                                        ----------------------------------------
                                        Name:  Paul Folino
                                        Title: Chairman of the Board and
                                               Chief Executive Officer

                                    /s/ STUART B. BERMAN
                                    --------------------------------------------
                                    Stuart B. Berman



                                                                         ANNEX A

[EMULEX LOGO]

                 EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT

         This Employee Creation and Non-Disclosure Agreement (this "Agreement")
is entered into between Emulex Corporation ("Emulex") and the undersigned
Employee. In consideration of employment or continued employment by Emulex and
the mutual promises contained in this Agreement, Employee and Emulex agree as
follows:

                Definition of Terms.

                  1.1      Creation. "Creation" means every idea, concept,
invention, device, design, apparatus, machine, practice, process, method,
product, composition of matter, improvement, formula, algorithm, literary or
graphical or audiovisual work or sound recording, mask work, or computer program
of any kind, whether or not subject to patent, copyright, mask work right, or
similar protection.

                  1.2      Create. "Create" means invent, develop, devise,
conceive, discover, create, first reduce to practice, write, or fix in a
tangible medium of expression.

                  1.3      Confidential Information. "Confidential Information"
means all Creations, data, information, know-how, process parameters,
fabrication techniques, technical plans, documentation, customer lists, price
lists, supplier lists, business plans, marketing plans, financial information,
and the like, in whatever form or medium, and whether or not designated or
marked "Confidential" or the like, which: (1) relate to the business of Emulex,
and (a) have not been disclosed by Emulex to, or (b) are not generally known to,
the general public or to Emulex's trade or industry; or (2) are received by
Emulex from a third party under an obligation of confidentiality to the third
party.

                  1.4      Emulex. "Emulex" includes Emulex Corporation, a
Delaware corporation, all of its subsidiaries, and all joint ventures and
partnerships of which such corporation and/or any of such subsidiaries is a
member, partner, or participant.

                Confidential Information.

                  2.1      Acknowledgement by Employee. Employee acknowledges
that during Employee's employment with Emulex, Employee may be given access to,
become acquainted with, or develop Confidential Information.

                  2.2      No Use or Disclosure. Employee shall not use or
disclose (directly or indirectly) any Confidential Information (whether or not
created or developed by Employee) at any time or in any manner, except as
required in the course of employment with Emulex. Employee acknowledges that,
except as set forth on an exhibit attached by Employee to this Agreement,
Employee is not a party to any agreement with any other entity which either (1)
restricts Employee's use or disclosure of any information gained or learned by
Employee from the entity or while employed by the entity, or (2) otherwise
relates to Employee's use or disclosure of any confidential information or trade
secrets of the entity. Employee represents that no entity has asserted or is
asserting that Employee has breached any of the terms or provisions of any of
the agreements listed on the attached exhibit. The obligations of this Paragraph
are continuing and survive the termination of Employee's employment with Emulex.

                  2.3      Restriction on Documents and Equipment. All
Confidential Information, documents, and equipment relating to the business of
Emulex, whether prepared by Employee or otherwise coming into Employee's
possession, are the exclusive property of Emulex, and must not be removed from
any of its premises except as required in the course of employment with Emulex.
All such Confidential Information, documents, and equipment



shall be promptly returned by Employee to Emulex upon the request of Emulex, and
on any termination of Employee's employment with Emulex.

                  2.4      No Disclosure or Use from Others. Employee shall not
disclose to Emulex or use on behalf of Emulex any confidential information or
trade secrets obtained from other entities, and shall not bring confidential
information or trade secrets of other entities onto Emulex's premises.

                Creations.

                  3.1      Disclosure and Assignment of Creations. Employee
shall promptly inform and disclose to Emulex all Creations which Employee
Creates (either alone or with others) while in the employment of Emulex, if the
Creations:

                  (1)      relate, at the time Created, to the business of
                  Emulex or to any actual or demonstrably anticipated research
                  or development work of Emulex; or

                  (2)      result from any work performed by Employee for
                  Emulex; or

                  (3)      were Created utilizing any of Emulex's equipment,
                  supplies, facilities, time, or Confidential Information.

ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK
PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR
HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS
OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE
PROPERTY OF EMULEX.

                  3.2      Governmental Rights. Employee acknowledges that
Emulex has entered or may enter into agreements with agencies of the United
States government, and that Emulex may be subject to laws and regulations which
impose obligations, restrictions, and limitations on Emulex with respect to
Creations which may be acquired by Emulex or which may be conceived or developed
by employees, consultants, and other agents rendering services to Emulex.
Employee shall be bound by all such obligations, restrictions, and limitations
applicable to any Creation of Employee. Employee also shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations. Employee further shall assign to Emulex
all of Employee's rights in any Creation of Employee if Emulex is required to
grant those rights to the United States government or any agencies of the United
States government.

                  3.3      Employee's Assistance. Employee agrees to assist
Emulex in obtaining and/or maintaining patents, copyrights, mask work rights,
and similar rights to any Creations assigned by Employee to Emulex if Emulex, in
its sole discretion, requests such assistance. Employee shall sign all documents
and do all other things deemed necessary by Emulex, at Emulex's expense, to
obtain and/or maintain such rights, to assign them to Emulex, to defend them
from invalidation, and to protect them against infringement by other parties.
The obligations of this Paragraph are continuing and survive the termination of
Employee's employment with Emulex. If Emulex requires Employee's assistance
under this Paragraph after termination of employment with Emulex, Employee will
be compensated for time actually spent in providing assistance at Employee's
hourly pay rate at the date of Employee's termination.

                  3.4      Appointment of Agent. Employee irrevocably appoints
the President of Emulex to act as Employee's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights, mask
work rights, and similar rights, to any Creations assigned by Employee to Emulex
under this Agreement if (1) Employee refuses to perform those acts, or (2) is
unavailable, within the meaning of any applicable laws. Employee acknowledges
that the grant of the foregoing power of attorney is coupled with an interest
and shall survive the death or disability of Employee.

                  3.5      Further Disclosure. Employee shall promptly disclose
to Emulex, in confidence, (1) all Creations of any kind which Employee Creates
while employed by Emulex, and (2) all patent applications filed by



Employee within one (1) year after termination of employment with Emulex.
Employee agrees that any application for a patent, copyright registration, mask
work registration, or similar right filed within one (1) year after termination
of employment with Emulex shall be presumed to relate to a Creation of Employee
Created during employment at Emulex, unless Employee can prove otherwise.

                  3.6      Records. Employee shall keep complete, accurate, and
authentic information and records on all Creations in the manner and form
requested by Emulex. The information and records, and all copies of them, shall
be the exclusive property of Emulex. Employee shall promptly surrender the
information and records upon the request of Emulex, and on any termination of
Employee's employment with Emulex.

                  3.7      Compliance with Labor Code. THIS AGREEMENT DOES NOT
APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870
OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S
INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW:

         "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                  (1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or

                  (2) Result from any work performed by the employee for the
employer.

         (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                Restrictions on Employee.

                  4.1      No Conflicting Competition. While employed by Emulex,
Employee shall not in any manner (whether as an employee, consultant, or
otherwise) perform services for, or have an ownership interest in (other than
less than one percent (1%) of a publicly-held company), any entity that competes
with Emulex or any employment or business which is otherwise in conflict with
Employee's employment relationship with Emulex.

                  4.2      No Competitive Planning. While employed by Emulex,
Employee shall not undertake any planning for any outside business activity (1)
competitive with the work which Employee performs for Emulex, or (2) competitive
with the profit unit of Emulex for which Employee works.

                  4.3      No Hiring of Other Employees. While employed by
Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ,
or assist or encourage others in employing or attempting to employ (whether as
an employee, consultant, or otherwise), any of Emulex's other employees who work
in any area in which Employee has been significantly engaged on behalf of
Emulex.

                  4.4      No Use of Confidential Information. While employed by
Emulex, and for 1 year afterward, Employee shall not enter into any other
employment (whether as an employee, consultant, or otherwise) in which the
duties of such other employment would require Employee to disclose or use any
Confidential Information.

                  4.5      No Conflicting Agreements. Employee represents that
Employee has no agreements with or obligations to any other party that would
interfere with Employee's compliance with this Agreement.

                  4.6      Subsequent Employment. Employee agrees that Emulex
may notify anyone as to the existence and provisions of this Agreement.



                Pre-existing Creations.

                  5.1      Representation of Coverage and Grant of License.
Except for those Creations (if any) specifically reserved by Employee in an
attachment to this Agreement, Employee represents that there are no Creations
owned wholly or in part by Employee, or controlled directly or indirectly by
Employee, which Employee considers to be reserved and excluded from the scope of
this Agreement. Employee grants to Emulex a royalty-free, non-exclusive,
worldwide, irrevocable license on any and all non-reserved Creations of
Employee.

                  5.2      Preservation of Confidence. In order to preserve
Employee's proprietary rights in any unpatented or unpublished reserved
Creations, Emulex shall keep in confidence all information provided by Employee
pertaining to any reserved Creation, unless the information: (1) is already
known to or in the possession of Emulex; (2) is or becomes publicly known
through no wrongful act of Emulex; (3) is rightfully received by Emulex from a
third party without breach of any obligation to Employee; (4) is approved for
release by written authorization of Employee; (5) is distributed or made
available to others by Employee without restriction as to use or disclosure; or
(6) is developed independently by Emulex through persons not involved with
information received by Emulex from Employee.

                  5.3      License from Use. Notwithstanding the reservation of
a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while
employed by Emulex, or (2) permits the use of a reserved Creation by another
employee of Emulex, and does not have a prior written agreement with Emulex
pertaining to such use, then Employee thereby grants to Emulex a royalty-free,
non-exclusive, worldwide, irrevocable license to that Creation (provided that
the reserved Creation is owned wholly or in part by Employee, or is within the
direct or indirect control of Employee at the time of employment).

                  5.4      Right of First Refusal. With respect to any reserved
Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right
of first refusal to purchase or license such Creations (unless otherwise
licensed to Emulex by any other terms of this Agreement) on terms at least as
favorable as offered to any other purchaser or licensee while Employee is
employed by Emulex.

                General Provisions.

                  6.1      Attorneys' Fees. If any arbitration, litigation, or
other legal proceeding occurs between the parties relating to this Agreement,
the prevailing party shall be entitled to recover (in addition to any other
relief awarded or granted) his, her, or its reasonable costs and expenses
(including attorneys' fees) incurred in the proceeding and any appeal therefrom.

                  6.2      Entire Agreement. This Agreement, including all
referenced attachments, constitutes the complete and final agreement between the
parties, and supersedes all prior negotiations, agreements, and understandings
between the parties concerning its subject matter.

                  6.3      Successors and Assigns. This Agreement is intended to
benefit and is binding on (1) the successors and assigns of Emulex, and (2) the
heirs and legal successors of Employee.

                  6.4      Separate Enforcement of Provisions. If any provision
of this Agreement is held by a court or arbitrator of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
be enforced to the extent possible.

                  6.5      Governing Law. The validity, construction, and
performance of this Agreement is governed by the laws of the State of
California.

                  6.6      Right to Relief. If Employee breaches or threatens to
breach any provision of this Agreement, in addition to any other rights and
remedies Emulex may have, Emulex shall be entitled to temporary and permanent
injunctive relief to prevent the breach or threatened breach without the
necessity of proving actual damages or posting any bond or undertaking.



                  6.7      Waiver and Amendment. No waiver, amendment, or
modification of this Agreement shall be effective unless in writing and signed
by the party against whom the waiver, amendment, or modification is sought to be
enforced. No failure or delay by either party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of the right, power, or
remedy. No waiver of any term, condition, or breach of this Agreement shall be
construed as a waiver of any other term, condition, or breach.

                Effective Date. This Agreement, no matter when signed by
Employee, is effective from the first date of Employee's employment with Emulex
and shall survive the termination of Employee's employment with Emulex.

                At Will Employment. Unless specifically provided differently in
a separate written agreement signed by an authorized agent of Emulex, Employee
acknowledges and agrees that Employee's employment by Emulex is now and will
continue to be throughout his or her employment with Emulex "AT WILL," and can
be terminated at any time by Emulex for any reason, with or without good cause,
and with or without prior warning or notice.

                Acknowledgment of Reading. Employee acknowledges that Employee
has read and understands this Agreement, and has received a copy of it.

AGREED:                                      EMULEX CORPORATION

______________________________               By:___________________________
Employee's signature

______________________________               ______________________________
Employee's Name                              Name

Dated:________________________               ______________________________
                                             Title

                                             Dated:________________________

EX-99.(D)(6)

                                                                  EXHIBIT (d)(6)

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
October 8, 2003, by and between Emulex Corporation, a California corporation
(the "COMPANY") and Thomas Hughes ("EXECUTIVE"), a shareholder and executive
officer of Vixel Corporation, a Delaware Corporation ("VIXEL").

                                    RECITALS

         A.       Vixel is engaged in the business of providing technologies and
products for the storage networking infrastructure business, fabric switches and
storage networking semiconductor components that are embedded in fabric switches
and storage appliances (including, but not limited to, storage arrays, network
attached storage, tape libraries and virtualization appliances) that are
contained in existing products of or products under development by Vixel (the
"BUSINESS"); provided, that if Executive accepts an offer of employment with the
Company following the Merger, the definition of Business shall also include the
preceding Business of the Company as well as Vixel, including HBAs.

         B.       Executive is a stockholder and an executive officer of Vixel
and accordingly has acquired confidential and proprietary information relating
to the Business and the operation of Vixel;

         C.       Executive's covenant not to compete, as reflected in this
Agreement, is an essential part of the transactions described in the Agreement
and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and
among Eagle Corporation, a Delaware corporation and the Company's parent
corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to
which, among other things, the Sub will be merged with and into Vixel (the
"MERGER");

         D.       Executive holds a substantial number of stock options of Vixel
that will continue to vest and shall be exercisable for shares of common stock
of the Company following the Merger and therefore has a material economic
interest in the consummation of the Merger.

         E.       In order to protect the goodwill related to the Business and
as a condition of, and an inducement to, the Company entering into the Merger
Agreement, Executive has agreed to the noncompetition and nonsolicitation
covenants and the confidentiality agreements provided in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and to induce the
Company to consummate the transactions contemplated by the Merger Agreement, the
receipt and sufficiency of which are hereby acknowledged, and with the knowledge
that no other good or valuable consideration has been offered to or received by
Executive in connection with the execution of this Agreement, Executive hereby
covenants and agrees as follows:



         1.       Effectiveness of Agreement. This Agreement is conditioned upon
the occurrence of the (i) Closing (as that term is defined in the Merger
Agreement) and (ii) a bone fide offer of employment to Executive by the Company
or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This
Agreement shall be null and void ab initio should the Merger not be consummated
for any reason or should the Employment Commencement not occur. This Agreement
will terminate in the event of and concurrent with a termination of the Merger
Agreement in accordance with its terms.

         2.       Noncompetition.

                  (a)      Executive and the Company agree that due to the
nature of Executive's association with Vixel, Executive has confidential and
proprietary information relating to the business and operations of Vixel and the
Company (all references to the "Company" hereinafter shall include Vixel, which
shall be the surviving corporation in the Merger). Executive acknowledges that
such information is of extreme importance to the business of the Company and
will continue to be so after the Merger and that disclosure of such confidential
information to others or the unauthorized use of such information by others
would cause substantial loss and harm to the Company. Executive and the Company
also agree that Executive will continue to acquire, and will assist in
developing, confidential and proprietary information relating to the Business
following the Merger by reason of his employment with the Company.

                  (b)      Executive and the Company further agree that the
market for the Business is intensely competitive and that the Company engages in
the Business throughout the United States, Europe, Scandinavia, Japan, China,
Taiwan, Thailand, South Korea and Singapore.

                  (c)      (i) Subject to subparagraph (ii) below, during the
         period commencing at the Effective Time of the Merger and ending one
         (1) year following the termination of Executive's employment with the
         Company (including, without limitation, voluntary resignation by such
         Executive or termination at the request of the Company) (the
         "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in
         the Business Area (as defined below), engage, directly or indirectly,
         in any in any capacity whatsoever (whether as an officer, director,
         stockholder, owner, proprietor, partner, member, co-owner, investor,
         employee, trustee, manager, consultant, independent contractor,
         co-venturer, financier, agent, representative or otherwise), in a
         Competing Business (as defined below), or otherwise hold any interest
         in a Competing Business; provided, however, that Executive may own,
         directly or indirectly, solely as a passive investment, securities of
         any entity traded on any national securities exchange if Executive is
         not a controlling person of, or a member of a group which controls,
         such entity and does not, directly or indirectly, "beneficially own"
         (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) 1.0% or more of any class of securities of such Competing
         Business.

                  (ii)     In the event that the employment of Executive is
         terminated by the Company without Cause (as defined herein) within one
         (1) year of the Effective Time, then the Restricted Period shall
         terminate on the expiration of severance payments to Executive.



                  (d)      "COMPETING BUSINESS" as used herein, means any
individual, corporation, partnership, limited partnership, limited liability
company, trust (business or otherwise), institution, foundation, pool, plan or
other entity or organization (other than the Company) which engages or has
publicly announced that it proposes to engage in the Business.

                  (e)      "BUSINESS AREA" as used herein, means each state
within the United States of America as well as each country, state, province and
territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea
and Singapore.

                  (f)      "CAUSE" as used herein shall mean: (i) any
misappropriation or embezzlement by Executive of the property of the Company or
any of its affiliates or other act of fraud or material misconduct by Executive
against the Company or any of its affiliates; (ii) Executive's conviction of or
plea of guilty or nolo contendere to a crime constituting a felony or any
criminal act involving moral turpitude; (iii) a breach by Executive of any
provision of this Agreement; (iv) the failure, refusal or neglect by Executive
to perform faithfully the duties and obligations customary to his office; (v)
the habitual non-performance or incompetent performance by Executive of the
duties or responsibilities customary to his office; (vi) misconduct by
Executive, including insubordination, in respect of the duties or obligations
customary to his office; and (vii) any intentional or grossly negligent act by
Executive having the effect of materially injuring the business or reputation of
the Company or any of its affiliates. No activities covered by item (iv), (v)
and (vi) will be deemed to be "Cause" unless the Company has notified Executive
of the prohibited activity in writing and Executive has failed to cease such
activity within thirty (30) days.

         3.       Nonsolicitation of the Purchaser and Company Employees. During
the Restricted Period, Executive shall not, without the prior written consent of
the Company, directly or indirectly solicit, request, cause or induce any person
who is at the time an employee of or a consultant of the Company to leave the
employ of or otherwise terminate such person's relationship with the Company.

         4.       Nonsolicitation of Customers or Suppliers. During the
Restricted Period, Executive shall not, directly or indirectly: (i) solicit,
induce or attempt to induce any customer, client or supplier of the Company to
cease doing business in whole or in part with the Company; or (ii) attempt to
limit or interfere with any business engagement or relationship existing between
the Company and any third party.

         5.       Confidentiality. Executive agrees that, upon the Closing, he
will execute the Company's standard proprietary information and invention
assignment agreement (the "Employee Invention and Non-Disclosure Agreement"),
the form of which is attached as Annex A, and will abide by all of its terms.

         6.       Injunctive Relief. The parties agree that the remedy at law
for any breach of this Agreement is and will be inadequate, and in the event of
a breach or threatened breach by Executive of any of the provisions of this
Agreement, the Company shall be entitled to seek an injunction restraining
Executive from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting the Company from



pursuing any other remedies available to it or them for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive.

         7.       Reasonableness and Enforceability of Covenants. The parties
expressly agree that the character, duration and geographical scope of this
Agreement are reasonable in light of the circumstances as they exist on the date
upon which this Agreement has been executed, including, but not limited to,
Executive's position of confidence and trust as an executive officer of Vixel as
well as his employment with the Company after the Closing. Moreover, if any
court determines that any of the covenants and agreements contained herein, or
any part thereof, is unenforceable because of the character, duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.

         8.       Severability. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         9.       Construction. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Washington, without
regard to principles of conflicts or choice of laws.

         10.      Amendments and Waivers. This Agreement may be modified only by
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.

         11.      Entire Agreement. This Agreement, together with the Merger
Agreement and the documents, instruments and other agreements contemplated by or
referred to therein and the Employee Invention and Non-Disclosure Agreement,
contains the entire understanding of the parties relating to the subject matter
hereof, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument signed by each of the parties hereto.

         12.      Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.

         13.      Section Headings. The headings of each section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.



         14.      Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that the Company may assign
its rights hereunder, without the consent of Executive, to any entity that
acquires or succeeds to the Business.

         15.      Further Assurances. From time to time, at the Company's
request and without further consideration, Executive shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.

         16.      Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (a)      if to the Company:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attn: Randall G. Wick
                                 Vice President, General Counsel
                           Telephone No.: (714) 662-5600
                           Facsimile No.: (714) 641-0172

                  (b)      if to Executive:

                           c/o Vixel Corporation
                           11911 North Creek Parkway South
                           Bothell, Washington 98011
                           Telephone No.: (425) 806-4528
                           Facsimile No.: (425) 806-4001

         17.      Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Merger Agreement.



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

                                    EMULEX CORPORATION

                                    By: /s/ PAUL FOLINO
                                        ----------------------------------------
                                        Name:  Paul Folino
                                        Title: Chairman of the Board and
                                               Chief Executive Officer

                                    /s/ THOMAS HUGHES
                                    --------------------------------------------
                                    Thomas Hughes



                                                                         ANNEX A

[EMULEX LOGO]

                 EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT

         This Employee Creation and Non-Disclosure Agreement (this "Agreement")
is entered into between Emulex Corporation ("Emulex") and the undersigned
Employee. In consideration of employment or continued employment by Emulex and
the mutual promises contained in this Agreement, Employee and Emulex agree as
follows:

                Definition of Terms.

                  1.1      Creation. "Creation" means every idea, concept,
invention, device, design, apparatus, machine, practice, process, method,
product, composition of matter, improvement, formula, algorithm, literary or
graphical or audiovisual work or sound recording, mask work, or computer program
of any kind, whether or not subject to patent, copyright, mask work right, or
similar protection.

                  1.2      Create. "Create" means invent, develop, devise,
conceive, discover, create, first reduce to practice, write, or fix in a
tangible medium of expression.

                  1.3      Confidential Information. "Confidential Information"
means all Creations, data, information, know-how, process parameters,
fabrication techniques, technical plans, documentation, customer lists, price
lists, supplier lists, business plans, marketing plans, financial information,
and the like, in whatever form or medium, and whether or not designated or
marked "Confidential" or the like, which: (1) relate to the business of Emulex,
and (a) have not been disclosed by Emulex to, or (b) are not generally known to,
the general public or to Emulex's trade or industry; or (2) are received by
Emulex from a third party under an obligation of confidentiality to the third
party.

                  1.4      Emulex. "Emulex" includes Emulex Corporation, a
Delaware corporation, all of its subsidiaries, and all joint ventures and
partnerships of which such corporation and/or any of such subsidiaries is a
member, partner, or participant.

                Confidential Information.

                  2.1      Acknowledgement by Employee. Employee acknowledges
that during Employee's employment with Emulex, Employee may be given access to,
become acquainted with, or develop Confidential Information.

                  2.2      No Use or Disclosure. Employee shall not use or
disclose (directly or indirectly) any Confidential Information (whether or not
created or developed by Employee) at any time or in any manner, except as
required in the course of employment with Emulex. Employee acknowledges that,
except as set forth on an exhibit attached by Employee to this Agreement,
Employee is not a party to any agreement with any other entity which either (1)
restricts Employee's use or disclosure of any information gained or learned by
Employee from the entity or while employed by the entity, or (2) otherwise
relates to Employee's use or disclosure of any confidential information or trade
secrets of the entity. Employee represents that no entity has asserted or is
asserting that Employee has breached any of the terms or provisions of any of
the agreements listed on the attached exhibit. The obligations of this Paragraph
are continuing and survive the termination of Employee's employment with Emulex.

                  2.3      Restriction on Documents and Equipment. All
Confidential Information, documents, and equipment relating to the business of
Emulex, whether prepared by Employee or otherwise coming into Employee's
possession, are the exclusive property of Emulex, and must not be removed from
any of its premises except as required in the course of employment with Emulex.
All such Confidential Information, documents, and equipment



shall be promptly returned by Employee to Emulex upon the request of Emulex, and
on any termination of Employee's employment with Emulex.

                  2.4      No Disclosure or Use from Others. Employee shall not
disclose to Emulex or use on behalf of Emulex any confidential information or
trade secrets obtained from other entities, and shall not bring confidential
information or trade secrets of other entities onto Emulex's premises.

                Creations.

                  3.1      Disclosure and Assignment of Creations. Employee
shall promptly inform and disclose to Emulex all Creations which Employee
Creates (either alone or with others) while in the employment of Emulex, if the
Creations:

                  (1)      relate, at the time Created, to the business of
                  Emulex or to any actual or demonstrably anticipated research
                  or development work of Emulex; or

                  (2)      result from any work performed by Employee for
                  Emulex; or

                  (3)      were Created utilizing any of Emulex's equipment,
                  supplies, facilities, time, or Confidential Information.

ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK
PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR
HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS
OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE
PROPERTY OF EMULEX.

                  3.2      Governmental Rights. Employee acknowledges that
Emulex has entered or may enter into agreements with agencies of the United
States government, and that Emulex may be subject to laws and regulations which
impose obligations, restrictions, and limitations on Emulex with respect to
Creations which may be acquired by Emulex or which may be conceived or developed
by employees, consultants, and other agents rendering services to Emulex.
Employee shall be bound by all such obligations, restrictions, and limitations
applicable to any Creation of Employee. Employee also shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations. Employee further shall assign to Emulex
all of Employee's rights in any Creation of Employee if Emulex is required to
grant those rights to the United States government or any agencies of the United
States government.

                  3.3      Employee's Assistance. Employee agrees to assist
Emulex in obtaining and/or maintaining patents, copyrights, mask work rights,
and similar rights to any Creations assigned by Employee to Emulex if Emulex, in
its sole discretion, requests such assistance. Employee shall sign all documents
and do all other things deemed necessary by Emulex, at Emulex's expense, to
obtain and/or maintain such rights, to assign them to Emulex, to defend them
from invalidation, and to protect them against infringement by other parties.
The obligations of this Paragraph are continuing and survive the termination of
Employee's employment with Emulex. If Emulex requires Employee's assistance
under this Paragraph after termination of employment with Emulex, Employee will
be compensated for time actually spent in providing assistance at Employee's
hourly pay rate at the date of Employee's termination.

                  3.4      Appointment of Agent. Employee irrevocably appoints
the President of Emulex to act as Employee's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights, mask
work rights, and similar rights, to any Creations assigned by Employee to Emulex
under this Agreement if (1) Employee refuses to perform those acts, or (2) is
unavailable, within the meaning of any applicable laws. Employee acknowledges
that the grant of the foregoing power of attorney is coupled with an interest
and shall survive the death or disability of Employee.

                  3.5      Further Disclosure. Employee shall promptly disclose
to Emulex, in confidence, (1) all Creations of any kind which Employee Creates
while employed by Emulex, and (2) all patent applications filed by Employee
within one (1) year after termination of employment with Emulex. Employee agrees
that any application



for a patent, copyright registration, mask work registration, or similar right
filed within one (1) year after termination of employment with Emulex shall be
presumed to relate to a Creation of Employee Created during employment at
Emulex, unless Employee can prove otherwise.

                  3.6      Records. Employee shall keep complete, accurate, and
authentic information and records on all Creations in the manner and form
requested by Emulex. The information and records, and all copies of them, shall
be the exclusive property of Emulex. Employee shall promptly surrender the
information and records upon the request of Emulex, and on any termination of
Employee's employment with Emulex.

                  3.7      Compliance with Labor Code. THIS AGREEMENT DOES NOT
APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870
OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S
INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW:

         "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                  (1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or

                  (2) Result from any work performed by the employee for the
employer.

         (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                Restrictions on Employee.

                  4.1      No Conflicting Competition. While employed by Emulex,
Employee shall not in any manner (whether as an employee, consultant, or
otherwise) perform services for, or have an ownership interest in (other than
less than one percent (1%) of a publicly-held company), any entity that competes
with Emulex or any employment or business which is otherwise in conflict with
Employee's employment relationship with Emulex.

                  4.2      No Competitive Planning. While employed by Emulex,
Employee shall not undertake any planning for any outside business activity (1)
competitive with the work which Employee performs for Emulex, or (2) competitive
with the profit unit of Emulex for which Employee works.

                  4.3      No Hiring of Other Employees. While employed by
Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ,
or assist or encourage others in employing or attempting to employ (whether as
an employee, consultant, or otherwise), any of Emulex's other employees who work
in any area in which Employee has been significantly engaged on behalf of
Emulex.

                  4.4      No Use of Confidential Information. While employed by
Emulex, and for 1 year afterward, Employee shall not enter into any other
employment (whether as an employee, consultant, or otherwise) in which the
duties of such other employment would require Employee to disclose or use any
Confidential Information.

                  4.5      No Conflicting Agreements. Employee represents that
Employee has no agreements with or obligations to any other party that would
interfere with Employee's compliance with this Agreement.

                  4.6      Subsequent Employment. Employee agrees that Emulex
may notify anyone as to the existence and provisions of this Agreement.



                Pre-existing Creations.

                  5.1      Representation of Coverage and Grant of License.
Except for those Creations (if any) specifically reserved by Employee in an
attachment to this Agreement, Employee represents that there are no Creations
owned wholly or in part by Employee, or controlled directly or indirectly by
Employee, which Employee considers to be reserved and excluded from the scope of
this Agreement. Employee grants to Emulex a royalty-free, non-exclusive,
worldwide, irrevocable license on any and all non-reserved Creations of
Employee.

                  5.2      Preservation of Confidence. In order to preserve
Employee's proprietary rights in any unpatented or unpublished reserved
Creations, Emulex shall keep in confidence all information provided by Employee
pertaining to any reserved Creation, unless the information: (1) is already
known to or in the possession of Emulex; (2) is or becomes publicly known
through no wrongful act of Emulex; (3) is rightfully received by Emulex from a
third party without breach of any obligation to Employee; (4) is approved for
release by written authorization of Employee; (5) is distributed or made
available to others by Employee without restriction as to use or disclosure; or
(6) is developed independently by Emulex through persons not involved with
information received by Emulex from Employee.

                  5.3      License from Use. Notwithstanding the reservation of
a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while
employed by Emulex, or (2) permits the use of a reserved Creation by another
employee of Emulex, and does not have a prior written agreement with Emulex
pertaining to such use, then Employee thereby grants to Emulex a royalty-free,
non-exclusive, worldwide, irrevocable license to that Creation (provided that
the reserved Creation is owned wholly or in part by Employee, or is within the
direct or indirect control of Employee at the time of employment).

                  5.4      Right of First Refusal. With respect to any reserved
Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right
of first refusal to purchase or license such Creations (unless otherwise
licensed to Emulex by any other terms of this Agreement) on terms at least as
favorable as offered to any other purchaser or licensee while Employee is
employed by Emulex.

                General Provisions.

                  6.1      Attorneys' Fees. If any arbitration, litigation, or
other legal proceeding occurs between the parties relating to this Agreement,
the prevailing party shall be entitled to recover (in addition to any other
relief awarded or granted) his, her, or its reasonable costs and expenses
(including attorneys' fees) incurred in the proceeding and any appeal therefrom.

                  6.2      Entire Agreement. This Agreement, including all
referenced attachments, constitutes the complete and final agreement between the
parties, and supersedes all prior negotiations, agreements, and understandings
between the parties concerning its subject matter.

                  6.3      Successors and Assigns. This Agreement is intended to
benefit and is binding on (1) the successors and assigns of Emulex, and (2) the
heirs and legal successors of Employee.

                  6.4      Separate Enforcement of Provisions. If any provision
of this Agreement is held by a court or arbitrator of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
be enforced to the extent possible.

                  6.5      Governing Law. The validity, construction, and
performance of this Agreement is governed by the laws of the State of
California.

                  6.6      Right to Relief. If Employee breaches or threatens to
breach any provision of this Agreement, in addition to any other rights and
remedies Emulex may have, Emulex shall be entitled to temporary and permanent
injunctive relief to prevent the breach or threatened breach without the
necessity of proving actual damages or posting any bond or undertaking.



                  6.7      Waiver and Amendment. No waiver, amendment, or
modification of this Agreement shall be effective unless in writing and signed
by the party against whom the waiver, amendment, or modification is sought to be
enforced. No failure or delay by either party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of the right, power, or
remedy. No waiver of any term, condition, or breach of this Agreement shall be
construed as a waiver of any other term, condition, or breach.

                Effective Date. This Agreement, no matter when signed by
Employee, is effective from the first date of Employee's employment with Emulex,
and shall survive the termination of Employee's employment with Emulex.

                At Will Employment. Unless specifically provided differently in
a separate written agreement signed by an authorized agent of Emulex, Employee
acknowledges and agrees that Employee's employment by Emulex is now and will
continue to be throughout his or her employment with Emulex "AT WILL," and can
be terminated at any time by Emulex for any reason, with or without good cause,
and with or without prior warning or notice.

                Acknowledgment of Reading. Employee acknowledges that Employee
has read and understands this Agreement, and has received a copy of it.

AGREED:                                      EMULEX CORPORATION

______________________________               By:___________________________
Employee's signature

______________________________               ______________________________
Employee's Name                              Name

Dated:________________________               ______________________________
                                             Title

                                             Dated:________________________

EX-99.(D)(7)

                                                                  EXHIBIT (d)(7)

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
October 8, 2003, by and between Emulex Corporation, a California corporation
(the "COMPANY") and Soogil Stephen Cho ("EXECUTIVE"), a shareholder and
executive officer of Vixel Corporation, a Delaware Corporation ("VIXEL").

                                    RECITALS

         A.       Vixel is engaged in the business of providing technologies and
products for the storage networking infrastructure business, fabric switches and
storage networking semiconductor components that are embedded in fabric switches
and storage appliances (including, but not limited to, storage arrays, network
attached storage, tape libraries and virtualization appliances) that are
contained in existing products of or products under development by Vixel (the
"BUSINESS"); provided, that if Executive accepts an offer of employment with the
Company following the Merger, the definition of Business shall also include the
preceding Business of the Company as well as Vixel, including HBAs.

         B.       Executive is a stockholder and an executive officer of Vixel
and accordingly has acquired confidential and proprietary information relating
to the Business and the operation of Vixel;

         C.       Executive's covenant not to compete, as reflected in this
Agreement, is an essential part of the transactions described in the Agreement
and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and
among Eagle Corporation, a Delaware corporation and the Company's parent
corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to
which, among other things, the Sub will be merged with and into Vixel (the
"MERGER");

         D.       Executive holds a substantial number of stock options of Vixel
that will continue to vest and shall be exercisable for shares of common stock
of the Company following the Merger and therefore has a material economic
interest in the consummation of the Merger.

         E.       In order to protect the goodwill related to the Business and
as a condition of, and an inducement to, the Company entering into the Merger
Agreement, Executive has agreed to the noncompetition and nonsolicitation
covenants and the confidentiality agreements provided in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and to induce the
Company to consummate the transactions contemplated by the Merger Agreement, the
receipt and sufficiency of which are hereby acknowledged, and with the knowledge
that no other good or valuable consideration has been offered to or received by
Executive in connection with the execution of this Agreement, Executive hereby
covenants and agrees as follows:



         1.       Effectiveness of Agreement. This Agreement is conditioned upon
the occurrence of the (i) Closing (as that term is defined in the Merger
Agreement) and (ii) a bone fide offer of employment to Executive by the Company
or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This
Agreement shall be null and void ab initio should the Merger not be consummated
for any reason or should the Employment Commencement not occur. This Agreement
will terminate in the event of and concurrent with a termination of the Merger
Agreement in accordance with its terms.

         2.       Noncompetition.

                  (a)      Executive and the Company agree that due to the
nature of Executive's association with Vixel, Executive has confidential and
proprietary information relating to the business and operations of Vixel and the
Company (all references to the "Company" hereinafter shall include Vixel, which
shall be the surviving corporation in the Merger). Executive acknowledges that
such information is of extreme importance to the business of the Company and
will continue to be so after the Merger and that disclosure of such confidential
information to others or the unauthorized use of such information by others
would cause substantial loss and harm to the Company. Executive and the Company
also agree that Executive will continue to acquire, and will assist in
developing, confidential and proprietary information relating to the Business
following the Merger by reason of his employment with the Company.

                  (b)      Executive and the Company further agree that the
market for the Business is intensely competitive and that the Company engages in
the Business throughout the United States, Europe, Scandinavia, Japan, China,
Taiwan, Thailand, South Korea and Singapore.

                  (c)      (i) Subject to subparagraph (ii) below, during the
         period commencing at the Effective Time of the Merger and ending one
         (1) year following the termination of Executive's employment with the
         Company (including, without limitation, voluntary resignation by such
         Executive or termination at the request of the Company) (the
         "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in
         the Business Area (as defined below), engage, directly or indirectly,
         in any in any capacity whatsoever (whether as an officer, director,
         stockholder, owner, proprietor, partner, member, co-owner, investor,
         employee, trustee, manager, consultant, independent contractor,
         co-venturer, financier, agent, representative or otherwise), in a
         Competing Business (as defined below), or otherwise hold any interest
         in a Competing Business; provided, however, that Executive may own,
         directly or indirectly, solely as a passive investment, securities of
         any entity traded on any national securities exchange if Executive is
         not a controlling person of, or a member of a group which controls,
         such entity and does not, directly or indirectly, "beneficially own"
         (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) 1.0% or more of any class of securities of such Competing
         Business.

                  (ii)     In the event that the employment of Executive is
         terminated by the Company without Cause (as defined herein) within one
         (1) year of the Effective Time, then the Restricted Period shall
         terminate on the expiration of severance payments to Executive.



                  (d)      "COMPETING BUSINESS" as used herein, means any
individual, corporation, partnership, limited partnership, limited liability
company, trust (business or otherwise), institution, foundation, pool, plan or
other entity or organization (other than the Company) which engages or has
publicly announced that it proposes to engage in the Business.

                  (e)      "BUSINESS AREA" as used herein, means each state
within the United States of America as well as each country, state, province and
territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea
and Singapore.

                  (f)      "CAUSE" as used herein shall mean: (i) any
misappropriation or embezzlement by Executive of the property of the Company or
any of its affiliates or other act of fraud or material misconduct by Executive
against the Company or any of its affiliates; (ii) Executive's conviction of or
plea of guilty or nolo contendere to a crime constituting a felony or any
criminal act involving moral turpitude; (iii) a breach by Executive of any
provision of this Agreement; (iv) the failure, refusal or neglect by Executive
to perform faithfully the duties and obligations customary to his office; (v)
the habitual non-performance or incompetent performance by Executive of the
duties or responsibilities customary to his office; (vi) misconduct by
Executive, including insubordination, in respect of the duties or obligations
customary to his office; and (vii) any intentional or grossly negligent act by
Executive having the effect of materially injuring the business or reputation of
the Company or any of its affiliates. No activities covered by item (iv), (v)
and (vi) will be deemed to be "Cause" unless the Company has notified Executive
of the prohibited activity in writing and Executive has failed to cease such
activity within thirty (30) days.

         3.       Nonsolicitation of the Purchaser and Company Employees. During
the Restricted Period, Executive shall not, without the prior written consent of
the Company, directly or indirectly solicit, request, cause or induce any person
who is at the time an employee of or a consultant of the Company to leave the
employ of or otherwise terminate such person's relationship with the Company.

         4.       Nonsolicitation of Customers or Suppliers. During the
Restricted Period, Executive shall not, directly or indirectly: (i) solicit,
induce or attempt to induce any customer, client or supplier of the Company to
cease doing business in whole or in part with the Company; or (ii) attempt to
limit or interfere with any business engagement or relationship existing between
the Company and any third party.

         5.       Confidentiality. Executive agrees that, upon the Closing, he
will execute the Company's standard proprietary information and invention
assignment agreement (the "Employee Invention and Non-Disclosure Agreement"),
the form of which is attached as Annex A, and will abide by all of its terms.

         6.       Injunctive Relief. The parties agree that the remedy at law
for any breach of this Agreement is and will be inadequate, and in the event of
a breach or threatened breach by Executive of any of the provisions of this
Agreement, the Company shall be entitled to seek an injunction restraining
Executive from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting the Company from



pursuing any other remedies available to it or them for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive.

         7.       Reasonableness and Enforceability of Covenants. The parties
expressly agree that the character, duration and geographical scope of this
Agreement are reasonable in light of the circumstances as they exist on the date
upon which this Agreement has been executed, including, but not limited to,
Executive's position of confidence and trust as an executive officer of Vixel as
well as his employment with the Company after the Closing. Moreover, if any
court determines that any of the covenants and agreements contained herein, or
any part thereof, is unenforceable because of the character, duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.

         8.       Severability. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         9.       Construction. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Washington, without
regard to principles of conflicts or choice of laws.

         10.      Amendments and Waivers. This Agreement may be modified only by
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.

         11.      Entire Agreement. This Agreement, together with the Merger
Agreement and the documents, instruments and other agreements contemplated by or
referred to therein and the Employee Invention and Non-Disclosure Agreement,
contains the entire understanding of the parties relating to the subject matter
hereof, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument signed by each of the parties hereto.

         12.      Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.

         13.      Section Headings. The headings of each section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.



         14.      Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that the Company may assign
its rights hereunder, without the consent of Executive, to any entity that
acquires or succeeds to the Business.

         15.      Further Assurances. From time to time, at the Company's
request and without further consideration, Executive shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.

         16.      Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (a)      if to the Company:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attn: Randall G. Wick
                                 Vice President, General Counsel
                           Telephone No.: (714) 662-5600
                           Facsimile No.: (714) 641-0172

                  (b)      if to Executive:

                           c/o Vixel Corporation
                           11911 North Creek Parkway South
                           Bothell, Washington 98011
                           Telephone No.: (425) 806-4528
                           Facsimile No.: (425) 806-4001

         17.      Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Merger Agreement.



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

                                    EMULEX CORPORATION

                                    By: /s/ PAUL FOLINO
                                        ----------------------------------------
                                        Name:  Paul Folino
                                        Title: Chairman of the Board and
                                               Chief Executive Officer

                                    /s/ SOOGIL STEPHEN CHO
                                    --------------------------------------------
                                    Soogil Stephen Cho



                                                                         ANNEX A

[EMULEX LOGO]

                 EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT

         This Employee Creation and Non-Disclosure Agreement (this "Agreement")
is entered into between Emulex Corporation ("Emulex") and the undersigned
Employee. In consideration of employment or continued employment by Emulex and
the mutual promises contained in this Agreement, Employee and Emulex agree as
follows:

                Definition of Terms.

                  1.1      Creation. "Creation" means every idea, concept,
invention, device, design, apparatus, machine, practice, process, method,
product, composition of matter, improvement, formula, algorithm, literary or
graphical or audiovisual work or sound recording, mask work, or computer program
of any kind, whether or not subject to patent, copyright, mask work right, or
similar protection.

                  1.2      Create. "Create" means invent, develop, devise,
conceive, discover, create, first reduce to practice, write, or fix in a
tangible medium of expression.

                  1.3      Confidential Information. "Confidential Information"
means all Creations, data, information, know-how, process parameters,
fabrication techniques, technical plans, documentation, customer lists, price
lists, supplier lists, business plans, marketing plans, financial information,
and the like, in whatever form or medium, and whether or not designated or
marked "Confidential" or the like, which: (1) relate to the business of Emulex,
and (a) have not been disclosed by Emulex to, or (b) are not generally known to,
the general public or to Emulex's trade or industry; or (2) are received by
Emulex from a third party under an obligation of confidentiality to the third
party.

                  1.4      Emulex. "Emulex" includes Emulex Corporation, a
Delaware corporation, all of its subsidiaries, and all joint ventures and
partnerships of which such corporation and/or any of such subsidiaries is a
member, partner, or participant.

                Confidential Information.

                  2.1      Acknowledgement by Employee. Employee acknowledges
that during Employee's employment with Emulex, Employee may be given access to,
become acquainted with, or develop Confidential Information.

                  2.2      No Use or Disclosure. Employee shall not use or
disclose (directly or indirectly) any Confidential Information (whether or not
created or developed by Employee) at any time or in any manner, except as
required in the course of employment with Emulex. Employee acknowledges that,
except as set forth on an exhibit attached by Employee to this Agreement,
Employee is not a party to any agreement with any other entity which either (1)
restricts Employee's use or disclosure of any information gained or learned by
Employee from the entity or while employed by the entity, or (2) otherwise
relates to Employee's use or disclosure of any confidential information or trade
secrets of the entity. Employee represents that no entity has asserted or is
asserting that Employee has breached any of the terms or provisions of any of
the agreements listed on the attached exhibit. The obligations of this Paragraph
are continuing and survive the termination of Employee's employment with Emulex.

                  2.3      Restriction on Documents and Equipment. All
Confidential Information, documents, and equipment relating to the business of
Emulex, whether prepared by Employee or otherwise coming into Employee's
possession, are the exclusive property of Emulex, and must not be removed from
any of its premises except as required in the course of employment with Emulex.
All such Confidential Information, documents, and equipment



shall be promptly returned by Employee to Emulex upon the request of Emulex, and
on any termination of Employee's employment with Emulex.

                  2.4      No Disclosure or Use from Others. Employee shall not
disclose to Emulex or use on behalf of Emulex any confidential information or
trade secrets obtained from other entities, and shall not bring confidential
information or trade secrets of other entities onto Emulex's premises.

                Creations.

                  3.1      Disclosure and Assignment of Creations. Employee
shall promptly inform and disclose to Emulex all Creations which Employee
Creates (either alone or with others) while in the employment of Emulex, if the
Creations:

                  (1)      relate, at the time Created, to the business of
                  Emulex or to any actual or demonstrably anticipated research
                  or development work of Emulex; or

                  (2)      result from any work performed by Employee for
                  Emulex; or

                  (3)      were Created utilizing any of Emulex's equipment,
                  supplies, facilities, time, or Confidential Information.

ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK
PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR
HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS
OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE
PROPERTY OF EMULEX.

                  3.2      Governmental Rights. Employee acknowledges that
Emulex has entered or may enter into agreements with agencies of the United
States government, and that Emulex may be subject to laws and regulations which
impose obligations, restrictions, and limitations on Emulex with respect to
Creations which may be acquired by Emulex or which may be conceived or developed
by employees, consultants, and other agents rendering services to Emulex.
Employee shall be bound by all such obligations, restrictions, and limitations
applicable to any Creation of Employee. Employee also shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations. Employee further shall assign to Emulex
all of Employee's rights in any Creation of Employee if Emulex is required to
grant those rights to the United States government or any agencies of the United
States government.

                  3.3      Employee's Assistance. Employee agrees to assist
Emulex in obtaining and/or maintaining patents, copyrights, mask work rights,
and similar rights to any Creations assigned by Employee to Emulex if Emulex, in
its sole discretion, requests such assistance. Employee shall sign all documents
and do all other things deemed necessary by Emulex, at Emulex's expense, to
obtain and/or maintain such rights, to assign them to Emulex, to defend them
from invalidation, and to protect them against infringement by other parties.
The obligations of this Paragraph are continuing and survive the termination of
Employee's employment with Emulex. If Emulex requires Employee's assistance
under this Paragraph after termination of employment with Emulex, Employee will
be compensated for time actually spent in providing assistance at Employee's
hourly pay rate at the date of Employee's termination.

                  3.4      Appointment of Agent. Employee irrevocably appoints
the President of Emulex to act as Employee's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights, mask
work rights, and similar rights, to any Creations assigned by Employee to Emulex
under this Agreement if (1) Employee refuses to perform those acts, or (2) is
unavailable, within the meaning of any applicable laws. Employee acknowledges
that the grant of the foregoing power of attorney is coupled with an interest
and shall survive the death or disability of Employee.

                  3.5      Further Disclosure. Employee shall promptly disclose
to Emulex, in confidence, (1) all Creations of any kind which Employee Creates
while employed by Emulex, and (2) all patent applications filed by Employee
within one (1) year after termination of employment with Emulex. Employee agrees
that any application



for a patent, copyright registration, mask work registration, or similar right
filed within one (1) year after termination of employment with Emulex shall be
presumed to relate to a Creation of Employee Created during employment at
Emulex, unless Employee can prove otherwise.

                  3.6      Records. Employee shall keep complete, accurate, and
authentic information and records on all Creations in the manner and form
requested by Emulex. The information and records, and all copies of them, shall
be the exclusive property of Emulex. Employee shall promptly surrender the
information and records upon the request of Emulex, and on any termination of
Employee's employment with Emulex.

                  3.7      Compliance with Labor Code. THIS AGREEMENT DOES NOT
APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870
OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S
INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW:

         "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                  (1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or

                  (2) Result from any work performed by the employee for the
employer.

         (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                Restrictions on Employee.

                  4.1      No Conflicting Competition. While employed by Emulex,
Employee shall not in any manner (whether as an employee, consultant, or
otherwise) perform services for, or have an ownership interest in (other than
less than one percent (1%) of a publicly-held company), any entity that competes
with Emulex or any employment or business which is otherwise in conflict with
Employee's employment relationship with Emulex.

                  4.2      No Competitive Planning. While employed by Emulex,
Employee shall not undertake any planning for any outside business activity (1)
competitive with the work which Employee performs for Emulex, or (2) competitive
with the profit unit of Emulex for which Employee works.

                  4.3      No Hiring of Other Employees. While employed by
Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ,
or assist or encourage others in employing or attempting to employ (whether as
an employee, consultant, or otherwise), any of Emulex's other employees who work
in any area in which Employee has been significantly engaged on behalf of
Emulex.

                  4.4      No Use of Confidential Information. While employed by
Emulex, and for 1 year afterward, Employee shall not enter into any other
employment (whether as an employee, consultant, or otherwise) in which the
duties of such other employment would require Employee to disclose or use any
Confidential Information.

                  4.5      No Conflicting Agreements. Employee represents that
Employee has no agreements with or obligations to any other party that would
interfere with Employee's compliance with this Agreement.

                  4.6      Subsequent Employment. Employee agrees that Emulex
may notify anyone as to the existence and provisions of this Agreement.



                Pre-existing Creations.

                  5.1      Representation of Coverage and Grant of License.
Except for those Creations (if any) specifically reserved by Employee in an
attachment to this Agreement, Employee represents that there are no Creations
owned wholly or in part by Employee, or controlled directly or indirectly by
Employee, which Employee considers to be reserved and excluded from the scope of
this Agreement. Employee grants to Emulex a royalty-free, non-exclusive,
worldwide, irrevocable license on any and all non-reserved Creations of
Employee.

                  5.2      Preservation of Confidence. In order to preserve
Employee's proprietary rights in any unpatented or unpublished reserved
Creations, Emulex shall keep in confidence all information provided by Employee
pertaining to any reserved Creation, unless the information: (1) is already
known to or in the possession of Emulex; (2) is or becomes publicly known
through no wrongful act of Emulex; (3) is rightfully received by Emulex from a
third party without breach of any obligation to Employee; (4) is approved for
release by written authorization of Employee; (5) is distributed or made
available to others by Employee without restriction as to use or disclosure; or
(6) is developed independently by Emulex through persons not involved with
information received by Emulex from Employee.

                  5.3      License from Use. Notwithstanding the reservation of
a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while
employed by Emulex, or (2) permits the use of a reserved Creation by another
employee of Emulex, and does not have a prior written agreement with Emulex
pertaining to such use, then Employee thereby grants to Emulex a royalty-free,
non-exclusive, worldwide, irrevocable license to that Creation (provided that
the reserved Creation is owned wholly or in part by Employee, or is within the
direct or indirect control of Employee at the time of employment).

                  5.4      Right of First Refusal. With respect to any reserved
Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right
of first refusal to purchase or license such Creations (unless otherwise
licensed to Emulex by any other terms of this Agreement) on terms at least as
favorable as offered to any other purchaser or licensee while Employee is
employed by Emulex.

                General Provisions.

                  6.1      Attorneys' Fees. If any arbitration, litigation, or
other legal proceeding occurs between the parties relating to this Agreement,
the prevailing party shall be entitled to recover (in addition to any other
relief awarded or granted) his, her, or its reasonable costs and expenses
(including attorneys' fees) incurred in the proceeding and any appeal therefrom.

                  6.2      Entire Agreement. This Agreement, including all
referenced attachments, constitutes the complete and final agreement between the
parties, and supersedes all prior negotiations, agreements, and understandings
between the parties concerning its subject matter.

                  6.3      Successors and Assigns. This Agreement is intended to
benefit and is binding on (1) the successors and assigns of Emulex, and (2) the
heirs and legal successors of Employee.

                  6.4      Separate Enforcement of Provisions. If any provision
of this Agreement is held by a court or arbitrator of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
be enforced to the extent possible.

                  6.5      Governing Law. The validity, construction, and
performance of this Agreement is governed by the laws of the State of
California.

                  6.6      Right to Relief. If Employee breaches or threatens to
breach any provision of this Agreement, in addition to any other rights and
remedies Emulex may have, Emulex shall be entitled to temporary and permanent
injunctive relief to prevent the breach or threatened breach without the
necessity of proving actual damages or posting any bond or undertaking.



                  6.7      Waiver and Amendment. No waiver, amendment, or
modification of this Agreement shall be effective unless in writing and signed
by the party against whom the waiver, amendment, or modification is sought to be
enforced. No failure or delay by either party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of the right, power, or
remedy. No waiver of any term, condition, or breach of this Agreement shall be
construed as a waiver of any other term, condition, or breach.

                Effective Date. This Agreement, no matter when signed by
Employee, is effective from the first date of Employee's employment with Emulex,
and shall survive the termination of Employee's employment with Emulex.

                At Will Employment. Unless specifically provided differently in
a separate written agreement signed by an authorized agent of Emulex, Employee
acknowledges and agrees that Employee's employment by Emulex is now and will
continue to be throughout his or her employment with Emulex "AT WILL," and can
be terminated at any time by Emulex for any reason, with or without good cause,
and with or without prior warning or notice.

                Acknowledgment of Reading. Employee acknowledges that Employee
has read and understands this Agreement, and has received a copy of it.

AGREED:                                      EMULEX CORPORATION

______________________________               By:___________________________
Employee's signature

______________________________               ______________________________
Employee's Name                              Name

Dated:________________________               ______________________________
                                             Title

                                             Dated:________________________

EX-99.(D)(8)

                                                                  EXHIBIT (d)(8)

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
October 8, 2003, by and between Emulex Corporation, a California corporation
(the "COMPANY") and Brian J. Reed ("EXECUTIVE"), a shareholder and executive
officer of Vixel Corporation, a Delaware Corporation ("VIXEL").

                                    RECITALS

         A.       Vixel is engaged in the business of providing technologies and
products for the storage networking infrastructure business, fabric switches and
storage networking semiconductor components that are embedded in fabric switches
and storage appliances (including, but not limited to, storage arrays, network
attached storage, tape libraries and virtualization appliances) that are
contained in existing products of or products under development by Vixel (the
"BUSINESS"); provided, that if Executive accepts an offer of employment with the
Company following the Merger, the definition of Business shall also include the
preceding Business of the Company as well as Vixel, including HBAs.

         B.       Executive is a stockholder and an executive officer of Vixel
and accordingly has acquired confidential and proprietary information relating
to the Business and the operation of Vixel;

         C.       Executive's covenant not to compete, as reflected in this
Agreement, is an essential part of the transactions described in the Agreement
and Plan of Merger, dated as of October 8, 2003 (the "MERGER AGREEMENT"), by and
among Eagle Corporation, a Delaware corporation and the Company's parent
corporation ("PARENT"), Vixel and Aviary Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent (the "SUB"), pursuant to
which, among other things, the Sub will be merged with and into Vixel (the
"MERGER");

         D.       Executive holds a substantial number of stock options of Vixel
that will continue to vest and shall be exercisable for shares of common stock
of the Company following the Merger and therefore has a material economic
interest in the consummation of the Merger.

         E.       In order to protect the goodwill related to the Business and
as a condition of, and an inducement to, the Company entering into the Merger
Agreement, Executive has agreed to the noncompetition and nonsolicitation
covenants and the confidentiality agreements provided in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and to induce the
Company to consummate the transactions contemplated by the Merger Agreement, the
receipt and sufficiency of which are hereby acknowledged, and with the knowledge
that no other good or valuable consideration has been offered to or received by
Executive in connection with the execution of this Agreement, Executive hereby
covenants and agrees as follows:



         1.       Effectiveness of Agreement. This Agreement is conditioned upon
the occurrence of the (i) Closing (as that term is defined in the Merger
Agreement) and (ii) a bone fide offer of employment to Executive by the Company
or any of its affiliates following the Closing ("EMPLOYMENT COMMENCEMENT"). This
Agreement shall be null and void ab initio should the Merger not be consummated
for any reason or should the Employment Commencement not occur. This Agreement
will terminate in the event of and concurrent with a termination of the Merger
Agreement in accordance with its terms.

         2.       Noncompetition.

                  (a)      Executive and the Company agree that due to the
nature of Executive's association with Vixel, Executive has confidential and
proprietary information relating to the business and operations of Vixel and the
Company (all references to the "Company" hereinafter shall include Vixel, which
shall be the surviving corporation in the Merger). Executive acknowledges that
such information is of extreme importance to the business of the Company and
will continue to be so after the Merger and that disclosure of such confidential
information to others or the unauthorized use of such information by others
would cause substantial loss and harm to the Company. Executive and the Company
also agree that Executive will continue to acquire, and will assist in
developing, confidential and proprietary information relating to the Business
following the Merger by reason of his employment with the Company.

                  (b)      Executive and the Company further agree that the
market for the Business is intensely competitive and that the Company engages in
the Business throughout the United States, Europe, Scandinavia, Japan, China,
Taiwan, Thailand, South Korea and Singapore.

                  (c)      (i) Subject to subparagraph (ii) below, during the
         period commencing at the Effective Time of the Merger and ending one
         (1) year following the termination of Executive's employment with the
         Company (including, without limitation, voluntary resignation by such
         Executive or termination at the request of the Company) (the
         "RESTRICTED PERIOD"), Executive agrees that he shall not, anywhere in
         the Business Area (as defined below), engage, directly or indirectly,
         in any in any capacity whatsoever (whether as an officer, director,
         stockholder, owner, proprietor, partner, member, co-owner, investor,
         employee, trustee, manager, consultant, independent contractor,
         co-venturer, financier, agent, representative or otherwise), in a
         Competing Business (as defined below), or otherwise hold any interest
         in a Competing Business; provided, however, that Executive may own,
         directly or indirectly, solely as a passive investment, securities of
         any entity traded on any national securities exchange if Executive is
         not a controlling person of, or a member of a group which controls,
         such entity and does not, directly or indirectly, "beneficially own"
         (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) 1.0% or more of any class of securities of such Competing
         Business.

                  (ii)     In the event that the employment of Executive is
         terminated by the Company without Cause (as defined herein) within one
         (1) year of the Effective Time, then the Restricted Period shall
         terminate on the expiration of severance payments to Executive.



                  (d)      "COMPETING BUSINESS" as used herein, means any
individual, corporation, partnership, limited partnership, limited liability
company, trust (business or otherwise), institution, foundation, pool, plan or
other entity or organization (other than the Company) which engages or has
publicly announced that it proposes to engage in the Business.

                  (e)      "BUSINESS AREA" as used herein, means each state
within the United States of America as well as each country, state, province and
territory in Europe, Scandinavia, Japan, China, Taiwan, Thailand, South Korea
and Singapore.

                  (f)      "CAUSE" as used herein shall mean: (i) any
misappropriation or embezzlement by Executive of the property of the Company or
any of its affiliates or other act of fraud or material misconduct by Executive
against the Company or any of its affiliates; (ii) Executive's conviction of or
plea of guilty or nolo contendere to a crime constituting a felony or any
criminal act involving moral turpitude; (iii) a breach by Executive of any
provision of this Agreement; (iv) the failure, refusal or neglect by Executive
to perform faithfully the duties and obligations customary to his office; (v)
the habitual non-performance or incompetent performance by Executive of the
duties or responsibilities customary to his office; (vi) misconduct by
Executive, including insubordination, in respect of the duties or obligations
customary to his office; and (vii) any intentional or grossly negligent act by
Executive having the effect of materially injuring the business or reputation of
the Company or any of its affiliates. No activities covered by item (iv), (v)
and (vi) will be deemed to be "Cause" unless the Company has notified Executive
of the prohibited activity in writing and Executive has failed to cease such
activity within thirty (30) days.

         3.       Nonsolicitation of the Purchaser and Company Employees. During
the Restricted Period, Executive shall not, without the prior written consent of
the Company, directly or indirectly solicit, request, cause or induce any person
who is at the time an employee of or a consultant of the Company to leave the
employ of or otherwise terminate such person's relationship with the Company.

         4.       Nonsolicitation of Customers or Suppliers. During the
Restricted Period, Executive shall not, directly or indirectly: (i) solicit,
induce or attempt to induce any customer, client or supplier of the Company to
cease doing business in whole or in part with the Company; or (ii) attempt to
limit or interfere with any business engagement or relationship existing between
the Company and any third party.

         5.       Confidentiality. Executive agrees that, upon the Closing, he
will execute the Company's standard proprietary information and invention
assignment agreement (the "Employee Invention and Non-Disclosure Agreement"),
the form of which is attached as Annex A, and will abide by all of its terms.

         6.       Injunctive Relief. The parties agree that the remedy at law
for any breach of this Agreement is and will be inadequate, and in the event of
a breach or threatened breach by Executive of any of the provisions of this
Agreement, the Company shall be entitled to seek an injunction restraining
Executive from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting the Company from



pursuing any other remedies available to it or them for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive.

         7.       Reasonableness and Enforceability of Covenants. The parties
expressly agree that the character, duration and geographical scope of this
Agreement are reasonable in light of the circumstances as they exist on the date
upon which this Agreement has been executed, including, but not limited to,
Executive's position of confidence and trust as an executive officer of Vixel as
well as his employment with the Company after the Closing. Moreover, if any
court determines that any of the covenants and agreements contained herein, or
any part thereof, is unenforceable because of the character, duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.

         8.       Severability. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         9.       Construction. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Washington, without
regard to principles of conflicts or choice of laws.

         10.      Amendments and Waivers. This Agreement may be modified only by
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.

         11.      Entire Agreement. This Agreement, together with the Merger
Agreement and the documents, instruments and other agreements contemplated by or
referred to therein and the Employee Invention and Non-Disclosure Agreement,
contains the entire understanding of the parties relating to the subject matter
hereof, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument signed by each of the parties hereto.

         12.      Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.

         13.      Section Headings. The headings of each section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.



         14.      Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that the Company may assign
its rights hereunder, without the consent of Executive, to any entity that
acquires or succeeds to the Business.

         15.      Further Assurances. From time to time, at the Company's
request and without further consideration, Executive shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.

         16.      Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (a)      if to the Company:

                           Emulex Corporation
                           3535 Harbor Boulevard
                           Costa Mesa, California 92626
                           Attn: Randall G. Wick
                                 Vice President, General Counsel
                           Telephone No.: (714) 662-5600
                           Facsimile No.: (714) 641-0172

                  (b)      if to Executive:

                           c/o Vixel Corporation
                           11911 North Creek Parkway South
                           Bothell, Washington 98011
                           Telephone No.: (425) 806-4528
                           Facsimile No.: (425) 806-4001

         17.      Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Merger Agreement.



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

                                     EMULEX CORPORATION

                                     By: /s/ PAUL FOLINO
                                         ---------------------------------------
                                         Name:  Paul Folino
                                         Title: Chairman of the Board and
                                                Chief Executive Officer

                                    /s/ BRIAN J. REED
                                    --------------------------------------------
                                    Brian J. Reed



                                                                         ANNEX A

[EMULEX LOGO]

                 EMPLOYEE CREATION AND NON-DISCLOSURE AGREEMENT

         This Employee Creation and Non-Disclosure Agreement (this "Agreement")
is entered into between Emulex Corporation ("Emulex") and the undersigned
Employee. In consideration of employment or continued employment by Emulex and
the mutual promises contained in this Agreement, Employee and Emulex agree as
follows:

                 Definition of Terms.

                  1.1      Creation. "Creation" means every idea, concept,
invention, device, design, apparatus, machine, practice, process, method,
product, composition of matter, improvement, formula, algorithm, literary or
graphical or audiovisual work or sound recording, mask work, or computer program
of any kind, whether or not subject to patent, copyright, mask work right, or
similar protection.

                  1.2      Create. "Create" means invent, develop, devise,
conceive, discover, create, first reduce to practice, write, or fix in a
tangible medium of expression.

                  1.3      Confidential Information. "Confidential Information"
means all Creations, data, information, know-how, process parameters,
fabrication techniques, technical plans, documentation, customer lists, price
lists, supplier lists, business plans, marketing plans, financial information,
and the like, in whatever form or medium, and whether or not designated or
marked "Confidential" or the like, which: (1) relate to the business of Emulex,
and (a) have not been disclosed by Emulex to, or (b) are not generally known to,
the general public or to Emulex's trade or industry; or (2) are received by
Emulex from a third party under an obligation of confidentiality to the third
party.

                  1.4      Emulex. "Emulex" includes Emulex Corporation, a
Delaware corporation, all of its subsidiaries, and all joint ventures and
partnerships of which such corporation and/or any of such subsidiaries is a
member, partner, or participant.

                 Confidential Information.

                  2.1      Acknowledgement by Employee. Employee acknowledges
that during Employee's employment with Emulex, Employee may be given access to,
become acquainted with, or develop Confidential Information.

                  2.2      No Use or Disclosure. Employee shall not use or
disclose (directly or indirectly) any Confidential Information (whether or not
created or developed by Employee) at any time or in any manner, except as
required in the course of employment with Emulex. Employee acknowledges that,
except as set forth on an exhibit attached by Employee to this Agreement,
Employee is not a party to any agreement with any other entity which either (1)
restricts Employee's use or disclosure of any information gained or learned by
Employee from the entity or while employed by the entity, or (2) otherwise
relates to Employee's use or disclosure of any confidential information or trade
secrets of the entity. Employee represents that no entity has asserted or is
asserting that Employee has breached any of the terms or provisions of any of
the agreements listed on the attached exhibit. The obligations of this Paragraph
are continuing and survive the termination of Employee's employment with Emulex.

                  2.3      Restriction on Documents and Equipment. All
Confidential Information, documents, and equipment relating to the business of
Emulex, whether prepared by Employee or otherwise coming into Employee's
possession, are the exclusive property of Emulex, and must not be removed from
any of its premises except as required in the course of employment with Emulex.
All such Confidential Information, documents, and equipment



shall be promptly returned by Employee to Emulex upon the request of Emulex, and
on any termination of Employee's employment with Emulex.

                  2.4      No Disclosure or Use from Others. Employee shall not
disclose to Emulex or use on behalf of Emulex any confidential information or
trade secrets obtained from other entities, and shall not bring confidential
information or trade secrets of other entities onto Emulex's premises.

                 Creations.

                  3.1      Disclosure and Assignment of Creations. Employee
shall promptly inform and disclose to Emulex all Creations which Employee
Creates (either alone or with others) while in the employment of Emulex, if the
Creations:

                  (1)      relate, at the time Created, to the business of
                  Emulex or to any actual or demonstrably anticipated research
                  or development work of Emulex; or

                  (2)    result from any work performed by Employee for Emulex;
                  or

                  (3) were Created utilizing any of Emulex's equipment,
                  supplies, facilities, time, or Confidential Information.

ALL OF THE ABOVE-DESCRIBED CREATIONS THAT ARE SUBJECT TO COPYRIGHT OR MASK WORK
PROTECTION ARE EXPLICITLY CONSIDERED BY EMPLOYEE AND EMULEX TO BE WORKS MADE FOR
HIRE TO THE EXTENT PERMITTED BY LAW. ALL OF THE ABOVE-DESCRIBED CREATIONS
OTHERWISE ARE HEREBY ASSIGNED BY EMPLOYEE TO EMULEX, AND ARE THE EXCLUSIVE
PROPERTY OF EMULEX.

                  3.2      Governmental Rights. Employee acknowledges that
Emulex has entered or may enter into agreements with agencies of the United
States government, and that Emulex may be subject to laws and regulations which
impose obligations, restrictions, and limitations on Emulex with respect to
Creations which may be acquired by Emulex or which may be conceived or developed
by employees, consultants, and other agents rendering services to Emulex.
Employee shall be bound by all such obligations, restrictions, and limitations
applicable to any Creation of Employee. Employee also shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations. Employee further shall assign to Emulex
all of Employee's rights in any Creation of Employee if Emulex is required to
grant those rights to the United States government or any agencies of the United
States government.

                  3.3      Employee's Assistance. Employee agrees to assist
Emulex in obtaining and/or maintaining patents, copyrights, mask work rights,
and similar rights to any Creations assigned by Employee to Emulex if Emulex, in
its sole discretion, requests such assistance. Employee shall sign all documents
and do all other things deemed necessary by Emulex, at Emulex's expense, to
obtain and/or maintain such rights, to assign them to Emulex, to defend them
from invalidation, and to protect them against infringement by other parties.
The obligations of this Paragraph are continuing and survive the termination of
Employee's employment with Emulex. If Emulex requires Employee's assistance
under this Paragraph after termination of employment with Emulex, Employee will
be compensated for time actually spent in providing assistance at Employee's
hourly pay rate at the date of Employee's termination.

                  3.4      Appointment of Agent. Employee irrevocably appoints
the President of Emulex to act as Employee's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights, mask
work rights, and similar rights, to any Creations assigned by Employee to Emulex
under this Agreement if (1) Employee refuses to perform those acts, or (2) is
unavailable, within the meaning of any applicable laws. Employee acknowledges
that the grant of the foregoing power of attorney is coupled with an interest
and shall survive the death or disability of Employee.

                  3.5      Further Disclosure. Employee shall promptly disclose
to Emulex, in confidence, (1) all Creations of any kind which Employee Creates
while employed by Emulex, and (2) all patent applications filed by Employee
within one (1) year after termination of employment with Emulex. Employee agrees
that any application



for a patent, copyright registration, mask work registration, or similar right
filed within one (1) year after termination of employment with Emulex shall be
presumed to relate to a Creation of Employee Created during employment at
Emulex, unless Employee can prove otherwise.

                  3.6      Records. Employee shall keep complete, accurate, and
authentic information and records on all Creations in the manner and form
requested by Emulex. The information and records, and all copies of them, shall
be the exclusive property of Emulex. Employee shall promptly surrender the
information and records upon the request of Emulex, and on any termination of
Employee's employment with Emulex.

                  3.7      Compliance with Labor Code. THIS AGREEMENT DOES NOT
APPLY TO ANY CREATIONS WHICH QUALIFY FULLY UNDER THE PROVISIONS OF SECTION 2870
OF THE CALIFORNIA LABOR CODE OR ANY SIMILAR APPLICABLE LAW. FOR EMPLOYEE'S
INFORMATION, THE CURRENT TEXT OF SECTION 2870 IS REPRODUCED BELOW:

         "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                  (1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or

                  (2)  Result from any work performed by the employee for the
employer.

         (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                 Restrictions on Employee.

                  4.1      No Conflicting Competition. While employed by Emulex,
Employee shall not in any manner (whether as an employee, consultant, or
otherwise) perform services for, or have an ownership interest in (other than
less than one percent (1%) of a publicly-held company), any entity that competes
with Emulex or any employment or business which is otherwise in conflict with
Employee's employment relationship with Emulex.

                  4.2      No Competitive Planning. While employed by Emulex,
Employee shall not undertake any planning for any outside business activity (1)
competitive with the work which Employee performs for Emulex, or (2) competitive
with the profit unit of Emulex for which Employee works.

                  4.3      No Hiring of Other Employees. While employed by
Emulex, and for 1 year afterward, Employee shall not employ, attempt to employ,
or assist or encourage others in employing or attempting to employ (whether as
an employee, consultant, or otherwise), any of Emulex's other employees who work
in any area in which Employee has been significantly engaged on behalf of
Emulex.

                  4.4      No Use of Confidential Information. While employed by
Emulex, and for 1 year afterward, Employee shall not enter into any other
employment (whether as an employee, consultant, or otherwise) in which the
duties of such other employment would require Employee to disclose or use any
Confidential Information.

                  4.5      No Conflicting Agreements. Employee represents that
Employee has no agreements with or obligations to any other party that would
interfere with Employee's compliance with this Agreement.

                  4.6      Subsequent Employment. Employee agrees that Emulex
may notify anyone as to the existence and provisions of this Agreement.



                 Pre-existing Creations.

                  5.1      Representation of Coverage and Grant of License.
Except for those Creations (if any) specifically reserved by Employee in an
attachment to this Agreement, Employee represents that there are no Creations
owned wholly or in part by Employee, or controlled directly or indirectly by
Employee, which Employee considers to be reserved and excluded from the scope of
this Agreement. Employee grants to Emulex a royalty-free, non-exclusive,
worldwide, irrevocable license on any and all non-reserved Creations of
Employee.

                  5.2      Preservation of Confidence. In order to preserve
Employee's proprietary rights in any unpatented or unpublished reserved
Creations, Emulex shall keep in confidence all information provided by Employee
pertaining to any reserved Creation, unless the information: (1) is already
known to or in the possession of Emulex; (2) is or becomes publicly known
through no wrongful act of Emulex; (3) is rightfully received by Emulex from a
third party without breach of any obligation to Employee; (4) is approved for
release by written authorization of Employee; (5) is distributed or made
available to others by Employee without restriction as to use or disclosure; or
(6) is developed independently by Emulex through persons not involved with
information received by Emulex from Employee.

                  5.3      License from Use. Notwithstanding the reservation of
a Creation under Paragraph 5.1, if Employee (1) uses a reserved Creation while
employed by Emulex, or (2) permits the use of a reserved Creation by another
employee of Emulex, and does not have a prior written agreement with Emulex
pertaining to such use, then Employee thereby grants to Emulex a royalty-free,
non-exclusive, worldwide, irrevocable license to that Creation (provided that
the reserved Creation is owned wholly or in part by Employee, or is within the
direct or indirect control of Employee at the time of employment).

                  5.4      Right of First Refusal. With respect to any reserved
Creations specified under Paragraph 5.1 above, Employee grants to Emulex a right
of first refusal to purchase or license such Creations (unless otherwise
licensed to Emulex by any other terms of this Agreement) on terms at least as
favorable as offered to any other purchaser or licensee while Employee is
employed by Emulex.

                 General Provisions.

                  6.1      Attorneys' Fees. If any arbitration, litigation, or
other legal proceeding occurs between the parties relating to this Agreement,
the prevailing party shall be entitled to recover (in addition to any other
relief awarded or granted) his, her, or its reasonable costs and expenses
(including attorneys' fees) incurred in the proceeding and any appeal therefrom.

                  6.2      Entire Agreement. This Agreement, including all
referenced attachments, constitutes the complete and final agreement between the
parties, and supersedes all prior negotiations, agreements, and understandings
between the parties concerning its subject matter.

                  6.3      Successors and Assigns. This Agreement is intended to
benefit and is binding on (1) the successors and assigns of Emulex, and (2) the
heirs and legal successors of Employee.

                  6.4      Separate Enforcement of Provisions. If any provision
of this Agreement is held by a court or arbitrator of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
be enforced to the extent possible.

                  6.5      Governing Law. The validity, construction, and
performance of this Agreement is governed by the laws of the State of
California.

                  6.6      Right to Relief. If Employee breaches or threatens to
breach any provision of this Agreement, in addition to any other rights and
remedies Emulex may have, Emulex shall be entitled to temporary and permanent
injunctive relief to prevent the breach or threatened breach without the
necessity of proving actual damages or posting any bond or undertaking.



                  6.7      Waiver and Amendment. No waiver, amendment, or
modification of this Agreement shall be effective unless in writing and signed
by the party against whom the waiver, amendment, or modification is sought to be
enforced. No failure or delay by either party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of the right, power, or
remedy. No waiver of any term, condition, or breach of this Agreement shall be
construed as a waiver of any other term, condition, or breach.

                 Effective Date. This Agreement, no matter when signed by
Employee, is effective from the first date of Employee's employment with Emulex,
and shall survive the termination of Employee's employment with Emulex.

                 At Will Employment. Unless specifically provided differently in
a separate written agreement signed by an authorized agent of Emulex, Employee
acknowledges and agrees that Employee's employment by Emulex is now and will
continue to be throughout his or her employment with Emulex "AT WILL," and can
be terminated at any time by Emulex for any reason, with or without good cause,
and with or without prior warning or notice.

                 Acknowledgment of Reading. Employee acknowledges that Employee
has read and understands this Agreement, and has received a copy of it.

AGREED:                                          EMULEX CORPORATION

______________________________                   By:____________________________
Employee's signature

______________________________                   _______________________________
Employee's Name                                  Name

Dated:________________________                   _______________________________
                                                 Title

                                                 Dated:_________________________

EX-99.(D)(9)

                                                                  EXHIBIT (d)(9)

VIXEL                            11911 North Creek Parkway South /
                                 Bothel / WA / 98011 Phone 425-806-5509 / Fax
                                 425-806-4050 / www.vixel.com

CONFIDENTIAL

September 2, 2003


Emulex Corporation
3535 Harbor Blvd.
Costa Mesa, California  92626-7112
Attention: Karen Mulvany

Ladies and Gentlemen:

To facilitate the consideration and negotiation of a possible transaction
involving Vixel Corporation, a Delaware corporation ("VCo."), and Emulex
Corporation, a Delaware corporation ("ECo."),VCo. and ECo. have requested access
to certain non-public information regarding the other party and any subsidiary
(such party when disclosing such information being the "Disclosing Party" and
when receiving such information being the "Receiving Party"). As a condition of
being furnished such information, the Receiving Party agrees to treat any
information (whether (i) prepared by the Disclosing Party, its Representatives
(as defined below) or otherwise, (ii) in written, electronic or other form and
(iii) such information is furnished or made available on or after the date
hereof) concerning the Disclosing Party or any of its subsidiaries which is
furnished or made available to the Receiving Party or any of its Representatives
by or on behalf of the Disclosing Party (herein collectively referred to as the
"Evaluation Material") in accordance with the provisions of this letter and to
take or abstain from taking certain other actions herein set forth. The term
"Evaluation Material" shall be deemed to include notes, analyses, compilations,
data, studies, interpretations, forecasts, records, memoranda or other documents
(collectively, "Documents") or information relating directly or indirectly to
the business of the Disclosing Party, any predecessor entity or any subsidiary
or other affiliate of the Disclosing Party, or that is prepared by the
Disclosing Party or its Representatives which contain, reflect or are based on,
in whole or in part, any Evaluation Material. The term "Evaluation Material"
does not include Documents or information which (i) is already in the Receiving
Party's possession, provided that such information is not known by the Receiving
Party to be subject to another confidentiality agreement with or other
obligation of secrecy to the Disclosing Party, directly or indirectly, (ii)
becomes generally available to the public other than as a result of a
disclosure, directly or indirectly, by the Receiving Party or its
Representatives in breach of this letter agreement, (iii) becomes available to
the Receiving Party from a source other than the Disclosing Party or its
Representatives, provided that such source is not known by the Receiving Party
to be bound by a confidentiality agreement with or other obligation of secrecy
to the Disclosing Party, directly or indirectly, (iv) is independently developed
by the employees, agents or Representatives of the Receiving Party without use
of the Evaluation Material, or (v) if in writing, is not clearly marked as being
confidential or proprietary to the Disclosing Party. The obligations of this
letter agreement shall expire three years after the date hereof (the
"Confidentiality Period"). The Disclosing Party hereby agrees not to disclose to
the Receiving Party any Documents or information, the disclosure or use of which
would violate the rights of any third party.

The Receiving Party hereby agrees that the Evaluation Material will be used
solely for the purpose of evaluating and negotiating a possible transaction
between the parties and will not be used, directly or indirectly, to compete
with the Disclosing Party or its subsidiaries, and that the Evaluation Material
will be kept confidential by the Receiving Party and its Representatives and

                                  Page 1 of 5

will be not be disclosed by the Receiving Party or any of its Representatives;
provided, however, that (i) the Evaluation Material may be disclosed (A) to the
Disclosing Party's Representatives who need to know such information for the
sole purpose of evaluating or negotiating any such possible transaction between
the parties (it being understood that such Representatives shall be informed by
the Receiving Party of the confidential nature of such information and shall be
directed by the Receiving Party to treat such information confidentially), and
(B) as required (which requirement shall not have been caused by the acts of the
Receiving Party or its Representatives) by applicable law, regulation or legal
process and only after compliance with the following paragraph and (ii) any
disclosure of Evaluation Material may be made if the Disclosing Party consents
in writing. The Receiving Party shall be responsible for any breach of this
letter agreement by any its Representatives (it being understood that such
responsibility shall be in addition to and not by way of limitation of any right
or remedy the Disclosing Party may have against the Representatives with respect
to such breach).

In the event that the Receiving Party or any of its Representatives becomes
legally compelled to disclose any of the Evaluation Material or the information
referred to in the following paragraph, the Receiving Party shall provide the
Disclosing Party with prompt prior written notice of such requirement so that
the Disclosing Party may seek a protective order or other appropriate remedy
and/or waive in writing compliance with the provisions of this letter agreement.
If such protective order or other remedy is not obtained and such a written
waiver has not been received from the Disclosing Party that would permit such
compelled disclosure, the Receiving Party or its Representatives agree to use
reasonable best efforts to disclose only that portion of the Evaluation Material
and the information referred to in the following paragraph that it is legally
required to be disclosed and to use reasonable best efforts to obtain assurances
and otherwise preserve the confidentiality of the Evaluation Material and the
information referred to in the following paragraph (including cooperation in
good faith with the Disclosing Party, at the Disclosing Party's sole expense, to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the Evaluation Material and the
information referred to in the following paragraph).

In addition, except as required by law or applicable rules and regulations (and
in such event, in compliance with the paragraph above regarding its obligations
in such event), each of ECo. and VCo. hereby agrees that, without the prior
written consent of the other party, neither party will, and will cause its
Representatives not to, disclose to any person: (a) the existence of this letter
agreement and the identity of the parties hereto; or (b) the fact that
investigations, discussions or negotiations are taking place concerning a
possible transaction between the parties; or (c) that the Receiving Party or any
of its Representatives has received Evaluation Material or Evaluation Material
has been made available to it; or (d) any of the terms, conditions or other
facts with respect to any such possible transaction, including the status
thereof. The term "person" as used in this letter agreement will be interpreted
broadly to include the media (electronic, print or otherwise), the Internet, any
governmental representative or authority or any corporation, company,
partnership, group or other entity or individual.

Notwithstanding any other provision of this letter agreement, each party or any
of its Representatives may disclose to any and all persons, without limitation
of any kind, the tax treatment and any facts that may be relevant to the tax
structure of the transactions contemplated by this letter agreement and all
materials of any kind (including, but not limited to, opinions or other tax
analyses) relating to such tax treatment and tax structure; provided, however,
that (i) any such information and materials shall be kept confidential to the
extent necessary to comply with any applicable federal and state securities
laws, and (ii) disclosure may not be made until the earliest of (A) the date of
the public announcement of discussions

                                   Page 2 of 5

relating to the possible transaction, (B) the date of the public announcement of
the possible transaction, and (C) the date of the execution of a definitive
agreement to enter into the transaction (provided further, that the limitation
set out in this clause (ii) on the timing of disclosure shall not be construed
to limit the ability by each party to this letter agreement to consult any tax
advisor (including a tax advisor independent from all other entities involved in
the transactions) regarding the tax treatment or tax structure of the
transactions).

Each party is aware, and will advise its Representatives who are informed as to
the matters which are the subject of this letter agreement, that the United
States securities laws prohibit any person who has received from an issuer
material, non-public information concerning the matters which are the subject of
this letter agreement from purchasing or selling securities of such issuer or
from communicating such information to any other person under circumstances in
which it is reasonably foreseeable that such person is likely to purchase or
sell such securities.

For a period of eighteen months from the date of this letter agreement ("the
Standstill Period"), each party will not (and shall cause its Representatives
acting on its and its subsidiaries' or affiliates' behalf not to), without the
specific prior written consent of the other party, (i) propose to the other
party or any other person any transaction involving the parties and/or the other
party's security holders and/or any of the other party's securities; (ii)
acquire, offer or propose to acquire or agree or seek to acquire, or assist,
advise or encourage any other persons in acquiring, offering or proposing to
acquire, directly or indirectly, (A) beneficial ownership of the other party or
any of the other party's securities, businesses or assets or (B) any contract to
sell or option to sell the other party's securities; (iii) make, or in any way
participate in, directly or indirectly, any "solicitation" of "proxies" (as such
terms are defined or used in the rules under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) to vote, or seek to advise or influence
any person or entity with respect to the voting of, any voting securities of the
other party or any of its subsidiaries; (iv) directly or indirectly form, join
or in any way participate in a "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) with respect to any voting securities of the other party or
any of its subsidiaries; (v) seek or propose, directly or indirectly, alone or
in concert with others, to influence or control the management or policies of
the other party or any of its subsidiaries; (vi) directly or indirectly enter
into any discussions, negotiations, arrangements or understandings with any
other person with respect to any of the foregoing activities or propose any of
such activities to any other person; (vii) advise, assist, encourage, act as a
financing source for or otherwise invest, directly or indirectly, in any other
person in connection with any of the foregoing activities; or (viii) disclose
any intention, plan or arrangement inconsistent with any of the foregoing. Each
party also agrees that, during the Standstill Period, it or any of its
Representatives will not: (i) request the other party or its Representatives,
directly or indirectly, to amend or waive any provision of this paragraph
(including this sentence) or otherwise take any action inconsistent with any
provision of this paragraph (including this sentence); or (ii) take any
initiative with respect to the other party or any of its subsidiaries which
involves making a public announcement or could require the other party or any of
its subsidiaries to make a public announcement regarding (A) such initiative,
(B) any of the activities referred to in this paragraph, (C) the possibility of
a transaction described in the first sentence of this letter agreement or any
similar transaction or (D) the possibility of any person acquiring control of
the other party or any of its subsidiaries, whether by means of a business
combination or otherwise. Notwithstanding anything to the contrary contained in
this letter agreement, if, at any time during the Standstill Period (i) a third
party (1) "commences a tender offer" (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934) for at least 50% of the outstanding capital
stock of VCo. or (2) commences a proxy contest with respect to the election of
any directors of VCo., or (ii) a third party enters into an agreement with VCo.
contemplating the acquisition (by way of merger, tender offer or otherwise) of
at least 50%

                                  Page 3 of 5

of the outstanding voting securities of VCo or all or substantially all of VCo's
assets, then (in either of such cases) the restrictions set forth in this
paragraph shall immediately terminate and cease to be of any further force and
effect.

Each party agrees that money damages may not be a sufficient remedy for any
breach or threatened breach of this letter agreement by the other party or its
Representatives and that the other party shall be entitled to seek equitable
relief, including injunction and specific performance, in the event of any such
breach or threatened breach, in addition to all other remedies available at law
or in equity without the necessity of posting any bond or other security or
proving that monetary damages would be an inadequate remedy. Such remedies shall
not be deemed to be the exclusive remedies for a breach of this letter agreement
but shall be in addition to all other remedies available of law or in equity.

Each party agrees that, for a period of eighteen months commencing on the date
of this letter agreement, without the prior written consent of the other party,
it shall cause its employees, agents or Representatives which have been provided
any Evaluation Material not to (or will not assist or encourage others to),
directly or indirectly, solicit for employment with it, or any of its
subsidiaries, any executive officer employed by the other party or any of its
subsidiaries; provided, however, that this paragraph will not prevent either
party from causing to be placed any general advertisement or similar notice that
is not targeted specifically at employees of the other party or its
subsidiaries.

Each party agrees that unless and until a definitive agreement between the
parties has been executed and delivered, neither party will be under any legal
obligation of any kind whatsoever with respect to such a transaction by virtue
of this or any written or oral expression with respect to such a transaction by
it or any of its Representatives except, in the case of this letter, for the
matters specifically agreed to herein. Nothing shall constitute a definitive
agreement unless signed by the CEO of ECo. on behalf of ECo.

If either party decides that it does not wish to proceed with a transaction or
at any time upon the written request of the Disclosing Party for any reason, the
Receiving Party shall promptly deliver to the Disclosing Party, or certify the
destruction of, all written Evaluation Material and any other written material
containing or reflecting any information in the Evaluation Material (whether
prepared by the Disclosing Party, its Representatives or otherwise) furnished to
the Receiving Party or its Representatives and will not retain any copies,
extracts or other reproductions in whole or in part of such written material,
except that an archival copy of such Evaluation Material may be retained by
attorneys for the parties. All other Evaluation Material shall be destroyed and
such destruction shall be certified in writing to the Disclosing Party by an
authorized officer supervising such destruction. Notwithstanding any such
writing or written notice or such return or destruction of the Evaluation
Material, the Disclosing Party and its Representatives will continue to be bound
by the obligations of confidentiality and other obligations hereunder for the
Confidentiality Period.

Each party agrees that, without the prior consent of the other party, it or its
Representatives will not contact or communicate with the other party's customers
or suppliers to discuss, or request information regarding the possible
transaction with the other party. Nothing in this letter agreement shall
constitute a grant of authority to the other party to obtain, remove or copy any
particular document or items of information regarding the other party or any of
its subsidiaries except as provided herein.

                                   Page 4 of 5

For purposes of this letter agreement, a party's "Representatives" will be
deemed to include each person that is or becomes (i) a subsidiary or other
affiliate of such party, or (ii) an officer, director, employee, partner,
attorney, advisor, accountant, agent or representative of such party or any of
such party's subsidiaries or other affiliates. No provision of this letter
agreement may be modified or waived except by means of a written instrument that
is validly executed on behalf of both of the parties. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law. If any provision of
this letter agreement is found to violate any statute, regulation, rule, order
or decree of any governmental authority, court, agency or exchange, such
invalidity shall not be deemed to affect any other provision hereof or the
validity of the remainder of this letter agreement, and such invalid provision
shall be deemed deleted to the minimum extent necessary to cure such violation,
and failure to comply with such invalid provision shall not be a breach of this
letter agreement. Neither this letter agreement nor any of the rights and/or
obligations hereunder may be assigned except by statutory merger or by the
assignment by a party to a parent corporation owning more than 50% of the voting
stock of such party, by either party without the prior written consent of the
other party, and any attempted assignment or transfer by either party not in
accordance herewith shall be null and void. This letter agreement is for the
benefit of each party and its Representatives and their respective successors
and permitted assigns. This letter agreement shall be governed by, and construed
in accordance with, the laws of the State of California.

Very truly yours,

VIXEL CORPORATION



By:  /s/ Kurtis L. Adams
    -------------------------------------
     Kurtis L. Adams, Chief Financial Officer

Confirmed and Agreed to as of this __ day of September 2003:

EMULEX CORPORATION


By:      /s/ Paul Folino
     ------------------------------------
Name: Paul Folino
     ------------------------------------
Its:     Chief Executive Officer
    -------------------------------------

                                  Page 5 of 5