Document:

Exhibit 10.2 

MONARCH
INVESTMENT PROPERTIES, INC.

1801 N. Military Trail

Suite 203

Boca Raton, Florida 33431

	
  

 	
  

 	
  

 
	
  (561) 391-6117

 	
 jjfn@prodigy.net

 	
 FAX:
 (561) 391-6187

 
	 

 

March 13, 2009

VIA E-MAIL, FACSIMILE & US MAIL

Kent Curran, President

All American Home Products, LLC

2659 NE 9th Avenue

Cape Coral, Florida 33909

          Re:     Monarch
AAHP Merger Agreement 

Dear Kent:

          As
you are aware our closing is scheduled to take place “on or before 30 days
after the company filed its definitive Information Statement with the S.E.C.”,
which is March 19, 2009.

          We
are ready, willing and able to close on or before March 19, 2009.

          Please
confirm that you are able to close on March 19, 2009 and provide us with a
status as soon as possible. Thank you.

	
  

 	
  

 
	
  

 	
 Very truly yours,

 
	
  

 	
  

 
	
  

 	
 /s/ David Miller               

 
	
  

 	
 David Miller

 
	
  

 	
 President

 

	
  

 	
  

 
	
 cc:

 	
 Todd Waggoner, CFO

 
	
  

 	
 Andrew Telsey, Esq.

 
	
  

 	
 Bruce Rosetto, Esq.

 
	
  

 	
 Glenn B. Meyers, CPA

 
	
  

 	
  

 
	
 Todd Waggoner, CFO

 
	
 All American Home
 Products, LLC

 
	
 2659 NE 9th
 Avenue

 
	
 Cape Coral, Florida 33909

 
	
  

 
	
 Andrew Telsey, Esq.

 
	
 12835 E. Arapahoe Road

 
	
 Tower I, Penthouse

 
	
 Englewood, CO 80112

 
	
  

 
	
 Bruce Rosetto, Esq.

 
	
 Greenberg Traurig, P.A.

 
	
 5100 Town Center Circle/Suite 400

 
	
 Boca Raton, Florida 33486Exh 10.1-8-K-9/17/08

EXHIBIT 10.1

COMPENSATORY ARRANGEMENTS OF EXECUTIVE OFFICERS AND DIRECTORS.

Each of our executive officers is employed on an at will basis. As part of our efforts to reduce costs, we have reduced the annual salaries paid to our named executive officers. Effective March 1, 2009, the current annual salaries of our executive officers are as set forth in the chart below:

	
 
	
 
	
Annual Base Salary
	
 

	

Executive Officers 
	

Title
	
Prior to

10/1/08
	
As of

3/1/09(1)
	

Variable Compensation

	
Robert E. Matthiessen
	
President, CEO and Director
	
$317,242
	
$202,242
	
1.0% of consolidated pre-tax profits plus 1.0% of each product segment's pre-tax profits.

	
 
	
 
	
 
	
 
	
 

	
Alyn R. Holt
	
Chairman
	
$275,600
	
$175,695
	
None

	
 
	
 
	
 
	
 
	 

	
Hugh T. Regan, Jr.
	
Secretary, Treasurer and CFO
	
$224,422
	
$143,069
	
Discretionary

	
 
	
 
	
 
	
 
	
 

	
Daniel J. Graham
	
Sr. Vice President and General Manager - Manipulator/Docking Hardware Product Segment
	
$205,712
	
$131,141
	
2.0% of pre-tax profits of the Manipulator and Docking Hardware product segment.

	
 
	
 
	
 
	
 
	
 

	
James Pelrin
	
Vice President and General Manager-Temperature Management Product Segment
	
$205,358
	
$157,968
	
2.0% of pre-tax profits of the Temperature Management product segment.

	
 
	
 
	
 
	
 
	
 

	
Dale E. Christman
	
Vice President and General Manager - Tester Interface Product Segment
	
$176,000
	
$112,200
	
2.0% of pre-tax profits of the Tester Interface product segment.

(1) This column reflects the net effect of a one-week furlough every four weeks worked for all of the named executive officers except for James Pelrin who has a one-week furlough for every month worked.

Each of the foregoing officers receive our standard benefits package. Messrs. Matthiessen, Regan, Graham, Pelrin and Christman are parties to Change of Control Agreements with us that provide for the payment of certain benefits upon the executive's termination of employment. These agreements are included as Exhibits to our 2007 Annual Report on Form 10-K.

Fees paid to Directors who are not also our officers (each a "non-employee director") have also been reduced. Effective March 1, 2009, each non-employee director will receive an annual retainer of $15,938. Members of the Executive Committee are paid an additional annual retainer of $9,563. The chairmen of the committees of the Board are paid an additional annual fee as follows: the Chairman of the Audit Committee is paid an additional annual fee of $9,563; the Chairman of the Compensation Committee is paid an additional annual fee of $6,375; the Chairman of the Intellectual Property Committee is paid an additional annual fee of $25,500; and the Chairman of the Nominating and Corporate Governance Committee is paid an additional annual fee of $6,375. Prior to October 1, 2008, non-employee directors had received annual retainers of $25,000 and members of the Executive Committee had been paid an additional $15,000. The chairmen of the Audit Committee, Compensation Committee, Intellectual Property and Nominating and Corporate Governance Committees had previously been paid $15,000, $10,000, $75,000, and $10,000, respectively.Exhibit 10.12

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

SOFTWARE
LICENSE AGREEMENT

 

This Software
License Agreement (this “Agreement”) is made and entered into this 22nd day of December, 2006, by and between THE
REGENTS OF THE UNIVERSITY OF COLORADO, a body corporate, having its principal
office at Suite 100, 4740 Walnut Street, 588 UCB, Boulder, CO 80309
(hereinafter “University”) and Fairfield & Sons Ltd., doing business
as Fairfield Language Technologies, a corporation having its principal office
at 135 West Market Street, Harrisonburg, VA 22801 (hereinafter “Licensee”).

 

WHEREAS,
University is the owner of certain Licensed Software
(as defined herein) relating to [REDACTED];

 

WHEREAS,
University and Licensee entered into that certain
Non-Exclusive Software License Agreement, dated March 20, 2006 (“Non-Exclusive
License Agreement”), pursuant to which Licensee obtained a non-exclusive
license to create Derivative Products from the Licensed Software and market the
Derivative Products to End Users, directly or indirectly through one or more
resellers;

 

WHEREAS,
the parties desire to enter into this Agreement in
order to, among other things, (i) terminate the Non-Exclusive License
Agreement and replace the non-exclusive license granted therein with an
exclusive license, and (ii) grant additional non-exclusive licenses to the
Licensed Software, in each case on the terms and subject to the conditions set
forth herein; and

 

WHEREAS,
University is willing to grant the rights and licenses
hereunder;

 

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

 

SECTION 1.  DEFINITIONS

 

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

 

1.01                           “Affiliates”
shall mean every officer, director, employee, agent, and representative of
Licensee, and any person, corporation, or entity, which, directly or
indirectly, or through one or more intermediaries, controls, is controlled by,
or is under common control with Licensee, as well as every officer, director,
agent and representative of any such person, corporation or entity.

 

1.02                           “Derivative
Products” shall mean any computer program in object code or source code form
developed by or for Licensee which is a modification of, enhancement to,
derived from, or based upon the Licensed Software.

 

1.03                           “Developer”
shall mean a third party developer or system integrator.

 

1.04                           “Documentation”
shall mean any all user manuals, training materials, and other documentation or
materials, in any form, pertaining to the Licensed Software supplied to
Licensee by University pursuant to this Agreement.

 

**CONFIDENTIAL**

 

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

1.05                           “End
User” shall mean the person or entity that uses a Derivative Product in object
code form for its own purposes in the regular course and not for resale to
others.

 

1.06                           “Effective
Date” shall mean the date of the last signature on this Agreement.

 

1.07                           “Field
of Use” shall mean language learning and language instruction products and
services, including software, online applications and language learning and
instruction services.

 

1.08                           “Licensed
Software” shall mean the computer programs in source code and object code form
described in Appendix A attached hereto and all related Documentation.  For the avoidance of doubt, the computer
programs in source code and object code form supplied to Licensee by University
pursuant to the Non-Exclusive License Agreement are part of the Licensed
Software.

 

1.09                           “License
Fee” shall have the meaning set forth in Section 6.01.

 

1.10                           “Maintenance”
shall mean technical support for the Licensed Software and Derivative
Products.  For the avoidance of doubt,
any Maintenance provided shall be provided solely by Licensee.

 

1.11                           “Net
Sales” shall mean all revenue received by or on behalf of Licensee from the
sale, sublicense, or transfer of [REDACTED],
whether invoiced or not, less (i) allowances for returns; (ii) shipping
and insurance costs; and (iii) wholesaler and cash discounts in amounts
customary in the trade to the extent actually granted.  No deductions shall be made for commissions,
or for the costs of collections.  Net
Sales shall also include the fair market value of any non-cash consideration
received by Licensee for the sale, sublicense, or transfer of [REDACTED] in source code or object code form.  Net Sales shall not include any revenue
received in connection with the provision of Related Services.

 

1.12                           “Non-Exclusive
License Agreement” shall have the meaning set forth in the recitals above.

 

1.13                           “Related
Services”  shall mean documentation
(other than the licensed Documentation), training, demonstration, product
customization, product development, technical support or consulting services
that relate to the [REDACTED] and
are provided by Licensee in an arm’s length transaction as a separate product
or service line item that does not cover or include any payment component
related to the sales of [REDACTED] by
or on behalf of Licensee, its distributors, development partners or its
sublicensees.

 

1.14                           “Royalty”
shall mean any consideration paid by Licensee to University pursuant to this
Agreement.

 

1.15                           [REDACTED]

 

SECTION 2.  GRANT OF RIGHTS
AND ACCEPTANCE

 

2.01                           Non-Exclusive
Licenses.  University hereby
grants,  and Licensee hereby accepts,
subject to the terms and conditions of this Agreement, a non-exclusive,
non-sublicensable

 

**CONFIDENTIAL**

 

2

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

(except as
explicitly permitted herein), non-transferable (except as explicitly permitted
herein) and non-assignable (except as explicitly permitted herein), perpetual,
irrevocable, worldwide license:

 

(a)                                  to
(i) access, copy, display, execute, install, load, transmit, host, store,
and otherwise use, and (ii) modify, improve, interpret, compile,
recompile, and create derivative works from, the Licensed Software in source
code form to create one or more Derivative Products;

 

(b)                                 to
merge, combine, incorporate, embed and/or integrate the Licensed Software and
any derivative works from the Licensed Software into any Derivative Products;

 

(c)                                  to
use, manufacture, reproduce (in any medium), have reproduced, display, perform,
sell, market, license and otherwise transfer and/or distribute (i) one or
more Derivative Products (including any incorporated portion of the Licensed
Software), and (ii) any portion of the Licensed Software and any derivative
works from the Licensed Software incorporated into Language Learning Products,
in each case (items (i) and (ii)) in object code form to one or more End
Users, directly or indirectly through one or more resellers; and

 

(d)                                 to
use, manufacture, reproduce (in any medium), have reproduced, display, perform,
sell, market, license and otherwise transfer and/or distribute one or more [REDACTED] (including any incorporated portion of the
Licensed Software) in source or object code form.

 

2.02                           Exclusive
Licenses.  University hereby grants
and Licensee hereby accepts, subject to the terms and conditions of this
Agreement, an exclusive (subject to the rights reserved in Section 2.03
below), non-sublicensable (except as explicitly permitted herein), non- transferable
(except as explicitly permitted herein) and non-assignable (except as
explicitly permitted herein), perpetual, irrevocable, worldwide license:

 

(a)                                  to
(i) access, copy, display, execute, install, load, transmit, host, store,
and otherwise use, and (ii) modify, improve, interpret, compile,
recompile, and create derivative works from, the Licensed Software in source
code form to create one or more Derivative Products in the Field of Use; and

 

(b)                                 to
use, manufacture, reproduce (in any medium), have reproduced, display, perform,
sell, market, license and otherwise transfer and/or distribute one or more
Derivative Products (including any incorporated portion of the Licensed
Software) in the Field of Use in object code form to one or more End Users, directly
or indirectly through one or more resellers.

 

In addition,
the University hereby agrees that it shall contractually restrict any
subsequent licensees of the Licensed Software (including any previous and/or
subsequent editions of such software) from creating products or services,
either directly or through the use of any [REDACTED], in
the Field of Use.

 

2.03                           Limited
Exceptions to Exclusivity. 
Notwithstanding the forgoing, the exclusive rights granted in Section 2.02
are subject to the following:

 

**CONFIDENTIAL**

 

3

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

(a)                                  the
nonexclusive licenses the University granted prior to the Effective Date to the
third parties listed in Appendix B for use of previous versions of the Licensed
Software,

 

(b)                                 the
University’s reserved right to grant a non-exclusive, royalty-bearing license
to [REDACTED] and its permitted successors
and assigns to develop one or more derivative products in the Field of Use and
to use, manufacture, reproduce, have reproduced, display, perform, sell, market
and distribute such derivative products to end users, directly or indirectly
through one or more resellers, including any incorporated portion of the
Licensed Software, in object code form, provided that such derivative products,
insofar as they are in the Field of Use, are:

 

(i)                                     solely
designed and developed to teach literacy (including reading and writing skills)
to end users who are either native speakers of a language (i.e., end users are
proficient in speaking, but not writing a language) or are learning English as
a Second Language (ESL); and

 

(c)                                                                                                                                  (ii)                                  not
marketed or intentionally sold as tools to teach a language to non-native
speakers of that language, except for English as a Second Language; and

 

(d)                                 the
University’s reserved rights under Section 4 below.

 

Notwithstanding
anything to the contrary, the parties agree that the University shall not grant
a license to any third parties for use of any previous and/or subsequent
versions of the Licensed Software in the Field of Use except as otherwise
expressly provided herein Section 2.03.

 

2.04                           Termination
of Non-Exclusive License Agreement. 
From and after the Effective Date, the Non-Exclusive License Agreement
shall be terminated and, except as provided in 11.11 thereof, of no further force
or effect.

 

SECTION 3.  SUBLICENSE RIGHTS
AND LICENSE EXCLUSIONS

 

3.01                           Sublicenses.  Licensee may grant (a) unlimited
sublicenses under Sections 2.01 (a), 2.01 (b) and 2.02(a) to its
Affiliates, (b) unlimited sublicenses under Sections 2.01 (b), 2.01 (c),
2.01 (d) and 2.02(b) to resellers and/or End Users, and (c) unlimited
sublicenses under Section 2.01 (d) to Developers with the right to
grant further sublicenses to End Users. 
The licenses granted in Section 2 also confer on Licensee the right
to support, maintain and service the Licensed Software and Derivative Products
and to authorize any contractor or other service provider, including any
third-party hosting or maintenance service, to exercise any rights and/or
perform any acts that Licensee is permitted to exercise or perform pursuant to
this Agreement.

 

3.02                           Restrictions on Use;
Trademarks; No Technical Support.

 

(a)                                  Except
as expressly authorized herein, Licensee shall not: (i)  copy or modify
the Licensed Software; or

 

(i)                                     reverse
compile or reverse assemble all or any portion of the Licensed Software that is
provided solely in object code form; or

 

**CONFIDENTIAL**

 

4

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

(ii)                                  disclose
the results of Licensed Software performance benchmarks to any third party
without University’s prior written consent; or

 

(iii)                               export
the Licensed Software in violation of U.S. Department of Commerce export
administration regulations.

 

(b)                                 No
license, right or interest in any University trademark, trade name or service
mark is granted hereunder.

 

(c)                                  Licensee
acknowledges that the Licensed Software is provided without any technical
support, telephone, email or otherwise, including but not limited to
modifications, improvements, customizations, patches, bug fixes.  Licensee acknowledges that it shall be solely
responsible for obtaining any technical support.

 

SECTION 4.  UNIVERSITY RIGHTS

 

4.01                           University
shall have the right to use the Licensed Software for its own research and
education, including sponsored research; provided, however, that University
shall not have the right to grant additional licenses for the Licensed Software
(including any previous or subsequent versions of the Licensed Software) in the
Field of Use to third parties who sponsor research.

 

SECTION 5.  TITLE AND
PROTECTION

 

5.01                           Title
to Licensed Software.  Except for the
rights and licenses granted herein, the University retains all right, title and
interest in and to any and all portions of the Licensed Software.

 

5.02                           Title
to Derivative Products.  Licensee
retains all right, title and interest in and to any and all portions of a
Derivative Product created by or for Licensee (including any derivative works
of the Licensed Software).  Licensee
shall affix, to each full or partial copy of the Derivative Products made by
Licensee, appropriate copyright and proprietary information notices for the
Licensed Software.  No rights or licenses
to the Language Learning Products are granted to the University herein, in the
Non-Exclusive License Agreement or otherwise and none may be inferred from the
terms of the Non-Exclusive License Agreement or this Agreement.

 

5.03                           Obligations
of the Parties.  Except as explicitly
permitted herein, each party (a) acknowledges that the Licensed Software
(including any previous or subsequent versions) contains valuable proprietary
information, and (b) agrees not to (i) disclose the Licensed Software
(including previous and subsequent versions) in source code form to anyone
other than those of its subsequent licensees, its employees or consultants or
the University’s academic institution research grant partners under
nondisclosure obligations, having a need to know for purposes consistent with
this Agreement; and (ii) disclose the Licensed Software (including
previous and subsequent versions) in object code form unless it is fully
complied; and (iii) make the Licensed Software in source code form freely
available to the public.  Each party
shall take any actions reasonably requested by the other party, at the other
party’s expense, to perfect and protect the rights, title and interest
acknowledged and agreed to this Section 5. 
The obligations set forth in this Section 5  shall survive the termination of this
Agreement.  

 

**CONFIDENTIAL**

 

5

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

Notwithstanding
the foregoing, the obligations set forth in this Section 5.03(b)(i) and
(ii) shall terminate after a period of ten (10) years after the
Effective Date.

 

SECTION 6.  PAYMENTS

 

6.01                           License
Fee.  The University acknowledges
receipt from the Licensee of the payments specified in Section 6 of the
Non-Exclusive License Agreement. 
Licensee agrees to pay to University a one-time, nonrefundable license
fee of $[REDACTED] (the “License Fee”) within
thirty (30) days from the Effective Date.

 

6.02                           Earned
Royalties.  Licensee agrees to pay
University earned royalties at the rate of [REDACTED]
percent ([REDACTED]%) of Net Sales of all [REDACTED] sold or otherwise transferred and/or distributed
by Licensee; provided, however, that upon tender of payments in
the aggregate amount of $[REDACTED]
(including the fee set forth in Section 6.01 above), Licensee shall have
and be deemed to have been granted by the University an irrevocable, perpetual,
worldwide, royalty-free and fully paid-up license of all rights denominated in Section 2
hereof without the requirement of any further royalties otherwise payable
hereunder.  For avoidance of doubt, when
calculating the aggregate payments made by Licensee hereunder, the $[REDACTED] License Fee specified in Section 6.01 shall
be included.  In addition, no royalties
shall be payable to the University on the sale, transfer or distribution of
Language Learning Products or any Derivative Products that are not [REDACTED].

 

6.03                           Payment
Terms.  Unless otherwise provided
herein, all payments required under this Agreement shall be due within thirty
(30) days of the end of each calendar quarter. 
Royalties are payable in arrears. 
Payments past due shall bear interest at the rate of one and one half
percent (1.5%) per month compounded, or the maximum interest rate allowed by
applicable law, whichever is less.

 

SECTION 7.  REPORTS, RECORDS
AND AUDITS

 

7.01                           Royalty
Reports.  Licensee shall, without
request by University, render to University written accounts for each calendar
quarter in which Net Sales of [REDACTED] subject
to royalty hereunder are made (which reports shall provide Net Sales data for
the prior three (3) month period) and shall simultaneously pay to
University the Royalties due on such Net Sales, if any, in United States
Dollars.  With respect to sales outside
the United States, payments shall be calculated based on currency exchange
rates as set forth below.  For each month
and each currency, such exchange rate shall be the daily exchange rate in
effect on the last day of the calendar quarter. 
Each such exchange rate shall be obtained from the Reuters Daily Rate
Report or The Wall Street Journal, Eastern
Edition, or, if not so available, as otherwise agreed by the parties.  The written report shall be in the form of
the report of Appendix C.  All royalty
reports, and the data contained therein, shall be the confidential information
of the Licensee for purposes of Section 8.

 

7.02                           Records.  Licensee shall keep accurate records in
sufficient detail to enable the Royalties accrued and payable under this
Agreement to be determined.  Such records
shall be retained for at least three (3) years after the close of the
period to which they pertain, or for such longer time as may be required to
finally resolve any question or discrepancy raised by University.

 

**CONFIDENTIAL**

 

6

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

7.03                           Audit.  Upon the request of University, with
reasonable notice, but not more frequently than once a year, Licensee shall
permit an independent public accountant selected and paid by University, to
have access during regular business hours to such records as may be necessary
to verify the accuracy of Royalty payments made or payable hereunder.  Said accountant shall disclose information
acquired to University only to the extent that it should properly have been
contained in the royalty reports required under this Agreement.  If an inspection shows an underreporting or
underpayment in excess of five percent (5%) for any twelve (12) month period,
then Licensee shall reimburse University for the reasonable cost of the
independent public accountant and pay the amount of the underpayment including
any interest as required by this Agreement. 
All reports of the independent public accountant, and the data contained
therein, shall be the confidential information of the Licensee for purposes of Section 8.

 

SECTION 8.  CONFIDENTIALITY

 

8.01                           Confidentiality
Obligations.  Each party shall
exercise reasonable care to protect the confidential information related to the
Licensed Software from disclosure to third parties; and no such disclosure
shall be made without the disclosing party’s written permission.  All written documents containing confidential
information and other material in tangible form received by either party under
this Agreement shall remain the property of the disclosing party, and such
documents and materials, together with copies of excerpts thereof, shall
promptly be returned to disclosing party upon request, except one copy may be
retained for archival purposes.

 

8.02                           Colorado
Public Records Act.  Licensee
acknowledges that University is subject to the Colorado Public Records Act
(C.R.S. §§ 24-72-201 et seq.).  All plans
and reports marked “confidential” shall be treated by University as
confidential to the extent permitted under § 24-72-204.

 

SECTION 9.  MAINTENANCE AND
RIGHTS TO SUE INFRINGERS

 

9.01                           Responsibility
for Maintenance.  Licensee shall be
solely responsible for the provision of Maintenance to End Users.  University shall have no obligation to provide
Maintenance to Licensee or End Users.

 

9.02                           Right
to Sue Infringers.  Licensee, as an
exclusive licensee under Section 2.02, shall have the right (but not the
obligation) to institute and prosecute, at its own expense, suits for
infringement of the Licensed Software in the Field of Use and, if required by
law, the University will join as a party plaintiff in any such suits.  All expenses in such suits will be borne
entirely by the Licensee, and any recovery in excess of litigation costs and
reasonable attorney fees shall be shared equally between Licensee and
University.

 

SECTION 10.  WARRANTIES AND
INDEMNIFICATIONS

 

10.01                     Disclaimer.  UNIVERSITY MAKES NO REPRESENTATIONS, EXTENDS
NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES
WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY LICENSEE,
SUBLICENSEE(S), OR THEIR VENDEES OR OTHER TRANSFEREES OF LICENSED SOFTWARE,
DOCUMENTATION OR DERIVATIVE PRODUCTS. 
THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF 

 

**CONFIDENTIAL**

 

7

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, NOR WARRANTIES THAT THE USE OR SALE OF
SUCH LICENSED SOFTWARE WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK,
SERVICE MARK, OR OTHER RIGHTS.

 

10.02                     Condition
of Licensed Software.  Licensee
agrees to accept delivery of the Licensed Software in “as- is” condition.  On the Effective Date, University’s legal
counsel is not aware of any claims of patent infringement, copyright
infringement, or the infringement of any other rights of third parties related
to the Licensed Software

 

10.03                     Other
Disclaimers.  Notwithstanding
anything in this Agreement to the contrary, nothing in this Agreement shall be
construed as:

 

(a)                                  A
warranty or representation that the Licensed Software or anything made, used,
sold or otherwise disposed of under this Agreement will or will not infringe
patents, copyrights or other rights of third parties; or

 

(b)                                 An
obligation to furnish any know-how or technology not provided in the Licensed
Software, to bring or prosecute actions or suits against third parties for
copyright infringement (provided that University will, at Licensee’s expense,
join an action for infringement as provided in Section 9.2 if required by
law) or to provide any services other than those specified in this Agreement.

 

10.04                     Indemnification.  Licensee shall indemnify, defend, and hold
University, its regents, employees, students, officers, agents, affiliates, and
representatives harmless from and against all liability,  demands, 
damages,  losses,  and expenses (including attorney
fees)(collectively “Losses”), for third party claims relating to death,
personal injury, illness, property damage, noncompliance with applicable laws
and any other third party claim, proceeding, demand, expense and liability of
any kind whatsoever in connection with or arising out of:

 

(a)                                  the
use by or on behalf of Licensee, its sublicensees, Affiliates, directors,
officers, employees, or third parties of any Licensed Software, Documentation
or Derivative Products; or

 

(b)                                 the
design,  manufacture,  production, 
distribution,  advertisement,
consumption, sale, lease, or sublicense of any Derivative Product by Licensee;

 

provided,
however, that Licensee shall have no obligations under this Section 10.04
if and to the extent the Losses are due to the negligence or intentional
misconduct of University, its regents, employees, students, officers, agents,
affiliates, and representatives.

 

10.05                     Limitation
of damages.  Neither party shall be
liable for any special, incidental, consequential, exemplary, or punitive
damages including damages for loss of business profits, business interruption,
loss of business information, or other pecuniary loss, even if a party has been
advised of the possibility of these damages.

 

**CONFIDENTIAL**

 

8

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are
confidential and have been omitted from this copy of the Agreement and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment

 

SECTION 11.  TERMINATION

 

11.01                     Termination
by Licensee.  Licensee may terminate
this Agreement at any time on sixty (60) days written notice to University if
Licensee:

 

(a)                                  pays
all License Fees due, as set forth in Section 6.01 above; and

 

(b)                                 returns
any confidential materials provided to Licensee by University in connection
with this Agreement; and

 

(c)                                  suspends
any future use of the Licensed Software and future sales of Derivative Products
provided however, that subject to making the payments required by Section 6.01,
Licensee may for a period of ninety (90) days after the effective date of such
termination, sell all Derivative Products which may be in inventory; and

 

(d)                                 provides
University a non-exclusive right to access any regulatory information filed
with any U.S. or foreign government agency with respect to Licensed Software
and Derivative Products.

 

11.02                     Termination
by the University.  University may
terminate this Agreement in the event that:

 

(a)                                  Licensee
fails to pay University any amounts when due to University hereunder and
Licensee fails to make such payment within thirty (30) days of written notice
from the University; provided, however, that University may not terminate this
Agreement for Licensee’s failure to pay a Royalty amount that is reasonably
disputed by the parties in good faith so long as (i) all such disputed
amounts deposited into an interest bearing escrow account, and (ii) all
amounts not disputed are paid when due. 
Any amounts payable to the University from the escrow account shall also
include the interest.

 

(b)                                 Licensee
becomes insolvent, files a petition in bankruptcy, has such a petition filed
against it, determines to file a petition in bankruptcy, or receives notice of
a third party’s intention to file an involuntary petition in bankruptcy and
fails to rectify any such filing within sixty (60) days; or

 

(c)                                  Licensee
is in material breach of this Agreement and Licensee fails to cure such material
breach within thirty (30) days of written notice of the breach from the
University.

 

SECTION 12.  MISCELLANEOUS

 

12.01                     Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto.  However, Licensee
may not assign its rights in this Agreement without prior written approval by
University, such approval not to be unreasonably withheld, except that Licensee
may assign its rights in this Agreement without prior approval to an Affiliate
or any successor in interest to Licensee, whether by merger, acquisition, asset
purchase, or otherwise.

 

**CONFIDENTIAL**

 

9

 

NOTE: All
provisions in this Agreement indicated by “[REDACTED]” are confidential and
have been omitted from this copy of the Agreement and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment

 

12.02       Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.

 

12.03       Notice.  Notice hereunder shall be deemed sufficient
if given by registered mail, postage prepaid, and addressed to the party to
receive such notice at the address given below, or such other address as may
hereafter be designated by notice in writing.

 

	
  University:
  

  	
   

  	
  Licensee:
  

  
	
  Office
  of Technology Transfer 

  	
   

  	
  Fairfield
  Language Technologies 

  
	
  University
  of Colorado

  	
   

  	
  135
  West Market St 

  
	
  Suite 100,4740
  Walnut Street 

  	
   

  	
  Harrisonburg,
  VA 22801 

  
	
  Campus
  Box 588 UCB 

  	
   

  	
  Attention:
  General Counsel

  
	
  Boulder,
  CO 80309

  	
   

  	
   

  

 

12.04       Press Releases.  Licensee agrees not to identify University in
any promotional advertising, press releases, sales literature or other
promotional materials to be disseminated to the public or any portion thereof
without University prior written consent in each case, except that Licensee may
state that it has a license for the Licensed Software from University and License
may display copyright notices as required by this Agreement or applicable
law.  Licensee further agrees, except as
expressly provided herein, not to use the name of University or any University
faculty member, inventor, employee or student or any trademark, service mark,
trade name, copyright or symbol of University, without the prior written
consent of the University, entity or person whose name is sought to be used.

 

12.05       Export
and Marking.  Licensee agrees to:

 

(a)           cause Licensed
Software, Documentation and Derivative Products sold in the United States under
this license to be marked with the notice of copyright protection, as may be
appropriate.

 

(b)           comply with all laws
and regulations of the United States and any other country as appropriate
concerning or controlling the import or export of the Licensed Software and
Derivative Products.  University makes no
representation that a license or consent for export will not be required by
applicable governmental agencies, or if required, that it will be issued.

 

12.06       Dispute Resolution.  In the event of any dispute arising out of or
relating to this Agreement, the affected party shall promptly notify the other
party (the date of such notice being the “Notice Date”), and the parties shall
attempt in good faith to resolve the matter. 
Any disputes not so resolved shall be referred to senior executives, who
shall meet at a mutually acceptable time and location within thirty (30) days
of the Notice Date and shall attempt to negotiate a settlement.  If the senior executives fail to meet within
thirty (30) days of the Notice Date, or if the matter remains unresolved for a
period of sixty (60) days after the Notice Date, the parties hereby irrevocably
submit to the jurisdiction of a court of competent jurisdiction in the State of
Colorado, and, by execution and delivery of this Agreement, each (a) accepts,
generally and unconditionally, the jurisdiction of such court and any related
appellate court, and (b) irrevocably waives any objection it may now or
hereafter have as to the venue of any such suit, action or proceeding brought
in such court or that such court is an inconvenient forum.

 

**CONFIDENTIAL**

 

10

 

NOTE: All
provisions in this Agreement indicated by “[REDACTED]” are confidential and
have been omitted from this copy of the Agreement and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment

 

12.07       Entire Agreement.  The terms and provisions contained in this
Agreement constitute the entire Agreement between the parties and shall
supersede all previous communications, 
representations,  agreements  (including 
the  Non-Exclusive  License Agreement) or understandings, either
oral or written, between the parties hereto with respect to the subject matter
hereof, and no agreement or understanding varying or extending this Agreement
will be binding upon either party hereto, unless in writing which specifically
refers to this Agreement, signed by duly authorized officers or representatives
of the respective parties, and the provisions of this Agreement not
specifically amended thereby shall remain in full force and effect according to
their terms.

 

12.08       Severability.  The provisions of this Agreement are severable,
and in the event that any provision of this Agreement is determined to be
invalid or unenforceable under any controlling body of the law, such invalidity
or unenforceability will not in any way affect the validity or enforceability
of the remaining provisions hereof.

 

12.09       Relationship of the
Parties.  This Agreement does not
establish a joint venture, agency or partnership between the parties, nor
create an employer - employee relationship.

 

12.10       No Waiver of Immunities.  The parties agree that nothing in this
Agreement is intended or shall be construed as a waiver, either express or
implied, of any of the immunities, rights, benefits, defenses or protections
provided to University under governmental or sovereign immunity laws from time
to time applicable to University, including, without limitation, the Colorado
Governmental Immunity Act (C.R.S. §§ 24-10-101, et seq.) and the Eleventh
Amendment to the United States Constitution.

 

12.11       No Third-Party
Beneficiaries.  Nothing in this
Agreement shall be construed as giving any person or entity, other than the
parties hereto and their successors and permitted assigns, any right, remedy or
claim under or in respect of this Agreement or any provision hereof.

 

12.12       Survival.  If this Agreement terminates for any reason,
all liabilities that have accrued, and all licenses that have been granted,
prior to the date of termination shall survive. 
In addition, the provisions of Sections 5 and 9.01, and Sections
7.02,10.01-10.03,12.02,12.04, 12.06-12.08,12.10 and this Section 12.12,
and any other provision of this Agreement that by its nature is intended to
survive, shall survive any termination of this Agreement.

 

12.13       Counterparts,
Etc.  This Agreement and any
amendments hereto may be executed in one or more counterparts, each of which
shall be an original, but all of which together shall constitute one
instrument.  The headings in this
Agreement are inserted for convenience only and shall not constitute a part
hereof.  As used herein, except as the
context otherwise indicates, the singular shall include the plural and vice
versa and words of any gender shall include any other gender.  The conjunction “or” shall be understood in
its inclusive sense (and/or).  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”

 

[End of text, signature page follows]

 

**CONFIDENTIAL**

 

11

 

NOTE: All
provisions in this Agreement indicated by “[REDACTED]” are confidential and have
been omitted from this copy of the Agreement and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment

 

IN WITNESS
WHEREOF the parties hereto have caused this Software License Agreement, which
is effective on the date of the last to sign below, to be executed in duplicate
by their respective duly authorized officers.

 

	
  THE
  REGENTS OF THE UNIVERSITY OF

  COLORADO

  	
   

  	
  FAIRFIELD &
  SONS, LTD.

  D/B/A FAIRFIELD LANGUAGE TECHNOLOGIES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Office
  of Technology Transfer 

  	
   

  	
  Fairfield
  Language Technologies 

  
	
  University
  of Colorado 

  	
   

  	
  135
  West Market 

  
	
  Suite 100,
  4740 Walnut Street 

  	
   

  	
  St
  Harrisonburg, VA 22801

  
	
  Campus
  Box 588 UCB 

  	
   

  	
   

  
	
  Boulder,
  CO 80309-0589

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Approved as to Legal Sufficiency:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
							

 

**CONFIDENTIAL**

 

12

 

NOTE: All
provisions in this Agreement indicated by “[REDACTED]” are confidential and
have been omitted from this copy of the Agreement and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment

 

APPENDIX A

 

[REDACTED]

 

**CONFIDENTIAL**

 

13

 

NOTE: All
provisions in this Agreement indicated by “[REDACTED]” are confidential and
have been omitted from this copy of the Agreement and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment

 

APPENDIX B

 

[REDACTED]

 

**CONFIDENTIAL**

 

 

NOTE: All
provisions in this Agreement indicated by “[REDACTED]” are confidential and
have been omitted from this copy of the Agreement and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment

 

APPENDIX C

 

ROYALTY
REPORT FOR [REDACTED]

 

	
  Licensee:

  	
   

  	
   

  	
  CU
  Case No.:

  
	
  Inventor:

  	
   

  	
   

  	
  Patent
  #:

  
	
  Period
  Covered:

  	
  From:          /          /

  	
   

  	
  Through:          /          /

  
	
  Prepared
  By:

  	
   

  	
   

  	
  Date:

  
	
  Approved
  By:

  	
   

  	
   

  	
  Date:

  

 

If license covers several major product lines, please prepare a separate
report

for each line.  Then combine all product
lines into a summary report.

 

	
  Report
  Type:

  	
   

  	
  Single
  Product Line Report:

  	
   

  
	
   

  	
   

  	
  Multiproduct
  Summary Report.  Page 1 of

  	
   

  	
  Pages

  
	
   

  	
   

  	
  Product
  Line Detail.

  	
  Line:

  	
   

  	
  Trademark:

  	
   

  	
  Pages:

  	
   

  	
   

  
													

 

Report Currency:  U.S. Dollars

 

	
   

  	
   

  	
  Unit

  	
   

  	
  Royalty

  	
   

  	
  Quarterly Royalty Amount

  
	
  Country

  	
   

  	
  Sales

  	
   

  	
  Rate

  	
   

  	
  This Year

  	
   

  	
  Last Year

  
	
  USA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canada

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Europe

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Sublicense
Fees this quarter:
$           (attach page showing
names, addresses, and telephone numbers; and amount of fees received;
territory; field of use)

 

The
following royalty forecast is non-binding and for CU’s internal planning
purposes only:

Royalty
Forecast Under This Agreement:

 

Next
Quarter:               Q2:               Q3:               Q4:               

 

**CONFIDENTIAL**

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