In consideration of the Settlement and the releases provided therein, and subject to the terms and conditions of the Stipulation, the Parties have agreed to the following settlement consideration for HP.

In consideration of the Settlement and the releases provided therein, and subject to the terms and conditions of the Stipulation, the Parties agree that the Company will implement and maintain certain management and governance measures, including: (i) enhancements to the Ethics & Compliance Committee’s Charter and membership requirements; (ii) enhancements to the Disclosure Committee’s Charter and membership requirements; (iii) commitments to HP’s Internal Audit and Compliance programs; (iv) commitments to properly resource key internal programs; and (v) continuing HP’s practice of explaining at the outset of earnings calls that references to “channel inventory” address data from Tier 1 partners only. A complete list and detailed description of the Reforms, which HP has agreed to maintain, is attached as Exhibit E to the Stipulation.

The Reforms shall be in place no later than twelve (12) months following entry of the Final Judgment substantially in the form of Exhibit F and be maintained for a period of not less than four (4) years following entry of the Final Judgment.

Plaintiffs’ Counsel believe that the claims asserted in the Action have merit and that their investigation of the evidence supports the claims asserted. Without conceding the merit of any of the Individual Defendants’ defenses, and in light of the benefits of the Settlement as well as to avoid the potentially protracted time, expense, and uncertainty associated with continued litigation, including potential trial(s) and appeal(s), Plaintiffs and Plaintiffs’ Counsel have concluded that it is desirable that the Action be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation.

Plaintiffs and Plaintiffs’ Counsel recognize the significant risk, expense, and length of continued proceedings necessary to prosecute the Action against the Individual Defendants through trial(s) and through possible appeal(s). Plaintiffs’ Counsel have also considered the uncertain outcome and the risk of any litigation, especially complex litigation such as the Action, the difficulties and delays inherent in such litigation, and the cost to HP, on behalf of which Plaintiffs filed the Action, that would result from extended litigation. Based on their evaluation, and given what Plaintiffs’ Counsel believe to be significant benefits conferred upon HP as a result of the Settlement, Plaintiffs and Plaintiffs’ Counsel have determined the Settlement is in the best interests of HP and its stockholders and have agreed to settle the Action upon the terms and subject to the conditions set forth in the Stipulation.

The Individual Defendants deny all the allegations made by Plaintiffs in the Action and maintain that their actions at all times were proper. The Individual Defendants have each denied and continue to deny that he or she has committed or attempted to commit any violations of law, any breaches of fiduciary duty owed to HP and/or its stockholders, or any wrongdoing whatsoever, and expressly maintain, that at all relevant times, he or she acted in good faith and in a manner that he or she reasonably believed to be in the best interests of HP and its stockholders. The Individual Defendants further deny that Plaintiffs, HP, or its stockholders suffered any damage or were harmed as a result of any act, omission, or conduct by the Individual Defendants as alleged in the Action or otherwise. The Individual Defendants further assert, among other things, that Plaintiffs lack standing to litigate derivatively on behalf of HP because Plaintiffs have not yet pleaded, and cannot properly plead, that a demand on the Board would be futile.

While Individual Defendants remain confident that the Court would ultimately hold Plaintiffs’ claims in the Action to be meritless, Defendants recognize the significant risks, expenses, and duration of continued proceedings to defend against the claims made in the Action through discovery, trial(s), and possible appeal(s). Defendants, therefore, are entering into this Settlement to eliminate the uncertainty, distraction, disruption, burden, risk, and expense of further litigation, and believe that the Settlement is in the best interest of the Company and its stockholders.

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