GADZOOX NETWORKS INC
EXHIBIT 10.2
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<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>f79020ex10-2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
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                                                                    EXHIBIT 10.2

                                    AGREEMENT

This AGREEMENT is made this 17th day of July, 1995, by and between Vitesse
Semiconductor Corp. ("Vitesse"), a Delaware Corporation, having an office at 741
Calle Plano, Camarillo, CA 93012 and Gadzoox Microsystems, Inc. a California
Corporation having an office at 86 Railway Avenue, Campbell, California 95008.
Gadzoox desires to develop an integrated circuit for use in products. Vitesse
desires rights to sell this integrated circuit in the general market under its
own name as a Vitesse standard product. In consideration of the premises and the
mutual covenants set forth below, Gadzoox and Vitesse agree as follows:

1.0     DEFINITIONS

        1.1     "Product Specification" means the functional description and
                detailed specifications for the VSC7120QJ Fibre Channel
                Repeater.

        1.2     "Licensed Design" means the VSC7120QJ and any Subcircuit. A
                description and specification of the function of the VSC7120QJ
                is listed in Appendix A.

        1.3     "Licensed Product" means a product sold or otherwise distributed
                by Vitesse which incorporates the Licensed Design.

        1.4     "Gross Revenue" means the ultimate worldwide revenue, in U.S.
                Dollars, received by Vitesse for Licensed Products sold by
                Vitesse.

        1.5     "Net Sales" means the total amounts invoiced by Vitesse,
                adjusted for replacements, returns, or credits for defective
                product, not including amounts separately itemized on the
                invoice, such as customs duties, sales, excise, use, import, and
                export taxes, other taxes, insurance, and shipping charges. Net
                Sales shall not include any sales to Gadzoox.

2.0     DEVELOPMENT

        2.1     The Product Specification, designs, and layouts will be agreed
                to by both parties and listed in Appendix A.

        2.2     Gadzoox shall design, layout, characterize, and revise as
                necessary the integrated circuit described by, and which will
                perform and comply with the Product Specification. Vitesse will
                provide Gadzoox with the design and layout of similar functions
                which will be used, or modified for use, in the product.

        2.3     Vitesse will create tooling for manufacturing based on the
                design and layout provided by Gadzoox, process wafers, and
                provide hardware and software for the testing of wafer and
                packaged units.

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        2.4     Should either party choose or agree to make any changes to the
                product description as specified in Appendix A., an Engineering
                Change Notice (ECN) shall be completed by the parties and
                submitted for incorporation herein. No verbal authorizations or
                changes are to be substituted for the ECN.

        2.5     Gadzoox shall follow the standard documentation and design
                review procedures used by Vitesse. These procedures are listed
                in Appendix B.

3.0     LICENSES

        3.1     Gadzoox grants to Vitesse a worldwide, exclusive,
                royalty-bearing license under the Licensed Design to make, have
                made, use, have used, sell, and otherwise transfer Licensed
                Product.

        3.2     The royalty rate for the Licensed Design is based on Vitesse's
                Gross Revenue from Net Sales of the Licensed Product and is to
                be the following:

                      Ten percent (10%) of the first $100,000

                      Seven percent (7%) of the next $200,000

                      Five percent (5%) of the next $400,000

                      Three percent (3%) of Gross Revenue thereafter until the
                      total sum of royalties paid is $1 million.

4.0     PREFERENTIAL PRICING

        4.1     Vitesse will sell the licensed design to Gadzoox for use in
                Gadzoox products at a price not to exceed the lowest price
                offered to any other customer for an equivalent quantity. During
                the term of any purchase order placed by Gadzoox, Vitesse will
                adjust the price of any unshipped quantity to maintain this
                preference.

5.0     OTHER CONSIDERATION

        5.1     Vitesse agrees to provide Gadzoox with five hundred (500) units
                of the VSC7120 at no cost when the product meets the mutually
                agreed upon specifications listed in Appendix A.

6.0     CONFIDENTIALITY

        6.1     Both parties shall execute a Vitesse Non-Disclosure Agreement.

        6.2     Documents or other information shall be deemed to contain
                confidential information only if exchanged in accordance with
                the terms and conditions of the Confidential Disclosure
                Agreement.



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        6.3     Within thirty days after the termination of this Agreement, the
                receiving party shall return to the disclosing party all copies
                of any Confidential Material for which the period of confidence
                has not expired.

7.0     TERM AND TERMINATION

        7.1     This Agreement becomes effective upon the date when the last of
                the signatures required below has been affixed and shall run for
                seven years from that date.

        7.2     Either party may terminate this Agreement for material breach of
                its provisions if the breach continues for sixty days after
                written notification of the breach and intent to terminate.

        7.3     Termination does not relieve either party of any liability
                accrued before termination. Obligations as to Confidential
                Material survive any termination.

8.0     WARRANTIES

        8.1     Gadzoox warrants that it has the full right and power to grant
                the license under the Licensed Design as set forth herein.

9.0     ASSIGNMENT

        9.1     Neither party shall assign this Agreement or delegate any of its
                duties or responsibilities without the prior written consent of
                the other party except to a successor in ownership of
                substantially all assets of that party who shall assume in
                writing all the terms and conditions of this Agreement.

10.0    COMMUNICATIONS

        10.1    Vitesse shall send Gadzoox written revenue statements providing
                a summary of Vitesse's Gross Revenue generated from Net Sales of
                the Licensed Product. The revenue statement shall provide a
                breakout of which revenue is attributed to Gadzoox. These
                revenue statements shall be provided to Gadzoox every six months
                after the first sale to a third party. Vitesse will calculate,
                based on the revenue statement, the royalty payments due to
                Gadzoox.

        10.2    Any notice required or permitted hereunder shall be given to the
                appropriate party at the address specified below or at such
                other address as the party shall specify in writing. Such notice
                shall be deemed given upon personal delivery to the appropriate
                address or if sent certified or registered mail, three days
                after the date of mailing.



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        10.3    The addresses are:

               For Gadzoox:
                      Attn: Alistair Black
                      Gadzoox Microsystems, Inc.
                      86 Railway Avenue
                      Campbell, CA 95008

               For Vitesse:
                      Attn: Michael Millhollan VP
                      Vitesse Semiconductor Corporation
                      741 Calle Piano
                      Camarillo, CA 93012

11.0    AUDIT RIGHTS WITH RESPECT TO COMPLIANCE WITH SECTION 10.1

        11.1    Vitesse will maintain accounting records to substantiate the
                revenue statements of Section 9.1. Vitesse will retain its
                accounting records and other records pertaining to this
                Agreement for the term of this Agreement and for one (1) year
                after its expiration or termination.

        11.2    Gadzoox will have access, upon reasonable notice to Vitesse, to
                the above records for audit purposes during Vitesse's normal
                business hours for the term of this Agreement and during the
                period for which Vitesse is required to maintain records as
                provided above. Any Gadzoox audit will relate only to records
                pertaining to this Agreement.

12.0    DISCLOSURE

        12.1    Neither party will in any manner, unless required to comply with
                any applicable Federal, State, and local laws, ordinances,
                rules, and regulations, advertise, publish, or otherwise
                disclose the fact that they have entered this Agreement without
                first obtaining the other party's written consent.

13.0    LIMITATION OF LIABILITY

        13.1    Neither party shall make a claim against, nor be liable to the
                other, for actual damages in excess of the amounts due but not
                paid (if any) pursuant to the terms of this Agreement, or for
                any consequential, special, incidental or punitive damages,
                including, but not limited to lost profit suffered by the other
                as a result of its breach.

        13.2    If any action in law or in equity is necessary to enforce the
                terms of this Agreement, the prevailing party shall be entitled
                to the reasonable attorney's fees, costs, and expenses in
                addition to any other relief which such prevailing party may be
                entitled.


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14.0    MISCELLANEOUS

        14.1    Nothing in this Agreement creates any joint venture,
                partnership, agency, or other relationship between the parties.
                Neither party's personnel shall be considered to be employees of
                the other for any purpose.

        14.2    Each party shall pay all taxes due in any country as a result of
                its furnishing consideration hereunder.

        14.3    This Agreement shall be construed in accordance with the laws of
                the State of California. If any provisions of this Agreement are
                for any reason found by a court of competent jurisdiction to be
                unenforceable, the remainder of this Agreement shall continue in
                full force and effect. Both parties expressly waive any right
                they may have to a jury trial as to any matter arising under
                this Agreement.

        14.4    This Agreement constitutes the full and complete understanding
                and agreement of the parties hereto and supersedes all prior
                understandings and agreements. Any waiver, modification, or
                amendment of the provision of this Agreement shall be effective
                only in writing and signed by the parties hereto.

IN WITNESS WHEREOF, the parties have signed this Agreement on the dates
indicated below:

Accepted and Agreed:                        Accepted and Agreed:

VITESSE SEMICONDUCTOR CORPORATION           GADZOOX MICROSYSTEMS, INC.


BY:  /s/ Michael Millhollan                 BY:  /s/ Alistair Black
    -------------------------------------      --------------------------------
     Authorized Signature                      Authorized Signature

PRINT NAME:  Michael Millhollan             PRINT NAME:  Alistair Black
            -----------------------------              ------------------------

TITLE: Vice President and General Manager   TITLE: President

DATE:  July 17, 1995                        DATE:  7/20/95
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