Document:

Exhibit 10.23

AMENDMENT NUMBER ONE TO SECURITY AGREEMENT

AMENDMENT NUMBER ONE TO

SECURITY
AGREEMENT

THIS AMENDMENT NUMBER ONE
TO SECURITY AGREEMENT (this “Amendment”) is dated as of July 25, 2002 and is
entered into by and among 3Com Corporation (“Grantor”), on the one hand, and
Bank of America, N.A., as administrative agent for the various financial
institutions that are or may from time to time become parties to the Credit
Agreement referred to below (collectively, the “Lenders” and individually, a
“Lender”) (in such capacity, together with its successors and assignees in such
capacity, the “Agent”).  All capitalized
terms used herein but not otherwise defined shall have the meanings ascribed to
them in the Security Agreement (as hereinafter defined).

R E C I T A L S

WHEREAS, Grantor, the
Lenders and the Agent have entered into that certain Credit Agreement dated as
of November 28, 2001 (as amended and supplemented, the “Credit Agreement”), and
Agent and Grantor have entered into that certain Security Agreement, dated as
of November 28, 2001 (as amended and supplemented the “Security Agreement”);
and

WHEREAS, Grantor desires
to amend the Security Agreement and the Agent and the Required Lenders are
willing to do so, subject to the terms and conditions stated herein;

NOW, THEREFORE, in
consideration of the premises herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Agent (on behalf of itself and the required Lenders) and the Grantor hereby
agree as follows:

A G R E E M E N T

Section 1.              Amendment to the Security Agreement. 
The Agent, Lenders and Grantor agree that Section 4(c)(D) of the
Security Agreement is hereby amended in its entirety to read as follows:

“(D) on
consignment, provided that the Grantor has taken all actions necessary to
protect its interests in such Collateral against such consignees and their
creditors (including the filing of precautionary financing statements against
such consignees and has provided to Agent an assignment of such financing
statements);  provided, however,
that the Grantor may place on consignment (1) Inventory having a fair market
value of approximately $4,000,000 and delivered prior to July 1, 2002 to
America II Electronics at their warehouse at 2600 118th Avenue
North, St. Petersburg, Florida 33716, and (2) Collateral having a fair market
value of up to $250,000 per fiscal quarter, but in no event shall Grantor place
on consignment Inventory having a fair market value of more than $2,500,000
outstanding at any one time, with any consignees, in each case

 

1

 

without the
necessity of taking the foregoing protective actions so long as such Collateral
has not been included in the Borrowing Base (or if it has been included, it has
been removed (with written notice to Agent) prior to delivery to the
consignee); or”

 

Section 2.              Conditions Precedent. 
The effectiveness of this Amendment is subject to the satisfaction of
the following conditions precedent:

A.            Amendment.  A fully executed copy of this Amendment
signed by the Grantor shall be delivered to Agent.

B.            Other Documents. Grantor
shall have executed and delivered to Agent such other documents and instruments
as Agent may reasonably require.

Section
3.              Miscellaneous.

A.            Survival of Representations and
Warranties.  All representations and
warranties made in the Security Agreement or any other document or documents
relating thereto, including, without limitation, any Loan Document furnished in
connection with this Amendment, shall survive the execution and delivery of
this Amendment and the other Loan Documents, and no investigation by Agent or
Lenders or any closing shall affect the representations and warranties or the
right of Agent or Lenders to rely thereon.

B.            Reference to Agreement.  The Security Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof, or pursuant to
the terms of the Security Agreement as amended hereby, are hereby amended so
that any reference therein to the Security Agreement shall mean a reference to
the Security Agreement as amended hereby.

C.            Agreement Remains in Effect.  The Security Agreement and the Loan
Documents, as amended hereby, remain in full force and effect and the Grantor
ratifies and confirms its agreements and covenants contained therein.  The Grantor hereby confirms that, after
giving effect to this Amendment and the Waiver Letter of even date herewith by
Agent and addressed to the Grantor, no Event of Default or Default exists as of
such date.

D.            Severability.  Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

E.             APPLICABLE
LAW.  THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.

F.             Successors and Assigns.  This Amendment is binding upon and shall
inure to the benefit of Agent, the Lenders and Grantor and their respective
successors and assigns; provided, however, that Grantor may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Agent and Lenders.

 

2

 

G.            Counterparts.  This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the
same instrument.

H.            Headings.  The headings, captions and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.

I.              NO
ORAL AGREEMENTS.  THIS AMENDMENT,
TOGETHER WITH THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL
AGREEMENT BETWEEN AGENT AND GRANTOR AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN AGENT AND GRANTOR.

*     *     *    
*     *

 

3

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed by
their respective authorized officers as of the date set forth above.

 

	
   

  	
  3COM CORPORATION,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

 

 

4Exhibit 10.24

 

WARRANT

 

                                                                THIS
WARRANT OR THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. 
THIS WARRANT, OR THE SHARES ISSUABLE HEREUNDER, MAY NOT BE SOLD OR
TRANSFERRED EXCEPT AS SET FORTH HEREIN OR IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION THEREUNDER.

 

	
   

  	
  W-1

  	
   

  	
  7,100,000

  
	
   

  	
   

  	
   

  	
  shares of Common Stock

  

 

3COM CORPORATION

 

WARRANT TO PURCHASE COMMON STOCK

Void after December 4, 2002

 

                This certifies that, for the issuance and delivery of
a promissory note in the original principal amount of twenty-one million
fifty-one thousand five hundred dollars ($21,051,500) dated of even date
herewith (the “Note”), which Note is subject to a pledge agreement
between the parties of even date herewith (the “Pledge Agreement”), BROADCOM
CORPORATION, a California corporation or its registered assigns (“Holder”)
is entitled, subject to the terms set forth below, to purchase from 3COM
CORPORATION, a Delaware corporation (the “Company”), up to
seven million one hundred thousand (7,100,000) shares (such number of shares
being referred to herein as the “Original Amount”) of the Common Stock
of the Company (the “Common Stock”), as constituted on the date hereof
(the “Warrant Issue Date”), upon surrender hereof, at the principal
office of the Company referred to below, with the notice of exercise form
attached hereto duly executed, and simultaneous payment therefor in lawful
money of the United States or otherwise as hereinafter provided, at the
exercise price per share as set forth in Section 2 below.  The Original Amount, character and Exercise
Price of such shares of Common Stock are subject to adjustment as provided
below.  The term “Warrant” as
used herein shall include this Warrant, and any warrants delivered in
substitution or exchange therefor as provided herein.

 

                1.             Term
of Warrant.

 

                                (a)           Subject
to the terms and conditions set forth herein and compliance with any applicable
regulatory requirements, this Warrant shall be exercisable, in whole or in
part, commencing on January 1, 2001  and
ending at 5:00 p.m., Pacific Standard Time, on December 4, 2002 (the “Expiration
Date”), and, except as otherwise provided herein, shall be void thereafter.

 

                                (b)           In
the event that the Expiration Date of this Warrant falls on a day which is not
a Business Day, the Expiration Date shall be adjusted to the Business Day
immediately following such Expiration Date. 
As used herein, the term “Business Day” means each day other

 

 

 

 

than a Saturday, Sunday or other day on which banks in the location of
the principal office of the Company are legally authorized to close.

 

                2.             Exercise
Price.  The per share exercise price
at which this Warrant may be exercised shall be equal to $9.31 (the “Exercise
Price”).

 

                3.             Exercise of Warrant.

 

                                (a)           The
purchase rights represented by this Warrant are exercisable by the Holder in
whole or in part subject to compliance with applicable regulatory requirements,
at any time and from time to time, during the term hereof as described in
Section 1 above, by the surrender of this Warrant and the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder, at the
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company), upon payment (i) in cash or by check
acceptable to the Company, (ii) by cancellation by the Holder of indebtedness
of the Company to the Holder, or (iii) by a combination of (i) and (ii), of an
amount equal to the then applicable Exercise Price per share multiplied by the
number of shares then being purchased.

 

                                (b)           This
Warrant shall be deemed to have been exercised immediately prior to the close
of business on the date of its surrender for exercise as provided above, and
the person entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of record of such shares
as of the close of business on such date. 
Subject to Section 15 hereof, as promptly as practicable on or after
such date and in any event within ten (10) days thereafter, the Company, at its
expense, shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates for the number of shares issuable upon
such exercise.  Subject to Section 15
hereof, in the event that this Warrant is exercised in part, the Company, at its
expense, will execute and deliver a new Warrant of like tenor exercisable for
the number of shares for which this Warrant may then be exercised.

 

                4.             Fractional
Shares.  No fractional shares will
be issued in connection with any exercise of this Warrant, and the number of
shares to which the Holder is entitled upon exercise of this Warrant shall be
rounded down to the nearest whole number.

 

                5.             Replacement
of Warrant.  On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and
substance to the Company or, in the case of mutilation, on surrender and
cancellation of this Warrant, the Company at its expense shall execute and
deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

                6.             No
Rights as Stockholder.  Subject to
Sections 9 and 11 of this Warrant, the Holder shall not be entitled to vote or
receive dividends pursuant to this Warrant or be deemed the holder of Common
Stock pursuant to this Warrant, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action (whether upon any

 

 

-2-

 

recapitalization, issuance of stock, reclassification of stock, change
of par value, or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised as provided herein.

 

                7.             Transfer of Warrant.    Subject to the restrictions on transfer
set forth herein, the rights and obligations of the Holder pursuant to this
Warrant shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the Holder; provided, however,
that neither this Warrant nor any of the rights, interests or obligations
hereunder may be assigned, by operation of law or otherwise, in whole or in
part, by the Holder without the prior written consent of the Company except in
connection with an assignment in whole to a successor corporation to the
Holder, provided that such successor corporation acquires all or substantially
all of the Holder’s property and assets and the Company’s rights hereunder are
not impaired or to a direct or indirect wholly-owned subsidiary of the
Holder.  Notwithstanding the immediately
preceding sentence, except for the restrictions on transfer set forth
hereafter, this Warrant shall be assignable by the Holder without obtaining the
prior written consent of the Company if a Definitive Agreement (as defined in
the Note) is not entered into by the Company and the Holder by June 1, 2001.

 

                                (a)
          The Company will maintain a
register (the “Warrant Register”) containing the names and addresses of
the Holder or Holders.  Any Holder of
this Warrant or any portion thereof may change his address as shown on the
Warrant Register by written notice to the Company requesting such change.  Any notice or written communication required
or permitted to be given to the Holder may be delivered or given by mail to
such Holder as shown on the Warrant Register and at the address shown on the
Warrant Register.  Until this Warrant is
transferred on the Warrant Register of the Company, the Company may treat the
Holder as shown on the Warrant Register as the absolute owner of this Warrant
for all purposes, notwithstanding any notice to the contrary.

 

                                (b)           The
Company may, by written notice to the Holder, appoint an agent for the purpose
of maintaining the Warrant Register referred to in Section 7(a) above, issuing
the Common Stock or other securities then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the
foregoing.  Thereafter, any such
registration, issuance, exchange, or replacement, as the case may be, shall be
made at the office of such agent.

 

                                (c)           Notwithstanding
anything else contained herein to the contrary, this Warrant may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee.  Subject to the provisions of this Warrant
with respect to compliance with the Securities Act of 1933, as amended (the
“Act”) and this Section 7, title to this Warrant may be transferred by
endorsement (by the Holder executing the Assignment Form annexed hereto) and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery.

 

                                (d)           On
surrender of this Warrant for exchange, properly endorsed on the Assignment
Form and subject to the provisions of this Warrant with respect to compliance
with the Act and with the limitations on assignments and transfers contained in
this Section 7, the

 

 

-3-

 

Company at its expense shall issue to or on the order of the Holder a
new warrant or warrants of like tenor, in the name of the Holder or as the
Holder (on payment by the Holder of any applicable transfer taxes) may direct,
for the number of shares issuable upon exercise hereof.

 

                                (e)           The Holder of this Warrant, by
acceptance hereof, acknowledges that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Common Stock to be issued
upon exercise hereof except in compliance with the registration requirements of
the Act, subject, nevertheless, to the disposition of the Holder’s property
being at all times within its control, and except that Holder shall not sell
any of the shares of Common Stock issued upon exercise of this Warrant for a period
of at least 32 days after the date such shares were issued.

 

                                (f) 
          This Warrant and all
shares of Common Stock issued upon exercise hereof (unless registered under the
Act) shall be stamped or imprinted with a legend in substantially the following
form:

 

                                                                                                THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION THEREUNDER.

 

                                (g)           The
Company shall undertake the obligations relating to the registration of the
shares of Common Stock on Form S-3 following exercise of the Warrant as set
forth on Exhibit A attached hereto.

 

                8.             Reservation
of Stock; Stock Fully Paid.  The
Company covenants that during the term this Warrant is exercisable, the Company
will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Certificates of Incorporation (the “Certificate”) to provide sufficient
reserves of shares of Common Stock issuable upon exercise of the Warrant and
will refrain from effecting any amendment to the Certificate which in any
manner would affect the rights or privileges of the holders of its Common
Stock.  The Company further covenants
that all shares that may be issued upon the exercise of rights represented by
this Warrant, upon exercise of the rights represented by this Warrant and
payment of the Exercise Price, all as set forth herein, will be duly
authorized, validly issued, fully paid and nonassessable.  The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the exercise of this Warrant.

 

 

-4-

 

                9.             Notices.

 

                                (a)           Whenever the Exercise Price or number
of shares purchasable hereunder shall be adjusted pursuant to Section 11
hereof, the Company shall issue a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the Exercise Price and number of shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such
certificate to be mailed (by first-class mail, postage prepaid) to the Holder
of this Warrant.

 

                                (b)           In case:

 

                                                (i)            the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right, or

 

                                                (ii)           of
any capital reorganization of the Company, any stock split or subdivision, or
reverse stock split or combination, or any similar event involving the Common
Stock, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation, or any
sale, transfer or other conveyance of all or substantially all of the assets of
the Company to another corporation, or

 

                                                (iii)          of
any voluntary dissolution, liquidation or winding-up of the Company,

 

then, and in each such
case, the Company will mail or cause to be mailed or send by facsimile
transmission to the Holder or Holders a notice specifying, as the case may be,
(A) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (B) the date on which a record is to
be taken for determining stockholders entitled to vote upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any
is to be fixed, as of which the holders of record of Common Stock (or such
stock or securities at the time receivable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. 
Such notice shall be mailed or faxed at least 10 business days prior to
the date therein specified.

 

                                (c)           All
such notices, advices and communications shall be deemed to have been received
(i) in the case of personal delivery, on the date of such delivery,
(ii) in the case of mailing, on the third business day following the date
of such mailing, and (iii) in the case of facsimile transmission, on the date
of such transmission.  Such notices,
advices and communications shall be made:

 

 

-5-

 

 

	
   

  	
  if to the Company, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3Com Corporation

  	
   

  
	
   

  	
  5400 Bayfront Plaza

  	
   

  
	
   

  	
  Santa Clara, CA 
  95052-8145

  	
   

  
	
   

  	
  Attention: 
  General Counsel

  	
   

  
	
   

  	
  Facsimile: 
  (408) 326-5001

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Wilson Sonsini Goodrich & Rosati

  	
   

  
	
   

  	
  650 Page Mill Road

  	
   

  
	
   

  	
  Palo Alto, CA 
  94304

  	
   

  
	
   

  	
  Attention: 
  Katharine A. Martin, Esq.

  	
   

  
	
   

  	
  Facsimile: 
  (650) 493-6811

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  if to the Holder, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Broadcom Corporation

  	
   

  
	
   

  	
  16215 Alton Parkway

  	
   

  
	
   

  	
  Irvine, CA 
  92619

  	
   

  
	
   

  	
  Attention: 
  Chief Financial Officer

  	
   

  
	
   

  	
  Facsimile: 
  (949) 450-8715

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Broadcom Corporation

  	
   

  
	
   

  	
  16215 Alton Parkway

  	
   

  
	
   

  	
  Irvine, CA 
  92619

  	
   

  
	
   

  	
  Attention: 
  General Counsel

  	
   

  
	
   

  	
  Facsimile: 
  (949) 450-8704

  	
   

  

 

                10.           Amendments.

 

                                (a)           This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.

 

                                (b)           No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.

 

                11.           Adjustments.

 

                                (a) 
         The Exercise Price and the
number of shares purchasable hereunder shall be subject to adjustment from time
to time as follows:

 

                                                (i)            The Exercise Price shall be adjusted
from time to time in the case of any stock split, subdivision of the number of
shares of the Common Stock or similar event involving Common Stock (a “Split”)
or any reverse stock split, combination or similar event

 

 

 

-6-

 

involving the Common Stock (a “Combination”) and, accordingly,
the Exercise Price shall be proportionately decreased in the case of a Split or
increased in the case of a Combination, as of the close of business on the date
the Split or Combination becomes effective, computed to the nearest cent.

 

                                                (ii)           In case of any reclassification or
change of outstanding shares of Common Stock (except a Split or Combination, or
a change in par value, or a change from par value to no par value, or a change
from no par value to par value), or in case of any consolidation or merger to
which the Company is a party or any sale, transfer or other conveyance of all
or substantially all of the Company’s assets, the Company, or its successor, as
the case may be, shall assume, by written instrument executed and delivered to
the registered holder of this Warrant at such Holder’s address shown on the
registration books of the Company the obligation to deliver to the Holder of
this Warrant, upon due exercise thereof, the kind and amount of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale, transfer or conveyance by a Holder of the number
of shares which would have been issued to such Holder had this Warrant been
exercised immediately prior thereto.

 

                                                As
evidence of the kind and amount of stock or other securities or property which
shall be issuable upon the exercise of this Warrant after any such
reclassification, change, consolidation, merger, sale, transfer or conveyance,
the Company shall maintain in its records at its principal office a certificate
of any firm of independent public accountants (who may be the regular auditors
retained by the Company) with respect thereto.

 

                                                The
provisions of this clause (ii) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales, transfers or
conveyances.

 

                                                Upon
any adjustment of the Exercise Price herein above provided for, the number of
shares issuable upon exercise of this Warrant shall be changed to the number of
shares calculated to the next highest whole share obtained by dividing (A) the
aggregate Exercise Price payable for the purchase of all shares issuable upon
exercise prior to such adjustment by (B) the Exercise Price in effect
immediately after such adjustment.

 

                                                (iii)          Whenever the Exercise Price or the
number of shares purchasable upon the exercise of this Warrant is adjusted as herein
provided, the Company shall:

 

                                                                (A)          forthwith place on file at its office
a certificate signed by the Chief Financial Officer of the Company, showing in
appropriate detail the facts requiring such adjustment, the computation
thereof, the Exercise Price after such adjustment, and the number of shares
purchasable upon the exercise of this Warrant after such adjustment with
respect to each share originally purchasable upon exercise hereof, and shall
exhibit the same from time to time to any holder of this Warrant desiring an
inspection thereof, and

 

                                                                (B)           within ten (10) days thereafter cause
a notice to be mailed to the Holder hereof at its address shown in the
registration books of the Company stating that such adjustment has been
effected and the adjusted Exercise Price and the number of shares purchasable
as aforesaid.

 

 

 

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                                                (iv)          Irrespective
of any adjustments in the Exercise Price or the number of shares or the number
or kind of other securities purchasable upon exercise of this Warrant, this
Warrant or any Warrant thereafter issued may continue to express the same price
and number and kind of shares as are stated in the Warrants initially issued by
the Company.

 

                                (b)           If any event occurs as to which in
the opinion of the Board of Directors of the Company the other provisions of
this Section 11 are not strictly applicable or if strictly applicable would not
adequately protect from dilution the exercise rights of the Holder in
accordance with the intent and principles of such provisions (including,
without limitation, a spin-off, split-off or extraordinary dividend), then the
Board of Directors of the Company shall make an equitable adjustment in the
application of such provisions, in accordance with such intent and principles
of such provisions, so as to protect such exercise rights as aforesaid, but in
no event shall such adjustment have the effect of increasing the Exercise
Price.

 

12.           Taxes.  The issue of any stock or other certificate
upon the exercise of this Warrant shall be made without charge to the Holder
for any documentary, stamp or similar tax in respect of the issue of such stock
or certificate.

 

13.           Valid Issuance.  Company represents to Holder that this
Warrant and the shares of Common Stock issuable upon the exercise of this
Warrant have been duly authorized by all necessary corporate action, this
Warrant has been duly executed and delivered and constitutes a legally binding
agreement of the Company enforceable in accordance with the terms hereof, the
Company has reserved out of its authorized and unissued shares of Common Stock
a number of shares sufficient to provide for the exercise of the rights
represented by this Warrant, and the shares of Common Stock issuable upon
exercise of this Warrant, when issued in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable.

 

14.           Representations
by Holder.  Holder represents and
warrants that it:  (a) is an “accredited
investor” within the meaning of Rule 501 promulgated under the Securities Act
of 1933; (b) is acquiring this Warrant for investment intent for Holder’s own
account, not as a nominee or agent, and not with a view to the distribution or
resale of any part thereof; (c) has full power and authority to enter into this
Warrant; (d) has received all of the information it considers necessary or
appropriate for deciding whether to purchase this Warrant; (e) has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of this Warrant; (f) is able to fend for
itself, can bear the economic risk of investment and has such knowledge and
experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the Warrant; and (g) will not sell
any of the shares of Common Stock issued upon exercise of this Warrant for a
period of at least 32 days after the date such shares were issued.

 

15.           Acknowledgments
by Holder. Holder acknowledges that this Warrant and the Common Stock
issued upon exercise of this Warrant shall be deemed Pledged Securities (as
defined in the Pledge Agreement and except to the extent set forth in the
Pledge Agreement), as long as any Obligations (as defined in the Note) are then
owed to the Company by Holder, and as such, except as contemplated by the
Pledge Agreement, the Company shall not be required to deliver this Warrant or
any certificates for Common Stock issuable upon exercise of this Warrant to
Holder in order to perfect the Company’s security interest in the Pledged
Securities.

 

 

 

-8-

 

16.           Governing
Law.  This Warrant shall be governed
by, construed, and enforced in accordance with the laws of the State of
Delaware without reference to its principles of conflicts of law.

 

 

 

 

-9-

 

IN WITNESS
WHEREOF, the parties hereto have caused this Warrant to be executed by each of
their respective officers thereunto duly authorized.

 

Dated as of:  December 4, 2000

 

	
   

  	
  3COM CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BROADCOM CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

 

 

-10-

 

NOTICE OF EXERCISE

 

 

 

To:  3Com Corporation

 

(1)           The undersigned hereby elects to
purchase ______ shares of Common Stock of 3Com Corporation, pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price for such shares in full;

 

(2)           The undersigned hereby elects to
purchase _______ shares of Common Stock of 3Com Corporation, pursuant to the
terms of the attached Warrant, and tenders herewith ________ shares of 3Com
Corporation held by the undersigned, the value of which equals the aggregate
exercise price of the shares of Common Stock set forth above in accordance with
Section 2 of the Warrant; or

 

                                (3)           Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified below:

 

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  

 

 

                                (4)           Please
issue a new Warrant for the unexercised portion of the attached Warrant in the
name of the undersigned or in such other name as is specified below:

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature)

  	
   

  

 

 

 

 

FORM OF ASSIGNMENT

 

 

 

                                FOR VALUE RECEIVED, the undersigned
registered owner of this Warrant hereby sells, assigns and transfers unto the
Assignee named below all of the rights of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock set forth below:

 

	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  No. of Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

 

and does hereby
irrevocably constitute and appoint Attorney _____________ to make such transfer
on the books of 3Com Corporation, maintained for the purpose, with full power
of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature of Holder

  	
   

  
						

 

 

 

 

EXHIBIT A

 

1.               Within three months following the date of the Warrant,
so long as the Company remains eligible to use a registration statement on Form
S-3 (as defined below), the Company will file a Form S-3 with the Securities
and Exchange Commission and use its commercially reasonable efforts to have
declared effective such registration statement relating to the resale in
accordance with the Securities Act of 1933, as amended (the “Securities Act”),
of any shares of Common Stock issued to Holder upon exercise of this Warrant
which do not then qualify for an exemption from such registration under Rule
144 under the Securities Act or a comparable or successor exemption from
registration.  Holder agrees to
cooperate with the Company in all reasonable ways to effect such registration,
subject to the Company and Holder entering into a supplemental agreement which
sets forth customary registration procedures and indemnities.  The Company will use its commercially
reasonable efforts to keep such registration effective for a total of thirty
(30) days during each calendar quarter. 
It is the Company’s current intention that such trading period will
generally occur during the second (2nd) month of each calendar
quarter; provided,
however, that the Company may select another thirty (30) day period
or prevent trading in any particular quarter for reasonable business reasons
provided that the Company uses commercially reasonable efforts to keep such
registration effective for an aggregate of at least one hundred twenty (120)
days during each calendar year.   The
Company shall not be required to maintain the effectiveness of any registration
statement after the earlier of (i) the shares of Common Stock issued upon
exercise hereof may be sold without registration pursuant to Rule 144 under the
Securities Act or a comparable or successor exemption from registration and
(ii) Holder has exercised in full this Warrant and the Holder no longer holds
any of the shares of Common Stock issued upon exercise hereof.

 

2.               The Company shall bear all expenses other than Holder
Expenses (as defined below) incurred in connection with any registration
hereunder, including without limitation all registration and filing fees, fees
with respect to any filings required to be made with the National Association
of Securities Dealers, listing fees relative to any stock exchange or national
market system, fees and expenses of compliance with state securities or blue
sky laws, printing expenses, fees and disbursements of counsel for the Company,
and fees and disbursements of all independent public accountants of the
Company.  Holder shall bear the
following expenses (collectively, 
“Holder Expenses”): (i) Holder’s legal costs, including the fees and
expenses of any counsel selected by Holder to represent it, and (ii) the
brokerage or underwriting commissions attributable to Holder’s shares.

 

3.               As used herein, the term “Form S-3” means such form
under the Securities Act as in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the
Securities and Exchange Commission which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the Commission (other than for use for employee stock and options).

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