Amendment No. 4 to Technology License Agreement between LeapFrog and Anoto A.B.



 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








 
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. 








 [*] 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. 








 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. 








 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.