EXHIBIT 10.8
LICENSE AGREEMENT
I. INTRODUCTION
This is a licensing agreement between Michael Smithwick (Developer) and
Virtual Reality Laboratories, Inc. (Publisher), in which Developer grants
Publisher certain rights in the software program formerly known as Galileo and
related data disks (Programs).
II. DEFINITIONS.
A. "Supporting Documentation" shall mean information that describes
the format, organization, and content of machine-readable
diskettes to be supplied to Publisher under the terms of this
Agreement.
B. "Manual" shall mean an instruction manual designed to teach an
inexperienced user how to operate the Programs.
C. "Gross Receipts" shall mean the amount collected by Publisher or
any sublicensee of Publisher for each copy of the Program sold
minus freight, allowances and returns.
D. "Errors" shall mean the failure of any of the Programs to operate
in conformance with the Supporting Documentation, the Manuals, or
in accordance with commonly accepted standards for microcomputer
software.
III. ITEMS PROVIDED BY DEVELOPER.
A. Developer shall furnish Publisher with computer readable programs
in object code form and in source code form. These Programs shall
be the (Galileo) Program and additional astronomical data disks
as described in Attachment A, which is hereby incorporated into
this Agreement.
B. Developer shall furnish Publisher a complete user's Manual for
the Programs as described in Attachment 3, which is hereby
incorporated into this Agreement.
C. Developer shall furnish Publisher with the Program registered
user list.
D. Developer shall furnish Publisher with any available performance
data, productivity data, and economic (marketing) data on the
Programs. At Publisher's request, Developer shall also supply
samples of existing advertising, training, or sales material that
may aid Publisher in marketing the Programs.
IV. DELIVERY SCHEDULE.
A. Developer shall provide all items to be furnished under Section
III of this Agreement according to the time schedule set out in
Attachment C, which is hereby incorporated into this Agreement.
V. MAINTENANCE, MODIFICATION, AND TRAINING.
A. For the duration of this Agreement, if Publisher notifies
Developer of program Error(s) or Developer has other reason to
believe that Error(s) exist(s) in the Programs, Developer shall
use his best efforts to verify and fix the Error(s) within 15
business days after notification. If a verified Error cannot be
fixed within business 15 days, Developer shall devote five hours
per day toward correcting the Error until the Error has been
corrected. Developer shall promptly notify Publisher if an Error
cannot be verified within a reasonable time. Error corrections
shall be machine-readable and shall be such that Publisher can
update the Programs immediately. Developer shall be required to
correct the Error(s) in each new version of the program for no
more than 6 months following release of the version.
B. For the duration of this Agreement, Developer shall supply at no
charge to Publisher any program enhancements that improve
performance, utility, or existing syntax, and that improve or
reduce storage requirements.
C. For the duration of this Agreement, Developer shall supply at no
charge to Publisher any new astronomical data disks or other
related accessories that are developed.
D. If Developer fails to comply with any of the provisions of this
Section V by failing to fix Errors or provide upgrades as
specified in this Section V, Publisher may modify the source code
directly and charge the costs of this development to Developer as
specified in Section XV.
E. If Developer fails to comply with any of the provisions of this
Section V, Publisher may withhold royalty payments until the
provisions of this Section V have been met.
VI. EXCLUSIVE LICENSE.
A. Developer hereby grants to Publisher the worldwide, exclusive
license to reproduce, distribute, market, and exploit copies of
the Programs (including all upgrades) and User Manuals for use on
the Commodore Amiga computer. This shall cover English and German
language versions only.
Developer retains the right to license non-English or non-German
language amiga versions. The license granted to Publisher
hereunder shall include the right of Publisher to grant
sublicenses to other parties subject to the limitations of this
license.
B. The license granted under Clause A of this Section shall begin on
the date of signing of this Agreement, and expire five (5) years
from that date.
C. Developer is granted the right to handle Program upgrades to
current owners, from version 2.0 to 3.0. Developer also has the
right to supply the current owners with the new data disks.
VII. ACCEPTANCE.
A. After Developer delivers Programs, Publisher shall have 15
business days to test the Programs. If Developer is not notified
in writing within 20 business days of delivery of the Programs
that the Programs are unacceptable, Publisher shall be deemed to
have accepted the Programs.
B. Publisher shall also be deemed to have accepted the Programs if
the Publisher makes the Programs available for sale.
C. If Publisher determines that Programs are unacceptable, Publisher
shall notify Developer in writing of what changes must be made in
the Programs to make them acceptable. Developer shall have 15
business days from receipt of the notification to make these
changes. If they are not made within the 15 business day period,
Publisher may terminate this Agreement. If after the period of
one (1) year, the program is still deemed unacceptable, this
Agreement is terminated.
VIII. ROYALTIES.
A. Subject to the conditions expressed elsewhere in this Agreement
and in consideration for the rights and license granted herein,
Publisher shall pay Developer a royalty 15% for the first 2,000
units sold, 20% for the next 2,000 units (units 2,001 to 4,000),
and 25% afterwards, on Gross Receipts of the Programs as defined
in Section II of this Agreement. Units are defined as the main
program formerly called "Galileo", and not the extra data disks.
B. Royalty payments for the preceding month shall be made to
Developer within 30 calendar days after the last day of each
month during the term of this Agreement.
C. Notwithstanding the provisions of this section, the minimum
yearly royalty payments for the Programs shall total at least
$11,500 for the English language version. This shall increase to
an additional $11,500 to a total of $23,000 for the first full
year that the German language version is available based on the
date of the English language introduction. For the year of
introduction, the additional $11,500 is prorated based on the
percentage of the year left.
The year ends on each anniversary of the date of acceptance of
the Program. An additional 60 calendar days following the end of
the year shall be given Publisher to make good on the minimum
yearly royalty. Should the royalties and advances accrued or paid
be less than the minimum yearly royalty payments, Publisher shall
pay, in addition to the accrued royalties, the amount necessary
to reach the minimum yearly royalty amount. This additional
amount, if paid, shall be regarded as nonrefundable compensation
in addition to royalties and shall not be considered an advance
on royalties. Alternatively, Publisher may opt to terminate this
Agreement, paying nothing in excess of the accrued royalties.
D. If Publisher is more than 30 calendar days late on any one
payment, Developer may cancel the license granted in Section VI
of this Agreement provided that Developer sends written notice by
certified mail to Publisher of his intention to cancel and
provided that Publisher does not make full payment within 15
calendar days of receipt of notice.
E. Upon execution of this Agreement, Publisher shall pay Developer a
$2,500 advance on royalties.
F. Any advances paid to Developer shall apply to the minimum yearly
royalty as described in Section C above.
G. No further royalty payments shall be made until the amount of
royalties accrued exceeds the amount of the advances made under
Clauses E and F of this section.
H. The advances on royalties shall be refunded to the Publisher if
this Agreement should be terminated as a result of the fault or
breach of Developer before the royalties accrued or paid to
Developer equal or exceed the amount of the advance. Any refund
shall be paid by Developer within 30 calendar days after
Developer receives a written demand for payment from Publisher.
I. Notwithstanding the other clauses of this section, no royalties
shall be paid for dealer demonstration programs, promotional
copies, or review copies which Publisher gives away.
J. No royalties shall be paid to Developer for the sale of any
Manuals unless they are sold or transferred independently of the
Programs. For each copy of the Manual transferred without a
simultaneous transfer of a copy of the Program. Publisher shall
pay Developer a royalty of the current rate of Gross Receipts of
the Manual.
IX. ACCOUNTING.
A. Publisher shall keep accurate records covering all transactions
relating to Program sales and transfers. At the time each royalty
payment is due, Publisher shall furnish Developer with a
statement setting forth the number of Programs sold or
sublicensed, the amount charged, and the Gross Receipts received.
Developer and/or Developer's agent, upon giving 30 calendar days
written notice, shall have the right to inspect these records
during business hours at Publisher's place of business. Developer
agrees to sign or require agent to sign nondisclosure agreements
obligating Developer and agent not to disclose matters that do
not pertain to Developer or Programs.
B. Developer may not audit records that are more than two years old
at the time of the audit.
X. WARRANTIES.
A. Developer warrants that Developer has the legal right to grant
Publisher the license rights as set out in Section VI of this
Agreement and that the exercise of such rights shall not infringe
any third parties' property or personal rights, nor do the
Programs violate the copyright, trademark, or proprietary right
of any third party.
B. Developer warrants that the Programs and the data contained
therein are accurate and not injurious.
C. Developer warrants that there are no pending lawsuits concerning
any aspect of the Programs and that the Programs have not been
published in such a way as to lose any of their copyright
protections.
D. Developer warrants that it owns the copyright to the Programs and
User Manuals that are being licensed to Publisher.
XI. INDEMNIFICATION.
A. Developer shall indemnify Publisher (including Publisher's
officers, employees, agents, and customers) and save and hold
Publisher harmless from and against any damages, liability, loss,
cost, or deficiency (including, but not limited to, reasonable
attorneys' fees and other costs and expenses incident to
proceedings or investigations or the defense of any claims
arising out of, any actual or alleged breach of any
representation, warranty, or covenant of Developer contained in
this Agreement.
XII. COPYRIGHTS AND TRADEMARKS.
A. All copies of the Programs and Manual shall contain an
appropriate copyright notice in the name of the Developer for the
content of the Manual and in the name of the Publisher for the
layout of the Manual.
B. All copies of the Programs and Manual shall contain appropriate
trademark notices in the name of the Developer.
C. If the Programs and Manual have not been registered previously in
the U.S. Copyright Office, Developer will register the
aforementioned items within 15 calendar days of the first
shipment of the Product.
XIII. TERMINATION.
A. Either party shall have the right to terminate this Agreement in
the event that the other party commits a material breach of its
obligations. Intent to terminate shall be made by a written
notice, sent by certified mail to the breaching party at the
address set forth in Section XVI-D hereof, that sets forth the
details of the breach. Termination shall become effective 30
calendar days from the date that the notification of intent to
terminate was mailed, unless the breaching party has corrected
the breach prior to that 30 calendar day period.
B. Notwithstanding Clause A above, termination shall be effective if
one or more of the following events occurs:
1. A petition of bankruptcy is filed by or against Publisher
which is not discharged in 90 calendar days.
2. Publisher notifies Developer in writing that it intends to
cease publishing Programs. Such termination shall be effective
as of the date specified by Publisher.
3. Upon acceptance of Programs the Publisher fails to provide
finished units of the English version ready for sale within 90
calendar days of the signing of this Agreement, or finished
units of the German version for sale within 12 months of the
date of signing.
C. Notwithstanding termination of this Agreement by either party,
the following obligations and rights shall continue in full
force:
1. All obligations under Sections X, XI, XVI and IX shall survive
and continue to bind the parties, notwithstanding the
termination.
2. Persons and companies who obtained the Programs prior to
termination and under paragraph XIII.C.4 below shall continue
to have the right to use the Programs.
3. Publisher shall honor any remaining obligations under the
section of this Agreement titled "Royalties."
D. In the event that this Agreement is terminated because of a
breach of this Agreement by Developer, Publisher may continue to
reproduce and to sell the Programs and Manuals for the remainder
of the term otherwise applicable.
E. In the event that this Agreement is terminated because of a
breach of this Agreement by Publisher, the exclusive license as
specified in Section VI shall revert to Developer. Developer
shall have the right for 60 calendar days after termination to
purchase all unsold copies of the Program at the manufacturing
cost, and any packaging materials and manuals at manufacturing or
printing cost. F.O.B. point of shipment from the Publisher. Under
such terms of purchase, the Developer would have the right to
distribute Programs and packaging with the Publisher's name. If
Developer fails to purchase the unsold copies, the Publisher may
continue to sell the Programs and Manuals, and continue to honor
the current royalty percentage.
XIV. ARBITRATION.
A. Any dispute relating to the interpretation or performance of this
Agreement shall be resolved at the request of either party
through binding arbitration. Arbitration shall be conducted in
the city where Publisher's headquarters is located, which is
currently San Luis Obispo, California. In accordance with the
then-existing rules of the American Arbitration Association,
judgment upon any award by the arbitrators may be entered by the
state or federal court having jurisdiction. The parties intend
that this Agreement to arbitrate be irrevocable.
XV. SOURCE CODE.
A. Developer will provide to Publisher in computer readable form,
the most current version of the source code (including
programmer's notes and comments) for the Programs within five
business days of acceptance of the Programs, and within five
business days of acceptance of any upgrades of the Programs.
B. Publisher shall have the right to use or modify the source code
to develop, produce, and sell new versions of the Programs after
Publisher notifies Developer in writing of a breach of Section V
of this Agreement that allows Publisher to use the source code,
unless Developer has corrected the breach within 30 business days
of receipt of the notification.
C. If Publisher gains the right to use the source code, Publisher
may modify the source code to correct Errors or develop
enhancements and upgrades to the Programs, which Publisher may
then reproduce, distribute, and market as specified in this
Agreement. All development costs, including a programmer's fees
or salary will be charged to Developer. These costs will be
deducted from royalties.
D. Publisher may withhold royalty payments during the time that it
is modifying the source code and until a new version of the
Program that is being modified has been released. At the time of
release, Publisher shall determine the costs of development,
deduct 1/3rd that amount from royalties due, and pay Developer
the difference (or withhold future royalty payments until the
development costs haves been recouped). All accrued royalties
shall be counted toward the minimum yearly royalty as specified
in Section VII, even if those royalties were not directly paid to
Developer but went to pay for development of the Programs as
provided in paragraph XV.C above.
E. At the expiration of this Agreement, all Program modifications
made by the Publisher shall become the property of the Developer,
provided that the Developer is in full compliance with this
Agreement and that the Developer pays any unrecouped development
costs (development costs that have not yet been fully deducted
from royalties as provided in paragraph XV.C above) to Publisher.
XVI. GENERAL.
A. Publisher shall have full freedom and flexibility in marketing
efforts for the Programs, including the freedom to decide its
method of marketing, terms, conditions, and prices.
B. Publisher shall provide Developer an electronic version of the
Program registered user list with each royalty payment. Developer
may not make use of this information unless and until this
Agreement is terminated.
C. Neither party may sell, transfer, or assign any rights or
obligations under this Agreement without the prior written
consent of the other party, except that Publisher may assign this
Agreement as part of a sale or transfer of substantially all the
assets to a third party.
D. Developer has the right to market and sell Programs for other
languages and computer versions not specified in this Agreement
under the name selected for the Program.
E. Any notice from one party to the other required by this Agreement
shall be deemed made on the date of mailing if sent by certified
mail, return receipt requested and mailed to the address
specified below.
Virtual Reality Laboratories, Inc.
2341 Ganador Court
San Luis Obispo, CA 93401
Attn: Lance Woeltjen
Michael Smithwick
035 Aster Avenue, #1117
Sunnyvale, CA 94086
F. This Agreement shall be construed under the law of the State of
California. Both parties waive any objection to the personal
jurisdiction and venue of the State and Federal Courts of the
State of California.
G. This Agreement sets forth the entire understanding between the
parties: it may be changed or modified only in writing and must
be signed by both parties.
H. This Agreement is binding upon and shall inure to the benefit of
the legal successors, heirs, administrators, and permitted
assigns of the parties.
I. If any provision or term of this Agreement is held to be invalid,
void, or unenforceable, the remainder of the provisions shall
remain in full force and effect and shall in no way be affected,
impaired, or invalidated.
The parties set their hands and seals to this Agreement as of the day and year
written below.
_________________________ Developer ______________________ Publisher
__________________ Date ____________________ Date
Attachment A
The programs to be supplied to Publisher are:
1. The Program version 3.0 with all of the features in the "Version 2.1 Beta"
version that has been supplied to Publisher, but thoroughly tested.
2. An installation program for installing Program on a hard disk.
3. The Yale Bright Star Catalog that is currently available.
4. The SkyMap Star Catalog.
5. The first digitized data disk consisting of 200 digitized stellar objects.
6. A self-running demonstration of Program.
7. Additional data disks.
8. The complete, compilable source code for the Program.
Attachment B
The Manual to be furnished shall include:
1. An ASCII text file on an Amiga or IBM disk containing the entire
contents of the Manual that is currently on the market and including any
modifications necessary for version 3.0. This text should not include page
numbers but should including markings for chapter headings, subheadings, etc.
This text should also including markings specifying words to be included in the
Index.
2. A printed copy of the text file with markings indicating any special
provisions.
3. Illustrations, preferably camera ready.
Attachment C
The Programs shall be delivered to Publisher according to the following
schedule:
Upon signing this Agreement - the most current version of Program
and the User Manual
_____________ - the final User Manual
_____________ - A final, tested version of Program
for approval
_____________ - A sample digitized data disk for
approval
_____________ - The final version of Program programs
The Program source code
_____________ - The Yale data disk
The SkyMap data disk
The digitized data disk
First Amendment to the License Agreement signed September 2, 1989
between R. Michael Smithwick, Developer, and Virtual Reality Laboratories, Inc.,
Publisher.
The Developer and Publisher amend the September 2, 1989 License
Agreement as follows:
The first paragraph of VIII C shall be deleted and replaced with the
following:
"Notwithstanding the provisions of this section, the minimum yearly
royalty payment for the Programs shall total at least $13,500 for the English
and German language versions for the first year. Each year thereafter, the
minimum yearly royalty payment shall total at least $11,500 per year."
XVI D shall be deleted and replaced with the following:
"Developer has the right to market and sell Programs for other
languages and computer versions not specified in this agreement under the name
selected for the Program, and the Publisher has the first right of refusal for
such other languages and computer versions."
The parties set their hands and seals to this amendment to the
Agreement as of the day and year written below:
_______________________ Developer _____________________ Publisher
_________________ Date __________________ Date
Attachment D
The Programs shall be delivered to the Publisher, and royalty advances
shall be paid by Publisher upon successful completion of the milestones,
according to the following milestone schedule:
Event Milestone Date Royalty Advance
- - ----- -------------- ---------------
User Manual Complete ____________ ______________
Beta Version of Program ____________ ______________
Program Duplication Master ____________ ______________
Expansion Disks ____________ ______________
Program Source Code ____________ ______________
Second Amendment to the License Agreement signed September 2, 1989
between R. Michael Smithwick, Developer, and Virtual Reality Laboratories, Inc.,
Publisher.
The Developer and Publisher amend the September 2, 1989 License
Agreement as follows:
Section III shall be amended to add paragraph E which states:
III. E. Developer shall furnish Publisher with items listed in III A.B.
and C. suitable to make the program useable on IBM PC's and IBM PC clones and
look alikes.
Section IV shall be amended to add a paragraph B which states:
IV. B. Developer shall provide all items to be furnished under Section
III of this Agreement according to the time schedule set out in Attachment D.
which is hereby incorporated into this Agreement.
The first paragraph of Section VI. A. shall be replaced with the
following paragraph:
Developer hereby grants to Publisher the worldwide, exclusive license
to reproduce, distribute, market, and exploit copies of the Programs (including
all upgrades) and User Manuals for use on the Commodore Amiga computer and the
IBM PC computer including all PC clones and PC look alikes. This shall cover the
English and German language versions only.
Section VIII. A. shall add the following sentence at the end of
paragraph A:
A royalty of 25% of Gross receipts for sales of Program for IBM PC, PC
clone, and PC look alikes shall be paid by the Publisher to the Developer.
Section VIII. C. shall add the following sentence at the end of
paragraph C:
A separate minimum annual royalty of $20,000 shall be paid by the
Publisher to the Developer for sales of Program for IBM PC, PC clone, and PC
look alikes.
Section VIII. E. shall add the following sentence at the end of
paragraph E:
Upon the execution of this second amendment to the License Agreement,
Publisher agrees to pay royalty advances to the Developer, contingent upon
successful milestone completion, as set out in Attachment D.
The parties set their hands and seals to this second amendment to the
Agreement as of the day and year written below:
_______________________ Developer _____________________ Publisher
_________________ Date __________________ Date
Third Amendment to the License Agreement signed September 2, 1989
between R. Michael Smithwick, Developer, and Virtual Reality Laboratories, Inc.,
Publisher.
The Developer and Publisher amend the September 2, 1989 License
Agreement as follows:
The purpose of this Amendment is to provide a 6 month period during
which the Developer receives royalties, including advances if necessary, of
$3,000 per month so that he may complete the port of Distant Suns to the IBM
platform granted in the second amendment and so that he may complete a version 4
of Distant Suns for the Amiga platform. It is envisioned that such work will be
complete in 4 months, on or around April 30, 1991. The extra two months are for
unexpected contingency and to allow the Publisher to release version 4 and the
IBM port thereby providing the Developer with an enhanced royalty stream by the
time this amendment expires.
It is the further purpose of this amendment to hire the Developer for
the six month period as an employee of Virtual Reality Laboratories, Inc. with a
salary of $1,000 per month with three deductions. The total cost of such salary
shall reduce the $3,000 per month royalty by the exact amount of such cost.
Therefore, the Developer agrees to make his best effort to complete a
port of Distant Suns to the IBM platform and version 4 of Distant Suns by June
30, 1990.
Therefore, the Publisher agrees to pay at least $3,000 per month of
royalty and royalty advance as necessary, commencing on the last day of
December, 1990 and ending after 6 payments on the last day of May, 1991. If the
amount of royalty earned during any month is less than $3,000, the Publisher
will advance the amount necessary to make up $3,000. The amount of the advance
will be made up on any months which exceed $3,000 before May 31, 1991 if such
months occur. If not, the amount of the advance shall be made up as quickly as
possible by the royalty stream after May 31, 1991. Excess royalty, above $3,000,
if earned during the period of the amendment will be retained by the Publisher
and used to make up the $3,000 amount if a subsequent short fall arises. If
there is any excess royalty due on May 31, 1991 it will be paid on that date.
The Developer desires to be hired, and the Publisher agrees to hire R.
Michael Smithwick, commencing January 1, 1991 for a period of 6 months ending
June 30, 1990. Payment will be in advance each month and shall be comprised of:
$852.58 paycheck to Mike Smithwick
$.92 California state income tax withholding
$61.00 Federal income tax withholding
$-6.50 Employee FICA contribution
$9.00 State disability insurance
$-6.50 Employer FICA contribution
$3.00 SUI
$35.00 FUTA
$1,880.50 Royalty
----------
$3,000.00 Charge to royalty account per month
The distribution above is for a single person with one deduction
earning a salary of $1,000 per month in the State of California.
In agreement hereto, Publisher and Developer set their hand herewith:
- - ---------------------------- -------------------------------
R. Michael Smithwick Lance H. Woeltjen, President
Developer Virtual Reality Laboratories, Inc.
Publisher
- - --------------------- -----------------------
Date Date
Fourth Amendment to the License Agreement signed September 2, 1989
between R. Michael Smithwick, Developer, and Virtual Reality Laboratories, Inc.,
Publisher.
The Developer and Publisher amend the September 2, 1989 License
Agreement as follows:
The purpose of this Amendment is to encourage the sales of Space
Visions as expansions to Distant Suns 4.0 by reducing its price. The Developer
agrees to reduce the royalty amount due for sale of Space Visions to 20%. The
Publisher agrees to make a separate accounting of Space Visions for royalty
calculation purposes and that all other versions of Distant Suns and Distant
Suns expansions shall retain a royalty of 25% as agreed in the original License
Agreement.
In agreement hereto, Publisher and Developer set their hand herewith:
- - ---------------------------- -------------------------------
R. Michael Smithwick Lance H. Woeltjen, President
Developer Virtual Reality Laboratories, Inc.
Publisher
- - --------------------- -----------------------
Date Date
Fifth Amendment to the License Agreement signed September 2, 1989
between R.Michael Smithwick, Developer, and Virtual Reality Laboratories, Inc.,
Publisher.
The Developer and Publisher amend the September 2, 1989 License
Agreement as follows:
Royalty due for the net sales of Distant Suns for the IBM PC Windows
platform shall be paid as follows:
16.67% to Mike Smithwick
8.33% to Zack Gray
Mike Smithwick will provide Zack Gray's address before the first
royalty payment is due on the Windows version, or VRLI will send Zack Gray's
check care of Mike Smithwick.
In agreement hereto, Publisher and Developer set their hand herewith:
- - ---------------------------- -------------------------------
R. Michael Smithwick Lance H. Woeltjen, President
Developer Virtual Reality Laboratories, Inc.
Publisher
- - --------------------- -----------------------
Date Date
Sixth Amendment to the License Agreement signed September 2, 1989
between R. Michael Smithwick, Developer, and Virtual Reality Laboratories, Inc.,
Publisher.
The Developer and Publisher amend the September 2, 1989 License
Agreement as follows:
Royalty due for the net sales of Distant Suns and Space Visions for all
platforms shall be capped at 20%. The split of royalty for sales of Distant Suns
Windows shall be:
10.00% to Mike Smithwick and 10.00% to Zack Gray.
In return for the cap of the royalty rate at 20%, Virtual Reality
Laboratories, Inc. Agrees to pay Mike Smithwick 5% royalty above the cap in
common stock of Virtual Reality Laboratories, Inc. as follows:
An accrual of the cash value of the 5% royalty will be made. On
December 31st and June 30th of each year the stock will be valued by dividing
the number of outstanding shares into the last 12 months sales to provide the
price per share. The cash value of the accrued royalty will be divided by the
price per share to yield the number of shares which will be accrued. Shares will
be issued upon the sooner of the first private offering of VRLI stock or the
expiration of this agreement on September 2, 1994 or upon its renewal. Virtual
Reality Laboratories, Inc. Shall have first right of refusal to repurchase VRLI
stock which Mike Smithwick desires to sell. Transfer of stock shall be
restricted by applicable Federal and State laws and regulations. Effective date
of this amendment shall be March 31, 1992.
In agreement hereto, Publisher and Developer set their hand herewith:
- - ---------------------------- -------------------------------
R. Michael Smithwick Lance H. Woeltjen, President
Developer Virtual Reality Laboratories, Inc.
Publisher
- - --------------------- -----------------------
Date Date
Seventh Amendment to the License Agreement signed September 2, 1989
between R. Michael Smithwick, Developer, and Virtual Reality Laboratories, Inc.,
Publisher.
The Developer and Publisher amend the September 2, 1989 License
Agreement as follows:
The term of the Agreement is extended, without lapse, for seven years,
until September 2, 2001.
Royalty for continuing sales of Distant Suns will be split 7.5% to Mike
Smithwick and 7.5% to Zachary Gray. Publisher will calculate stock earned by
Mike Smithwick and Zachary Gray and provide amounts not later than August 4,
1995 and certificates not later than August 18, 1995.
Royalties earned for First Light shall be 13% to Mike Smithwick, 3% to
Clint Woeltjen and 1/2% to John Hinkley. If Clint Woeltjen does not provide a
simplified Vistapro rendering engine for First Light within 6 months of the date
that Publisher accepts a 32 bit version of First Light, then his royalty shall
be reduced to 1.5%.
The Publisher's agreement to provide $4,500.00 royalty plus pre-paid
royalty during the development of First Light shall conclude with a $5,500
royalty plus pre-paid royalty payment at the end of July, 1995. Publisher will
return half of any accrued overages in August, 1995 and the balance in
September.
- - ---------------------------- -------------------------------
R. Michael Smithwick Lance H. Woeltjen, President
Developer Virtual Reality Laboratories, Inc.
Publisher
- - --------------------- -----------------------
Date Date