License Agreement

enCaption  LICENSE AGREEMENT

This “Agreement” is by and between ENCO Systems Inc. (“ENCO”) located at 41551 W 11 Mile Road, Novi, MI 48375

And ________________ including its subsidiaries and affiliates (the "Licensee").

1. LICENSE In accordance with the terms herein, ENCO grants to Licensee, and Licensee accepts from ENCO, a perpetual non-exclusive and non-transferable license to use the current object code version of ENCO's Software described in and attached as Exhibit A (the “Software”) and associated hardware.

Licensee's use is restricted so that Licensee may not:

(a) Sublicense, sell, lease, or rent the Software without written permission from ENCO.

(b) Decompile, disassemble, or reverse engineer the Software or attempt to avoid, modify or disable any protection or security device / feature related thereto;

(c) Create a derivative work of the Software;

(d) Use the software by more than the number of concurrent users that have been licensed; or

(e) Reveal benchmark tests.

2. COPIES The license(s) granted herein include(s) the right to copy the Software for archival and back-up only. In order to protect ENCO's copyrights in the Software, Licensee agrees to reproduce and incorporate ENCO's copyright notice in any copy, modifications or partial copy.

3. TRANSFER Licensee may physically transfer the Software from (as applicable): a. one stand alone computer or network node to another stand alone computer network node; or b. one server to another server, provided the Software is used on only one computer, network node or server at a time; or c. the same number of stand alone computers, network nodes or server to the same other stand alone network nodes or servers.

4. PRICE AND PAYMENT Licensee shall make payment to ENCO for the Software license pursuant to the fees and payment terms set forth in Exhibit A.

5. SOFTWARE OWNERSHIP ENCO represents that it has all rights required to license the Software and all portions thereof and to grant Licensee the license.

6. OTHER SERVICES ENCO may provide Licensee with consulting services, software maintenance, and technical support through separate agreements.

7. TITLE TO SOFTWARE The Software, Hardware and all copies thereof are proprietary to ENCO and title thereto remains with ENCO. All applicable rights to patents, copyrights, trademarks and trade secrets in the Software or any modifications or derivative works belong to and shall remain in ENCO. Licensee shall not sell, transfer, publish, or otherwise make available the Software or copies thereof to others. Licensee agrees to secure and protect each module, software product, documentation and copies thereof in a manner consistent with the maintenance of ENCO's rights therein and to take appropriate action by instruction or agreement with its employees or consultants who are permitted access to each program or software product to satisfy its obligations hereunder. All copies made by the Licensee of the Software and other programs developed hereunder, including translations, compilations, partial copies with modifications and updated works, are the property of ENCO. Violation of any provision of this paragraph shall be the basis for immediate termination of this Agreement.

8. CONFIDENTIALITY Each party agrees to afford the other party's Proprietary Information the same degree of protection against unauthorized use or disclosure as each party normally provides for its Proprietary Information, provided that each party's obligation shall not apply to information which: i) Is known to the receiving party at the time of disclosure by the disclosing party; ii) Is now or hereafter in the public domain through no fault of the receiving party; iii) Is developed independently by the receiving party; and iv) Is generally known or available from third parties without restriction; and The term "Proprietary Information" means documented information or software which at the time of its disclosure to the receiving party is identified as Proprietary by an appropriate stamp or legend.

9. LIMITED WARRANTY

(a) ENCO warrants that the Software will operate, as to all substantial features, in accordance with ENCO's current published specifications when installed.

(b) IT IS UNDERSTOOD BY BOTH PARTIES TO THIS AGREEMENT THAT THE SOFTWARE IS BASED ON SPEECH RECOGNITION METHODOLOGY AND  THAT SPEECH RECOGNITION IS INHERENTLY A STATISTICAL PROCESS; THAT SPEECH RECOGNITION ERRORS ARE INHERENT IN THE PROCESS OF SPEECH RECOGNITION; THAT USE OF SPEECH RECOGNITION APPLICATIONS MUST BE DESIGNED TO ALLOW FOR SUCH ERRORS IN THE SPEECH RECOGNITION PROCESS; AND THAT IT IS LICENSEE’S RESPONSIBILITY THAT ALL ITS USERS UNDERSTAND THAT SUCH ERRORS ARE INEVITABLE AND THAT IT IS THE RESPONSIBILITY OF THE USER  TO PROVIDE FOR HANDLING SUCH ERRORS AND TO MONITOR THE SPEECH RECOGNITION PROCESS AND CORRECT ANY ERRORS. ENCO SHALL IN NO EVENT BE LIABLE FOR ANY DIRECT OR INDIRECT DAMAGES, INCLUDING FINES, RESULTING FROM ERRORS IN THE RECOGNITION PROCESS.

(c) The Licensee must notify ENCO in writing, within thirty (30) days of delivery of the Software to the Licensee (the “Warranty Period”),  of its claim of any such defect. If the Software is found defective by ENCO, ENCO's sole obligation under this warranty is to use reasonable commercial efforts to attempt to correct or work around errors, replace defective media or replace the Software with functionally equivalent Software.

(d) THE ABOVE IS A LIMITED WARRANTY AND IT IS THE ONLY WARRANTY MADE BY ENCO. ENCO MAKES AND LICENSEE RECEIVES NO ADDITIONAL WARRANTY, EXPRESS OR IMPLIED, AND THERE ARE EXPRESSLY EXCLUDED ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. ENCO SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

(e) If any modifications are made to the Software by Licensee during the warranty period, this warranty shall immediately be terminated. Correction for difficulties or defects traceable to Licensee's errors or systems changes shall be billed at ENCO's standard time and material charges.

(f) Licensee agrees that ENCO's liability arising out of contract, negligence, strict liability in tort or warranty shall not exceed any amounts payable by Licensee for the Software identified above.

10. INDEMNITY ENCO, at its own expense, will defend any action brought against Licensee to the extent that it is based on a claim that any software system used within the scope of this Agreement infringes any U.S. patents, copyrights, license or other property right, provided that ENCO is immediately notified in writing of such claim. ENCO shall have the right to control the defense of all such claims, lawsuits and other proceedings. In no event shall Licensee settle any such claim, lawsuit or proceeding without ENCO's prior written approval. If, as a result of any claim of infringement against any patent, copyright, license or other property right, ENCO is enjoined from using the Software, or if ENCO believes that the Software is likely to become the subject of a claim of infringement, ENCO at its option and expense may procure the right for Licensee to continue to use the Software, or replace or modify the Software so as to make it non-infringing. If neither of these two options is reasonably practicable ENCO may discontinue the license granted herein on one month's written notice and refund to Licensee the unamortized portion of the license fees hereunder (based on four years straight line depreciation, such depreciation to commence on the date of this Agreement). The foregoing states the entire liability of ENCO with respect to infringement of any copyrights or patents by the Software or any parts thereof.

11. TERMINATION ENCO shall have the right to terminate this Agreement and license(s) granted herein: (a) Upon ten days' written notice in the event that Licensee, its officers or employees violates any provision of this Agreement including, but not limited to, confidentiality and payment. (b) In the event of termination by reason of the Licensee's failure to comply with any part of this agreement, or upon any act which shall give rise to ENCO's right to terminate, ENCO shall have the right, at any time, to terminate the license(s) and take immediate possession of the Software, Hardware and documentation and all copies wherever located. Within five (5) days after termination of the license(s), Licensee will return to ENCO the Software and Hardware in the form provided by ENCO. Termination under this paragraph shall not relieve Licensee of its obligations regarding confidentiality of the Software. (c) Without limiting any of the above provisions, in the event of termination as a result of the Licensee's failure to comply with any of its obligations under this Agreement, the Licensee shall continue to be obligated for any payments due. Termination of the license shall be in addition to and not in lieu of any equitable remedies available to ENCO. (d) Licensee may terminate this agreement at any time provided payment in full for the contacted period has been made and Licensee returns the original and all copies of Software and any associated provided hardware to ENCO. Licensee is financially responsible for any missing items that were not returned following termination.

12. TAXES Licensee shall, in addition to the other amounts payable under this Agreement, pay all sales and other taxes, federal, state, or otherwise, however designated, which are levied or imposed by reason of the transactions contemplated by this Agreement. Without limiting the foregoing, Licensee shall promptly pay to ENCO an amount equal to any such items actually paid, or required to be collected or paid by ENCO.

13. GENERAL (a) Licensee acknowledges that it has read this Agreement, it understands it, and agrees to be bound by its terms, and further agrees that this is the complete and exclusive statement of the Agreement between the parties, which supersedes and merges all prior proposals, understandings and all other agreements, oral and written, between the parties relating to this Agreement. This Agreement may not be modified or altered by Licensee except by written instrument duly executed by both parties. (b) Dates or times by which ENCO is required to make performance under this license shall be postponed automatically to the extent that ENCO is prevented from meeting them by causes beyond its reasonable control. (c) This Agreement and performance hereunder shall be governed by the laws of the State of Michigan. Venue shall be in Oakland County, Michigan. (d) No action, regardless of form, arising out of this Agreement may be brought by Licensee more than two years after the cause of action has arisen. (e) If any provision of this Agreement is invalid under any applicable statute or rule of law, it is to that extent, deemed to be omitted. (f) The Licensee may not assign or sub-license, without the prior written consent of ENCO, its rights, duties or obligations under this Agreement to any person or entity, in whole or in part.  (g) The prevailing party in any action related to this agreement shall have the right to recover its reasonable expenses including attorney's fees. (h) The waiver or failure of ENCO to exercise, in any respect, any right provided for herein shall not be deemed a waiver of any further right hereunder.

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