exv10w4






Exhibit 10.4




AGREEMENT




          This AGREEMENT (the “Agreement”) is dated and effective as of July 11, 2008, and hereby
entered into by and between 3Com Corporation (“3Com”), on the one hand, and Realtek Semiconductor
Corporation (“Realtek”), on the other hand. There are no other parties to this Agreement.




RECITALS




          WHEREAS, 3Com is a Delaware corporation, with an office at 350 Campus Drive, Marlborough,
Massachusetts;




          WHEREAS, Realtek is a Taiwanese corporation, with an office at No. 2, Innovation Road II,
Hsinchu Science Park, Hsinchu 300, Taiwan;




          WHEREAS, for purposes of this Agreement, 3Com and Realtek shall be referred to collectively as
the “Parties” and individually as a “Party”;




          WHEREAS, 3Com is the owner of certain United States patents, including United States Patent
Nos. 5,307,459, 5,434,872, 5,732,094, and 6,570,884 (collectively, the “Parallel Tasking Patents”
and/or the “3Com Patents”);




          WHEREAS, the Parties have engaged in litigation concerning infringement of the 3Com Patents,
captioned 3Com Corp. v. Realtek Semiconductor Corp., Case No. C 03-02177-VRW (the “Litigation”);




          WHEREAS, on April 9, 2008, following a jury trial, the jury rendered a verdict that the 3Com
Patents were willfully infringed by Realtek and were not invalid, and awarding damages to 3Com in
the amount of $45,300,000.00;




          WHEREAS, Realtek has filed various motions seeking to set aside the jury’s verdict and has
indicated its intention to appeal from that verdict;




          WHEREAS, 3Com has filed various motions seeking a permanent injunction, enhanced damages, and
other forms of post-trial relief;




          WHEREAS, to avoid the expense and uncertainty of further litigation, the Parties hereto now
desire and hereby agree to compromise, settle, discharge, and resolve, fully and finally, said
disputes between the Parties hereto with respect to claims that were asserted in the Litigation,
through the date of this Agreement;




          WHEREAS, 3Com is the owner of certain other United States patents, including United States
Patent Nos. 6,115,776 and 6,327,625 (collectively the “Gigabit Technology Patents”); and




          WHEREAS, separately from the Litigation, Realtek and 3Com wish to establish a technology
relationship as to the Parallel Tasking Patents, the Gigabit Technology Patents and related
technology;




			
	 	 	 
	Confidential Agreement
	 	Page 1






 









 






          NOW, THEREFORE, in settlement of all such claims and in consideration of the undertakings
contained 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 treated
as an admission of liability by any Party for any purpose. The Parties shall cooperate
in taking all steps necessary to finally settle and dismiss the Litigation while
providing that the Court shall retain jurisdiction over the Parties with respect to
enforcement of this Agreement, including, without limitation, the execution and filing
of a Stipulation of Dismissal substantially in the form annexed hereto and made a part
hereof as Exhibit A, and the preparation and execution of such other documents as
reasonably may be required to carry out the intent of this Agreement, including without
limitation and as may be appropriate, joint requests to the Court to stay further
proceedings 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 orders
with respect to the jury’s finding of willful infringement shall be vacated. None of
the Parties’ respective obligations and/or rights under this Agreement shall be
conditioned upon the willingness of the Court to vacate the finding of willful
infringement. Notwithstanding the foregoing, the Stipulation of Dismissal shall not be
filed until September 1, 2008, and shall then be filed only if Realtek is at that time
in full compliance with the terms of this Agreement.






	2.	 	MUTUAL RELEASES






	 	2.1	 	3Com hereby waives, fully and unconditionally releases and discharges with
prejudice Realtek and its respective officers, directors, members, employees, attorneys
and 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 or
unlicensed 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 Agreement
and up to September 1, 2008, and arising anywhere in the world, that relate to or arise
from or are relevant to the 3Com Patents and the Gigabit Technology Patents (as defined
in 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 over
those claims to allow them to be brought in the Litigation, provided however that this
Section 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 compliance
with the terms of this Agreement. “Covered Products” shall mean those products
identified in Exhibit B hereto, and any later versions thereof or other products
technologically derived therefrom (in whole or in part) and any network adapter and/or
interface devices or components, in each case that are (a) made by or for Realtek
and/or its Subsidiaries (as defined below), and (b) sold by Realtek and/or its
Subsidiaries to their direct customers (including, without limitation, distributors) as
a Realtek or





			
	 	 	 
	Confidential Agreement
	 	Page 2






 









 







	 	 	 	Realtek-Subsidiary Product. For purposes of this Agreement, a “Realtek or
Realtek-Subsidiary Product” shall be a product designed by Realtek and/or its
Subsidiary, and sold by Realtek and/or its Subsidiary under a Realtek and/or Realtek
Subsidiary part number and/or with a Realtek and/or Realtek Subsidiary topmark. For
purposes of this Agreement, a part designed and sold by Realtek and/or a Realtek
Subsidiary using a part number requested by the customer shall be considered “sold
by Realtek and/or a Realtek Subsidiary under a Realtek and/or Realtek Subsidiary
part number.” For purposes of this Agreement, “Subsidiary” shall mean a
corporation, partnership or other legal entity in which Realtek (x) owns a majority
of the voting stock or other voting or controlling interests, and (y) has effective
management control.
	 
	 	2.2	 	Realtek hereby waives, fully and unconditionally releases and discharges with
prejudice 3Com and its respective officers, directors, members, employees, attorneys
and 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 to
the date of this Agreement and up to September 1, 2008, and arising anywhere in the
world, that relate to or arise from or are relevant to the 3Com Patents and the Gigabit
Technology Patents (on the one hand) and Covered Products (on the other), including all
licensing activities and communications with respect thereto, regardless of whether
jurisdiction and venue could have existed over those claims to allow them to be brought
in the Litigation, provided however that this Section 2.2 shall not release 3Com from
or under any Realtek patents. Notwithstanding the foregoing, this provision shall not
take effect until September 1, 2008, and shall then take effect only if 3Com is at that
time in full compliance with the terms of this Agreement.
	 
	 	2.3	 	Full and timely compliance with the terms of this Agreement shall require full
and timely compliance with all of the terms (including full and timely payment) of the
Gigabit Technology License Agreement and of the Parallel Tasking Technology License
Agreement.
	 
	 	2.4	 	The amounts to be paid by the Realtek Group to 3Com pursuant to the agreements
in Section 2.3 shall be in United States dollars net of any non-U.S. taxes, including
withholding taxes, without any deductions (except deductions or charges imposed by
3Com’s bank which 3Com will bear). 3Com shall use reasonable commercial efforts to
provide prompt assistance and documentation as reasonably requested by the Realtek
Group, including certificate(s) authorizing the Realtek Group to apply for tax
exemption(s) on behalf of 3Com and copy(ies) of the certificate of incorporation of
3Com, to assist the Realtek Group in obtaining tax exemption(s) on payments made to
3Com on account of these agreements. The Parties agree to reasonably cooperate with
respect to obtaining such exemption(s). In the event Realtek succeeds in securing
exemption(s) or waiver(s) of withholding, 3Com will cooperate with Realtek to assign to
Realtek any benefit from taxes previously paid by Realtek in that regard. Nothing
herein shall obligate 3Com to provide to the Realtek Group for purposes of obtaining
such 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 Agreements
shall be non-refundable for any reason.




	3.	 	APPLICABLE LAW






	 	3.1	 	This Agreement shall be governed by and construed according to the laws of the
United States of America and the State of California, applicable to agreements
negotiated, executed and performed wholly within the State of California and without
conflict of laws consideration. The Parties agree that exclusive jurisdiction and
venue for any action brought between the Parties relating to the subject matter of this
Agreement shall lie in the United States District Court for the Northern District of
California, and each of the Parties agrees and submits itself to the exclusive
jurisdiction 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 elsewhere
between 3Com and Realtek, all statements and steps taken by the Parties to settle this
matter (including this Agreement) shall not be construed as an admission on the merits
of either Party’s position and shall not be admissible for any purpose, except for the
limited purposes identified below:






	 	(a)	 	In an action for breach of this Agreement or any other
agreement between the Parties, the Parties may introduce this Agreement into
evidence in order to enforce its terms; or
	 
	 	(b)	 	In an action for infringement, this Agreement or any other
agreement between the Parties may be introduced into evidence by Realtek in
order to support any asserted defense that the alleged infringement is covered
by 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 rights
and obligations under this Agreement shall be null and void and ineffective, unless
both (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 of
this Agreement.






	6.	 	MISCELLANEOUS PROVISIONS






	 	6.1	 	Expenses. Each Party shall bear its own costs and attorneys’ fees for
all litigation, negotiation and similar costs incurred between the Parties prior to and
including the date of this Agreement, including, but not limited to, all costs and fees
incurred in the Litigation.





			
	 	 	 
	Confidential Agreement
	 	Page 4






 









 







	 	6.2	 	Representations. Each Party represents (a) that it has read and
understands this Agreement, (b) that it has investigated the facts pertinent to this
Agreement as it deemed necessary, (c) that it has been represented by legal counsel of
its own choice in the negotiation and drafting of this Agreement, and has executed this
Agreement with the advice and consent of such counsel, (d) that no other Party, nor any
agent or attorney of any other Party, has made any promise, representation or warranty
whatsoever, express or implied, not contained herein concerning the subject matter
hereof, to induce it to execute this Agreement, and (e) that it has not executed this
Agreement in reliance on any promise, representation or warranty not contained herein.
The Parties have included this clause to preclude any claim that any Party was
fraudulently induced to execute this Agreement and to preclude the introduction of
parol evidence to vary, interpret, supplement or contradict the terms of this
Agreement.
	 
	 	6.3	 	Amendments. This Agreement, including this provision of this
Agreement, may be amended only by a writing signed by the Party to be charged with such
amendment or its successor(s) in interest.
	 
	 	6.4	 	Construction. No presumption for or against either Party arising out
of drafting all or any part of this Agreement will be applied in any action relating
to, connected to, or involving this Agreement. Accordingly, the Parties hereby waive
the benefit of California Civil Code §1654 and any successor or amended statute, which
provides that in cases of uncertainty, the language of a contract should be interpreted
most strongly against the Party who caused the uncertainty to exist.
	 
	 	6.5	 	Unenforceable Terms. In the event any provision of this Agreement is
held to be void or unenforceable by a court of competent jurisdiction, that part will
be severed from the balance of this Agreement and the remaining provisions shall
nevertheless be binding upon the Parties with the same force and effect as though the
void or unenforceable parts had been severed and deleted. Notwithstanding the
foregoing, if the void or unenforceable parts were essential to the intended purpose of
this Agreement, then the Party who was to receive the benefit of each said part has the
option to void this Agreement in its entirety.
	 
	 	6.6	 	Waiver of Terms. A waiver of any term or condition of this Agreement
will not be deemed to be, and may not be construed as, a waiver of any other term or
condition thereof.
	 
	 	6.7	 	Authority. Each of the Parties represents, warrants and agrees that it
has the full right and authority to enter into this Agreement, and that the person
executing this Agreement on its behalf has the full right and authority fully to commit
and to bind such Party.
	 
	 	6.8	 	Non-Assignment of Claims. Each Party hereto represents and warrants
that such Party is the sole and lawful owner of all right, title, and interest in and
to 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 released
and/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 and
in the capacity indicated.
	 
	 	6.10	 	Execution in Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be considered an original but all of which will
constitute one agreement.
	 
	 	6.11	 	Confidentiality. The Parties shall keep the terms of this Agreement
confidential and shall not disclose them to other persons, except as required by law or
legal process or to comply with regulatory or financial disclosure obligations.
Notwithstanding the foregoing, the Parties understand that either Party may at its
discretion publicly disclose the monetary amount of the agreed payments from Realtek to
3Com, that the Litigation has been resolved and dismissed pursuant to mutually
agreeable terms, that 3Com has covenanted not to sue Realtek and its customers under
the 3Com Patents with respect to Realtek products, and that 3Com has licensed Realtek
with respect to those and other patents and related technology. In addition, either
Party may, at its discretion, disclose this Agreement to: (a) its legal, financial,
tax and other advisors; (b) to potential acquirors of their respective businesses (and
in 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 3Com
Patents or Gigabit Technology Patents, in each case provided that the persons to whom
the 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 by
their 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)

SIMPSON THACHER & BARTLETT LLP

2550 Hanover Street

Palo Alto, California 94304-1115

Telephone: (650) 251-5000

Facsimile: (650) 251-5002

E-mail: jostrow@stblaw.com




Henry B. Gutman (admitted pro hac vice)

Kerry L. Konrad (admitted pro hac vice)

SIMPSON THACHER & BARTLETT LLP

425 Lexington Avenue

New York, New York 10017-3954

Telephone: (212) 455-2000

Facsimile: (212) 455-2502

E-mail: hgutman@stblaw.com




Attorneys for Plaintiff

3Com Corporation



Yitai Hu (SBN 248085)

Sean P. DeBruine (SBN 168071)

Elizabeth H. Rader (SBN 184963)

S.H. Michael Kim (SBN 203491)

AKIN GUMP STRAUSS HAUER & FELD, LLP

Two Palo Alto Square

3000 El Camino Real, Suite 400

Palo Alto, California 94306-2112

Telephone: (650) 838-2000

Facsimile: (650) 838-2001

E-mail: mkim@akingump.com




Attorneys for Defendant

Realtek Semiconductor Corporation



UNITED STATES DISTRICT COURT



NORTHERN DISTRICT OF CALIFORNIA



SAN FRANCISCO DIVISION




	 	 	 
	3COM CORPORATION,
	 	 
	 

	 	Case No. Cv-03-02177-VRW
	Plaintiff,

	 	 
	 
	v.
	 	 
	 
	 	STIPULATION AND [PROPOSED] 
	REALTEK SEMICONDUCTOR
	 	ORDER DISMISSING ACTION 
	CORPORATION,
	 	WITH PREJUDICE
	 
	 	 
	Defendant.
	 	 






STIPULATION AND [PROPOSED] ORDER

DISMISSING ACTION WITH PREJUDICE

Case No. Cv-03-02177-VRW




1









 





Exhibit B




COVERED PRODUCTS




RTL8139

RTL8139A

RTL8139B

RTL8139C

RTL8139D

RTL8100

RTL8100B

RTL8100C

RTL8100E

RTL8101E

RTL8101L

RTL8139C+

RTL8169

RTL8169S-32

RTL8110S-32

RTL8169S-64

RTL8110S-64

RTL8169SB

RTL8110SB

RTL8169SC

RTL8110

RTL8110SC




 









 








          Plaintiff 3Com Corporation, Inc. (“3Com”), by its counsel Simpson Thacher & Bartlett LLP, and
Defendant Realtek Semiconductor Corporation (“Realtek”), by its counsel Akin Gump Strauss Hauer &
Feld, LLP, hereby stipulate that they have reached a settlement of the dispute that is the subject
matter of the above-referenced action (the “Action”). Based upon such settlement, on the consent
and approval of 3Com and Realtek, IT IS HEREBY ORDERED that:




          1. The Action, including, without limitation, all claims asserted by 3Com against Realtek in
the Action and all claims asserted by Realtek against 3Com in the Action, is hereby dismissed with
prejudice pursuant to Rules 41(a)(1)(A) and 41(c) of the Federal Rules of Civil Procedure.




          2. The parties have entered into a confidential settlement agreement. The Court shall retain
jurisdiction over the parties for purposes of enforcing this agreement.




          3. Pursuant to the terms of the settlement agreement, the judgment with respect to the jury’s
finding of willful infringement shall be vacated.




          4. Each party shall bear its own costs and attorneys’ fees.




	 	 	 	 	 
	AGREED TO AND ACCEPTED:	 
	 
	Dated: September 1, 2008 	
SIMPSON THACHER & BARTLETT LLP
 	 
	 
	 	By:  	
 	 
	 	 	Henry B. Gutman 	 
	 	Attorneys for Plaintiff

3COM CORPORATION 	 
	 
	 
	Dated:  September 1, 2008 	AKIN GUMP STRAUSS HAUER & FELD, LLP

 	 
	 	By:  	 	 
	 	 	Yitai Hu 	 
	 	Attorneys for Defendant

REALTEK SEMICONDUCTOR CORP. 	 
	 
	SO ORDERED:
	 	 	 	 
	 

	Dated:                     , 2008
	
 	 	 
	 
	 	
The Honorable Vaughn R. Walker
	 
	 	
United States District Judge
	 




STIPULATION AND [PROPOSED] ORDER

DISMISSING ACTION WITH PREJUDICE

Case No. Cv-03-02177-VRW




2