License Agreement - Kyushu Matsushita Electric Co. Ltd. and 8x8 Inc.
LICENSE AGREEMENT
CONFIDENTIAL
This Agreement is made between KYUSHU MATSUSHITA ELECTRIC CO., LTD.
(herein called KME ); and 8x8, INC. (herein called 8x8), effective the 7th day
of May, 1996.
WHEREAS, 8x8 a developer and a supplier of integrated circuit products
has the right to license certain software and related materials useful in
connection with the use of such integrated circuits which software and related
materials contain valuable proprietary information of 8x8; and
WHEREAS, KME is in the business of developing and marketing hardware
products; and
WHEREAS, KME desires to obtain certain rights from 8x8 with respect to
that software and related materials from 8x8.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained hereinafter, 8x8 and KME agree as follows:
1. LICENSE. 8x8 will immediately deliver to KME all of the source code
version and/or object code version of the H.324 code and related software and
document, as well as the DVC7 board schematics (herein called H.324 Technology)
by the 15th day of May, 1996, and hereby grants to KME a nonexclusive,
nonassignable world-wide license to make, have made, use or sell products with
such H.324 Technology and any 8x8 patents or copyrights relevant thereto
(including after acquired rights), all to the extent 8x8 is legally entitled to
grant rights thereto to KME hereunder. In consideration therefore, KME will pay
8x8 immediately [*] (to be received by wire transfer on or before [*] after
execution of this Agreement) and another [*] on [*] (total [*] for the immediate
delivery of what 8x8 has in the way of H.324 Technology). If 8x8 fails to
deliver the H.324 Technology to KME within 30 days to the reasonable
satisfaction of KME, KME shall have the right to request on or before 30 days
from the effective date of this agreement that 8x8 refund the amount paid (in
which case this Agreement is void, other than the provision on confidentiality,
and KME will return all materials to 8x8 and not use the proprietary technology
furnished by 8x8). These payments are not contingent on 8x8 doing anything
further, or upon the results of KME's developments or use of such H.324
Technology. Except for the above, 8x8 makes no warranties expressed or implied
as to the condition of such technology, other than 8x8 hereby represents that it
has not knowingly misused or stolen technology of others; provided 8x8 makes no
warranties with respect to the ITU standard itself, such as DSP Group's claims
with respect to G.723 as 8x8 explained to KME. KME hereby grants to 8x8 a
nonexclusive, nonassignable world-wide license to make, have made, use or sell
products covered by patents KME has now or later acquires, to the extent KME is
legally entitled to do so, but limited to H.324 Technology.
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2. LICENSING OF ENHANCEMENTS. The parties agree, at no charge, to
license to the other party any enhancements of H.324 Technology which will be
performed on LVP or VCP chip (or enhancements to the LVP/VCP chip if KME elects
to manufacture as provided below) made by either party, delivered at least
monthly, until such time as KME decides to discontinue licensing enhancements by
notice to 8x8 (but enhancements up to the date of such notice shall be shared).
3. ADDITIONAL CONSIDERATION. If KME succeeds in achieving its objective
of initiation of shipment of volume manufacturing by [*] of a [*] in FOB Japan
price of [*] US dollars or less, as defined according to its specifications in
good faith, then KME will pay to 8x8 additional consideration for the license in
paragraph 1 of [*] on or before [*]. In the event that KME fails to achieve such
objective for any reason (regardless of cause by 8x8 or KME), KME will not be
obligated to pay to 8x8 such additional consideration.
4. MANUFACTURING OF LVP/VCP CHIP. KME has the right to obtain from 8x8
the technology 8x8 has for manufacturing the LVP and/or VCP chip upon payment to
8x8 of [*] (provided credit is given for the payment to the extent made by KME
to 8x8 under paragraph 3 above). In the event that KME paid the additional [*]
consideration to 8x8 under paragraph 3 above, payment of [*] under this
paragraph 4 shall be reduced to [*]. 8x8 shall then provide to KME all technical
information, including without limitation the schematics and process flows
(hereinafter called LVP/VCP Technology), which is necessary for KME to
manufacture the LVP and/or VCP. KME may have made the LVP and/or VCP by its
subcontractors. KME is limited to using the LVP and/or VCP chips it manufactures
to internal use only (but internal includes any affiliate of KME, such as any
entity controlled directly or indirectly by Matsushita Electric Industrial Co.,
Ltd.) on systems assembled by KME or its affiliates. Under no circumstances is
KME or its subcontractors allowed to sell or make available such LVP and/or VCP
chips to unaffiliated entities. Further, KME will pay to 8x8 a royalty of [*] of
the value (material costs plus reasonable manufacturing costs of the LVP and/or
VCP chip or shipping price to KME from its subcontractors) of the LVP and/or
VCP chip (or any unit wherein KME uses any part of the LVP and/or VCP chip
technology) or [*], whichever is greater.
5. ENGINEERING SUPPORT. 8x8 will provide engineering support to KME to
enable KME [*] to implement the DVC7 for demonstration purposes in [*] and to
enable KME to achieve its objectives of volume manufacturing by the end of [*],
to the extent possible. The parties shall bear any of their own costs and
expenses incurred by each party for performance of engineering support. 8x8 will
provide reasonable technical support, [*] to KME with respect to H.324
Technology after initiation of volume manufacturing. If KME at any time request
8x8 engineers or others to travel to Japan, KME will pay the reasonable cost
agreed upon by both parties associated therewith, including 8x8's labor cost for
such 8x8 personnel as well as travel (business class on the airplane), meals and
lodging.
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6. LVP/VCP PRICING. Once KME places noncancellable orders for [*]
units of LVP and/or VCP in any single quarter, 8x8 will assure KME that the
pricing for such units [*]; and further, 8x8 will do its best to selectively
sort the units to identify the units that will best work in KME's system. The
parties recognize that the price target is [*] or less under this paragraph.
7. WARRANTIES. 8x8 represents and warrants that as of the Effective
date of this agreement it has received no notice that H.324 Technology and
Technical Information infringes any patent, copyright, trade secret or other
intellectual property right (collectively Intellectual Property Rights) of any
third party. 8x8 will immediately advise KME of any such notice received by 8x8
in the future as it applies to H.324 Technology (or LVP/VCP Technology if KME
elects to manufacture it), whether current versions of H.324 Technology or later
enhanced versions, and whether the enhancement was done by 8x8 or KME; likewise
KME will notify 8x8 of any notice KME receives where there is a claim that
applies to H.324 Technology (or LVP/VCP if KME elect to manufacture it), whether
current versions of H.324 Technology or later enhanced versions, and whether the
enhancement was done by 8x8 or KME. Each party bears the risk that some party
claims or sues it with respect to alleged infringement of Intellectual Property
Rights of others; provided that the other party will cooperate in such
litigation to the extent it can be helpful in defending against such claims of
other third parties. EITHER PARTY MAKES NO WARRANTIES EXPRESSED OR IMPLIED AS TO
THE QUALITY, PATENTS OR COPYRIGHTS OF ANYTHING DELIVERED HEREUNDER AND
ENHANCEMENT, EXCEPT AS SPECIFIED IN THIS AGREEMENT. EITHER PARTY MAKES NO
INDEMNITY IN THE EVENT THAT THE OTHER PARTY IS SUED FOR ANYTHING RELATED TO THE
H.324 TECHNOLOGY OR LVP/VCP TECHNOLOGY OR ENHANCEMENT HEREUNDER EXCEPT AS
SPECIFIED IN THIS AGREEMENT, BUT EITHER PARTY WILL COOPERATE IN THE EVENT OF
SUCH LITIGATION TO ASSIST THE OTHER PARTY TO DEFEND SUCH LITIGATION.
8. CONFIDENTIAL INFORMATION. The parties will keep confidential any
information provided to it by the other party that is proprietary to the other
party and marked confidential; provided such information shall not be considered
proprietary once it is in the public domain by no fault of the other party. Such
confidentiality will be maintained by the other party with the same care that
such party would use for its own confidential information, but in any event with
reasonable care.
9. TERMINATION. This Agreement may be terminated by KME at any time
after paying the [*] required under paragraph 1. A party may terminate
this Agreement if the other party (a) becomes involved in any voluntary or
involuntary bankruptcy or other insolvency proceeding not terminated within 30
days, or (b) ceases to be actively engaged in business or financially capable of
fulfilling its obligations under this Agreement. Even though 8x8 becomes
involved in any voluntary or involuntary bankruptcy or succession or assignment
or other insolvency proceedings, or ceases to be actively in business, KME shall
have its rights under this Agreement provided KME is making the financial
payments required by KME hereunder. A party may terminate this Agreement on
thirty (30)
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days written notice for breach by the other party unless it is corrected and
notice thereof given to the party not in breach within the same thirty (30)
days. A license shall end on termination of this Agreement. Termination of this
Agreement shall not relieve either party of any obligation hereunder for
transactions completed or for which commitments have been made in the normal
course prior to such termination, nor the obligations concerning nondisclosure
of information contained here. KME will return the object code version and the
source code version of the H.324 Technology, all other confidential information,
and all copies thereof to 8x8 promptly upon termination of the Agreement, and
KME then covenants not to use the 8x8 proprietary technology contained in the
H.324 Technology (or LVP/VCP Technology, to the extent KME obtains it).
10. COMPLETE AGREEMENT. This is a complete agreement binding upon the
parties, their heirs, successors and assigns. It may only be modified in writing
signed by officers of both parties. It is governed by the laws of California.
KME is entitled to withhold taxes not exceeding 10% due the government of Japan
on any payment due 8x8 hereunder, provided KME furnishes 8x8 with proof of such
payment of taxes.
IN WITNESS WHEREOF, the parties have executed this Agreement.
KYUSHU MATSUSHITA ELECTRIC CO., 8x8, INC.
LTD.
By: ______________________________ By: ___________________________
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