8x8 2002 Annual Report Download - page 79

ANYTHING TO THE CONTRARY, This non-assert clause is NON-Transferable, not assignable and will automatically terminate in
the event of a change of control of ST. For purposes of this section, a change of control shall mean one transaction or a series of related
transactions that results in a change of control through direct or indirect ownership of fifty percent (50%) or more of the outstanding
shares of stock entitled to vote for the election of directors (other than restricted shares of stock).
14. All royalties payable hereunder will be due within 30 days of the end of each of the payee's fiscal quarters in which applicable product
was shipped. Each party is entitled to audit the other party's records through an independent auditor. Either party shall have the right for
representatives of a firm of independent accountants who shall have signed an appropriate non disclosure agreement, to which the other
party shall not unreasonably object ("Auditors"), to make an examination and audit, by prior appointment agreed between the Parties,
such agreement not to be unreasonably withheld, during normal business hours, not more frequently than once annually during the time
that a party is required to make royalty payments to the other party hereunder and for one year thereafter, of all records and accounts as
may under recognized accounting practices contain information bearing upon the royalties revenue and the number of products sold by
either party under this Agreement. The Auditors will report to the auditing party only upon whether the royalties paid to it by the
audited party were or were not correct, and if incorrect, what are the correct amounts for the royalties. The audited party shall be
supplied with a copy of or sufficient extracts from any report prepared by the Auditors. Such audit shall be at the auditing party's
expense unless it reveals an underpayment of royalties of five percent (5%) or more in which case the audited party shall reimburse the
auditing party for the costs of such audit, plus interest of 12% per annum on the deficiency from the time the royalty was due until
paid.
A. Concurrent with each royalty payment either party makes hereunder, the paying party shall provide an explanation, as mutually
agreed to, of how the payment amount was calculated.
15. Development Schedule. ST will employ commercially reasonable efforts to deliver the LX Tools, the LX Technology and the MPEG4
Code (together "ST Technology") within one (1) month of the Effective Date. 8x8 will employ commercially reasonable efforts to
deliver the initial 8x8 Code within nine (9) months from receipt of the LX Tools and the LX Technology.
16. Tool Updates . ST will provide 8x8 with updates and enhancements to the LX Tools developed by ST, including but not limited to the
new tool chain that ST is developing that is expected to be available at the end of 2002 and any documentation as they become available
for the term of this Agreement. Upon delivery, such updates and enhancements shall become part of the LX Tools as defined herein.
17. Update and Enhancement Sharing. ST and 8x8 will share with each other where the creating party has the legal ability to disclose,
such updates and enhancements either party makes to the LX Technology, MPEG4 Code and 8x8 Code ("Enhancements") as those
terms are defined herein as they become available for a period of two (2) years from the Effective Date or two (2) years from the date
on which a new, major version of the relevant technology is made available whichever is later. For purposes of this agreement, the
meaning of a new, major version shall be mutually agreed to but would be considered , but not limited to , for the LX Technology the
initial delivery and any new version of the LX core provided hereunder and for the 8X8 Code the H263 codec or new H26L codec.
After that time, Enhancement sharing is to continue unless either party indicates an interest in discontinuing to share such
Enhancements at which time the parties will exchange the latest updates and no further Enhancements will be shared. Upon delivery
such Enhancements will become part of the relevant LX Technology, MPEG4 Code or 8x8 Code as those terms are defined herein.
18. Future Developments. The parties understand that availability of the H26L based 8x8 Code assumes implementation of a mutually
agreed to version of the LX Technology capable of executing the H.26L based 8x8 Code and ratification and acceptance of the relevant
standard currently known as the Joint Video Team (JVT) initiative. ST and 8X8 agree to negotiate in good faith on a case-by-case basis
the terms and conditions under which such a license may be provided for future cores and future codecs.
19. Technical Support . Each party will provide the other with sufficient applications engineering level technical support necessary to
commercialize products based on the licensed technology for as long as the parties continue to share enhancements to the licensed
technology.
20. 8x8 LX Chip Customers . In the event that an 8x8 LX Chip customer wishes to license the LX Tools or the MPEG4 Code in source
format, ST agrees to negotiate in good faith on a case-by-case basis the terms and conditions under which such a license may be
provided.
21. ST LX Customers . In the event that an ST Chip customer wishes to license the 8x8 Code in source code form, 8x8 agrees to negotiate
in good faith on a case by case basis the terms and conditions under which such a license may be provided.
22. Representations and Warranties
A. 8x8 represents and warrants to ST that (a) to the best of its knowledge as of the Effective Date it has full power and authority to
enter into this Agreement, (b) to the best of its knowledge as of the Effective Date the terms and conditions of this Agreement,
and 8x8's obligations hereunder, do not conflict with or violate any terms or conditions of any other agreement or commitment
to which 8x8 is a signatory or by which it is bound, (c) to the best of its knowledge as of the Effective Date it owned or
controlled the 8x8 Code that will be licensed and delivered to ST under this Agreement and (d) it will defend and indemnify ST
against any third party claims arising out of or related to a breach of these warranties and representations.
B. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, 8x8 MAKES NO WARRANTIES OR CONDITIONS,
EXPRESSED, STATUTORY, IMPLIED, OR OTHERWISE, WITH RESPECT TO THE 8x8 CODE LICENSED
HEREUNDER, AND 8x8 HEREBY DISCLAIMS THE IMPLIED WARRANTIES AND CONDITIONS OF,
SATISFACTORY QUALITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT
THERETO.
C. ST represents and warrants to 8x8 that (a) to the best of its knowledge as of the Effective Date it has full power and authority to
enter into this Agreement, (b) to the best of its knowledge as of the Effective Date the terms and conditions of this Agreement,
and ST's obligations hereunder, do not conflict with or violate any terms or conditions of any other agreement or commitment to
which ST is a signatory or by which it is bound, (c) to the best of its knowledge as of the Effective Date it owned or has
authority to license the ST Technology that will be licensed and delivered to 8x8 under this Agreement and (d) it will defend and
indemnify 8x8 against any third party claims arising out of or related to a breach of these warranties and representations.
D. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ST MAKES NO WARRANTIES OR CONDITIONS,
EXPRESSED, STATUTORY, IMPLIED, OR OTHERWISE, WITH RESPECT TO THE ST CODE LICENSED
HEREUNDER, AND ST HEREBY DISCLAIMS THE IMPLIED WARRANTIES AND CONDITIONS OF, SATISFACTORY
QUALITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT THERETO