NOW, THEREFORE, in settlement of all such claims and in consideration of the undertakingscontained herein, the Parties hereto covenant and agree as follows:1. SETTLEMENT; FINAL JUDGMENT; NON-ADMISSION OF LIABILITY 1.1 This Agreement consists of a compromise by the Parties and shall not be treatedas an admission of liability by any Party for any purpose. The Parties shall cooperatein taking all steps necessary to finally settle and dismiss the Litigation whileproviding that the Court shall retain jurisdiction over the Parties with respect toenforcement of this Agreement, including, without limitation, the execution and filingof a Stipulation of Dismissal substantially in the form annexed hereto and made a parthereof as Exhibit A, and the preparation and execution of such other documents asreasonably may be required to carry out the intent of this Agreement, including withoutlimitation and as may be appropriate, joint requests to the Court to stay furtherproceedings until September 1, 2008. The Stipulation of Dismissal shall provide that,pursuant to the terms of an agreement between the Parties, the judgment and all orderswith respect to the jury’s finding of willful infringement shall be vacated. None ofthe Parties’ respective obligations and/or rights under this Agreement shall beconditioned upon the willingness of the Court to vacate the finding of willfulinfringement. Notwithstanding the foregoing, the Stipulation of Dismissal shall not befiled until September 1, 2008, and shall then be filed only if Realtek is at that timein full compliance with the terms of this Agreement.2. MUTUAL RELEASES 2.1 3Com hereby waives, fully and unconditionally releases and discharges withprejudice Realtek and its respective officers, directors, members, employees, attorneysand agents, from and against any and all claims, demands, actions, causes of action,and charges of any nature, including but not limited to all claims of unauthorized orunlicensed use by Realtek of the 3Com Patents and the Gigabit Technology Patents,whether known or unknown, from the beginning of time up to the date of this Agreementand up to September 1, 2008, and arising anywhere in the world, that relate to or arisefrom or are relevant to the 3Com Patents and the Gigabit Technology Patents (as definedin the whereas clauses above) on the one hand, and Covered Products (as defined below)on the other, regardless of whether jurisdiction and venue could have existed overthose claims to allow them to be brought in the Litigation, provided however that thisSection 2.1 shall not release Realtek from or under any other 3Com patents.Notwithstanding the foregoing, this provision shall not take effect until September 1,2008, and shall then take effect only if Realtek is at that time in full compliancewith the terms of this Agreement. “Covered Products” shall mean those productsidentified in Exhibit B hereto, and any later versions thereof or other productstechnologically derived therefrom (in whole or in part) and any network adapter and/orinterface devices or components, in each case that are (a) made by or for Realtekand/or its Subsidiaries (as defined below), and (b) sold by Realtek and/or itsSubsidiaries to their direct customers (including, without limitation, distributors) asa Realtek or   **Confidential Agreement** **Page 2**
 

 
   Realtek-Subsidiary Product. For purposes of this Agreement, a “Realtek orRealtek-Subsidiary Product” shall be a product designed by Realtek and/or itsSubsidiary, and sold by Realtek and/or its Subsidiary under a Realtek and/or RealtekSubsidiary part number and/or with a Realtek and/or Realtek Subsidiary topmark. Forpurposes of this Agreement, a part designed and sold by Realtek and/or a RealtekSubsidiary using a part number requested by the customer shall be considered “soldby Realtek and/or a Realtek Subsidiary under a Realtek and/or Realtek Subsidiarypart number.” For purposes of this Agreement, “Subsidiary” shall mean acorporation, partnership or other legal entity in which Realtek (x) owns a majorityof the voting stock or other voting or controlling interests, and (y) has effectivemanagement control.  2.2 Realtek hereby waives, fully and unconditionally releases and discharges withprejudice 3Com and its respective officers, directors, members, employees, attorneysand agents, from and against any and all claims, demands, actions, causes of action,and charges of any nature, whether known or unknown, from the beginning of time up tothe date of this Agreement and up to September 1, 2008, and arising anywhere in theworld, that relate to or arise from or are relevant to the 3Com Patents and the GigabitTechnology Patents (on the one hand) and Covered Products (on the other), including alllicensing activities and communications with respect thereto, regardless of whetherjurisdiction and venue could have existed over those claims to allow them to be broughtin the Litigation, provided however that this Section 2.2 shall not release 3Com fromor under any Realtek patents. Notwithstanding the foregoing, this provision shall nottake effect until September 1, 2008, and shall then take effect only if 3Com is at thattime in full compliance with the terms of this Agreement.  2.3 Full and timely compliance with the terms of this Agreement shall require fulland timely compliance with all of the terms (including full and timely payment) of theGigabit Technology License Agreement and of the Parallel Tasking Technology LicenseAgreement.  2.4 The amounts to be paid by the Realtek Group to 3Com pursuant to the agreementsin Section 2.3 shall be in United States dollars net of any non-U.S. taxes, includingwithholding taxes, without any deductions (except deductions or charges imposed by3Com’s bank which 3Com will bear). 3Com shall use reasonable commercial efforts toprovide prompt assistance and documentation as reasonably requested by the RealtekGroup, including certificate(s) authorizing the Realtek Group to apply for taxexemption(s) on behalf of 3Com and copy(ies) of the certificate of incorporation of3Com, to assist the Realtek Group in obtaining tax exemption(s) on payments made to3Com on account of these agreements. The Parties agree to reasonably cooperate withrespect to obtaining such exemption(s). In the event Realtek succeeds in securingexemption(s) or waiver(s) of withholding, 3Com will cooperate with Realtek to assign toRealtek any benefit from taxes previously paid by Realtek in that regard. Nothingherein shall obligate 3Com to provide to the Realtek Group for purposes of obtainingsuch tax exemption(s) any confidential information of 3Com. Notwithstanding   **Confidential Agreement** **Page 3**
 

 
the foregoing, all payments made by the Realtek Group to 3Com under these Agreementsshall be non-refundable for any reason.3. APPLICABLE LAW 3.1 This Agreement shall be governed by and construed according to the laws of theUnited States of America and the State of California, applicable to agreementsnegotiated, executed and performed wholly within the State of California and withoutconflict of laws consideration. The Parties agree that exclusive jurisdiction andvenue for any action brought between the Parties relating to the subject matter of thisAgreement shall lie in the United States District Court for the Northern District ofCalifornia, and each of the Parties agrees and submits itself to the exclusivejurisdiction and venue of such courts for such purpose.4. LITIGATION AFTER DISMISSAL 4.1 In any current or subsequent litigation in the United States or elsewherebetween 3Com and Realtek, all statements and steps taken by the Parties to settle thismatter (including this Agreement) shall not be construed as an admission on the meritsof either Party’s position and shall not be admissible for any purpose, except for thelimited purposes identified below: (a) In an action for breach of this Agreement or any otheragreement between the Parties, the Parties may introduce this Agreement intoevidence in order to enforce its terms; or  (b) In an action for infringement, this Agreement or any otheragreement between the Parties may be introduced into evidence by Realtek inorder to support any asserted defense that the alleged infringement is coveredby the license, release, or covenant not to sue contained in this Agreement.5. TRANSFERABILITY/ASSIGNABILITY 5.1 Each Party agrees that any transfer or assignment of any or all of its rightsand obligations under this Agreement shall be null and void and ineffective, unlessboth (a) the other Party consents in writing to the transfer or assignment, and(b) the entity acquiring or receiving assignment or transfer of said rights agrees,in a writing provided to the other Party, to be bound by the terms and conditions ofthis Agreement.6. MISCELLANEOUS PROVISIONS 6.1 Expenses. Each Party shall bear its own costs and attorneys’ fees forall litigation, negotiation and similar costs incurred between the Parties prior to andincluding the date of this Agreement, including, but not limited to, all costs and feesincurred in the Litigation.   **Confidential Agreement** **Page 4**
 

 
 6.2 Representations. Each Party represents (a) that it has read andunderstands this Agreement, (b) that it has investigated the facts pertinent to thisAgreement as it deemed necessary, (c) that it has been represented by legal counsel ofits own choice in the negotiation and drafting of this Agreement, and has executed thisAgreement with the advice and consent of such counsel, (d) that no other Party, nor anyagent or attorney of any other Party, has made any promise, representation or warrantywhatsoever, express or implied, not contained herein concerning the subject matterhereof, to induce it to execute this Agreement, and (e) that it has not executed thisAgreement in reliance on any promise, representation or warranty not contained herein.The Parties have included this clause to preclude any claim that any Party wasfraudulently induced to execute this Agreement and to preclude the introduction ofparol evidence to vary, interpret, supplement or contradict the terms of thisAgreement.  6.3 Amendments. This Agreement, including this provision of thisAgreement, may be amended only by a writing signed by the Party to be charged with suchamendment or its successor(s) in interest.  6.4 Construction. No presumption for or against either Party arising outof drafting all or any part of this Agreement will be applied in any action relatingto, connected to, or involving this Agreement. Accordingly, the Parties hereby waivethe benefit of California Civil Code §1654 and any successor or amended statute, whichprovides that in cases of uncertainty, the language of a contract should be interpretedmost strongly against the Party who caused the uncertainty to exist.  6.5 Unenforceable Terms. In the event any provision of this Agreement isheld to be void or unenforceable by a court of competent jurisdiction, that part willbe severed from the balance of this Agreement and the remaining provisions shallnevertheless be binding upon the Parties with the same force and effect as though thevoid or unenforceable parts had been severed and deleted. Notwithstanding theforegoing, if the void or unenforceable parts were essential to the intended purpose ofthis Agreement, then the Party who was to receive the benefit of each said part has theoption to void this Agreement in its entirety.  6.6 Waiver of Terms. A waiver of any term or condition of this Agreementwill not be deemed to be, and may not be construed as, a waiver of any other term orcondition thereof.  6.7 Authority. Each of the Parties represents, warrants and agrees that ithas the full right and authority to enter into this Agreement, and that the personexecuting this Agreement on its behalf has the full right and authority fully to commitand to bind such Party.  6.8 Non-Assignment of Claims. Each Party hereto represents and warrantsthat such Party is the sole and lawful owner of all right, title, and interest in andto every claim and other matter released and/or conferred pursuant to this Agreement,and that such Party has not heretofore assigned or transferred, or purported to assign   **Confidential Agreement** **Page 5**
 

 
   or transfer, to any person or entity, any claims or other matters herein releasedand/or conferred.  6.9 Successors and Assigns. This Agreement shall inure to the benefit of,and shall be binding upon, each of the Parties’ respective successors, assigns,affiliates, subsidiaries, parent companies, predecessors, successors, divisions,operating companies, officers, directors, agents, employees, representatives,shareholders, heirs, partners, investors, accountants, and attorneys, individually andin the capacity indicated.  6.10 Execution in Counterparts. This Agreement may be executed in separatecounterparts, each of which shall be considered an original but all of which willconstitute one agreement.  6.11 Confidentiality. The Parties shall keep the terms of this Agreementconfidential and shall not disclose them to other persons, except as required by law orlegal process or to comply with regulatory or financial disclosure obligations.Notwithstanding the foregoing, the Parties understand that either Party may at itsdiscretion publicly disclose the monetary amount of the agreed payments from Realtek to3Com, that the Litigation has been resolved and dismissed pursuant to mutuallyagreeable terms, that 3Com has covenanted not to sue Realtek and its customers underthe 3Com Patents with respect to Realtek products, and that 3Com has licensed Realtekwith respect to those and other patents and related technology. In addition, eitherParty may, at its discretion, disclose this Agreement to: (a) its legal, financial,tax and other advisors; (b) to potential acquirors of their respective businesses (andin the case of Realtek, to potential acquirors of the relevant product lines); and (c)in the case of 3Com, to potential licensees or purchasers of any or all of the 3ComPatents or Gigabit Technology Patents, in each case provided that the persons to whomthe Agreement is disclosed agree in writing to respect the confidentiality thereof.          IN WITNESS THEREOF, this Agreement has been executed and delivered by the Parties hereto bytheir duly authorized officers or representatives.3COM CORPORATION     By: /s/ Neal D. Goldman       Title: Executive Vice President            REALTEK SEMICONDUCTOR CORPORATION   By: /s/ ILLEGIBLE       Title: President     **Confidential Agreement** **Page 6**
 

 
**Exhibit A**Jeffrey Ostrow (CSB No. 213118)