Exhibit 10.31

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

AMENDMENT NO. 4 TO

TECHNOLOGY LICENSE AGREEMENT

(PROJECT PHOENIX)

This Amendment No. 4 (“Amendment No. 4”) dated as of August 19, 2005 (the
“Amendment No. 4 Effective Date”) to that certain Technology License Agreement
dated January 25, 2004 (the “Original Agreement”) by and between ANOTO AB, a
company incorporated under the laws of Sweden (“Anoto”), ANOTO GROUP AB, a
company incorporated under the laws of Sweden (“Anoto Group”) and LEAPFROG
ENTERPRISES, INC., a company incorporated under the laws of Delaware
(“LeapFrog”). Each of Anoto, Anoto Group, LeapFrog are referred to as a “Party”,
and collectively as the “Parties”. Capitalized terms not defined in this
Amendment No. 4 will have the meaning ascribed to them in the Original
Agreement.

BACKGROUND

The Parties entered into the Original Agreement as of January 25, 2004.

The Parties desire to amend the Original Agreement in order to (1) enable
LeapFrog to use Licensed Anoto Technology in a Licensed Product which has
limited functionality and a lower royalty rate and (2) allow LeapFrog
appropriate access to certain Anoto Technology in view of the increased
integration of Licensed Anoto Technology into LeapFrog products.

Based on the foregoing, and in consideration of the mutual promises and
covenants set forth below and other good and valuable consideration the receipt
and adequacy of which is hereby acknowledged, the Parties hereby agree as
follows:

1. Definitions. The following additional definitions are hereby added to the
Original Agreement:

“Level 1 Licensed Products” means the following two categories of Licensed
Products: (1) a Licensed Product that has the ability to [*] but does not have
the ability to [*] and (2) a Licensed Product that has the ability to [*] but
does not have the ability to [*].

“Level 2 Licensed Product” means a Licensed Product that has the ability to [*]
but does not have [*] functionality beyond the foregoing.

2. Amendment to Schedule G of the Original Agreement. A new Section 7 is hereby
added to Schedule G of the Original Agreement as follows:

7. Royalties for Level 1 Licensed Products and Level 2 Licensed Products. The
provisions of Sections 1, 2 and 4 of Schedule G shall not apply to Level 1
Licensed Products and Level 2 Licensed Products. LeapFrog shall pay an IPR
Royalty of [*] for each Level 1 Licensed Product sold by LeapFrog. LeapFrog
shall pay an IPR Royalty of [*] for each Level 2 Licensed Product sold by
LeapFrog. LeapFrog may offer to end users an add-on device which converts a
Level 1 Licensed Product to a Level 2 Licensed Product (a “Converter”). LeapFrog
shall pay an IPR

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Royalty of [*] for each Converter sold by LeapFrog. The foregoing royalty
obligations shall not apply to [*] In particular, there shall be no royalty
obligations with respect to [*] Content sold for use with Licensed Products
having capabilities [*] is subject to the LeapFrog Content Royalty according to
the Original agreement. The IPR Royalties under this Section 7 of Schedule G
will be deducted against the Advance Royalties paid under Section 5 of this
Schedule G.

3. Escrow Considerations. The parties acknowledge that Anoto and LeapFrog have
been negotiating a technology escrow agreement pursuant to the provisions of
Section 11.4 of the Original Agreement. The parties agree that the escrow
agreement will provide that, in addition to a release of the Deposit Materials
in the event of an Anoto Bankruptcy Event, LeapFrog will be entitled to a
release of the Deposit Materials upon the occurrence of the following event:
Anoto or Anoto Group materially breaches the executed version of the Agreement
for Mutual Maintenance and Support under the Technology License Agreement and
fails to cure such material breach within thirty (30) days of written notice
thereof. For the avoidance of doubt, the license rights under Section 11.4(h)
shall apply equally to Licensed Products, Level 1 Licensed Products and Level 2
Licensed Products.

4. Anoto will under an SSOW according to the Master Agreement For Subsequent
Statements Of Work Under The Technology License Agreement develop and optimize
the [*] in Level 1 and 2 Licensed Products including the portions of [*] to meet
the specifications set out in Exhibit A, “Limited Camera System Specifications”.
To make performance enhancements, RAM/ROM memory use modifications, API
modifications and other modifications as may be useful in system integration
Anoto will invite Leapfrog expertise to provide assistance as required. In case
Anoto cannot make the limited camera system for Level 1 and 2 Licensed Products
meet the Limited Camera System Specifications, Anoto and Leapfrog shall in good
faith negotiate if and how Leapfrog shall have limited access to limited parts
of the APR source code to make necessary modifications to meet said
specifications.

In addition, the parties agree to work in good faith toward allowing LeapFrog
access to selected [*] and selected [*] which LeapFrog identifies as [*]. (The
[*] and [*] are referred to herein as the “Highly Sensitive Information.”) The
following provisions shall apply with respect to any Highly Sensitive
Information shared with LeapFrog: (i) LeapFrog shall maintain a log of all
persons accessing or using the Highly Sensitive Information and shall make such
log available to Anoto upon written request; (ii) the Highly Sensitive
Information shall not be accessed by any third parties or consultants; (iii) the
Highly Sensitive Information shall be installed only on a non-networked computer
system which is password protected, and all files will be password protected;
(iv) LeapFrog shall prevent telephone or other remote access to the Highly
Sensitive Information from other locations; (v) all hardcopy produced from the
Highly Sensitive Information must be labeled “Highly Confidential” and must be
shredded after use; and (vi) the building in which LeapFrog uses the Highly
Sensitive Information shall have restricted access twenty-four (24) hours a day.
All backup copies made of the Highly Sensitive Information must be labeled
“Highly Confidential” and must be stored in a locked, secure locations.

Leapfrog will at a defined time approve or reject the performance and
manufacturability of the system according the specifications and schedule in
Exhibit A.

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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[*] shall not apply to Level 1 Licensed Products and/or Level 2 Licensed
Products. For the avoidance of doubt, the Anoto Licensed Technology contained in
Level 1 Licensed Products and Level 2 Licensed Products shall be covered under
the terms of the Agreement for Mutual Maintenance and Support under the
Technology License Agreement.

5. Limitation of Liability for Level 1 Licensed Products and/or Level 2 Licensed
Products. A new Subsection (h) is hereby added to Section 14.2 of the Original
Agreement as follows:

(h) For Claims for indemnity with respect to Level 1 Licensed Products and Level
2 Licensed Products, the total liability of Anoto Group for any single Claim
will be limited to [*]. In the event multiple Claims arise in any one calendar
year, Anoto Group’s total liability for such multiple Claims will be limited to
[*] If a Claim arises after the termination of this Agreement, then [*] [*]
shall not be counted as royalties received by Anoto Group for purposes of
calculating the liability cap of Section 14.2(d). Likewise, amounts paid under
Claims for [*] shall not count toward the liability cap of Section 14.2(d).

6. Future Engineering Support. Anoto will provide engineering support for the
following modifications to the Licensed Anoto Technology, at LeapFrog’s request:
(a) [*], (b) [*], (c) [*] and (d) [*] and (e) adjustments to optimize production
(f) other modifications or enhancements that LeapFrog may request. All such work
shall be set forth in a mutually agreed upon statement of work setting forth the
deliverables timeframe for deliver, timeframe for acceptance and mutually agreed
upon rates, which shall be reasonable.

7. Joint Platform. Any and all modifications or improvements to the Joint
Platform created pursuant to the work performed under the statement of work set
forth in Exhibit A shall be deemed a part of the Joint Platform. Any and all
other Updates and Upgrades to the Joint Platform are addressed in Section 6.8 of
the Original Agreement.

8. Future Discussions. Leapfrog acknowledges that use of Licensed Anoto
Technology beyond the scope of the license grant in the Original Agreement will
require additional license rights and that Anoto is willing to negotiate such a
license.

9. Effective of this Amendment. Except as expressly set forth herein, the
Original Agreement shall remain in full force and effect in accordance with its
terms.

10. Miscellaneous. This Amendment No. 4, the Original Agreement and all other
duly executed, written amendments to the Original Agreement represent the entire
agreement between the Parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings with respect to the subject
matter hereof.

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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IN WITNESS WHEREOF, the authorized representatives of each of the parties have
executed and delivered this Amendment No 4 as of the Effective Date.

 

LEAPFROG ENTERPRISES, INC.     ANOTO AB By:  

/s/ Jim Marggraff

    By:  

 

  Jim Marggraff, EVP Worldwide Content       Christer Fåhraeus, Chairman By:  

/s/ Mike Houlahan

    By:  

/s/ Örjan Johansson

  Mike Houlahan, VP of Business       Örjan Johansson, EVP Business  

Development

Development

      Address for Notices:     Address for Notices:  

6401 Hollis Street, Suite 100

Emeryville, CA 94608 USA

Fax: (510) 420-5011

Attention: Corporate Counsel

     

Scheelevägen 19 C

223 70 Lund, SWEDEN

Fax: +46 46 540 12 02

Attention: Chief Executive Officer

      ANOTO GROUP AB       By:  

 

        Christer Fåhraeus, Chairman       Address for Notices:        

Scheelevägen 19 C

223 70 Lund, SWEDEN

Fax: +46 46 540 12 02

Attention: Chairman

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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EXHIBIT A

Schedule and Specifications of the camera system

To be developed and mutually agreed upon by the parties.

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.