FINANCING AND DEVELOPMENT AGREEMENT

THIS AGREEMENT is made this [Date] by and between [Intellectual Property Co.], a [Type of Organization] with offices at [Address] (the “Intellectual Property Co.”), and [Name of Lender], a [Type of Organization] with offices at [Address] (the “Software Investment Fund”).

WITNESSETH:

WHEREAS, the Intellectual Property Co. is in the business of developing, publishing, and distributing multimedia educational software through local area networks and wide area networks, such as the Internet and the World Wide Web;

WHEREAS, the Software Investment Fund has been formed for the purpose of commercially exploiting opportunities in connection with the Internet; and

WHEREAS, Software Investment Fund and Intellectual Property Co. desire to enter into a project financing agreement for a program to be known as [name of technology] (the “Program”) pursuant to which the specific terms and conditions of such financing by Software Investment Fund may be set forth, including the consideration to Software Investment Fund of such financing.

NOW, THEREFORE, in consideration of the promises and agreements set forth herein, the parties, each intending to be legally bound hereby, do promise and agree as follows:

1. DEVELOPMENT PROGRAM FINANCING
A. Software Investment Funding Obligations. Subject to the terms of this Agreement, the Software Investment Fund hereby agrees to provide to Intellectual Property Co. certain cash payments to be used by Intellectual Property Co. for the development, operation and marketing of the Program, all as more specifically set forth in this Section.

B. Schedule of Payments. Subject to the fulfillment by Intellectual Property Co. of the milestones set forth below, as such may be amended from time to time by the mutual agreement of the parties hereto, Software Investment Fund hereby agrees to make cash payments to Intellectual Property Co. in the following amounts on or before the dates and upon the fulfillment by Intellectual Property Co. of the milestone(s) here indicated:
Amount         Date Milestone

$[amount]  [date] Final specification and white paper for Program delivered to Software Investment Fund; procurement of dedicated  servers, software and telecommunications equipment.
$[amount]  [date] Beta merchandising system in place.
$[amount]  [date] Final development of fully interactive online course delivery  product/tools; marketing of beta tools to developers.  First interactive online courses available; marketing  campaign to professional learners.
$[amount]  [date] Continued effectiveness of Agreement

C. Effect of Missed Milestone. In the event Intellectual Property Co. fails to meet the milestone applicable to a particular payment as set forth above, and such failure is not excused hereunder, Software Investment Fund may withhold the relevant payment until such time as Intellectual Property Co. fulfills the applicable milestone. Software Investment Fund may, at its discretion, make any payment otherwise required under this Agreement notwithstanding a missed milestone by Intellectual Property Co.. In the event that Intellectual Property Co. is unable to meet any of the first three milestones within the [#]-day cure period provided below, then (i) the ownership interest of Intellectual Property Co. in the source code for the Program shall be reduced and (ii) the royalties to which Intellectual Property Co. would otherwise be entitled from the Program shall be reduced to Intellectual Property Co. (and thus paid to Software Investment Fund), each in accordance with the schedule set forth on Schedule [#] attached hereto.

D. Effect of Missed or Partial Payment. In the event Software Investment Fund fails to make any portion of a payment when such payment is due as set forth above, then (i) the ownership interest of Software Investment Fund in the source code for the Program and (ii) the royalties otherwise payable to Software Investment Fund as set forth in Section 4 below each shall be reduced in accordance with the schedule set forth on Schedule __. Any such reductions taken will correspond with the proportion of the payment amount Software Investment Fund failed to make as it related to the aggregate payments then due. In the event Software Investment Fund fails to make at least a partial payment of $[number] in respect of any three milestone payments as required by Section 1(B) above, Intellectual Property Co. may, in its discretion, invoke the termination provisions of Section 9 below. The parties hereto expressly acknowledge and agree that there shall be no cure period in respect of a missed payment, but Software Investment Fund shall have thirty (30) days after making a timely payment of at least $[number] within which to pay the difference between the full milestone payment and such $[number] (or such greater amount as actually paid) before a reduction in ownership rights of the source code and in the royalties otherwise payable to Software Investment Fund. Any consequential reduction in warrants granted to Software Investment Fund, reduction in revenue stream or reduction in interest in the source code shall be based solely on the amount not paid by Software Investment Fund on or before the last day of the 30-day grace period. Software Investment Fund shall be entitled to the proportionate amount of warrants, revenue stream and source code interest relevant to the partial payment made by Software Investment Fund.

E. Intellectual Property Co.’s Use of Software Investment Funding Supplied by Software Investment Fund. Intellectual Property Co. shall utilize all Software Investment Funds provided by Software Investment Fund under this Agreement for the sole purpose of paying for the development, marketing and operational expenses incurred and to be incurred by Intellectual Property Co. under for the Program. These expenses shall include, but are not limited to those associated with writing the source code, purchasing hardware and marketing the Program.

F. Payment Method. All payments required under this Section shall be made by wire transfer of immediately available Software Investment Funds to an account of Intellectual Property Co. pursuant to wire instructions delivered to Software Investment Fund by Intellectual Property Co. at least three business days in advance of a required payment. If such wire instructions are not so given, Software Investment Fund may make that payment with a bank check mailed to the offices of Intellectual Property Co..

2. SOFTWARE INVESTMENT FUND FINANCING EFFORTS
A. Offers to Third Parties. Intellectual Property Co. acknowledges that Software Investment Fund will obtain some or all of the Software Investment Funding required by Software Investment Fund to make the payments to Intellectual Property Co. as set forth in this Agreement from third parties.

B. Conduct of Financing Efforts. Software Investment Fund agrees that it will conduct all of its financing efforts in compliance with all federal and applicable state securities laws and that it will not hold itself out in any way, directly or indirectly, as a broker, selling agent or finder for the sale of Intellectual Property Co. securities. Software Investment Fund agrees to provide to Intellectual Property Co. in advance of their use, copies of all soliciting material to be used by Software Investment Fund that includes references to Intellectual Property Co., the Program or this Agreement. Intellectual Property Co. shall have the right to approve all such materials prior to their use.

C. Eligible Investors. To the extent the Software Investment Funding will be provided by third party investors in Software Investment Fund, Software Investment Fund agrees that it will sell its securities only to persons who are qualified “accredited investors” as that term is defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “1933 Act”).

D. Benefits to Investors. Intellectual Property Co. and Software Investment Fund agree to make available to third party investors the following:

1. Policy and Procedure Committee. The parties hereto shall establish a Policy and Procedure Committee which shall make recommendations as to desirable policies and procedures for access to the Program by vendors and resellers. The Committee shall consist of six persons, three persons appointed by Intellectual Property Co. and three persons appointed by Software Investment Fund, which persons may include investors.

2. Advertising on the Program. Each investor shall be offered preferred advertising space at a discount from advertising rates offered to unrelated third parties, as follows: an investment of $[amount] shall entitle the investor to a 25% discount for one year; an investment of $[amount] shall entitle the investor to a 50% discount for one year; an investment of $[amount] shall entitle the investor to a discount of 50% for the first year and 25% for the next year; and an investment of $[amount] shall entitle the investor to a 50% discount for two years. After these periods, the investors will be given the right to continue in the preferred advertising space at a 10% discount from the then full rate.

3. COMMON STOCK PURCHASE WARRANTS
A. Common Stock Purchase Warrants. Intellectual Property Co. hereby agrees to issue to Software Investment Fund warrants to purchase the Common Stock of Intellectual Property Co., par value $.01 per share, pursuant to the following schedule:

Number of Shares    Date of Issuance
[number]             [date]

B. Terms of Warrants. The exercise price for the Common Stock underlying the warrants shall be $[price] per share. Each warrant shall expire three years after the Effective Date of this Agreement. Other terms and conditions of the warrants issued pursuant to this Section shall be substantially as set forth in the form of Warrant set forth hereto as Exhibit A.

C. Effect of Missed or Partial Payment by Software Investment Fund. If a scheduled payment by Software Investment Fund as required by Section 1 is not made when due, Intellectual Property Co. shall be under no obligation to issue the warrant of the corresponding date as set forth above. If Software Investment Fund fails to make the full required payment as set forth in Section 1 but makes a partial payment, Intellectual Property Co. may, in its discretion, reduce the number of shares subject to the corresponding warrant by the proportionate amount of the deficient payment to the full amount of the payment due. A partial payment of at least $[amount] by Software Investment Fund will not afford Intellectual Property Co. with a right of termination under Section 9.

D. Investor Representations. Software Investment Fund understands and acknowledges that neither the warrants to be issued under this Agreement nor the shares of Common Stock for which they may be exercised have been registered under the 1933 Act or the securities laws of any state in reliance on exemptions therefrom. Software Investment Fund agrees to make such investor representations as may be reasonably required to facilitate reliance on such exemptions from registration at the time the warrants are issued and at the time the shares of Common Stock are issued pursuant to exercise of such warrants unless such shares are subject to a then effective registration statement.

4. SHARING OF ROYALTIES AND OWNERSHIP OF
THE PROGRAM
A. Royalties. Subject to the provisions of Section 2, the Software Investment Fund shall be entitled to [#] percent ([# ]%) of the Net Revenues generated by the license or sale of the Program.

B. Software Investment Fund Marketing Contribution and Intellectual Property Co. Ongoing Obligations. Software Investment Fund agrees that at least [#] percent ([# ]%) of the revenues to which it is entitled under this Agreement will be used for marketing expenses attributable to promoting the Program. Software Investment Fund and Intellectual Property Co. acknowledge that the actual allocation of Software Investment Fund’s revenue towards marketing may be greater than [#] percent ([#]%).

C. Source Code for the Program. Intellectual Property Co. and Software Investment Fund will jointly own the source code for the Program; unless such ownership interest has been reduced as the result of one or more missed milestones by Intellectual Property Co. or missed or partial milestone payments by Software Investment Fund, Software Investment Fund shall own an equal share of such source code. The source code shall be placed in escrow pursuant to the terms of an escrow agreement in substantially the form attached hereto as Exhibit B. Software Investment Fund agrees to pay all expenses to initiate such escrow and all expenses to maintain such escrow, provided that Intellectual Property Co. will reimburse Software Investment Fund for half the expenses up to a maximum cost to Intellectual Property Co. of $[amount] the first year and $[amount] each year thereafter. Neither party shall be entitled to license, transfer, sell or otherwise encumber the ownership rights to the source code, or enter into negotiations concerning same, without the prior written consent of the other party. Software Investment Fund expressly acknowledges and agrees that its interest in the Program source code is limited to the exploitation of such source code in the [anticipated market]. Notwithstanding any other provisions of this Agreement, Software Investment Fund shall have no rights whatsoever to exploitation of the generic platforms and related software created, acquired or otherwise utilized by Intellectual Property Co. in connection with the Program, it being expressly understood and agreed that, as between Intellectual Property Co. and Software Investment Fund, such platforms and related software are the sole and exclusive property of Intellectual Property Co.. Intellectual Property Co. expressly agrees that Software Investment Fund shall be under no obligation to pay to Intellectual Property Co. any additional royalties or fees in connection with the platforms and related software which are the sole and exclusive property of Intellectual Property Co. but which are included in the Program so long as the use by Software Investment Fund is limited to the Program. Notwithstanding any other provision of this Agreement, Intellectual Property Co. acknowledges that Software Investment Fund shall have the right to develop independently other projects, and engage in other activities, including without limitation activities similar to those contemplated by this Agreement, with other parties, so long as Software Investment Fund is not using Intellectual Property Co. confidential or proprietary information or technology.

D. Payment Method. Payments to Software Investment Fund of royalties under Section 4(A) above shall be made on a monthly basis in arrears.

E. Records; Inspection. Intellectual Property Co. shall keep complete, true, and accurate books of account and records for the purpose of determining the royalty amounts payable under this Agreement. Such books and records shall be kept at Intellectual Property Co.’s principal place of business. Software Investment Fund may inspect such books and records to confirm the royalty payments paid and payable to Software Investment Fund under this Agreement. Such inspections may be done by Software Investment Fund’s independent certified public accountant at Software Investment Fund’s sole cost and expense no more than twice each calendar year, at reasonable times as mutually agreed. The certified public accountant will be obliged to execute a reasonable confidentiality agreement on terms consistent with Article 8 hereof prior to commencing any such inspection. In the event an inspection reveals a variation or error producing an increase exceeding ten percent (10%) of the amount stated as having been due by Intellectual Property Co. for any period covered by the inspection, all costs relating to the inspection for such period and any unpaid amounts that are discovered shall be paid by Intellectual Property Co.. Software Investment Fund’s independent certified public accountant will report to Software Investment Fund as to whether or not there has been an underpayment and, if so, the amount thereof. No additional information discerned by the certified public accountant during the course of their inspection may be disclosed to Software Investment Fund.

5. REPRESENTATIONS AND WARRANTIES
A. Software Investment Fund.

1. Organization; Good Standing; Corporate Power. Software Investment Fund is a corporation duly organized, validly existing and in good standing under the laws of the State of [State], has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.

2. Authority. The execution, delivery and performance of this Agreement has been duly and validly authorized by all necessary corporate action on the part of Software Investment Fund, and this Agreement will be, upon such execution and delivery, duly executed and will constitute legal, valid and binding obligations of Software Investment Fund, enforceable against Software Investment Fund in accordance with their respective terms.

3. No Conflicts. The execution, delivery and performance by Software Investment Fund of this Agreement does not and will not violate, conflict with or result in the breach of any agreement, instrument, judgment, judicial decree or order, or any provision of federal or state law to which Software Investment Fund is a party or by which Software Investment Fund or any of its assets are bound.

4. No Consent. No consent or approval by, or any notification of or filing with, any person (governmental or private) is required in connection with the execution, delivery and performance by Software Investment Fund of this Agreement.

5. Absence of Litigation. There are no judicial, administrative or other legal proceedings or governmental investigations pending against Software Investment Fund or its principals with respect to the execution or performance of Software Investment Fund’s obligations under this Agreement or involving its business or assets and, to the best of Software Investment Fund’s knowledge, there are no such proceedings or investigations threatened.

6. Compliance with Laws. Software Investment Fund has complied in all material respects with all laws (statutory or otherwise), rules, regulations, ordinances, orders, writs, injunctions, judgments, decrees and awards of all governmental and regulatory authorities (collectively the “Laws”) relating to the operation of its business and assets. Software Investment Fund has not received any notification of any asserted present or past failure of Software Investment Fund to comply with any Law and no such violation of any Law exists.

B. Intellectual Property Co..

1. Organization; Good Standing; Corporate Power. Intellectual Property Co. is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Intellectual Property Co. represents and warrants that it has provided to Software Investment Fund a true and complete copy of Intellectual Property Co.’s certificate of incorporation and bylaws, each in effect on the date hereof.

2. Authority. The execution, delivery and performance of this Agreement, including the issuance of warrants as contemplated by Section 3, has been duly and validly authorized by all necessary corporate action on the part of Intellectual Property Co., and this Agreement will be, upon such execution and delivery, duly executed and will constitute legal, valid and binding obligations of Intellectual Property Co., enforceable against Intellectual Property Co. in accordance with their respective terms.

3. No Conflicts. The execution, delivery and performance by Intellectual Property Co. in this Agreement does not and will not violate, conflict with or result in the breach of any agreement, instrument, judgment, judicial decree or order, or any provision of federal or state law to which Intellectual Property Co. is a party or by which Intellectual Property Co. or any of its assets are bound.

4. No Consent. No consent or approval by, or any notification of or filing with, any person (governmental or private) is required in connection with the execution, delivery and performance by Intellectual Property Co. of this Agreement.

5. Intangible Assets. To the best of Intellectual Property Co.’s knowledge, Intellectual Property Co. owns or possesses adequate rights to develop, manufacture, license, provide and market its products and services using all patents, patent applications, trademarks, service marks, copyrights, trade secrets, confidential information, processes and formulations used or proposed to be used in the conduct of its business related to this Agreement (collectively the “Intangibles”); to the best of Intellectual Property Co.’s knowledge, Intellectual Property Co. has not infringed and is not infringing upon the rights of others with respect to Intangibles; and Intellectual Property Co. has not received any notice of conflict with the asserted rights of others with respect to Intangibles which could, singly or in the aggregate, materially adversely affect its business as presently conducted or the prospects, financial condition or results of operations of Intellectual Property Co., and Intellectual Property Co. knows of no basis therefor; and to the best of Intellectual Property Co.’s knowledge, no others have infringed upon the Intangibles of Intellectual Property Co..

6. Absence of Litigation. There are no judicial, administrative or other legal proceedings or governmental investigations pending against Intellectual Property Co. with respect to the right of Intellectual Property Co. to enter into or perform its obligations under this Agreement or involving its business or assets, and, to the best of Intellectual Property Co.’s knowledge, there are no such proceedings or investigations threatened.

7. Compliance with Laws. Intellectual Property Co. has complied in all material respects with all laws (statutory or otherwise), rules, regulations, ordinances, orders, writs, injunctions, judgments, decrees and awards of all governmental and regulatory authorities (collectively the “Laws”) relating to the operation of its business and assets and the development, marketing and operation of the Program. Intellectual Property Co. has not received any notification of any asserted present or past failure of Intellectual Property Co. so to comply with any Law and no such violation of any Law exists.

8. Financial Statements. Attached hereto as Exhibit C are the draft audited balance sheets of Intellectual Property Co. as of [dates], and the Intellectual Property Co. draft Report of Independent Auditors, as well as the draft quarterly financial for each of the first two quarters of fiscal 1996. Such financial statements fairly present the financial condition of Intellectual Property Co. at [dates], respectively, and, in respect of the quarterly reports, at [dates], and were prepared in accordance with generally accepted accounting principles.

9. No Adverse Changes. Since December 31, 1995, there has not been any material adverse change in the financial condition, assets, liabilities, business or resulting operations of Intellectual Property Co..

10. Taxes. Intellectual Property Co. has filed all federal, state and local taxes and other returns and reports which were required to be filed in respect of all taxes, levies, license, registration and permit fees, charges or withholding of any nature whatsoever, and has paid all applicable taxes, levies and assessments which are due; and except for taxes which are not yet due and payable, there are no taxes, levies or assessments which will be payable by Intellectual Property Co. in respect of any period prior to the date hereof; Intellectual Property Co. is not in default in the payment of any taxes due or payable or of any assessments received in respect thereof; and there are no unpaid assessments or proposals for additional federal, state or local taxes for which Intellectual Property Co. does not have adequate reserves, nor does Intellectual Property Co. know of any basis therefor.

11. Assets. The assets and properties of Intellectual Property Co. include all assets and properties which are or will be material to the conduct of Intellectual Property Co.’s business as presently contemplated.

12. Capitalization, etc. As of the date hereof, Intellectual Property Co.’s authorized capitalization consists of (a) [number] shares of Common Stock, par value $0.01 per share, of which [number] shares are issued and outstanding and (b) [number] shares of Preferred Stock, par value $0.01 per share, of which [number] shares have been designated “Series A Preferred Stock” (and there are now outstanding [number] of such Series A Preferred Stock), [number] shares have been designated “Series B Preferred Stock” (and there are now none outstanding) and [number] shares have been designated “Series B-1 Preferred Stock” (and there are now outstanding [number] of such Series B-1 Preferred Stock). The Common Stock issuable upon exercise of the Warrants to be acquired pursuant to this agreement have been duly and validly reserved for issuance and, upon issuance, will be duly and validly issued, fully paid and non-assessable and will be free of restrictions on transfer, except pursuant to applicable federal and state securities laws. All corporate action on the part of Intellectual Property Co. and stockholders thereof, if necessary, for the authorization, execution and delivery of this agreement and the Warrants contemplated hereby, and the authorization, issuance or reservation for issuance of such Warrants and the Common Stock issuable upon exercise thereof has been taken. Except as set forth on Schedule __ or as contemplated by the Warrants issuable hereunder, there are no outstanding options, warrants, rights (including conversion or pre-emptive rights) or agreements for the purchase or acquisition from Intellectual Property Co. of any shares of its capital stock or any rights which permit or allow a holder of securities of Intellectual Property Co. to cause Intellectual Property Co. to file a registration statement or which permit or allow the holder thereof to include securities of Intellectual Property Co. in a registration statement filed by Intellectual Property Co..

C. Disclaimer of Warranties. EXCEPT AS EXPRESSLY STATED HEREIN, NEITHER PARTY HAS MADE ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED BY OPERATION OF LAW OR OTHERWISE, CONCERNING THE PRODUCT TO BE DEVELOPED BY INTELLECTUAL PROPERTY CO.. THE SCOPE OR DURATION OF ANY MARKETING EFFORTS THAT THE PARTIES MAY UNDERTAKE, OR THE SUCCESS OF SUCH MARKETING EFFORT. NEITHER PARTY HAS RELIED ON ANY EXPRESS OR IMPLIED REPRESENTATION OF THE OTHER PARTY, WRITTEN OR ORAL, AS AN INDUCEMENT TO ENTERING INTO THIS AGREEMENT EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT.

6. CONFIDENTIALITY
A. Confidential Information. Except as expressly provided herein, the parties agree that, for the term of this Agreement and for two (2) years thereafter, the receiving party shall keep completely confidential and shall not publish or otherwise disclose and shall not use for any purpose except for the purposes contemplated by this Agreement, any information that is marked or noted as confidential and furnished to it by the disclosing party hereto pursuant to this Agreement, except that to the extent that it can be established by the receiving party by competent proof that such confidential information (a) was already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure, as evidenced by its written records; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party; (c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement; (d) was independently developed by the receiving party as demonstrated by documented evidence prepared contemporaneously with such independent development; or (e) was subsequently lawfully disclosed to the receiving party by a person other than a party hereto.

B. Permitted Use and Disclosures. Each party hereto may use or disclose information disclosed to it by the other party to the extent such use or disclosure is reasonably necessary in prosecuting or defending litigation, complying with applicable governmental regulations or otherwise submitting information to tax or other government authorities, or otherwise exercising its rights hereunder; provided that if a party is required to make any such disclosure of another party’s confidential information, other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the latter party of such disclosure and will use its best efforts to secure confidential treatment of such information prior to its disclosure (whether through protective orders or otherwise).

C. Public Disclosure. Except as otherwise required by law, neither party shall issue a press release or make any other public oral or written disclosure of the terms of this Agreement or the results of the Program contemplated hereby without prior approval of the other party, it being expressly acknowledged that Software Investment Fund will be seeking Intellectual Property Co.’s prior approval with respect to certain of such information in disclosure to be provided to potential investors.

7. INDEMNIFICATION
A. Indemnification of Software Investment Fund. Intellectual Property Co. shall indemnify, defend and hold harmless Software Investment Fund and the directors, officers, employees, agents and counsel of Software Investment Fund and the successors and assigns of any of the foregoing (the “Software Investment Fund Indemnitees”), from and against any and all liabilities, damages, losses, costs or expenses (including reasonable attorneys’ and professional fees and expenses and other expenses of litigation and arbitration) resulting from a claim, suit or proceeding brought by a third party against a Software Investment Fund Indemnitee, arising from or occurring (i) as a result of a breach of any of Intellectual Property Co.’s representations and warranties as set forth herein, or (ii) as a result of a breach by Intellectual Property Co. of any of its obligations hereunder.

B. Indemnification of Intellectual Property Co.. Software Investment Fund shall indemnify, defend and hold harmless Intellectual Property Co. and the directors, officers, employees, agents and counsel of Intellectual Property Co. and the successors and assigns of any of the foregoing (the “Intellectual Property Co. Indemnitees”), from and against any and all liabilities, damages, losses, costs or expenses (including reasonable attorneys’ and professional fees and expenses and other expenses of litigation and arbitration) resulting from a claim, suit or proceeding brought by a third party against a Intellectual Property Co. Indemnitee, arising from or occurring (i) as a result of a breach of any of Software Investment Fund’s representations and warranties of Software Investment Fund set forth herein, or (ii) as a result of a breach of any of Software Investment Fund’s obligations hereunder, or (iii) as a result of Software Investment Fund’s financing efforts contemplated by Section 2 above, provided, however, that Software Investment Fund shall have no obligation to indemnify the Intellectual Property Co. Indemnitees for claims based on information provided by Intellectual Property Co. and included in information provided by Software Investment Fund to potential investors.

C. Procedure. A party (the “Indemnitee”) that intends to claim indemnification under this Section shall promptly notify the other party (the “Indemnitor”) in writing of any loss, claim, damage, liability, or action in respect of which the Indemnitee or any of its directors, officers, employees, or agents intend to claim such indemnification, and the Indemnitor shall have the right to participate in, and, to the extent the Indemnitor so desires, to assume the defense thereof. The indemnity agreement in this Section shall not apply to amounts paid in the settlement of any loss, claim, damage, liability or action if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Section. At the Indemnitor’s request, the Indemnitee under this Section, its employees and agents, shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action, claim, or liability covered by this indemnification and provide full information with respect thereto.

8. TERMINATION
A. Term. This Agreement shall commence as of the Effective Date and shall continue until terminated pursuant to paragraph (B), below.

B. Termination. This Agreement may be terminated by either party upon thirty (30) days written notice to the other party in the event of a breach of a material provision of this Agreement by the other party, provided that, during the [number] ([#]) days period, the breaching party fails to cure such breach. Upon a Termination, the non-breaching party shall have the right to exploit the source code in respect of the Program’s market without the further involvement of the terminating party and revenues otherwise payable to the terminating party from merchants offering Products and Services on the Program at the time of the Termination shall be reduced by one-half. Revenues thereafter generated in respect of additional merchants offering Products or Services on the Program shall be the sole property of the non-breaching party. The source code shall then be released to the non-terminating party subject to the terms of the escrow agreement. The terminating party in a Termination agrees not to seek to restrict the use of the source code on and after the effective date of the Termination.

C. Termination for Insolvency. If a voluntary or involuntary proceeding by or against a party are instituted in bankruptcy under any insolvency law, or a receiver or custodian is appointed for such party, or proceedings are instituted by or against such party for corporate reorganization or the dissolution of such party, which proceedings, if involuntary, shall not have been dismissed within sixty (60) days after the date of filing, or if such party makes an assignment for the benefit of creditors, or substantially all of the assets of such party are seized or attached and not released within sixty (60) days thereafter, the other party may immediately terminate this Agreement effective upon notice of such termination.

D. Permissive Termination.

1. In the event Intellectual Property Co. fails to meet a milestone as set forth in Section 1 and Software Investment Fund is entitled to terminate this Agreement as provided therein, Software Investment Fund may terminate this Agreement upon the giving of written notice thereof. The source code may then be released to Software Investment Fund subject to the terms of the escrow agreement.

2. In the event Software Investment Fund fails to make all or at least a partial payment of $[amount] of any three required payments as set forth in Section 1, Intellectual Property Co. may terminate this Agreement. Such termination shall be effective immediately upon the giving of written notice thereof and there shall be no cure period. The source code will then be released to Intellectual Property Co. subject to the terms of the escrow agreement.

E. Mutual Termination. In the event of termination of this Agreement by the mutual agreement of the parties, the parties will continue to jointly own the source code (in such ownership amounts as provided in this Agreement) and may pursue exploitation of such source code pursuant to such other agreements between the parties as they may determine, consistent with the provisions of Section 3.

F. Accrued Obligations. Termination of this Agreement for any reason shall not release any party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to such termination, nor shall it preclude either party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement.

G. Return of Confidential Information. Upon any termination of this agreement, Software Investment Fund and Intellectual Property Co. shall promptly return to the other party all confidential information received from the other party (except one copy which may be retained for archival purposes), and shall no longer be entitled to use any such confidential information for any purpose.

9. INTELLECTUAL PROPERTY CO. INITIAL PUBLIC OFFERING
A. Impact of Intellectual Property Co. Initial Public Offering. In the event Intellectual Property Co. files with the Securities and Exchange Commission a Registration Statement for the initial public offering of its Common Stock (an “IPO”) in 1996, payments under Section 1 shall be accelerated pursuant to the following terms:

1. Half of the remaining payments required under Section 1 shall be due and payable to Intellectual Property Co. upon the consummation of the IPO; and

2. The remaining half of the payment amounts will be due and payable four months after the consummation of the IPO.

B. Acceleration of Warrant Issuances. If and when payments are accelerated, the same acceleration shall apply to the issuance of the corresponding warrants contemplated by Section 2.

10. FORCE MAJEURE
Neither party will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such Party’s reasonable control and that such Party is unable to overcome through the exercise of commercially reasonable diligence. If any force majeure event occurs, the affected Party will give prompt written notice to the other Party and will use commercially reasonable efforts to minimize the impact of the event.

11. NOTICE AND PAYMENT
A. Any notice required to be given under this Agreement shall be in writing and delivered personally to the other designated party at the above stated address or mailed by certified, registered or Express mail, return receipt requested or by Federal Express.

B. Either party may change the address to which notice or payment is to be sent by written notice to the other under any provision of this paragraph.

12. JURISDICTION/DISPUTES
This Agreement shall be governed in accordance with the laws of the State of [State]. All disputes under this Agreement shall be resolved by litigation in the courts of the State of [State] including the federal courts therein and the Parties all consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it.

13. AGREEMENT BINDING ON SUCCESSORS
The provisions of the Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their heirs, administrators, successors and assigns.

14. ASSIGNABILITY
Neither party may assign this Agreement or the rights and obligations thereunder to any third party without the prior express written approval of the other party which shall not be unreasonably withheld.

15. WAIVER
No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same of other provisions of this Agreement.

16. SEVERABILITY
If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement.

17. INTEGRATION
This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement.

IN WITNESS WHEREOF each of the parties hereto has caused this Agreement to be duly executed by their authorized representatives and delivered in duplicate as of the date first written above.

[NAME OF INTELLECTUAL PROPERTY CO.]  [NAME OF SOFTWARE INVESTMENT FUND]

By:        By:
Name:       Name:
Title:       Title: