License Agreement And Development Contract

EXHIBIT 10.8


LICENSE AGREEMENT
BETWEEN
AWARE, INC.
AND
WESTELL, INC.


This Agreement is made and entered into this 5th day of September 1994, (the "Effective Date") by and between Aware, Inc. (hereinafter referred to as "AWARE") a corporation duly organized under the laws of the Commonwealth of Massachusetts with offices at One Memorial Drive, Cambridge MA and Westell, Inc. (hereinafter referred to as "WESTELL") a corporation duly organized under the laws of Illinois, with offices at 75 Executive Drive, Aurora, IL 60504 (hereinafter referred to as "LICENSEE" or "WESTELL").


WITNESSETH


WHEREAS, AWARE is the owner of certain rights, title and interest in the PROGRAM (as later defined herein) and the TRADEMARK (as later defined herein) and has the right to grant licenses thereunder;


WHEREAS, WESTELL desires to obtain a license to sell hardware incorporating the PROGRAM, and


WHEREAS, WESTELL and AWARE have entered into a separate DEVELOPMENT AGREEMENT, a copy of which is attached here to as Appendix A and incorporated herein.


NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:


1 - DEFINITIONS


For the purposes of this Agreement, the following words and phrases shall have the following meanings;


1.1 "PROGRAM(s)" shall mean the software developed by AWARE (and all associated documentation) pursuant to the DEVELOPMENT AGREEMENT.


1.2 "LICENSED PRODUCT(s)" shall mean any product(s) that incorporate the PROGRAM(s) or any part thereof.


1.3 "COPYRIGHT(s)" shall mean AWARE's copyrights in the PROGRAM(s).


1.4 "INTELLECTUAL PROPERTY RIGHTS" shall mean any and all rights associated with the PROGRAMS including the COPYRIGHTS and any rights associated with the TRADEMARKS.


1.5 "TERRITORY" shall mean the world.


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1.6 "TRADEMARK(s)" shall mean the AWARE trademark(s).


1.7 Asymmetric Digital Subscriber Line (ADSL) transceiver systems shall mean devices that are capable of transmitting and receiving high speed data over copper telephone lines.


1.8 "FIELD OF USE" shall mean Asymmetric Digital Subscriber Line transceivers.


1.9 "GROSS PROFIT" shall mean the Gross Sales price of the LICENSED PRODUCTS less discounts, less direct labor, less labor overhead, less direct material and less material overhead costs. All such costs and discounts to be calculated in conformity with generally accepted accounting principles.


2 - GRANT


2.1 AWARE hereby grants to WESTELL an exclusive license for one year and two weeks from Milestone 4 as described in Paragraph 4 of the Development Contract and a perpetual non-exclusive license thereafter to the INTELLECTUAL PROPERTY RIGHTS in the TERRITORY to:


a. make, use, sell, have made and distribute LICENSED PRODUCT(s)


b. use, at WESTELL's option the TRADEMARK in conjunction with the
manufacture, use, sale and distribution of the LICENSED
PRODUCT(s), and


c. use and reproduce the PROGRAM(s) in conjunction with (a) and
(b) above.


2.2 The license granted hereunder shall not be construed to confer any rights upon LICENSEE by implication, estoppel or otherwise, as to any intellectual property not specifically included in COPYRIGHT(s).


3 - ROYALTIES


3.1 For the rights, privileges and license granted hereunder, WESTELL shall pay a license fee and royalties to AWARE in the manner herinafter provided to the end of the term of the COPYRIGHT(s) or until this Agreement shall be terminated:


a. A license fee of (redact) payable as follows:


[redact] which was paid to Aware on August 3, 1994.


[redact] upon execution of this agreement.


[redact] upon completion of Milestone 2.


[redact] upon completion of Milestone 3.


[redact] upon completion of Milestone 5.


3.2 Royalty payments shall be paid in United States dollars in Cambridge, Massachusetts, or at such other place as AWARE may reasonably designate. If any currency conversion shall be required in connection with the payment of royalties hereunder, such


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conversion shall be made by using the exchange rate prevailing at the Chase Manhattan Bank (N.A.) on the last business day of the calendar quarterly reporting period to which such royalty payments relate.


a. Royalty payments on the first [redact] of GROSS PROFIT shall be
[redact]. Thereafter royalty payments shall be [redact] of the
GROSS PROFIT on LICENSED PRODUCTS. If WESTELL can show that a
royalty of [redact] does not allow it to compete in the
marketplace, Aware agrees to consider renegotiating royalty
rates. Payments willl be made within fifteen (15) days of the
end of each quarter based on sales net of returns for which
credits were issued for the calendar quarter.


4 - AWARE REPRESENTATIONS AND WARRANTIES


4.1 AWARE represents and warrants that it shall be the legal owner of the PROGRAMS and all COPYRIGHTS associated therewith.


4.2 AWARE represents and warrants that the INTELLECTUAL PROPERTY RIGHTS shall not be subject to any liens, claims or entitlements on the part of any third party. AWARE represents and warrants that its employees are, and shall be, the original authors of the PROGRAMS.


4.3 AWARE represents and warrants that it does not know of any patents, copyrights or trade secrets or other proprietary rights which belong to third parties which will be infringed by the PROGRAMS after development by AWARE.


4.4 AWARE represents and warrants that it will provide full support for its software at AWARE's cost including bug fixes consistent with standard software industry practices for three years from date of each release.


5- REPORTS AND RECORDS


5.1 WESTELL shall keep full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to AWARE hereunder. Said books of account shall be kept at WESTELL's principal place of business or the principal place of business of the appropriated division of WESTELL to which this Agreement relates. Said books and the supporting data shall be open at all reasonable times for one (1) year following the end of the calendar year to which they pertain, to the inspection of AWARE or its agents of the purpose of verifying WESTELL's royalty statement or compliance in other respects with this Agreement. Records of any year may be inspected only once. However, should such inspection lead to the discovery of a greater than ten percent (10%) discrepancy in reporting, LICENSEE agrees to pay the full cost of such inspection and to allow a re-inspection of the records of the prior three(3) years. All records to be inspected shall be kept confidential pursuant to the AWARE/WESTELL Confidentiality Agreement of 25 June, 1993.


5.2 WESTELL, within sixty (60) days after March 31, June 30, September 30 and December 31, of each year, shall deliver to AWARE true and accurate reports, giving such particulars of the business conducted by WESTELL during the preceding three-month period under


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this Agreement as shall be pertinent to a royalty accounting hereunder. These shall include at least the following:


a. descriptions of LICENSED PRODUCTS;


b. number of LICENSED PRODUCTS sold by or for LICENSEE:


c. total royalties due.


5.3 With each such report submitted, WESTELL shall pay to AWARE the royalties due and payable under this Agreement. If no royalties shall be due, WESTELL shall so report.


5.4 The royalty payments set forth in this Agreement and amounts due under Paragraph 3 shall, if overdue, bear interest until payment at a per annum rate thrice percent (2%) above the prime rate in effect at the Chase Manhattan BAnk (N.A.) on the due date. The payment of such interest shall not foreclose AWARE from exercising any other rights it may have as a consequence of the lateness of any payment.


6 - COPYRIGHT


6.1 WESTELL acknowledges that title to the PROGRAM(s) (including copyright) shall remain with AWARE and that any copies of the LICENSED PRODUCTS and related documentation, or portions thereof, made by WESTELL shall include an AWARE copyright notice thereon the following form: "Copyright 199-, Aware, Inc. All Rights Reserved". The notice shall be affixed to all copies or portions thereof in such manner and location as to give reasonable notice of AWARE's claim of copyright. WESTELL shall at all times hereafter protect the PROGRAM, and all related technical information, data and materials supplied by AWARE, from transfer using measures at least as strong as thos ...