Document:

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                                                                    Exhibit 10.6
                                                CONFIDENTIAL TREATMENT REQUESTED

                             COMPREHENSIVE AGREEMENT

       This Comprehensive Agreement ("Agreement") is entered into as of July 2,
1999 (the "Effective Date"), by and between Conexant Systems, Inc. ("Conexant"),
a Delaware corporation, with principal offices located at 4311 Jamboree Road,
Newport Beach, CA 92660-3095 and Intellon Corporation ("Intellon"), a Florida
corporation, with principal offices located at 5100 West Silver Springs
Boulevard., Ocala, Florida 34482.

       WHEREAS, Intellon has developed and is developing certain technology for
communication over existing home power lines, known as "Intellon's 11Mbps
PowerLine OFDM Technology ";

       WHEREAS, Intellon has developed and is developing a specification for the
"Intellon's 11Mbps PowerLine OFDM Technology ";

       WHEREAS, Intellon has developed and is developing certain protocol
technology known as "TAMA Protocol" that is a sub-layer between Intellon's power
line physical layer and a standard Ethernet MAC that isolates the Ethernet MAC
from the complexities of the power line medium. The TAMA protocol handles both
asynchronous and isochronous communications for support of data and multimedia
networking (e.g., quality voice);

       WHEREAS, Intellon has developed and is developing the "Intellon 's 11Mbps
PowerLine OFDM Engine" that is the intellectual property block containing
Intellon's 11 Mbps physical layer technology and Intellon's TAMA Protocol.

       WHEREAS, Conexant desires to license the "Intellon 's 11Mbps PowerLine
OFDM Engine";

       WHEREAS, Conexant and Intellon would like to collaborate to promote the
formation of a Home PowerLine Networking Alliance to develop an industry
sponsored specification for in-home networking using power lines;

         WHEREAS, Conexant and Intellon would like to collaborate in obtaining
approval by the Home PowerLine Networking Alliance of Intellon's specifications
as its sponsored specification;

         WHEREAS, Conexant and Intellon would like to jointly define and develop
a Parent IC that would embody Intellon's 11Mbps PowerLine OFDM Engine, which
would be compliant with such industry sponsored specification.

       WHEREAS, Conexant and Intellon would like to manufacture and sell such
Parent IC;

       WHEREAS, Conexant and Intellon would like to develop, manufacture and
sell Derivative Products that include Intellon 's 11Mbps Power line OFDM Engine
and that are compatible with such specifications;

                                       1

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

       WHEREAS, Conexant would like to make an equity investment in Intellon;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:

1.     DEFINITIONS

       For purposes of this Agreement the following terms have the meanings set
forth below:

1.     "Affiliates" means an entity that directly or indirectly controls, is
       controlled by or is under common control with another entity so long as
       such control exists.

2.     "Alliance Formation Plan" means a Conexant and Intellon joint defined
       activity plan that contains coordinated action items and respective
       timeframes that Conexant and Intellon shall take to promote the formation
       of the HomePLNA and the ratification of the Proposal by the Ratification
       Body. The Alliance Formation Plan is not yet fully documented; once the
       parties agree on such documentation, they will amend this Agreement and
       to include such documentation as an addendum hereto.

3.     [Intentionally ommitted]

4.     "Conexant & Intellon Foundry Partner" or "Chartered" means Chartered
       Semiconductor in Singapore.

5.     "Control" means beneficial ownership ( as such term is defined under the
       Securities and Exchange Act of 1934) of more than fifty (50%) percent of
       the voting stock or equity in an entity.

6.     "Basic Exclusivity" means that until the day after the Premium IP
       Decision Date, Intellon will not license its Premium IP Transfer Package
       to any Semiconductor Manufacturer without Conexant's prior written
       consent.

7.     "Channel Price Adjustment" means the price adjustment applied
       retroactively to a specific product in a specific marketing channel in
       accordance with Conexant standard policies.

8.     "Confidential Information" has the meaning set forth in Section 17.1,
       below.

9.     "Demonstration Expertise" means the Intellon know how, information,
       instructions, software, firmware and specifications that Intellon will
       provide to Conexant which Intellon reasonably believes will allow
       Conexant to establish a Demonstration Setup to perform demonstrations of
       the Intellon's 11Mbps Power line OFDM Engine. The Demonstration Expertise
       is not yet fully documented; once the parties agree on such

                                       2

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

       documentation, they will amend this Agreement to include such
       documentation as an addendum hereto.

10.    "Demonstration Setup" means a laboratory owned by Conexant that includes
       the Demonstration Expertise that will be used by Conexant to demonstrate
       the Intellon's 11Mbps Power line OFDM Engine .

11.    "Derivative Products" means the devices subsequent to the Parent IC
       developed by Conexant incorporating Intellon's 11Mbps PowerLine OFDM
       Engine in whole or in part.

12.    "Equity Investment" shall have the meaning set forth in Section 9.1 ,
       below.

13.    "Europe Decision Date" means the day on which Intellon licenses Europe
       Rights and it is the later of a) March 31, 2000 or b) Premium IP Decision
       Date plus 2 months.

14.    "Europe Rights" means that Intellon may license its Premium IP Transfer
       Package to an European Semiconductor Manufacturer if Conexant decides not
       to purchase Extended Exclusivity on or before the Europe Decision Date.

15.    "Evaluation Period" has the meaning set forth in Section 2.3, below.

16.    "Extended Exclusivity" means that the Basic Exclusivity is extended,
       pursuant to Section 9.3, to the later of (a) December 31, 2000 or (b)
       Premium IP Decision Date plus 11 months.

17.    "Exclusivity Period" means the period of time in which Conexant has Basic
       Exclusivity first and optionally Extended Exclusivity later. The
       Exclusivity Period starts on Effective Date and ends on a) Premium IP
       Decision Date or b) the end of the Extended Exclusivity if Conexant has
       elected to buy the Extended Exclusivity.

18.    "Extended Exclusivity Decision Date" means the date on which Conexant
       will decide whether to purchase Extended Exclusivity with an additional
       equity investment and which date will be any day in the period from the
       Premium IP Decision Date to the later of (a) June 30, 2000 or (b) Premium
       IP Decision Date plus 5 months.

19.    "HPNA" means the Home PhoneLine Networking Alliance, which is a
       not-for-profit organization incorporated in the State of California.

20.    "HPNA 1.0 Specification" and "HPNA 1.1 Specification" means the
       specification and update adopted by the HPNA for the purpose of offering
       home networking products using phone lines with a 1 Megabit per second
       transmission rate.

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Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

21.    "HomePLNA" means the Home PowerLine Networking Alliance. The HomePLNA
       will be an industry alliance modeled after the HomePNA. The final name
       for such association could be different. Conexant and Intellon agree to
       amend this agreement when the name for such industry alliance will be
       finalized.

22.    "HPLNA 1.0 Industry Specification" means a document that contains
       Intellon 's 11Mbps PowerLine OFDM Specification that is being developed
       by Intellon, its industry collaborators, and Conexant. The HPLNA 1.0
       Industry Specification shall be modeled after the HPNA 1.0 industry
       specification, and is intended to evolve into the specification
       ultimately adopted by Ratification Body. The final name for such HPLNA
       1.0 Industry Specification could be different. Conexant and Intellon
       agree to amend this agreement when the name for such HPLNA 1.0 Industry
       Specification will be finalized.

23.    "Key Customers" shall mean the key customers that Intellon and Conexant
       will jointly contact to verify the Parent IC Specification and to promote
       the formation of the HomePLNA. The key customers list is not yet fully
       finalized; once the parties agree on such list, they will amend this
       Agreement and include such list as an addendum hereto.

24.    "Intellectual Property Rights" or "IPR" shall mean, with respect to any
       technology, all right, title and interest in and to any patent, letters
       patent, industrial model, design patent, petty patent, patent of
       importation, utility model, certificate of invention, and/or other
       indicia of inventorship and/or invention ownership, and any application
       for any of the foregoing, and including any such rights granted upon any
       reissue, division, continuation or continuation-in-part applications now
       or hereafter filed, related to any such application; and all right, title
       and interest in and to all trade secret rights arising under the common
       law, state law, federal law or the laws of any foreign country; and all
       right, title and interest in and to all semiconductor mask work rights,
       and in all copyright rights and all other literary property and/or other
       rights of authorship; and all right, title and interest in and to all
       know-how and show-how; in each case, with respect to the subject
       technology.

25.    "Intellon's 11Mbps Power line OFDM Engine" is the intellectual property
       block containing Intellon's 11 Mbps physical layer technology and
       Intellon's TAMA protocol.

26.    "Intellon's 11Mbps PowerLine OFDM Specifications" means, at any time, the
       most current version of the specifications for Intellon's 11Mbps
       PowerLine OFDM Engine developed by Intellon. The scope of Intellon's
       11Mbps PowerLine OFDM Specifications is restricted to that information
       descriptive (i) of the electrical characteristics and protocols of
       physical interfaces, (ii) of a standard set of transmitted signals and
       (iii) of such test procedures as required to establish conformance of
       devices to items (i) and (ii).

                                       4

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

27.    "Intellon Product" means a Home Networking over Power Line IC product
       sold by Intellon.

28.    "Japan Decision Date" means the day on which Intellon licenses Japan
       Rights and is the day after the Premium IP Decision Date.

29.    "Japan Rights" means that Intellon may license its Premium IP Transfer
       Package to a Japanese Semiconductor Manufacturer if Conexant decides not
       to purchase Extended Exclusivity on or before the Japan Decision Date.

30.    "Licensed Products" means both Parent IC and/or Derivative Products.

31.    "Net Sales" means the gross selling price of the Licensed Product
       invoiced to a customer less if applicable; 1) actual charges for
       handling, freight, sales taxes, insurance costs and import duties when
       such items are separately stated on the invoice and paid by the customer;
       2) discounts and or credits customarily given and actually taken and/or;
       3) Channel Price Adjustments.

32.    "Parent IC" means the initial IC implementation of Intellon's 11Mbps
       PowerLine OFDM Engine as jointly defined by the parties.

33.    "Parent IC Development Phase" means the required set of actions, to be
       completed in defined timeframe, that Conexant and Intellon will perform
       in order to develop the Parent IC and to enable the Conexant & Intellon
       Foundry Partner to manufacture it. The Parent IC Development Phase is not
       yet fully documented; once the parties agree on such documentation, they
       will amend this Agreement and to include such documentation as an
       addendum hereto.

34.    "Parent IC Test Package" shall mean the test vectors set in industry
       standard format, and test program, in electronic form or otherwise, to be
       used by the Conexant & Intellon Foundry Partner to test the Parent IC
       wafer. The Parent IC Test Package is not yet fully documented; once the
       parties agree on such documentation, they will amend this Agreement to
       include such documentation as an addendum hereto.

35.    "Parent IC Data Sheet" means technical document for customer use that
       describes how to use the jointly defined Parent IC

36.    "Parent IC Specification" means the detailed technical specification that
       describes the jointly defined Parent IC to be used solely for internal
       use by Intellon and Conexant.

37.    "Per Unit Royalty" has the meaning set forth in Section 14.4 below.

38.    "Premium IP Decision Date" means the date on which Conexant will decide
       whether to license the Premium IP Transfer Package, which date shall be
       the later of (a)

                                       5

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

January 31, 2000 or (b) two (2) working days after finalization by Intellon of
the Premium IP Transfer Package.

39.    "Premium IP Package" or Premium IP Transfer Package" means Intellon's
       11Mbps PowerLine OFDM Engine in the following form:

         VHDL Netlist
         Receiver model
         Channel model
         Test bench including test vectors
         Generic IC specification
         Firmware source code
         Memory specification
         I/O specification

40.
"Private Label IC Product" shall mean the Parent IC or any Derivative Product
manufactured by Conexant for Intellon bearing the trademark and/or logo of
Intellon, in a manner to identify it as an Intellon product.

41.    "Professor" shall have the meaning set forth in paragraph no. 14.7 of
       this Agreement.

42.    "Proposal" means Intellon's 11Mbps PowerLine OFDM Specifications
       submitted by Intellon to the Ratification Body for possible adoption as
       the HPLNA 1.0 Specification.

43.    "Ratification Body" means the standard organization or the HomePLNA that
       will be in charge of ratifying the HPLNA 1.0 Industry Specification.
       Conexant and Intellon agree to amend this agreement when the name for
       such Ratification Body will be finalized

44.    "Ratio" shall have the meaning set forth in Section 14.7, below.

45.    "Royalty Prepayments" shall have the meaning set forth in Section 9.3,
       below.

46.    "Royalty Rate" has the meaning set forth in Section 14.5, below.

47.    "Royalty Value Cap" means the maximum amount of royalties that Conexant
       will pay to Intellon to use the Intellon's 11Mbps PowerLine OFDM Engine.
       The Royalty Value Cap is defined to**********.

48.    "Sell" means to sell, lease, or otherwise transfer or distribute the
       product or item ("sold," "sale," and other forms of "sell" shall have the
       same meaning).

49.    "Semiconductor Manufacturer" means a company or a semiconductor division
       of a parent company with or without a semiconductor fabrication plant
       which designs, manufactures and/or sells semiconductors and could as a
       result of a license from

                                       6

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   7
                                                CONFIDENTIAL TREATMENT REQUESTED

       Intellon, design, manufacture or sell a semiconductor or IP licensable
       semiconductor block incorporating the Intellon's 11Mbps Power line OFDM
       Technology Engine. System divisions of parent companies are exempt from
       this definition, provided that said system division can provide assurance
       of and certify and warrant that information provided to the system
       division will not be shared with the semiconductor division of said
       parent company.

50.    "Semiconductor Foundry" means a semiconductor fabrication plant which
       manufactures semiconductors for third parties and could, as a result of a
       license from Intellon and / or Conexant, manufacture but not sell the
       Parent IC or Parent IC Wafers to anyone but Conexant and/or Intellon.

51.    "Standard IP Package" or "Standard IP Transfer Package" means Intellon's
       11Mbps PowerLine OFDM Engine in the following form:

         Intellon's Industry Specification
         Transmitter reference model
         Interoperability test cards
         Receiver test data
         Analog front-end specification

52.    "Subcontractor" means a third party that performs subcontract
       manufacturing of the Licensed Products for Conexant.

53.    "Subsidiary" of a company means a corporation or other legal entity (i)
       the majority of whose shares or securities entitled to vote for election
       of directors (or other managing authority) is now or hereafter owned or
       otherwise controlled by such company either directly or indirectly; or
       (ii) which does not have outstanding shares or securities but the
       majority of whose ownership interest representing the right to manage
       such corporation or other legal entity is now or hereafter owned or
       otherwise controlled by such company either directly or indirectly; but
       any such corporation or other legal entity shall be deemed to be a
       Subsidiary of such company only as long as such ownership or control
       exists.

54.    "TAMA Protocol" means the sub-layer between Intellon's PowerLine physical
       layer and a standard Ethernet MAC that isolates the Ethernet MAC from the
       complexities of the power line medium. The TAMA protocol handles both
       asynchronous and isochronous communications for support of data and
       multimedia networking (e.g. quality voice).

55.    "Term" has the meaning set forth in Section 18.1, below.

56.    "Testing Material" means the Intellon test silicon, at least five (5)
       evaluation boards, schematics, instructions, software, firmware and
       specifications that Intellon will provide to Conexant and which Conexant
       will use to field test the Intellon's 11Mbps Power line OFDM Engine.

                                       7

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   8
                                                CONFIDENTIAL TREATMENT REQUESTED

57.    "Warrant" shall mean that certain Warrant issued by Intellon to Conexant
       for 700,000 shares of Intellon Series C Preferred Stock and which
       provides for two possible exercise scenarios: 1) Subject to Conexant's
       payment of the full Phase ONE $5.25 million on or before January 31,
       2000, Conexant may on or before the Premium IP Decision Date, exercise
       the Warrant for all the shares at $.01 per share until June 30, 2000, or
       2) Upon the earlier of (a) the licensing of the Premium IP Package or (b)
       July 1, 2000, the Warrant for all the shares shall automatically reprice
       at $3.50 per share. The Warrant shall be in the form mutually agreed by
       the parties. The Warrant expires on November 30, 2000.

2.       SPECIFICATION REVIEW

         2.1 Grant of Access. Subject to the terms and conditions herein,
Intellon shall permit Conexant to have access to the Intellon' s 11Mbps
PowerLine OFDM Specifications for the Evaluation Period solely for the purpose
of performing an internal review and evaluation of the Intellon' s 11Mbps
PowerLine OFDM Specifications ("Evaluation"). Conexant shall not make any use of
the Intellon' s 11Mbps PowerLine OFDM Specifications or any Confidential
Information it receives from Intellon during the Evaluation Period except for
the Evaluation.

         2.2      Specification Delivery.

                  (a)      Not later than one (1) business day after the
Effective Date, Intellon shall deliver to Conexant an electronic copy of the
Intellon' s 11Mbps PowerLine OFDM Specifications solely for the purpose of
defining the Parent IC. Conexant agrees that title and, as except expressly
permitted hereunder, all rights to any and all copies and other Confidential
Information delivered to Conexant under this Agreement shall at all times remain
with Intellon.

                  (b)      Conexant shall not directly disclose, reproduce,
display, provide, transfer or otherwise make available all or any part of the
Intellon' s 11Mbps PowerLine OFDM Specification or other Confidential
Information to any person other than an employee of Conexant directly involved
with the Evaluation or an independent contractor or consultant that has entered
into a written agreement with Conexant containing materially equivalent
restrictions regarding Intellon's Confidential Information to those contained
herein.

                  (c)      Intellon represents and warrants as of the Effective
Date thatIntellon intends to submit Intellon' s 11Mbps Power line OFDM
Specifications delivered to Conexant pursuant to Section 2.3(a) above, or one
substantially similar thereto, to the HomePLNA for adoption as the Proposal. If
Intellon updates the Intellon' s 11Mbps PowerLine OFDM Specifications prior to
submission of the Proposal, Intellon shall provide Conexant with such updated
Intellon' s 11Mbps PowerLine OFDM Specifications.

                                       8

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

         2.3 Specification Evaluation. Following delivery of the Intellon' s
11Mbps PowerLine OFDM Specifications, Conexant shall evaluate the specification
at its own expense for a period no longer than thirty (30) days from the date of
its receipt ("Evaluation Period"). Intellon shall use commercially reasonable
efforts to respond to any reasonable inquiries relating to the Intellon' s
11Mbps PowerLine OFDM Specification made by Conexant in writing during the
Evaluation Period within two (2) business days of Intellon's receipt thereof.

                                       9

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   10
                                                CONFIDENTIAL TREATMENT REQUESTED

         3.       PARENT IC DATA SHEET

         3.1      Joint Definition. Once Conexant has satisfactorily reviewed
Intellon' s 11Mbps Power line OFDM Specification, Conexant and Intellon shall
jointly define the Parent IC Data Sheet

         3.2      Customer Verification. Conexant and Intellon shall each use
commercially reasonable efforts to jointly verify the suitability of the Parent
IC Data Sheet with Key Customers.

         3.3      Parent IC Data Sheet Refinement. Once Conexant and Intellon
have completed the Customer Verification phase Conexant and Intellon shall each
use commercially reasonable efforts to a) modify the Parent IC Data Sheet to
reflect mutually agreed upon requirements suggested by Key Customers and b)
start development of the Parent IC Specification pursuant to Section 8..

         3.4      Parent IC Data Sheet. Conexant and Intellon shall use
commercially reasonable efforts to complete the items 3.1, 3.2 and 3.3(a) by
August 31, 1999.

         3.5      Parent IC Data Sheet Ownership. The Parent IC Data Sheet will
be owned by Intellon, and Conexant shall have the right to use and modify such
Parent IC Data Sheet.

4.       POWER LINE DEMONSTRATION CAPABILITIES TRANSFER

         4.1      Demonstration Transfer. Intellon shall use commercially
reasonable efforts to provide to Conexant Demonstration Expertise which Conexant
shall use to establish a Demonstration Setup for the Intellon' s 11Mbps Power
Line OFDM Engine on Conexant's premises.

         4.2      Demonstration Support. Intellon shall use commercially
reasonable efforts to train and support Conexant personnel in using the
Demonstration Setup while they perform demonstrations for the Intellon' s 11Mbps
Power line OFDM Engine.

         4.3      Demonstration Transfer Milestone. Intellon shall use
commercially reasonable efforts to complete item 4.1 and 4.2 by August 30, 1999.

5.       TEST SILICON AND MATERIAL TRANSFER

         5.1      Test Material Transfer. Intellon shall use commercially
reasonable efforts to provide to Conexant Testing Material which Conexant shall
use to field test the Intellon' s 11Mbps Power line OFDM Engine and shall
consist of at least five (5) hardware boards and associated software drivers..

                                       10

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

         5.2      Field Test Support. Intellon shall use commercially reasonable
efforts to train and support Conexant personnel in using the Testing Material
while they perform field tests of Intellon' s 11Mbps Power line OFDM Engine.

         5.3      Test Material Transfer Milestone. Intellon shall use
commercially reasonable efforts to complete the item 5.1 on or before October
31, 1999.

6.       PREMIUM IP ACQUISITION

         6.1      Finalization of the Premium IP Transfer Package. Intellon
shall use commercially reasonable efforts to finalize the Premium IP Transfer
Package 2 working days before January 31st 2000. During the development of the
Premium IP Transfer Package, Conexant and Intellon will hold one or more design
review meetings to demonstrate Intellon's design process and the requirements to
complete the Premiun IP Transfer Package, that is, what the parties agree is
necessary for the Premium IP Transfer Package to satisfy the Proposal and enable
Conexant to design Licensed Products.

         6.2      Verification of the Premium IP Transfer Package. Conexant
shall use commercially reasonable efforts to review the finalized Premium IP
Transfer Package in 2 working days.

         6.3      Decision. On Premium IP Decision Date, Conexant shall notify
Intellon in writing of its decision to license or not to license the Premium IP
Transfer Package.

                  (a)      If Conexant decides to license the Premium IP
                           Transfer Package;

                           (i)      Basic Exclusivity will be extended until
                                    Extended Exclusivity Decision Date.
                           (ii)     Conexant's Exclusivity will not be disclosed
                                    to any third party without written
                                    permission from Conexant except as permitted
                                    under the parties' non disclosure agreement
                                    dated March 3,1999 ("NDA").
                           (iii)    Intellon will deliver a copy to Conexant of
                                    the Premium IP Transfer Package. Conexant
                                    will have license as set forth in Section 11
                                    to the Premium IP Transfer Package and may
                                    use it to develop the Parent IC and / or
                                    Derivative Products.

                  (b)      If Conexant decides to not license the Premium IP
                           Transfer Package.

                           (i)      Conexant loses the Basic Exclusivity.
                           (ii)     Intellon will not deliver to Conexant a copy
                                    of the Premium IP Transfer Package. Conexant
                                    will not receive or have rights to the
                                    Premium IP Transfer package. Conexant may
                                    not use the Premium IP Transfer Package to
                                    develop the Parent IC and Derivative
                                    Products and any other products.

                                       11

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

7.       EXCLUSIVITY

         7.1      Basic Exclusivity Upon the Effective Date, Intellon hereby
grants Conexant Basic Exclusivity.

         7.2      Extended Exclusivity. Subject to Sections 7.3 and 7.4,
Conexant, in its sole discretion may decide to purchase the Extended Exclusivity
in accordance with Section 9.3, and thereby the Basic Exclusivity will be
extended to the later of; a) December 31, 2000, or b) the Premium IP Decision
date plus eleven (11) months.

         7.3      Japan Rights. If Conexant fails to purchase the Extended
Exclusivity before Intellon exercises the Japan Rights, Conexant may thereafter
purchase the Extended Exclusivity which will be effective against all parties
except those licensed under the Japan Rights.

         7.4

Europe Rights. If Conexant fails to purchase the Extended Exclusivity before
Intellon exercises the Europe Rights, Conexant may thereafter purchase the
Extended Exclusivity which will be effective against all parties except those
licensed under the Japan Rights and/or the Europe Rights.

8.       PARENT IC DEVELOPMENT AND MANUFACTURING

         8.1      Parent IC Development. Upon Conexant's licensing the Premium
IP Package Intellon, shall as described below, develop the Parent IC for
production by the Conexant & Intellon Foundry Partner .

                  (a)      Intellon Development Responsibilities

                           (i)      Intellon shall use commercially reasonable
                                    efforts to develop the system architecture,
                                    DSP algorithm design, chip design, logic
                                    design and the layout for the Parent IC
                                    chip, Parent IC Test Package and the Parent
                                    IC Specification pursuant to the jointly
                                    defined Parent IC Data Sheet. Intellon shall
                                    deliver a copy of the Parent IC Test Package
                                    and the Parent IC Specification to Conexant
                                    upon the availability of the first Parent IC
                                    silicon wafer from Chartered. Conexant shall
                                    have the right to use the foregoing as
                                    permitted pursuant to Section 11.

                           (ii)     To facilitate the development efforts of
                                    Intellon, Conexant shall disclose and
                                    deliver to Intellon all necessary technical
                                    information, including without limitation
                                    Confidential Information relating to the
                                    Parent IC.

                                       12

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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                                                CONFIDENTIAL TREATMENT REQUESTED

                           (iii)    Intellon shall use commercially reasonable
                                    efforts to fully specify the Analog Front
                                    End (AFE), as a companion to the Parent IC
                                    chip.

                           (iv)     Intellon shall use commercially reasonable
                                    efforts to complete the Parent IC layout and
                                    physical design within hundred twenty (120)
                                    days from Premium IP Decision Date.

                  (b)      Conexant Development Responsibilities

                           (i)      Conexant shall use commercially reasonable
                                    efforts to convert the Parent IC Test
                                    Package to suitable format compatible with
                                    Conexant testing capabilities.

                                       13

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   14

                                                CONFIDENTIAL TREATMENT REQUESTED

         9.       FINANCIAL STRUCTURE

         9.1      Financial Limits. Conexant's financial stake in Intellon may,
                  in the sole discretion of Conexant, vary from a minimum
                  investment of $5.25 million for an ownership stake of 1.5
                  million shares of Series C Preferred Stock, subject to the
                  receipt of Intellon shareholder approval and compliance with
                  provisions of Article III, Section 9, of its Restated Articles
                  of Incorporation at $3.50 per share of Intellon common stock
                  (or equivalent) which represents no less than 5% of fully
                  diluted ownership as of the Effective Date (the "Equity
                  Investment") up to a maximum of $10.25 million, which amount
                  would consist of a combination the Equity Investment (not to
                  exceed $5.25 million) plus up to $5 million of NRE/Royalty
                  Prepayments. Payments for both the Equity Investment and
                  NRE/Royalty Prepayments will be based on achieved milestones
                  and/or timeframes. The Series C Preferred Stock for the Equity
                  Investment shall be issued in accordance with a Stock Purchase
                  Agreement between the parties.

         9.2      Phase ONE: $5.25 Million Commitment Conexant shall pay
Intellon a total of $5.25million with the following timeframe and subject to
Intellon achieving the following milestones:

         9.2.1    If this Agreement is executed by July 2nd, 1999

                           9.2.1.1  Conexant shall make a payment of $2.8
                                    million in equity investment (800,000 shares
                                    of Series C Preferred Stock @ $3.50 per
                                    share) promptly after the Effective Date and
                                    at that time Intellon will issue the
                                    Warrant.

                           9.2.1.2  Conexant shall make a payment equal to $1
                                    million dollars of nonrecurring engineering
                                    expenses ("NRE") promptly after the
                                    Effective Date and delivery of Intellon' s
                                    11Mbps Power line OFDM Specifications.

                           9.2.1.3  Conexant shall make an NRE payment of $1
                                    million on modification of the Parent IC
                                    Data Sheet to reflect mutually agreed upon
                                    requirements suggested by Key Customers

                           9.2.1.4  Conexant shall make an NRE payment of
                                    $250,000 upon Intellon's providing the
                                    Demonstration Expertise to Conexant.

                           9.2.1.5  Conexant shall make an NRE payment of
                                    $200,000 on Intellon's providing the Testing
                                    Material to Conexant.

                                       14

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   15

                                                CONFIDENTIAL TREATMENT REQUESTED

         9.2.2    If this Agreement is executed after July 2nd, 1999

                  9.2.2.1  Conexant shall make a payment of $2.8 million - of
                           which $500,000 will be the sum already deposited in
                           Escrow - in exchange for the Equity Investment
                           (800,000 of Series C Preferred Stock shares at $3.50
                           per share) promptly after the Effective Date; and at
                           that time Intellon will issue the Warrant.

                  9.2.2.2  Conexant shall make an NRE payment of $1.45 million
                           on modification of the Parent IC Data Sheet to
                           reflect mutually agreed upon requirements suggested
                           by Key Customers.

                  9.2.2.3  Conexant shall make an NRE payment of $500,000 on
                           Intellon's providing the Demonstration Expertise to
                           Conexant.

                  9.2.2.4  Conexant shall make an NRE payment of $500,000 on
                           Intellon's providing the Testing Material to
                           Conexant.

         9.2.3    As a consequence of such initial investment Conexant will
                  obtain:

                  9.2.3.1  Standard IP Package: Conexant will obtain the
                           Standard IP Package and a license to use it to
                           develop and manufacture the Parent IC and/or
                           Derivative Products pursuant to Section 11.

                  9.2.3.2  Basic Exclusivity: Conexant will obtain the Basic
                           Exclusivity. Conexant, at its sole discretion, if it
                           judges it necessary to obtain maximum support in the
                           HomePLNA for Intellon' s 11Mbps Power line OFDM
                           Specifications, may decide to authorize in writing
                           Intellon to provide the Premium IP Package to a
                           Semiconductor Manufacturer on terms and conditions
                           negotiated between Intellon and the Semiconductor
                           Manufacturer.

                  9.2.3.3  Early Notification of Change in Ownership: Intellon
                           will provide to Conexant a written notification of
                           any potential change of 5% or greater ownership of
                           Intellon five (5) working days before the event
                           should happen if known in advance; and in any event
                           promptly upon knowledge of such event. This
                           obligation shall end on the occurrence of a public
                           offering of Intellon securities as described in the
                           Stock Purchase Agreement.

                                       15

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   16

                                                CONFIDENTIAL TREATMENT REQUESTED

                  9.2.3.4  Conexant will have a seat on Intellon's Technology
                           Advisory Board. Conexant will provide to Intellon
                           written notification with the name of Conexant's
                           representative on Intellon 's Technology Advisory
                           Board who shall be subject to Intellon's policies for
                           such board members.

                  9.2.3.5  The Royalty Value Cap will be reduced by the amount
                           of the total NRE $2.45 million paid in Phase ONE.

         9.3      Phase TWO: Optional $5 Million Commitment. Conexant, at its
sole discretion, may decide to license the Premium IP Package on the Premium IP
Decision Date and buy the Extended Exclusivity on the Extended Exclusivity
Decision Date, and if so Conexant will pay Intellon an additional $5 million.

                  9.3.1    If on or before the Premium IP Decision Date Conexant
                           decides not to license the Premium IP Package and not
                           to buy the Extended Exclusivity, then Conexant shall
                           make a payment of $7,000 in equity investment to
                           exercise the Warrant for all the shares represented
                           by the Warrant at $.01 per share.

                  9.3.2    If Conexant has not previously exercised the Warrant
                           and decides to license the Premium IP Package and to
                           buy the Extended Exclusivity on Premium IP Decision
                           Date, then

                           9.3.2.1  Conexant shall make a payment of $1.0
                                    million in Prepaid Royalties within 30 days
                                    of the Premium IP Decision Date.

                           9.3.2.2  Conexant shall make a payment of $1.55
                                    million in Prepaid Royalties upon Intellon's
                                    providing the Premium IP Package to
                                    Conexant.

                           9.3.2.3  Conexant shall make a payment of $2.45
                                    million as an Equity Investment to exercise
                                    the Warrant for all the shares represented
                                    by the Warrant at the repriced $3.50 per
                                    share within 30 days from Premium IP
                                    Decision Date.

                           9.3.2.4  As a consequence of such additional
                                    investment Conexant will obtain:

                                    9.3.2.4.1 Premium IP Package: Conexant will
                                              obtain a copy of the Premium IP
                                              Package and a license to use it
                                              pursuant to Section 11 to develop
                                              and manufacture the Parent IC and
                                              or Derivative Products.

                                       16

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   17

                                                CONFIDENTIAL TREATMENT REQUESTED

                                   9.3.2.4.2 Wafer Rights: Conexant will have
                                             rights to procure the wafers of the
                                             Parent IC from the Conexant &
                                             Intellon Foundry Partner

                                   9.3.2.4.3 Parent IC Test Package: Conexant
                                             will obtain from Intellon the
                                             Parent IC Test Package and a
                                             license to use it to test the
                                             Parent IC wafers.

                                   9.3.2.4.4 Extended Exclusivity: Conexant
                                             will obtain the Extended
                                             Exclusivity. Conexant, at its sole
                                             discretion, if it judges it
                                             necessary to obtain maximum support
                                             in the HomePLNA for Intellon' s
                                             11Mbps Power line OFDM
                                             Specifications, may decide to
                                             authorize in writing Intellon to
                                             provide the Premium IP Package to a
                                             Semiconductor Manufacturer upon
                                             terms and conditions to be
                                             negotiated between Intellon and the
                                             Semiconductor Manufacturer.

                                   9.3.2.4.5 The Royalty Value Cap will be
                                             reduced by the amount of the total
                                             Prepaid Royalty $2.55 million paid
                                             in Phase TWO. Conexant will only
                                             make cash payments for additional
                                             royalties in calendar year 2000 if
                                             the aggregate total of all Per Unit
                                             Royalties that otherwise would be
                                             paid as defined in Section 14.4
                                             exceed $2.55 million.

                  9.3.3    If Conexant has not previously exercised the Warrant
                           and decides to license the Premium IP Package but not
                           to buy the Extended Exclusivity on Premium IP
                           Decision Date

                           9.3.3.1  Conexant shall make a payment of $1.0
                                    million in Prepaid Royalties within 30 days
                                    of Premium IP Decision Date.

                           9.3.3.2  Conexant shall make a payment of $1.55
                                    million in Prepaid Royalties upon Intellon's
                                    providing the Premium IP Package to
                                    Conexant.

                           9.3.3.3  As a consequence of such additional
                                    investment Conexant will obtain:

                                    9.3.3.3.1 Premium IP Package: Conexant will
                                              obtain a copy of the Premium IP
                                              Package and a license to use it
                                              pursuant to Section 11 to develop
                                              and

                                       17

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   18

                                                CONFIDENTIAL TREATMENT REQUESTED

                                             manufacture the Parent IC and / or
                                             Derivative Products.

                                   9.3.3.3.2 Wafer Rights: Conexant will have
                                             rights to procure the wafers of the
                                             Parent IC from the Conexant &
                                             Intellon Foundry Partner

                                   9.3.3.3.3 Parent IC Test Package: Conexant
                                             will obtain from Intellon the
                                             Parent IC Test Package and a
                                             license to use it to test the
                                             Parent IC wafers.

                                   9.3.3.3.4 Basic Exclusivity will be extended
                                             until Extended Exclusivity Decision
                                             Date. Conexant, at its sole
                                             discretion, if it judges it
                                             necessary in order to obtain
                                             maximum support in the HomePLNA for
                                             Intellon' s 11Mbps Power line OFDM
                                             Specifications, may decide to
                                             authorize in writing Intellon to
                                             provide the Premium IP Package to a
                                             Semiconductor Manufacturer.

                                   9.3.3.3.5 The Royalty Value Cap will be
                                             reduced by the amount of the total
                                             Prepaid Royalty $2.55 million paid
                                             in Phase TWO. Conexant will only
                                             make cash payments for additional
                                             royalties in calendar year 2000 if
                                             the aggregate total of all Per Unit
                                             Royalties that otherwise would be
                                             paid as defined in Section 14.4
                                             exceed $2.55 million.

                  9.3.4    If Conexant decides to buy the Extended Exclusivity
                           on Extended Exclusivity Decision Date after having
                           licensed pursuant to Section 11 the Premium IP
                           Package on Premium IP Decision Date

                           9.3.4.1  Conexant shall make a payment of $2.45
                                    million in equity investment to exercise the
                                    Warrant for all the shares represented by
                                    the Warrant at the repriced $3.50 per share
                                    within 30 days from Extended Exclusivity
                                    Decision Date.

                           9.3.4.2  As a consequence of such additional
                                    investment Conexant will obtain:

                                    9.3.4.2.1 Extended Exclusivity: Conexant
                                              will obtain the Extended
                                              Exclusivity. Conexant, at its sole
                                              discretion, if it judges it
                                              necessary to obtain maximum
                                              support in the HomePLNA for
                                              Intellon' s 11Mbps Power line OFDM
                                              Specifications, may decide to
                                              authorize in

                                       18

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   19

                                                CONFIDENTIAL TREATMENT REQUESTED

                                            writing Intellon to provide the
                                            Premium IP Package to a
                                            Semiconductor Manufacturer

         9.4      Other Financial Conditions Conexant and Intellon agree on the
following:
The Series C Preferred Stock shall have terms and conditions comparable to the
Series B Preferred Stock, including without limitation a redemption period from
the date of issuance of the Series C Preferred Stock equal to that of the Series
B Preferred Stock.

10.      MARKETING ACTIVITIES

         10.1     Principle. Conexant and Intellon intend to collaborate to
promote the formation of the HomePLNA and the HPLNA 1.0 Industry Specification,
which is intended to become a worldwide industry sponsored specification for
in-home data and telecommunications networking over power line that incorporates
Intellon's 11Mbps OFDM PowerLine Engine and potentially Conexant's intellectual
property.

         10.2     Activities and Timeframes. Conexant and Intellon shall use
commercially reasonable efforts to coordinate respective activities in the
implementation of the Alliance Formation Plan to promote the formation of the
HomePLNA and the ratification of the Proposal by the Ratification Body.

         10.3     Public Announcement. Within thirty (30) days of Proposal
ratification by the Ratification Body, Conexant shall announce the existence of
this Agreement and of the license granted by Intellon to Conexant in Section
11.3 and the license granted by Conexant to Intellon in Section 11.4 in a public
announcement mutually acceptable to both parties.

         10.4     Customers and HomePLNA Forum. Upon execution of this
Agreement, Conexant and Intellon may disclose Conexant's co-sponsorship of the
Proposal to promoters and other participants and adopters in the HomePLNA or
prospective promoters, participant and adopters of the HomePLNA. Before
proceeding with such disclosure, either party shall inform the other party in
writing on the identity of the third party that will receive the disclosure and
shall obtain written authorization by the other party Program Manager before
proceeding. Either party, at its sole discretion, may request that a reasonably
satisfactory Non-Disclosure Agreement be in place with the third party before
the other party may proceed with the disclosure.

         10.5     Joint Customer Visits. Upon execution of this Agreement,
Conexant and Intellon may participate in joint visits to existing and potential
customers of each other for the Parent IC product, including computer
manufacturers, telephone companies and other equipment manufacturers. Either
party, at its sole discretion, may request that a reasonably satisfactory NDA is
in place with the third party before Conexant and Intellon may proceed with the
joint visit.

                                       19

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   20

                                                CONFIDENTIAL TREATMENT REQUESTED

         10.6     Standard Organization. Upon execution of this agreement,
Conexant and Intellon shall collaborate and coordinate their positions and
contributions to key standards-setting bodies such as ITU, UAWG, ANSI, and ETSI

         10.7     Sales and Marketing. Until at least the second anniversary of
the Effective Date, the sales and marketing organizations of each of the parties
shall cooperate with those of the other party to promote, based on mutually
agreed upon activities, the Parent IC product to be developed pursuant to this
Agreement. This shall include each party stimulating its own internal sales and
marketing organizations to present to customers the advantages and benefits to
each company of the cooperative arrangement provided for in this Agreement and
the combination of the design and development efforts of Conexant and Intellon
in regard to the Parent IC. It shall also include Conexant and Intellon sales
and marketing organizations presenting joint displays, marketing efforts and
seminars and other customer awareness/educational efforts jointly at relevant
principal conferences and trade shows stressing the advantages and benefits of
the cooperative arrangement and of the jointly developed Parent IC.

         11. OWNERSHIP AND LICENSING OF INTELLECTUAL PROPERTY RIGHTS

         11.1     Ownership. Each party owns and shall retain all right, title
and interest in and to all of its Intellectual Property Rights and the other
party shall have no rights with respect to such IPR except as expressly
permitted under this Agreement..

         11.2     Conexant License. Subject to all the terms and conditions of
this Agreement and Conexant's compliance therewith, Intellon hereby grants, as
far as it lawfully and contractually may at no additional cost, to Conexant, a
worldwide, royalty-bearing, non-exclusive, non-transferable license, without the
right to sub-license to Intellon's 11Mbps Power line OFDM Engine, solely for the
purpose of making, having made, using, importing, exporting, offering for sale,
or otherwise selling Licensed Products and for no other purpose.

         11.3     Future Cross Licenses. After the Parent IC is jointly defined
the parties will decide what elements of their respective IPR will be cross
licensed to each other for use in or with the Parent IC.

         11.4     Parent IC Exclusivity. Subject to all the terms and conditions
of this Agreement, Intellon shall not, except to a Semiconductor Foundry, engage
in a similar technology transfer and/or license regarding the Parent IC, with
any third party, to design or develop a third party Parent IC. Intellon shall
not provide the Parent IC design to any Semiconductor Manufacturer.

                                       20

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   21

                                                CONFIDENTIAL TREATMENT REQUESTED

         11.5     Inventions. During the term of this Agreement, all
discoveries, improvements, inventions and trade secrets whether patentable or
not ( Inventions):

                  11.5.1   made in the performance of this Agreement solely by
                           Conexant personnel ("Conexant Development") shall be
                           the sole and exclusive property of Conexant and
                           Conexant shall retain any and all rights to file any
                           patent applications on such Conexant Developments.

                  11.5.2   made in the performance of this Agreement solely by
                           Intellon personnel ("Intellon Development") shall be
                           the sole and exclusive property of Intellon and
                           Intellon shall retain any and all rights to file any
                           patent applications on such Intellon Developments.

                  11.5.3   made in the performance of this Agreement jointly by
                           Conexant and Intellon personnel ( "Joint Development
                           ") shall be jointly owned and the property of
                           Intellon and Conexant. Conexant and Intellon shall
                           jointly retain any and all rights to file any joint
                           patent applications on such Joint Developments.
                           During the prosecution of any applications filed
                           pursuant to this Section 11.5, and prior to
                           responding to Office Actions from the patent
                           authority of any country, each company agrees to
                           provide the other company with timely copies of all
                           correspondence and official papers related to the
                           prosecution any such patent application. All expenses
                           incurred pursuant to the drafting, filing and
                           prosecution of such applications shall be borne
                           equally by both Conexant and Intellon.

                  11.5.4   As to all patentable Joint Developments, Intellon and
                           Conexant shall jointly determine whether to file for
                           patent protection in any country or not. If one of
                           the two companies (Refusing Company) decides not to
                           pursue filing a patent application on the patentable
                           Joint Development in any given country, the other
                           company (Proceeding Company) may independently pursue
                           patent protection of the patentable Joint Development
                           in such country on behalf of Proceeding Company and
                           shall bear all expenses therefor. If Proceeding
                           Company so pursues patent protection in such country,
                           the Proceeding Company shall be the sole owner of any
                           and all resulting patents and shall be entitled to
                           all revenues derived by Proceeding Company relating
                           to the issued patent, provided, however, that
                           Refusing Company shall have a non-exclusive,
                           irrevocable, royalty-free license (with no right to
                           sublicense) under such patent within such country to
                           make, have made, use, import, export, offer for sale,
                           or otherwise sellproducts or processes utilizing or
                           embodying the subject matter claimed in such patent.
                           During the prosecution of any applications filed
                           pursuant to this Section 11.5, and prior to
                           responding to Office

                                       21

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   22

                                                CONFIDENTIAL TREATMENT REQUESTED

                           Actions from the patent authority of any country,
                           Proceeding Company agrees to provide Refusing Company
                           with timely copies of all correspondence and official
                           papers related to the prosecution any such patent
                           application. All expenses incurred pursuant to the
                           drafting, filing and prosecution of such applications
                           shall be borne by Proceeding Company.

         11.6     Subcontractors and Subsidiaries

                  11.6.1   Conexant and Intellon shall have the right to
                           subcontract manufacturing of all or part of Licensed
                           Products to Subcontractors or Semiconductor Foundries
                           provided that each Subcontractor or Semiconductor
                           Foundry agrees in writing to confidentiality
                           provisions materially equivalent to the NDA and
                           otherwise not to disclose or use the Intellon' s
                           11Mbps PowerLine OFDM Specification for any purpose
                           other than such subcontract manufacturing for
                           Conexant or Intellon, respectively.

                  11.6.2   Conexant and Intellon shall have the right to
                           purchase from Conexant & Intellon Foundry Partner
                           either (a) untested Parent IC wafers, or (b) tested
                           Parent IC wafers.

                  11.6.3   Conexant may exercise any of its rights and perform
                           any of its obligations under this Agreement through
                           any of its Subsidiaries, but Conexant shall remain
                           primarily liable for any act or omission of such
                           Subsidiary which results in a violation or other
                           breach of this Agreement.

                                       22

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   23

                                                CONFIDENTIAL TREATMENT REQUESTED

         12.      WARRANTIES AND INDEMNIFICATION

         12.1     Principle. In the case of Intellon, subject to the receipt of
shareholder approval and compliance with the provisions of Article III, Section
9 of its Restated Articles of Incorporation, each party represents and warrants
that, as of the Effective Date it has the right to grant the licenses granted by
it herein, and that the terms and conditions of this Agreement do not violate
its respective Articles of Incorporation or By-Laws and do not conflict with any
other agreement to which it is a party or by which it is bound.

         12.2     No Infringement. Except as specifically noted below as of the
Effective Date, each party warrants that it has not received notice from a third
party that any design previously developed by it, or to be developed by it
pursuant to this Agreement infringes upon any Intellectual Property Rights of
any such third party. It is acknowledged by each party that the other party has
not conducted, and is not responsible for conducting, a patent, copyright or
other Intellectual Property Rights search, to determine if there are any
Intellectual Property Rights of others subject to the warranty provided for in
this Section 12.

         12.3     Indemnification. Should any information or technology licensed
by a party pursuant to this Agreement, become e subject of a claim of
infringement of any Intellectual Property Rights, such party, at its own option
and expense (except as set forth in this Section 12), will (a) correct the
design, within a commercially reasonable time, so that it is non-infringing
without loss of performance or functionality or demonstrate that the design is
non-infringing without correction, or (b) procure for the other party, within a
commercially reasonable time, the right to continue using such information or
technology without liability for infringement, and without further cost to the
other party beyond its obligations provided for under this Agreement, or (c)
return to the other party royalties paid to the other party under this
Agreement, except to the extent that the other party is able itself to obtain
such a license, then such party's obligation to return such royalties shall be
limited to the other party's commercially reasonable cost of obtaining such
license. In the event that the other party remains obligated to pay royalties
under this Agreement, then, to the extent that the license so obtained involves
ongoing royalty payments, such royalty payments shall be credited against
contemporaneous ongoing royalty payments due and owing hereunder by such other
party. The indemnification obligation of this Section 12 shall apply only where
the claim of infringement would not have occurred but for the presence of
information or technology licensed by a party, and shall expressly not include
those cases where the claim of infringement arises because of the combination by
the licensee of such information or technology with other information or
technology of its own or of a third party, and such combination gives rise to
such claim of infringement (except where such combination is the parties
expected natural and intended use of such information or technology), and shall
also expressly not include those cases where the claim of infringement arises
because of the licensor incorporating into such information or technology
subject matter that was expressly directed, instructed or specified by the
licensee to be so incorporated.

                                       23

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   24

                                                CONFIDENTIAL TREATMENT REQUESTED

         12.4     DISCLAIMER. EXCEPT AS EXPRESSLY WARRANTED ABOVE, THE LICENSED
INTELLON' S 11MBPS POWER LINE OFDM ENGINE, INTELLON'S INTELLECTUAL PROPERTY AND
OTHER CONFIDENTIAL INFORMATION IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND.
EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 12, INTELLON HEREBY DISCLAIMS ALL
OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO ALL
TECHNOLOGY, DELIVERABLES, SPECIFICATIONS, CONFIDENTIAL INFORMATION, MATERIALS,
SERVICES AND ALL OTHER MATTER PROVIDED HEREUNDER, INCLUDING WITHOUT LIMITATION,
ANY WARRANTY OF DESIGN, MERCHANTABILITY, NONINFRINGEMENTOR THE VALIDITY,
ENFORCIBILITY OR SCOPE OF ANY IPR, FITNESS FOR A PARTICULAR PURPOSE, WHETHER
ARISING FROM A COURSE OF DEALING OR TRADE PRACTICE AND REGARDLESS OF WHETHER
INTELLON HAS BEEN ADVISED OF ANY OF THE FOREGOING. WITHOUT LIMITING THE
FOREGOING, INTELLON DISCLAIMS ANY WARRANTY THAT CONEXANT WILL BE SUCCESSFUL IN
ITS EFFORTS TO DEVELOP LICENSED PRODUCTS OR THAT LICENSED PRODUCTS WILL
COMMUNICATE IN ANY MANNER OR TO ANY EXTENT WITH ANY OTHER PRODUCTS BASED UPON
THE INTELLON' S 11MBPS POWER LINE OFDM SPECIFICATIONS.

         13.      IP COOPERATION

         13.1     Principle. Conexant and Intellon shall cooperate in order to
maximize Intellon's 11Mbps Power Line OFDM Engine (and Conexant's) IP position
in the Proposal.

         13.2     IP Review. In recognition of the importance of the strength of
Intellon' s IP portfolio to the successful inclusion of Intellon-based IP in the
HomePLNA Standard, Conexant has the right to contribute certain resources to
maximize Intellon's (and thereby, indirectly, Conexant's) IP position. Such
contribution might include a full review of Intellon' s patent applications and
patents directly related to Intellon's 11Mbps Power Line OFDM Engine, for the
purpose of assessing and making recommendations for maximizing Intellon' s IP
portfolio.

         13.3     Timing. Any IP cooperation contemplated by this Agreement
                  would take place from the Effective Date through Premium IP
                  Decision Date.

         Process. In the event that Conexant were to recommend in writing that
Intellon file a new patent application for a specific country(s), Intellon would
have sixty (60) days from that date of such recommendation to opt whether or not
to file for the recommended patent protection.

                                       24

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   25

                                                CONFIDENTIAL TREATMENT REQUESTED

         If Intellon were to pursue the recommended patent protection, then
Intellon would be the sole owner of any and all resulting patents and would be
entitled to all revenues derived by Intellon relating to the issued patent;
provided, however, that Conexant would have a non-transferable, non-exclusive,
royalty-free license (with no right to sublicense) under such patent within each
relevant country to make, have made, use or sell products or processes utilizing
or embodying the subject matter claimed in such patent. During the prosecution
of any applications filed pursuant to this Section, and prior to responding to
Office Actions from the patent authority of any country, Intellon would agree to
provide Conexant with timely copies of all correspondence and official papers
related to the prosecution any such patent application. All expenses incurred
pursuant to the drafting, filing and prosecution of such applications would be
borne by Intellon.

         If Intellon were to decide not to pursue filing for patent protection
as recommended by Conexant within sixty (60) days of the date of Conexant's
written recommendation, then Conexant could independently pursue patent
protection in each such country on behalf of and for its sole benefit, and
Conexant would bear all expenses therefor. If Conexant were to pursue patent
protection in any such country, Conexant would be the sole owner of any and all
resulting patents and would be entitled to all revenues derived by Conexant
relating to the issued patent; provided, however, that Intellon would have a
non-transferable, non-exclusive, royalty-free license (with no right to
sub-license) under such patent within such country to make, have made, use or
sell products or processes utilizing or embodying the subject matter claimed in
such patent. During the prosecution of any applications filed pursuant to this
Section, and prior to responding to Office Actions from the patent authority of
any country, Conexant would agree to provide Intellon with timely copies of all
correspondence and official papers related to the prosecution any such patent
application. All expenses incurred pursuant to the drafting, filing and
prosecution of such applications would be borne by Conexant.

13.5     Non Competing Technology. During the Exclusivity Period Conexant agrees
to not develop or have a third party develop for Conexant any similar product.

14.      ROYALTY

         14.1     Principle. Conexant and Intellon agree to have different
Royalty Rates. Such Royalty Payments combined with **********.

         14.2     **********

         14.3     Manufacturing for Intellon. Conexant would owe no royalties to
Intellon for Parent IC or Derivative Products manufactured by Conexant for
Intellon.

         14.4     Per Unit Royalty. Conexant would pay to Intellon a per unit
royalty in an amount equal to the mathematical ********** (i)**********; (ii)
**********; and (iii) ********** for each Licensed Product Sold to any third
party by Conexant.

                                       25

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   26

                                                CONFIDENTIAL TREATMENT REQUESTED

         14.5     Royalty Rates. Four royalty rates are defined for the purpose
                  of this agreement:

                           **********
                           **********

                           **********

                           **********
                           **********

         14.6     Limitations. Total License and/or Royalties paid by Conexant
would not exceed the Value Cap or the Time Cap from January 1st 2000, whichever
accrues or occurs first.

         14.7     Ratio Determination. The Ratio is the ratio in which the
numerator is the die area occupied by the HPLNA 1.0 functionality (as embodied
by Intellon 's 11Mbps PowerLine OFDM Engine) less the area required for any
external memory buffers and the denominator is the total die area less the area
required for any external memory buffers. Prior to the first shipment by
Conexant of any Licensed Product, Conexant and Intellon shall appoint a mutually
agreed upon, objective, third party with proper experience and skill in the art
to determine the Ratio ("Professor"). Conexant shall disclose to the Professor
all information and materials necessary to determine the Ratio. Intellon and
Conexant agree that the Ratio established by the Professor shall be conclusive
and binding upon the parties. The parties shall share equally the costs of
retaining the Professor; provided, however, that if the Professor is asked to
determine whether the die area occupied by the HPLNA 1.0 functionality includes
die area that is not embodied by Intellon's 11Mbps PowerLine OFDM Engine, then
all costs of retaining the Professor shall be borne by Conexant alone.

         14.8     Future Generations. If the Ratification Body (i) adopts a
second generation specification, ********** year later than HPLNA 1.0
ratification date, with a speed greater than the one provided by the Intellon's
11Mbps OFDM PowerLine Engine ("HPLNA 2.0 Specification") and (ii) such HPLNA 2.0
Specification requires the Intellon's 11Mbps OFDM PowerLine Engine solely for
the purposes of supporting backwards compatibility, ********** for the sale of
future generation licensed products that incorporate both Intellon's 11Mbps OFDM
PowerLine Engine and the new HPLNA2.0 higher speed PowerLine Engines
manufactured after the date of such adoption. If the HomePLNA (i) adopts a third
generation specification, ********** later than HPLNA 1.0 ratification date,
********** ("HPLNA 3.0 Specification") and (ii) such HPLNA 3.0 Specification
requires the Intellon's 11Mbps OFDM PowerLine Engine solely for the purposes of
supporting backwards compatibility, ********** licensed products that
incorporate the Intellon's 11Mbps OFDM PowerLine Engine and the new HPLNA 3.0
higher speed PowerLine Engines manufactured after the date of such adoption. If
Intellon were the technology provider of the new HPLNA 2.0 and HPLNA

                                       26

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   27

                                                CONFIDENTIAL TREATMENT REQUESTED

3.0 to be adopted by the Ratification Body, then Conexant shall negotiate new
licenses with Intellon.

         14.9     Payments and Reporting.

                  14.9.1       Records and Audits. With respect to the Per
                           Unit Royalties set forth herein, Conexant shall keep
                           complete and accurate records. These records shall be
                           retained for a period of at least three (3) years
                           from the date of payment, notwithstanding the
                           expiration or other termination of this Agreement.
                           Intellon through an independent accounting firm shall
                           have the right to examine and audit, not more than
                           once a year unless the preceding audit revealed a
                           discrepancy, and during normal business hours, all
                           such records and such other records and accounts as
                           may contain, under recognized accounting practices,
                           information bearing upon the amount of Per Unit
                           Royalties payable to Intellon under this Agreement.
                           Prompt adjustment shall be made by Conexant to
                           compensate for any errors and/or omissions disclosed
                           by such examination or audit which result in an
                           underpayment of royalties hereunder.

                  14.9.2       Reports and Payment Terms. Within sixty (60)
                           days after the end of each calendar quarter, until
                           all Per Unit Royalties payable hereunder shall have
                           been reported and paid, Conexant shall furnish to
                           Intellon a statement, in suitable form, showing the
                           number of Licensed Products Sold to third parties
                           itemized by product, and the amount of royalty
                           payable thereon. If no products subject to payment of
                           Per Unit Royalties have been Sold, that fact shall be
                           shown on such statement. Also, within such sixty-(60)
                           day period Conexant shall pay to Intellon the Per
                           Unit Royalties payable hereunder for such quarter.

         14.10    Taxes. Conexant shall be solely responsible for any
withholding tax imposed by the country in which the Conexant is located or any
other non-United States government tax imposed by any other non-United States
Government, with respect to the License Fees, NRE, Per Unit Royalties, and other
payments to be made pursuant to this Agreement; i.e., the amounts specified in
this Agreement shall be the amounts actually received by Intellon from Conexant,
without any deductions.

15.      MANUFACTURING & PRODUCTION

Principle. Conexant and Intellon will have the right to manufacture and market
the Parent IC and Derivative Products under the companies' respective trademarks
and other labels.

                                       27

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Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   28

                                                CONFIDENTIAL TREATMENT REQUESTED

16.      LIMITATION OF LIABILITY

         16.1 Cap. ********** REGARDLESS WHETHER THE UNDERLYING CLAIM IS BASED
IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.

         16.2 Exclusion. IN NO EVENT SHALL CONEXANT OR INTELLON BE LIABLE FOR
ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR BUSINESS
INTERRUPTION) ARISING OUT OF THIS AGREEMENT OR THE USE OF OR INABILITY TO USE
ANY PRODUCT, EQUIPMENT OR ASSOCIATED SOFTWARE DESCRIBED HEREIN EITHER SEPARATELY
OR IN COMBINATION WITH ANY OTHER PRODUCT, EQUIPMENT, SOFTWARE OR OTHER MATERIALS
EVEN IF INTELLON OR CONEXANT HAS BEEN ADVISED OF THE POSSIBILITY OR CERTAINTY OF
SUCH DAMAGES.

         16.3 Failure of Essential Purpose. The limitations in Sections 16 shall
survive and apply even if any limited remedy in this Agreement is found to have
failed of its essential purpose.

17.      CONFIDENTIAL INFORMATION

         17.1     NDA. The term "Confidential Information" hereunder shall
have the same meaning as in the NDA and shall be subject to and treated in
accordance therewith, except as expressly modified pursuant to this Section 17.

         17.2     Amendment of NDA. The purposes of the NDA shall include, in
addition to the discussion of a business relationship, all disclosures of
Confidential Information made pursuant to this Agreement. Furthermore, if there
is a "required" disclosure pursuant to Section 4(vii) of the NDA, the parties
shall cooperate with each other to minimize the scope of such disclosure. Also,
to the extent Section 16 of the NDA conflicts with this Agreement, this
Agreement shall control, and Section 5 of the NDA shall be considered void and
of no effect. Finally, all Confidential Information disclosed pursuant to the
NDA shall be considered disclosed hereunder.

         17.3     Additional Responsibilities. Where applicable, or as
otherwise required by this Agreement, each party shall obtain the execution of
confidentiality agreements with its Subsidiaries, employees, agents and
consultants having access to Confidential Information of the other party, and
shall diligently enforce such agreements, or shall be responsible for the
actions of such Subsidiaries, employees, agents and consultants and
Subcontractors in this respect.

         17.4     Remedies. Conexant and Intellon agree that the unauthorized
use by a party of Confidential Information will diminish the value of such
information. Therefore, if a

                                       28

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   29

                                                CONFIDENTIAL TREATMENT REQUESTED

receiving party breaches any of its obligations with respect to the
confidentiality or use of the Confidential Information hereunder, the disclosing
party is entitled to seek equitable relief to protect its interest herein,
including injunctive relief, as well as money damages.

         17.5     Confidentiality of Agreement. Each party agrees that the terms
and conditions of this Agreement shall be treated as Confidential Information
and that neither party will disclose the terms or conditions to any third party
(including any promoters, or adopters or participants in the HPLNA) without the
prior written consent of the other party, provided, however, that each party may
disclose the terms and conditions of this Agreement: (i) as required by any
court or other governmental body provided the receiving party uses reasonable
efforts to give the disclosing party reasonable notice of such required
disclosure; (ii) as otherwise required by law provided the receiving party uses
reasonable efforts to give the disclosing party reasonable notice of such
required disclosure; (iii) to accountants and other professional advisors
provided such accountants or professional advisors have entered into a written
agreement with the respective party containing substantially equivalent
restrictions regarding Confidential Information to those contained herein; (iv)
to banks, investors or other financial sources and their advisors provided such
banks, investors and other financial sources and their advisors have entered
into a written agreement with the respective party containing substantially
equivalent restrictions regarding Confidential Information to those contained
herein; or (v) in connection with the enforcement of this Agreement or rights
under this Agreement

18.      TERM AND TERMINATION

         18.1     Term. The Agreement shall commence as of the Effective Date
and, unless and until terminated hereunder, shall continue (the "Term").

         18.2     Termination

                  (a)      If Intellon's shareholders do not approve the
issuance of the Series C Preferred Stock as contemplated hereunder, then this
Agreement shall terminate automatically without any further action by the
parties. Upon such termination the parties shall return all monies paid to date.

                  (b)      If either party defaults in the performance of any
material obligation hereunder and if any such default is not corrected within
forty-five (45) days after the defaulting party receives written notice thereof
from the non-defaulting party, then the non-defaulting party, at its option,
may, in addition to any other remedies it may have, terminate this Agreement.

                  (c)      Either party may terminate this Agreement effective
upon written notice to the other party in the event that the other party becomes
the subject of a voluntary or involuntary petition in bankruptcy or any
proceeding relating to insolvency, or reorganization for the benefit of
creditors, (and in the case of an involuntary petition, if that petition or
proceeding is not dismissed within one hundred twenty (120) days after filing).

                                       29

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   30

                                                CONFIDENTIAL TREATMENT REQUESTED

                  (d)      Either party may terminate this Agreement effective
upon written notice to the other party in the event that the Proposal is not
adopted, in whole or in part, by the HPLNA as the HPLNA 1.0 Specification.

         18.3     Sale of Inventory. Unless this Agreement is terminated by
Intellon for a default by Conexant, upon expiration or termination of this
Agreement, Conexant shall have one hundred and eighty (180) days to sell any
Licensed Products in its inventory as of the effective date of such expiration
or termination.

         18.4     Survival

         (a) Upon any termination or expiration of this Agreement for any
reason, the parties shall return to the disclosing party, or certify the
destruction of, all Confidential Information of the disclosing party, including
all copies thereof in whole or in part.
         (b) Upon termination of this Agreement for (i) a material breach by a
party or (ii) the insolvency of a party, all licenses and rights granted to the
defaulting or insolvent party shall terminate, and the defaulting or insolvent
party shall promptly certify the destruction of or deliver to the other party
all materials comprising, incorporating, or using, in whole or in part, any of
the other party's Confidential Information.
         (c) In addition, except as otherwise specified herein, all amounts (i)
paid to Intellon prior to the date of termination or expiration are
nonrefundable; and all amounts (ii) due or payable to Intellon as a result of
events prior to the date of termination or expiration shall remain due and
payable. The provisions of Sections 3.5, 11.1, 12.3, 12.4, 16, 17, 18, and 19
shall survive any expiration or termination of this Agreement for any reason.

19.      GOVERNING LAW; DISPUTE RESOLUTION

    19.1    Governing Law. This Agreement shall be governed by and interpreted
         in accordance with the laws of the State of New York without reference
         to conflict of laws principles.

    19.2    Dispute Resolution. All disputes and claims arising out of this
         Agreement shall be subject to the exclusive jurisdiction and venue of
         the state and federal courts nearest the principal place of business
         of the defendant, and the parties agree and consent to the personal and
         exclusive jurisdiction of these courts.

20.      MISCELLANEOUS

         20.1     Assignment. Neither party may assign or delegate this
Agreement or any of its licenses, rights or duties under this Agreement, by
operation of law or otherwise, without the prior written consent of the other
party, except either party may assign this Agreement to a person or entity into
which it has merged or which has otherwise succeeded to all or substantially all
of its business and assets, and which has assumed in

                                       30

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   31

                                                CONFIDENTIAL TREATMENT REQUESTED

writing or by operation of law its obligations under this Agreement. Any
attempted assignment in violation of this Section 20.1 shall be void.

         20.2     Authority. Each party represents that all corporate action
necessary for the authorization, execution and delivery of this Agreement by
such party and the performance of its obligations hereunder has been taken.

         20.3     Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed (by registered or
certified mail if available), postage prepaid, or otherwise delivered by hand,
by messenger or by telecommunication, addressed to the addresses first set forth
above or at such other address furnished with a notice in the manner set forth
herein. Such notices shall be deemed to have been served when delivered or, if
delivery is not accomplished by reason of some fault of the addressee, when
tendered.

         20.4     Program Manager. Each party shall assign one or two qualified
individuals (Program Manager) for purposes of acting as a liaison for delivery
and receipt of technical information pursuant to this Agreement. As of the
Effective Date, **********. Either party may designate new Program Managers to
be effective upon written notice to the other party.

         20.5     Export Controls. Conexant understands and acknowledges that
Intellon is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce, which prohibit export or diversion of certain
products and technology to certain countries. Any and all obligations of
Intellon to provide Intellon' s 11Mbps Power line OFDM Engine, and any other
materials in any media in which any of the foregoing is contained, training,
technical assistance, and related technical data (collectively, "Data") shall be
subject in all respects to such United States laws and regulations as shall from
time to time govern the license and delivery of technology and products abroad
by persons subject to the jurisdiction of the United States, including the
Export Administration Act of 1979, as amended, any successor legislation, and
the Export Administration Regulations issued by the Department of Commerce,
International Trade Administration, Bureau of Export Administration. Conexant
agrees to cooperate with Intellon, including without limitation, providing
required documentation, in order to obtain export licenses or exemptions
therefrom. Conexant warrants that it will comply in all respects with the export
and re-export restrictions set forth in the export license (if necessary) for
every item shipped to Conexant and will otherwise comply with the Export
Administration Regulations or other United States laws and regulations in effect
from time to time.

         20.6     Partial Invalidity. If any paragraph, provision, or clause
thereof in this Agreement shall be found or be held to be invalid or
unenforceable in any jurisdiction in which this Agreement is being performed,
the remainder of this Agreement shall be valid and enforceable and the parties
shall negotiate, in good faith, a substitute, valid and enforceable provision
which most nearly effects the parties' intent in entering into this Agreement.

                                       31

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Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   32

                                                CONFIDENTIAL TREATMENT REQUESTED

         20.7     Counterparts. This Agreement may be executed in two (2) or
more counterparts, all of which, taken together, shall be regarded as one and
the same instrument.

         20.8     Relationship of Parties. The parties hereto are independent
contractors. Nothing contained herein or done in pursuance of this Agreement
shall constitute either party the agent of the other party for any purpose or in
any sense whatsoever, or constitute the parties as partners or joint ventures.

         20.9     Modification. No alteration, amendment, waiver, cancellation
or any other change in any term or condition of this Agreement shall be valid or
binding on either party unless the same shall have been mutually assented to in
writing by both parties.

         20.10    Waiver. The failure of either party to enforce at any time the
provisions of this Agreement, or the failure to require at any time performance
by the other party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the right of either party to enforce each and every such provision
thereafter. The express waiver by either party of any provision, condition or
requirement of this Agreement shall not constitute a waiver of any future
obligation to comply with such provision, condition or requirement.

         20.11    Section Headings. The Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         20.12    Currency. All dollar amounts are specified and payable in U.S.
dollars.

         20.13    Entire Agreement. This Agreement and the Exhibits hereto
constitute the entire agreement between the parties and supersede all previous
agreements and understandings, whether oral or written, between the parties
hereto with respect to the subject matter hereof and no agreement or
understanding varying or extending the same shall be binding upon either party
hereto unless in a written document signed by the parties to be bound thereby.

                                       32

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   33

                                                CONFIDENTIAL TREATMENT REQUESTED

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by duly authorized officers or representatives as of the date first above
written.

INTELLON, INC.                           CONEXANT SYSTEMS, INC.
("Intellon")                             ("Conexant")

By:                                      By:
   ---------------------------------           --------------------------------

Name:                                    Name:
     -------------------------------           --------------------------------

Title:                                   Title:
      ------------------------------           --------------------------------

Date:                                    Date:
     -------------------------------           --------------------------------

                                       33

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.<PAGE>   1

                                                                    Exhibit 10.7
                                                CONFIDENTIAL TREATMENT REQUESTED

                         DEVELOPMENT & LICENSE AGREEMENT

        THIS DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is entered into
on September ____, 1998, ("Effective Date") between MICROSOFT CORPORATION, a
Washington corporation with its principal location at One Microsoft Way,
Redmond, WA, 98052 U.S.A. ("Microsoft") and INTELLON CORPORATION, a Florida
corporation with its principal location at 5100 West Silver Springs Blvd.,
Ocala, FL, 34482, U.S.A. ("Intellon"). Microsoft and Intellon are each referred
to herein as a "Party" and collectively as the "Parties".

                                    RECITALS

        WHEREAS, a technology commonly referred to as "Power Line Carrier" or
"PLC" is being developed by various companies including Intellon, which
technology uses the alternating current ("AC") wiring in a home or building to
move and control data between electronic devices connected to the home's or
building's AC wiring, by using the AC outlets as power and dataports for the
electronic devices;

        WHEREAS, Intellon has developed a PLC technology known as the "Spread
Spectrum Carrier (SSC)" which technology is used for controlling electronic
devices connected to AC wiring and is developing a second PLC technology known
as "Intellon Enhanced Orthogonal Frequency Division Multiplexing (IEOFDM)" which
technology is used for networking electronic devices connected to AC wiring;

        WHEREAS, Microsoft is willing to make certain payments to Intellon as
specified below in consideration of Intellon granting Microsoft the below
specified license rights with respect to the technology utilized in the SSC and
the IEOFDM as accepted by Microsoft;

        WHEREAS, upon Microsoft's acceptance of the SSC and the IEOFDM
technologies, Microsoft further desires to discuss with Intellon, Intellon's
modification of the SSC and the IEOFDM in order to optimize such technology and
devices for Microsoft applications and whereas Intellon is willing to undertake
such customization;

        NOW THEREFORE, in consideration of the foregoing and of the mutual
promises herein contained, the Parties hereby agree as follows:

                                    AGREEMENT

1.      DEFINITIONS.  As used in this Agreement, the following terms shall have
the following meanings whenever initially capitalized:

        "Affiliates" means an entity which controls, is controlled by, or is
under common control with either Microsoft or Intellon. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a legally recognizable entity,
whether through the ownership of voting shares, by contract, or otherwise. In
the case of such an entity that is a partnership, limited liability company,
corporation, or similar entity and that has partners, members, or shareholders
with equal ownership interests or equal control interests (by contract or
otherwise), each such partner, member, or shareholder shall be deemed to possess
the power to direct or cause the direction of the management and policies of
that entity.

        "ASIC" means an application specific integrated circuit.

                                       1

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   2
                                                CONFIDENTIAL TREATMENT REQUESTED

        "Authorized Manufacturer" means an entity authorized to manufacture
``Royalty-Bearing ASICs.

        "Confidential Information" means: (i) any trade secrets relating to
either Party's product plans, designs, costs, prices and names, finances,
marketing plans, business opportunities, personnel, research development or
know-how; (ii) any information designated by the disclosing Party as
confidential in writing or that the disclosing person states to be considered
proprietary or confidential, or that would logically be considered proprietary
or confidential under the circumstances of the disclosure; and (iii) the terms
and conditions of this Agreement. "Confidential Information" shall not include
information that: (i) is or becomes generally known or available by publication,
commercial use or otherwise through no fault of the receiving Party; (ii) is
known and has been reduced to tangible form by the receiving Party at the time
of disclosure and is not subject to restriction; (iii) is independently
developed or learned by the receiving Party without reference to any information
received by that Party from the disclosing Party; (iv) is lawfully obtained from
a Third Party that has the right to make such disclosure; or (v) is made
generally available by the disclosing Party without restriction on disclosure.

        "Derivative Technology" means: (i) for copyrightable or copyrighted
material, any translation (including translation into other computer languages),
portation, modification, correction, addition, extension, upgrade, improvement,
compilation, abridgement or other form in which an existing work may be recast,
transformed or adapted; (ii) for patentable or patented material, any
improvement thereon; and (iii) for material which is protected by trade secret,
any new material derived from such existing trade secret material, including new
material which may be protected by copyright, patent and/or trade secret.

        "IEOFDM" means Intellon's PLC signaling technology for networking
electronic devices at a minimum of 2 Mbps, which device is based on the
Orthogonal Frequency Division Multiplexing (OFDM) modulation technique and which
is more fully described in the attached Exhibit A.

        "Intellectual Property" means (i) any existing or future patent
applications and issued patents ; (ii) any mask works; (iii) any copyrights or
moral rights; and (iv) any trade secret or other proprietary rights (other than
trademarks, trade names or service marks).

        "Intellon Intellectual Property" has the meaning set forth in Section
3.6.

        "Microsoft PLC Compatible" means, with respect to a PLC modem device,
that such device is (i) able to interoperate with Microsoft Products within the
limited field of use set forth in Section 4.1.1 and (ii) intended to be marketed
under such a trademark or logo (or similar trademark or logo) pursuant to a logo
program intended to be established by Microsoft.

        "Microsoft PLC Product" means any Microsoft Product, including any
subassembly or portion thereof, that embodies the Phase 1 Intellectual Property,
Intellon Intellectual Property or Phase 2 Intellectual Property.

        "Microsoft Product" means a product marketed by Microsoft under its
trademark(s) or brand name(s), whether such trademark(s) or brand name(s) appear
alone or in conjunction with the trademark(s) or brand name(s) of Third Parties;
provided that a product labeled as "Microsoft PLC Compatible" without any
additional indication or use of the Microsoft trademark shall not be considered
a Microsoft Product for purposes of this Agreement.

                                       2

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   3
                                                CONFIDENTIAL TREATMENT REQUESTED

        "Phase 1" refers to the development by Intellon, and delivery to
Microsoft for its acceptance, of the Phase 1 Deliverables.

        "Phase 1 Acceptance Criteria" means the criteria and methods used to
evaluate the Phase 1 Deliverables to determine whether or not they are
acceptable.

        "Phase 1 Deliverables" collectively refers to the items set forth in the
Phase 1 Statement of Work which are required for delivery to Microsoft by
Intellon.

        "Phase 1 Intellectual Property" means the Intellectual Property embodied
in Phase 1 Deliverables or necessary for the commercialization of the Phase 1
Deliverables.

        "Phase 1 Requirements" means the description of the functional
characteristics necessary of the Phase 1 Deliverables.

        "Phase 1 Schedule" means the schedule(s) for completion of the Phase 1
Statement of Work.

        "Phase 1 Specifications" means the detailed technical specifications for
the Phase 1 Deliverables.

        "Phase 1 Statement of Work" means a schedule of tasks and
responsibilities to be accomplished in the creation and delivery of the Phase 1
Deliverables.

        "Phase 2" refers to the development by Intellon, and delivery to
Microsoft for its acceptance, of the Phase 2 Deliverables.

        "Phase 2 Acceptance Criteria" means the criteria and methods used to
evaluate the Phase 2 Deliverables to determine whether or not they are
acceptable.

        "Phase 2 Budget" means the budget for the completion of the Phase 2
Statement of Work.

        "Phase 2 Deliverables" collectively refers to the items set forth in the
Phase 2 Statement of Work required for delivery to Microsoft by Intellon, and
shall include without limitation the elements set forth in Exhibit D.

        "Phase 2 Intellectual Property" means the Intellectual Property (other
than Phase 1 Intellectual Property and Intellon Intellectual Property) created
by or for Intellon and/or Microsoft embodied in the Phase 2 Deliverables or
necessary for the commercialization of the Phase 2 Deliverables.

        "Phase 2 Requirements" means the description of the functional
characteristics necessary of the Phase 2 Deliverables.

        "Phase 2 Schedule" means the schedule for the completion of the Phase 2
Statement of Work.

        "Phase 2 Specifications" means the detailed technical specifications for
the Phase 2 Deliverables.

        "Phase 2 Statement of Work" means a schedule of tasks and
responsibilities to be accomplished in the creation and delivery of the Phase 2
Deliverables.

        "Royalty-Bearing ASIC" means an ASIC which is subject to the license
grants in Section 2.3 and 3.6, any part of which is protected by a patent, mask
work, or copyright included within the definition of

                                       3

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   4
                                                CONFIDENTIAL TREATMENT REQUESTED

Phase 1 Intellectual Property or Intellon Intellectual Property, and which is
not an integrated portion and/or component of a Microsoft Product.

        "Safe Ad Date" means the date on which Microsoft's retailers are
authorized by Microsoft to advertise the availability of a Microsoft PLC
Product.

        "SSC" means Intellon's PLC signaling technology for controlling
electronic devices, which is based on the Binary Phase Shift Keying (BPSK)
modulation technique and which is more fully described in the attached Exhibit
A.

        "Third Party" means a party other than Microsoft or its Affiliates or
Intellon or its Affiliates.

        All other initially capitalized terms shall have the meanings
hereinafter or hereinabove assigned to them.

2.      PHASE 1.

        The purpose of Phase 1 is to demonstrate that the Phase 1 'Deliverables
meet Microsoft's technology requirements for Power Line Carrier.

        2.1.   DEFINITION, DEVELOPMENT, AND DELIVERY OF THE PHASE 1
               DELIVERABLES.

               2.1.1. The Phase 1 Requirements, Phase 1 Specifications, Phase 1
               Acceptance Criteria, Phase 1 Schedule and Phase 1 Statement of
               Work for the Phase 1 Deliverables are attached as Exhibit C.

               2.1.2. Intellon shall develop, manufacture and deliver the Phase
               1 Deliverables to Microsoft in accordance with the Phase 1
               Schedule, Phase 1 Requirements, Phase 1 Specifications, and
               Phase 1 Statement of Work. If Intellon fails to deliver any
               Phase 1 Deliverable within fifteen (15) working days of the
               applicable date specified in the Phase 1 Schedule, then
               Microsoft may, at its option: (i) extend the time period for the
               delivery of the Phase 1 Deliverables; or (ii) terminate this
               Agreement upon written notice without any opportunity for cure.

        2.2    EVALUATION, ACCEPTANCE, AND CORRECTION OF THE PHASE 1
        DELIVERABLES. Microsoft shall evaluate the Phase 1 Deliverables and
        shall submit a written acceptance or rejection of the same to Intellon
        within thirty (30) business days following Microsoft's receipt of the
        Phase 1 Deliverables, such acceptance to be based on whether the Phase 1
        Deliverables were delivered in their entirety and whether the Phase 1
        Deliverables as delivered meet the Phase 1 Acceptance Criteria, Phase 1
        Requirements, Phase 1 Specifications and Phase 1 Statement of Work.
        Microsoft's acceptance will be given either in writing or via email, and
        Microsoft shall not unreasonably withhold its acceptance. If Microsoft
        determines that the Phase 1 Deliverables were not delivered in their
        entirety or if Microsoft identifies errors in the Phase 1 Deliverables
        (i.e. noncompliance with the Phase 1 Acceptance Criteria, Phase 1
        Requirements, Phase 1 Specifications and Phase 1 Statement of Work),
        then Microsoft shall notify Intellon in writing of the incomplete nature
        of the delivery and/or the errors identified by Microsoft and Intellon
        shall deliver to Microsoft a complete and/or corrected version of the
        Phase 1 Deliverables within such time as may be mutually agreed upon in
        writing between Microsoft and Intellon, or if the Parties cannot agree
        within three (3) days, then such delivery shall be made within thirty
        (30) days thereafter. If Microsoft identifies incompleteness in the
        corrected Phase 1 Deliverables or errors in the corrected Phase 1

                                       4

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   5
                                                CONFIDENTIAL TREATMENT REQUESTED

        Deliverables, then Parties shall repeat the foregoing process one more
        time (e.g, if Microsoft identifies errors in the corrected Phase 1
        Deliverables, Microsoft shall notify Intellon in writing and Intellon
        shall have the opportunity to correct those errors and deliver a second
        corrected Phase 1 Deliverables to Microsoft for its acceptance). If
        Microsoft determines that the second corrected Phase 1 Deliverables were
        not delivered in their entirety or identifies errors in the second
        corrected Phase 1 Deliverables, then Microsoft may, at its option: (i)
        extend the time period for Intellon to deliver acceptable Phase 1
        Deliverables; or (ii) terminate this Agreement upon written notice
        without opportunity for cure.

        2.3    LICENSE GRANT TO THE PHASE 1 INTELLECTUAL PROPERTY. Intellon
        hereby grants to Microsoft, a non-exclusive, perpetual, irrevocable,
        royalty-free (except with respect to Royalty-Bearing ASICs, as provided
        in Exhibit B), fully paid up, worldwide right and license to:

               2.3.1 Use, copy, edit, format, modify, and translate the Phase 1
               Intellectual Property and Phase 1 Deliverables and create and
               have created Derivative Technology of the Phase 1 Intellectual
               Property and Phase 1 Deliverables;

               2.3.2 Make, sell, rent, lease or otherwise distribute, and have
               made, reproduced, rented, leased or otherwise distributed, to and
               by Third Parties, products that incorporate the Phase 1
               Intellectual Property and Phase 1 Deliverables and any Derivative
               Technology thereof created by Microsoft;

               2.3.3 Make, use, sell, rent, lease or otherwise distribute and
               have made, reproduced, rented, leased or otherwise distributed,
               to and by Third Parties, software products that support products
               or applications incorporating the Phase 1 Intellectual Property
               and Phase 1 Deliverables and any Derivative Technology thereof
               created by Microsoft; and

               2.3.4 Grant the rights set forth in Section 2.3.1 and 2.3.2 in
               the Phase 1 Intellectual Property and Phase 1 Deliverables to
               Third Parties.

        Except as expressly licensed to Microsoft in this Agreement, Intellon
        retains all right, title and interest in and to the Phase 1 Intellectual
        Property and Phase 1 Deliverables.

        2.4    PAYMENT FOR THE PHASE 1 DELIVERABLES AND THE LICENSE GRANTS. In
        consideration of Intellon's developing, manufacturing and delivering the
        Phase 1 Deliverables to Microsoft and in consideration of the license
        rights granted Microsoft in the Phase 1 Intellectual Property and Phase
        1 Deliverables, Microsoft agrees to pay Intellon the sum of Six Million
        Dollars (US $6,000,000). ********** of this amount shall be paid within
        ********** of the **********. The balance of ********** shall be paid
        within ********** of Microsoft's ********** above.

3.      PHASE 2.

        The purpose of Phase 2 is for Microsoft and Intellon to engage in a
development program to create ASIC devices for the Microsoft PLC program.

        3.1    AGREEMENT OF THE PARTIES WITH RESPECT TO INTELLON'S DEVELOPMENT
        OF THE PHASE 2 DELIVERABLES. Following Microsoft's acceptance of the
        Phase 1 Deliverables pursuant to Section 2.2, the Parties agree to meet
        and discuss Intellon's developing the Phase 2 Deliverables for
        Microsoft. If the Parties reach written agreement on an initial version
        of the Phase 2

                                       5

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   6
                                                CONFIDENTIAL TREATMENT REQUESTED

        Requirements, the Phase 2 Specifications, the Phase 2 Acceptance
        Criteria, the Phase 2 Statement of Work, the Phase 2 Schedule, and the
        Phase 2 Budget, then the Parties shall execute and attach to this
        Agreement a written document confirming the same which includes the
        initial version of the Phase 2 Requirements, the Phase 2 Specifications,
        the Phase 2 Acceptance Criteria, the Phase 2 Statement of Work, the
        Phase 2 Schedule and the Phase 2 Budget. Intellon understands that
        Microsoft in its sole discretion, may elect to make additions, deletions
        or other changes, to the Phase 2 Requirements which may affect the Phase
        2 Deliverables and/or the Phase 2 Specifications at any time during
        Phase 2. Upon notice of any such changes by Microsoft, Intellon and
        Microsoft shall work together to make any necessary changes to the Phase
        2 Deliverables, the Phase 2 Specifications, the Phase 2 Acceptance
        Criteria, the Phase 2 Statement of Work, the Phase 2 Schedule and/or the
        Phase 2 Budget as may be necessary in order to accommodate any such
        changes. If the Parties fail to promptly reach written agreement on the
        initial Phase 2 Specifications, Phase 2 Acceptance Criteria, Phase 2
        Schedule, Phase 2 Statement of Work, and Phase 2 Budget, then Microsoft
        shall be under no obligation to proceed with Phase 2.

        3.2    CREATION, MANUFACTURE AND DELIVERY OF THE PHASE 2 DELIVERABLES.
        Following the Parties reaching agreement on Intellon's development of
        the Phase 2 Deliverables as set forth in Section 3.1 above, Intellon
        shall develop, manufacture and deliver the Phase 2 Deliverables to
        Microsoft in accordance with the Phase 2 Requirements, Phase 2
        Specifications, Phase 2 Statement of Work, Phase 2 Schedule and the
        Phase 2 Budget. If Intellon fails to deliver any Phase 2 Deliverable
        within fifteen (15) working days of the applicable date specified in the
        Phase 2 Schedule, then Microsoft may, at its option: (i) extend the time
        period for the delivery of the Phase 2 Deliverable in question; or (ii)
        terminate this Agreement upon written notice without opportunity for
        cure.

        3.3    EVALUATION, ACCEPTANCE, AND CORRECTION OF THE PHASE 2
        DELIVERABLES. Microsoft shall evaluate each of the Phase 2 Deliverables
        and shall submit a written acceptance or rejection of the same to
        Intellon within thirty (30) business days following Microsoft's receipt
        of a given Phase 2 Deliverable, Microsoft's acceptance to be based on
        whether the Phase 2 Deliverable was delivered in its entirety and
        whether the Phase 2 Deliverable as delivered meets the Phase 2
        Acceptance Criteria, Phase 2 Requirements, Phase 2 Specifications and
        Phase 2 Statement of Work. Microsoft's acceptance will be given either
        in writing or via email, and Microsoft shall not unreasonably withhold
        its acceptance. If Microsoft determines that the given Phase 2
        Deliverable was not delivered in its entirety or if Microsoft identifies
        errors in the Phase 2 Deliverable (i.e. noncompliance with the Phase 2
        Acceptance Criteria, Phase 2 Requirements, Phase 2 Specifications and
        Phase 2 Statement of Work), then Microsoft shall notify Intellon in
        writing of the incomplete nature of the delivery and/or the errors
        identified by Microsoft and Intellon shall deliver to Microsoft a
        complete and/or corrected version of the given Phase 2 Deliverable
        within such time as may be mutually agreed upon in writing between
        Microsoft and Intellon, or if the Parties cannot agree within three (3)
        days, then such delivery shall be made within thirty (30) days
        thereafter. If Microsoft identifies incompleteness in the corrected
        Phase 2 Deliverable or errors in the corrected Phase 2 Deliverable, then
        Parties shall repeat the foregoing process one more time (e.g., if
        Microsoft identifies errors in the corrected Phase 2 Deliverable,
        Microsoft shall notify Intellon in writing and Intellon shall have the
        opportunity to correct those errors and deliver a second corrected Phase
        2 Deliverable to Microsoft for its acceptance). If Microsoft determines
        that the second corrected Phase 2 Deliverable was not delivered in its
        entirety or identifies errors in the second corrected Phase 2
        Deliverable, then Microsoft may, at its option: (i) extend the time
        period for Intellon to deliver an acceptable Phase 2 Deliverable; or
        (ii) terminate this Agreement upon written notice without opportunity
        for cure.

                                       6

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   7
                                                CONFIDENTIAL TREATMENT REQUESTED

        3.4    PAYMENT FOR THE PHASE 2 DELIVERABLES. Microsoft shall pay the
        reasonable costs and expenses incurred by Intellon in connection with
        the development of the Phase 2 Deliverables (hereinafter the "Expenses")
        as provided in the Phase 2 Budget. All Expenses will be consistent with
        the Phase 2 Budget unless otherwise approved in writing by Microsoft.

        3.5    PHASE 2 INTELLECTUAL PROPERTY. Microsoft shall own all right,
        title and interest in and to the Phase 2 Deliverables (subject to
        Intellon's ownership of the included Phase 1 Intellectual Property and
        Intellon Intellectual Property) and Phase 2 Intellectual Property as of
        the date of creation. In consideration of the Expenses paid or to be
        paid by Microsoft, Intellon hereby assigns to Microsoft all necessary
        right, title and interest in and to the Phase 2 Deliverables (subject to
        Intellon's ownership of the included Phase 1 Intellectual Property and
        Intellon Intellectual Property) and Phase 2 Intellectual Property. Such
        assignment includes, without limitation, the following:

               3.5.1 Subject to Intellon's ownership of the included Phase 1
               Intellectual Property and Intellon Intellectual Property, any and
               all copyrights and equivalent rights that Intellon may possess or
               acquire in the Phase 2 Intellectual Property throughout the
               world, including all renewals and extensions of such rights that
               may be secured under the laws now or hereafter in force and
               effect in the United States of America or in any other country or
               countries;

               3.5.2 Subject to Intellon's ownership of the included Phase 1
               Intellectual Property and Intellon Intellectual Property, any and
               all rights in and to any inventions, ideas, designs, concepts,
               techniques, discoveries, or improvements, whether or not
               patentable, embodied in Phase 2 Intellectual Property or Phase 2
               Deliverables or developed in the course of Intellon's creation of
               the Phase 2 Intellectual Property or Phase 2 Deliverables,
               including but not limited to all trade secrets, utility and
               design patent rights and equivalent rights in and to such trade
               secrets, inventions and designs throughout the world regardless
               of whether or not legal protection for the Phase 2 Intellectual
               Property or Phase 2 Deliverables is sought;

               3.5.3 Copies of any documents, magnetically or optically encoded
               media, or other materials created by Intellon in the course of
               creating and developing the Phase 2 Intellectual Property or
               Phase 2 Deliverables; and

               3.5.4 Subject to Intellon's ownership of the included Phase 1
               Intellectual Property and Intellon Intellectual Property, any and
               all "moral rights" that Intellon may have in the Phase 2
               Deliverables or Phase 2 Intellectual Property. Intellon also
               hereby forever waives and agrees never to assert any and all
               "moral rights" it may have in the Phase 2 Intellectual Property
               or Phase 2 Deliverables, even after termination of this
               Agreement.

        Intellon shall execute and deliver such instruments and take such other
        action as may be requested by Microsoft to perfect or protect
        Microsoft's rights in the Phase 2 Intellectual Property and Phase 2
        Deliverables and to carry out the assignments contemplated in this
        Section 3.5, and assist Microsoft and its nominees in every proper way
        to secure, maintain, protect and defend for Microsoft's own benefit all
        such rights in the Phase 2 Intellectual Property and Phase 2
        Deliverables in any and all countries. Intellon shall cooperate with
        Microsoft in the filing and prosecution of any copyright registrations
        or patent applications that Microsoft may elect to file on the Phase 2
        Intellectual Property or Phase 2 Deliverables. Intellon shall ensure
        that each of its

                                       7

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   8
                                                CONFIDENTIAL TREATMENT REQUESTED

        employees and independent contractors involved with the development of
        the Phase 2 Intellectual Property or Phase 2 Deliverables is
        contractually obligated to assign to it all rights, including patents
        and copyrights, that such employee or independent contractor may obtain
        in the Phase 2 Intellectual Property or Phase 2 Deliverables. Intellon
        shall obtain written approval from Microsoft for any independent
        contractor involved in the development of the Phase 2 Intellectual
        Property or Phase 2 Deliverables and shall have each independent
        contract execute an assignment in the form set forth in Exhibit E.
        Microsoft agrees to use commercially reasonable best efforts to respond
        to Intellon's request for written approval within three (3) business
        days of Microsoft's receipt of such request.

        3.6    LICENSE OF THE INTELLON INTELLECTUAL PROPERTY TO MICROSOFT.
        During Phase 2, Intellon may offer for evaluation to Microsoft, in
        writing, technology and associated Intellectual Property, other than the
        Phase 1 Intellectual Property, created by or for or licensed by Intellon
        (from Third Parties) independent of and outside the scope of the Phase 2
        Requirements, Phase 2 Specifications and Phase 2 Statement of Work that
        may enhance or otherwise benefit a Microsoft PLC Compatible product.
        Upon Microsoft's evaluation and written acceptance of such technology,
        the Intellectual Property embodied in such technology shall be Intellon
        Intellectual Property. The Parties shall attach a document to this
        Agreement confirming the nature of such Intellectual Property and
        Microsoft's acceptance thereof. Upon such acceptance, Intellon shall be
        deemed to have granted to Microsoft a non-exclusive, perpetual,
        irrevocable, royalty-free (except with respect to Royalty-Bearing ASICs,
        as provided in Exhibit B), fully paid-up, worldwide right and license
        to:

               3.6.1 Use, copy, edit, format, modify, and translate the Intellon
               Intellectual Property and create and have created Derivative
               Technology of the Intellon Intellectual Property;

               3.6.2 Make, sell, rent, lease or otherwise distribute, and have
               made, reproduced, rented, leased or otherwise distributed, to and
               by Third Parties, products that incorporate the Intellon
               Intellectual Property and any Derivative Technology thereof
               created by Microsoft;

               3.6.3 Make, use, sell, rent, lease or otherwise distribute and
               have made, reproduced, rented, leased or otherwise distributed,
               to and by Third Parties, software products that support products
               or applications incorporating the Intellon Intellectual Property
               and any Derivative Technology thereof created by Microsoft; and

               3.6.4 Grant the rights set forth in Sections 3.6.1 and 3.6.2 in
               the Intellon Intellectual Property to Third Parties.

        Except as expressly licensed to Microsoft in this Agreement, Intellon
        retains all right, title and interest in and to the Intellon
        Intellectual Property.

        3.7    LICENSE OF THE PHASE 2 INTELLECTUAL PROPERTY TO INTELLON. Subject
        to the restrictions set forth in Section 4.2, effective as of the date
        Microsoft accepts the Phase 2 Deliverables, Microsoft shall be deemed to
        have granted to Intellon for use in and only in ASICs or subassembly
        products a non-exclusive, perpetual, irrevocable, royalty-free (except
        as provided in Exhibit B), fully paid-up, worldwide right and license
        to:

                                       8

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   9
                                                CONFIDENTIAL TREATMENT REQUESTED

               3.7.1 Use, copy, edit, format, modify and translate the Phase 2
               Intellectual Property and create and have created Derivative
               Technology of the Phase 2 Intellectual Property so long as
               interoperability with Microsoft PLC Products is not affected;

               3.7.2 Make, sell, rent, lease or otherwise distribute, and have
               made, reproduced, rented, leased or otherwise distributed, to and
               by Third Parties, ASICs or subassemby products that incorporate
               the Phase 2 Intellectual Property and any Derivative Technology
               thereof created by Intellon; and

               3.7.3 Grant only the rights to use and copy the Phase 2
               Intellectual Property set forth in Section 3.7.1 and the rights
               set forth in Section 3.7.2 in the Phase 2 Intellectual Property
               to Third Parties.

        Except as expressly licensed to Intellon in this Agreement, Microsoft
        retains all right, title and interest in and to the Phase 2 Intellectual
        Property.

4.      RESTRICTIONS ON USE; ADDITIONAL UNDERTAKINGS OF THE PARTIES WITH
RESPECT TO DERIVATIVE TECHNOLOGY.

        4.1    LIMITED FIELD OF USE OF THE LICENSE GRANTS TO MICROSOFT.

               4.1.1 The license grants to Microsoft set forth in Sections 2.3,
               3.6 and 4.3 shall be limited with regard to products to the field
               of wired media networking of personal computers, peripherals,
               consumer electronics, telephony products, control systems and any
               and all other devices of any nature intended for use within the
               home or office. Microsoft and its sublicensees are explicitly
               restricted from exercising the rights set forth in Sections 2.3.2
               and 3.6.2 with regard to the Phase 1 Intellectual Property or
               Intellon Intellectual Property to develop products intended for
               use within the following areas: local exchange bypass; wide area
               networks (WAN); WAN gateways; products which terminate voice,
               data, or video network from outside the user premises, with the
               exception of providing the local area network connection within
               products which are bridges from external networks to local area
               networks within the customer premises; networks connecting
               devices located in transportation vehicles such as automotive or
               commercial vehicles, railway cars, marine vessels, or aircraft;
               or any other communications or control applications not within
               the home or office. This field of use limitation is not intended
               to prevent Microsoft from developing and selling software having
               application outside the field of use when such software supports
               products or applications incorporating the Phase 1 Intellectual
               Property, Phase 1 Deliverables, or Intellon Intellectual
               Property, or any Derivative Technology thereof created by
               Microsoft.

               4.1.2 Microsoft shall have the option to obtain unrestricted
               field of use for wired media networking for the rights set forth
               in Sections 2.3, 3.6 and 4.3 for an additional license fee of
               Twenty Million Dollars ($20,000,000). This option shall expire
               four (4) years after the Effective Date. On payment by Microsoft
               to Intellon of the additional license fee of Twenty Million
               Dollars ($20,000,000), Section 4.1.1 of this Agreement shall
               cease to have effect.

                                       9

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   10
                                                CONFIDENTIAL TREATMENT REQUESTED

               4.1.3 Unless mutually agreed upon by the Parties, Microsoft shall
               require any Authorized Manufacturer licensed by Microsoft to
               limit the use of ASICs and subassembly products embodying the
               Phase 1 Intellectual Property or Intellon Intellectual Property
               to products which are certified as and appropriately marked as
               "Microsoft PLC Compatible."

        4.2    RESTRICTIONS ON USE OF PHASE 2 INTELLECTUAL PROPERTY BY INTELLON.

               4.2.1 Intellon agrees that it will not, during the period
               commencing on the Effective Date and ending on the earlier of (i)
               the first anniversary of the Safe Ad Date of the first Microsoft
               PLC Product or (ii) two (2) years from the Effective Date ("the
               Exclusivity Period"), offer any Third Party that designs,
               manufactures or sells USB/PLC/SWAP hubs; AC switching, dimming or
               control modules; IR blasters; or PC to PC, or PC to PC
               peripheral, networking modules; the right (a) to license all or
               any portion of the Phase 2 Intellectual Property or Derivative
               Technology thereof licensed to Intellon pursuant to Section 4.4
               or (b) to purchase from Intellon, its manufacturers or other
               licensees, any ASICs or other products that embody the Phase 2
               Intellectual Property or Derivative Technology thereof licensed
               to Intellon pursuant to Section 4.4.

               4.2.2 Notwithstanding Section 4.2.1, Intellon shall be released
               from the restrictions in Section 4.2.1 to the extent, but only to
               the extent, that Microsoft sells, or directly authorizes (or
               indirectly allows) a Third Party ASIC or subassembly manufacturer
               to sell, ASICS or subassembly products that embody Phase 1
               Intellectual Property or Intellon Intellectual Property for use
               in products other than Microsoft Products.

                  Example: If Microsoft enters into a written agreement with a
                  Third Party hardware product manufacturer for the sublicensing
                  or other distribution of a product which is not a Microsoft
                  Product containing an ASIC or subassembly product which
                  embodies Phase 1 Intellectual Property or Intellon
                  Intellectual Property and thereby allows such hardware product
                  manufacturer to contract for the manufacture and purchase of
                  the ASIC or subassembly product from a Third Party, Intellon
                  may offer the right to purchase ASICs or subassembly products
                  incorporating Phase 2 Intellectual Property or Derivative
                  Technology thereof licensed to Intellon under Section 4.4 to
                  such Third Party hardware product manufacturer to whom
                  Intellon would otherwise be restricted from offering the right
                  to purchase such ASICs or subassembly products.

                  Example: If Microsoft offers any Third Party ASIC or
                  subassembly product manufacturer the right to sell ASICs or
                  subassembly products that embody Phase 1 Intellectual Property
                  or Intellon Intellectual Property to one or more Third Party
                  hardware product manufacturers for use in products which are
                  not Microsoft Products, Intellon may offer to sell ASICs or
                  subassembly products that embody or are based on Phase 2
                  Intellectual Property or Derivative Technology thereof
                  licensed to Intellon under Section 4.4 to the same Third Party
                  hardware product manufacturers.

                  Example: If Microsoft offers to sell ASICs or subassembly
                  products that embody or are based on the Phase 1 Intellectual
                  Property or Intellon Intellectual Property to one or more
                  Third Party hardware product manufacturers for use in products
                  which are not Microsoft Products, Intellon may offer to sell
                  ASICs or subassembly products

                                       10

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   11
                                                CONFIDENTIAL TREATMENT REQUESTED

                  that embody or are based on Phase 2 Intellectual Property or
                  Derivative Technology thereof licensed to Intellon under
                  Section 4.4 to the same Third Party hardware product
                  manufacturers.

               4.2.3 Notwithstanding Section 4.2.1 of this Agreement Intellon
               may request in writing that Microsoft approve a specific purchase
               from Intellon of specified ASICs or other subassembly products by
               a Third Party to whom Intellon would otherwise be restricted
               under Section 4.2.1 from offering the right to purchase such
               ASICs or other subassembly products. Any such request shall fully
               identify such Third Party, describe the product(s) to be sold to
               the extent that it can do so without violating any
               confidentiality obligations imposed on it by its agreements with
               Third Parties and specify the applicable time period. Microsoft,
               in its sole discretion, may grant or deny such a request. Any
               approval of such request must be in writing, and Microsoft shall
               make a good faith effort to respond in writing to such request
               within thirty (30) days of notice of such request, provided that
               any failure by Microsoft to respond in writing shall not
               constitute a breach of this Agreement. If Microsoft has not
               provided a written approval of such request by Intellon to
               Intellon within thirty (30) days of notice of such request, the
               request shall be deemed denied.

               4.2.4 Unless mutually agreed upon by the Parties, Intellon shall
               require any sublicensee to limit the use of ASICs or subassembly
               products embodying Phase 2 Intellectual Property or Derivative
               Technology thereof licensed to Intellon under Section 4.4 to
               products which are certified as and appropriately marked as
               "Microsoft PLC Compatible."

        4.3    DERIVATIVE TECHNOLOGY CREATED BY INTELLON.

               4.3.1 Intellon shall own all right, title and interest in and to
               any Derivative Technology of the Phase 1 Intellectual Property
               and Intellon Intellectual Property created by or for Intellon
               (except for the Phase 2 Intellectual Property) and, subject to
               Microsoft's underlying rights, any Derivative Technology of the
               Phase 2 Intellectual Property created by or for Intellon as
               permitted in Section 3.7.1. This Agreement does not grant any
               rights to Microsoft other than those specifically granted in this
               Agreement.

               4.3.2 Intellon agrees that in the event that it (i) creates or
               has created Derivative Technology of the Phase 1 Intellectual
               Property or Intellon Intellectual Property, or Phase 2
               Intellectual Property (as permitted by Section 3.7.1),
               independent of Phase 2; and (ii) incorporates or has incorporated
               such Derivative Technology into its ASICs or subassembly products
               that are, or are intended to be, certified and appropriately
               marked as Microsoft PLC Compatible; and (iii) such Derivative
               Technology affects the interoperability of the ASICs or
               subassembly products with Microsoft PLC Products; at any time
               during the three (3) year period following Microsoft's acceptance
               of the Phase 1 Deliverables, Intellon shall be deemed to have
               included such Derivative Technology within the license grant to
               Microsoft in Section 3.6. Intellon shall deliver to Microsoft the
               source code listings, blueprints, schematics, master design
               source tapes, diagrams and descriptions to such Derivative
               Technology as is required for Microsoft to be able to exercise
               the license rights set forth in Section 3.6 as to such Derivative
               Technology and as may be reasonably required for Microsoft to
               maintain the interoperability of Microsoft PLC Products with
               Intellon ASICs or subassembly products embodying such Derivative

                                       11

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   12
                                                CONFIDENTIAL TREATMENT REQUESTED

               Technology. Intellon shall further provide to Microsoft, upon
               Microsoft's request, technical support and consulting at
               Intellon's then standard commercial rates in connection with
               Microsoft's understanding, use and exploitation of such
               Derivative Technology.

        4.4    DERIVATIVE TECHNOLOGY CREATED BY MICROSOFT.

               4.4.1 Microsoft shall own all right, title and interest in and to
               any Derivative Technology of the Phase 2 Intellectual Property
               created by or for Microsoft and, subject to Intellon's underlying
               rights, any Derivative Technology of the Phase 1 Intellectual
               Property and Intellon Intellectual Property created by or for
               Microsoft. This Agreement does not grant any rights to Intellon
               other than those specifically granted in this Agreement.

               4.4.2 Microsoft agrees that in the event that it (i) creates or
               has created Derivative Technology of the Phase 1 Intellectual
               Property, Intellon Intellectual Property or Phase 2 Intellectual
               Property, independent of Phase 2; and (ii) incorporates or has
               incorporated such Derivative Technology into the ASICs or
               subassembly products which are integrated into or are component
               parts of Microsoft Products that are, or are intended to be,
               certified and appropriately marked as Microsoft PLC Compatible;
               and (iii) such Derivative Technology affects the interoperability
               of Microsoft PLC Products with Intellon's ASICs or subassembly
               products; at any time during the three (3) year period following
               Microsoft's acceptance of the Phase 1 Deliverables, Microsoft
               shall be deemed to have included such Derivative Technology
               within the license grant to Intellon in Section 3.7. Microsoft
               shall deliver to Intellon the source code listings, blueprints,
               schematics, master design source tapes, diagrams and descriptions
               to such Derivative Technology as is required for Intellon to be
               able to exercise the license rights set forth in Section 3.7 as
               to such Derivative Technology and as may be reasonably required
               for Intellon to maintain the interoperability of Intellon ASICs
               or subassembly products with Microsoft PLC Products embodying
               such Derivative Technology. Microsoft shall further provide to
               Intellon, upon Intellon's request, technical support and
               consulting at Microsoft's then standard commercial rates in
               connection with Intellon's understanding, use and exploitation of
               such Derivative Technology.

5.     USE OF INTELLON MARKS. In circumstances which Microsoft deems to be
commercially reasonable in its sole discretion, Microsoft will place one of the
two identifying markings listed below or similar markings mutually agreed to
both parties on the commercial retail packaging for Microsoft PLC Products
embodying Phase 1 Intellectual Property, Intellon Intellectual Property, in such
a manner that one of such identifying markings may be reasonably visible by the
consumer.

                                           Connected by Intellon
                                            Powered by Intellon

6.      OTHER OBLIGATIONS OF THE PARTIES.

        6.1 PRESS RELEASES. The Parties will co-operate with each other on press
        releases and similar communications regarding the non-confidential
        subject matter of this Agreement. The content, timing and necessity of
        all such communications will be mutually agreed upon in writing by both

                                       12

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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   13
                                                CONFIDENTIAL TREATMENT REQUESTED

        Parties, and neither Party may issue any public announcement or press
        release regarding the subject matter of this Agreement without having
        received the prior consent of the other Party.

        6.2 PURCHASE OF CHIPS. For a period of three (3) years following
        Microsoft's acceptance of the Phase 2 Deliverables, Microsoft agrees to
        identify Intellon as a "Microsoft Approved Manufacturer" of PLC modems
        that is authorized to purchase ASICs based on the Phase 1 Intellectual
        Property or Phase 2 Intellectual Property, from Microsoft's manufacturer
        of such ASICs. Microsoft agrees to use reasonable efforts (but not to
        include the payment of financial or other consideration) to have such
        Third Party manufacturer sell such ASICs to Intellon under the master
        pricing structure and terms and conditions, if any, that Microsoft has
        negotiated with such Third Party manufacturer to be available to
        purchasers of such ASICs.

        6.3 APPLICATION KITS. Subject to the terms and conditions of this
        Agreement including without limitation Section 8, either Party may make
        available to Third Parties an ASIC applications kit containing technical
        and other information to assist such Third Parties to develop Microsoft
        PLC Compatible products. During the Exclusivity Period, as that term is
        defined in Section 4.2.1 of this Agreement, Intellon shall obtain
        Microsoft's written approval prior to Intellon's distribution of any
        applications kit embodying Phase 2 Intellectual Property. Nothing in
        this section shall be construed to expand the license grants provided in
        Sections 2, 3 or 4 of this Agreement.

        6.4 SUPPORT TO THIRD PARTIES. Intellon shall act as a free agent
        contractor to provide to Third Parties to whom Microsoft has granted
        rights in the Phase 1 Intellectual Property, Phase 1 Deliverables, Phase
        2 Deliverables, or Intellon Intellectual Property, at the request of
        those parties, technical support and consulting at Intellon's then
        standard commercial rates in connection with such Third Parties'
        understanding, use, and exploitation of the Phase 1 Intellectual
        Property, Phase 1 Deliverables, Phase 2 Deliverables or Intellon
        Intellectual Property.

        6.5 COMPLIANCE TESTING. Microsoft, in its sole discretion, may request
        that Intellon provide compliance testing services for Third Parties, for
        the purpose of evaluating whether products distributed by such Third
        Parties are Microsoft PLC Compatible. In the event that Microsoft
        requests and Intellon agrees to provide such compliance testing
        services, either Microsoft or the Third Parties may contract with
        Intellon, at Intellon's then standard commercial rates and subject to
        the mutual agreement of the contracting parties, to develop a compliance
        testing suite which includes a "seal of approval" mechanism. Microsoft
        shall approve in writing any such compliance testing suite before it is
        implemented.

        6.6 MARKING FOR ASICS INCORPORATING LICENSED INTELLON PATENTS. In
        accordance with the patent marking provisions of U.S.C. Title 35,
        Microsoft agrees to use commercially reasonable best efforts to require
        its licensees to mark stand-alone ASICs (or the tube or packaging
        containing the ASIC) with the numbers of all licensed Intellon U.S.
        patents covering the ASIC, which numbers shall be provided by Intellon
        to Microsoft. Microsoft agrees, as a condition of any license permitting
        the manufacture of a ASIC, to require that Intellon shall be a third
        party beneficiary of any such license entitled to enforce the marking
        requirement set forth in this Section. There shall be no requirement to
        mark Microsoft PLC Products which contain ASICs as a component or
        integrated portion thereof with such patent numbers.

7. NO OBLIGATION/INDEPENDENT DEVELOPMENT. Notwithstanding any other provision of
this Agreement, neither Party shall have any obligation to market, sell or
otherwise distribute Intellectual

                                       13

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<PAGE>   14
                                                CONFIDENTIAL TREATMENT REQUESTED

Property licensed from the other Party, either alone or in any product. Except
as provided in Section 8, nothing in this Agreement will be construed as
restricting either Party's ability to acquire, license, develop, manufacture or
distribute for itself, or have others acquire, license, develop, manufacture or
distribute for that Party, similar technology performing the same or similar
functions as the technology contemplated by this Agreement, or to market and
distribute such similar technology in addition to, or in lieu of, the technology
contemplated by this Agreement.

8.      CONFIDENTIALITY

        8.1 OBLIGATIONS. Each Party shall protect the other Party's Confidential
        Information from unauthorized disclosure and use with the same degree of
        care that such Party uses to protect its own like information, but in no
        event with less than reasonable care. Neither Party will use the other
        Party's Confidential Information for purposes other than those necessary
        to directly further the purposes of this Agreement. Neither Party will
        disclose to Third Parties the other Party's Confidential Information
        without the prior written consent of the other Party.

        8.2 RESIDUALS. The Parties' obligations of confidentiality under this
        Agreement shall not be construed to limit either Party's right to
        independently develop or acquire products without use of the other
        Party's Confidential Information. Further, either Party shall be free to
        use for any purpose the residuals resulting from access to or work with
        such Confidential Information, provided that such Party shall maintain
        the confidentiality of the Confidential Information as provided herein.
        The term "residuals" means information in non-tangible form, which may
        be retained by persons who have had access to the Confidential
        Information, including ideas, concepts, know-how or techniques contained
        therein. Neither Party shall have any obligation to limit or restrict
        the assignment of such persons or to pay royalties for any work
        resulting from the use of residuals. However, the foregoing shall not be
        deemed to grant to either Party a license under the other Party's
        copyrights or patents beyond that specifically granted by the terms of
        this Agreement.

        8.3 CONFIDENTIALITY OF AGREEMENT. Each Party agrees that the terms and
        conditions, but not the existence, of this Agreement shall be treated as
        the other's Confidential Information and that no terms and conditions of
        this Agreement can be disclosed without the prior written consent of the
        other Party; provided, however, that each Party may disclose the terms
        and conditions of this Agreement: (i) as required by any court or other
        governmental body; (ii) as otherwise required by law; (iii) to legal
        counsel of the Parties; (iv) in connection with the requirements of an
        initial public offering or securities filing; (v) in confidence, to
        accountants, banks, and financing sources and their advisors; (vi) in
        confidence, in connection with the enforcement of this Agreement or
        rights under this Agreement; or (vii) in confidence, in connection with
        a merger or acquisition or proposed merger or acquisition, or the like.

        8.4 COMPELLED DISCLOSURE. If either Party believes that it will be
        compelled by a court or other authority to disclose Confidential
        Information of the other, such Party shall give such other Party prompt
        notice so that such other Party may take steps to oppose such
        disclosure.

9.      WARRANTIES.

        9.1    BY INTELLON.  Intellon warrants and represents that:

                                       14

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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   15
                                                CONFIDENTIAL TREATMENT REQUESTED

               9.1.1 It has the full power to enter into this Agreement and make
               the assignments and grant the license rights set forth herein;

               9.1.2 It has not previously and will not grant any rights in the
               Phase 1 Intellectual Property, Derivative Technology of the Phase
               1 Intellectual Property, the Phase 1 Deliverables, the Phase 2
               Deliverables, or the Intellon Intellectual Property to any Third
               Party that would prevent Intellon from granting to Microsoft the
               rights described in this Agreement or that would prevent
               Microsoft from exercising the rights that it is being granted
               under this Agreement;

               9.1.3 The Phase 1 Intellectual Property, the Phase 1
               Deliverables, the Phase 2 Deliverables, the Phase 2 Intellectual
               Property (other than as provided by Microsoft) and the Intellon
               Intellectual Property are original to Intellon or appropriately
               licensed from Third Parties, do not infringe any copyright, trade
               secret, or other proprietary rights (other than patents) held by
               any Third Party and, to the reasonable knowledge of Intellon
               without an obligation to conduct a patent search, do not infringe
               any patent rights held by any Third Party;

               9.1.4 The Phase 1 Deliverables, Phase 1 Intellectual Property,
               Phase 2 Deliverables, Phase 2 Intellectual Property (other than
               as provided by Microsoft) and the Intellon Intellectual Property
               have been or will be created by employees of Intellon within the
               scope of their employment and under obligation to assign
               inventions to Intellon, or by independent contractors under
               written obligations to assign all rights in the foregoing to
               Intellon (as set forth in Section 3.5), or have been or will be
               licensed to Intellon with all rights necessary to grant the
               rights described in this Agreement; and

               9.1.5 In the event any bugs, errors or other deviations from the
               Phase 1 Specifications or recurring systemic failures (except for
               failures caused by compliance with the Phase 1 Specifications,
               Phase 1 Requirements or Phase 1 Statement of Work) are discovered
               in the Phase 1 Deliverables within one (1) year of Microsoft's
               acceptance of the same, or in the event any bugs, errors or other
               deviations from the Phase 2 Specifications or recurring systemic
               failures (except for failures caused by compliance with the Phase
               2 Specifications, Phase 2 Requirements or Phase 2 Statement of
               Work) are discovered in the Phase 2 Deliverables within one (1)
               year of Microsoft's acceptance of the same, Intellon will use its
               commercially reasonable best efforts to correct such errors or
               deficiencies and to deliver to Microsoft corrected Phase 1
               Deliverables or Phase 2 Deliverables as the case may be.

        9.2    BY MICROSOFT.  Microsoft warrants and represents that:

               9.2.1 It has the full power to enter into this Agreement and make
               the assignments and license rights set forth herein and that it
               has not previously and will not grant any rights in the Phase 2
               Intellectual Property to any Third Party that would prevent
               Microsoft from granting to Intellon the rights described in this
               Agreement or that would prevent Intellon from exercising the
               rights that it is being granted under this Agreement;

               9.2.2 The Phase 2 Intellectual Property provided by Microsoft is
               original to Microsoft or appropriately licensed from Third
               Parties, does not infringe any copyright, trade secret, or other
               proprietary rights (other than patents) held by any Third Party,
               and,

                                       15

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   16
                                                CONFIDENTIAL TREATMENT REQUESTED

               within the reasonable knowledge of Microsoft, does not
               infringe any patent rights held by any Third Party; and

               9.2.3 The Phase 2 Intellectual Property provided by Microsoft has
               been or will be created by employees of Microsoft within the
               scope of their employment and under obligation to assign
               inventions to Microsoft, or by independent contractors under
               written obligation to assign all rights in the foregoing to
               Microsoft, or have been or will be licensed to Microsoft with all
               rights necessary to grant the rights described in this Agreement.

10.     INDEMNIFICATION.

        10.1 INDEMNITY BY INTELLON. Intellon shall, at its expense and
        Microsoft's request, defend any claim or action brought against
        Microsoft, or Microsoft's affiliates, directors, officers, employees,
        OEMs, licensees, distributors, agents and independent contractors
        (collectively the "Microsoft Indemnitees"), to the extent it is based
        upon a Third Party claim that if true, would constitute a breach of an
        Intellon warranty under Section 9.1 (collectively, "Intellon Claims"),
        and Intellon will indemnify and hold the Microsoft Indemnitees harmless
        from and against any costs, damages and fees reasonably incurred by the
        Microsoft Indemnitees, including but not limited to reasonable fees of
        outside attorneys and other professionals, that are attributable to such
        Intellon Claims. Microsoft shall: (i) provide Intellon reasonably prompt
        notice in writing of any such Intellon Claims and permit Intellon,
        through counsel chosen by Intellon and acceptable to Microsoft in its
        reasonable discretion, to answer and defend such Intellon Claims; and
        (ii) provide Intellon with reasonable information, assistance and
        authority, at Intellon's expense, to help defend such Intellon Claims.
        Intellon will not be responsible for any settlement made by Microsoft
        without Intellon's written permission, which permission will not be
        unreasonably withheld or delayed. Microsoft reserves the right to retain
        its own counsel at its expense to participate in the defense of any
        Intellon Claim. Unless Intellon obtains for Microsoft a complete release
        of all Intellon Claims thereunder, Intellon may not settle any Intellon
        Claim under this Section 10.1 on Microsoft Indemnitees' behalf without
        first obtaining Microsoft's written permission, which permission will
        not be unreasonably withheld or delayed. In the event Microsoft and
        Intellon agree to settle an Intellon Claim, Intellon agrees not to
        publicize the settlement without first obtaining Microsoft's written
        permission, which permission will not be unreasonably withheld or
        delayed. If at any time after such an Intellon Claim has been made,
        Microsoft's licensed use of the Phase 1 Intellectual Property, the Phase
        1 Deliverables, the Phase 2 Deliverables, the Intellon Intellectual
        Property or the Derivative Technology licensed to Microsoft under
        Section 4.2.3 ("Intellon Technology") is reasonably expected to be
        enjoined, Intellon shall at its sole expense, and prior to the issuance
        of any such injunction, either, at Intellon's discretion, (i) procure
        for Microsoft the right to continue selling the Microsoft PLC Product(s)
        and licensing the Intellon Technology, or (ii) replace the alleged
        infringing Intellon Technology with a version that is non-infringing,
        with the same functionality and performance and pay Microsoft's actual
        cost of recalling and reworking Microsoft PLC Products to install the
        non-infringing Intellon Technology. Intellon shall have no liability to
        Microsoft under this Section 10.1 to the extent that such infringement
        is based upon the use of the Intellon Technology in combination with
        other components, equipment or software not furnished by Intellon where
        the infringement would not have occurred but for the combination.

        10.2 INDEMNITY BY MICROSOFT. Microsoft shall, at its expense and
        Intellon's request, defend any claim or action brought against Intellon,
        directors, officers, employees, agents and

                                       16

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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   17
                                                CONFIDENTIAL TREATMENT REQUESTED

        independent contractors (collectively the "Intellon Indemnitees") ,
        that, if true, would constitute a breach of a Microsoft warranty under
        Section 9.2 (collectively, "Microsoft Claims"), and Microsoft will
        indemnify and hold the Intellon Indemnitees harmless from and against
        any costs, damages and fees reasonably incurred by the Intellon
        Indemnitees, including but not limited to reasonable fees of outside
        attorneys and other professionals, that are attributable to such
        Microsoft Claims. Intellon shall: (i) provide Microsoft reasonably
        prompt notice in writing of any such Microsoft Claims and permit
        Microsoft, through counsel chosen by Microsoft and acceptable to
        Intellon in its reasonable discretion, to answer and defend such
        Microsoft Claims; and (ii) provide Microsoft with reasonable
        information, assistance and authority, at Microsoft's expense, to help
        Microsoft to defend such Microsoft Claims. Microsoft will not be
        responsible for any settlement made by Intellon without Microsoft's
        written permission, which permission will not be unreasonably withheld
        or delayed. Intellon reserves the right to retain its own counsel at its
        expense to participate in the defense of any Microsoft Claim. Unless
        Microsoft obtains for Intellon a complete release of all Microsoft
        Claims thereunder Microsoft may not settle any Microsoft Claim under
        this Section 10.2 on the Intellon Indemnitees' behalf without first
        obtaining Intellon's written permission, which permission will not be
        unreasonably withheld or delayed. In the event Intellon and Microsoft
        agree to settle a Microsoft Claim, Microsoft agrees not to publicize the
        settlement without first obtaining Intellon's written permission, which
        permission will not be unreasonably withheld or delayed. If at any time
        after such a Microsoft Claim has been made, Intellon's licensed use of
        the Derivative Technology licensed to Intellon under Section 4.2.4
        ("Microsoft Technology") is reasonably expected to be enjoined,
        Microsoft shall at its sole expense, and prior to the issuance of any
        such injunction, either, at Microsoft's discretion, (i) procure for
        Intellon the right to continue selling the Intellon products
        incorporating the Microsoft Technology and licensing the Microsoft
        Technology, or (ii) replace the alleged infringing Microsoft Technology
        with a version that is non-infringing, with the same functionality and
        performance and pay Intellon's actual cost of recalling and reworking
        Intellon products incorporating the Microsoft Technology to install the
        non-infringing Microsoft Technology. Microsoft shall have no liability
        to Intellon under this Section 10.2 to the extent that such infringement
        is based upon the use of the Microsoft Technology in combination with
        other components, equipment or software not furnished by Microsoft where
        the infringement would not have occurred but for the combination.

11.     [INTENTIONALLY LEFT BLANK]

12.     TERM AND TERMINATION.

        12.1 TERM. The term of this Agreement shall commence as of the Effective
        Date and shall continue until terminated as provided in this Section 12
        or as set forth in Sections 2.1.2, 2.2, 3.2 or 3.3.

        12.2   TERMINATION BY MICROSOFT WITHOUT CAUSE. Microsoft may terminate
        this Agreement for any reason, without cause, upon written notice.

        12.3 TERMINATION BY EITHER PARTY FOR CAUSE. Either Party may suspend
        performance and/or terminate this Agreement immediately upon written
        notice at any time if the other Party is in material breach of any
        material warranty, term, condition or covenant of this Agreement and
        fails to cure that breach within sixty (60) days after written notice
        thereof.

                                       17

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   18
                                                CONFIDENTIAL TREATMENT REQUESTED

        12.4   TERMINATION DURING PHASE 1.

               12.4.1 By Microsoft For Cause. In the event of termination of the
               Agreement by Microsoft during Phase 1 pursuant to Section 2.1.2
               as a result of Intellon's failure to deliver Phase 1 Deliverables
               that are substantially complete within fifteen (15) days after
               the delivery date specified in the Phase 1 Schedule for the Phase
               1 Deliverables (or as such date as been mutually extended) or a
               material breach by Intellon of Section 8 of this Agreement
               occurring prior to such delivery date, Intellon shall return to
               Microsoft, within five (5) days after the date of termination,
               the Three Million Dollars (US $3,000,000) sum paid to it under
               Section 2.4 of this Agreement and the license grants in Section
               2.3 shall terminate and Intellon shall not be entitled to receive
               the balance of Three Million Dollars (US $3,000,000) provided for
               in Section 2.4 of this Agreement. In the event of termination of
               the Agreement by Microsoft during Phase 1 pursuant to Sections
               2.1.2 (except for the cause specified in the previous sentence),
               2.2 or 12.3, the license grants in Section 2.3 shall terminate
               and Intellon shall not be entitled to receive the balance of
               Three Million Dollars (US $3,000,000) provided for in Section 2.4
               of this Agreement.

               12.4.2 By Microsoft Without Cause or By Intellon For Cause. In
               the event of a termination of the Agreement by Microsoft pursuant
               to Section 12.2, or by Intellon pursuant to Section 12.3, before
               Microsoft's acceptance of the Phase 1 Deliverables, Intellon
               shall discontinue all work then being performed under Phase 1
               upon receipt or giving of the termination notice, whichever is
               appropriate. Intellon shall be entitled to keep all payments
               made, or required to be made, by Microsoft under this Agreement
               as of the date of termination and the license grants in Section
               2.3 shall terminate.

        12.5   TERMINATION DURING PHASE 2.

               12.5.1 By Microsoft For Cause. In the event of a termination of
               the Agreement by Microsoft pursuant to Sections 3.2, 3.3 or 12.3
               during Phase 2 prior to Microsoft's acceptance of the Phase 2
               Deliverables, Intellon will discontinue all work then being
               performed under Phase 2 upon the receipt of the termination
               notice. Microsoft shall have the option of either: (i) receiving
               from Intellon (within ten (10) days after the date of
               termination), and retaining, the work in progress as Phase 2
               Intellectual Property in which case Intellon shall be entitled to
               keep all payments made, or required to be made, by Microsoft
               under this Agreement as of the date of termination and all
               license grants and ownership provisions and restrictions under
               Sections 3 and 4.2 shall survive termination (but the
               cross-licensing provisions of Sections 4.3.2 and 4.4.2 shall
               terminate); or (ii) assigning all Phase 2 work in progress to
               Intellon (except for any Intellectual Property contributed by
               Microsoft to the Phase 2 work in progress) in which case Intellon
               shall refund to Microsoft all payments made by Microsoft to
               Intellon pursuant to Section 3.4 and the license grants and
               ownership provisions under Section 3, 4.3.2 and 4.4.2, and the
               restrictions of Section 4.2 on Intellon's sublicensing rights,
               shall terminate. In addition to the Sections set forth in Section
               12.7 below and set forth in clause (i) of the preceding sentence,
               Sections 2, 4.1, 4.3.1, 4.4.1 and 6.6 shall survive termination
               in either event.

               12.5.2 By Microsoft Without Cause or by Intellon For Cause. In
               the event of a termination of the Agreement by Microsoft pursuant
               to Section 12.2, or by Intellon pursuant to Section 12.3, during
               Phase 2 prior to Microsoft's acceptance of the Phase 2

                                       18

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   19
                                                CONFIDENTIAL TREATMENT REQUESTED

               Deliverables, Intellon will discontinue all work then being
               performed under Phase 2 upon the receipt of the termination
               notice. Intellon shall turn over to Microsoft all work in
               progress applicable to Phase 2 within ten (10) days after the
               termination date. Intellon shall be entitled to keep all
               payments made, or required to be made, by Microsoft under this
               Agreement as of the date of termination. In addition to the
               Sections set forth in Section 12.7 below, Sections 2, 3, 4.1,
               4.2, 4.3.1, 4.4.1 and 6.6 shall survive termination.

        12.6   TERMINATION AFTER PHASE 2.

               12.6.1 By Microsoft Without Cause. If Microsoft terminates the
               Agreement pursuant to Section 12.2 after Microsoft's acceptance
               of the Phase 2 Deliverables, the cross-licensing provisions of
               Sections 4.3.2 and 4.4.2 shall terminate. In addition to the
               Sections set forth in Section 12.7 below, Sections 2, 3, 4.1,
               4.2, 4.3.1, 4.4.1 and 6.6 shall survive termination.

               12.6.2 By Either Party For Cause. If either Party terminates the
               Agreement pursuant to Section 12.3 after Microsoft's acceptance
               of the Phase 2 Deliverables, the cross-licensing provisions of
               Sections 4.3.2 and 4.4.2 shall terminate. In addition to the
               Sections set forth in Section 12.7 below, Sections 2, 3, 4.1,
               4.2, 4.3.1, 4.4.1 and 6.6 shall survive termination.

        12.7   EFFECT OF TERMINATION. In the event of termination or expiration
        of this Agreement for any reason, Sections 1, 6.1, 7, 8, 9, 10, 12, 13
        and 14 (except Section 14.5, which shall terminate) shall survive
        termination.

        12.8    BREACH OF SECTION 4.1.1. In the event that Microsoft
        unintentionally breaches the field of use restrictions set forth in
        Section 4.1.1 (i.e., the breach occurs without the manager(s)
        responsible for the breach being aware of the existence of the field of
        use restriction), within ninety (90) days after receipt of notice of
        such breach from Intellon, Microsoft may cure such breach by exercising
        the option set forth in Section 4.1.2 if the option by its terms is
        still available. If the option is not available or if Microsoft chooses
        not to exercise the option, the parties shall enter into good faith
        discussions to determine the cure for the breach. Possible cures for the
        breach shall include without limitation: (i) Microsoft's termination of
        the sale or license of the products which are intended for uses outside
        of those authorized in Section 4.1.1 and (ii) agreement between the
        parties to remove the Section 4.1.1 restrictions in whole or in part in
        return for either a lump sum payment or royalties. The Parties shall
        have ninety (90) days in which to negotiate a cure for such breach. If
        the cure is (i) above, Microsoft shall have a commercially reasonable
        time to effect such a cure.

13. LIMITATION OF LIABILITIES. EXCEPT FOR A BREACH OF SECTIONS 8, 9 OR 10,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY EVENT, EITHER PARTY'S CUMULATIVE
LIABILITY TO THE OTHER PARTY SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY
MICROSOFT TO INTELLON UNDER SECTION 2.4 AND 3.4. THIS LIMITATION OF LIABILITY
SHALL NOT APPLY WITH REGARD TO AN ACTION BY INTELLON TO OBTAIN PAYMENTS REQUIRED
TO BE MADE UNDER SECTIONS 2.4 AND 3.4 AND EXHIBIT B.

                                       19

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   20
                                                CONFIDENTIAL TREATMENT REQUESTED

14.     GENERAL.

        14.1 NOTICES. All notices and requests in connection with this Agreement
        shall be deemed given as of the day they are received either by
        messenger, delivery service, or in the United States of America mails,
        postage prepaid, certified or registered, return receipt requested, and
        addressed as follows:

        TO INTELLON:                           TO MICROSOFT:

        Intellon Corporation                   Microsoft Corporation
        5100 West Silver Springs Blvd.         One Microsoft Way
        Ocala, FL 34482                        Redmond, WA  98052-6399
        Attention:   Eric Buffkin              Attention:   V.P. of Hardware
        Phone:   (352) 237-7416                Phone:   (425) 882-8080
        Fax:   (352) 237-7616                  Fax:   (425) 936-7329
        E-mail:   eric.buffkin@intellon.com

        Copy to:   Fish & Richardson           Copy to: Law & Corporate Affairs
        225 Franklin Street                    Fax:   (425) 936-7409
        Boston, MA 02110
        Attention:   G. Roger Lee
        Phone:   (617) 521-7039
        Fax:   (617) 542-8906
        E-mail:   lee@fr.com

        or to such other address as a Party may designate pursuant to this
        notice provision.

        14.2   INDEPENDENT CONTRACTORS.  Intellon  and Microsoft are independent
        entities, and nothing in this Agreement shall be construed as creating
        an employer-employee relationship, a partnership, or a joint venture
        between the Parties.

        14.3   TAXES.

               14.3.1 The amounts to be paid by Microsoft to Intellon herein do
               not include any state or local sales or use taxes now or
               hereafter imposed on the provision of goods and services to
               Microsoft by Intellon under this Agreement. Any such sales or use
               taxes that (i) are owed by Microsoft solely as a result of
               entering into this Agreement and the payment of the fees
               hereunder, (ii) are required to be collected from Microsoft by
               Intellon under applicable law, and (iii) are based solely upon
               the amounts payable under this Agreement (the "Collected Taxes")
               shall be stated separately as applicable on Intellon's invoices
               and shall be remitted by Microsoft to Intellon, whereon Intellon
               shall remit to Microsoft official tax receipts indicating that
               such taxes have been collected by Intellon. Microsoft may provide
               to Intellon an exemption certificate acceptable to the relevant
               taxing authority (including without limitation a resale
               certificate) in which case Intellon shall not collect the taxes
               covered by such certificate. Intellon agrees to take such steps
               as are requested by Microsoft to minimize such taxes in
               accordance with all relevant laws and to cooperate with and
               assist Microsoft, at Microsoft's request, in challenging the
               validity of any taxes collected from Microsoft by Intellon or
               otherwise paid by Microsoft. Intellon shall indemnify and hold
               Microsoft harmless from any

                                       20

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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   21
                                                CONFIDENTIAL TREATMENT REQUESTED

               Collected Taxes, penalties, interest, or additions to tax
               arising from amounts paid by Microsoft to Intellon under this
               Agreement, that are asserted or assessed against Microsoft to
               the extent such amounts relate to amounts that are paid to or
               collected by Intellon from Microsoft under this section.

               14.3.2 All amounts to be paid by Microsoft to Intellon herein
               exclude any foreign, U.S. federal, state, local, municipal or
               other governmental taxes arising as a result of the transactions
               contemplated under this Agreement including, without limitation,
               (a) taxes imposed or based on or with respect to or measured by
               any net or gross income or receipts of Intellon, (b) any
               franchise taxes, taxes on doing business, gross receipts taxes or
               capital stock taxes (including any minimum taxes and taxes
               measured by any item of tax preference), (c) any taxes imposed or
               assessed after the date upon which this Agreement is terminated,
               (d) taxes based upon or imposed with reference to Intellon's real
               and personal property ownership (e) any taxes imposed with
               respect to the employees or independent contractors of Intellon
               (including, without limitation, federal insurance contributions
               act (FICA) taxes, federal unemployment tax act (FUTA) taxes, or
               income tax withholding or any similar state taxes) (f) any taxes
               similar to or in the nature of those taxes described in (a), (b),
               (c), (d) or (e) above, now or hereafter imposed on Intellon or
               any Third Parties with which Intellon enters into agreements
               relating to its undertakings hereunder (collectively "Taxes").
               Microsoft is not liable for any Taxes, duties, levies, fees,
               excises or tariffs or any penalties, interest or any additions
               thereon, incurred in connection with or related to the sale of
               goods and services under this Agreement, provided that Microsoft
               shall pay Intellon Collected Taxes in accordance with subsection
               (a) above. Such Taxes (other than Collected Taxes) shall be the
               responsibility of Intellon, including penalties, interest and
               other additions thereon, and Intellon agrees to indemnify, defend
               and hold Microsoft harmless from any Taxes or claims, causes of
               action, costs (including without limitation, reasonable
               attorneys' fees), penalties, interest charges and other
               liabilities of any nature whatsoever related to such Taxes.

               14.3.3 If taxes are required to be withheld on any amounts
               otherwise to be paid by Microsoft to Intellon, Microsoft will
               deduct such taxes from the amount otherwise owed and pay them to
               the appropriate taxing authority. At Intellon's written request
               and expense, Microsoft will use reasonable efforts to cooperate
               with and assist Intellon in obtaining tax certificates or other
               appropriate documentation evidencing such payment provided,
               however, that the responsibility for such documentation shall
               remain with Intellon.

        14.4   GOVERNING LAW. This Agreement shall be governed by the laws of
        the State of Washington as though entered into between Washington
        residents and to be performed entirely within the State of Washington,
        and Intellon consents to jurisdiction and venue in the state and federal
        courts sitting in the State of Washington.

        14.5   ASSIGNMENT.

               14.5.1 Restriction on Assignment and Delegation. This Agreement
        shall be binding upon and inure to the benefit of each Party's
        respective successors and lawful assigns; provided, however, that prior
        to the completion of Phase 1, or prior to the completion of Phase 2 if
        the Parties enter into Phase 2, Intellon may not assign its rights or
        delegate its obligations under this Agreement to any other party, in
        whole or in part, whether by sale of assets, merger (whether or not
        Intellon is the surviving entity), or transfer of management or control
        of Intellon, or by operation of law or otherwise, without the prior
        written approval of Microsoft, which approval

                                       21

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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   22
                                                CONFIDENTIAL TREATMENT REQUESTED

        shall not be unreasonably withheld. Intellon shall guarantee the
        performance by any successor or assignee of any and all of the
        obligations imposed by this Agreement.

               14.5.2  Effect of Microsoft Termination. This restriction on
        assignment and delegation terminates immediately upon Microsoft's
        termination of the Agreement under any of the various termination
        provisions of Section 12.

               14.5.3 Definition of Control. For purposes of this Section,
        "control" shall mean the possession, directly or indirectly, of the
        power to direct or cause the direction of the management and policies of
        a legally recognizable entity, whether through the ownership of voting
        shares, by contract, or otherwise. Transfer of more than 30% of any
        class of Intellon's voting stock to another person or entity shall
        constitute a transfer of control. In the case of such an entity that is
        a partnership, limited liability company, corporation, or similar entity
        and that has partners, members, or shareholders with equal ownership
        interests or equal control interests (by contract or otherwise), each
        such partner, member, or shareholder shall be deemed to possess the
        power to direct or cause the direction of the management and policies of
        that entity.

              14.5.4 Obtaining Approval from Microsoft. If Intellon desires to
        effect a transaction (e.g., a merger, acquisition, or refinancing) that
        would amount to a transfer of control requiring Microsoft's approval
        hereunder, Intellon shall request Microsoft's approval in writing.
        Microsoft shall inform Intellon of its decision in writing within 15
        days. Failure to respond within such time shall be deemed disapproval by
        Microsoft.

        14.6   CONSTRUCTION. If for any reason a court of competent
        jurisdiction finds any provision of this Agreement, or portion thereof,
        to be unenforceable, that provision of the Agreement will be enforced to
        the maximum extent permissible so as to effect the intent of the
        Parties, and the remainder of this Agreement will continue in full force
        and effect. Failure by either Party to enforce any provision of this
        Agreement will not be deemed a waiver of future enforcement of that or
        any other provision. This Agreement has been negotiated by the Parties
        and their respective counsel and will be interpreted fairly in
        accordance with its terms and without any strict construction in favor
        or against either Party.

        14.7   ENTIRE AGREEMENT. This Agreement does not constitute an offer by
        Microsoft and it shall not be effective until signed by both Parties.
        This Agreement constitutes the entire agreement between the Parties with
        respect to the Services and all other subject matter hereof and merges
        all prior and contemporaneous communications. It shall not be modified
        except by a written agreement dated subsequent to the date of this
        Agreement and signed on behalf of Intellon and Microsoft by their
        respective duly authorized representatives.

        14.8   EXHIBITS.  The following Exhibits are part of this Agreement:

        Exhibit A     -      Power Line Carrier Technology Definition
        Exhibit B     -      Royalties
        Exhibit C     -      Phase 1
        Exhibit D     -      Elements for Phase 2
        Exhibit E            Independent Contractor Assignment of Rights Form

        IN WITNESS WHEREOF, the Parties have entered into this Agreement as of
the Effective Date written above.

                                       22

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   23
                                                CONFIDENTIAL TREATMENT REQUESTED

<TABLE>
<CAPTION>
        MICROSOFT CORPORATION                INTELLON CORPORATION.

<S>                                          <C>
        --------------------------           -----------------------------------
        By (Sign)                            By (Sign)

        --------------------------           -----------------------------------
        Name (Print)                         Name (Print)

        --------------------------           -----------------------------------
        Title                                Title

        --------------------------           -----------------------------------
        Date                                 Date

                                             -----------------------------------
                                             Intellon's Federal Employer ID
                                             number

</TABLE>

                                       23

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Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   24
                                                CONFIDENTIAL TREATMENT REQUESTED

                                    EXHIBIT A

                 POWER LINE CARRIER (PLC) TECHNOLOGY DEFINITION

SUMMARY

        Two separate PLC technologies are being licensed by Intellon Corporation
to Microsoft Corporation in accordance with the attached license agreement. The
first is called Spread Spectrum Carrier(TM) (SSC). The second is called Intellon
Enhanced OFDM (IEOFDM).

SPREAD SPECTRUM CARRIER

        SSC Technology is a method of spread spectrum communications suitable
for carrier sense multiple access (CSMA) networks. SSC Technology utilizes a
series of short, self-synchronizing, frequency swept "chirps" that act as a
carrier. The chirps are always of the same known pattern and detectable by all
of the nodes on the network. This approach is described in U.S. patent number
5,090,024, "Spread Spectrum Communications System for Networks" and number
5,574,748, "Spread Spectrum Communications System for Networks".

        Chirps can be divided into two frequency swept portions so that the
beginning and end of the chirp occur at the intermediate frequency of the sweep
range. This allows the frequency transitions to be controlled so that less
out-of-band energy is produced. This technique is described in U.S. patent
number 5,263,046, "Spread-Spectrum Chirp Communication with Sharply Defined
Bandwidth".

        In the embodiment of SSC used in conjunction with EIA-600 (SSC), two
modulation schemes are used for symbol transmission by the physical layer.
Amplitude Shift Keying (ASK) is used in the preamble of the message packet. ASK
modulation uses alternating SUPERIOR and INFERIOR states to encode symbols. A
SUPERIOR state is represented by the presence of a chirp and an inferior state
by the absence of a chirp. Because the transmitter is quiet during inferior
states, superior states transmitted by other devices contending for the channel
can be detected during the preamble of the packet. In the preamble, pitch (time
between inception of successive chirps) is slightly longer than in the body of
the packet. This change in pitch allows the receiver to unambiguously determine
the start of packet data and is covered by U.S. patent number 5,278,862, "Timing
for Spread-Spectrum Communication Across Noisy Media".

INTELLON ENHANCED ORTHOGONAL FREQUENCY DIVISION MULTIPLEXING (IEOFDM)

        Note: The OFDM program at Intellon is nearing the point at which patents
will be outlined, drafted and filed on crucial and unique pieces of OFDM
technology and implementation. The tutorial shown below outlines the theory of
operation but is not intended to serve as a comprehensive licensing document nor
the final deliverable of the "technology definition document".. It is Intellon's
goal to outline our full patent position and provide Microsoft with a document
similar in scope to that given for SSC (above). This timeframe will in no case
be later than Dec 31, 1998. Until such patents are filed, Intellon will have to
work to protect its proprietary information. As such, Microsoft will have access
to all relevant information but will have to work with Intellon to gain approval
to pass proprietary technical information on to Third Parties such as
sublicensees. Once patents are filed, such precautions shall be lifted

        Orthogonal Frequency Division Multiplexing (OFDM) is a spectrum
efficient modulation technique that enables wireless transmission of very high
data rates. Data rates in excess of 100 Million bits per second (Mbps) are
possible. OFDM has characteristics that make it adaptable to environments with
harsh multi-path reflections without equalization. Equalization becomes very
complex and expensive,

                                       24

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<PAGE>   25
                                                CONFIDENTIAL TREATMENT REQUESTED

if not impossible, for data rates above 10 Mbps. The problems caused by
multi-path reflections increase with distance and data rate.

        OFDM has been adopted as the modulation standard in Europe for
terrestrial and satellite audio broadcast (Eureka 147 DAB - Digital Audio
Broadcast - in use in Europe and Canada) and for terrestrial television
broadcast (DVB - Digital Video Broadcast). The decision to select OFDM was
largely due to OFDM's ability to mitigate multi-path reflections while making
efficient use of the available spectrum. The DVB standard provides for net data
rates up to 31.67 Mbps in a channel only 8 MHz wide for distances exceeding 50
miles (using OFDM/64-QAM).

        OFDM modulation is essentially the simultaneous transmission of a large
number of narrow band carriers (or subcarriers) each modulated with a low data
rate, the sum total yielding a very high data rate. The history of OFDM dates
back to 1966, when R. W. Chang published his paper on the synthesis of
band-limited orthogonal signals for multichannel transmission (Bell System
Technical Journal). A major contribution to OFDM was later presented in 1971 by
S. B. Weinstein and P. M. Ebert, who used the discrete Fourier transform (DFT)
to perform baseband modulation and demodulation. They also added a guard space
between OFDM symbols to combat intersymbol interference (ISI) caused by
multi-path reflections. In 1980, A. Peled and A. Ruiz introduced the cyclic
prefix in the guard space to solve a final problem with maintaining
orthogonality (lack of which causes interchannel interference (ICI)). With
today's technology, the DFT processor and other circuitry required to implement
OFDM can be built in a very low cost CMOS IC. Very high-speed, low cost
(consumer) transceivers can now be a reality.

THEORY OF OPERATION

        The basic idea of OFDM is to divide the available spectrum into many
narrowband, low data rate carriers (or subcarriers). To obtain high spectral
efficiency the frequency response of the subcarriers are overlapping and
orthogonal, hence the name OFDM. Each narrowband subcarrier can be modulated
using various modulation formats where BPSK, QPSK and QAM (or the differential
equivalents) are commonly used.

        Since the modulation rate on each subcarrier is very low, each
subcarrier experiences flat fading in a multi-path environment and is easy to
equalize. The need for equalization can be eliminated by selecting a relatively
small subcarrier spacing and using differential QPSK (DQPSK) modulation where
the data is encoded as the difference in phase between subcarriers (see Figure
1). Subcarrier pairs experience flat fading due to the narrow bandwidth they
occupy and the difference in phase and amplitude error between them is small.
Differential modulation can also be encoded as the difference in phase between
the present and previous symbol in time on the same subcarrier.

                                   [GRAPHIC]

                  Figure 1. Data encoded on the difference in phase between
subcarriers.

                                       25

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<PAGE>   26
                                                CONFIDENTIAL TREATMENT REQUESTED

TRANSMITTER

        OFDM modulation is generated using a fast Fourier transform (FFT)
processor. M bits of data are encoded in the frequency domain onto N subcarriers
as per Figure 2. M = [N-1] x B where B = the number of bits per modulation
symbol. B=2 in the case of QPSK or DQPSK.

        An inverse FFT (IFFT) is performed on the set of frequency subcarriers
to convert to the time domain (see Figure 2) to produce a single OFDM "symbol".
The length of time for the OFDM symbol is equal to the reciprocal of the
subcarrier spacing and is generally a very long time compared to the data rate.

                                   [GRAPHIC]

          Figure 2. Transform from the frequency to the time domain and adding
the cyclic prefix

RECEIVER

        OFDM signals are demodulated by the reverse process of the transmitter
(see Figure 2) where the cyclic prefix is removed from the time domain signal
and an FFT is performed on each symbol to convert to the frequency domain. Data
is decoded (in the case of DQPSK) by examining the phase difference of adjacent
subcarriers. Additional requirements for the receiver are frequency and time
synchronization. Phase synchronization of the local oscillators is not required
with differential modulation.

MULTI-PATH

        A cyclic prefix is added to the OFDM symbol to maintain complete
orthogonality in a time-dispersive channel (caused by multi-path reflections) by
copying the last part of the symbol and adding the copy to the beginning of the
symbol (see Figure 2). The long OFDM symbol time (generally many microseconds)
combined with the cyclic prefix (usually a small percent of the OFDM symbol
time) are key factors that enable performance in a time-dispersive channel. The
cyclic prefix needs to be as long as the longest multi-path delay time to
maintain orthogonality (eliminate ICI) and eliminate ISI.

        Conventional modulation suffers from interference caused by time-delayed
reflections of the original signal overlapping successive symbols (ISI).
Consider the transmission of conventional QPSK symbols at a rate of 1 MHz
(yielding 2 Mbps) in a time-dispersive channel with reflections delayed as much
as 1 uS. (Multi-path reflections of 1 uS occur in indoor environments with
several hundred feet of range.) In this example, the symbol time is 1/(1 MHz) =
1 uS. When multiple copies of the original signal arrive at the receiver delayed
up to 1 uS, the symbol being decoded (likely to be the signal from the most
direct path) is interfered with and corrupted by the delayed signals which
contain the previous symbol transmitted 1 uS earlier. This distortion can be
corrected with equalization, but becomes much more difficult when the symbol
rate is increased to 10 MHz, for example, where potentially all 10 preceding
symbols interfere with the symbol currently being decoded.

                                       26

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<PAGE>   27
                                                CONFIDENTIAL TREATMENT REQUESTED

        With OFDM, many hundreds of bits ( see above: [N-1] x B ) are
transmitted for each symbol making the duration of the symbol many microseconds.
Selecting a cyclic prefix of 1 uS for the example above, all received copies of
the original signal would contain the same OFDM symbol (except shifted in time)
and there would be no ISI.

        For long distance transmissions (such as the DVB standard where the
distance may be 50 miles or more), the time-dispersion is much longer (many
microseconds). In this case, the OFDM symbol time is specified to be hundreds of
microseconds and the cyclic prefix many microseconds in order to combat
interference from reflections.

FADING

        Even though OFDM can eliminate ISI, there remains a problem called
fading, also caused by multi-path reflections. Fading is caused when the
reflected signals arrive such that they cancel (i.e. 180 degrees out of phase)
the signal arriving first. This usually occurs only at particular frequencies
(or subcarriers in the case of OFDM) since the time delay for the reflections
are generally constant whereas the phase angle for a fixed time delay varies
with frequency. The net result is loss of data from some of the subcarriers that
are attenuated due to fading.

        A solution is to add interleaving and error coding to recover the lost
bits. This is commonly referred to as coded OFDM (COFDM). Both the DAB and DVB
standards use COFDM.

THE FOREGOING EXHIBIT A IS AGREED TO AND ACCEPTED BY THE PARTIES:

MICROSOFT CORPORATION                       INTELLON CORPORATION

--------------------------                  ------------------------------------
By (Sign)                                   By (Sign)

--------------------------                  ------------------------------------
Name (Print)                                Name (Print)

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

Title                                       Title

--------------------------                  ------------------------------------
Date                                        Date

                                    EXHIBIT B

                                  ROYALTIES FOR
                         ASICs IN NON-MICROSOFT PRODUCTS

        1.     ROYALTIES FOR MICROSOFT ASIC SALES TO THIRD PARTIES FOR NON-
MICROSOFT PRODUCTS. In the event that Microsoft sells Royalty-Bearing ASICs
manufactured by or for Microsoft to any Third Party for use in a product that is
not a Microsoft Product :

                                       27

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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   28
                                                CONFIDENTIAL TREATMENT REQUESTED

        1.1 Microsoft agrees to pay a royalty of ********** of the amount paid
        by Microsoft to its Authorized Manufacturer for the manufacture of
        Royalty-Bearing ASICs sold to Third Parties for use in a product that is
        not a Microsoft Product. The "amount paid" for purposes of this Section
        1.1 shall exclude any set-up charges or other costs not charged on a per
        unit basis that are not exclusively for the manufacture of
        Royalty-Bearing ASICs. The royalty percentage set forth in this Section
        2.1 shall be adjusted to ********** pursuant to the provisions of
        Section 3 of this Exhibit B.

        1.2 Within forty five (45) days after the end of each calendar quarter
        with respect to which Microsoft owes Intellon any royalties, Microsoft
        agrees to furnish Intellon with a statement, together with payment for
        any amount shown thereby to be due to Intellon. The royalty statement
        shall contain information sufficient to discern how the royalty payment
        was computed.

        1.3 Microsoft shall be entitled to withhold from all royalties otherwise
        payable hereunder a reasonable reserve, made in good faith, against
        anticipated returns of Royalty-Bearing ASICs, which reserve shall not
        exceed ********** of all amounts due hereunder for the two most recent
        calendar quarters, without adjustment for reserve, and which reserve
        shall be reviewed quarterly in light of the actual returns of the
        preceding two (2) quarters. The excess or short-fall, if any, of such
        reserve balance at the time of such quarterly review over or under the
        actual aggregate amount of returns for such period shall be credited to
        or debited against the next payment due Intellon hereunder.

        1.4 Intellon shall have the right to have a Third Party approved by
        Microsoft conduct an audit of Microsoft's records relating to
        Microsoft's sales of Royalty-Bearing ASICs that are not in Microsoft
        Products to Third Parties in order to verify the royalties due under
        Section 1 of this Exhibit B. Any such audit shall be conducted at a
        mutually agreed-upon location (which shall not be on Microsoft property
        unless specifically agreed to by Microsoft) during regular business
        hours no more than once per calendar year. Intellon shall provide
        Microsoft at least thirty (30) day's written notice that Intellon is
        initiating an audit and Microsoft shall gather and provide the relevant
        records as reasonably requested. Any audit shall be conducted at
        Intellon's expense. Prompt adjustment shall be made of any material
        discrepancies disclosed by such audit.

        1.5 The royalty obligation imposed by Section 1 of this Exhibit B shall
        terminate ********** from the Safe Ad Date of the first Microsoft PLC
        Product. All ASIC sales by Microsoft after that date shall be
        royalty-free.

        1.6 Notwithstanding the provisions of this Exhibit B, any
        Royalty-Bearing ASIC used by Microsoft or its contractors for
        development, marketing, or related purposes, including any such ASIC
        distributed as "free," "complimentary," "no charge," or at nominal
        prices less than One Dollar (US $1.00) per ASIC to promote or stimulate
        sales of Microsoft PLC Compatible products, limited to no more than one
        hundred ASICs to any single entity, and any sales to Microsoft employees
        that are not subject to resale, shall be exempt from royalty.

        1.7 For purposes of calculating the royalty due under Section 1.1 of
        this Exhibit, in cases where the SSC or IEOFDM technologies constitute a
        subset of the full functions of a Royalty-Bearing ASIC, the percentage
        of gates incorporating the SSC or IEOFDM technologies out of the total
        number of gates in such ASIC shall be applied to the sales price of the
        ASIC to determine the "amount paid' for purposes of Section 1.1 of this
        Exhibit. This allocation shall apply only in cases where SSC or
        IEOFDM-related gates represent less than ********** of the ASIC gate
        total. (For example, if ********** of the gates in such ASIC incorporate
        the SSC or IEOFDM

                                       28

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Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   29
                                                CONFIDENTIAL TREATMENT REQUESTED

        technologies, the royalty shall be calculated based on ********** of the
        amount paid; if ********** of the gates in such ASIC incorporate the SSC
        or IEOFDM technologies, the royalty shall be calculated based on
        ********** of the amount paid.) If the percentage of gates in a
        Royalty-Bearing ASIC that incorporate the SSC or IEOFDM technologies is
        less than ********** allocation shall be applied to determine the amount
        paid for purposes of Section 1.1 of this Exhibit.

2.      ROYALTIES FOR ASIC SALES TO THIRD PARTIES BY AUTHORIZED MANUFACTURER(s).

        2.1 Microsoft agrees that, in any contract whereby Microsoft licenses an
        Authorized Manufacturer to manufacture and sell Royalty-Bearing ASICs to
        Third Parties, Microsoft shall require such Authorized Manufacturer to
        pay a royalty to Intellon in the amount of ********** of the amount
        received by such Authorized Manufacturer for each such ASIC (the "Sales
        Price"), for sales to any Third Party.

        2.2 The royalty percentage set forth in Section 2.1 of this Exhibit B
        shall be adjusted to ********** pursuant to the provisions of Section 3
        of this Exhibit B.

        2.3 Microsoft agrees, in any contract subject to Section 2.1 of this
        Exhibit B, to require that any royalties due be paid to Intellon within
        forty-five (45) days of the end of the each calendar quarter with
        respect to which the Authorized Manufacturer owes Intellon any
        royalties, together with a statement containing information sufficient
        to discern how the royalty payment was computed.

        2.4 For purposes of calculating the royalty due under Section 2.1 of
        this Exhibit, in cases where the SSC or IEOFDM technologies constitute a
        subset of the full functions of a Royalty-Bearing ASIC, the percentage
        of gates incorporating the SSC or IEOFDM technologies out of the total
        number of gates in such ASIC shall be applied to the sales price of such
        ASIC to determine Sales Price for royalty purposes. This allocation
        shall apply only in cases where SSC or IEOFDM-related gates represent
        ********** of the Royalty-Bearing ASIC gate total. (For example, if
        ********** of the gates in a Royalty-Bearing ASIC incorporate the SSC or
        IEOFDM technologies, the royalty shall be calculated based on **********
        of the Sales Price; if ********** of the gates in such ASIC incorporate
        the SSC or IEOFDM technologies, the royalty shall be calculated based on
        ********** of the Sales Price.) If the percentage of gates in a
        Royalty-Bearing ASIC that incorporates the SSC or IEOFDM technologies is
        less than ********** allocation shall be applied to determine the Sales
        Price for royalty purposes.

        2.5 In cases where an Authorized Manufacturer manufactures
        Royalty-Bearing ASICs as an integrated portion and/or component of a
        finished product, the larger of: (i) the per ASIC average selling price
        booked by the Authorized Manufacturer for that internal transfer, as
        otherwise determined under Section 2.3 of this Exhibit, (ii) the Sales
        Price for sales to the second largest outside ASIC customer of the
        Authorized Manufacturer, or (iii) in cases where the Authorized
        Manufacturer has only one outside ASIC customer, the Sales Price for
        sales to that customer, shall be used to determine the Sales Price for
        royalty purposes. The foregoing shall be subject to the adjustment set
        forth in Section 2.4 of this Exhibit B.

        2.6 Microsoft agrees that any contract subject to Section 2.1 of this
        Exhibit B shall provide Intellon with the right to have an independent
        Third Party conduct an audit of Royalty-Bearing ASIC sales by an
        Authorized Manufacturer in order to verify the royalties due under
        Section 2 of this Exhibit B. Any such audit shall be conducted during
        regular business hours no more than

                                       29

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<PAGE>   30
                                                CONFIDENTIAL TREATMENT REQUESTED

        once per calendar year. Intellon shall provide the Authorized
        Manufacturer to be audited with at least thirty (30) day's written
        notice that Intellon is initiating an audit. Any such audit shall be
        conducted at Intellon's expense.

        2.7 An Authorized Manufacturer shall be entitled to withhold from all
        royalties otherwise payable hereunder a reasonable reserve, made in good
        faith, against anticipated returns of ASICs, which reserve shall not
        exceed ********** of all amounts due hereunder for the two most recent
        calendar quarters, without adjustment for reserve, and which reserve
        shall be reviewed quarterly in light of the actual returns of the
        preceding two (2) quarters. The excess or short-fall, if any, of such
        reserve balance at the time of such quarterly review over or under the
        actual aggregate amount of returns for such period shall be credited to
        or debited against the next payment due Intellon hereunder.

3.      CHANGE IN ROYALTY PERCENTAGE.

        3.1 On the first day of the calendar quarter following the calendar
        quarter in which Royalty-Bearing ASICs incorporating IEOFDM reach a
        cumulative total of ********* units sold, the royalty percentage due to
        Intellon for IEOFDM based Royalty-Bearing ASICs under Section 1 and
        Section 2 of this Exhibit B shall be reduced to **********. On the first
        day of the calendar quarter following the calendar quarter in which
        Royalty-Bearing ASICs incorporating SSC reach a cumulative total of
        **********units sold, the royalty percentage due to Intellon for SSC
        based Royalty-Bearing ASICs under Section 1 and Section 2 of this
        Exhibit B shall be reduced to **********.

        3.2 Intellon shall provide timely written notice to Microsoft and to all
        Authorized Manufacturers that have paid or are paying royalties to
        Intellon pursuant to this Agreement when the sale of Royalty-Bearing
        ASICs has reached a cumulative total of ********** ASICs. Such notice
        shall inform Microsoft and all Authorized Manufacturers of the date on
        which the royalty percentage under this Exhibit B is reduced from
        **********. Retroactive adjustment may be made by Microsoft or any
        Authorized Manufacturer to reflect the reduction in royalty percentage
        as of that date.

        3.3 Both SSC ASICs and IEOFDM ASICs are subject to royalty under Section
        1.1 and 2.1 of this Exhibit B. Each ASIC type shall be subject to an
        independent cumulative total of *********** of that type of ASIC for the
        purposes of this Section 3. Each shall be counted as a separate ASIC
        (even if sold together) for purposes of calculating when a cumulative
        total of ********** ASICs incorporating each technology have been sold
        for purposes of this Section 3.

4.      INTELLON SUBLICENSEES ROYALTY TO MICROSOFT. Intellon shall require any
of its sublicensees that produce components or products that are protected by
Phase 2 Intellectual Property to pay or provide to Microsoft the identical
royalties, license fees, or any other consideration for the use of such
technologies or intellectual property, that such sublicensees are required to
pay or provide to Intellon. Intellon shall also require that Microsoft shall
have the right to have a Third Party approved by Intellon conduct an audit of
payments made to Intellon by Intellon sublicensees in order to verify the
royalties, license fees or other payments made by such sublicensees to Intellon
and to have any material discrepancies promptly adjusted. Any such audit shall
be conducted during regular business hours no more than once per calendar year.
Microsoft shall provide Intellon with at least thirty (30) day's written notice
that Microsoft is initiating an audit. Any such audit shall be conducted at
Microsoft's expense.

                                       30

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   31
                                                CONFIDENTIAL TREATMENT REQUESTED

THE FOREGOING EXHIBIT B IS AGREED TO AND ACCEPTED BY THE PARTIES:

MICROSOFT CORPORATION               INTELLON CORPORATION.

-----------------------             ----------------------------------------
By (Sign)                           By (Sign)

-----------------------             ----------------------------------------
Name (Print)                        Name (Print)

-----------------------             ----------------------------------------
Title                               Title

-----------------------             ----------------------------------------
Date                                Date

                                       31

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE>   32
                                                CONFIDENTIAL TREATMENT REQUESTED

                               EXHIBIT C - PHASE 1

                                       SSC

APPROACH:

The approach to Phase I (SSC) is to take the requirements identified below and
verify performance to these requirement with an existing Intellon SSC based IC
(P400). An existing P400 evaluation board will be used to gather real world
performance data and a test report will be generated.

The Technology will then be transferred to Microsoft in the form specified in
the Deliverables section below.

REQUIREMENTS:

HOME CONTROL PLC

The Home Control PLC will be used to communicate low data rate commands between
the system hub and other line powered home automation system peripherals,
including AC Modules, IR Modules and embedded controllers in future consumer
devices.

DATA RATE

-       Home Control PLC Data Rate      -   **********

POWER LINE IMPEDIMENTS

The Home Control PLC must function in the presence of these impediments:

-       Loading attenuation             -  **********
-       Cross phase attenuation         -  **********
-       Continuous Wave interference    -  **********
-       White gaussian noise            -  **********
-       Dimmer noise                    -  **********
                                           **********
                                           **********
-       Multipath distortion            -  **********
                                           **********

Performance requirements in the presence of these impediments shall be:

-       Packet Error Rate               -  **********
-       Working Outlet Percentage       -  **********
-       Working Home Percentage         -  **********

X-10 INTEROPERABILITY

It has been estimated that over 100,000,000 X-10 devices have been sold since
their introduction in the mid 1970's. The Home Networking PLC must accommodate
this installed base.

                                       32

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Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   33
                                                CONFIDENTIAL TREATMENT REQUESTED

-       Must not interfere with communication between two separate X-10 devices
-       Must be able to transmit and receive X-10 commands directly

COST

The typical Home Control installation may have 20 or 30 control modules in
addition to the controller/router. All must include the Home Control PLC. As
such, it must be very low cost.

-       Cost per Control PLC node       -  **********

STATEMENT OF WORK:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
                       TASK                                ********
----------------------------------------------------------------------------
<S>                                                 <C>
Deliver requirements                                **********
----------------------------------------------------------------------------
Generate field verification test plans              **********
----------------------------------------------------------------------------
Generate acceptance criteria                        **********
----------------------------------------------------------------------------
Review and mutually agree on field test plan and
acceptance criteria                                 **********
----------------------------------------------------------------------------
Test SSC ICs in real world                          **********
----------------------------------------------------------------------------
Complete test reports                               **********
----------------------------------------------------------------------------
Transfer technology                                 **********
----------------------------------------------------------------------------
</TABLE>

DELIVERABLES:

- Device specification (data sheet)
- VHDL logic description source code
- VHDL simulation test bench source code
- Analog cell functional specifications
- I/O cell functional specifications
- Memory cell functional specifications
- Microprocessor firmware source code

SCHEDULE ESTIMATES:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
                    MILESTONE                         ESTIMATED COMPLETION
----------------------------------------------------------------------------
<S>                                                 <C>
Test plans acceptance criteria and specifications   4 weeks ARO
----------------------------------------------------------------------------
Assemble field data gathering units                 10 weeks ARO
----------------------------------------------------------------------------
Data gathering                                      14 weeks ARO
----------------------------------------------------------------------------
Final test report                                   16 weeks ARO
----------------------------------------------------------------------------
</TABLE>

Schedule will run in parallel with the OFDM Phase I schedule

                                       33

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   34
                                                CONFIDENTIAL TREATMENT REQUESTED

                                     IEOFDM

APPROACH:

The approach to Phase I (IEOFDM) is to take the requirements identified below
and create a specification for an implementation to meet the stated
requirements. The specification will be reviewed and jointly agreed upon by
Microsoft and Intellon. The specification will then be implemented (using C
language) in an industry standard communications simulator and verified the with
simulation test plan and acceptance criteria. Once the computer simulations have
been completed, the C models used for the simulation will be ported to a system
capable of gathering field data against real world impairments. The computer
simulation results and the field data results will be compiled into a test
report that will document the required performance results and the actual
performance results obtained from the simulation and field testing.

The Technology will then be transferred to Microsoft in the form of C models
used in the simulation, the specifications and the test reports.

REQUIREMENTS:

HIGH-SPEED NETWORKING PLC

The High-Speed Networking PLC will be used to connect the system hub to other
high-speed networking peripherals, including other PCs, networked printers and
future voice acquisition home control modules.

DATA RATE

The High-Speed Networking PLC data rate must support standard networking
activities such as file transfers and printing. The access into the home is
expected to be 1 Mbps through cable modems, ADSL or other high-speed technology.
This sets the minimum for interhome networking data rate.

-       High-Speed PLC Data Rate        -  **********

POWER LINE IMPEDIMENTS

The Home Control PLC must function in the presence of these impediments:

-       Loading attenuation             -  **********
-       Cross phase attenuation         -  **********
-       Continuous Wave interference    -  **********
-       White gaussian noise            -  **********
-       Dimmer noise                    -  **********
                                           **********
                                           **********
-       Multipath distortion            -  **********
                                           **********

Performance requirements in the presence of these impediments shall be:

-       Packet Error Rate               -  **********
-       Working Outlet Percentage       -  **********

                                       34

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   35
                                                CONFIDENTIAL TREATMENT REQUESTED

-       Working Home Percentage         -  **********

X-10 COMPATIBILITY

Since the High-Speed Networking PLC is intended for high performance data
connections only, it need not interoperate with existing X-10 devices. It shall,
however, not interfere with X-10 command transfers.

-       Must not interfere with communication between two separate X-10 devices

COST

High data rate performance is the priority for High-Speed Networking PLC. Cost
is still a consideration, but fewer system nodes gives some latitude for a
higher per node cost.

-       Cost per High-Speed PLC node-       **********

STATEMENT OF WORK:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
                       TASK                            RESPONSIBLE PARTY
<S>                                                <C>
----------------------------------------------------------------------------
Deliver requirements                                **********
----------------------------------------------------------------------------
Generate simulation and field verification test
plans                                               **********
----------------------------------------------------------------------------
Generate acceptance criteria                        **********
----------------------------------------------------------------------------
Review and mutually agree on simulation test
plan, field test plan and acceptance criteria       **********
----------------------------------------------------------------------------
Develop simulation C models for channel and DSP
algorithms to meet requirements                     **********
----------------------------------------------------------------------------
Complete simulation                                 **********
----------------------------------------------------------------------------
Test simulation models in real world                **********
----------------------------------------------------------------------------
Complete test reports                               **********
----------------------------------------------------------------------------
Transfer technology in form of C simulation
models specifications and test reports              **********
----------------------------------------------------------------------------
</TABLE>

DELIVERABLES:

-       Specifications
-       Simulation and field verification test plans
-       Simulation and field verification test reports
-       Technology transfer of simulation (C language)

SCHEDULE ESTIMATES:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
                    MILESTONE                        ESTIMATED COMPLETION
----------------------------------------------------------------------------
<S>                                                <C>
Test plans acceptance criteria and specifications   4 weeks ARO
----------------------------------------------------------------------------
Develop simulation models                           10 weeks ARO
----------------------------------------------------------------------------
Data gathering and computer simulation              14 weeks ARO
----------------------------------------------------------------------------
Final test report                                   16 weeks ARO
----------------------------------------------------------------------------
</TABLE>

                                       35

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   36
                                                CONFIDENTIAL TREATMENT REQUESTED

                                    EXHIBIT D

                               ELEMENTS OF PHASE 2

1.   Intellon will create a "Master ASIC Design Source Tape" at the beginning of
     Phase 2 and will maintain the tape to the current level of the design
     throughout Phase 2. Included in the Master ASIC Design Source Tape are the
     following items:

     - Device specification (data sheet)
     - VHDL logic description source code
     - VHDL simulation test bench source code
     - Analog cell functional specifications
     - I/O cell functional specifications
     - Memory cell functional specifications
     - Microprocessor firmware source code

2.   Intellon will provide the final Master ASIC Design Source Tape to Microsoft
     at the completion of Phase 2 and will deliver a current Master ASIC Design
     Source Tape for the IC to Microsoft periodically throughout Phase 2 upon
     request.

                                       36

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   37
                                                CONFIDENTIAL TREATMENT REQUESTED

                                    EXHIBIT E

                         INDEPENDENT CONTRACTOR ASSIGNMENT OF RIGHTS FORM

        For valuable consideration, receipt of which is hereby acknowledged,
     __________________________, a corporation of ________________, with an
     office at __________________ (hereinafter, "the Assignor") hereby assigns
     to Intellon Corporation, a Florida corporation with its principal offices
     at Ocala, Florida, and its successors and assigns (collectively
     hereinafter, "the Assignee"), the entire right, title and interest
     throughout the world in all inventions, improvements, patent applications,
     patents, utility models, design registrations, inventor's certificates,
     mask works, copyrights or moral rights, and trade secrets or other
     proprietary rights (other than trademarks, trade names, or service marks)
     arising out of the work done under the ____________________________________
     contract for Intellon Corporation. This assignment includes the right to
     claim priority based on the filing date of any application under the
     International Convention for the Protection of Industrial Property, the
     Patent Cooperation Treaty, the European Patent Convention, and all other
     treaties of like purposes, and the right to apply in all countries in the
     Assignor's name, or the name of the individual inventors, or in Assignee's
     own name, for patents, utility models, design registrations and like rights
     of exclusion, and for inventors' certificates for said inventions and
     improvements; and Assignor agrees for itself and all its legal
     representatives and assigns, without further compensation, to perform such
     lawful acts and to sign such further applications, assignments, statements,
     and other lawful documents as the Assignee may reasonably request to
     effectuate fully this assignment.

         Assignor

Date:
        ---------  -------------------------------------------------------------
         By:

         Its:

         Assignee

Date:
        ---------  -------------------------------------------------------------
         By:

         Its:

                                       37

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

<PAGE>   38
                                                CONFIDENTIAL TREATMENT REQUESTED

STATE OF  ____________________________________:
                                              :SS.
COUNTY OF ____________________________________:

Before me this ____day of __________, 19__, personally appeared _______________
     on behalf of Assignor and known to me to be the person whose name is
     subscribed to the foregoing Assignment, and acknowledged that he/she
     executed the same as his/her free act and deed for the purposes therein
     contained.

              Notary Public

              My Commission Expires:
[Notary's Seal Here]

STATE OF  ____________________________________:

                                              :SS.
COUNTY OF ____________________________________:

     Before me this _________day of ____________________________, 19___,
     personally appeared on behalf of Assignee and known to me to be the person
     whose name is subscribed to the foregoing Assignment, and acknowledged
     that he/she executed the same as his/her free act and deed for the purposes
     therein contained.

              Notary Public

              My Commission Expires:
[Notary's Seal Here]

                                       38

Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.

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