013002 8K/A Exhibit 10.1





                                                            Exhibit 10.1



REDEMPTION AND EXCHANGE AGREEMENT

THIS REDEMPTION AND EXCHANGE AGREEMENT (this
"Agreement"), dated as of December 13, 2001, is made by and among 8x8,
Inc., a Delaware corporation, with headquarters located at 2445 Mission College
Blvd., Santa Clara, California 95054 (the "Company"), and the investors
listed on the Schedule of Investors attached hereto (individually, an
"Investor" and collectively, the "Investors").

WHEREAS:

A.The Company and the Investors have entered into that certain
Securities Purchase Agreement, dated as of December 15, 1999 (the "Securities
Purchase Agreement"), pursuant to which the Investors purchased from the
Company (i) Series A Notes (the "Series A Notes") convertible into shares
of the Company's common stock, par value $0.001 per share (the "Common
Stock"), (ii) Series B Notes (the "Series B Notes," and, collectively
with the Series A Notes, the "Notes") convertible into shares of Common
Stock (together with the shares of Common Stock issuable upon conversion of the
Series A Notes, the "Conversion Shares"), (iii) Series A Warrants (the
"Series A Warrants") to purchase shares of Common Stock (as exercised,
the "Series A Warrant Shares") and (iv) Series B Warrants (the "Series
B Warrants" and collectively with the Series A Warrants, the
"Warrants") to purchase shares of Common Stock (as exercised, the
"Series B Warrant Shares" and, collectively with the Series A Warrant
Shares, the "Warrant Shares");

B.Each Investor is the holder of Series A Notes and Series B Notes in
the respective principal amounts set forth opposite its name on the Schedule of
Investors and Warrants to purchase the number of Warrant Shares set forth
opposite its name on the Schedule of Investors;

C.Upon the terms and conditions set forth in this Agreement, the
Company wishes to redeem and exchange the Notes, and each of the Investors wish
to allow the Company to redeem and exchange the Notes, for (i) an aggregate
of $4,500,000 in cash in the respective amounts set forth opposite each
Investor's name on the Schedule of Investors, (ii) an aggregate of
1,000,000 shares of Common Stock in the respective amounts set forth opposite
each Investor's name on the Schedule of Investors (collectively, the "Common
Shares") and (iii) the Company's agreement to amend the Warrant Exercise
Price (as defined in the Warrants) of the Warrants in accordance with the Form
of Amendment of Warrant (as defined below);

D.Upon the terms and conditions set forth in this Agreement, the
Company and each of the Investors wish to amend the exercise price of the
Warrants, by executing and delivering an amendment to each Warrant in the form
attached hereto as Exhibit A (the "Form of Amendment of Warrant"
and as executed the "Warrant Amendment"); and

E.Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit B (the
"Registration Rights Agreement"), pursuant to which the Company has
agreed to provide certain registration rights under the 1933 Act, and the rules
and regulations promulgated thereunder, and applicable state securities
laws.

F.The exchange of the Notes and the Common Shares is being made in
reliance upon the exemption from securities registration afforded by Rule 506 of
Regulation D ("Regulation D") as promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as
amended (the "1933 Act").

NOW THEREFORE, the Company and the Investors hereby agree as
follows:

1.REDEMPTION AND EXCHANGE OF NOTES.

a.Redemption and Exchange of Notes. Subject to
satisfaction (or waiver) of the conditions set forth in Sections 5 and 6, the
Company shall redeem and exchange from each Investor and each Investor shall
tender to the Company the Series A Notes and the Series B Notes in the
respective principal amounts set forth opposite such Investor's name on the
Schedule of Investors (the "Closing"). The aggregate redemption price of
the Notes at the Closing shall be (i) $4,500,000 in cash (the
"Redemption Price"), and (ii) the issuance by the Company of an
aggregate of 1,000,000 Common Shares, each in the respective amounts set forth
opposite each Investor's name on the Schedule of Investors.

b.Amendment of Warrants. Effective as of the Closing and
in further consideration of each Investor permitting the Company to redeem and
exchange such Investor's Notes, the Company and each of the Investors shall
amend the terms of each Warrant, by executing and delivering the Warrant
Amendment, to provide that the Warrant Exercise Price (as defined in each
Warrant) shall be reduced to the average of the Closing Bid Price (as defined in
the Warrants) of the Common Stock on each of the five (5) consecutive trading
days immediately preceding the Closing Date.

c.The Closing Date. The date and time of the Closing (the
"Closing Date") shall be 10:00 a.m., Central Time, on December 17, 2001,
subject to satisfaction (or waiver) of the conditions to the Closing set forth
in Sections 5 and 6 (or such later date as is mutually agreed to by the Company
and the Investors). The Closing shall occur on the Closing Date at the offices
of Katten Muchin Zavis, 525 West Monroe Street, Suite 1600, Chicago, Illinois
60661-3693. "Business Day" means any day other than Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law to remain closed. 

d.Form of Payment. On the Closing Date (i) the Company
shall pay to each Investor such Investor's pro rata portion of the aggregate
Redemption Price (as set forth opposite such Investor's name on the Schedule of
Investors hereto) for the Notes held by such Investor which the Company is
redeeming at Closing, by wire transfer of immediately available funds in
accordance with each Investors' written wire instructions, (ii) the Company
shall issue and deliver to each Investor certificates representing that number
of Common Shares set forth opposite such Investor's name on the Schedule of
Investors hereto, which Common Shares are being issued in exchange for the Notes
held by such Investor (in such denominations as such Investor shall request)(the
"Stock Certificates"), (iii) the Company shall execute and deliver
to each Investor the Warrant Amendments for all of the Warrants held by such
Investor, and (iv) each Investor shall deliver to the Company the written
direction (the "Note Direction") for the Company to retain and cancel
such Investor's Notes (in principal amount as indicated opposite such Investor's
name on the Schedule of Investor) which Notes were destroyed but which the
Company has not yet reissued.

2.INVESTOR'S REPRESENTATIONS AND WARRANTIES.

Each Investor represents and warrants with respect to only itself
that as of the date of this Agreement and as of the Closing Date: 

a..Investment Purpose. Such Investor is receiving the
Common Shares for its own account for investment only and not with a view
towards, or for resale in connection with the public sale or distribution
thereof, except pursuant to sales registered or exempted under the 1933 Act;
provided, however, that by making the representations contained in this Section
2(a), such Investor does not agree to hold any of the Common Shares for any
minimum or other specific term and reserves the right to dispose of the Common
Shares at any time in accordance with or pursuant to a registration statement or
an exemption under the 1933 Act.

b.Accredited Investor Status. Such Investor is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation
D.

c.Reliance on Exemptions. Such Investor understands that
the Common Shares are being offered to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Investor's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of such
Investor to acquire the Common Shares.

d.Information. Such Investor and its advisors, if any,
have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Common Shares which have been requested by such Investor. Such Investor and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence investigations
conducted by such Investor or its advisors, if any, or its representatives shall
modify, amend or affect such Investor's right to rely on the Company's
representations and warranties contained in Sections 3 and 8(l) below. 

e.No Governmental Review. Such Investor understands that
no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Common
Shares or the fairness or suitability of the investment in the Common Shares nor
have such authorities passed upon or endorsed the merits of the offering of the
Common Shares.

f.Transfer or Resale. Such Investor understands that
except as provided in the Registration Rights Agreement: (i) the Common Shares
have not been and are not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, (B) such Investor shall have
delivered to the Company an opinion of counsel, in a generally acceptable form,
to the effect that such Common Shares to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration,
or (C) such Investor provides the Company with reasonable assurance that
such Common Shares can be sold, assigned or transferred pursuant to Rule 144
promulgated under the 1933 Act (or a successor rule thereto) ("Rule 144")
(which reasonable assurances may be satisfied by such Investor's delivery to the
Company of a letter of representation covering the representations described in
Exhibit C to this Agreement); (ii) any sale of the Common Shares
made in reliance on Rule 144 may be made only in accordance with the terms of
Rule 144 and further, if Rule 144 is not applicable, any resale of the Common
Shares under circumstances in which the seller (or the person through whom the
sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or
the rules and regulations of the SEC thereunder; and (iii) neither the Company
nor any other person is under any obligation to register such Common Shares
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder. Notwithstanding the foregoing, the
Common Shares may be pledged in connection with a bona fide margin account or
other loan secured by the Common Shares.

g.Legends. Such Investor understands that, until such time
as the sale of the Common Shares has been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Common Shares, except as set forth below, shall bear a
restrictive legend in substantially the following form (and a stop transfer
order may be placed against transfer of such stock certificates):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Common Shares upon which it
is stamped, if (i) such Common Shares are registered for sale under the 1933
Act, (ii) in connection with a sale transaction, such holder provides the
Company with an opinion of counsel, in a generally acceptable form to the
Company, to the effect that a public sale, assignment or transfer of such Common
Shares may be made without registration under the 1933 Act, or (iii) such holder
provides the Company with a representation letter in the form attached hereto as
Exhibit C (a "Representation Letter") relating to the sale of the
Common Shares pursuant to Rule 144. Such Investor acknowledges, covenants and
agrees to sell the Common Shares represented by a certificate(s) from which the
legend has been removed only pursuant to (i) a registration statement effective
under the 1933 Act, or (ii) advice of counsel that such sale is exempt from
registration required by Section 5 of the 1933 Act.

h.Authorization; Enforcement. This Agreement and the
Registration Rights Agreement have been executed and delivered on behalf of such
Investor and is a valid and binding agreement of such Investor enforceable
against such Investor in accordance with its terms, subject as to enforceability
to general principles of equity and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies. 

i.Residency. Such Investor is a resident of that
jurisdiction specified on the Schedule of Investors.

3.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Investors that as
of the date of this Agreement and as of the Closing Date:

a.Organization and Qualification. The Company and its
"Subsidiaries" (which for purposes of this Agreement means any entity in
which the Company, directly or indirectly, owns more than 20% of the aggregate
voting power of such entity) are corporations duly organized and validly
existing in good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power and authorization to own
properties and to carry on their business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. As used in this
Agreement, "Material Adverse Effect" means any material adverse effect on
the business, properties, assets, operations, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole, or on the
transactions contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability of the
Company to perform its obligations under the Transaction Documents (as defined
below). The only operating Subsidiaries are Centile, Inc. and Netergy
Microelectronics, Inc.

b.Authorization; Enforcement; Compliance with Other
Instruments. (i) The Company has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement, the Registration
Rights Agreement and the Warrant Amendment and each of the other agreements
entered into by the parties hereto in connection with the transactions
contemplated by this Agreement (collectively, the "Transaction
Documents"), and to issue the Common Shares in accordance with the terms
thereof, (ii) the execution and delivery of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated hereby and
thereby, including without limitation the issuance of the Common Shares and the
amendment of the Warrants, have been duly authorized by the Company's Board of
Directors and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders, (iii) this Agreement and the
Registration Rights Agreement have been duly executed and delivered by the
Company and constitutes the valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms, and
(iv) as of the Closing, the Warrant Amendment shall have been duly executed
and delivered by the Company and shall constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms. 

c.Capitalization. The authorized capital stock of the
Company consists of (i) 100,000,000 shares of Common Stock, of which, as of
December 12, 2001, 26,894,280 shares were issued and outstanding, and (ii)
5,000,000 shares of preferred stock, of which as of the date hereof, one share
is issued and outstanding. All of such outstanding shares have been, or upon
issuance will be, validly issued and are fully paid and nonassessable. No shares
of the Company's capital stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company. There are no outstanding securities or instruments (other than the
Notes) of the Company or any of its Subsidiaries which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries. There are
no securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Common Shares as described in this
Agreement, however there are outstanding 152,535 exchangeable shares issued by
the Company in connection with the Company's acquisition of UForce in 2000 and
the Company has the right to redeem such exchangeable shares if the holder
thereof ceases to be employed by the Company prior to such exchangeable shares
becoming vested. The Company has furnished to the Investor true and correct
copies of the Company's Certificate of Incorporation, as amended and as in
effect on the date hereof (the "Certificate of Incorporation"), and the
Company's By-laws, as in effect on the date hereof (the "By-laws").

d.Issuance of Common Shares. The Common Shares are duly
authorized and, upon issuance in accordance with the terms hereof, shall be free
from all taxes, liens and charges with respect to the issue thereof. Upon
issuance in accordance with the terms of this Agreement, the Common Shares will
be validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock. The issuance by the Company
of the Common Shares is exempt from registration under the 1933 Act.

e.No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby will not (i) result in a
violation of the Certificate of Incorporation, any Certificate of Designations,
Preferences and Rights of any outstanding series of preferred stock of the
Company or the By-laws; (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party; or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of The Nasdaq
Stock Market, Inc. applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected. Neither the Company nor its Subsidiaries is in violation of any
term of or in default under its Certificate of Incorporation, any Certificate of
Designations, Preferences and Rights of any outstanding series of preferred
stock of the Company or By-laws or their organizational charter or by-laws,
respectively. Except for the filing of an additional listing application with
The Nasdaq Stock Market, Inc., the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or any regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the date hereof.

f.SEC Documents; Financial Statements. Since March 31,
2000, the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities Exchange Commission
(the "SEC") pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the "SEC Documents"). The Company has
filed all of the SEC Documents with the SEC through EDGAR. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). 

g.Absence of Certain Changes. Except as disclosed in the
SEC Documents filed with the SEC through EDGAR at least five (5) days prior to
the date of this Agreement, since March 31, 2001 there has been no material
adverse change and no material adverse development in the business, properties,
operations, financial condition, liabilities or results of operations of the
Company or its Subsidiaries, taken as a whole.

h.Solvency. The Company is not as of the date hereof, and
after giving effect to the transactions contemplated hereby (including, without
limitation, the payment of the Redemption Price and the issuance of the Common
Shares) will not be, Insolvent (as defined below). The Company has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings. For purposes of this Section 3(h), "Insolvent" means (i) the
present fair saleable value of the Company's assets is less than the amount
required to pay the Company's total indebtedness, contingent or otherwise, (ii)
the Company is unable to pay its debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured, (iii)
the Company intends to incur or believes that it will incur debts that would be
beyond its ability to pay as such debts mature or (iv) the Company has
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be
conducted.


i.Fair Consideration. The Company, having been fully
involved in developing the transactions contemplated hereby, and having been
advised by the Company's financial and legal advisors, is satisfied that the
negotiations between the Company and the Investors were conducted properly and
were arm's length in nature and in good faith, and fair consideration for the
Redemption Price, the Common Shares and the amendment to the Warrants was
obtained. The Company has not entered into this Agreement with the actual intent
to hinder, delay or defraud any entity to which either it or any of its
subsidiaries was or is indebted.


j.Acknowledgment Regarding the Investor's Redemption and
Exchange of Notes. The Company acknowledges and agrees that each of the
Investors is acting solely in the capacity of an arm's length purchaser with
respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that each Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
the Transaction Documents and the transactions contemplated thereby and any
advice given by any of the Investors or any of their respective representatives
or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to such Investor's purchase of the
Common Shares. The Company further represents to each Investor that the
Company's decision to enter into the Transaction Documents has been based solely
on the independent evaluation by the Company and its representatives and the
representations and warranties made by each Investor in Section 2 hereof. The
Company acknowledges and agrees that neither of the Investors is (i) an officer
or director of the Company or (ii) assuming that neither Investor is the
"beneficial owner" of any shares of Common Stock other than the Common Shares
issuable pursuant to this Agreement and the Warrant Shares issuable pursuant to
the Warrants, (A) a "beneficial owner" of more than 10% of the Common Stock (as
defined for purposes of Rule 13d-3 of the 1934 Act) or (B) an "affiliate" of the
Company (as defined in Rule 144(a) promulgated under the 1933 Act).

k.No General Solicitation. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Common Shares.

l.No Integrated Offering. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Common Shares under the 1933 Act or cause this offering of the Common Shares
to be integrated with prior offerings by the Company for purposes of the 1933
Act or any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of the Nasdaq National Market, nor
will the Company or any of its Subsidiaries take any action or steps that would
require registration of any of the Common Shares under the 1933 Act or cause the
offering of the Common Shares to be integrated with other offerings.

m.Application of Takeover Protections. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar anti-
takeover provision under the Certificate of Incorporation or the laws of the
state of its incorporation which is or could become applicable to the Investors
as a result of the Investors and the Company fulfilling their obligations under
the Transaction Documents, including, without limitation, the Company's issuance
of the Common Shares and the Investors' ownership of the Common Shares.

n.Shareholders Rights Plan. As of the date hereof, the
Company has not adopted a shareholder rights plan or similar arrangement
relating to accumulation of beneficial ownership of Common Stock or a change in
control of the Company.

o.Material Nonpublic Information. Other than the terms of
this Agreement and the transactions contemplated by this Agreement, all of which
shall be publicly disclosed in the 8-K Filing (as defined in Section 4(g)),
neither the Company nor any of its Subsidiaries nor any of their officers,
directors, employees or agents have provided the Investors with any material,
nonpublic information. 

p.Warrant Share Registration. The Warrant Shares issuable
upon exercise of the Warrants, as amended, were registered for resale with the
SEC by the Company on a registration statement on Form S-3 (the "Resale
Registration Statement") in accordance with the First Registration Rights
Agreement (as defined below). Such Resale Registration Statement was declared
effective by the SEC on March 21, 2000 and remains effective as of the date
hereof. Such Resale Registration Statement covers for resale all of the Warrant
Shares issuable upon exercise of the Warrants, as amended pursuant to the terms
of this Agreement and the Warrant Amendment, in accordance with the terms of the
First Registration Rights Agreement, dated as of December 15, 1999, by and among
the parties hereto (the "First Registration Rights Agreement"). Upon the
Company's filing of the prospectus supplement referred to in Section 4(h), the
Investors may sell the Warrant Shares upon exercise of the Warrants, as amended,
pursuant to the Resale Registration Statement in accordance with the terms
thereof.

4.COVENANTS.

a.Best Efforts. Each party shall use its best efforts
timely to satisfy each of the conditions to be satisfied by it as provided in
Sections 5 and 6 of this Agreement.

b.Form D and Blue Sky. The Company agrees to file a Form D
with respect to the Common Shares as required under Regulation D and to provide
a copy thereof to each Investor promptly after such filing. The Company shall,
on or before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Common Shares for, or obtain exemption for
the Common Shares for, sale to the Investors at the Closing pursuant to this
Agreement under applicable securities or "Blue Sky" laws of the states of the
United States, and shall provide evidence of any such action so taken to the
Investors on or prior to the Closing Date. The Company shall make all filings
and reports relating to the offer and sale of the Common Shares required under
applicable securities or "Blue Sky" laws of the states of the United States
following the Closing Date.

c.Reporting Status. Until the earlier of (i) January
31, 2004 and (ii) the date on which (A) the Investors shall have sold all
the Common Shares and Warrant Shares and (B) none of the Warrants is outstanding
(the "Reporting Period"), the Company shall file all reports required to
be filed with the SEC pursuant to the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would otherwise
permit such termination.

d.Financial Information. The Company agrees to send the
following to each Investor during the Reporting Period (i) within two (2)
Business Days after the filing thereof with the SEC, unless available through
the EDGAR system, a copy of its Annual Reports on Form 10-K, its Quarterly
Reports on Form 10-Q, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act
and (ii) copies of any notices and other information made available or given to
the stockholders of the Company generally, contemporaneously with the making
available or giving thereof to the stockholders.

e.Listing. The Company shall promptly secure the listing
of all of the Common Shares upon each national securities exchange and automated
quotation system (including the Nasdaq National Market ("NNM")), if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all the Common Shares issued pursuant to this
Agreement. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 4(e).

f.Expenses. At Closing, the Company shall pay a
nonaccountable expense allowance of $17,980 to Fisher Capital Ltd. (an Investor)
or its designee(s) and $11,020 to Wingate Capital Ltd. (an Investor) or its
designee(s), by wire transfer of immediately available funds in accordance with
each such Investor's written wire instructions.

g.Disclosure of Transactions and Other Material
Information. On or before the first Business Day following the Closing Date,
the Company shall file a Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act,
and attaching the material Transaction Documents (including, without limitation,
this Agreement, the Registration Rights Agreement and the Warrant Amendment) as
exhibits to such filing (including all attachments, the "8-K Filing").
From and after the filing of the 8-K Filing with the SEC, no Investor shall be
in possession of any material nonpublic information received from the Company,
any of its subsidiaries or any of its respective officers, directors, employees
or agents, that is not disclosed in the 8-K Filing. The Company shall not, and
shall cause each of its subsidiaries and its and each of their respective
officers, directors, employees and agents, not to, provide any Investor with any
material nonpublic information regarding the Company or any of its subsidiaries
from and after the filing of the 8-K Filing with the SEC without the express
written consent of such Investor. In the event of a breach of the foregoing
covenant by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees and agents, in addition to any other
remedy provided herein, in the Transaction Documents, an Investor shall have the
right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material nonpublic information without the
prior approval by the Company, its subsidiaries, or any of its or their
respective officers, directors, employees or agents; provided that the Company
does not publicly disclose such information within 24 hours of such Investor (i)
notifying the Company of the breach of the immediately preceding sentence and
(ii) first providing the Company with such Investor's proposed form of
disclosure. Such Investor agrees to make any reasonable changes (determined in
such Investor's sole discretion) to such disclosure requested by the Company
within 24 hours of such Investor first providing the Company with such
Investor's proposed form of disclosure. No Investor shall have any liability to
the Company, its subsidiaries, or any of its or their respective officers,
directors, employees, shareholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor any Investor shall issue any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of any Investor, to make any press release or other
public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) each Investor shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release).

(h)Prospectus Supplement. Within two (2) Business Days of
the filing with the SEC of the Form 8-K referred to in the first sentence of
Section 4(g), the Company shall file with the SEC, a prospectus supplement, in a
form reasonably acceptable to each Investor, to the prospectus for the Resale
Registration Statement disclosing the terms of this transaction and all other
information necessary to be included in a prospectus supplement to keep such
Resale Registration Statement current and available for use by the Investors for
the resale of the Warrant Shares. On or before the second Business Day following
the Closing Date, the Company shall deliver a copy of such prospectus supplement
to each Investor.

(i)Destroyed Notes. The Company acknowledges and agrees
that it has received satisfactory evidence of, and an indemnification
undertaking with respect to, the prior destruction of the Notes and the Warrants
in accordance with Section 16 of the Notes and Section 11 of the Warrants.

5.CONDITIONS TO THE COMPANY'S OBLIGATION TO REDEEM AND
EXCHANGE. The obligation of the Company to redeem and exchange the Notes
from and with each Investor and to amend the Warrants at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Investor with prior written notice thereof:

(a)Such Investor shall have executed this Agreement and delivered
the same to the Company.

(b)Such Investor shall have delivered to the Company the Note
Direction with respect to the Notes being redeemed by such Investor at the
Closing.

(c)The representations and warranties of such Investor contained
herein shall be true and correct as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and such Investor shall have performed, satisfied
and complied with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Investor at or
prior to the Closing Date.

6.CONDITIONS TO EACH INVESTOR'S OBLIGATION TO EXCHANGE. The
obligation of each Investor hereunder to tender and exchange the Notes and to
amend the related Warrants at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for such Investor's sole benefit and may be waived by such
Investor at any time in its sole discretion by providing the Company and each
Investor with prior written notice thereof:

(a)The Company shall have executed each of the Transaction
Documents, and delivered the same to such Investor.

(b)The Common Stock shall be designated for quotation on the NNM
and shall not have been suspended from trading on or delisted from such
exchanges.

(c)The representations and warranties of the Company contained
herein shall be true and correct as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date. Such Investor shall have received a
certificate, executed by the Chief Executive Officer of the Company, dated as of
the Closing Date, to the foregoing effect and as to such other matters as such
Investor may reasonably request, including, without limitation, an update as of
the Closing Date regarding the representation contained in Section 3(c)
above.

(d)Such Investor shall have received the opinion of Wilson
Sonsini Goodrich & Rosati dated as of the Closing Date, in substantially the
form of Exhibit D attached hereto.

(e)The Company shall have delivered to such Investor such
Investor's pro rata portion of the Redemption Price (as set forth opposite such
Investor's name on the Schedule of Investors hereto) for the Notes being
redeemed by the Company from such Investor (as set forth in Section 1(a)) on the
Closing Date, by wire transfer of immediately available funds pursuant to the
wire instructions provided by such Investor and the Company shall have delivered
the amounts set forth in Section 4(f) by wire transfer of immediately available
funds to such Investor or its designee(s).

(f)The Company shall have executed and delivered to such Investor
the Stock Certificates representing the number of Common Shares set forth
opposite such Investor's name on the Schedule of Investors hereto.

(g)The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b)(ii) above and in a form reasonably
acceptable to such Investor (the "Resolutions").

(h)The Company shall have delivered to such Investor a
secretary's certificate certifying as to (A) the Resolutions, (B) the
Certificate of Incorporation and (C) the By-laws, each as in effect at the
Closing Date.

(i)The Company shall have delivered to such Investor a
certificate evidencing the incorporation and good standing of (x) the Company,
Netergy Microelectronics, Inc., and Centile, Inc. in such corporation's state of
incorporation issued by the Secretary of State of such state of incorporation
and (y) the Company in California, each as of a date within 15 days of the
Closing Date.

(j)The Company shall have delivered to such Investor a certified
copy of its Certificate of Incorporation as certified by the Secretary of State
of the State of Delaware within ten (10) days of the Closing Date.

(k)The Company shall have made all filings under all applicable
federal and state securities laws necessary to consummate the issuance of the
Common Shares pursuant to this Agreement in compliance with such laws.

(l)The Company shall have executed and delivered to such Investor
a receipt acknowledging the Company's receipt of such Investor's Notes (in the
principal amounts indicated opposite such Investor's name on the Schedule of
Investors hereto).

7.INDEMNIFICATION. In consideration of each Investor's
execution and delivery of the Transaction Documents and permitting the
redemption and exchange of its Notes hereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Investor and each other holder
of the Common Shares and all of their stockholders, officers, directors,
employees and direct or indirect investors and any of the foregoing persons'
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions,
causes of action and suits and from any claims, losses, costs, penalties, fees,
liabilities and damages, and expenses actually suffered or actually paid by such
Indemnitee in connection therewith (irrespective of whether any such Indemnitee
is a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by any Indemnitee as a result of, or arising out of,
or relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in the Transaction Documents or any other
certificate, instrument or document contemplated thereby, provided such
Indemnitee notifies the Company of its claim for indemnification under this
Section 7 for such misrepresentation or breach of a representation or warranty
on or before the date which is one (1) year after the date of this Agreement,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated thereby or (c) any cause of action, suit or claim brought or made
against such Indemnitee (other than a cause of action, suit or claim which is
(x) brought or made by the Company and (y) is not a shareholder derivative suit)
and arising out of or resulting from (i) the execution, delivery, performance or
enforcement of the Transaction Documents, (ii) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of the
issuance of the Common Shares or (iii) solely the status of such Investor
or holder of the Common Shares as an investor in the Company. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.

Any controversy, claim or dispute arising between the Company and an
Indemnitee concerning the existence, scope or amount of any Indemnified
Liability shall be determined by arbitration in the City of Chicago by one
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "Arbitration Rules"). Such arbitrator shall
be selected by mutual agreement of the Company and such Indemnitee in accordance
with the Arbitration Rules. In the event the Company and such Indemnitee cannot
agree on the selection of the arbitrator within 30 days, the American
Arbitration Association shall nomination three persons. Each of the Company and
the Indemnitee shall be entitled to strike one of such three nominees on a
peremptory basis within 10 days after its receipt of such list of nominees,
indicating its order of preference with respect to the remaining nominees. If
two such nominees have been stricken by the parties, the unstricken nominee
shall be the arbitrator. Otherwise, the selection of the arbitrator shall be
made by the American Arbitration Association from the remaining nominees in
accordance with the parties' mutual order of preference, or by random selection
in the absence of a mutual order of preference. The arbitrator shall base its
award on applicable law and judicial precedent, shall include such award
findings of fact and conclusions of law upon which the award is based and shall
not grant any remedy or relief that a court could not grant under applicable
law. The arbitrator's award and findings shall be for purposes of this Section 7
only and shall not in any way limit or prejudice any other rights that the
Company or such Indemnitee under this Agreement or the other Transaction
Documents or under any applicable law. 

8.GOVERNING LAW; MISCELLANEOUS.

a.Governing Law; Jurisdiction; Jury Trial. The corporate
laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in Cook County, the City of Chicago, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereby irrevocably waives any right it may
have, and agrees not to request, a jury trial for the adjudication of any
dispute hereunder or in connection herewith or arising out of this Agreement or
any transaction contemplated hereby.

b.Counterparts. This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

c.Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

d.Severability. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

e.Entire Agreement; Amendments. This Agreement, the
Registration Rights Agreement and the Warrant Amendment supersede all other
prior oral or written agreements between the Investors, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. Notwithstanding
the foregoing, the Securities Purchase Agreement, the First Registration Rights
Agreement and the Warrants, as amended by the Warrant Amendment, shall remain in
full force and effect with respect to any securities and the transactions
contemplated thereby. No provision of this Agreement may be amended other than
by an instrument in writing signed by the Company and the Investors which
received a majority of the Common Shares received on the Closing Date or, if
prior to the Closing Date, the Investors listed on the Schedule of Investors as
being obligated to tender and exchange a majority of the aggregate principal
amount of the Notes proposed to be redeemed and exchanged at the Closing. No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Common Shares or Warrants then outstanding. No consideration shall be offered or
paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration also
is offered to all of the parties to the Transaction Documents or holders of the
Common Shares as the case may be.

f.Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

If to the Company:


	
8x8, Inc.

	
2445 Mission College Blvd.

	
Santa Clara, California 95054

	
Telephone:
	
(408) 727-1885

	
Facsimile:
	
(408) 980-042

	
Attention:
	
Chief Executive Officer





With a copy to:


	
Wilson Sonsini Goodrich & Rosati

	
650 Page Mill Road

	
Palo Alto, California 94304

	
Telephone:
	
(650) 493-9300

	
Facsimile:
	
(650) 493-6811

	
Attention:
	
John T. Sheriden, Esq.







If to the transfer agent:


	
American Stock Transfer & Trust Company

	
12039 W. Alameda Parkway, Suite Z-2

	
Lakewood, Colorado 80228

	
Telephone:
	
(303) 986-5400

	
Facsimile:
	
(303) 986-2444

	
Attention:
	
Legal Transfer Department









If to an Investor, to it at the address and facsimile number set forth on
the Schedule of Investors, with copies to such Investor's representatives as set
forth on the Schedule of Investors, or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communications, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

g.Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Warrants. The Company shall not assign
this Agreement or any rights without the prior written 

consent of each Investor. An Investor may assign some or all of its rights
hereunder without the consent of the Company, provided, however, that any such
assignment shall not release such Investor from its obligations hereunder unless
such obligations are assumed by such assignee and the Company has consented to
such assignment and assumption. Notwithstanding anything to the contrary
contained in the Transaction Documents, the Investors shall be entitled to
pledge the Common Shares in connection with a bona fide margin account or other
loan secured by such Common Shares.

h.No Third Party Beneficiaries. Except with respect to
Section 8(p), this Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other person.

i.Survival. Unless this Agreement is terminated under
Section 8(k), the representations and warranties of the Company and the
Investors contained in Sections 2 and 3, the agreements and covenants set forth
in Sections 4 and 8, and the indemnification provisions set forth in Section 7,
shall survive the Closing. Each Investor shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

j.Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

k.Termination. In the event that the Closing shall not
have occurred with respect to an Investor on or before three (3) Business Days
from the date hereof due to the Company's or the Investor's failure to satisfy
the conditions set forth in Sections 5 and 6 above (and the non-breaching
party's failure to waive such unsatisfied condition(s)), the non-breaching party
shall have the option to terminate this Agreement with respect to such breaching
party at the close of business on such date without liability of any party to
any other party; provided, however, that if this Agreement is terminated
pursuant to this Section 8(k) and neither of the Investors is in breach of this
Agreement, the Company shall remain obligated to reimburse the Investors for
expenses up to the amount described in Section 4(f) above.

l.Placement Agent or Exchange Agent. The Company
acknowledges that it has not engaged a placement agent or exchange agent in
connection with the redemption and exchange of the Notes. The Company shall be
responsible for the payment of any placement agent's fees, exchange agent fees
or brokers' commissions relating to or arising out of the transactions
contemplated hereby. The Company shall pay, and hold each Investor harmless
against, any liability, loss or expense (including, without limitation,
attorneys' fees and out of pocket expenses) arising in connection with any such
claim.

m.No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

n.Remedies. Each Investor and each holder of the Common
Shares shall have all rights and remedies set forth in the Transaction Documents
and all rights and remedies which such holders have been granted at any time
under any other agreement or contract and all of the rights which such holders
have under any law. Any person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.

o.Payment Set Aside. To the extent that the Company makes
a payment or payments to any Investor hereunder or pursuant to the Registration
Rights Agreement or the Warrants or such Investor enforces or exercises its
rights hereunder or thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.


p.Mutual General Release.
i.In consideration of the releases set forth in Section 8(p)(ii),
effective as of the Closing, each Investor, severally and not jointly, on behalf
of itself and, to the extent permitted by law, its heirs, executors,
administrators, devisees, trustees, partners, directors, officers, shareholders,
employees, consultants, representatives, predecessors, principals, agents,
parents, associates, affiliates, subsidiaries, attorneys, accountants,
successors, successors-in-interest and assignees (collectively, the "Investor
Releasing Persons"), hereby waives and releases, to the fullest extent
permitted by law, but subject to Section 8(p)(iii) below, any and all claims,
rights and causes of action, whether known or unknown (collectively, the
"Investor Claims"), that any of the Investor Releasing Persons had,
currently has or as of the Closing may have against (i) the Company, (ii) any of
the Company's current or former parents, shareholders, affiliates, subsidiaries,
predecessors or assigns, or (iii) any of the Company's or such other persons' or
entities' current or former officers, directors, employees, agents, principals,
investors, signatories, advisors, consultants, spouses, heirs, estates,
executors, attorneys, auditors and associates and members of their immediate
families (collectively, the "Company Released Persons"), including,
without limitation, Investor Claims arising out of or relating to the Securities
Purchase Agreement and the First Registration Rights Agreement (collectively,
the "Released Documents") other than Investor Claims arising after the
Closing.

ii.In further consideration of the Investors entering into this
Agreement, effective as of the Closing, the Company on behalf of itself and, to
the extent permitted by law, its heirs, executors, administrators, devisees,
trustees, partners, directors, officers, shareholders, employees, consultants,
representatives, predecessors, principals, agents, parents, associates,
affiliates, subsidiaries, attorneys, accountants, successors, successors-in-
interest and assignees (collectively, the "Company Releasing Persons"),
hereby waives and releases, to the fullest extent permitted by law, but subject
to Section 8(p)(iii) below, any and all claims, rights and causes of action,
whether known or unknown (collectively, the "Company Claims"), that any
of the Company Releasing Persons had, currently has or as of the Closing may
have against (i) the Investors, (ii) any of the Investors' respective current or
former parents, shareholders, affiliates, subsidiaries, predecessors or assigns,
or (iii) any of the Investors' or such other persons' or entities' current or
former officers, directors, employees, agents, principals, investors,
signatories, advisors, consultants, spouses, heirs, estates, executors,
attorneys, auditors and associates and members of their immediate families
(collectively, the "Investor Released Persons"), including, without
limitation, any Company Claims arising out of or relating to the Released
Documents.

iii.The Company and each of the Investors acknowledge that the releases
set forth in Sections 8(p)(i) and 8(p)(ii) above do not affect any claim which
any Company Releasing Person or Investor Releasing Person may have under this
Agreement, or Section 9(m) or clause (c) of the first paragraph of Section 8 of
the Securities Purchase Agreement or Sections 5, 6 or 7 of the First
Registration Rights Agreement.

iv.It is the intention of each party that
this Section 8(p) shall be effective as a final accord and satisfaction and
release of each and every Investor Claim and Company Claim, except as otherwise
specifically provided in this Section 8(p). In furtherance of this intention,
each party acknowledges that it is familiar with Section 1542 of the California
Civil Code which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT NOW
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.

Each party hereby waives and relinquishes every right or benefit
which it may have under Section 1542 or the California Civil Code to the extent
that it may lawfully waive such right or benefit pertaining to the subject
matter of this Agreement. Each party acknowledges that the foregoing waiver was
separately bargained for and is a key element of the Agreement of which this
release is a part.




* * * * * *

IN WITNESS WHEREOF, the Investors and the Company have caused
this Redemption and Exchange Agreement to be duly executed as of the date first
written above.

	
COMPANY
	
 
	
INVESTORS

	
8x8, INC.
	
	
FISHER CAPITAL LTD.

	
By:
	
/s/ Bryan Martin
	
 
	
By:
	
/s/ Daniel J. Hopkins 

	
Name:
	
Bryan Martin
	
 
	
Name:
	
Daniel J. Hopkins

	
Its:
	
President and Chief Operating
Officer
	
 
	
Its:
	
Authorized Signatory




 

 

	
WINGATE CAPITAL LTD.

	
By:
	
/s/ Daniel J. Hopkins 

	
Name:
	
Daniel J. Hopkins

	
Its:
	
Authorized Signatory






















	
SCHEDULE OF INVESTORS

	
 

 

Investor's Name, Address

and Facsimile Number
	
 
	
Redemption

Price
	
 
	
Common Stock to be Issued
	
 
	
Series A Warrant Shares 
	
 
	
Series B Warrant Shares 
	
 
	
Outstanding Principal

Amount of

Series A Notes
	
 
	
Outstanding Principal

Amount of

Series B Notes
	
 
	
 

Investor's Legal 

Representatives' Address

and Facsimile Number

	
Fisher Capital Ltd.

jCitadel
Investment Group, L.L.C.

225 West Washington Street

Chicago, Illinois 60606
Attention:Daniel J. Hopkins



Facsimile: (312) 338-0780

Telephone: (312) 696-2100

Residence: Illinois
	
 
	
$2,790,000
	
 
	
620,000
	
 
	
329,787
	
 
	
65,493
	
 
	
$2,325,000
	
 
	
$2,325,000
	
 
	
Katten Muchin Zavis

525 W. Monroe Street

Chicago, Illinois 60661-3693

Attention: Robert J. Brantman, Esq.

Facsimile: (312) 902-1061

Telephone: (312) 902-5200

	
Wingate Capital Ltd.

jCitadel
Investment Group, L.L.C.

225 West Washington Street

Chicago, Illinois 60606
Attention:Daniel J. Hopkins



Facsimile: (312) 338-0780

Telephone: (312) 696-2100

Residence: Illinois
	
 
	
$1,710,000
	
 
	
380,000
	
 
	
202,128
	
 
	
40,141
	
 
	
$1,425,000
	
 
	
$1,425,000
	
 
	
Katten Muchin Zavis

525 W. Monroe Street

Chicago, Illinois 60661-3693

Attention: Robert J. Brantman, Esq.

Facsimile: (312) 902-1061

Telephone: (312) 902-5200





 

 

 

SCHEDULES 


Schedule of Investors



	
EXHIBITS

	
Exhibit A
	
Form of Amendment of Warrant

	
Exhibit B
	
Form of Registration Rights Agreement

	
Exhibit C
	
Form of Rule 144 Representation Letter

	
Exhibit D
	
Form of Opinion of Counsel























EXHIBIT A

 

 

 

 

(Filed previously as Exhibit 4.1 of the Current Report on
Form 8-K filed with the Securities and Exchange Commission on December 17,
2001)




















 

 

EXHIBIT B

 

 

 

 

(Filed previously as Exhibit 4.2 of the Current Report on
Form 8-K filed with the Securities and Exchange Commission on December 17,
2001)



















EXHIBIT C

[DATE]

8x8, Inc.

2445 Mission College Blvd.

Santa Clara, California 95054

Attention: _______________

Re:Rule 144 Sales

Ladies and Gentlemen: 

The undersigned has sold ________ shares of common stock
(the "Shares") of 8x8, Inc. (the "Company") in
a transaction permitted by Rule 144 ("Rule 144") under the
Securities Act of 1933, as amended (the "Act").  This
representation letter is being delivered to the Company pursuant to Section 2(g)
of the Redemption and Exchange Agreement, dated as of December __, 2001, between
the Company and the investors named in the Schedule of Investors thereto (the
"Redemption and Exchange Agreement").  Pursuant to the
Redemption and Exchange Agreement, the undersigned received directly from the
Company the Shares in exchange for and upon redemption of Series A Convertible
Notes and Series B Convertible Notes of the Company (the
"Notes").  The undersigned represents the following relevant
facts:

1.The undersigned received the Shares upon the
redemption and exchange of the Notes and for consideration consisting solely of
the Notes.  The undersigned has held the Shares for at least [one] OR
[two] years.

2.The undersigned does not hold at present and has
not held during the preceding three months 10% or more of the outstanding shares
of the Company's common stock, nor during this period has the undersigned been
an "affiliate" of the Company within the meaning of Rule
144(a)(i).

[If the Shares have been held for less than two years, the
following additional representations shall be made.]

3. Other than the sale of the Shares [and the
sale of an additional _________ shares of Common Stock of the Company], the
undersigned has not sold any securities of the Company within the preceding
three months pursuant to Rule 144, and[, except for the sale of _______ shares
of Common Stock of the Company by [INSERT name of any affiliate of the
undersigned],] no other person or parties whose sales must be aggregated with
the undersigned's made such a sale within the preceding three months pursuant to
Rule 144.

4.The undersigned is not and will not be acting in
concert with any other person for the purpose of selling securities of the
Company[, except to the extent that the undersigned may be deemed to be acting
in concert with [INSERT name of any relevant affiliate of the undersigned]].


5.The number of Shares sold, along with the number of
shares of Common Stock of the Company sold by the undersigned [or [INSERT name
of any relevant affiliate of the undersigned] within the last three months
pursuant to Rule 144, did not exceed the applicable volume limitation on such
sales as stated in Rule 144(e)(i).

6.Except for usual and customary broker's commissions
paid to the brokers listed on the Form 144 attached as Annex A, the undersigned
has made no payment to any other person in connection with the execution of the
sale of the Shares and the undersigned will not do so.  The undersigned has not
solicited or arranged for the solicitation of any orders to buy Shares of the
Company in anticipation of, or in connection with, this proposed sale and the
undersigned will not do so.

7.This transaction has been made through transactions
which comply with the requirements of Rule 144(f). 

8.The undersigned filed a Form 144 with the
Securities and Exchange Commission on [DATE], a copy of which is attached as
Annex A.  

[INSERT NAME OF SELLER]

 

 
By:_______________________________

Name:















Title:



















EXHIBIT D

 

December __, 2001


To the Investors Listed in on the

Schedule of Investors to the Redemption

and Exchange Agreement, dated as of 

December __, 2001

Ladies and Gentlemen:

This opinion refers to the Redemption and Exchange Agreement, dated December
13, 2001 (the "Redemption Agreement"), complete with all listed
exhibits thereto, by and among 8x8, Inc., a Delaware corporation (the
"Company"), and the persons and entities listed on the Schedule of
Investors to the Redemption Agreement (the "Investors").  This opinion
is rendered to you pursuant to Section 6(d) of the Redemption Agreement,
and all terms used herein have the meanings defined for them in the Redemption
Agreement unless otherwise defined herein.

We have acted as counsel for the Company in connection with the negotiation
of the Redemption Agreement, the Registration Rights Agreement (together the
"Transaction Agreements") and the issuance of the Common Stock.  As
such counsel, we have made such legal and factual examinations and inquiries as
we have deemed advisable or necessary for the purpose of rendering this opinion.
In addition, we have examined, among other things, originals or copies of such
corporate records of the Company, including copies of stock certificates for the
Common Shares, certificates of public officials and such other documents and
questions of law that we consider necessary or advisable for the purpose of
rendering this opinion.  In such examination, we have assumed the genuineness of
all signatures on original documents, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all copies
submitted to us as copies thereof, the legal capacity of natural persons, and
the due execution and delivery of all documents (except as to due execution and
delivery by the Company) where due execution and delivery are a prerequisite to
the effectiveness thereof.

As used in this opinion, the expression "to our knowledge" with
reference to matters of fact means that, after an examination of documents made
available to us by the Company, and after inquiries of officers of the
Company, but without any further independent factual investigation, we find no
reason to believe that the opinions expressed herein are factually incorrect.
Further, the expression "to our knowledge" with reference to matters
of fact refers to the current actual knowledge of the attorneys of this firm who
have worked on matters for the Company.  Except to the extent expressly set
forth herein or as we otherwise believe to be necessary to our opinion, we have
not undertaken any independent investigation to determine the existence or
absence of any fact, and no inference as to our knowledge of the existence or
absence of any fact should be drawn from our representation of the Company or
the rendering of the opinions set forth below.

For purposes of this opinion, we are assuming that you have all requisite
power and authority, and have taken any and all necessary corporate, partnership
or individual action, to execute and deliver the Transaction Agreements and we
are assuming that the representations and warranties, as to factual matters,
made by you in the Redemption Agreement and pursuant thereto are true and
correct.  For purposes of our opinion concerning the enforceability of
provisions in the Registration Rights Agreement concerning redemption of the
Registrable Securities, we are assuming that the Company will have sufficient
funds necessary for redeeming such shares as required under the Delaware General
Corporation Law ("DGCL").

The opinions expressed below are subject to the following qualifications:


	We express no opinion as to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar federal or state laws affecting the
rights of creditors; 
	We express no opinion as to the effect or availability of rules of law
governing specific performance, injunctive relief or other equitable remedies
(regardless of whether any such remedy is considered in a proceeding at law or
in equity);
	We express no opinion as to the enforceability of the release and waiver
provisions of Section 8(p) of the Redemption Agreement to the extent the
provisions thereof may be subject to limitations of public policy and the effect
of applicable statutes and judicial decisions;
	We express no opinion as to compliance with applicable anti-fraud provisions
of federal or state securities laws;
	We express no opinion as to the enforceability of the indemnification
provisions of Section 7 of the Redemption Agreement and Section 6 of the
Registration Rights Agreement to the extent the provisions thereof may be
subject to limitations of public policy and the effect of applicable statutes
and judicial decisions; 
	We express no opinion as to the enforceability of any provisions of the
Registration Rights Agreement purporting to impose fines to the extent that they
constitute a penalty or are otherwise contrary to public policy; 
	With respect to our opinion in paragraph 1 below, insofar as it relates to
the valid existence or good standing of the Company, Netergy Microelectronics,
Inc. and Centile, Inc., we have relied solely upon certificates from government
officials; and
	We are members of the Bar of the State of California and we are not
expressing any opinion as to any matter relating to the laws of any jurisdiction
other than the federal laws of the United States of America, the laws of the
State of California and the DGCL.




Based on the foregoing, and subject to the assumptions and qualifications set
forth below, we are of the opinion that:


	The Company and each of Netergy Microelectronics, Inc. and Centile, Inc. is
a corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation.  The Company has the requisite
corporate power and authority to conduct its business, and to own, lease and
operate its properties, as described in the Company's Annual Report on Form 10-K
for the year ended March 31, 2001 (the "Annual Report"). 
	As of the date hereof, the authorized capital stock of the Company consists
of (i) 100,000,000 shares of Common Stock, par value $0.001 per share and
(ii) 5,000,000 shares of Preferred Stock, par value $0.001 per share.
	Subject to the accuracy as to factual matters of the Investors'
representations in Section 2 of the Redemption Agreement, the Common Shares may
be issued to you pursuant to the Redemption Agreement without registration under
the 1933 Act or the securities laws of any state.
	The issuance and sale of the Common Shares has been duly authorized, and
when issued in accordance with the terms of the Redemption Agreement, the Common
Shares (a) will be validly issued, fully paid and non-assessable and (b) will be
free of any preemptive rights under the Company's Certificate of Incorporation
or Bylaws or the DGCL.  The certificates for the Common Shares are in due and
proper form, have been duly executed under and conform to the requirements of
the DGCL, the Company's Certificate of Incorporation and Bylaws.
	The Company has the requisite corporate power and authority to execute,
deliver and perform its obligations under the Transaction Agreements and to
issue the Common Shares in accordance with the terms thereof.  The execution and
delivery of the Transaction Agreements by the Company, the performance of the
obligations of the Company thereunder and the consummation by it of the
transactions contemplated therein have been duly authorized by all necessary
corporate action on the part of the Company and the Transaction Agreements have
been duly executed and delivered by the Company.  Assuming that New York
contract law is the same as California contract law, the Transaction Agreements
constitute the valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors' rights and
remedies.
	The execution, delivery and performance by the Company of the Transaction
Agreements, the consummation by the Company of the transactions contemplated
thereby and the compliance by the Company with the terms thereof does not (a)
violate, conflict with or constitute a default (or an event which, with the
giving of notice or lapse of time or both, constitutes or would constitute a
default) (i) the Company's Certificate of Incorporation or the Bylaws, or (ii)
any agreement, note, lease, mortgage, deed or other instrument to which the
Company is a party or by which the Company is bound and which the Company has
filed, including by incorporation by reference, as an exhibit to its Annual
Report or any reports filed with the SEC under the 1934 Act after the filing of
its Annual Report; or to our knowledge that the Company will be required to file
as an exhibit to its future reports under the 1934 Act; or (b) to our
knowledge result in any violation of any statute, law, rule or regulation known
to us to be applicable to the Company or, to the best of our knowledge, any
order, writ, injunction or decree, if such violation would have a Material
Adverse Effect.
	No authorization, approval, consent, filing or other order of any Federal or
state governmental body, regulatory agency, self-regulatory organization or
stock exchange or market, or the stockholders of the Company (except to the
extent that the Company may be required pursuant to the rules of the Nasdaq
National Market to file a notice filing concerning the issuance of the Common
Shares in order for the Common Shares to be designated for quotation on the
Nasdaq National Market and to the extent that the Company may file a Form D
pursuant to rules adopted under the 1933 Act and similar filings to comply with
exemptions under state securities laws), or any court, or, to our knowledge, any
third party, is required to be obtained by the Company to enter into and perform
its obligations under the Transaction Agreements or for the issuance and sale of
the Common Shares as contemplated by the Redemption Agreement.
	To our knowledge, and except as disclosed in the Redemption Agreement, there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body or any governmental agency or self-regulatory organization
pending or threatened against the Company or any of its subsidiaries or any of
the properties of the Company or any of its subsidiaries which might reasonably
be expected to have a Material Adverse Effect.




 

 

This opinion is furnished to the Investors solely for their benefit in
connection with the transactions contemplated by the Redemption Agreement only,
and may not be relied upon by any other person or for any other purpose without
our prior written consent.




WILSON SONSINI GOODRICH & ROSATI

Professional Corporation