EXHIBIT 10.9
License Agreement
I. INTRODUCTION
This is a licensing agreement between Virtual Reality Laboratories, Inc.
(Publisher) 2341 Ganador Court, San Luis Obispo, CA 93401 and Hypercube
Engineering, a partnership, (Developer) 140 Barber Street, Livermore, CA 94550.
In this licensing agreement, the Developer grants the Publisher rights to
produce and sell the Developer s programs currently called Fractal Flights and
Vista.
II. DEFINITIONS
A. Supporting Documentation shall mean information that describes
the format, organization, and content of machine readable diskettes to be
supplied to the Publisher under the terms of this Agreement.
B. "Manual" shall mean an instruction manual design to teach an
inexperienced user how to operate the Programs.
C. "Gross Receipts" shall mean the amount collected by the
Publisher for each copy of the program minus freight and handling paid by the
Publisher 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 THE DEVELOPER
A. Developer shall furnish Publisher with computer readable
programs in object code form and source code form. These programs shall be
Fractal Flights and Vista.
B. Developer shall furnish Publisher a complete User's Manual for
Fractal Flights and Vista in ASCII files on diskette.
C. Developer shall furnish the Publisher with any available
performance data. training data, and economic or marketing data which the
Developer has for the programs which may be used by the Publisher to increase or
enhance the sales of the programs.
IV. DELIVERY SCHEDULE
A. Developer shall provide Vista by April 16, 1990; and shall
provide Fractal Flights no later than December 31, 1990. Developer shall notify
the Publisher of a firm date for delivery of Fractal Flights no later than
June 1, 1990.
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V. MAINTENANCE, MODIFICATION, AND TRAINING
A. For the duration of this Agreement, if Publisher notifies
Developer of program Errors) or if Developer has other reason to believe that
Error(s) exist(s) in the Programs, Developer shall use his best efforts to
verify and repair the Error(s) within 15 days after notification in writing by
the Publisher. If a verified Error cannot be repaired within 15 days, Developer
shall devote full time to repair of the Error(s) until Error(s) has(have) been
corrected. Developer shall promptly notify the 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 Errors) in each new version of the programs for
no more than 6 months after the following release of the new version for sale.
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. If Developer fails to comply with any provisions of Section V
by failing to repair Error(s) or provide upgrade versions as specified in
Section V, then the Publisher may modify the source code directly and charge the
expense of this development not to exceed $500 per instance, to Developer as
specified in Section XV.
VI. EXCLUSIVE LICENSE
A. Developer hereby grants to the Publisher the worldwide,
exclusive license to reproduce. distribute, market. and otherwise exploit copies
of the Programs and User Manuals for use on Commodore products. IBM PC's under
MS-DOS. Apple Products, during the term of this Licensing Agreement.
Notwithstanding the above list of platforms, Publisher shall leave first right
of refusal for any port produced for the programs by the Developer. The License
granted to the Publisher hereunder shall include the right of the Publisher to
grant sublicenses to other parties subject to the limitations of this license.
B. The license granted under paragraph A of Section VI shall
begin on the date of signing this Agreement, and it shall expire seven (7) years
from that date. The Developer is not required to provide any ports or programs
beyond the Commodore platform.
VII. ACCEPTANCE
A. After the Developer delivers the Programs, Publisher shall
have 30 days to test the Programs. If Developer is not notified in writing
within 45 days of delivery of the Programs that the Programs are unacceptable,
Publisher shall be deemed to have accepted the Programs.
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B. Publisher shall be deemed to have accepted the Programs if the
Publisher is selling the Programs.
C. If the Publisher deems the Programs unacceptable, Publisher
shall notify Developer in writing of what changes must be made in the Programs
to make them acceptable. Developer shall have 15 days from the receipt of the
notification to make the required changes. or the Publisher may terminate this
Agreement, If after the period of one (1) year, the Programs are 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 of 10% for the first $100,000 of Gross
Receipts from the sale and/or sublicensing of the Programs; a royalty of 15% for
Gross Receipts from $100,001 to $1,000,000; and a royalty of 20% for gross
Receipts of $1,000.001 and greater.
B. Royalty payments shall be calculated monthly by the Publisher.
and the amount calculated for the month shall be due and payable 30 days after
said calculation.
C. If Publisher is more than 30 days late on any payment, the
Developer may cancel the license granted in Section VI of this Agreement
provided that the Developer sends written notice of his intent to cancel by
certified mail to the Publisher, and provided that the Publisher fails to make
payment in full within 15 calendar days of receipt of notice.
D. Upon execution of this Agreement. Publisher shall pay
Developer a $1,000 advance on royalties as earnest money to secure the
Agreement.
E. The advance on royalty shall be refunded to the Publisher by
the Developer if the Agreement is terminated by the Developer before royalties
are earned from Gross Receipts. Such refund will be made within 30 days of such
termination.
F. Notwithstanding the other clauses of this section. no
royalties shall be paid for dealer demonstration programs, promotional copies,
copies traded for advertising of the Programs, or review copies given away by
the Publisher.
G. Minimum annual royalty paid for the Programs shall be $10,000.
IX. ACCOUNTING
A. Publisher shall keep accurate records covering all
transactions related to sale of the Programs. At the time each royalty payment
is due. Publisher shall furnish Developer with a statement setting forth the
Gross Receipts received from sales and sublicensing of the Programs. Developer,
upon giving 30 days written notice. shall have the right to inspect the
accounting records of the Publisher related to the sale and sublicensing of the
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Programs. This inspection shall be at the Publisher's place of business
indicated in Section 1. Developer agrees to sign nondisclosure statements
obligating the Developer not to disclose matters not pertaining to the licensed
Programs of the Developer. Alternatively, Developer may request, and Publisher
shall provide, photocopies of accounting records related to the sale of the
programs. Such photocopies shall be provided within 10 days.
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 it has the legal right to grant
Publisher the license rights set forth in Section VI, and that the exercise of
such rights shall not infringe any third party property or personal rights.
B. Developer warrants that there are no pending lawsuits
pertaining to any aspect of the Programs and that the Programs have not been
published in any way such as to lose their copyright protections.
C. Developer warrants that it owns the copyright to the Programs
and User Manuals that are being licensed to the Publisher.
XI. INDEMNIFICATION
A. Developer shall indemnify Publisher, and save and hold
Publisher harmless from and against any damages. liability, loss, cost, or
deficiency arising out of any misrepresentation. warranty, or covenant of
Developer contained in this Agreement.
XII. COPYRIGHTS AND TRADEMARKS
A. All copies of the Programs and User Manuals shall contain an
appropriate copyright notice in the name of the Developer for content of the
User Manuals and Programs.
B. All copies of the Programs and User Manuals shall contain
trademark notices in the name of the Publisher for the trade names of the
Programs which are currently Vista and Fractal Flight, but which may be changed
at the sole discretion of the Publisher for marketing purposes.
C. If the Programs and User Manuals have not been registered
previously in the U. S. Copyright Office. Developer will register the Programs
and User Manuals within 15 days of the first shipment of the Programs for sale.
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XIII. TERMINATION
A. Either party shall have the right to terminate this Agreement
in the event the other party commits a material breach of its obligations.
Intent to terminate shall be made by written notice, sent by certified mail to
the breaching party at the address set for in Section 1. Termination shall
become effective 30 days from the date of mailing the notification of intent to
terminate unless the breaching party has corrected the breach prior to the end
of that 30 day period,
B. Notwithstanding Section XIII; paragraph A, termination shall
be effective if one or more of the following events occurs:
1. Publisher notifies the Developer in writing that it intends
to cease publishing the Programs. Such termination shall be effective as of the
date specified by the Publisher.
2. Publisher falls to provide Programs for sale within 120
days after acceptance of the Programs as defined in Section VI 1.
C. In the event that this Agreement is terminated through breach
by the Developer, Publisher may continue to reproduce and sell the Programs and
User Manuals for the remainder of the term otherwise applicable.
D. In the event that this Agreement is terminated through breach
by the Publisher. the exclusive license shall revert to the Developer.
XIV. ARBITRATION
A. Any dispute relating to the interpretation or performance of
this Agreement shall be resolved at the request of either party though binding
arbitration. Arbitration shall be conducted in the city of 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 shall be irrevocable.
XV. SOURCE CODE
A. Developer will provide to the Publisher in computer readable
form, the most current version of the source code, including programmer's notes
and comments, for the Programs within five days of acceptance of the Programs
and upgrades of the Programs.
B. Publisher shall have the right to use or modify the source
code to develop, produce, and sell new versions (subject to the limitations of
Section XV, paragraph F) of the Programs after Publisher notifies the Developer
in writing of a breach of Section V of this Agreement, unless the Developer has
corrected the breach within 15 days of receipt of the notification.
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C. If Publisher gains right to use the source code, Publisher may
modify the source code to correct Errors or develop enhancements and upgrades to
the Programs, which the Publisher may then reproduce, distribute, and market as
specified in this Agreement. All development costs, including programmer's fee
or salary, up to the maximum indicated in section 5 paragraph C. shall be
deducted from the royalty otherwise due to the Developer.
D. Publisher may withhold royalty payments during the time that
it is modifying the source code until a new version of the Program using the
modified source code is released. Royalties, up to the maximum indicated in
section 5 paragraph C, withheld or deducted under Section XV paragraphs C and D
shall be counted toward the minimum annual royalty as specified in Section VIII.
E. At the expiration, or termination by the Publisher, 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 the Publisher any unrecouped
development cost, up to the maximum indicated in section 5 paragraph C, not yet
deducted from royalties as provided in Section XV paragraph C.
F. Software and source codes shall remain the intellectual
property of Developer. Any source codes provided to Publisher are for the sole
purpose of recreating the executable form of the software, or for fixing minor
bugs. Any modifications or enhancements, or other changes (other than minor bug
fixes) to the software are to be made at Developer discretion. No part of the
source code may be used in, or used to product, any other programs or products,
without the express written permission of the Developer. Publisher will not
disclosure source code to any third parties without signed non-disclosure
documents which will be immediately mailed to Developers.
XVI. GENERAL
A. Publisher shall have full freedom and flexibility in
determining how the Programs should be marketed, including, but not limited to,
freedom to decide its method of marketing, price and trade names for the
Programs.
B. Neither party may sell, transfer, or assign any rights or
obligations under this Agreement, without prior written consent of the other
party, except that the Publisher may assign this Agreement as part of a sale or
transfer of substantially all its assets to a third party.
C. 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 addresses specified in Section 1.
D. This Agreement shall be construed under the law of the State
of California, United States of America. Both parties waive any objection to the
personal jurisdiction and venue of the State and Federal courts of the State of
California.
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E. 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.
F. This Agreement is binding upon and shall inure to the benefit
of the legal successors, heirs, administrators, and permitted assigns of the
parties.
G. 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:
_____________________________________ Date ________________________________ Date
_____________________________________ ____________________________________
Mr. Brick Eksten Mr. Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
The Developer The Publisher
_____________________________________ Date
_____________________________________
John Hinkley
Hypercube Engineering
The Developer
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AMENDMENT A TO LICENSE AGREEMENT
Section III. ITEMS PROVIDED BY THE DEVELOPER shall be amended to include
Vistapro.
Section III. ITEMS PROVIDED BY THE DEVELOPER shall be amended to make it
clear that the Developer's responsibility is limited to providing an English
language User's Manual. It shall be the responsibility of the Publisher to make
translations to any other language.
Section VIII. ROYALTIES shall be amended to state that the Publisher
shall pay Developer royalties on any foreign language versions of Vista or
Vistapro published. Section VIII shall be further amended to state that the
Publisher shall pay Developer royalties on any expansion disks which it
publishes. whether or not produced by the Developer. for use on Vista or
Vistapro,
Section VIII. ROYALTIES shall be amended to state that the Publisher
shall pay the Developer a royalty of 15% for Gross Receipts received from the
date November 1, 1990 until $1,000.000 of Gross Receipts are received.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF THE DAY AND
YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
Brick Eksten Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
The Developer The Publisher
_____________________________________ Date
_____________________________________
John Hinkley
Hypercube Engineering
The Developer
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AMENDMENT B TO LICENSE AGREEMENT
Beginning with the royalty payment due 2/28/91, Virtual Reality
Laboratories, Inc. agrees to pay the sum of the royalty due and a prepaid
royalty amount so that the sum of the royalty due and the prepaid amount is
$6,000 per month for 6 months including the 2/28/91 payment.
The prepaid royalty amount will be recouped from royalty amounts due
after the first sales of the IBM PC version have been collected. An amount of
20% per month of the royalty due to Hypercube Engineering after the first sales
of an IBM PC version have been collected will be used to pay down the prepaid
royalty accumulated until all prepaid royalty has been recouped by Virtual
Reality Laboratories Inc.
If Hypercube Engineering should fail to produce a marketable IBM PC
version of VISTA by August 31, 1991, then Virtual Reality Laboratories, Inc.
will begin recouping prepaid royalties at 20% of royalties due per month
beginning August 31st.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
Brick Eksten Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
The Developer The Publisher
_____________________________________
Date
John Hinkley
Hypercube Engineering
The Developer
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AMENDMENT C TO LICENSE AGREEMENT
Virtual Reality Laboratories, Inc. shall pay a royalty rate of 22.5% on
gross receipts as defined above for Pathmaker for Vista and Vistapro. This
royalty rate is limited to Pathmaker.
Hypercube Engineering shall deliver the software and any documentation
required to use the software. Pathmaker shall be supported in the same manner as
Vistapro and Vista by Hypercube Engineering.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
Brick Eksten Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
The Developer The Publisher
_____________________________________ Date
_____________________________________
John Hinkley
Hypercube Engineering
The Developer
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AMENDMENT D TO LICENSE AGREEMENT
Virtual Reality Laboratories, Inc. "VRLI" shall, at its sole expense,
undertake a port of the Vistapro program to the Apple Macintosh platform.
Accordingly, it shall assume the responsibilities of the Developer for this
port, and, in consideration of producing this port, royalties (as set forth in
the master agreement) for the Macintosh port shall be apportioned as follows:
50% Virtual Reality Laboratories, Inc.
40% John Hinkley, Hypercube
10% Brick Eksten, Hypercube
The copyright for the Vistapro Macintosh port shall remain with John Hinkley,
Hypercube Engineering.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
John Hinkley Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
_____________________________________ Date
_____________________________________
Brick Eskten
Hypercube Engineering
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AMENDMENT E TO LICENSE AGREEMENT
Virtual Reality Laboratories, Inc. "VRLI" shall prepay David Warthen
$3000 per month prepaid royalty for a period of six months beginning February
15, 1993 to undertake a port of the Vistapro PC program to the Microsoft
Windows platform. In consideration of producing this port, royalties (as set
forth in the master agreement) for the Windows port shall be apportioned as
follows:
50% John Hinkley
50% David Warthen
The prepaid royalty shall be recovered from sales before royalties are
distributed.
The copyright for the Windows port shall remain with John Hinkley.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
John Hinkley Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
_____________________________________ Date
_____________________________________
David Warthen
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AMENDMENT F TO LICENSE AGREEMENT
Royalties (as set forth in the master agreement) for the Amiga Vista
Lite port shall be apportioned as follows:
47.5% John Hinkley
47.5% Clint Woeltjen
5.0% Brick Eksten
There are no prepaid royalties involved in this port. Brick Eksten
verbally agreed with VRLI, to take 5% of royalties due on this port as an
honorarium.
The copyright for the Vista Lite port shall remain with John Hinkley.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
John Hinkley Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
_____________________________________ Date
_____________________________________
Clint H. Woeltjen
Chaocity
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AMENDMENT G TO LICENSE AGREEMENT
Virtual Reality Laboratories, Inc. "VRLI" shall pay Michael Bass $10,000
and royalties as defined below to undertake a port of the Vistapro program to
the Apple Macintosh platform. In consideration of producing this port,
royalties (as set forth in the master agreement - currently 20% of adjusted
sales) for the Macintosh port shall be apportioned as follows:
50% John Hinkley
25% Michael Bass
Amendment G supercedes and replaces Amendment D. Brick Eksten has
verbally given notice to VRLI on November 1, 1993 that he releases any claim
to the port set forth in Amendment D, and that he will return equipment to VRLI
with the understanding that the port will be reassigned. He never returned a
signed copy of Amendment D, so that amendment was never in force.
The copyright for the Vistapro Macintosh port shall remain with
John Hinkley.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
John Hinkley Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
_____________________________________ Date
_____________________________________
Michael A. Bass
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AMENDMENT H TO THE LICENSE AGREEMENT
John Hinkley, majority holder in the license of Vistapro PC DOS CD ROM,
hereby grants license to VRLI to publish Vistapro PC DOS CD ROM in accordance
with the master license agreement to which this amendment is attached. VRLI
agrees royalties on adjusted gross sales shall be paid at the following rates
to the following persons:
John Hinkley 14.91% Part Vistapro + part Makepath
Brick Eksten 1.52% Part Vistapro
Vince Lee .42% Part Makepath
Jean Ames 1.55% Part Vistamorph
Tim Finer .39% Part Vistamorph
Copyrights in each of the programs shall remain in the name of the person
holding them for each separate program.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
John Hinkley Lance H. Woeltjen, President
Hypercube Engineering Virtual Reality Laboratories, Inc.
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AMENDMENT "I" TO THE LICENSE AGREEMENT
Effective May 1, 1995, VRLI agrees to pay John Hinkley, the majority
holder in the license of Vistapro a royalty of 45% of any republished versions
of Vistapro. Said 45% is to be paid to John Hinkley for his portion of sales
only since a representation was made to him prior to this agreement and because
John Hinkley has explicitly asked for this and because he has offered to reduce
the overall rate of royalty for Vistapro from 20% to 18% herewith. The 45%
royalty rate on republished items is for John Hinkley only and is not extended
to those who have ported other versions of Vistapro, but John Hinkley will
maintain the 45% rate for his portion of shared royalty streams. This agreement
does not reflect the general policy of VRLI, but is being extended to John
Hinkley because of the verbal understanding between VRLI and John Hinkley in
1990. This agreement is not retroactive but begins with royalty earned May 1,
1995, The term of this agreement is extended 3 years from the date of its
current termination.
VRLI will not place Vistapro in a shell corporation.
A republished version is defined as a version of Vistapro which has been
localized and in which the republisher has been allowed a license to reproduce
Vistapro, its manual and its box. This currently applies to Visual Media in
France and, shortly, to Al Soft in Japan. Not included are down level demo
versions included with magazines and books where the primary purpose is
advertising and producing an upgrade path to the current VRLI version of the
program.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AMENDMENT AS OF
THE DAY AND YEAR WRITTEN BELOW:
_____________________________________ Date ________________________________ Date
_____________________________________ _____________________________________
John Hinkley Lance H. Woeltjen, President
Virtual Reality Laboratories, Inc.
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