Exhibit 10.1

SETTLEMENT AGREEMENT

This Settlement Agreement (the “Agreement”) is entered into as of December 1,
2006, by and between the following parties (each a “Party” and together the
“Parties”): (1) on the one hand, Ericsson Inc. on behalf of itself and all of
its family of companies (together “Ericsson”); and (2) on the other hand, Exar
Corporation (“Exar”) and Rohm Co., Ltd. and Rohm Device U.S.A., LLC
(collectively “Rohm Entities”) (Exar and Rohm Entities together “Exar/Rohm”).

RECITALS

A. The Parties are involved in litigation between themselves and Vicor
Corporation (“Vicor”) in the following actions which have been coordinated in
San Diego County Superior Court: San Diego County Superior Court Case No. GIC
829632 and San Diego County Superior Court Case No. GIC 871121 (formerly Santa
Clara County Superior Court Case No. 105CV036737) (both together the
“Litigation”). The Litigation involves various claims more fully set forth in
the pleadings and other documents filed and/or served in the Litigation.

B. The Parties desire to settle the Litigation, as between themselves, on the
terms set forth in this Agreement. Vicor is not a party to this Agreement.

AGREEMENT

WHEREFORE, in consideration of the mutual covenants and promises herein
contained, it is hereby agreed by and between the Parties, intending to be
legally bound, as follows:

 

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1. The foregoing Recitals are incorporated herein by reference and made a part
of this Agreement.

2. This Agreement is a “sliding scale” settlement agreement authorized by and
being entered pursuant to California Code of Civil Procedure Section 877.5.

3. This Agreement is being entered into after arms-length negotiations between
the Parties, in absolute good faith and in a spirit of settlement and
compromise. It is based upon the information and facts learned in the course of
investigation and discovery, uncertainty of litigation, the costs of litigation,
and the desire of the Parties to reasonably settle this Litigation, as between
themselves, on the terms and conditions set forth in this Agreement. The Parties
shall prepare and submit to the Court a joint motion pursuant to California Code
of Civil Procedure section 877.6, for determination by the Court of the good
faith of the settlement set forth in this Agreement, and that results in the
discharge of all claims for indemnity by Vicor against Exar/Rohm relating to
that part of the Litigation for the San Diego County Superior Court Case No. GIC
829632 (the “Good Faith Motion”). The Parties will jointly pursue the Good Faith
Motion to final determination by the Court and if necessary, the appellate
courts, regardless of any settlement between Ericsson and Vicor or the
Litigation being dismissed. If such motion is granted by the Court, and not
overturned by a petition for writ of mandate pursuant to Section 877.6(e), then
all of the terms of this Agreement shall be binding upon the Parties. If such
motion should be denied by the Court, the Court’s good faith determination
overturned upon a petition for writ of mandate, or the Court should find that
the value of the Agreement is an amount other than the exact amount set forth in
paragraph 10 below, then the Parties shall negotiate in good faith to cure to
the extent possible any points of concern raised by the trial or appellate

 

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courts or any difference between the Parties’ agreed upon value of the Agreement
and the Court’s value of the Agreement sufficient to obtain good faith approval
of the Agreement at a value that the Parties agree upon. All of the negotiations
related to this Agreement and to the Good Faith Motion shall be deemed to be
settlement negotiations and subject to Evidence Code Section 1152. The Good
Faith Motion shall be made as expeditiously as possible after execution of this
Agreement, and, pending the determination of such motion, the Parties shall
endeavor to limit litigation activities and expense as between them (so long as
doing so does not jeopardize the pending trial date of March 29, 2007).

4. Within 10 days of granting of the Good Faith Motion and either the failure of
Vicor to timely seek a reversal of such ruling by writ of mandate under
Section 877.6 or the failure of any such writ petition (hereinafter “Finality of
the Good Faith Motion”), Exar/Rohm (whose obligations under this Agreement are
joint and several) shall pay to Ericsson the sum of $1 million dollars. The
respective contributions to that total sum by Exar, on the one hand, and the
Rohm Entities, on the other hand, shall be equal (and the share of the Rohm
Entities shall be paid by Rohm Device U.S.A., LLC). The amount set forth in this
paragraph is non-refundable under any circumstances.

5. In addition, upon Finality of the Good Faith Motion, Exar/Rohm hereby
guarantee Ericsson a minimum recovery in the Litigation of $14 million dollars
(excluding interest, costs, and attorneys’ fees, and before any offset is
applied) – such $14 million dollar amount consisting of the $1 million dollar
amount referred to in the preceding paragraph and an additional contingent $13
million dollar amount (the “Contingent $13 Million Dollar Amount”) as more fully
described below in paragraph 8. The respective contributions to that total sum
by Exar, on the one hand, and the Rohm Entities, on the other

 

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hand, shall be equal (and the share of the Rohm Entities shall be paid by Rohm
Device U.S.A., LLC). Within 30 days of Finality of the Good Faith Motion,
Exar/Rohm shall provide Ericsson with letters of credit to release payment of
the Contingent $13 Million Dollar Amount to Ericsson under the conditions and
circumstances stated in this Agreement within ten (10) days after being notified
in writing that the Court has entered a final judgment – and that any deadlines
for appeal have expired and/or any appellate proceedings have come to a complete
end – in the part of the Litigation for the San Diego County Superior Court Case
No. GIC 829632. As long as the letters of credit provide for payment of the
total Contingent $13 Million Dollar Amount to Ericsson under the conditions and
circumstances stated in this Agreement, Exar and the Rohm Entities may provide
separate letters of credit for their respective shares of the Contingent $13
Million Dollar Amount.

6. Also, within 5 court days of the Finality of the Good Faith Motion, Ericsson
shall file a request for dismissal of the San Diego County Superior Court Case
No. GIC 829632 as to Ericsson’s claims against Exar in that action, with the
Court retaining jurisdiction to enforce this Agreement as set forth in paragraph
14 below.

7. Additionally, upon Finality of the Good Faith Motion, Exar/Rohm agree that
although they will not continue to participate in the part of the Litigation for
the San Diego County Superior Court Case No. GIC 829632, they will in connection
with that part of the Litigation reasonably assist and cooperate with Ericsson
in preparing and presenting its case against Vicor. This reasonable assistance
and cooperation shall be limited to the obtaining and presentation of truthful
and accurate documentary evidence and testimony by witnesses. Ericsson retains
control over all aspects of the prosecution of its case against Vicor including
at both the trial and appellate courts, and Ericsson has the sole discretion
regarding

 

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whether to pursue any appellate proceedings. Exar/Rohm may pursue at any time or
continue to pursue affirmative relief against Vicor for any claims they have or
may have in the future against Vicor, and may defend against any claims that
Vicor has or may make against Exar/Rohm, including, without limitation, the part
of the Litigation for the San Diego County Superior Court Case No. GIC 871121
(formerly Santa Clara County Superior Court Case No. 105CV036737) not resolved
by this Agreement, provided such pursuit does not adversely impact Ericsson.

8. Insofar as the Contingent $13 Million Dollar Amount is concerned, if Ericsson
fails in the Litigation to obtain a judgment (excluding interest, costs, and
attorneys’ fees, and before any offset pursuant to California Code of Civil
Procedure section 877(b) is applied) (“Pre-Offset Judgment”) against Vicor of at
least $14 million dollars, then Exar/Rohm shall pay to Ericsson, dollar for
dollar, an amount equal to any shortfall in Ericsson obtaining a Pre-Offset
Judgment against Vicor for at least $14 million dollars – subject to a maximum
payment by Exar/Rohm of $14 million dollars. Alternatively stated, for any
amount that Ericsson obtains in a Pre-Offset Judgment in the Litigation against
Vicor, the amount of the Contingent $13 Million Dollar Amount shall be reduced
dollar for dollar. Additionally, should Ericsson obtain between $1 dollar and
$15,999,999.99 dollars in a Pre-Offset Judgment in the Litigation against Vicor,
the Contingent $13 Million Dollar Amount shall also include an amount calculated
using the following formula: (a) take $14 million dollars and subtract from it
the judgment (excluding interest, costs, and attorneys’ fees, and after any
offset pursuant to California Code of Civil Procedure section 877(b) is applied)
(“Post-Offset Judgment”) against Vicor, and then (b) take that resulting dollar
amount and subtract from it the total amount Exar/Rohm shall pay to Ericsson
equal to any

 

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shortfall in Ericsson obtaining a Pre-Offset Judgment against Vicor for at least
$14 million dollars as alternatively stated in the first two sentences of this
paragraph, and then finally (c) take that resulting dollar amount and if it is
$2 million dollars or less, reduce it by one-half (50%); but if it is over $2
million dollars and equal to or less than $3 million dollars, reduce it by
one-half for the first $2 million dollars, and do not reduce it for any part of
the amount over $2 million dollars. The non-refundable $1 million dollar payment
described in paragraph 4 above shall be credited to the maximum payment by
Exar/Rohm of $14 million dollars. If Ericsson obtains a judgment against Vicor
for any amount less than $14 million dollars or fails to obtain any judgment
against Vicor in a final judgment in the part of the Litigation for the San
Diego County Superior Court Case No. GIC 829632, Exar/Rohm would pay Ericsson at
most $14 million dollars - $13 million on the Contingent $13 Million Dollar
Amount and $1 million dollars under paragraph 4 above. On the other hand,
Ericsson would obtain no less than $13 million dollars from the total of (a) the
Post-Offset Judgment that it obtains against Vicor and (b) the total amount that
Exar/Rohm are to pay to Ericsson under this Agreement. Please see the schedule
attached as Exhibit 1 and incorporated by reference as though fully set forth in
this Agreement for examples of the Contingent $13 Million Dollar amount and
total amount that Exar/Rohm are to pay Ericsson under this Agreement. Exar/Rohm
shall have no obligation to pay any part of the Contingent $13 Million Dollar
Amount unless and until Ericsson has pursued the Litigation to a final judgment
against Vicor (including the expiration of any deadlines for appeal and/or
conclusion of any appellate proceedings). If Ericsson desires to enter a
settlement with Vicor at any time and in any amount, desires not to continue to
pursue the part of the Litigation for the San Diego County Superior Court Case
No. GIC 829632 against Vicor, or

 

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otherwise voluntarily dismisses that part of the Litigation against Vicor, it
may do so, however, in such an event, Exar/Rohm shall have no responsibility to
pay any portion of the Contingent $13 Million Dollar Amount to Ericsson.

9. Upon Finality of the Good Faith Motion and compliance with the terms of this
Agreement, the Parties, for themselves, their predecessors, parent and
subsidiaries, their related families of companies, and affiliates, hereby
completely and finally release any and all claims against each other mentioned
or suggested in the pleadings or discovery in the Litigation, and each Party
agrees that the releases shall apply to all unknown, unanticipated, unsuspected
and undisclosed claims, demands, liabilities, actions, or causes of action, in
law, equity or otherwise, as well as those which are now known, anticipated,
suspected, or disclosed, including, without limitation, all such claims and
demands arising out of or in any way related to the Litigation. Such releases
shall be binding upon and inure to the benefit of the Parties to this Agreement,
as well as their related families of companies, parent and subsidiaries,
insurers, predecessors, successors, affiliates, and assigns. Such releases shall
also inure to the benefit of the officers, directors, shareholders, owners,
servants, agents, employees, attorneys, insurers and other representatives,
within such capacities, of such Parties and affiliates. In connection therewith
and within the scope of such releases, after an opportunity to consult with
counsel the Parties, HEREBY WAIVE ANY AND ALL RIGHTS TO THE CONTRARY UNDER
CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

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10. Neither this Agreement nor any releases set forth in this Agreement shall
have any effect on any rights or claims between or among Exar and the Rohm
Entities. In addition, except as otherwise expressly provided in this Agreement,
this Agreement shall provide no third party beneficiary rights to any person or
entity, and, notwithstanding any provision in this Agreement, this Agreement
shall provide no rights or benefits to Vicor whatsoever – except as provided in
California Code of Civil Procedure Section 877. The Parties agree and hereby
declare that the value of the settlement set forth in this Agreement is $3.0
million dollars.

11. If Ericsson elects, pursuant to Section 877.5(a)(2) to ask the Court to
refrain from disclosing the existence of the settlement reflected in this
Agreement to the jury (on the ground that such disclosure “will create
substantial danger of undue prejudice, of confusing the issues, or of misleading
the jury”), Exar/Rohm will support such request. And if a disclosure is made to
the jury of the existence of the settlement reflected in this Agreement,
Exar/Rohm will support Ericsson’s request to the Court that such disclosure, as
provided in Section 877.5(a)(2), will be “no more than necessary to inform the
jury of the possibility that the agreement may bias the testimony of the
witness” and will exclude any mention of financial amounts set forth in this
Agreement.

12. The Parties warrant that they have neither transferred nor suffered the
transfer in any other matter to any other person or entity of all or any portion
of any claims covered by any releases set forth in this Agreement.

13. The Parties to this Agreement shall bear their own costs and attorneys’ fees
in connection with the Litigation and the negotiation, preparation, and
execution of this Agreement.

 

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14. This Agreement is hereby stipulated to be subject to enforcement by the
Court in this Litigation pursuant to California Code of Civil Procedure
Section 664.6, and the Court shall retain jurisdiction for such purpose.

15. In the event that it should be necessary for any Party to this Agreement, or
any person or entity benefiting from any release set forth in this Agreement, to
become involved in any proceeding involving the interpretation or enforcement of
any part of this Agreement, the prevailing party in such proceeding shall be
entitled to recover all costs and reasonable attorneys’ fees incurred in
connection with such proceeding, including enforcement of judgment and/or
appeal.

16. This Agreement reflects the settlement of disputed claims and assertions,
and a desire of the Parties to avoid the expense and nuisance of continued
litigation between themselves. As such, neither this Agreement, nor any action
taken pursuant to this Agreement, shall be deemed to be an admission of
wrongdoing, fault or otherwise by any person or entity.

17. This Agreement shall be binding upon and inure to the benefit of each of the
Parties to this Agreement and their respective related families of companies,
parent and subsidiaries, insurers, predecessors, successors, affiliates,
assigns, officers, directors, shareholders, owners, servants, agents, employees,
attorneys, insurers, and other representatives of the Parties hereto.

18. The terms “person” and/or “entity” as used in this Agreement shall include
natural persons, corporations, partnerships, associations, limited liability
entities and other entities or organizations of any kind.

 

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19. This Agreement may be executed in any number of counterparts. Facsimile
signatures shall be sufficient.

20. This Agreement shall be deemed to have been drafted jointly by the Parties.
No law or rule requiring the interpretation of uncertainties against a drafting
party shall apply.

21. Should any portion of this Agreement be declared invalid or unenforceable,
that portion shall be construed consistent with applicable law to reflect as
closely as possible the intention of the Parties, and the other provisions of
the Agreement shall remain in full force and effect.

22. This Agreement shall be governed and construed in accordance with the
internal laws of the State of California, excluding any laws that direct
application of another jurisdiction’s laws; and any disputes arising out of or
in connection with this Agreement (including the interpretation or enforcement
of this Agreement) shall be solely and exclusively resolved by the Superior
Court of the State of California for the County of San Diego.

23. This Agreement is executed by each signatory upon such entity’s own
independent judgment, after an opportunity to consult with counsel, and without
any representation, express or implied, of any kind, having been made or relied
upon, except as expressly set forth in this Agreement.

24. This Agreement constitutes an integrated contract and the entire agreement
of the Parties pertaining to the subject matters hereof, superseding all prior
and/or contemporaneous negotiations, agreements, representations and/or
understandings of the Parties with respect to the subject matters of this
Agreement. No amendment,

supplement,

 

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modification, waiver or termination of any part of this Agreement shall be valid
or binding unless executed in writing by the Party to be bound thereby,
expressly stating the intent to modify this Agreement.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set
forth below, but effective as of the date set forth at the outset of this
Agreement.

 

  ERICSSON INC. Dated: December 4, 2006   By  

     /s/ M. Rasmussen

      Signature       M. RASMUSSEN       Printed Name       VP FINANCE      
Title   EXAR CORPORATION Dated: December 1, 2006   By  

     /s/ Roubik Gregorian

      Signature       Roubik Gregorian       Printed Name       President and
CEO       Title   ROHM CO., LTD. Dated: December 1, 2006   By  

     /s/ Nobuo Hatta

      Signature       NOBUO HATTA       Printed Name       Member of the Board,
Director, Administrative Headquarters       Title   ROHM DEVICE U.S.A., LLC
Dated: December 1, 2006   By  

     /s/ Isao Moriguchi

      Signature       ISAO MORIGUCHI       Printed Name       President      
Title

 

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Exhibit 1 to Settlement Agreement

Schedule of Example Potential

Exar/Rohm Payments Under Settlement

Agreement

 

Ericsson’s Pre-Offset Judgment Against Vicor        $1.00    $1,000,000.00   
$2,000,000.00    $2,000,001.00    $3,000,000.00    $4,000,000.00   
$5,000,000.00    $6,000,000.00    $8,000,000.00    $10,000,000.00   
$11,000,000.00   Offset (Value of Settlement Agreement)        $3,000,000.00   
$3,000,000.00    $3,000,000.00    $3,000,000.00    $3,000,000.00   
$3,000,000.00    $3,000,000.00    $3,000,000.00    $3,000,000.00   
$3,000,000.00    $3,000,000.00   Ericsson’s Post-Offset Judgment Against Vicor  
     $0.00    $0.00    $0.00    $0.00    $0.00    $1,000,000.00    $2,000,000.00
   $3,000,000.00    $5,000,000.00    $7,000,000.00    $8,000,000.00   Total
Shortfall Between $14 million dollars and Pre-Offset Judgment to be covered by
Exar/Rohm        $13,999,999.00    $13.000,000.00    $12,000,000.00   
$11,999,999.00    $11,000,000.00    $10,000,000.00    $9,000,000.00   
$8,000,000.00    $6,000,000.00    $4,000,000.00    $3,000,000.00   Exar/Rohm
nonrefundable payment portion under paragraph 4 of Settlement Agreement       
$1,000,000.00    $1,000,000.00    $1,000,000.00    $1,000,000.00   
$1,000,000.00    $1,000,000.00    $1,000,000.00    $1,000,000.00   
$1,000,000.00    $1,000,000.00    $1,000,000.00   Exar/Rohm Contingent $13
Million Dollar Amount of Settlement Agreement under first two sentences of
paragraph 8 of Settlement Agreement (excludes additional amount under third
sentence of paragraph 8 of Settlement Agreement)        $12,999,999.00   
$12,000,000.00    $11,000,000.00    $10,999,999.00    $10,000,000.00   
$9,000,000.00    $8,000,000.00    $7,000,000.00    $5,000,000.00   
$3,000,000.00    $2,000,000.00   Calculation of Exar/Rohm additional amount of
Contingent $13 Million Dollar Amount should Ericsson obtain between $1 dollar
and $15,999,999.99 million dollars in Pre-Offset Judgment Against Vicor under
third sentence of paragraph 8 of Settlement Agreement        $0.50   
$500,000.00    $1,000,000.00    $1,000,001.00    $2,000,000.00    $2,000,000.00
   $2,000,000.00    $2,000,000.00    $2,000,000.00    $2,000,000.00   
$2,000,000.00   Exar/Rohm Total Contingent $13 Million Dollar Amount under
paragraph 8 of Settlement Agreement        $12,999,999.50    $12,500,000.00   
$12,000,000.00    $12,000,000.00    $12,000,000.00    $11,000,000.00   
$10,000,000.00    $9,000,000.00    $7,000,000.00    $5,000,000.00   
$4,000,000.00   Exar/Rohm Total Payment Under Settlement Agreement (Contingent
$13 Million Dollar Amount and nonrefundable $1 million dollar payment)       
$13,999,999.50    $13,500,000.00    $13,000,000.00    $13,000,000.00   
$13,000,000.00    $12,000,000.00    $11,000,000.00    $10,000,000.00   
$8,000,000.00    $6,000,000.00    $5,000,000.00   Total Recovery to Ericsson
(from Post-Offset Judgment against Vicor and Exar/Rohm under Settlement
Agreement)        $13,999,999.50    $13,500,000.00    $13,000,000.00   
$13,000,000.00    $13,000,000.00    $13,000,000.00    $13,000,000.00   
$13,000,000.00    $13,000,000.00    $13,000,000.00    $13,000,000.00

 

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Exhibit 1 to Settlement Agreement

Schedule of Example Potential

Exar/Rohm Payments Under Settlement

Agreement

 

Ericsson’s Pre-Offset Judgment Against Vicor        $12,000,000.00   
$13,000,000.00    $13,000,001.00    $14,000,000.00    $15,000,000.00   
$16,000,000.00    $17,000,000.00   Offset (Value of Settlement Agreement)       
$3,000,000.00    $3,000,000.00    $3,000,000.00    $3,000,000.00   
$3,000,000.00    $3,000,000.00    $3,000,000.00   Ericsson’s Post-Offset
Judgment Against Vicor        $9,000,000,00    $10,000,000.00    $10,000,001.00
   $11,000,000.00    $12,000,000.00    $13,000,000.00    $14,000,000.00   Total
Shortfall Between $14 million dollars and Pre-Offset Judgment to be covered by
Exar/Rohm        $2,000,000.00    $1,000,000.00    $999,999.00    $0.00    $0.00
   $0.00    $0.00   Exar/Rohm nonrefundable payment portion under paragraph 4 of
Settlement Agreement        $1,000,000.00    $1,000,000.00    $1,000,000.00   
$1,000,000.00    $1,000,000.00    $1,000,000,00    $1,000,000.00   Exar/Rohm
Contingent $13 Million Dollar Amount of Settlement Agreement under first two
sentences of paragraph 8 of Settlement Agreement (excludes additional amount
under third sentence of paragraph 8 of Settlement Agreement)       
$1,000,000.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00  
Calculation of Exar/Rohm additional amount of Contingent $13 Million Dollar
Amount should Ericsson obtain between $1 dollar and $15,999,999.99 million
dollars in Pre-Offset Judgment Against Vicor under third sentence of paragraph 8
of Settlement Agreement        $2,000,000.00    $2,000,000.00    $1,999,999.00
   $1,000,000.00    $500,000.00    $0.00    $0.00   Exar/Rohm Total Contingent
$13 Million Dollar Amount under paragraph 8 of Settlement Agreement       
$3,000,000.00    $2,000,000.00    $1,999,999.00    $1,000,000.00    $500,000.00
   $0.00    $0.00   Exar/Rohm Total Payment Under Settlement Agreement
(Contingent $13 Million Dollar Amount and nonrefundable $1 million dollar
payment)        $4,000,000.00    $3,000,000.00    $2,999,999.00    $2,000,000.00
   $1,500,000.00    $1,000,000.00    $1,000,000.00   Total Recovery to Ericsson
(from Post-Offset Judgment against Vicor and Exar/Rohm under Settlement
Agreement)        $13,000,000.00    $13,000,000.00    $13,000,000.00   
$13,000,000.00    $13,500,000.00    $14,000,000.00    $15,000,000.00

 

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