Document:

EX-10.7

Exhibit 10.7

August 12, 2008

Robert L. Tirva

Vice President and Corporate Controller

Broadcom Corporation

5300 California Avenue

Irvine, California 92617

Dear Bob:

          Broadcom Corporation considers it essential to its best interests and those of its
shareholders that you be encouraged to remain with the company and continue to devote your full
attention to Broadcom’s business, notwithstanding the possibility that your employment with
Broadcom might end in connection with or following a Change of Control event defined in Paragraph 1
of the Appendix (“Change in Control”) to this Letter Agreement (the “Letter Agreement”).
Accordingly, the Compensation Committee of the Broadcom Board of Directors (the “Compensation
Committee”) has selected you as a participant in the special change in control severance benefit
program (the “Program”).

          Capitalized terms not defined in this Letter Agreement are defined in the revised Appendix
attached hereto, which is hereby incorporated as though set forth in full herein.

          The initial term of your participation in the Program will commence on August 20, 2008 and
will continue through August 19, 2009 (such initial term together with any renewals thereof, the
“Term”). On August 19 of each succeeding calendar year, the Term shall, without any action by
Broadcom or the Compensation Committee, automatically be extended for one (1) additional year
unless, before any such automatic renewal date, the Compensation Committee, by a majority vote,
expressly determines that the automatic extension for such year shall not apply.

          Employment with Broadcom is at-will, and Broadcom may unilaterally terminate your employment
with or without “Cause” or in the event of your “Disability.” You may terminate your employment
with or without “Good Reason,” and your employment will automatically terminate upon your death.
Any termination of your employment by Broadcom or you during the Term (or, if it extends beyond the
Term, during the first twenty-four (24) months following a Change in Control that occurs during the
Term) shall be communicated by a “Notice of Termination.”

          If a Change in Control is effected during the Term and within twenty-four (24) months after
the effective date of that Change in Control:

          (i) Broadcom unilaterally terminates your employment other than for Cause or Disability, or

          (ii) you terminate your employment for Good Reason,

 

 

          Broadcom shall make the payments and provide the benefits described below, provided you were
employed on a full-time basis by Broadcom immediately prior to such termination and, with respect
to certain of those benefits, there is compliance with each of the following requirements (the
“Severance Benefit Requirements”):

          (i) you deliver the general release required under Section 12 of the attached Appendix (the
“Required Release”) within the applicable time period following your Date of Termination,

          (ii) the Required Release becomes effective in accordance with applicable law following the
expiration of any applicable revocation period,

          (iii) you comply with each of the restrictive covenants set forth in Subsection (9), and

          (iv) you are and continue to remain in material compliance with your obligations to Broadcom
under your Confidentiality and Invention Assignment Agreement.

          The payments and benefits to which you will become entitled if all the Severance Benefits
Requirements are satisfied are as follows:

     (1) Cash Severance. Broadcom will pay you cash severance (“Cash Severance”) in
an amount equal to one (1) times the sum of (A) your annual rate of base salary (using your
then current rate or, if you terminate your employment for Good Reason pursuant to
Subsection 3(ii) of the attached Appendix due to an excessive reduction in your base salary,
then your rate of base salary immediately before such reduction) and (B) the average of your
actual annual bonuses for the three calendar years (or such fewer number of calendar years
of employment with Broadcom) immediately preceding the calendar year in which such
termination of employment occurs. Such Cash Severance shall be payable over a twelve
(12)-month period in successive equal bi-weekly or semi-monthly installments in accordance
with the payment schedule in effect for your Base Salary on your Date of Termination.
Subject to the deferral provisions of Subsection (8) below, the Cash Severance payments will
begin on the first regular pay day, within the sixty (60)-day period measured from the date
of your Separation from Service, on which your Required Release is effective following the
expiration of all applicable revocation periods, but in no event shall such initial payment
be made later than the last business day of such sixty (60)-day period on which the Required
Release is so effective. The installment payments shall cease once you have received the
full amount of your Cash Severance. The installment payments shall be treated as series of
separate payments for purposes of the final Treasury Regulations under Section 409A
(“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”). However,
the amount of Cash Severance to which you may be entitled pursuant to the foregoing
provisions of this Subsection (1) shall be subject to reduction in accordance with
Subsection (9) in the event you breach your restrictive covenants under Subsection (9).

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     (2) Options and Other Equity Awards. Notwithstanding any less favorable terms
of any stock option or other equity award agreement or plan, any options to purchase shares
of Broadcom’s common stock or any restricted stock units or other equity awards granted to
you by Broadcom, whether before or after the date of this Letter Agreement, that are
outstanding on your Date of Termination but not otherwise fully vested shall be subject to
accelerated vesting in accordance with the following provisions:

     (i) On the date your timely executed and delivered Required Release becomes effective
following the expiration of any applicable revocation period (the “Release Condition”), you
will receive twenty-four (24) months of service vesting credit under each of your
outstanding stock options, restricted stock units and other equity awards.

     (ii) The portion of each of your outstanding stock options, restricted stock units and
other equity awards that remains unvested after your satisfaction of the Release Condition
will vest in a series of twelve (12) successive equal monthly installments over the twelve
(12)-month period measured from your Date of Termination (the “Additional Monthly Vesting”),
provided that during each successive month within that twelve (12)-month period (x) you must
comply with all of your obligations under your Confidentiality and Invention Assignment
Agreement with Broadcom that survive the termination of your employment with Broadcom and
(y) you must comply with the restrictive covenants set forth in Subsection (9). In the
event that you violate the Confidentiality and Invention Assignment Agreement or engage in
any of the activities precluded by the restrictive covenants set forth in Subsection (9),
you shall not be entitled to any Additional Monthly Vesting for and after the month in which
such violation or activity (as the case may be) occurs.

     In addition, the period for exercising each option that accelerates in accordance with
subparagraph (i) or (ii) above shall be extended from the limited post-termination period
otherwise provided in the applicable stock option agreement until the earlier of (A) the end
of the twenty-four (24)-month period measured from your Date of Termination or (if later)
the end of the one-month period measured from each installment vesting date of that option
in accordance herewith or (B) the applicable expiration date of the maximum ten (10)-year or
shorter option term.

     Upon your satisfaction of the Release Condition, the limited post-termination exercise
period for any other options granted to you by Broadcom and outstanding on your Date of
Termination shall also be extended in the same manner and to the same extent as your
accelerated options.

     The shares of Broadcom Class A common stock underlying any restricted stock unit award
that vests on an accelerated or Additional Monthly Vesting basis in accordance with this
Subsection (2) shall be issued as follows: The shares subject to that award that vest upon
the satisfaction of the Release Condition shall be issued within the sixty (60) day period
measured from the date of your Separation from Service, but in no event later than the next
regularly-scheduled share issuance date for that restricted stock unit award (currently, the
5th day of February, May, August and November each year) following the date of your
Separation from Service on which your Required Release is

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effective, unless subject to further deferral pursuant to the provisions of Subsection
(8) below the (“Initial Issuance Date”), and each remaining share subject to such restricted
stock unit award shall be issued on the next regularly-scheduled share issuance date for
that restricted stock unit award (currently, the 5th day of February, May, August and
November each year) following the prescribed vesting date for that share in accordance with
this Subsection (2), but in no event earlier than the Initial Issuance Date.

     (3) Lump Sum Benefit Payments. Provided you satisfy the Release Condition, the
following special payments shall be made to you to allow you to obtain health care, life
insurance and disability insurance coverage following your Date of Termination:

          A. Provided you and your spouse and eligible dependents elect to continue medical care
coverage under Broadcom’s group health care plans pursuant to the applicable COBRA
provisions, Broadcom will make a lump sum cash payment (the “Lump Sum Health Care Payment”)
to you in an amount equal to thirty-six (36) times the amount by which (i) the monthly cost
payable by you, as measured as of your Date of Termination, to obtain COBRA coverage for
yourself, your spouse and eligible dependents under Broadcom’s employee group health plan at
the level in effect for each of you on such Date of Termination exceeds (ii) the monthly
amount payable at such time by a similarly-situated executive whose employment with Broadcom
has not terminated to obtain group health care coverage at the same level. Broadcom shall
pay the Lump Sum Health Care Payment to you on the earlier of (A) the first business day of
the first calendar month, within the sixty (60)-day period measured from the date of your
Separation from Service, that is coincident with or next following the date on which your
Required Release is effective following the expiration of all applicable revocation periods
or (B) the last business day of such sixty (60) — day period on which such Required Release
is so effective. Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be
subject to the deferred payment provisions of Subsection (8) below, to the extent such
payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the
year in which your Separation from Service occurs.

          B. You shall also be entitled to an additional lump sum cash payment (the “Lump Sum
Insurance Benefit Payment”) from Broadcom in an amount equal to twelve (12) times the amount
by which (i) the monthly cost payable by you, as measured as of your Date of Termination, to
obtain post-employment continued coverage under Broadcom’s employee group term life
insurance and disability insurance plans at the level in effect for you on such Date of
Termination exceeds (ii) the monthly amount payable at that time by a similarly-situated
executive whose employment with Broadcom has not terminated to obtain similar coverage.
Broadcom shall pay the Lump Sum Insurance Benefit Payment to you concurrently with the
payment of the Lump Sum Health Care Benefit, provided, however, that the Lump Sum Insurance
Benefit Payment shall be subject to the deferred payment provisions of Subsection (8) below,
to the extent such payment, when added to the Lump Sum Health Care Payment, exceeds the
applicable dollar amount under section 402(g)(1) of the Code for the year in which your
Separation from Service occurs.

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          (4) Additional Payments Broadcom shall, to the extent applicable, pay you the
following amounts, provided you satisfy the Release Condition:

          (i) any cash bonus that was not vested on your Date of Termination because a
requirement of continued employment had not yet been satisfied by you, but with respect to
which the applicable performance goal or goals had been fully attained as of your Date of
Termination (for the avoidance of doubt, a bonus shall be payable under this clause only to
the extent that any performance criteria with respect to such bonus had been satisfied
during the applicable performance period), and

          (ii) provided you were employed for the entire plan year immediately preceding your
Date of Termination and discretionary bonuses are payable for that plan year to
similarly-situated Broadcom executives whose employment has not terminated, any
discretionary bonus the Compensation Committee may decide to award you for that plan year on
the basis of your individual performance and contributions during that plan year.

     Any bonus payments to which you become entitled under clause (i) of this Subsection (4)
shall be paid to you at the same time you are paid your first Cash Severance installment
under Subsection (1), after taking into account any required deferral under Subsection (8),
and any bonus payment to which you may become entitled under clause (ii) of this Subsection
(4) shall also be paid to you at the same time or (if later) the tenth business day
following the date the Compensation Committee awards you such discretionary bonus.

     The amounts set forth Subsections (5) and (6) below shall be referred to collectively
as the “Accrued Obligations” and shall not be subject to your delivery of the Required
Release or your compliance with the restrictive covenants set forth in Subsection (9).

     (5) Accrued Salary, Expenses and Bonus. On your Date of Termination, Broadcom
shall pay you (i) any earned but unpaid base salary through that date based on the rate in
effect at the time the Notice of Termination is given, (ii) any unreimbursed business
expenses incurred by you, and (iii) any cash bonus that had been fully earned and vested
(i.e., for which the applicable performance period and any service requirements for vesting
had been fully completed) on or before the Date of Termination, but which had not been paid
as of the Date of Termination (for the avoidance of doubt, any such bonus shall be payable
only to the extent the applicable performance criteria had been satisfied during the
applicable performance period). However, any vested amounts deferred by you under one or
more Broadcom non-qualified deferred compensation programs or arrangements subject to
Section 409A that remain unpaid on your Date of Termination shall be paid at such time and
in such manner as set forth in each applicable plan or agreement governing the payment of
those deferred amounts, subject, however, to the deferred payment provisions of Subsection
(8) below

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     (6) Vacation and Deferred Compensation. Broadcom shall, upon your Date of
Termination, pay you an amount equal to your accrued but unpaid vacation pay (based on
your then-current rate of base salary). Any vested amounts deferred by you under one
or more Broadcom non-qualified deferred compensation programs subject to Section 409A that
remain unpaid on your Date of Termination shall be paid at such time and in such manner as
set forth in each applicable plan or agreement governing the payment of those deferred
amounts, subject, however, to the deferred payment provisions of Subsection (8) below. Any
other vested amounts owed to you under any other compensation plans or programs will be paid
to you in accordance with the terms and provisions of each such applicable plan or program.

     (7) Other Benefits. To the extent not theretofore paid or provided, Broadcom
shall timely pay or provide to you any other amounts or benefits required to be paid or
provided or that you are eligible to receive under any plan, program, policy, practice,
contract, agreement, etc. of Broadcom and its affiliated companies, including (without
limitation) any benefits payable to you under a plan, policy, practice, contract or
agreement referred to in Section 11 of the Appendix (all such other amounts and benefits
being hereinafter referred to as “Other Benefits”), in accordance with the terms of such
plan, program, policy, practice, contract or agreement. However, the payment of such Other
Benefits shall be subject to any applicable deferral period under Subsection (8) below to
the extent such benefits constitute items of deferred compensation subject to Section 409A.

               Notwithstanding the foregoing provisions of this Subsection (7), in no event shall you
be allowed to participate in the Broadcom Corporation 1998 Employee Stock Purchase Plan, as
amended and restated, or the 401(k) Employee Savings Plan following your Date of Termination
or to receive any substitute benefits hereunder in replacement of those particular benefits,
but you shall be entitled to the full value of any benefits accrued under such plans prior
to your Date of Termination.

     (8) Delay in Payment for Certain Specified Employees. The following special
provisions shall govern the commencement date of certain payments and benefits to which you
may become entitled under the Program:

          A. Notwithstanding any provision in this Letter Agreement to the contrary other than
Subsection (8)B below, no payment or benefit under the Program that constitutes an item of
deferred compensation under Section 409A and becomes payable in connection with your
termination of employment will be made to you prior to the earlier of (i) the first day of
the seventh (7th) month following the date of your Separation from Service or (ii) the date
of your death, if you are deemed to be a Specified Employee at the time of such Separation
from Service and such delayed commencement is otherwise required to avoid a prohibited
distribution under Section 409A(a)(2) of the Code. Any cash amounts to be so deferred shall
immediately upon your Separation from Service be deposited by Broadcom into a grantor trust
that satisfies the requirements of Revenue Procedure 92-64 and that will accordingly serve
as the funding source for Broadcom to satisfy its obligations to you with respect to the
heldback amounts upon the expiration of the required deferral period, provided, however,
that the funds deposited into such trust shall at all times remain subject to the claims of
Broadcom’s creditors and shall be maintained and located at all times in the United States.
Upon the expiration of

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the applicable deferral period, all payments and benefits deferred pursuant to this
Subsection (8)A (whether they would have otherwise been payable in a single sum or in
installments in the absence of such deferral) shall be paid or provided to you in a lump
sum, either from the grantor trust or by Broadcom directly, on the first day of the seventh
(7th) month after the date of your Separation from Service or, if earlier, the first day of
the month immediately following the date Broadcom receives proof of your death. Any
remaining payments due under the Program will be paid in accordance with the normal payment
dates specified herein.

          B. The portion of your Lump Sum Health Care Payment that is not in excess of the
applicable dollar amount in effect under Section 402(g)(1)(B) of the Code for the calendar
year in which your Separation form Service occurs shall not be subject to the Subsection
(8)A deferred payment requirement. If the Lump Sum Health Care Benefit does not exceed such
dollar amount, then the deferred payment provisions of Subsection (8)A shall not be
applicable to the Lump Sum Insurance Benefit Payment to the extent the dollar amount of that
payment, when added to the Lump Sum Health Care Payment, does not exceed the applicable
dollar amount in effect under Section 402(g)(1)(B) of the Code for the calendar year in
which your Separation form Service occurs.

          C. It is the intent of the parties that the provisions of this Letter Agreement comply
with all applicable requirements of Section 409A. Accordingly, to the extent there is any
ambiguity as to whether one or more provisions of this Letter Agreement would otherwise
contravene the applicable requirements or limitations of Section 409A, then those provisions
shall be interpreted and applied in a manner that does not result in a violation of the
applicable requirements or limitations of Section 409A and the applicable Treasury
Regulations thereunder.

     (9) Restrictive Covenants. You hereby acknowledge that your right and
entitlement to the severance benefits specified in Subsections (1), (2)(ii) and (10) of this
Letter Agreement are, in addition to your satisfaction of the Release Condition, also
subject to your compliance with each of the following covenants during the one (1)-year
period measured from your Date of Termination, and those enumerated severance benefits will
immediately cease or be reduced in accordance herewith should you breach any of the
following covenants:

     A. You shall not directly or indirectly encourage or solicit any employee,
consultant or independent contractor to leave the employ or service of Broadcom (or
any affiliated company) for any reason or interfere in any other manner with any
employment or service relationships at the time existing between Broadcom (or any
affiliated company) and its employees, consultants and independent contractors.

     B. You shall not directly or indirectly solicit or otherwise induce any vendor,
supplier, licensor, licensee or other business affiliate of Broadcom (or any
affiliated company) to terminate its existing business relationship with Broadcom (or
affiliated company) or interfere in any other manner with any existing business
relationship between Broadcom (or any affiliated company) and any such vendor,
supplier, licensor, licensee or other business affiliate.

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     C. You shall not, whether on your own or as an employee, consultant, partner,
principal, agent, representative, equity holder or in any other capacity, directly or
indirectly render, anywhere in the United States, services of any kind or provide any
advice or assistance to any business, enterprise or other entity that is engaged in
any line of business that competes with one or more of the lines of business that
were conducted by Broadcom during the Term of your employment or that are first
conducted after your Date of Termination but which you were aware were under serious
consideration by Broadcom prior to your Date of Termination, except that you make a
passive investment representing an interest of less than one percent (1%) of an
outstanding class of publicly-traded securities of any corporation or other
enterprise.

     D. You shall not, directly or indirectly, make any adverse, derogatory or
disparaging statements, whether orally or in writing, to any person or entity
regarding (i) Broadcom, any members of the Board of Directors or any officers,
members of management or shareholders of Broadcom or (ii) any practices, procedures
or business operations of Broadcom (or any affiliated company).

     Should you breach any of the restrictive covenants set forth in this Subsection (9),
then you shall immediately cease to be entitled to any Gross-Up Payment under Subsection 10
below or any Cash Severance Payments pursuant to Subsection (1) in excess of the greater of
(i) 0.5 times the sum of (A) your annual rate of base salary (using your then current rate
or, if you terminate your employment for Good Reason pursuant to Subsection 3(ii) of the
attached Appendix due to an excessive reduction in your base salary, then your rate of base
salary immediately before such reduction) and (B) the average of your actual annual bonuses
for the three calendar years (or such fewer number of calendar years of employment with
Broadcom) immediately preceding the calendar year in which such termination of employment
occurs (which minimum amount represents partial consideration for your satisfaction of the
Release Consideration) or (ii) the actual Cash Severance Payments you have received through
the date of such breach. In addition, all Additional Monthly Vesting of any stock options,
restricted stock units, other equity awards or unvested share issuances outstanding at the
time of such breach shall cease as of the month in which such breach occurs, and no further
Additional Monthly Vesting shall occur thereafter. Broadcom shall also be entitled to
recover at law any monetary damages for any additional economic loss caused by your breach
and may, to the maximum extent allowable under applicable law, seek equitable relief in the
form of an injunction precluding you from continuing such breach.

          (10) Tax Gross-Up Payment.

          A. In the event that (i) any payments or benefits to which you become entitled in accordance
with the provisions of this Letter Agreement or any other agreement with Broadcom constitute a
parachute payment under Section 280G of the Code (collectively, the “Parachute Payment”) subject to
the excise tax imposed under Section 4999 of the Code or any

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interest or penalties related to such excise tax (with such excise tax and related interest and
penalties to be collectively referred to as the “Excise Tax”) and (ii) it is determined by an
independent registered public accounting firm selected by Broadcom from among the largest four
accounting firms in the United States (the “Accounting Firm”) that the Present Value (measured as
of effective date of the Change in Control) of your aggregate Parachute Payment exceeds one hundred
twenty percent (120%) of your Permissible Parachute Amount, then you will be entitled to receive
from Broadcom an additional payment (the “Gross-Up Payment”) in a dollar amount such that after
your payment of all taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, you retain a net amount equal to the
Excise Tax imposed upon your aggregate Parachute Payment. Notwithstanding the foregoing, you shall
not be entitled to any Gross-Up Payment unless there is compliance with each of the Severance
Benefit Requirements set forth above.

          For purposes of determining your eligibility for such Gross-Up Payment, the following
definitions will be in effect:

          “Present Value” means the value, determined as of the date of the Change in Control, of each
payment or benefit in the nature of compensation to which you become entitled in connection with
the Change in Control or your subsequent termination of employment with Broadcom that constitutes a
Parachute Payment. The Present Value of each such payment or benefit shall be determined in
accordance with the provisions of Code Section 280G(d)(4), utilizing a discount rate equal to one
hundred twenty percent (120%) of the applicable Federal rate in effect at the time of such
determination, compounded semi-annually to the effective date of the Change in Control.

          “Permissible Parachute Amount” means a dollar amount equal to the 2.99 times the average of
your W-2 wages from Broadcom for the five (5) calendar years (or such fewer number of calendar
years) completed immediately prior to the calendar year in which the Change in Control is effected.

          Should the aggregate Present Value (measured as of the Change in Control) of your aggregate
Parachute Payment not exceed one hundred twenty percent (120%) of your Permissible Parachute
Amount, then no Gross-Up Payment will be made to you, and your payments and benefits under this
Letter Agreement shall instead be subject to reduction in accordance with the benefit limitation
provisions of Subsection (11).

          B. All determinations as to whether any of the payments or benefits to which you become
entitled in accordance with the provisions of this Letter Agreement or any other agreement with
Broadcom constitute a Parachute Payment, whether a Gross-Up Payment is required with respect to any
Parachute Payment, the amount of such Gross-Up Payment, and any other amounts relevant to the
calculation of such Gross-Up Payment, will be made by the Accounting Firm. Such Accounting Firm
will make the applicable determinations (the “Gross-Up Determination”), together with detailed
supporting calculations regarding the amount of the Excise Tax, any required Gross-Up Payment and
any other relevant matter, within thirty (30) days after the date of your Separation from Service.
In making the Gross-Up Determination, the

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Accounting Firm shall make a reasonable determination of the value of the restrictive covenants to
which you will be subject under Subsection 9, and the amount of your potential Parachute Payment
shall accordingly be reduced by the value of those restrictive covenants to the extent consistent
with Code Section 280G and the Treasury Regulations thereunder. The Gross-Up Determination made by
the Accounting Firm will be binding upon both you and Broadcom. The Gross-Up Payment (if any)
determined on the basis of the Gross-Up Determination shall be paid to you or on your behalf within
ten (10) business days after the completion of such Determination or (if later) at the time the
related Excise Tax is remitted to the appropriate tax authorities.

          C. In the event that your actual Excise Tax liability is determined by a Final Determination
to be greater than the Excise Tax liability taken into account for purposes of any Gross-Up Payment
or Payments initially made to you pursuant to the provisions of Subsection (10)B, then within
thirty (30) days following that Final Determination, you shall notify Broadcom of such
determination, and the Accounting Firm shall, within thirty (30) days thereafter, make a new Excise
Tax calculation based upon that Final Determination and provide both you and Broadcom with the
supporting calculations for any supplemental Gross-Up Payment attributable to that excess Excise
Tax liability. Broadcom shall make the supplemental Gross-Up payment to you within ten (10)
business days following the completion of the applicable calculations or (if later) at the time
such excess tax liability is remitted to the appropriate tax authorities. In the event that your
actual Excise Tax liability is determined by a Final Determination to be less than the Excise Tax
liability taken into account for purposes of any Gross-Up Payment initially made to you pursuant to
the provisions of Subsection (10)B, then you shall refund to Broadcom, promptly upon receipt (but
in no event later than ten (10) business days after such receipt), any federal or state tax refund
attributable to the Excise Tax overpayment. For purposes of this Subsection (10)C, a “Final
Determination” means an audit adjustment by the Internal Revenue Service that is either (i) agreed
to by both you and Broadcom or (ii) sustained by a court of competent jurisdiction in a decision
with which both you and Broadcom concur or with respect to which the period within which an appeal
may be filed has lapsed without a notice of appeal being filed.

          D. Should the Accounting Firm determine that any Gross-Up Payment made to you was in fact more
than the amount actually required to be paid to you in accordance with the provisions of Subsection
(10)B, then you will, at the direction and expense of Broadcom, take such steps as are reasonably
necessary (including the filing of returns and claims for refund), follow reasonable instructions
from, and procedures established by, Broadcom, and otherwise reasonably cooperate with Broadcom to
correct such overpayment. Furthermore, should Broadcom decide to contest any assessment by the
Internal Revenue Service of an Excise Tax on one or more payments or benefits provided you under
this Letter Agreement or otherwise, you will comply with all reasonable actions requested by
Broadcom in connection with such proceedings, but shall not be required to incur any out-of-pocket
costs in so doing.

          E. Notwithstanding anything to the contrary in the foregoing, any Gross-Up Payments due you
under this Subsection (10) shall be subject to the hold-back provisions of Subsection (8). In
addition, no Gross-Up Payment shall be made later than the end of the calendar year following the
calendar year in which the related taxes are remitted to the

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appropriate tax authorities or such other specified time or schedule that may be permitted under
Section 409A of the Code. To the extent you become entitled to any reimbursement of expenses
incurred at the direction of Broadcom in connection with any tax audit or litigation addressing the
existence or amount of the Excise Tax, such reimbursement shall be paid to you no later than the
later of (i) the close of the calendar year in which the Excise Tax that is the subject of such
audit or litigation is paid by you or (ii) the end of the sixty (60)-day period measured from such
payment date. If no Excise Tax liability is found to be due as a result of such audit or
litigation, the reimbursement shall be paid to you no later than the later of (i) the close of the
calendar year in which the audit is completed or there is a final and non-appealable settlement or
other resolution of the litigation or (ii) the end of the sixty (60)-day period measured from the
date the audit is completed or the date the litigation is so settled or resolved.

          (11) Benefit Limitation. The provisions of this Subsection 11 shall be applicable in
the event (i) any payments or benefits to which you become entitled in accordance with the
provisions of this Letter Agreement or any other agreement with Broadcom would otherwise constitute
a Parachute Payment that is subject to the Excise Tax and (ii) it is determined by the Accounting
Firm that the Present Value (measured as of effective date of the Change in Control) of your
aggregate Parachute Payment does no exceed one hundred twenty percent (120%) of your Permissible
Parachute Amount or you are not otherwise entitled to the Gross-Up Payment by reason of your
failure to comply with your restrictive covenants under Subsection (9) or any other of your
Severance Benefit Requirements.

          In such event, those payments and benefits will be subject to reduction to the extent
necessary to assure that you receive only the greater of (i) your Permissible Parachute Amount or
(ii) the amount which yields you the greatest after-tax amount of benefits after taking into
account any excise tax imposed under Section 4999 of the Code on the payments and benefits provided
to you under this Letter Agreement (or on any other benefits to which you may be entitled in
connection with a change in control or ownership of Broadcom or the subsequent termination of your
employment with Broadcom). To the extent any such reduction is required, the dollar amount of your
Cash Severance under Subsection (1) of this Letter Agreement will be reduced first, with such
reduction to be effected pro-rata as to each payment, then the dollar amount of your Lump Sum
Health Care and Insurance Benefit Payments shall each be reduced pro-rata, next the number of
options or other equity awards that are to vest on an accelerated basis pursuant to Subsection (2)
of this Letter Agreement shall be reduced (based on the value of the parachute payment resulting
from such acceleration) in the same chronological order in which awarded, and finally your
remaining benefits will be reduced in a manner that not result in any impermissible deferral or
acceleration of benefits under Section 409A.

          Notwithstanding the foregoing, in determining whether the benefit limitation of this
Subsection (11) is exceeded, the Accounting Firm shall make a reasonable determination of the value
of the restrictive covenants to which you will be subject under Subsection (9) of this Letter
Agreement, and the amount of your potential Parachute Payment shall accordingly be reduced by the
value of those restrictive covenants to the extent consistent with Code Section 280G and the
Treasury Regulations thereunder.

11

 

          (12) Other Terminations. If your employment is terminated during the Term for Cause
or by reason of your death or Disability, or you terminate your employment during the Term without
Good Reason, your participation in the Program shall terminate without any further obligations of
Broadcom to you or your legal representatives under the Program, other than for timely payment of
the Accrued Obligations owed you and the payment or provision of any Other Benefits to which you
are entitled. However, in the event your employment is terminated during the Term by reason of
your death or Disability, then (i) Broadcom shall also timely pay any bonuses to which you are
entitled in accordance with Subsection (4) above to you or your legal representative, subject to
any required holdback under Subsection (8) and, (ii) notwithstanding any less favorable terms in
any stock option or other equity award agreement or plan or this Program, any unvested portion of
any stock options, restricted stock units or other equity awards granted to you by Broadcom,
whether before or after the date of this Letter Agreement, shall immediately vest in full on your
Date of Termination and remain exercisable by you or your legal representative for 12 months after
the Date of Termination. The shares of Broadcom Class A common stock subject to any restricted
stock unit award that vests on an accelerated basis in accordance with the foregoing shall be
issued within the sixty (60) day period measured from the date of your Separation from Service due
to your death or Disability, but in no event later than the next regularly-scheduled share issuance
date for that restricted stock unit award date (currently, the 5th day of February, May, August and
November each year) following the date of your Separation from Service, unless subject to further
deferral pursuant to the provisions of Subsection (8) above.

          (13) The provisions of this Letter Agreement apply only (i) in the event of a Change of
Control followed by a subsequent termination of your employment by Broadcom without Cause or by you
for Good Reason or (ii) in the event of your death or Disability. In all other events where your
employment is terminated, Broadcom’s normal severance policies will apply.

12

 

          To acknowledge your participation in the Program pursuant to the terms and provisions of this
Letter Agreement and the attached Appendix and your understanding of its terms and conditions,
please sign, date and return the enclosed copy of this Letter Agreement.

	 	 	 	 	 
	 	Broadcom Corporation

 	 
	 	By:  	/s/ Scott A. McGregor
 	 
	 	 	Scott A. McGregor 	 
	 	 	President and Chief Executive Officer 	 
	 

ACCEPTANCE

          I hereby accept all of the terms and conditions of the Letter Agreement, including the revised
Appendix thereto, and agree to be bound by all those terms and conditions.

	 	 	 	 	 
	 	 	 
	 	     /s/ Robert L. Tirva
 	 
	 	Robert L. Tirva 	 
	 
	 	Dated:  August 18, 2008 	 

13

 

	 	 	 	 	 

APPENDIX

to

CHANGE IN CONTROL SEVERANCE PROGRAM

     This appendix sets forth terms and conditions of the special change in control severance
benefit program (“Program”) of Broadcom Corporation (together with any successor thereto,
“Broadcom”) applicable to certain key executives. This Appendix is to be construed in conjunction
with, and is made a part of, the Letter Agreement evidencing your continued participation in the
Program. Eligibility for the Program is limited to executives who execute the Letter Agreement
evidencing their eligibility. Defined terms apply both to the Letter Agreement and this Appendix.

          1. Change of Control. For purposes of the Program, a “Change of Control” shall mean a
change in ownership or control of Broadcom effected through any of the following transactions:

          (i) a shareholder-approved merger, consolidation or other reorganization, unless securities
representing more than fifty percent (50%) of the total combined voting power of the outstanding
securities of the successor corporation are immediately after such transaction, beneficially owned,
directly or indirectly and in substantially the same proportion, by the persons who beneficially
owned Broadcom’s outstanding voting securities immediately prior to such transaction,

          (ii) a shareholder-approved sale, transfer or other disposition of all or substantially all of
Broadcom’s assets,

          (iii) the closing of any transaction or series of related transactions pursuant to which any
person or any group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of
Securities Exchange Act of 1934, as amended (the “1934 Act”), other than Broadcom or a person that,
prior to such transaction or series of related transactions, directly or indirectly controls, is
controlled by or is under common control with, Broadcom, becomes directly or indirectly (whether as
a result of a single acquisition or by reason of one or more acquisitions within the twelve
(12)-month period ending with the most recent acquisition) the beneficial owner (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for
securities possessing) more than fifty percent (50%) of the total combined voting power of
Broadcom’s securities (as measured in terms of the power to vote with respect to the election of
Board members) outstanding immediately after the consummation of such transaction or series of
related transactions, whether the transaction involve a direct issuance from Broadcom or the
acquisition of outstanding securities held by one or more of Broadcom’s existing shareholders, or

          (iv) a change in the composition of the Board over a period of twenty-four (24) consecutive
months or less such that a majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority
of the Board members described in clause (A) who were still in office at the time the Board
approved such election or nomination.

14

 

          2. Cause. Broadcom may terminate your employment with or without Cause. As used
herein, “Cause” shall mean the reasonable and good faith determination by a majority of the Board
that any of the following events or contingencies exists or has occurred:

     (i) You materially breached a fiduciary duty to Broadcom, materially breached a
material term of the Confidentiality and Invention Assignment Agreement between you
and Broadcom or materially breached any material provision or policy set forth in
Broadcom’s Code of Ethics and Corporate Conduct;

     (ii) You are convicted of a felony or misdemeanor that involves fraud,
dishonesty, theft, embezzlement, and/or an act of violence or moral turpitude, or
plead guilty or no contest (or a similar plea) to any such felony or misdemeanor;

     (iii) You engage in any act, or there is any omission on your part, that
constitutes fraud, material negligence or material misconduct in connection with
your employment by Broadcom, including (but not limited to) a material violation of
applicable material state or federal securities laws. Notwithstanding the
foregoing, an isolated or occasional failure to file or late filing of a report
required under 1934 Act shall not be deemed a material violation for purposes of
this Subsection 2(iii). Furthermore, with respect to filing reports or
certifications you are required to provide under the 1934 Act, with respect to a
transaction’s compliance with the requirements of Rule 144 under the Securities Act
of 1933, as amended or with respect to the implementation of your 10b5-1 Plan, you
shall not have committed a material violation for purposes of this Subsection 2(iii)
if the violation occurred because you relied in good faith on a certification or
certifications provided by Broadcom or an authorized employee or agent of Broadcom,
unless you knew or should have known after reasonable diligence that such
certification was inaccurate, or upon the processes or actions of the securities
brokerage firm handling your transactions in Broadcom equities provided that you
have used a nationally recognized securities brokerage firm with substantial prior
experience in and established regular procedures for handling option and equity
transactions by executive officers of public companies in the United States; or;

     (iv) You willfully and knowingly participate in the preparation or release of
false or materially misleading financial statements relating to Broadcom’s
operations and financial condition or you willfully and knowingly submit any false
or erroneous certification required of you under the Sarbanes-Oxley Act of 2002 or
any securities exchange on which shares of Broadcom’s Class A common stock are at
the time listed for trading.

15

 

     The foregoing shall constitute an exclusive list of the events or contingencies that may
constitute Cause under the Program and this revised Appendix.

     No termination that is based exclusively upon your commission or alleged commission of act(s)
or omission(s) that are asserted to constitute material negligence shall constitute Cause hereunder
unless you have been afforded notice of the alleged acts or omissions and have failed to cure such
acts or omissions within thirty (30) days after receipt of such notice.

     If, following the receipt of a Notice of Termination stating that your termination is for
Cause, you believe that Cause does not exist, you may, by written notice delivered to the Board
within three business (3) days after receipt of such Notice of Termination, request that your Date
of Termination be delayed to permit you to appeal the Board’s determination that Cause for such
termination existed. If you so request, you will be placed on administrative leave for a period
determined by the Board (not to exceed 30 days), during which you will be afforded an opportunity
to request that the Board reconsider its decision concerning your termination. If the Board or an
appropriate committee thereof has not previously provided you with an opportunity to be heard in
person concerning the reasons for termination stated in the Notice of Termination, the Board will
endeavor in good faith to provide you with such an opportunity during such period of administrative
leave. It is understood and agreed that any change in your employment status that occurs in
connection with or as a result of such an administrative leave shall not constitute Good Reason.
The Board may, as a result of such a request for reconsideration, reinstate your employment, revise
the original Notice of Termination, or affirm the original Notice of Termination. If the Board
affirms the original Notice of Termination or the period of administrative leave ends before the
Board takes action, the Date of Termination shall be the date specified in the original Notice of
Termination. If the Board reinstates your employment or revises the original Notice of
Termination, then the original Notice of Termination shall be void and neither its delivery nor its
contents shall be deemed to constitute Good Reason.

          3. Good Reason. You may terminate your employment for Good Reason at any time within
the twenty-four (24)-month period measured from the effective date of a Change in Control that
occurs during the Term. For purposes of the Program, “Good Reason” shall mean:

     (i) except as you may otherwise agree in writing, a change in your position
(including status, offices, titles and reporting requirements) with Broadcom that
materially reduces your authority, duties or responsibilities as in effect on the
date of the Letter Agreement, or any other action by Broadcom that results in a
material diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial or inadvertent action not
taken in bad faith and that is remedied by Broadcom reasonably promptly after
Broadcom receives your notice thereof;

     (ii) a more than fifteen percent (15%) reduction by Broadcom in your base
salary as in effect on the date of the Letter Agreement or as the same may be
increased from time-to-time during the Term;

     (iii) any action by Broadcom (including the elimination of benefit plans
without providing substitutes therefor or the reduction of your benefit thereunder)
that would materially diminish the aggregate value of your bonuses and other cash

16

 

incentive awards from the levels in effect on the date of the Letter Agreement by
more than fifteen percent (15%) in the aggregate; provided, however, that (i) a
reduction in your bonuses or cash incentive awards that is part of a broad-based
reduction in corresponding bonuses or awards for management employees and pursuant
to which your bonuses or awards s are not reduced by a greater percentage than the
reductions applicable to other management employees and (ii) a reduction in your
bonuses and other cash incentive awards occurring as a result of your failure or
Broadcom’s failure to satisfy performance criteria applicable to such bonuses or
awards shall not constitute Good Reason;

     (iv) Broadcom’s requiring you to be based at any office or other business
location that increases the distance from your home to such office or location by
more than fifty (50) miles from the distance in effect on the date of the Letter
Agreement;

     (v) any purported termination by Broadcom of your employment other than
pursuant to a Notice of Termination (for avoidance of doubt, the delivery or
contents of a Notice of Termination that is revised or voided under the procedure
provided in the definition of Cause above shall not constitute Good Reason); or

     (vi) any failure by Broadcom to comply with and satisfy Section 13 of this
Appendix after receipt of written notice from you of such failure and a reasonable
cure period of not less than thirty (30) days.

     The foregoing shall constitute an exclusive list of the events or contingencies that may
constitute Good Reason under the Program and this revised Appendix.

     Notwithstanding the above, an isolated or inadvertent action or inaction by Broadcom that
causes Broadcom to fail to comply with Subsections 3(ii) or 3(iii) and that is cured within ten
(10) days of your notifying Broadcom of such action or inaction shall not constitute Good Reason.
Furthermore, no act, occurrence or condition set forth in this Section 3 shall constitute Good
Reason if you consent in writing to such act, occurrence or condition, whether such consent is
delivered before or after the act, occurrence or condition comes to pass.

          4. Code. The term “Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time.

          5. Death. Your employment shall terminate automatically upon your death.

          6. Disability. If your Disability occurs during the Term and no reasonable
accommodation is available to permit you to continue to perform the essential duties and
responsibilities of your position, Broadcom may give you written notice of its intention to
terminate your employment. In such event, your employment with Broadcom shall terminate effective
on the 30th day after you receive such notice (the “Disability Effective Date”), unless you resume
the performance of your duties within thirty (30) days after receipt of such notice. For purposes
of the Program, “Disability” shall mean your absence from and inability to perform your duties with
Broadcom on a full-time basis for one hundred eighty (180) consecutive business days as a result of
incapacity due to mental or physical illness that is (i) determined to

17

 

be total and permanent by two (2) physicians selected by Broadcom or its insurers and reasonably
acceptable to you or your legal representative and (ii) entitles you to the payment of long-term
disability benefits from Broadcom’s long-term disability plan commencing immediately on the
Disability Effective Date.

          7. Notice of Termination. For purposes of the Program, a “Notice of Termination”
means a written notice that (i) indicates the specific termination provision relied upon for the
termination of your employment, (ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of your employment under the
provision so indicated and (iii) if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date (with such date to be not more than
thirty (30) days after the giving of such notice). The basis for termination set forth in any
Notice of Termination shall constitute the exclusive set of facts and circumstances upon which the
party may rely to attempt to demonstrate that Cause or Good Reason (as the case may be) for such
termination existed.

          8. Date of Termination. “Date of Termination” means (i) if your employment is
terminated by Broadcom or by you for any reason other than death or Disability, the date of receipt
of the Notice of Termination or any later date specified therein (subject to the limitations set
forth above in the definition of Notice of Termination), as the case may be, and (ii) if your
employment is terminated by reason of death or Disability, the Date of Termination shall be the
date of your death or the Disability Effective Date, as the case may be.

          9. Separation from Service. For purposes of the Program, “Separation from Service”
means the cessation of your Employee status and shall be deemed to occur at such time as the level
of the bona fide services you are to perform in Employee status (or as a consultant or other
independent contractor) permanently decreases to a level that is not more than twenty percent (20%)
of the average level of services you rendered in Employee status during the immediately preceding
thirty-six (36) months (or such shorter period for which you may have rendered such service). Any
such determination as to Separation from Service, however, shall be made in accordance with the
applicable standards of the Treasury Regulations issued under Section 409A. In addition to the
foregoing, a Separation from Service will not be deemed to have occurred while you are on a sick
leave or other bona fide leave of absence if the period of such leave does not exceed six (6)
months or any longer period for which you are provided with a right to reemployment with Broadcom
by either statute or contract, provided, however, that in the event of a leave of absence due to
any medically determinable physical or mental impairment that can be expected to result in death or
to last for a continuous period of not less than six (6) months and that causes you to be unable to
perform your duties as an Employee, no Separation from Service shall be deemed to occur during the
first twenty-nine (29) months of such leave. If the period of leave exceeds six (6) months (or
twenty-nine (29) months in the event of disability as indicated above) and you are not provided
with a right to reemployment by either statute or contract, then you will be deemed to have
Separated from Service on the first day immediately following the expiration of the applicable six
(6)-month or twenty-nine (29)-month period.

18

 

          For purposes of determining whether a Separation from Service has occurred, you will be deemed
to continue in “Employee” status for so long as you remain in the employ of one
or more members of the Employer Group, subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of performance.

          “Employer Group” means Broadcom and any other corporation or business controlled by,
controlling or under common control with, Broadcom, as determined in accordance with Sections
414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying
Sections 1563(1), (2) and (3) for purposes of determining the controlled group of corporations
under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80
percent” each place the latter phrase appears in such sections, and in applying Section 1.414(c)-2
of the Treasury Regulations for purposes of determining trades or businesses that are under common
control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of
“at least 80 percent” each place the latter phrase appears in Section 1.4.14(c)-2 of the Treasury
Regulations.

          10. Specified Employee. For purposes of the Program, “Specified Employee” means a
“key employee” (within the meaning of that term under Code Section 416(i)). Accordingly, you will
be deemed to be a Specified Employee if you are, as of the last day of any calendar year:

               (i) an officer of Broadcom whose annual compensation from Broadcom and any
other members of the Employer Group is in the aggregate greater than the
compensation limit in Section 416(i)(1)(A)(i) of the Code, provided that no more
than fifty (50) officers of Broadcom shall be determined to be Specified Employees
as of the relevant determination date;

               (ii) a five percent (5%) owner of Broadcom or any other member of the Employer
Group; or

               (iii) a one percent (1%) owner of Broadcom or any other member of the Employer
Group whose annual compensation from Broadcom and any other members of the Employer
Group is in the aggregate more than $150,000.

          The Specified Employees shall be determined as of the last day of each calendar year. If you
are determined to be a Specified Employee on any such date, you will be considered a Specified
Employee for purposes of the Program during the period beginning on the April 1 of the following
year and ending on the March 31 of the next year thereafter.

          For purposes of determining an officer’s compensation when identifying Specified Employees,
compensation is defined in accordance with Treas. Reg. §1.415(c)—2(a), without applying any safe
harbor, special timing or other special rules described in Treas. Reg. §§ 1.415(c)—2(d), 2(e) and
2(g).

          11. Non-exclusivity of Rights. Nothing in the Program shall prevent or limit your
continuing or future participation in any plan, program, policy or practice provided by Broadcom or
any other member of the Employer Group during your period of employment with

19

 

Broadcom and for which you may qualify, nor, subject to Subsection (2) of the accompanying
Letter Agreement, shall anything herein limit or otherwise affect such rights as you may have under
any contract or agreement with Broadcom or any other member of the Employer Group. Amounts that
are vested benefits or that you are otherwise entitled to receive under any plan, policy, practice
or program of or any contract or agreement with Broadcom or any other member of the Employer Group
on or subsequent to your Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement, except as explicitly modified by the Program.

          12. Full Settlement.

          (a) Except as specifically set forth in this Appendix or the accompanying Letter Agreement,
Broadcom’s obligation to make the payments provided for in the Program and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action that Broadcom may have against you or others, except only for any
advances made to you or for taxes that Broadcom is required to withhold by law. In no event shall
you be obligated to seek other employment or take any other action by way of mitigation of the
amounts payable to you under any of the provisions of the Program, and such amounts shall not be
reduced whether or not you obtain other employment.

          (b) You will not become eligible to receive any of the payments and benefits provided under
Subsections 1(a), (b), (c) and (d) and Subsection 10 of the Program unless you execute and deliver
to Broadcom, within twenty one (21) days after your Date of Termination (or within forty-five (45)
days after such Date of Termination, to the extent such longer period is required under applicable
law), a general release in a form acceptable to Broadcom (the “Required Release”) that (i) releases
Broadcom and its subsidiaries, officers, directors, employees, and agents from all claims you may
have relating to your employment with Broadcom and the termination of that employment, other than
claims relating to any benefits to which you become entitled under the Program, and (ii) becomes
effective in accordance with applicable law upon the expiration of any applicable revocation
period.

          13. Successors.

               (a) The Program is personal to you and shall not be assignable by you otherwise than by will
or the laws of descent and distribution. The Program shall inure to the benefit of and be
enforceable by your legal representatives.

               (b) The Program shall inure to the benefit of and be binding upon Broadcom and its successors
and assigns.

               (c) Broadcom will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of Broadcom
to assume expressly and agree to perform its obligations under the Program in the same manner and
to the same extent that Broadcom would be required to perform those obligations if no such
succession had taken place. As used in the Program, “Broadcom” shall include any successor to its
business and/or assets as aforesaid that assumes and agrees to perform the obligations created by
the Program by operation of law or otherwise.

20

 

          14.  Mandatory Arbitration. ANY AND ALL DISPUTES OR CONTROVERSIES BETWEEN YOU AND
BROADCOM ARISING OUT OF, RELATING TO OR OTHERWISE CONNECTED WITH THE NEW AGREEMENT (OR THE ORIGINAL
LETTER AGREEMENT) OR THE BENEFITS PROVIDED UNDER THE PROGRAM AS SET FORTH HEREIN OR THE VALIDITY,
CONSTRUCTION, PERFORMANCE OR TERMINATION OF THE NEW AGREEMENT (OR THE ORIGINAL LETTER AGREEMENT)
SHALL BE SETTLED EXCLUSIVELY BY BINDING ARBITRATION TO BE HELD IN THE COUNTY IN WHICH YOU ARE (OR
HAVE MOST RECENTLY BEEN) EMPLOYED BY BROADCOM (OR ANY PARENT OR SUBSIDIARY) AT THE TIME OF SUCH
ARBITRATION. THE ARBITRATION PROCEEDINGS SHALL BE GOVERNED BY (i) THE NATIONAL RULES FOR THE
RESOLUTION OF EMPLOYMENT DISPUTES THEN IN EFFECT OF THE AMERICAN ARBITRATION ASSOCIATION AND (ii)
THE FEDERAL ARBITRATION ACT. THE ARBITRATOR SHALL HAVE THE SAME, BUT NO GREATER, REMEDIAL
AUTHORITY AS WOULD A COURT HEARING THE SAME DISPUTE. THE DECISION OF THE ARBITRATOR SHALL BE
FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE ARBITRATION AND SHALL BE IN LIEU OF THE RIGHTS
THOSE PARTIES MAY OTHERWISE HAVE TO A JURY TRIAL; PROVIDED, HOWEVER, THAT SUCH DECISION SHALL BE
SUBJECT TO CORRECTION, CONFIRMATION OR VACATION IN ACCORDANCE WITH THE PROVISIONS AND STANDARDS OF
APPLICABLE LAW GOVERNING THE JUDICIAL REVIEW OF ARBITRATION AWARDS. THE PREVAILING PARTY IN SUCH
ARBITRATION, AS DETERMINED BY THE ARBITRATOR, AND IN ANY ENFORCEMENT OR OTHER COURT PROCEEDINGS,
SHALL BE ENTITLED, TO THE EXTENT PERMITTED BY LAW, TO REIMBURSEMENT FROM THE OTHER PARTY FOR ALL OF
THE PREVAILING PARTY’S COSTS, INCLUDING, BUT NOT LIMITED TO, EXPENSES AND REASONABLE ATTORNEY’S
FEES. HOWEVER, THE ARBITRATOR’S COMPENSATION AND OTHER FEES AND COSTS UNIQUE TO ARBITRATION SHALL
IN ALL EVENTS BE PAID BY BROADCOM. JUDGMENT SHALL BE ENTERED ON THE ARBITRATOR’S DECISION IN ANY
COURT HAVING JURISDICTION OVER THE SUBJECT MATTER OF SUCH DISPUTE OR CONTROVERSY. NOTWITHSTANDING
THE FOREGOING, EITHER PARTY MAY IN AN APPROPRIATE MATTER APPLY TO A COURT PURSUANT TO CALIFORNIA
CODE OF CIVIL PROCEDURE SECTION 1281.8, OR ANY COMPARABLE STATUTORY PROVISION OR COMMON LAW
PRINCIPLE, FOR PROVISIONAL RELIEF, INCLUDING A TEMPORARY RESTRAINING ORDER OR A PRELIMINARY
INJUNCTION. TO THE EXTENT PERMITTED BY LAW, THE PROCEEDINGS AND RESULTS, INCLUDING THE
ARBITRATOR’S DECISION, SHALL BE KEPT CONFIDENTIAL.

          15. Governing Law. The laws of California shall govern the validity and
interpretation of the Program, without resort to that State’s rules governing conflicts of laws.

          16. Captions. The captions of this Appendix are not part of the provisions of the
Program and shall have no force or effect.

          17. Amendment. The Program may not be amended or modified with respect to you other
than by a written agreement executed by you and Broadcom or your and its respective successors and
legal representatives.

21

 

          18. Notices. All notices and other communications under the Letter Agreement shall be
in writing and shall be given by hand delivery to the other party, by overnight courier or by
registered or certified mail, return receipt requested, postage prepaid, addressed (if to you) at
the address you last provided in writing to Broadcom, and if to Broadcom, as follows:

Broadcom Corporation

5300 California Avenue

Irvine, California 92617

Attention: Chief Executive Officer

          Notice and communications shall be effective when actually received by the addressee. Neither
your failure to give any notice required by the Program, nor defects or errors in any notice given
by you, shall relieve Broadcom of any corresponding obligation under the Program unless, and only
to the extent that, Broadcom is actually and materially prejudiced thereby.

          19. Severability. If any provision of the Letter Agreement or this revised Appendix
as applied to any party or to any circumstance should be adjudged by a court of competent
jurisdiction or determined by an arbitrator to be void or unenforceable for any reason, the
invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the
application of such provision under circumstances different from those adjudicated by the court or
determined by the arbitrator, the application of any other provision of the Letter Agreement or
this revised Appendix, or the enforceability or invalidity of the Letter Agreement or revised
Appendix as a whole. Should any provision of the Letter Agreement or the revised Appendix become
or be deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent
or duration of its coverage, then such provision shall be deemed amended to the extent necessary to
conform to applicable law so as to be valid and enforceable or, if such provision cannot be so
amended without materially altering the intention of the parties, then such provision will be
stricken, and the remainder of the Letter Agreement or the revised Appendix, as the case may be,
shall continue in full force and effect.

          20. Withholding Taxes. Broadcom shall withhold from any amounts payable under the
Program all Federal, state, local or foreign taxes required to be withheld pursuant to any
applicable law or regulation.

          21. No Waiver. Your failure or Broadcom’s failure to insist upon strict compliance
with any provision hereof or any other provision of the Program or the failure to assert any right
you or Broadcom may have hereunder, including, without limitation, your right to terminate
employment for Good Reason, shall not be deemed to be a waiver of the application of such provision
or right with respect to any subsequent event or the waiver of any other provision or right of the
Program.

22exv10w1

Exhibit 10.1

1807 Ross Avenue, Suite 400

Dallas, Texas 75201

October 16, 2008

Infinity Energy Resources, Inc.

633 Seventeenth Street, Suite 1800

Denver, Colorado 80202

     Re:      Third Forbearance Agreement

Ladies and Gentlemen:

     This letter (this “Agreement”) sets forth the third forbearance agreement among
Infinity Energy Resources, Inc. (“Borrower”), a Delaware corporation; Infinity Oil
and Gas of Texas, Inc., a Delaware corporation, and Infinity Oil & Gas of Wyoming,
Inc., a Wyoming corporation (collectively “Guarantors”); and Amegy Bank National
Association (“Lender”). Borrower, Guarantors, and Lender previously entered into a
Forbearance Agreement (the “First Forbearance Agreement”) dated August 31, 2007, and a
Second Forbearance Agreement (the “Second Forbearance Agreement”) dated March 26, 2008.
Capitalized terms below have the meanings assigned in the Loan Agreement dated January 9, 2007,
among Borrower, Guarantors, and Lender, as amended (the “Loan Agreement”).

     1. Forbearance. (a) Lender, Borrower, and Guarantors agree to a forbearance period
commencing as of June 1, 2008, and continuing through May 31, 2009, unless extended as set forth in
Subsection (b) below or unless terminated earlier by Lender due to a Default, as defined below (the
“Forbearance Period”). During the Forbearance Period, but subject to a Default, Lender
will forebear from exercising any remedies under the Loan Agreement, the Revolving Note, the
Security Documents, the Guaranties, and the other Loan Documents. Borrower and Guarantors agree
that all statutes of limitation with respect to enforcement of the Revolving Note, the Guaranties,
and the Security Documents will be tolled during the Forbearance Period and for ninety (90) days
thereafter.

          (b) The Forbearance Period shall be extended until June 15, 2009, if Borrower has satisfied
the following conditions as of May 31, 2009:

               (i) The sum of the principal amount outstanding on the Revolving Loan, plus the aggregate
undrawn amount on the Nicaragua Letters of Credit (as defined below), is $5,000,000.00 or less; and

               (ii) There is no existing Default.

 

 

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     2. Extension of Revolving Loan. The “Termination Date” as defined in the Loan
Agreement is hereby extended until 11:00 a.m. (Dallas, Texas time) on May 31, 2009. Borrower
agrees to sign and deliver a First Amendment of the Revolving Note to reflect this extension.

     3. Events of Default. Borrower and Guarantors acknowledge that the following Events of
Default have occurred and remain outstanding (the “Existing Defaults”):

          (a) The Existing Defaults set forth in the First Forbearance Agreement and the Second
Forbearance Agreement;

          (b) Borrower and Guarantors breached the financial covenants set forth in Subsection (a) — (h)
of Section 8 of the Loan Agreement for the periods ended March 31 and June 30, 2008; and

          (c) Borrower and Guarantors breached the covenants set forth in Subsections (g), (i), and (m)
of Section 7 of the Loan Agreement for the periods ended March 31 and June 30, 2008; provided,
however, that the breach of Subsection (i) of Section 7 of the Loan Agreement was solely
attributable to involuntary mineral lien claims made under Chapter 56 of the Texas Property Code or
similar applicable law.

     4. Temporary Waiver. Borrower and Guarantors have requested that Lender temporarily
waive the Existing Defaults and additional defaults under the provisions covered by the Existing
Defaults, excluding, however, the following (the “Excluded Defaults”): (i) except as
contemplated under this Agreement, any additional defaults under the additional debt prohibitions
in Subsection (h) of Section 7 of the Loan Agreement, and (ii) any additional defaults under the
use of Free Operating Cash Flow prohibitions in Subsection (h) of Section 8 of the Loan Agreement.
Lender hereby waives the Existing Defaults through the Forbearance Period only. This is a
temporary and limited waiver, and Lender reserves the right to require strict compliance with all
covenants under the Loan Agreement, including the covenants violated as set forth above, in the
future. This waiver does not modify, supplement, or alter any of the terms of the Loan Agreement
or any other Loan Document. Further, this waiver shall not be construed as a commitment by Lender
to waive any future violation of the same or any other term or condition of the Loan Agreement or
any of the Loan Documents. Neither the negotiation or execution of this Agreement will be an
election of any right or remedy
available to Lender; and, except as specifically limited or postponed herein, Lender reserves all
rights and remedies.

     5. Borrowing Base and Deficiency. (a) The Borrowing Base has not been redetermined since
the Second Forbearance Agreement and remains at $3,806,000.00, until reset by Lender in connection
with the next redetermination of the Borrowing Base. Lender agrees that it will not redetermine
the Borrowing Base during the Forbearance Period.

          (b) As of September 3, 2008, the Borrowing Base results in a Borrowing Base deficiency in the
amount of $6,104,493.64 (the “Deficiency”). On or before the end of the Forbearance
Period, Borrower and Guarantors agree to cure the Deficiency by selling assets, refinancing of the
Revolving Loan, or raising capital on terms acceptable to Lender.

 

 

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     6. Nicaragua Concessions. (a) On or before December 31, 2008, or such later date as
agreed by Lender in writing, Borrower shall have received all governmental authorizations necessary
for the validation and ratification of the concessions (“Governmental Approval”) in the
Tyra and Perlas Blocks, offshore Nicaragua, as awarded to Borrower by the Republic of Nicaragua in
2003, as hereafter amended and modified (the “Nicaragua Concessions”), and affected by
Sentencia No. 92, Expediente No 591-06, rendered by the Supreme Court of Justice of the Republic of
Nicaragua, Constitutional Hall, dated May 2, 2006.

          (b) So long as the Deficiency remains uncured or there is any outstanding Event of Default,
Borrower and Guarantors agree that:

               (i) They shall not sell, assign, transfer, or otherwise dispose of all or any interest in the
Nicaragua Concessions, without the prior written consent of Lender, except for (1) the sale of
hydrocarbons in the ordinary course of business, (2) the sale or transfer of equipment or inventory
in the ordinary course of business or that is no longer necessary for the business of Borrower or
that is obsolete or replaced by equipment of at least comparable value and use, (3) the assignment
or transfer required under Section 10.02 of Borrower’s insurance policies issued by the Overseas
Private Investment Corporation (“OPIC”) related to the Nicaragua Concessions (the “OPIC
Policies”), after payment of compensation for a claim made by Borrower under the OPIC Policies,
and (4) in connection with capital raising transactions, the conveyance of one or more overriding
royalty interests in the Nicaragua Concessions in an aggregate net revenue amount not to exceed
four percent (4.0%), in exchange for cash equity contributions or Subordinate Loans (as defined
below) to Borrower in an amount not less than $100,000.00 for each two-tenths of one percent (0.2%)
of royalty conveyed; and

               (ii) They shall not mortgage, assign, hypothecate, pledge, or encumber, and not create, incur,
or assume any lien or security interest on or in, the Nicaragua
Concessions (or any interest in the Nicaragua Concessions), without the prior written consent
of Lender, except for any security interest in favor of Lender and the Permitted Encumbrances.

     7. Nicaragua Letters of Credit. Lender agrees, upon the request of Borrower, to issue
one or more Letters of Credit in an aggregate amount not to exceed $850,000.00, in favor of the
Direccion General de Hidrocarburos, Insituto Nicaraguense de Energia, for the account of Borrower
and as security for Borrower’s obligations with respect to the Nicaragua Concessions (the
“Nicaragua Letters of Credit”). Any fundings under the Nicaragua Letters of Credit will be
treated as an advance on the Revolving Loan and will be secured by the Security Documents. The
Nicaragua Letters of Credit shall be on terms reasonably acceptable to Lender and shall be for a
term of up to one year and, if necessary, to renew automatically unless Lender gives prior written
notice. Borrower will sign and deliver Lender’s customary forms for the issuance of Letters of
Credit. Lender agrees to take any and all reasonable actions in relation to the Nicaragua Letters
of Credit as may be reasonably requested, and comply with the terms and conditions reasonably set
forth, by the Nicaraguan government. Borrower agrees to pay to Lender a Letter of Credit fee on
the Nicaragua Letters
of Credit equal to three and one-quarter percent (3.25%) per annum,
calculated on the aggregated stated amount of the Nicaragua Letters

 

 

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of Credit for the stated
duration thereof (computed on the basis of actual days elapsed as if each year consisted of 360
days), and due on or before the Deferral Date (as defined below).

     8. Stock Options. On or before October 31, 2008, Borrower shall cause Stanton E. Ross
and Dan Hutchins to exercise existing stock options granted at the most-recent annual meeting of
Borrower for shares in Borrower (the “Stock Options”) at a cash price of not less than 38¢
per share and for an aggregate cash equity contribution received by Borrower of not less than
$200,000.00. The net proceeds from the Stock Options may be used by Borrower for general and
administrative expenses in excess of the monthly limit set forth in Section 15 below or for
development of the Nicaragua Concessions.

     9. Subordinate Loans. On or before October 31, 2008, Borrower shall receive one or more
subordinate loans in an aggregate amount not less than $1,500,000.00, which shall be subordinated
in writing to the Loans and Hedge Liabilities on terms acceptable to Lender (the “Subordinate
Loans”). Lender will allow the Subordinate Loans to be secured by the Security Documents on a
fully-subordinated basis, pursuant to loan documents or amendments reasonably acceptable to Lender.
The proceeds from the Subordinate Loans will be held in an escrow account at Lender until such
time as Borrower shall have received the Governmental Approval, and thereafter, the proceeds from
the Subordinate Loans may be used by Borrower for general and administrative expenses in excess of
the monthly limit set forth in Section 15 below or for development of the Nicaragua
Concessions; provided, however, that if
the Governmental Approval is not obtained, all escrowed proceeds from the Subordinate Loans shall
be promptly returned to the Subordinate Creditor.

     10. Cash Flow. Borrower agrees that it will use its commercially reasonable best efforts
to cause the contribution of cash to Borrower to the extent necessary so that Borrower’s
consolidated cash flow is a minimum of break even, after payment of interest expense on the
Revolving Loan, to prevent any additional accounts payable from becoming past due, and to prevent
any mineral liens under Chapter 56 of the Texas Property Code or similar applicable law from being
filed against the Properties.

     11. Lockbox. Borrower and Guarantors agree that the following provisions regarding
production proceeds attributable to their oil and gas properties continue to apply:

          (a) Borrower and Guarantors will direct all production proceeds attributable to their oil and
gas properties to be paid to a lockbox account to be set up and maintained with Lender for the
purpose of collection of production proceeds (the “Lockbox Account”).

          (b) All production proceeds received in the Lockbox Account by Lender with respect to
production, severance, ad valorem, or other taxes on production proceeds (excluding income taxes)
or that are attributable to another person’s or entities’ royalty or other interest in the oil and
gas properties shall be released immediately to Borrower upon Borrower’s request and verification
of those amounts. Borrower and Guarantors shall provide evidence of the timely payment of
production, severance, ad valorem, or other taxes on production proceeds (excluding income taxes)
and of the royalty and overriding royalty owners; provided, however,

 

 

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that no royalties and
overriding royalty interests owned by Borrower, Guarantors, or any affiliates of Borrower or
Guarantors within the meaning of Securities and Exchange Commission Rule 144, shall be paid from
the Lockbox Account proceeds.

          (c) Borrower will provide Lender with a proposed budget of recurring operating expenses,
non-recurring operating expenses, general and administrative expenses, and any capital expenditures
for the oil and gas properties expected to be paid during the Forbearance Period and supporting
documentation for those expenses and expenditures.

          (d) At Borrower’s request, production proceeds in the Lockbox Account may be used to pay
operating expenses, general and administrative expenses (subject to the limits in Section 15
below), and capital expenditures, all as approved by Lender (which approval shall not be
unreasonably withheld, delayed, or denied). Borrower and Guarantors shall not pay in any month
operating expenses, general and administrative expenses, or capital expenditures exceeding the
aggregate budgeted expenses for each such category for that month, unless Lender has approved such
payments. Borrower shall, not later than two (2) business days prior to the date on which Borrower
proposes to pay such operating expenses, general and administrative expenses, or capital
expenditures and as a condition precedent to requesting such approval,
deliver to Lender in usual and customary form reasonably acceptable to Lender reasonable
detail of all expenses and expenditures proposed to be paid in respect of such month. Any excess
production proceeds in the Lockbox Account may be used only for such other purposes as approved by
Lender, in its discretion.

          (e) All production proceeds remaining in the Lockbox Account after payment of the taxes and
royalties as provided above and the operating expenses and discretionary amounts as provided above
will be applied by Lender on the last day of each month to the Revolving Note and collection costs
as set forth in Section 3.2 of the Deed of Trust. If the production proceeds received in the
Lockbox during any month are not sufficient to make the scheduled monthly payment on the Revolving
Loan, Borrower will pay Lender the deficiency within ten (10) days of notice from Lender of such
shortfall.

     12. Escrow Account. Under the Second Forbearance Agreement, Infinity Oil and Gas of
Texas, Inc. (“IOGTx”), Forest Oil Corporation (“Forest”), a New York
corporation, Lender, and Amegy Bank National Association, as escrow agent, entered into
the Escrow Agreement (the “Escrow Agreement”) dated December 27, 2007. The purpose for
which the Escrow Agreement was set up has been completed. Borrower and Guarantors shall cause
Forest and IOGTx to terminate the Escrow Agreement in writing. Upon termination of the Escrow
Agreement, one-half of all sums in the Escrow Account covered by the Escrow Agreement shall be
transferred by Lender into the Lockbox Account and shall thereafter be held and used solely for the
payment of monthly interest payments on the Revolving Loan and any other fees due under the Loan
Agreement or this Agreement (other than fees due on the Deferral Date) and one-half of all sums in
the Escrow Account shall be applied by Lender to the reduction of the principal balance of the
Revolving Note.

 

 

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     13. Sale of Oil and Gas Properties. In order to cure the Deficiency, Borrower and
Guarantors agree to take the following actions:

          (a) Borrower and Infinity Oil & Gas of Wyoming, Inc. (“IOGWy”) shall proceed
with the sale and marketing of the interest retained in the oil and gas properties of IOGWy (the
“Rockies Properties”). Borrower and Guarantors shall devote their substantial efforts,
time, talents, and expertise to the sale and marketing of the Rockies Properties and the Texas
Properties, will take all lawful actions as will result in the prompt payment of the Deficiency,
and will thereafter accept any commercially reasonable offer to buy the Rockies Properties, or any
of them; provided no oil and gas property or leasehold interest which is mortgaged to Lender shall
be sold except on terms and price acceptable to Lender and with the prior written approval of
Lender. Borrower and Guarantors shall use their best efforts to (i) promptly open a data room on
the properties to be sold, (ii) to promptly obtain firm proposals for the sale of the properties,
(iii) to execute a definitive agreement or agreements, subject to stockholder approval if required,
for the sale of properties with proceeds sufficient to repay the Deficiency, and (iv) seek
stockholder approval, if required, and consummate the sale of the properties as soon as practicable
thereafter, but in no event later than the end of the Forbearance Period. Borrower further agrees
to deliver marketing packages on the Rockies Properties to not less than ten (10) prospective
buyers on or before December 15, 2008.

          (b) After Borrower obtains the Governmental Approval, upon the written directive of Lender, to
be exercised in Lender’s sole discretion, Borrower and Guarantors shall proceed with the sale and
marketing of interests in the Texas oil and gas properties of IOGTx (the “Texas
Properties”). If elected by Lender, Borrower and Guarantors shall devote their substantial
efforts, time, talents, and expertise to the sale and marketing of the Texas Properties, will take
all lawful actions as will result in the prompt payment of the Deficiency, and will thereafter
accept any commercially reasonable offer to buy the Texas Properties, or any of them; provided no
oil and gas property or leasehold interest which is mortgaged to Lender shall be sold except on
terms and price acceptable to Lender and with the prior written approval of Lender. Upon Lender’s
election to proceed with the sale of the Texas Properties, or any of them, Borrower and Guarantors
shall thereafter use their best efforts to (i) promptly open a data room on the properties to be
sold, (ii) to promptly obtain firm proposals for the sale of the properties, (iii) to execute a
definitive agreement or agreements, subject to stockholder approval if required, for the sale of
properties with proceeds sufficient to repay the Deficiency, and (iv) seek stockholder approval, if
required, and consummate the sale of the properties as soon as practicable thereafter, but in no
event later than the end of the Forbearance Period.

          (c) Borrower and Guarantors shall promptly provide Lender with a copy of the agreement or
engagement letter with any oil and gas broker or consultant retained to assist with sales under
this Section; and thereafter Borrower and Guarantors shall provide a monthly report on the first
(1st) day of each month, to be prepared by the oil and gas broker or consultant engaged
by Borrower and Guarantors to facilitate the sale of the oil and gas properties and leasehold
interests, that includes any and all information pertaining to property bids, the current status of
any bids or sale discussions, and all marketing efforts employed to sell the Rockies Properties
and, when applicable, the Texas Properties. Notwithstanding any provision to the

 

 

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contrary, at least two business days prior to the date on which Borrower proposes to pay such,
Borrower shall deliver to Lender in usual and customary form reasonably acceptable to Lender,
reasonable detail of all broker fees and other transaction costs related to the sale of the
properties proposed to be paid from proceeds in the Lockbox Accounts, and thereafter Borrower may
pay such fees and costs as are approved by Lender (which approval shall not be unreasonably
withheld, delayed, or denied).

          (d) No sale of any of the Rockies Properties and the Texas Properties, or any of them, will be
permitted to an affiliate of Borrower or Guarantors, unless Lender consents in writing.

          (e) Except as set forth below, Borrower and Guarantors will direct all of the net sale
proceeds from the sale of any of the Rockies Properties and the Texas Properties to be paid to
Lender to be applied to the Revolving Note and collection costs in such order as determined by
Lender and shall take all lawful actions to ensure that the proceeds of any such sales are
contemporaneously with the closing thereof applied to the Revolving Note and collection costs as
herein provided. Lender hereby agrees that, so long as there is no Default at the time of the
sale of the Rockies Properties, Borrower and IOGWy may retain ten percent (10%) of the net sale
proceeds from the sale and use those net sale proceeds solely for working capital and development
of the Nicaragua Concessions; and if Borrower receives the full amount of the Subordinate Loans
required by Section 9 above, then Borrower and IOGWy may retain twenty percent (20%) of the
net sale proceeds from the sale and use those net sale proceeds solely for working capital and
development of the Nicaragua Concessions.

     14. Lease Operating Expense. Borrower and IOGTx shall not permit the lease operating
expense on the Texas properties of IOGTx to exceed an average of $2,500 per well per month.

     15. General and Administrative Expense. Notwithstanding the provisions of Subsection
(f) of Section 8 of the Loan Agreement, Borrower and Guarantors shall not permit cash general and
administrative expenses on a consolidated basis to exceed $75,000.00 per month during term of this
Agreement; provided, however, that (i) the net proceeds from the Stock Options under Section
8 above and the proceeds from the Subordinate Loans under Section 9 above may be used
by Borrower for general and administrative expenses in excess of this monthly limit, (ii)
reasonable costs and expenses incurred by Borrower in connection with the Subordinate Loans shall
not be subject to this limit, and (iii) unpaid general and administrative expenses in excess of
this monthly limit may be accrued and paid only after the Revolving Note and all other obligations
under this Agreement and the Loan Agreement are paid in full, and all outstanding Letters of
Credit, including the Nicaragua Letters of Credit, are terminated or cash secured to Lender’s
satisfaction.

     16. Use of Proceeds. Notwithstanding any term of this Agreement or the Loan Agreement
to the contrary, Borrower and Guarantors shall not use any proceeds from the Lockbox Account, any
proceeds from any capital contribution, including under the Stock Options, any proceeds of the
Subordinate Loans, or any net sale proceeds from the sale of any of

 

 

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the Rockies Properties or the Texas Properties for the purpose of acquiring any oil and gas
properties or leases or drilling any well, without the prior written consent of Lender.

     17. Hedge Transactions. Notwithstanding the terms of Section 4 of the Loan Agreement,
Borrower and Guarantors agree that during the Forbearance Period and so long thereafter as any
Event of Default remains outstanding and uncured, Borrower and Guarantors shall not enter into any
Hedge Transaction without the prior written consent of Lender. If Lender consents to any
additional Hedge Transactions, those Hedge Transactions must comply with the terms of Section 4 of
the Loan Agreement.

     18. Audit and Inspections. (a) Borrower and Guarantors agree that Lender and its
auditors or accountants may, during the term of this Agreement, conduct an audit at Borrower’s and
Guarantors’ offices and examine, audit, and make and take away copies or reproductions of
Borrower’s and Guarantors’ books and records reasonably required by Lender, relating to (i) the
sources and uses of all funds advanced by Lender under the Revolving Note, and (ii) the sources and
uses of all production proceeds attributable to Borrower’s and Guarantors’ oil and gas properties.
Lender will provide Borrower and Guarantors with five (5) business days written notice of its
intention to commence the audit. Borrower and Guarantors agree to cooperate with Lender and
comply with all reasonable requests in connection with the audit, and Borrower and Guarantors
hereby consent to the review and use by Lender’s auditors of Borrower’s third-party audit of the
books and records of Borrower, Guarantors, and any other subsidiaries, including the supporting
documentation and work papers of such independent auditors.

     19. Reporting Requirements. Until the Revolving Note, the Hedge Liabilities, and all
other obligations and liabilities of Borrower under the Revolving Note and the other loan documents
are fully paid and satisfied, Borrower and Guarantors will furnish to Lender the following in
Proper Form:

          (a) Within ten (10) days of the end of each month, a report showing Borrower’s consolidated
actual cash flow for the month and for the period from the beginning of the fiscal year through the
end of the month and consolidated projected cash flow for the next six months.

          (b) Within ten (10) days of the end of each month, a pro-forma working capital balance for
Borrower and Guarantors as of the end of the prior month.

          (c) Within ten (10) days of the end of each month, an accounts payable listing and aging,
along with copies of all additional liens or claims made by any account creditors.

          (d) As received and available, Borrower and Guarantors shall promptly provide to Lender all
information related in any way to their ability to raise additional capital.

          (e) As received and available, Borrower and Guarantors shall promptly provide to Lender copies
of any agreement or engagement letter with an oil and gas broker or consultant, all written
purchase bids, purchase agreements, and farm-in proposals related in any

 

 

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way to the prospective sale of any of the Rockies Properties and the Texas Properties and shall
promptly inform Lender of any unwritten offers or bids.

          (f) As received and available, Borrower and Guarantors shall promptly provide to Lender copies
of any term sheets or financing proposals received that would result in the Deficiency being cured
or a refinance of the entire outstanding amount owed on the Revolving Note and Hedge Liabilities.

          (g) Notwithstanding the provisions of Subsection (h) of Section 9 of the Loan Agreement,
within fifty (50) days of the end of each month, a production report, on a lease-by-lease or unit
basis, showing the gross proceeds from the sale of oil, gas, and associated hydrocarbons produced
from the Properties, the quantity of oil, gas, and associated hydrocarbons sold, the severance,
gross production, occupation, or gathering taxes deducted from or paid out of the proceeds,
settlements of any Hedge Transactions, the cash lease operating expenses, including non-recurring
cash operating expenses, intangible drilling costs, and capital expenditures, general and
administrative expenses, the number of wells operated, drilled, or abandoned, the name, address,
telephone number, and contact of the first purchaser of production for all of the Properties, and
such other information as Lender may reasonably request;

          (h) As received and available, copies of the daily farmout activity reports from Forest,
including any additional information received from Forest related to the Farmout and Acquisition
Agreement (the “Farmout Agreement”) dated December 26, 2007, between IOGTx, as farmor, and
Forest, as farmee; and

          (i) such other information respecting the condition and the operations, financial or
otherwise, of Borrower, Guarantors, and the Properties as Lender may from time to time reasonably
request.

     20. Additional Collateral. Borrower and Guarantors agree to mortgage all oil and gas
properties and leasehold interests (excluding the Nicaragua Concessions) owned by Borrower or
Guarantors and not previously mortgaged to Lender as additional security for the Notes. Within
thirty (30) days of the date of this Agreement, Borrower and IOGTx agree to provide evidence to
Lender documenting their efforts to obtain a waiver of the prohibition against liens from the
lessors on the Murray lease, Erath County, Texas.

     21. Interest. Borrower and Lender hereby agree that during the Forbearance Period
(including the Forbearance Period under the First Forbearance Agreement and the Second Forbearance
Agreement), the entire unpaid principal balance owed on the Revolving Note shall accrue interest at
the sum of the Stated Rate, plus the Applicable Margin as set forth in the
Revolving Note; provided, however, that Lender reserves the right to impose the default rate
of Stated Rate, plus six percent (6.0%) (the “Default Rate”), as set forth in the Revolving
Note, at any time after the termination of the Forbearance Period, in the event that an Event of
Default remains uncured and outstanding. Further, in lieu of the additional interest accrued and
unpaid under this Agreement, Borrower shall pay the Forbearance/Waiver Fee set forth below.

 

 

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     22. Forbearance Fee. (a) In consideration of the forbearance by Lender under this
Agreement and the waiver of the Existing Defaults and for other valuable consideration, the receipt
and sufficiency of which are acknowledged, Borrower agrees to pay to Lender a Forbearance/Waiver
Fee calculated as follows, and due on or before the earlier of the following (the “Deferral
Date”): (i) the termination of the Forbearance Period, (ii) the cure of the Deficiency, or
(iii) the refinance of the Revolving Note by another lender:

               (i) Forbearance/Waiver Fee under the First Forbearance Agreement in the amount of $553,666.67;
plus

               (ii) Forbearance/Waiver Fee under the Second Forbearance Agreement in the amount of
$723,666.33; plus

               (iii) Until Borrower has received Governmental Approval, a Forbearance/Waiver Fee shall be due
for each month from June 2008 through the end of the Forbearance Period, inclusive, calculated as
one percent (1.0%) of the average daily outstanding principal balance on the Revolving Note for the
month as of the last day of each of those months (or as of the Deferral Date if such occurs during
any month).

               (iv) After Borrower has received Governmental Approval, a Forbearance/Waiver Fee shall be due
for each month through the end of the Forbearance Period, calculated as three-quarters of one
percent (0.75%) of the average daily outstanding principal balance on the Revolving Note for the
month as of the last day of each of those months (or as of the Deferral Date if such occurs during
any month).

Except as set forth below, the Forbearance/Waiver Fees and all other fees are non-refundable and
earned by Lender upon execution of this Agreement.

          (b) If on or before January 31, 2009, the Revolving Note, the Hedge Liabilities, and all other
obligations under this Agreement and the Loan Agreement are paid in full, and all outstanding
Letters of Credit, including the Nicaragua Letters of Credit, are terminated or cash secured to
Lender’s satisfaction, then Lender hereby agrees to waive all of the Forbearance/Waiver Fees
accrued, but unpaid, under subsection (a) above. If on or before January 31, 2009, the outstanding
principal balance owed on the Revolving Note has been paid down, then Lender hereby agrees to waive
a pro-rata portion of the Forbearance/Waiver Fees accrued, but unpaid, under subsection (a) above,
equal to the percentage of the current principal balance of $9,910,493.64 owed on the Revolving
Note that has been paid as of that date.

          (c) Borrower may make a written proposal to Lender regarding the payment of the
Forbearance/Waiver Fees due under this Section by (i) delivery of unrestricted, marketable stock in
Borrower to Lender or its nominee, or (ii) assignment of an overriding royalty interest in the
Nicaragua Concessions to Lender or its nominee. The proposal will be subject to Lender’s credit
approval and must be upon terms and pricing acceptable to Lender, in its sole discretion. Lender
does not yet have credit approval for payment of the Forbearance/Waiver Fees by delivery of stock
or assignment of royalty.

 

 

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     23. Other Fees. Borrower acknowledges the following additional fee owed to Lender
that is due on or before the Deferral Date: a hedge termination fee in the amount of $56,085.00,
due pursuant to the Second Forbearance Agreement in connection with the termination of Hedge
Transactions.

     24. Conditions Precedent. The obligation of Lender to enter into this Agreement and
to forbear with respect to the Existing Defaults is subject to Borrower’s satisfaction, in Lender’s
sole discretion, of the following conditions precedent:

          (a) Except for the Deficiency and the Existing Defaults, all representations and warranties
set forth in Section 6 of the Loan Agreement must be true as of the date of this Agreement, except
for Subsection (d) of Section 6, which is qualified by the lawsuits set forth in Schedule A
attached, and Subsection (i) of Section 6, which is no longer applicable.

          (b) the negotiation, execution, and delivery of Loan Documents in Proper Form, including, but
not limited to, the following:

(i) this Agreement;

(ii) First Amendment to Revolving Note; and

(iii) Borrower and Guarantors Resolutions.

          (c) other than as contemplated in this Agreement, there shall not have occurred a material
adverse change in the business, assets, liabilities (actual and contingent), operations, or
financial condition of Borrower or in the facts and information regarding such entities as
represented to date.

          (d) Lender’s receipt and satisfactory review of a 180-day operating/cash flow forecast for
Borrower and Guarantors.

          (e) Lender’s receipt and satisfactory review of a proposed budget from Borrower of recurring
operating expenses, non-recurring operating expenses, general and administrative expenses, and any
capital expenditures for the oil and gas properties expected to be paid during the Forbearance
Period and supporting documentation for those expenses and expenditures.

     25. Default and Remedies. (a) As used in this Agreement, “Default” means (i)
any breach by Borrower or Guarantors of their obligations under this Agreement, (ii) any
misrepresentation by Borrower or Guarantors of the representations or warranties set forth in this
Agreement, (iii) any default by IOGTx under the Farmout Agreement that results in Forest declaring
an event of default and giving notice of its intent to exercise its remedies under the Farmout
Agreement, or (iv) any further Event of Default under the Loan Agreement, other than the existing
Borrowing Base deficiency or any additional defaults under the provisions covered by the Existing
Defaults, excluding the Excluded Defaults.

 

 

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          (b) Upon a Default, Lender may terminate the Forbearance Period and exercise any and all
rights and remedies available to it, including, without limitation, those under the Loan Agreement,
the Revolving Note, the Security Documents, the Guaranties, the Loan Documents, this Agreement, and
any other instrument or agreement relating hereto, or any one or more of them. All rights and
remedies of Lender shall be cumulative and concurrent and, after a Default, may be pursued
separately, successively, or together as often as occasion therefore shall arise, at the sole
discretion of the Lender.

     26. Other Representations. Borrower and Guarantors hereby represent to Lender as
follows:

          (a) The execution, delivery, and performance of this Agreement by Borrower and Guarantors have
been duly authorized by Borrower’s and Guarantors’ respective boards of directors and this
Agreement constitutes their legal, valid, and binding obligations, enforceable in accordance with
their respective terms; and

          (b) Except as set forth on Schedule A hereto, there are no actions, suits, or
proceedings pending or threatened against or affecting Borrower, Guarantors, or the Properties,
before any court or governmental department, commission, or board, which, if determined adversely,
would have a material adverse effect on any of the Properties or the operations or financial
condition of any of Borrower or Guarantors.

     27. Confirmations. (a) Borrower and Guarantors agree that the following amounts are
due and outstanding with respect to the Revolving Note as of September 3, 2008:

	 	 	 	 	 
	Principal
	 	$	9,910,493.64	 
	Interest
	 	$	96,902.60	 
	 
	 	 	 
	 
	Total
	 	$	10,007,396.24	 

Borrower and Guarantors agree that there is no set off or defense to payment of the Revolving Note
or the Hedge Liabilities.

          (b) As security for the Notes, Borrower and Guarantors previously executed the Security
Documents, including the Security Agreement (as defined in the Second Forbearance Agreement).
Borrower and Guarantors ratify and confirm the Security Documents, acknowledge that they are valid,
subsisting, and binding, and agree that the Security Documents secure payment of the Notes
(including the Revolving Note) and the Loans (including the Revolving Loan).

          (c) In connection with the Revolving Note, Guarantors executed the Guaranties. Guarantors
ratify and confirm the Guaranties, acknowledge that the Guaranties are valid, subsisting, and
binding upon Guarantors, and agree that the Guaranties guarantee payment of the Revolving Note.
Guarantors agree that there is no defense to payment under the Guaranties.

 

 

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          (d) Borrower and Guarantors hereby represent to Lender that all representations and warranties
set forth in Section 6 of the Loan Agreement are true and correct as of the date of execution of
this Agreement, except for Subsection (d) of Section 6, which is qualified by the lawsuits set
forth in Schedule A attached, and Subsection (i) of Section 6, which is no longer
applicable; and that, except for the Existing Defaults, Borrower and Guarantors are in compliance
as of the date of execution of this Agreement with all covenants set forth in Section 7 of the Loan
Agreement, all financial covenants set forth in Section 8 of the Loan Agreement, and all reporting
requirements set forth in Section 9 of the Loan Agreement.

     28. Validity and Defaults. The Loan Agreement remains in full force and effect.
Borrower and Guarantors acknowledge that the Loan Agreement, the Revolving Note, the Security
Documents, the Guaranties, and the other Loan Documents are valid, subsisting, and binding upon
Borrower and Guarantors; no uncured breaches or defaults exist under the Loan Agreement, except for
the Existing Defaults; and except as contemplated by this Agreement, no other event has occurred or
circumstance exists which, with the passing of time or giving of notice, will constitute a default
or breach under the Loan Agreement. Borrower and Guarantors ratify the Loan Agreement.

     29. Release. For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Guarantors hereby RELEASE AND FOREVER DISCHARGE Lender and its
officers, directors, employees, agents, representatives, attorneys, subsidiaries, and affiliates
(collectively “Released Parties”), from any and all claims, counterclaims, demands,
damages, debts, suits, obligations, liabilities, offsets, rights, actions, and causes of action of
any nature whatsoever (collectively “Claims”), caused by, because of, as a result of,
arising from, or related in any way to the Loan Agreement, the Revolving Note, the Security
Documents, the Loan Documents, this Agreement, any other transaction between Lender and Borrower,
or any act, omission, communication, transaction, occurrence, representation, promise, breach,
violation of any statute or law, or any other matter whatsoever or thing done, omitted, or suffered
by any of the Released Parties in connection with the Loan
Agreement, the Revolving Note, the Security Documents, the Loan Documents, this Agreement, any
other transaction between Lender and Borrower, whether those Claims are now or hereafter accrued or
possessed, whether known or unknown, direct or indirect, liquidated or unliquidated, absolute or
contingent, foreseen or unforeseen, at law or in equity, and now or hereafter asserted, including,
without limitation, claims for contribution or indemnity, claims of control, duress, mistake,
tortuous interference, usury, negligence, or violations of the Texas Consumer Protection and
Deceptive Trade Practices Act; provided, however, that any acts of willful misconduct or fraud by
the Releases Parties shall not be released or discharged.

     30. Advice from Counsel. Borrower and Guarantors understand that this Agreement is
legally binding and represent to Lender that each has obtained independent legal counsel from the
attorney of their choice regarding the meaning and legal significance of this Agreement. The
parties agree that no provision of this Agreement shall be interpreted or construed against a party
because that party prepared the provision, it being agreed that all parties have participated in
the drafting of this Agreement and have had legal counsel of their choice.

 

 

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     31. Governing Law and Venue. THIS AGREEMENT, THE LOAN AGREEMENT, THE REVOLVING NOTE,
AND ALL LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS AND SHALL BE PERFORMED IN DALLAS COUNTY, TEXAS. BORROWER, GUARANTORS, AND LENDER
IRREVOCABLY AGREE THAT VENUE FOR ANY ACTION OR CLAIM RELATED TO THIS AGREEMENT, THE LOAN AGREEMENT,
THE REVOLVING NOTE, OR ANY LOAN DOCUMENTS SHALL BE IN DALLAS COUNTY, TEXAS.

     32. Savings Clause. Regardless of any provision contained in the Loan Agreement, the
Revolving Note, the Security Documents, the other Loan Documents, or this Agreement, it is the
express intent of the parties that at no time shall Borrower or Guarantors pay interest in excess
of the maximum lawful rate (or any other interest amount which might in any way be deemed
usurious), and Lender will never be considered to have contracted for or to be entitled to charge,
receive, collect, or apply as interest on the Revolving Note, any amount in excess of the maximum
lawful rate (or any other interest amount which might in any way be deemed usurious), and, in the
event that Lender ever receives, collects, or applies as interest any such excess, the amount which
would be excessive interest will be applied to the reduction of the principal balance of the
Revolving Note, and, if the principal balance of the Revolving Note is paid in full, any remaining
excess shall forthwith be paid to Borrower. In determining whether the interest paid or payable
exceeds the maximum lawful rate (or any other interest amount which might in any way be deemed
usurious), Borrower and Lender shall, to the maximum extent permitted under applicable law, spread
the total amount of interest throughout the entire contemplated term of the Revolving Note so that
the interest rate is uniform throughout the term.

     33. Fax Provision. This Agreement and the related Loan Documents may be executed in
counterparts, and Lender is authorized to attach the signature pages from the counterparts to
copies for Lender and Borrower. At Lender’s option, this Agreement and the related Loan Documents
may also be executed by Borrower and Guarantors in remote locations with signature pages faxed to
Lender. Borrower and Guarantors agree that the faxed signatures are binding upon Borrower and
Guarantors, and Borrower and Guarantors further agree to promptly deliver the original signatures
for this Agreement and the related Loan Documents by overnight mail or expedited delivery. It will
be an Event of Default if Borrower or Guarantors fail to promptly deliver all required original
signatures.

     34. Captions. Captions are for convenience only and should not be used in
interpreting this Agreement.

     35. Final Agreement. (a) In connection with the Loans, Borrower, Guarantors, and
Lender have executed and delivered this Agreement, the Loan Agreement, and the Loan Documents
(collectively the “Written Loan Agreement”).

          (b) It is the intention of Borrower, Guarantors, and Lender that this paragraph be
incorporated by reference into each of the Loan Documents. Borrower, Guarantors, and Lender each
warrant and represent that their entire agreement with respect to the Loans is

 

 

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contained within the Written Loan Agreement, and that no agreements or promises have been made by,
or exist by or among, Borrower, Guarantors, and Lender that are not reflected in the Written Loan
Agreement.

          (c) THE LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

     If the foregoing correctly sets forth your understanding of our agreement, please sign and
return one copy of this letter. Notwithstanding any provision to the contrary, this Agreement
shall only be effective if Borrower and Guarantors sign and return to Lender by 3 p.m., Houston,
Texas time, on October 17, 2008.

	 	 	 	 	 
	 	Yours very truly,

Amegy Bank National Association

 	 
	 	By:  	 	 
	 	 	A. Stephen Kennedy, 	 
	 	 	Senior Vice President/

Manager — Energy Group 	 
	 

	 	 	 	 	 
	Accepted and agreed to	 	 
	this ____ day of October, 2008:	 	 
	 
	 	 	 	 
	BORROWER:	 	 
	 
	 	 	 	 
	Infinity Energy Resources, Inc.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Stanton E. Ross, President
	 	 
	 

	 	and Chief Executive Officer	 	 
	 
	 	 	 	 
	GUARANTORS:	 	 
	 
	 	 	 	 
	Infinity Oil and Gas of Texas, Inc.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Stanton E. Ross, President
	 	 

 

 

Infinity Energy Resources, Inc.

October 16, 2008

Page 16 of 17

	 	 	 	 	 
	Infinity Oil & Gas of Wyoming, Inc.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	     Stanton E. Ross, President	 	 

Exhibits and Schedules:

Schedule A — Lawsuits

 

 

SCHEDULE A

Lawsuits

     Southwest Aviation Specialist, LLC filed an action in the District Court in and for the County
of Tulsa, State of Oklahoma, number CS200708783, on October 31, 2007, against Infinity Oil and Stan
Ross.

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