Document:

Executive Retention and Severance Plan

 Exhibit 10.23 
  
 AGILE SOFTWARE CORPORATION 
 EXECUTIVE RETENTION AND SEVERANCE PLAN 
 Adopted October 17, 2002 
  

	 	1.
	 
	ESTABLISHMENT AND PURPOSE 
 

  
 1.1      Establishment. The Agile Software Corporation Executive Retention and Severance Plan (the
“Plan”) is hereby established by the Compensation Committee of the Board of Directors of Agile Software Corporation, effective October 17, 2002 (the “Effective Date”). 
  
 1.2      Purpose. The Company draws upon the knowledge, experience and advice of its Officers and Key
Employees in order to manage its business for the benefit of the Company’s stockholders. Due to the widespread awareness of the possibility of mergers, acquisitions and other strategic alliances in the Company’s industry, the topic of
compensation and other employee benefits in the event of a Change in Control is an issue in competitive recruitment and retention efforts. The Committee recognizes that the possibility or pending occurrence of a Change in Control could lead to
uncertainty regarding the consequences of such an event and could adversely affect the Company’s ability to attract, retain and motivate its Officers and Key Employees. The Committee has therefore determined that it is in the best interests of
the Company and its stockholders to provide for the continued dedication of its Officers and Key Employees notwithstanding the possibility or occurrence of a Change in Control by establishing this Plan to provide designated Officers and Key
Employees with enhanced financial security in the event of a Change in Control. The purpose of this Plan is to provide its Participants with specified compensation and benefits in the event of termination of employment under circumstances specified
herein upon or following a Change in Control. 
  

	 	2.
	 
	DEFINITIONS AND CONSTRUCTION 
 

 
 2.1      Definitions. Whenever used in this Plan, the following terms shall have the
meanings set forth below: 
  
 (a)    “Annual Bonus” means an amount
equal to the greatest of (1) the aggregate of all bonuses earned by the Participant (whether or not actually paid) under the terms of the programs, plans or agreements providing for such bonuses for the fiscal year of the Company immediately
preceding the fiscal year of the Change in Control, (2) the aggregate of all bonuses earned by the Participant (whether or not actually paid) under the terms of the programs, plans or agreements providing for such bonuses for the fiscal year of the
Company immediately preceding the fiscal year of the Participant’s Termination Upon a Change in Control, or (3) the aggregate of all annual bonuses that would be earned by the Participant at the targeted annual rate (assuming attainment of 100%
of all applicable performance goals) under the terms of the programs, plans or agreements providing for such bonuses in which the Participant was participating for the fiscal year of the Participant’s Termination Upon a Change in Control.

 
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 (b)    “Base Salary Rate”
means a Participant’s monthly base salary determined at the greater of (1) the Participant’s monthly base salary rate in effect immediately prior to the Participant’s Termination Upon a Change in Control or (2) the Participant’s
monthly base salary rate in effect immediately prior to the applicable Change in Control. For this purpose, base salary does not include any bonuses, commissions, fringe benefits, car allowances, other irregular payments or any other compensation
except base salary. 
  
 (c)    “Benefit Period” means with respect to
all Participants, a period of six (6) months. 
  
 (d)    “Board” means
the Board of Directors of the Company. 
  
 (e)    “Cause” means the
occurrence of any of the following, as determined in good faith by a vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an
opportunity for the Participant, together with the Participant’s counsel, to be heard before the Board): 
  
 (1)    the Participant’s commission of any act of fraud, embezzlement or dishonesty; 
  
 (2)    the Participant’s unauthorized use or disclosure of confidential information or trade secrets of any member of the Company Group; or 
  
 (3)    the Participant’s intentional misconduct adversely affecting the business or affairs of any member of the Company Group. 

 
 (f)    “Change in Control” means, except as otherwise provided in the
Participation Agreement applicable to a given Participant, the occurrence of any of the following: 
  
 (1)    any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other
fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of (i) the outstanding shares of common stock of the Company or (ii) the total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of
directors; 
  
 (2)    the Company is party to a merger or consolidation which results in the
holders of the voting securities of the Company outstanding immediately prior thereto failing to retain immediately after such merger or consolidation direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined
voting power of the securities entitled to vote generally in the election of directors of the Company or the surviving entity outstanding immediately after such merger or consolidation; 

 
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 (3)    the sale or disposition of all or substantially all
of the Company’s assets or consummation of any transaction having similar effect (other than a sale or disposition to one or more subsidiaries of the Company); 
  
 (4)    a change in the composition of the Board within any consecutive two-year period as a result of which fewer than a majority of the directors are
Incumbent Directors. 
  
 (g)    “Change in Control Period” means a
period commencing upon the date of the consummation of a Change in Control and ending on the date occurring eighteen (18) months thereafter. 
  
 (h)    [Intentionally left blank] 
  
 (i)    [Intentionally left blank] 
  
 (j)    “Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto and any applicable regulations promulgated thereunder. 
  
 (k)    “Committee” means the Compensation Committee of the Board. 
  
 (l)    “Company” means Agile Software Corporation, a Delaware corporation, and, following a
Change in Control, a Successor that agrees to assume all of the terms and provisions of this Plan or a Successor which otherwise becomes bound by operation of law to this Plan. 
  
 (m)    “Company Group” means the group consisting of the Company and each present or future parent and subsidiary corporation
or other business entity thereof. 
  
 (n)    “Disability” means a
Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code. 
  
 (o)    “Good Reason” means the occurrence of any of the following conditions upon or following a Change in Control, without the Participant’s informed written consent, which
condition(s) remain(s) in effect ten (10) days after written notice to the Company from the Participant of such condition(s): 
  
 (1)    assignment of the Participant to a position that is not a Substantive Functional Equivalent of the position which the Participant occupied immediately prior to the Change in Control; 

 
 (2)    a decrease in the Participant’s Base Salary Rate or a decrease in the Participant’s
target bonus amount (excluding any bonus in the form of sales compensation or pursuant to sales incentive programs, and, in any event, subject to applicable performance requirements with respect to the actual amount of bonus compensation earned by
the Participant); 
  
 (3)    any failure by the Company to (i) continue to provide the
Participant with the opportunity to participate, on terms no less favorable than those in effect for 

 
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 the benefit of any employee group which customarily includes a person holding the employment position or
a comparable position with the Company Group then held by the Participant, in any benefit or compensation plans and programs, including, but not limited to, the Company Group’s life, disability, health, dental, medical, savings, profit sharing,
stock purchase and retirement plans, if any, in which the Participant was participating immediately prior to the date of the Change in Control, or their equivalent, or (ii) provide the Participant with all other fringe benefits (or their equivalent)
from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Company Group then held by the Participant; 
  
 (4)    the relocation of the Participant’s work place for the Company Group to a location that increases the
regular commute distance between the Participant’s residence and work place by more than thirty (30) miles (one-way), or the imposition of travel requirements substantially more demanding of the Participant than such travel requirements
existing immediately prior to the Change in Control; or 
  
 (5)    any material breach of this
Plan by the Company with respect to the Participant. 
  
 The existence of Good Reason shall not be affected by the Participant’s
temporary incapacity due to physical or mental illness not constituting a Disability. The Participant’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any condition constituting Good Reason
hereunder. For the purposes of any determination regarding the existence of Good Reason hereunder, any claim by the Participant that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board that Good Reason does
not exist, and the Board, acting in good faith, affirms such determination by a vote of not less than two-thirds of its entire membership. 
  
 (p)    “Incumbent Director” means a director who either (1) is a member of the Board as of the Effective Date, or (2) is elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but (3) was not elected or nominated in connection with an actual or threatened proxy contest relating to the
election of directors of the Company. 
  
 (q)    “Key Employee” means an
individual, other than an Officer, who, immediately prior to the consummation of a Change in Control, is employed by the Company Group and has been designated by the Board or the Committee as eligible to participate in the Plan. 

 
 (r)    “Officer” means an individual who, immediately prior to the consummation of
a Change in Control, serves as an officer of the Company as appointed by the Board. 
  
 (s)    “Option” means any option to purchase shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other
Company Group member, whether granted before or after a Change in Control. 

 
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 (t)    “Participant” means each
Officer and each Key Employee designated by the Committee to participate in the Plan provided such individual has executed a Participation Agreement. 
  
 (u)    “Participation Agreement” means an Agreement to Participate in the Agile Software Corporation Executive Retention and Severance Plan in the form
attached hereto as Exhibit A or in such other form as the Committee may approve from time to time; provided, however, that, after a Participation Agreement has been entered into between a Participant and the Company, it may be modified only
by a supplemental written agreement executed by both the Participant and the Company. The terms of such forms of Participation Agreement need not be identical with respect to each Participant. For example, a Participation Agreement may limit the
duration of a Participant’s participation in the Plan or may modify the definition of “Change in Control” with respect to a Participant. 
  
 (v)    “Release” means a general release of all known and unknown claims against the Company and its affiliates and their stockholders, directors, officers,
employees, agents, successors and assigns substantially in the appropriate form attached hereto as Exhibit B, with any modifications thereto determined by legal counsel to the Company to be necessary or advisable to comply with applicable law
or to accomplish the intent of Section 8 hereof. 
  
 (w)    “Restricted
Stock” means any shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member or acquired upon the exercise of an Option, whether such
shares are granted or acquired before or after a Change in Control, including any shares issued in exchange for any such shares by a Successor or any other member of the Company Group. 
  
 (x)    “Substantive Functional Equivalent” means an employment position occupied by a Participant after a Change in Control
that: 
  
 (1)    is in a substantive area of competence (such as, accounting, executive
management, finance, human resources, marketing, sales and service, or operations, etc.) that is consistent with the Participant’s experience and not materially different from the position occupied by the Participant immediately prior to the
Change in Control; 
  
 (2)    allows the Participant to serve in a role and perform duties that
are functionally equivalent to those performed immediately prior to the Change in Control (such as, business unit executive with profit and loss responsibility, product line manager, marketing strategist, geographic sales manager, executive officer,
etc.); and 
  
 (3)    does not otherwise constitute a material, adverse change in the
Participant’s responsibilities or duties, as measured against the Participant’s responsibilities or duties prior to the Change in Control, causing it to be of materially lesser rank or responsibility within the Company or an equivalent
business unit of its parent. 
  
 (y)    “Successor” means any successor
in interest to substantially all of the business and/or assets of the Company. 

 
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 (z)    “Termination Upon a Change in
Control” means the occurrence of any of the following events: 
  
 (1)    termination by the Company Group of the Participant’s employment for any reason other than Cause during the Change in Control Period; or 
  
 (2)    the Participant’s resignation for Good Reason during the Change in Control Period from all capacities in which the Participant is then
rendering service to the Company Group; 
  
 provided, however, that Termination Upon a Change in Control shall not include any termination
of the Participant’s employment which is (i) for Cause, (ii) a result of the Participant’s death or Disability, or (iii) a result of the Participant’s voluntary termination of employment other than for Good Reason. 

 
 2.2    Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise. 
  
 3.      ELIGIBILITY 
  
 The Board or Committee shall designate those Officers and Key Employees who shall be eligible to become Participants in the Plan. 
  
 4.      TREATMENT OF OPTIONS AND RESTRICTED STOCK UPON
A CHANGE IN CONTROL 
  
 In the event of a Change in Control or Termination Upon a Change in Control, the vesting and exercisability of each outstanding Option and the vesting of shares of Restricted Stock held by a Participant shall be determined by the
provisions contained in the agreement between the Company (or other Company Group member) and the Participant evidencing such Option or award of Restricted Stock, including any modification to such agreement pursuant to an employment or other
agreement between the Company (or other Company Group member) and the Participant. 
  
 5.      SEVERANCE BENEFITS 
  
 In the event of a Participant’s Termination Upon a Change in Control and provided that the Participant has executed and not revoked a Release at the time of such Termination Upon a Change in
Control, the Participant shall be entitled to receive, in addition to all compensation and benefits earned by the Participant through the date of the Participant’s termination of employment, the following severance payments and benefits:

  
 5.1    Salary and Bonus. Subject to Section 6, within thirty (30) days following the
later of the Participant’s termination of employment or the last day following the Participant’s execution of the Release on which the Participant may, by its terms, revoke such Release, the Company shall pay to the Participant in a lump
sum cash payment an amount equal 

 
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 to the sum of (a) the Participant’s Base Salary Rate multiplied by the number of months in the
Benefit Period applicable to the Participant and (b) fifty percent (50%) of the Participant’s Annual Bonus. 
  
 5.2      Health and Life Insurance Benefits. For the period commencing immediately following the Participant’s termination of employment and continuing for the duration of the Benefit Period
applicable to the Participant, the Company shall arrange to provide the Participant and his or her dependents with health (including medical and dental) and life insurance benefits substantially similar to those provided to the Participant and his
or her dependents immediately prior to the date of such termination of employment (without giving effect to any reduction in such benefits constituting Good Reason). Such benefits shall be provided to the Participant at the same premium cost to the
Participant and at the same coverage level as in effect as of the Participant’s termination of employment (without giving effect to any reduction in such benefits constituting Good Reason); provided, however, that the Participant shall be
subject to any change in the premium cost and/or level of coverage applicable generally to all employees holding the position or comparable position with the Company which the Participant held immediately prior to the Change in Control. The Company
may satisfy its obligation to provide a continuation of health insurance benefits by paying that portion of the Participant’s premiums required under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) that
exceed the amount of premiums that the Participant would have been required to pay for continuing coverage had he or she continued in employment. If the Company is not reasonably able to continue such coverage under the Company’s benefit plans,
the Company shall provide substantially equivalent coverage under other sources or will reimburse the Participant for premiums (in excess of the Participant’s premium cost described above) incurred by the Participant to obtain his or her own
such coverage. If the Participant becomes eligible to receive such coverage under another employer’s benefit plans during the applicable Benefit Period, the Participant shall report such eligibility to the Company, and the Company’s
obligations under this Section 5.2 shall be secondary to the coverage provided by such other employer’s plans. For the balance of any period in excess of the applicable Benefit Period during which the Participant is entitled to continuation
coverage under COBRA, the Participant shall be entitled to maintain coverage for himself or herself and the Participant’s eligible dependents at the Participant’s own expense. 
  
 5.3      Indemnification; Insurance. 
  
 (a) In addition to any rights a Participant may have under any indemnification agreement previously entered into between the Company and such Participant (a “Prior Indemnity
Agreement”), from and after the date of the Participant’s termination of employment, the Company shall indemnify and hold harmless the Participant against any costs or expenses (including attorneys’ fees), judgments, fines,
losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, by reason of the fact that the Participant is or was a director,
officer, employee or agent of the Company Group, or is or was serving at the request of the Company Group as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether asserted or
claimed prior to, at or after the date of the Participant’s termination of employment, to the fullest extent permitted under applicable law, and the Company shall also advance fees and expenses (including attorneys’ fees) as incurred by
the Participant to the fullest extent permitted under applicable law. In the event of a conflict 

 
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 between the provisions of a Prior Indemnity Agreement and the provisions of this Plan, the Participant
may elect which provisions shall govern. 
 (b)    For a period of six (6) years from and after the date of termination of employment
of a Participant who was an officer and/or director of the Company at any time prior to such termination of employment, the Company shall maintain a policy of directors’ and officers’ liability insurance for the benefit of such Participant
which provides him or her with coverage no less favorable than that provided for the Company’s continuing officers and directors. 
  
 6.      FEDERAL EXCISE TAX UNDER SECTION 4999 OF THE
CODE 
  
 6.1    Excess Parachute
Payment. In the event that any payment or benefit received or to be received by the Participant pursuant to this Plan or otherwise (collectively, the “Payments”) would subject the Participant to any excise tax pursuant to
Section 4999 of the Code (the “Excise Tax”) due to the characterization of such Payments as an excess parachute payment under Section 280G of the Code, then, notwithstanding the other provisions of this Plan, the amount of
such Payments will not exceed the amount which produces the greatest after-tax benefit to the Participant. 
  
 6.2    Determination by Accountants. Upon the occurrence of any event (the “Event”) that would give rise to any Payments pursuant to this Plan, the Company shall promptly request a
determination in writing to be made within thirty (30) days of the date of the Event by independent public accountants (the “Accountants”) selected by the Company and reasonably acceptable to the Participant of the amount and
type of such Payments which would produce the greatest after-tax benefit to the Participant. For the purposes of such determination, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and
4999 of the Code. The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make their required determination. The Company shall bear all fees and expenses
the Accountants may reasonably charge in connection with their services contemplated by this Section. In the event that the report of the Accountants is not received within thirty (30) days following the Participant’s Termination Upon Change in
Control, the Company shall pay to the Participant the cash severance benefits required by Section 5.1 above (subject to any reduction necessary to produce the greatest after-tax benefit to the Participant) within ten (10) days of the date of the
Accountants’ report of their determination. 
  
 7.      CONFLICT IN BENEFITS; NONCUMULATION OF BENEFITS 

 
 7.1    Effect of Plan. The terms of this Plan, when accepted by a Participant pursuant to an
executed Participation Agreement, shall supersede all prior arrangements, whether written or oral, and understandings regarding the subject matter of this Plan and shall be the exclusive agreement for the determination of any payments and benefits
due to the Participant upon the events described in Sections 4, 5 and 6. 
  
 7.2    Noncumulation of Benefits. Except as expressly provided in a written agreement between a Participant and the Company entered into after the date of such Participant’s Participation Agreement and
which expressly disclaims this Section 7.2 and is 

 
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 approved by the Board or the Committee, the total amount of payments and benefits that may be received
by the Participant as a result of the events described in Sections 4, 5 and 6 pursuant to (a) the Plan, (b) any agreement between the Participant and the Company or (c) any other plan, practice or statutory obligation of the Company, shall not
exceed the amount of payments and benefits provided by this Plan upon such events (plus any payments and benefits provided pursuant to an agreement evidencing an Option or award of Restricted Stock, as described in Section 4, or a Prior Indemnity
Agreement, as described in Section 5.3(a)), and the aggregate amounts payable under this Plan shall be reduced to the extent of any excess (but not below zero). 
  

	 	8.
	 
	EXCLUSIVE REMEDY 
 

  
 The payments and benefits provided by Section 5 and Section 6 (plus any payments and benefits provided pursuant to an agreement evidencing
an Option or award of Restricted Stock, as described in Section 4, or a Prior Indemnity Agreement, as described in Section 5.3(a)), if applicable, shall constitute the Participant’s sole and exclusive remedy for any alleged injury or other
damages arising out of the cessation of the employment relationship between the Participant and the Company in the event of the Participant’s Termination Upon a Change in Control. The Participant shall be entitled to no other compensation,
benefits, or other payments from the Company as a result of any Termination Upon a Change in Control with respect to which the payments and benefits described in Section 5 and Section 6 (plus any payments and benefits provided pursuant to an
agreement evidencing an Option or award of Restricted Stock, as described in Section 4, or a Prior Indemnity Agreement, as described in Section 5.3(a)), if applicable, have been provided to the Participant, except as expressly set forth in this Plan
or, subject to the provisions of Sections 7.2, in a duly executed employment agreement between Company and the Participant. 
  

	 	9.
	 
	PROPRIETARY AND CONFIDENTIAL INFORMATION 

  
 The Participant agrees to continue to abide by the terms and conditions of the confidentiality and/or
proprietary rights agreement between the Participant and the Company. 
  

	 	10.
	 
	NONSOLICITATION 
 

  
 If the Company performs its obligations to deliver the payments and benefits set forth in Section 5 and Section 6 (plus any payments and benefits provided pursuant to an
agreement evidencing an Option or award of Restricted Stock, as described in Section 4, or a Prior Indemnity Agreement, as described in Section 5.3(a)), then for a period equal to the Benefit Period applicable to a Participant following the
Participant’s Termination Upon a Change in Control, the Participant shall not, directly or indirectly, recruit, solicit or invite the solicitation of any employees of the Company to terminate their employment relationship with the Company.

  

	 	11.
	 
	NO CONTRACT OF EMPLOYMENT 

  
 Neither the establishment of the Plan, nor any amendment thereto, nor the payment of any benefits shall be
construed as giving any person the right to be retained by the Company, a Successor or any other member of the Company Group. Except as otherwise established in an employment agreement between the Company and a Participant, the employment
relationship between the Participant and the Company is an “at-will” relationship. 

 
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 Accordingly, either the Participant or the Company may terminate the relationship at any time, with or
without cause, and with or without notice except as otherwise provided by Section 14. In addition, nothing in this Plan shall in any manner obligate any Successor or other member of the Company Group to offer employment to any Participant or to
continue the employment of any Participant which it does hire for any specific duration of time. 
  

	 	12.
	 
	ARBITRATION 
 

  
 12.1    Disputes Subject to Arbitration. Any claim, dispute or controversy arising out of this Plan, the interpretation, validity or
enforceability of this Plan or the alleged breach thereof shall be submitted by the parties to binding arbitration by the American Arbitration Association; provided, however, that (a) the arbitrator shall have no authority to make any ruling or
judgment that would confer any rights with respect to trade secrets, confidential and proprietary information or other intellectual property; and (b) this arbitration provision shall not preclude the parties from seeking legal and equitable relief
from any court having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse or misappropriation of intellectual property. Judgment may be entered on the award of the arbitrator in any court having jurisdiction.

  
 12.2    Site of Arbitration. The site of the arbitration proceeding shall be in San
Jose, California or any other site mutually agreed to by the Company and the Participant. 
  
 12.3    Costs and Expenses Borne by Company. All costs and expenses of arbitration, including but not limited to reasonable attorneys’ fees and other costs reasonably incurred by the Participant in
connection with an arbitration in accordance with this Section 12, shall be paid by the Company. Notwithstanding the foregoing, if the Participant initiates the arbitration, and the arbitrator finds that the Participant’s claims were totally
without merit or frivolous, then the Participant shall be responsible for the Participant’s own attorneys’ fees and costs. 
  
 13.    SUCCESSORS AND ASSIGNS 
  
 13.1    Successors of the Company. The Company shall require any successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, expressly, absolutely and unconditionally to assume and agree to perform this Plan in the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment had taken place. Failure of the Company to obtain such agreement shall be a material breach of this Plan and shall entitle the Participant to resign for Good Reason and to receive the
benefits provided under this Plan in the event of Termination Upon a Change in Control. 
  
 13.2    Acknowledgment by Company. If, after a Change in Control, the Company fails to reasonably confirm that it has performed the obligation described in Section 13.1 within thirty (30) days after written
notice from the Participant, such failure shall be a material breach of this Plan and shall entitle the Participant to resign for Good Reason and to receive the benefits provided under this Plan in the event of Termination Upon a Change in Control.

 
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 13.3    Heirs and Representatives of
Participant.  This Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devises, legatees or other beneficiaries.
If the Participant should die while any amount would still be payable to the Participant hereunder (other than amounts which, by their terms, terminate upon the death of the Participant) if the Participant had continued to live, then all such
amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the executors, personal representatives or administrators of the Participant’s estate. 
  

	 	14.
	 
	NOTICES 
 

  
 14.1    General.  For purposes of this Plan, notices and all other communications provided for herein shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by United States certified mail, return receipt requested, or by overnight courier, postage prepaid, as follows: 
  
                     (a)    if to the Company:

  
 Agile Software Corporation 
 One Almaden Boulevard 
 San Jose, California 95113 
 Attention: General Counsel 
  
                     (b)    if to the Participant, at the home address which the Participant most recently
communicated to the Company in writing. 
  
 Either party may provide the other with notices of change of address, which shall be effective
upon receipt. 
  
 14.2    Notice of Termination. Any termination by the Company of the
Participant’s employment during the Change in Control Period or any resignation by the Participant during the Change in Control Period shall be communicated by a notice of termination or resignation to the other party hereto given in accordance
with Section 14.1. Such notice shall indicate the specific termination provision in this Plan relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated,
and shall specify the termination date. 
  

	 	15.
	 
	TERMINATION AND AMENDMENT OF PLAN

 

  
 This Plan and/or any Participation Agreement executed by a Participant may not be terminated
with respect to such Participant without the written consent of the Participant. This Plan and/or any Participation Agreement executed by a Participant may be modified, amended or superseded with respect to such Participant only by a supplemental
written agreement between the Participant and the Company. 
  

	 	16.
	 
	MISCELLANEOUS PROVISIONS 
 

  
 16.1    Unfunded Obligation. Any amounts payable to Participants pursuant to the Plan are unfunded obligations.
The Company shall not be required to segregate any monies 

 
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 from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at
all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not
create or constitute a trust or fiduciary relationship between the Board or the Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of the Company.

  
 16.2    No Duty to Mitigate; Obligations of Company. A Participant shall not be
required to mitigate the amount of any payment or benefit contemplated by this Plan by seeking employment with a new employer or otherwise, nor shall any such payment or benefit (except for benefits to the extent described in Section 5.2) be reduced
by any compensation or benefits that the Participant may receive from employment by another employer. Except as otherwise provided by this Plan, the obligations of the Company to make payments to the Participant and to make the arrangements provided
for herein are absolute and unconditional and may not be reduced by any circumstances, including without limitation any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Participant or any third party
at any time. 
  
 16.3    No Representations. By executing a Participation Agreement, the
Participant acknowledges that in becoming a Participant in the Plan, the Participant is not relying and has not relied on any promise, representation or statement made by or on behalf of the Company which is not set forth in this Plan. 

 
 16.4    Waiver. No waiver by the Participant or the Company of any breach of, or of any lack of
compliance with, any condition or provision of this Plan by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 
  

Choice of Law. The validity, interpretation, construction and performance of this Plan shall be governed by the substantive laws of the State
of California, without regard to its conflict of law provisions. 
  
 16.5    Validity. The
invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect. 
  
 16.6    Benefits Not Assignable. Except as otherwise provided herein or by law, no right or interest of any Participant under the Plan shall be
assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including, without limitation, by execution, levy, garnishment, attachment, pledge or in any other manner, and no attempted transfer or assignment
thereof shall be effective. No right or interest of any Participant under the Plan shall be liable for, or subject to, any obligation or liability of such Participant. 
  
 16.7    Tax Withholding. All payments made pursuant to this Plan will be subject to withholding of applicable income and employment taxes.

  
 16.8    Consultation with Legal and Financial Advisors. By executing a Participation
Agreement, the Participant acknowledges that this Plan confers significant legal 

 
 Page 15 

 rights, and may also involve the waiver of rights under other agreements; that the Company has encouraged the Participant to consult with the
Participant’s personal legal and financial advisors; and that the Participant has had adequate time to consult with the Participant’s advisors before executing the Participation Agreement. 
  

	 	17.
	 
	AGREEMENT 
 

  
 By executing a Participation Agreement, the Participant acknowledges that the Participant has received a copy of this Plan and has read, understands and is familiar with
the terms and provisions of this Plan. This Plan shall constitute an agreement between the Company and the Participant executing a Participation Agreement. 
  
 IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing Plan was duly adopted by the Committee on October 17, 2002. 
  
 
	 

 

 
 Page 16 

 EXHIBIT B 
  
 AGREEMENT TO PARTICIPATE IN THE 
 AGILE SOFTWARE CORPORATION 
 EXECUTIVE RETENTION AND SEVERANCE PLAN 
 Adopted October 17, 2002 
  
 In consideration of the benefits provided by the Agile Software Corporation Executive Retention and Severance Plan (the “Plan”), the undersigned
employee of Agile Software Corporation (the “Company”) and the Company agree that, as of the date written below, the undersigned shall become a Participant in the Plan and shall be fully bound by and subject to all of its
provisions. All references to a “Participant” in the Plan shall be deemed to refer to the undersigned. 
  
 The undersigned employee acknowledges that the Plan confers significant legal rights and may also constitute a waiver of rights under other agreements with the Company; that Company has encouraged the undersigned to consult with the
undersigned’s personal legal and financial advisors; and that the undersigned has had adequate time to consult with the undersigned’s advisors before executing this agreement. 
  
 The undersigned employee acknowledges that he or she has received a copy of the Plan and has read, understands and is familiar with the terms and provisions of the Plan.
The undersigned employee further acknowledges that (1) by accepting the arbitration provision set forth in Section 12 of the Plan, the undersigned is waiving any right to a jury trial in the event of any dispute covered by such provision and (2)
except as otherwise established in an employment agreement between the Company and the undersigned, the employment relationship between the undersigned and the Company is an “at-will” relationship. 
  
 Executed on
                                        
                    . 
  
 
	 PARTICIPANT
 
	 
	                                      
                                        
                          
 Signature
 
	 
	                                      
                                        
                          
 Name Printed
 
	 
	                                      
                                        
                          
 Address
                                      
                                        
                          
 
	 
	 AGILE SOFTWARE CORPORATION
 
	 
	 By:                                     
                                        
                   
  
 Title:                                    
                                        
                
 

 

 
 Page 17 

 EXHIBIT C 
  
 GENERAL RELEASE OF CLAIMS 
 [Age 40 and over] 
  
 This Agreement is by and between [Employee Name] (“Employee”) and [Agile Software Corporation or successor that agrees to assume the Executive Retention and Severance Plan following
a Change in Control] (the “Company”). This Agreement will become effective on the eighth (8th) day after it is signed by Employee (the “Effective Date”), provided that the Company has signed this Agreement and Employee has
not revoked this Agreement (by written notice to [Company Contact Name] at the Company) prior to that date. 
  
 RECITALS 
  
 A.    Employee was employed by the Company as of
                        ,             . 

 
 B.    Employee and the Company entered into an Agreement to Participate in the Agile Software Corporation
Executive Retention and Severance Plan (such agreement and plan being referred to herein as the “Plan”) effective as of
                        ,              wherein Employee
is entitled to receive certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan), provided Employee signs and does not revoke a Release (as defined by the Plan). 
  
 C.    A Change in Control (as defined by the Plan) has occurred as a result of [briefly describe change in
control] 
  
 D.    Employee’s employment is being terminated as a result of a
Termination Upon a Change in Control. Employee’s last day of work and termination is effective as of
                        ,             . Employee
desires to receive the payments and benefits provided by the Plan by executing this Release. 
  
 NOW, THEREFORE, the
parties agree as follows: 
  
 1.    Commencing on the Effective Date, the Company shall provide
Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the
Company’s obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued, unused vacation that Employee earned during his or her employment with the Company. 
  
 2.    Employee and Employee’s successors release the Company, its respective subsidiaries, stockholders,
investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or
shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever directly related to Employee’s employment by the Company or the termination of such employment and
occurring or existing at any time up to and including the 

 
 Page18 

 Effective Date, including, but not limited to, any claims of breach of written contract, wrongful termination, retaliation, fraud, defamation,
infliction of emotional distress, or national origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the Americans with
Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to Section 5.3 of the Plan or pursuant to a Prior Indemnity
Agreement (as such term is defined by the Plan). 
  
 3.    Employee acknowledges that he or she
has read Section 1542 of the Civil Code of the State of California, which states in full: 
  
 A general release does
not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. 
  
 Employee waives any rights that Employee has or may have under Section 1542 and comparable or similar provisions of the laws of other states in the United States
to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all known and unknown claims that he or she has or may have against the parties listed above.

  
 4.    Employee and the Company acknowledge and agree that they shall continue to be bound by
and comply with the terms and obligations under the following agreements: (i) any proprietary rights or confidentiality agreements between the Company and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the
Plan) to which Employee is a party, and (iv) any stock option, stock grant or stock purchase agreements between the Company and Employee. 
  
 5.    This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives. 
  
 6.    The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or
enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement shall be subject to binding arbitration pursuant to Section 12 of the Plan.

  
 7.    The parties agree that any and all disputes that (i) do not arise out of the Plan, the
interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described
shall be subject to binding arbitration, to the extent permitted by law, in San Jose, California or any other cite mutually agreed to by the Company and Employee, before the American Arbitration Association, as provided in this paragraph. The
parties agree to and hereby waive their rights to jury trial as to such matters to the extent permitted by law; provided however, that (a) the arbitrator shall have no authority to make any ruling or judgment that would confer any rights with
respect to trade secrets, 

 
 Page 19 

 confidential and proprietary information or other intellectual property; and (b) this arbitration provision shall not preclude the parties from
seeking legal and equitable relief from any court having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse or misappropriation of intellectual property. The Company shall bear the costs of the arbitrator,
forum and filing fees and each party shall bear its own respective attorney fees and all other costs, unless otherwise provided by law and awarded by the arbitrator. 
  
 8.    This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior
negotiations and agreements, whether written or oral, with the exception of any agreements described in paragraph 4 of this Agreement. This Agreement may not be modified or amended except by a document signed by an authorized officer of the Company
and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected. 
  
 EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO
SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO 45 DAYS TO CONSIDER THIS AGREEMENT, THAT
EMPLOYEE MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS AFTER EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND
VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1. 
  
 
	 
	 Dated:
 	  	 
	  	 

	  	  	  	  	 [Employee Name]
 
	 
	  	  	  	  	 [Company]
 
	 
	 Dated:
 	  	 
	  	 By:
 	  	 

 

 
 Page 20 

 EXHIBIT D 
  
 GENERAL RELEASE OF CLAIMS 
 [Under age 40] 
  
 This Agreement is by and between [Employee Name] (“Employee”) and [Agile Software Corporation or successor that agrees to assume the Executive Retention and Severance Plan following
a Change in Control] (the “Company”). This Agreement is effective on the day it is signed by Employee (the “Effective Date”). 
  
 RECITALS 
  
 A.    Employee was employed by the
Company as of                         ,             .

  
 B.    Employee and the Company entered into an Agreement to Participate in the Agile Software
Corporation Executive Retention and Severance Plan (such agreement and plan being referred to herein as the “Plan”) effective as of
                        ,              wherein Employee
is entitled to receive certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan), provided Employee signs a Release (as defined by the Plan). 
  
 C.    A Change in Control (as defined by the Plan) has occurred as a result of [briefly describe change in control] 
  
 D.    Employee’s employment is being terminated as a result of a Termination Upon a Change in Control.
Employee’s last day of work and termination is effective as of                         ,
             (the “Termination Date”). Employee desires to receive the payments and benefits provided by the Plan by executing this Release. 
  
 NOW, THEREFORE, the parties agree as follows: 
  
 1.    Commencing on the Effective Date, the Company shall provide Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan.
Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the Company’s obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued,
unused vacation that Employee earned during his or her employment with the Company. 
  
 2.    Employee and Employee’s successors release the Company, its respective subsidiaries, stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of
and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact,
thing, act or omission whatsoever directly related to Employee’s employment by the Company or the termination of such employment and occurring or existing at any time up to and including the Termination Date, including, but not limited to, any
claims of breach of written contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress, or national 

 
 Page 21 

 origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age
Discrimination In Employment Act of 1967, the Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to
Sections 5.3 of the Plan or pursuant to a Prior Indemnity Agreement (as such terms are defined by the Plan). 
  
 3.    Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State of California, which states in full: 
  
 A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him
must have materially affected his settlement with the debtor. 
  
 Employee waives any rights that Employee has or may have under Section
1542 and comparable or similar provisions of the laws of other states in the United States to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all
known and unknown claims that he or she has or may have against the parties listed above. 
  
 4.    Employee and the Company acknowledge and agree that they shall continue to be bound by and comply with the terms and his obligations under the following agreements: (i) any proprietary rights or
confidentiality agreements between the Company and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee is a party, and (iv) any stock option, stock grant or stock purchase agreements
between the Company and Employee. 
  
 5.    This Agreement shall be binding upon, and shall inure
to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives. 
  
 6.    The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability
of this Agreement or the interpretation of the terms of this Agreement shall be subject to binding arbitration pursuant to Section 12 of the Plan. 
  
 7.    The parties agree that any and all disputes that (i) do not arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and
(ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described shall be subject to binding arbitration, to the extent permitted by law, in San Jose,
California or any other cite mutually agreed to by the Company and Employee, before the American Arbitration Association, as provided in this paragraph. The parties agree to and hereby waive their rights to jury trial as to such matters to the
extent permitted by law; provided however, that (a) the arbitrator shall have no authority to make any ruling or judgment that would confer any rights with respect to trade secrets, confidential and proprietary information or other intellectual
property; and (b) this arbitration provision shall not preclude the parties from seeking legal and equitable relief from any court 

 
 Page 22 

 having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse or misappropriation of intellectual
property. The Company shall bear the costs of the arbitrator, forum and filing fees and each party shall bear its own respective attorney fees and all other costs, unless otherwise provided by law and awarded by the arbitrator. 

 
 8.    This Agreement constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior negotiations and agreements, whether written or oral, with the exception of any agreements described in paragraph 4 of this Agreement. This Agreement may not be modified or amended except by a document signed
by an authorized officer of the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any way be affected. 
  
 EMPLOYEE UNDERSTANDS THAT EMPLOYEE
SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT EMPLOEE IS SIGNING THIS AGREEMENT
KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1. 
  
 
	 
	 Dated:
 	  	 
	  	 

	  	  	  	  	 [Employee Name]
 
	 
	  	  	  	  	 [Company]
 
	 
	 Dated:
 	  	 
	  	 By:
 	  	 

 

 
 Page 23<PAGE>

EXHIBIT 10.29

                        USAF CRADA NUMBER 02-263-AMWC-02
                 COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
                                     BETWEEN
                           USAF AIR MOBILITY BATTLELAB
                                       AND
                                  EUROTECH LTD.

ARTICLE 1.  PREAMBLE

1.1     This Cooperative Research and Development Agreement (Agreement) for
        performing the work described in the Work Plan attached hereto as
        Appendix A is entered into pursuant to 15 U.S.C. ss. 3710a (as amended)
        and Air Force Policy Directive 61-3 and Air Force Instruction 61-302 by
        and between Eurotech Ltd. (Hereinafter referred to as "Collaborator"),
        located at 10306 Eaton Place Suite 220 Fairfax, VA 22030 USA and the
        United States of America as represented by the Department of the Air
        Force, USAF Air Mobility Battlelab, (hereinafter referred to as the "Air
        Force Activity"), located at Fort Dix, New Jersey. The terms and
        conditions of this Agreement are set forth as follows.

ARTICLE 2.  DEFINITIONS

2.1     As used in this Agreement, the following terms shall have the following
        meanings and such meanings shall be applicable to both the singular and
        plural forms of the terms. All other terms of this Agreement shall be
        ascribed their plain, commonly accepted definitions.

2.2     "CREATED" in relation to any copyrightable work means when the work is
        fixed in any tangible medium of expression for the first time, as
        provided for at 17 U.S.C.ss.101.

2.3     "EFFECTIVE DATE" means the earlier of: (a) the date of the last
        signature of the duly authorized representatives of the parties and the
        REVIEWING OFFICIAL; or (b) thirty (30) days after the receipt of a
        signed copy of this Agreement by the REVIEWING OFFICIAL without that
        official taking any action thereon.

2.4     "GOVERNMENT" means the Government of the United States of America.

2.5     "SPECIAL PURPOSE LICENSE" means a license to the GOVERNMENT conveying a
        nonexclusive, nontransferable, irrevocable, worldwide, royalty-free
        license to practice and have practiced an INVENTION for or on behalf of
        the GOVERNMENT for research or other government purposes and conveying a
        nonexclusive, nontransferable, irrevocable, worldwide, royalty-free

<PAGE>

        license to use, duplicate, prepare derivative works, distribute or
        disclose copyrighted works or Proprietary Information in whole or in
        part and in any manner, and to have or permit others to do so, for
        research or other government purposes. Research or other government
        purposes include competitive procurement, but do not include the right
        to have or permit others to practice an INVENTION or use, duplicate,
        prepare derivative works, distribute or disclose copyrighted works or
        Proprietary Information for commercial purposes.

2.6     "INVENTION" means any invention or discovery that is or may be
        patentable or otherwise protectable under Title 35 of the United States
        Code or any novel variety of plant which is or may be protectable under
        the Plant Variety Protection Act (7 U.S.C. ss. 2321 ET SEQ).

2.7     "MADE" in relation to any INVENTION means the conception or first actual
        reduction to practice of such INVENTION.

2.8     "Proprietary Information" means information which embodies trade secrets
        or which is confidential technical, business or financial information
        provided that such information:
        i)      is not generally known, or is not available from other sources
                without obligations concerning its confidentiality;
        ii)     has not been made available by the owners to others without
                obligation concerning its confidentiality;
        iii)    is not described in an issued patent or a published copyrighted
                work or is not otherwise available to the public without
                obligation concerning its confidentiality; or
        iv)     can be withheld from disclosure under 15 U.S.C.ss.
                3710a(c)(7)(A) & (B) and the Freedom of Information Act, 5
                U.S.C.ss.552 ET SEQ; and
        v)      is identified as such by labels or markings designating the
                information as proprietary.

2.9     "REVIEWING OFFICIAL" means the authorized representative of the
        Department of the Air Force who is identified on the signature page of
        this Agreement.

2.10    "UNDER" as used in the phrase "Under this Agreement" means within the
        scope of work to be performed as described in the Work Plan.

ARTICLE 3.  WORK PLAN

3.1     Appendix A sets forth the nature and scope of the work to be performed
        UNDER THIS AGREEMENT, including any equipment, maintenance and other
        support, and any associated reporting requirements.

<PAGE>

3.2     The COLLABORATOR may inspect GOVERNMENT property identified in Appendix
        A prior to use. Such property may be repaired or modified at the
        COLLABORATOR'S expense only after obtaining the written approval of the
        AIR FORCE ACTIVITY. Any repair or modification of the property shall not
        affect the title of the GOVERNMENT. Unless AIR FORCE ACTIVITY hereafter
        otherwise agrees, the COLLABORATOR shall, at no expense to the AIR FORCE
        ACTIVITY, return all GOVERNMENT property after termination or expiration
        of this AGREEMENT in the condition in which it was received, normal wear
        and tear excepted. Unless the COLLABORATOR hereafter otherwise agrees,
        the AIR FORCE ACTIVITY shall return all of COLLABORATOR's property after
        termination or expiration of this AGREEMENT in the condition in which it
        was received, normal wear and tear excepted.

3.3     The parties agree to confer and consult with each other prior to
        publication or other public disclosure of the results of work UNDER THIS
        AGREEMENT to ensure that no PROPRIETARY INFORMATION or military critical
        technology or other controlled information is released. Prior to
        submitting a manuscript for publication or before any other public
        disclosure, each party will offer the other party ample opportunity to
        review such proposed publication or disclosure, to submit objections,
        and to file applications for patents in a timely manner.

ARTICLE 4.  FINANCIAL OBLIGATIONS

4.1     Except as otherwise stated in the Work Plan described in Appendix A,
        each party shall bear it own expenses in the performance of work UNDER
        THIS AGREEMENT.

4.2     The COLLABORATOR is responsible for the shipment of all COLLABORATOR
        owned property.

4.3     This Agreement does not create any contractual obligation, express or
        implied, on Air Force Activity and/or Government to purchase goods or
        services from COLLABORATOR.

ARTICLE 5.  PATENTS

5.1     DISCLOSURE OF INVENTIONS. Each party shall report to the other party, in
        writing, each INVENTION MADE Under this Agreement, promptly after the
        existence of each such INVENTION, in the exercise of reasonable
        diligence, becomes known.

5.2     RIGHTS IN INVENTIONS. Each party shall separately own any INVENTION MADE
        solely by its respective employees Under this Agreement. INVENTIONS MADE
        jointly by the Air Force Activity and the Collaborator employees shall
        be jointly owned by both parties. The Collaborator shall have an option
        to choose an exclusive license for a pre-negotiated field of use at a
        reasonable royalty rate, subject to the conditions set forth in 15
        U.S.C.ss. 3710a(b)(1)(A), (B) & (C), in any INVENTION MADE in whole or
        in part by Air Force Activity employees Under this Agreement. The
        Collaborator shall exercise the option to obtain a license by giving

<PAGE>

        written notice thereof to the Air Force Activity within three (3) months
        after disclosure of the INVENTION under paragraph 5.1. The royalty rate,
        field of use and other terms and conditions of the license shall be set
        forth in a separate license agreement and shall be negotiated promptly
        after notice is given. The Collaborator hereby grants to the GOVERNMENT,
        in advance, a SPECIAL PURPOSE LICENSE in any INVENTION MADE by the
        Collaborator employees Under this Agreement.

5.3     FILING PATENT APPLICATIONS. The Collaborator shall have the first option
        to file a patent application on any INVENTION MADE Under this Agreement,
        which option shall be exercised by giving notice in writing to the Air
        Force Activity within three (3) months after disclosure of the INVENTION
        under paragraph 5.1, and by filing a patent application in the U.S.
        Patent and Trademark Office within six (6) months after written notice
        is given. If the Collaborator elects not to file or not to continue
        prosecution of a patent application on any such INVENTION in any country
        or countries, the Collaborator shall notify the Air Force Activity
        thereof at least three (3) months prior to the expiration of any
        applicable filing or response deadline, priority period or statutory bar
        date. In any country in which the Collaborator does not file, or does
        not continue prosecution of, or make any required payment on, an
        application or patent on any such INVENTION, the Air Force Activity may
        file, or continue prosecution of, or make any required payment on, an
        application or patent, and the Collaborator agrees, upon request by the
        Air Force Activity, to assign to the GOVERNMENT all right, title and
        interest of the Collaborator in any such application or patent and to
        cooperate with the Air Force Activity in executing all necessary
        documents and obtaining cooperation of its employees in executing such
        documents related to such application or patent. The party filing an
        application shall provide a copy thereof to the other party.

        NOTE: Any patent application filed on any INVENTION MADE Under this
        Agreement shall include in the patent specification thereof the
        statement: "This invention was made in the performance of a Cooperative
        Research and Development Agreement with the Department of the Air Force.
        The Government of the United States has certain rights to use the
        invention."

5.4     PATENT EXPENSES. Unless otherwise agreed, the party filing an
        application shall pay all patent application preparation and filing
        expenses and issuance, post issuance and patent maintenance fees
        associated with that application.

ARTICLE 6.  COPYRIGHTS

6.1     The Collaborator shall own the copyright in all works CREATED in whole
        or in part by the Collaborator Under this Agreement, which are
        copyrightable under Title 17, United States Code. The Collaborator shall
        mark any such works with a copyright notice showing the Collaborator as
        an owner and shall have the option to register the copyright at the
        Collaborator'S expense.

<PAGE>

6.2     The Collaborator hereby grants in advance to the GOVERNMENT a SPECIAL
        PURPOSE LICENSE in all copyrighted works CREATED Under this Agreement.
        The Collaborator will prominently mark each such copyrighted work
        subject to the SPECIAL PURPOSE LICENSE with the words: "This work was
        created in the performance of a Cooperative Research and Development
        Agreement with the Department of the Air Force. The Government of the
        United States has certain rights to use this work."

6.3     The Collaborator shall furnish to the Air Force Activity, at no cost to
        the Air Force Activity, three (3) copies of each work CREATED in whole
        or in part by the Collaborator Under this Agreement.

ARTICLE 7.  PROPRIETARY INFORMATION

7.1     Neither party to this AGREEMENT shall deliver to the other party any
        PROPRIETARY INFORMATION not developed UNDER this AGREEMENT, except with
        the written consent of the receiving party. Unless otherwise expressly
        provided in a separate document, such PROPRIETARY INFORMATION shall not
        be disclosed by the receiving party except under a written AGREEMENT of
        confidentiality to employees and contractors of the receiving party who
        have a need for the information in connection with their duties UNDER
        THIS AGREEMENT. Neither party shall be liable for release of unmarked
        information.

7.2.1   PROPRIETARY INFORMATION developed UNDER THIS AGREEMENT shall be owned by
        the developing party, and any jointly developed PROPRIETARY INFORMATION
        shall be jointly owned. GOVERNMENT shall have a SPECIAL PURPOSE LICENSE
        to use, duplicate and disclose, in confidence, and to authorize others
        to use, duplicate and disclose, in confidence, for government purposes,
        any such PROPRIETARY INFORMATION developed UNDER THIS AGREEMENT solely
        by the COLLABORATOR. The COLLABORATOR may use, duplicate and disclose,
        in confidence, and authorize others on its behalf to use, duplicate and
        disclose, in confidence, any such PROPRIETARY INFORMATION developed
        UNDER THIS AGREEMENT solely by the Air Force Activity. PROPRIETARY
        INFORMATION developed UNDER THIS AGREEMENT shall be exempt from the
        Freedom of Information Act, 5 U.S.C.ss. 552 et seq., as provided at 15
        U.S.C.ss. 3710a(c)(7)(A) & (B). The exemption for PROPRIETARY
        INFORMATION developed jointly by the parties or solely by the Air Force
        Activity shall expire not later than five years from the date of
        development of such PROPRIETARY INFORMATION.

7.2.2    It is expressly agreed herein that the Acoustic Core Technology
         equipment developed by COLLABORATOR'S proprietary transfer function
         optimization software shall be treated as PROPRIETARY INFORMATION. In
         respect to this PROPRIETARY INFORMATION, the Government's rights under
         a Special Purpose License shall not include the right of disclosure to
         non-Government 3rd parties, nor the right of use for competitive
         procurement. This does not preclude the AIR FORCE ACTIVITY comparing
         the results of the COLLABORATOR's system with the results of similar
         systems.

<PAGE>

ARTICLE 8.  TERM, MODIFICATION, EXTENSION TERMINATION AND DISPUTES

8.1     TERM AND EXTENSION. The term of this AGREEMENT is for a period of 18
        months, commencing on the EFFECTIVE DATE of this AGREEMENT. This
        AGREEMENT shall expire at the end of this term unless both parties
        hereto agree in writing to extend it further. Expiration of this
        AGREEMENT shall not affect the rights and obligations of the parties
        accrued prior to expiration.

8.2     MODIFICATION. Any modifications of this AGREEMENT shall be by mutual
        written AGREEMENT signed by the parties' representatives authorized to
        execute this AGREEMENT and attached hereto. A copy of any modifications
        will be forwarded to the REVIEWING OFFICIAL for information purposes.

8.3     TERMINATION. Either party may terminate this AGREEMENT for any reason
        upon delivery of written notice to the other party at least one (1)
        month prior to such termination. Termination of this AGREEMENT shall not
        affect the rights and obligations of the parties accrued prior to the
        date of termination of this AGREEMENT. In the event of termination by
        either party, each party shall be responsible for its own costs incurred
        through the date of termination, as well as its own costs incurred after
        the date of termination and which are related to the termination. If the
        AIR FORCE ACTIVITY terminates this AGREEMENT, it shall not be liable to
        the COLLABORATOR or its contractors or subcontractors for any costs
        resulting from or related to the termination, including, but not limited
        to, consequential damages or any other costs. In the event that the AIR
        FORCE ACTIVITY terminates this AGREEMENT prior to the completion of the
        work outlined in Appendix A, the Air Force shall return all of
        COLLABORATOR's equipment in the condition in which it was received,
        normal wear and tear excepted.

8.4     DISPUTES. All disputes arising out of, or related to, this AGREEMENT
        shall be resolved in accordance with this Article.

        8.4.1     The parties shall attempt to resolve disputes between
                  themselves. Resolution attempts must be documented and kept on
                  file by the local technology transfer focal point for the AIR
                  FORCE ACTIVITY. Either party may refer in writing any dispute
                  which is not disposed of by AGREEMENT of the parties to the
                  REVIEWING OFFICIAL for decision.

        8.4.2     REVIEWING OFFICIAL. The REVIEWING OFFICIAL shall within sixty
                  (60) days of the receipt of the dispute, notify the parties of
                  the decision. This decision shall be final and conclusive
                  unless, within thirty (30) days from the date of receipt of
                  such copy, either party submits to the REVIEWING OFFICIAL, a
                  written appeal addressed to the Office of the Assistant
                  Secretary of the Air Force (Acquisition), Deputy Assistant
                  Secretary (Science, Technology, and Engineering).

<PAGE>

        8.4.3     Office of the Assistant Secretary of the Air Force
                  (Acquisition), Deputy Assistant Secretary (Science,
                  Technology, and Engineering). The decision of the Assistant
                  Secretary of the Air Force (Acquisition), Deputy Assistant
                  Secretary (Science, Technology, and Engineering), or his duly
                  authorized representative, on the appeal shall be final and
                  conclusive.

8.5     Continuation of Work. Pending the resolution of any such dispute, work
        UNDER THIS AGREEMENT will continue as elsewhere provided herein.

ARTICLE 9.  REPRESENTATIONS AND WARRANTIES

9.1     The Air Force Activity hereby represents and warrants to the
        Collaborator as follows:

        9.1.1   MISSION. The performance of the activities specified by this
                Agreement are consistent with the mission of the Air Force
                Activity.

        9.1.2     AUTHORITY. All prior reviews and approvals required by
                  regulations or law have been obtained by the Air Force
                  Activity prior to the execution of the Agreement. The Air
                  Force Activity official executing this Agreement has the
                  requisite authority to do so.

        9.1.3   STATUTORY COMPLIANCE. The Air Force Activity, prior to entering
                into this Agreement, has (1) given special consideration to
                entering into cooperative research and development agreements
                with small business firms and consortia involving small business
                firms; (2) given preference to business units located in the
                United States which agree that products embodying an INVENTION
                MADE Under this Agreement or produced through the use of such
                INVENTION will be manufactured substantially in the United
                States; and (3) taken into consideration, in the event this
                Agreement is made with an industrial organization or other
                person subject to the control of a foreign company or
                government, whether or not such foreign government permits
                United States agencies, organizations, or other persons to enter
                into cooperative research and development agreements and
                licensing agreements with such foreign country.

9.2     The Collaborator hereby represents and warrants to the Air Force
        Activity as follows:

         9.2.1    CORPORATE ORGANIZATION. The Collaborator, as of the date
                  hereof, is a corporation duly organized, validly existing and
                  in good standing under the laws of the United States of
                  America, and is a wholly owned subsidiary of Eurotech Ltd, USA
                  corporation.
<PAGE>

         9.2.2    STATEMENT OF OWNERSHIP. The Collaborator is a US owned or a
                  subsidiary of a US-owned entity. The Collaborator has the
                  right to assignment of all INVENTIONS MADE and copyrightable
                  works CREATED by its employees Under this Agreement.

         9.2.3    AUTHORITY. The Collaborator official executing this Agreement
                  has the requisite authority to enter into this Agreement and
                  the Collaborator is authorized to perform according to the
                  terms thereof.

ARTICLE 10.  LIABILITY

10.1    PROPERTY. All property is to be furnished "as is." Except as otherwise
        provided in this Agreement or the attached Work Plan, no party to this
        Agreement shall be liable to any other party for any property of that
        other party consumed, damaged or destroyed in the performance of this
        Agreement, unless it is due to the gross negligence or willful
        misconduct of the party or an employee or agent of the party.

10.2    COLLABORATOR EMPLOYEES. The Collaborator agrees to indemnify and hold
        harmless and defend the GOVERNMENT, its employees and agents, against
        any liability or loss for any claim made by an employee or agent of the
        Collaborator, or persons claiming through them, for death, injury, loss
        or damage to their person or property arising in connection with this
        Agreement, except to the extent that such death, injury, loss or damage
        arises solely from the negligence of the Air Force Activity or its
        employees.

10.3    NO WARRANTY. EXCEPT AS SPECIFICALLY STATED IN ARTICLE 9, OR IN A LATER
        AGREEMENT, THE PARTIES MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO ANY
        MATTER WHATSOEVER, INCLUDING THE CONDITIONS OF THE RESEARCH OR ANY
        INVENTION OR OTHER INTELLECTUAL PROPERTY, OR PRODUCT, WHETHER TANGIBLE
        OR INTANGIBLE, MADE, OR DEVELOPED UNDER THIS AGREEMENT, OR THE
        MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH OR
        ANY INVENTION OR OTHER INTELLECTUAL PROPERTY, OR PRODUCT. THE PARTIES
        FURTHER MAKE NO WARRANTY THAT THE USE OF ANY INVENTION OR OTHER
        INTELLECTUAL PROPERTY OR PRODUCT CONTRIBUTED, MADE OR DEVELOPED UNDER
        THIS AGREEMENT WILL NOT INFRINGE ANY OTHER UNITED STATES OR FOREIGN
        PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT. IN NO EVENT WILL ANY PARTY
        BE LIABLE TO ANY OTHER PARTY FOR PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL
        DAMAGES.

<PAGE>

10.4    OTHER LIABILITY. The GOVERNMENT shall not be liable to any party to this
        Agreement, whether directly or by way of contribution or indemnity, for
        any claim made by any person or other entity for personal injury or
        death or for property damage or loss, arising in any way from this
        Agreement, including, but not limited to, the later use, sale or other
        disposition of research and technical developments, whether by resulting
        products or otherwise, whether made or developed Under this Agreement or
        contributed by either party pursuant to this Agreement, except as
        provided under the Federal Tort Claims Act (28 U.S.C. ss. 2671 ET SEQ)
        or other Federal law where sovereign immunity has been waived.

ARTICLE 11.  GENERAL TERMS AND PROVISIONS

11.1    DISPOSAL OF TOXIC OR OTHER WASTE. The Collaborator shall be responsible
        for removal and disposal from Air Force Activity premises of toxic or
        other material provided or generated by Collaborator in the course of
        performing this Agreement, except that, for purposes of this Agreement,
        removal and disposal of hazardous materials and wastes in amounts and of
        types typically produced during operation of the Air Force Activity
        facilities described in the Work Plan will be the responsibility of the
        Air Force Activity. Removal and disposal of hazardous materials and
        wastes over and above amounts and different from types typically
        produced during operation of the Air Force Activity facilities described
        in the Work Plan will be the responsibility of Collaborator.
        Collaborator shall obtain at its own expense all necessary permits and
        licenses as required by local, state, and Federal law and regulation and
        shall conduct such removal and disposal in a lawful and environmentally
        responsible manner.

11.2    FORCE MAJEURE. Neither party shall be in breach of this Agreement for
        any failure of performance caused by any event beyond its reasonable
        control and not caused by the fault or negligence of that party. In the
        event such a force majeure event occurs, the party unable to perform
        shall promptly notify the other party and shall in good faith maintain
        such part performance as is reasonably possible and shall resume full
        performance as soon as is reasonably possible.

11.3    RELATIONSHIP OF THE PARTIES. The parties to this Agreement and their
        employees are independent contractors and are not agents of each other,
        joint venturers, partners or joint parties to a formal business
        organization of any kind. Neither party is authorized or empowered to
        act on behalf of the other with regard to any contract, warranty or
        representation as to any matter, and neither party will be bound by the
        acts or conduct of the other. Each party will maintain sole and
        exclusive control over its own personnel and operations.

11.4    PUBLICITY/USE OF NAME ENDORSEMENT. Any public announcement of this
        Agreement shall be coordinated between the Collaborator, the Air Force
        Activity and the public affairs office supporting the Air Force
        Activity. By entering into this Agreement, the Air Force Activity or the
        GOVERNMENT does not directly or indirectly endorse any product or
        service provided, or to be provided, by Collaborator, its successors,
        assignees, or licensees. The Collaborator shall not in any way imply
        that this Agreement is an endorsement of any such product or service.

<PAGE>

11.5    NO BENEFITS. No member of, or delegate to the United States Congress, or
        resident commissioner, shall be admitted to any share or part of this
        Agreement, nor to any benefit that may arise there from; but this
        provision shall not be construed to extend to this Agreement if made
        with a corporation for its general benefit.

11.6    GOVERNING LAW. The construction, validity, performance and effect of
        this Agreement for all purposes shall be governed by the laws applicable
        to the GOVERNMENT.

11.7    WAIVER OF RIGHTS. Any waiver shall be in writing and provided to all
        other parties. Failure to insist upon strict performance of any of the
        terms and conditions hereof, or failure or delay to exercise any rights
        provided herein or by law, shall not be deemed a waiver of any rights of
        any party hereto.

11.8    SEVERABILITY. The illegality or invalidity of any provision of this
        Agreement shall not impair, affect or invalidate the other provisions of
        this Agreement.

11.9    ASSIGNMENT. Neither this Agreement nor any rights or obligations of any
        party hereunder shall be assigned or otherwise transferred by any party
        without the prior written consent of all other parties.

11.10   CONTROLLED INFORMATION. The parties understand that information and
        materials provided pursuant to or resulting from this Agreement may be
        export controlled, classified, or unclassified sensitive and protected
        by law, executive order or regulation. Nothing in this Agreement shall
        be construed to permit any disclosure in violation of those
        restrictions.

<PAGE>

ARTICLE 12.  NOTICES

12.1.   Notices specified in this Agreement shall be deemed made if given and
        addressed as set forth below.

A. Send formal notices under this Agreement by prepaid certified U.S. Mail to:

        Air Force Activity:         Attn: (ORTA) - staff
        Address                     SMSgt John Acosta
                                    AMWC/WCB
                                    5656 Texas Ave
                                    Fort Dix NJ 08640-5403

Collaborator:             Attn:
Address

                                    Mr Don V. Hahnfeldt,CEO
                                    Eurotech Ltd.
                                    10306 Eaton Place Suite 220
                                    Fairfax, VA 22030
                                    USA

B. Send correspondence on technical matters by prepaid ordinary U.S. Mail to:

        Air Force Activity:         Attn: (ORTA) - staff
        Address                     SMSgt John Acosta
                                    AMWC/WCB
                                    5656 Texas Ave
                                    Fort Dix NJ 08640-5403

Collaborator:                       Attn:   Robert Tarini
Address:                            88 Royal Little Drive
                                    Providence, RI 02904
                                    USA

<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate through their duly authorized representatives as follows:

               COLLABORATOR                         AIR FORCE ACTIVITY
               ------------                         ------------------

               EUROTECH. LTD                      AIR MOBILITY BATTLELAB
         (Name of Collaborator)                 (Name of Air Force Activity)

             DON V. HAHNFELDT                   MARK J. SURINA, LT COL, USAF
    (NAME OF OFFICIAL--PRINTED OR TYPED)    (NAME OF OFFICIAL--PRINTED OR TYPED)

           /S/ DON V. HAHNFELDT                     /S/ MARK J. SURINA
          (SIGNATURE OF OFFICIAL)                 (SIGNATURE OF OFFICIAL)

                 PRESIDENT                   COMMANDER, AIR MOBILITY BATTLELAB
            (TITLE OF OFFICIAL)                    (TITLE OF OFFICIAL)

  10306 EATON PLACE, STE 220 FAIRFAX, VA  5656 TEXAS AVE, FORT DIX NJ 08640-5403
           (ADDRESS OF OFFICIAL)                 (ADDRESS OF OFFICIAL)

            SEPTEMBER 24, 2002                        OCTOBER 18, 2002
               (DATE SIGNED)                            (DATE SIGNED)

             REVIEWED AND APPROVED BY AIR FORCE REVIEWING OFFICIAL:
             ------------------------------------------------------

                      PAUL D. NIELSEN, MAJOR GENERAL, USAF
            (NAME OF AIR FORCE REVIEWING OFFICIAL--PRINTED OR TYPED)

                    COMMANDER, AIR FORCE RESEARCH LABORATORY
                            (TITLE--PRINTED OR TYPED)

        /S/ PAUL D. NIELSEN                             NOVEMBER 18, 2002
           (SIGNATURE)                                       (DATE)

<PAGE>

                                   APPENDIX A
                                   ----------

                                    WORK PLAN
                                    ---------

1.0  Title.  Acoustic Technology Explosive Detection Demonstration

2.0 Objective. This program will develop a system that will demonstrate the
effectiveness of Acoustic Core(TM) technology to non-intrusively detect
explosive materials in cargo and/or vehicles.

3.0 Background. The Collaborator will design/develop a device to non-intrusively
detect explosive materials in cargo and/or vehicles using its Acoustic Core(TM)
technology. This will be accomplished by the Collaborator undertaking a trial
activity to create a database of acoustic algorithms to be integrated with their
Acoustic Core(TM) spectral analysis tools. The Collaborator will develop a
device that will screen and detect explosives using the aforementioned
technology. For these demonstrations, the Collaborator will provide the data
collection hardware, analysis software/hardware system, and technical guidance
to use it.

The Air Force Activity will provide the necessary technical support for the
trial activity phase and cargo pallets and/or vehicles for the demonstration
phase. The Air Force Activity will also provide the facilities, explosives and
resources necessary to conduct this demonstration as well as other miscellaneous
materials and equipment, that are agreed upon, that might be required. The
demonstration team will consist of personnel from the Collaborator, Air Force
Activity, and other USAF/DOD personnel from the operating location, and
technical experts as required. In general, USAF personnel will be responsible
for demonstration of the system with assistance from the Collaborator and the
Collaborator will be responsible for setup and operation of the system with
oversight and assistance from USAF personnel.

4.0  Technical Tasks.

4.1  Air Force Activity will be responsible for the following tasks:

     -   Provide suitable demonstration items for the length of the
         demonstration
     -   Provide technical data/support for the purpose of developing the
         necessary database for the demonstration.
     -   Review and acceptance of the design of the system for the length of the
         demonstration
     -   Procure/make available necessary explosives for the demonstration
     -   Provide personnel and support activities necessary for the length of
         the demonstration
     -   Agree to and coordinate demonstration execution criteria
     -   Execute the agreed demonstration plans
     -   Prepare an after initiative report

<PAGE>

4.2  The Collaborator will be responsible for the following tasks:

     -   The design, develop and manufacture the software/hardware system(s)
         required for the demonstration
     -   Supplying the system(s) for the length of the demonstrations. Specific
         time period to be agreed upon by both parties
     -   Assisting with the set up of equipment for the demonstrations
     -   Supporting the demonstrations as required
     -   Providing the system replacement parts as required
     -   Assisting the USAF in preparing required reports, plans and other
         submissions as requested
     -   Provide information/guidance for best data collection of the system

5.0 Deliverables or Desired Benefit. From this demonstration, the Air Force
Activity expects to gain enough data/knowledge about Acoustic Core(TM)
technology's explosive detection capability to determine whether it has the
potential to enhance the USAF mission accomplishment. The results will be
provided to USAF personnel to determine the value of Acoustic Core(TM)
technology and whether it warrants further analysis for an acquisition decision.
From this demonstration, the Collaborator will use the results of this
demonstration to improve their probability of a USAF wide implementation of this
system.

6.0 Milestones. The following table shows major milestones for this
demonstration. All dates may slip due to unforeseen circumstances (manufacturing
delays, facility and measuring equipment unavailable due to mission
requirements, personnel deployments, etc.).

               EVENT                         START               FINISH
------------------------------------- -------------------- -------------------
CRADA approval                              Jul 02               Aug 02
------------------------------------- -------------------- -------------------
Air Force Activity  and
Collaborator agree on specific
requirements document                       Jun 02               Aug 02
------------------------------------- -------------------- -------------------
Air Force Activity (or agents) and
Collaborator will work trial                Aug 02               Oct 02
activities on database
------------------------------------- -------------------- -------------------
Air Force Activity and Collaborator
will agree on specific design of            Jun 02               Aug 02
detection portal
------------------------------------- -------------------- -------------------
Collaborator will develop detection
portal and interface with detection         Aug 02               Dec 02
portal system
------------------------------------- -------------------- -------------------

<PAGE>

         Phase I Execution

?  Air  Force  Activity (or agents)
and Collaborator
                                            Jan 03               Feb 03
-        Full system setup
-        Data collection
-        Evaluate Data
------------------------------------- -------------------- -------------------
         Phase II Execution

? Air Force Activity (or agent)
and Collaborator system installation

? Collaborator final data collection
                                            TBD                  TBD

? Air Force Activity data collection
------------------------------------- -------------------- -------------------
Collaborator Report                         TBD                  TBD
------------------------------------- -------------------- -------------------
Air Force Activity After Initiative         TBD                  TBD
Report
------------------------------------- -------------------- -------------------

5.0   Reports. The Collaborator will provide a report of the data/results
      collected from their optimization software as well as any other finding by
      the collaborator throughout this demonstration. The Air Force Activity
      will provide an after initiative report of all data/results collected
      throughout this demonstration. Proprietary information in any report will
      be marked appropriately.

<PAGE>

                                   APPENDIX B
                         RELEASE OF LIABILITY AGREEMENT

In consideration of being allowed to use the facilities of the United States Air
Force, I hereby accept full responsibility for any risks related to my own use
of such facilities and for my own safety. I hereby release forever the
Government of the United States (U.S. Government), its agencies and personnel,
from every liability whatsoever to me arising out of the use of such facilities,
including liabilities for personal injury or death and property damage or loss,
except to the extent that the death, injury, loss or damage results from the
gross negligence or willful misconduct of U.S. Government personnel. For the
purposes of this Agreement, "U.S. Government personnel" includes military
personnel and civilian employees of the United States, including
non-appropriated fund employees acting within the scope of their employment, and
the heirs, successors, executors, administrators and assigns of such personnel
and employees.

                I make this release for myself and on behalf of my heirs,
        successors, executors, administrators and assigns.

         ______________                       __________________________________
              Date                            Signature of Collaborator Employee

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