Amendment No. 2 To The Shareholders' Agreement

EXHIBIT 10.35


CONFIDENTIAL TREATMENT REQUESTED; PORTIONS OMITTED FROM THE PUBLICLY-FILED
DOCUMENT AND FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY
ASTERISK


AMENDMENT NO. 2 TO THE SHAREHOLDERS' AGREEMENT


This Amendment No. 2 to the Shareholders' Agreement ("Amendment No. 2") is made and entered into effective as of January 27, 2006 by and among Shenzhen Huawei Investment & Holding Co. Ltd., a limited liability company organized and existing under the laws of the People's Republic of China ("Huawei Holding"), 3Com Technologies, a corporation organized under the laws of the Cayman Islands and a wholly owned subsidiary of 3Com Corporation ("3Com Technologies") and Huawei-3Com Co., Ltd., a company incorporated under the laws of Hong Kong ("JVCO"; each of JVCO, Huawei Holding and 3Com Technologies, a "Party" and, collectively, the "Parties").


RECITALS


WHEREAS, Huawei Holding, 3Com Technologies and JVCO are parties to that certain Shareholders' Agreement dated November 15, 2003, as amended by Amendment No. 1 to the Shareholders' Agreement, effective July 31, 2004 (as amended, the "Agreement"); and


WHEREAS, the Parties desire to amend the Agreement to (i) provide a framework for necessary cooperation between 3Com and JVCO regarding, among other things, product development, (ii) allow JVCO to sell products in additional territories and (iii) make such other changes as set forth herein.


NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:


1. Article V-A. A new section, ARTICLE V-A is added to the Agreement in its entirety as follows:


"ARTICLE V-A


PRODUCT DEVELOPMENT AND OPERATIONS COLLABORATION


SECTION 5A.01. Product Development. 3Com Technologies and Huawei Holding agree that, once every quarter or as otherwise mutually agreed, 3Com's senior executive responsible for data, voice and security products (e.g., 3Com's General Manager for its Data Business Unit) and JVCO's senior executive for product development shall meet to jointly review and agree on JVCO's:


(i) product, solution and technology strategy;


(ii) product roadmaps and product migration timing; and


(iii) new technology development.


The 3Com Parties agree to conduct the above meetings in good faith to ensure open and honest discussions. The purpose of the above activities is to review 3Com and JVCO's product roadmaps to allow for planned product migration by 3Com to JVCO-sourced products, based on agreed upon product roadmap and feature, quality and price requirements.


SECTION 5A.02. *


(I) *


(II) *


(III) *


SECTION 5A.03. *


2. Territories. The 3Com Parties and Huawei Parties agree that, to further increase the sales of the JVCO for the mutual benefit of both shareholders, Schedule B-3 to the Agreement shall be deleted and replaced with a new Schedule B-3 in the form attached hereto as Schedule B-3.


3. Section 6.02(d). Section 6.02(d) of the Agreement is hereby amended to read in its entirety as follows:


(d) *


4. Section 3.11. Section 3.11 of the Agreement is hereby amended by adding the following sentence to the end of such section:


"Notwithstanding the foregoing, the compensation for the Chief Executive Officer will be approved by the Board. Any increase in compensation of 100% or less payable by JVCO to its Chief Operating Officer or any of his directly reporting officers may be implemented by the Chief Executive Officer without additional Board approvals. Any adjustment in the compensation payable by JVCO to its Chief Operating Officer or any of the Chief Operating Officer's directly reporting officers that would result in an increase in the compensation of such individual of more than 100%, must be proposed by the Chief Executive Officer of JVCO to the Nomination and Compensation Committee for approval."


5. Section 3.15(a)(iii)(9). Section 3.15(a)(iii)(9), is deleted from the Agreement in its entirety.


6. Section 3.17. Section 3.17 ...