EXHIBIT 10.10
License Agreement
I. INTRODUCTION
This is a licensing agreement between Virtual Reality Laboratories,
Inc., (Publisher) 2341 Ganador Court, San Luis Obispo, CA 93401, and Jean Ames,
(Developer), and Lance Woeltjen (Designer). Hereinafter, the Designer and
Developer shall be jointly referred to as "Developer." In this licensing
agreement, the Developer grants the Publisher rights to produce and sell the
Developer's program called Formbuster.
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 designed to teach an
inexperienced user how to operate the Program.
C. "Gross Receipts" shall mean the amount collected by the Publisher
for each copy of the program minus channel promotion, freight and handling paid
by the Publisher, and returns.
D. "Errors" shall mean the failure of any of the Program to operate in
conformance with the Supporting Documentation, the Manual, or in accordance with
commonly accepted standards for microcomputer software.
III. ITEMS PROVIDED BY THE DEVELOPER
A. Developer shall furnish Publisher with computer readable program in
object code form and source code form. This program shall be Formbuster.
B. Developer shall furnish Publisher a complete User's Manual for
Formbuster.
C. Developer shall furnish the Publisher with any available performance
data, training data, and economic or marketing data which the Developer has for
the program which may be used by the Publisher to increase or enhance the sales
of the program.
IV. DELIVERY SCHEDULE
A. Formbuster shall be delivered for publication on or before June
1,1993.
V. MAINTENANCE, MODIFICATION, AND TRAINING
A. For the duration of this Agreement, if Publisher notifies Developer
of program Error(s) or if Developer has other reason to believe that Error(s)
exist(s) in the Program, 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 Program immediately. Developer
shall be required to correct the Error(s) in each new version of the program 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
Program and User Manual for use on Commodore products, IBM PC's under MS-DOS and
Windows, Apple Products, during the term of this Licensing Agreement.
Notwithstanding the above list of platforms, Publisher shall have 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 PC MS-DOS platform.
VII. ACCEPTANCE
A. Publisher shall be deemed to have accepted the Program if the
Publisher is selling the Program.
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 15% for the Gross Receipts from the sale and/or
sublicensing of the Program.
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. Any prepaid royalty will be collected by the Publisher before any
royalty is paid to the Developer.
E. Developer agrees to loan all amounts of royalty earned back to the
Publisher at prime rate established at the date of the first royalty due and
annually thereafter. Publisher agrees to pay the Developer 25% of royalty and
interest accrued for each year through December 31st, no later than April 1st of
the following year in order to pay taxes due on the royalty and interest amounts
earned. Such loaning of royalty earned shall continue for a period of 36 months
from the first date that prepaid royalty is repaid and a royalty amount becomes
due to the Developer. At the end of the 36 month period the balance in the
account will be converted into a 3 year long term note paying prime rate plus
6%. Interest on the long term note shall be paid on a monthly basis and
royalties from the 37th month forward shall be directly to the Developer.
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. No minimum annual royalty agreed.
H. Royalty shall be shared equally by Developer (Jean Ames) and
Designer (Lance Woeltjen).
IX. ACCOUNTING
A. Publisher shall keep accurate records covering all transactions
related to sale of the Program. 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 Program. 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 Program.
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 Program 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 Program and that the Program has not been published in any way
such as to lose its copyright protections.
C. Developer warrants that it owns the copyright to the Program and
User Manual 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 Program and User Manuals shall contain an
appropriate copyright notice in the name of the Developer for content of the
User Manuals and Program.
B. All copies of the Program and User Manual shall contain trademark
notices in the name of the Publisher for the trade name of the Program which is
Formbuster, but which may be changed at the sole discretion of the Publisher for
marketing purposes.
C. Under current U. S. laws, copyright resides with the creator without
registration, so Developer's warranty that the material is their creation is
sufficient copyright protection for the Publisher.
XIII. TERMINATION
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 I. 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 Program. Such termination shall be effective as of the date
specified by the Publisher.
C. In the event that this Agreement is terminated through breach by the
Developer, Publisher may continue to reproduce and sell the Program and User
Manual 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 through 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 Program within five days of acceptance of the Program and
upgrades of the Program.
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 Program 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.
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 Program, 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's discretion. No part of the source
code may be used in, or used to produce, any other programs or products, without
the express written permission of the Developer. Publisher will not disclose
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 Program should be marketed, including, but not limited to, freedom to decide
its method of marketing, price and trade name for the Program.
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.
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
- - --------------------------- ---------------------------------
- - --------------------------- ---------------------------------
Jean Ames Lance H. Woeltjen, President
The Developer Virtual Reality Laboratories, Inc.
The Publisher
Date
- - ----------------------------
- - ----------------------------
Lance H. Woeltjen
The Designer
AMENDMENT A TO FORMBUSTER AGREEMENT
The first two sentences of section I shall be amended to read:
This is a licensing Agreement between Virtual Reality Laboratories, Inc.,
(Publisher) 2341 Ganador Court, San Luis Obispo, CA 93401, and Jean Ames
(Developer) and Jim Heintz (Developer of Windows version), and Lance Woeltjen
(Designer). Hereinafter, the Designer and Developers shall be jointly referred
to as "Developer."
The second sentence of section VI, paragraph A, shall be amended to read:
All rights in Formbuster and its derivatives reside in the Publisher and
Developer shall not license Formbuster or any derivative of Formbuster to any
other entity without written permission of Publisher, its successors or assigns.
The first sentence of Section VI, paragraph B, shall be amended to read:
The license granted under Section VI, paragraph A, shall begin on the date of
the signing of this Agreement, and it shall expire fifty (50) years from that
date.
The first sentence of Section VIII, paragraph C, shall be amended to read:
If Publisher is more than 90 days late on any payment, the Developer may cancel
the license granted in Section VI of this Agreement provided that the Developer,
or their successors or assigns, send written notice of intent to cancel to the
Publisher, and provided the Publisher fails to make payment within 30 calendar
days of receipt of notice. Such notice of intent to cancel must be submitted by
Lance Woeltjen, Jean Ames, and Jinx Heintz, their successors or assigns, jointly
and unanimously, in the case of the Windows or Windows-like version of
Formbuster, or by Lance Woeltjen and Jean Ames, jointly and unanimously, in the
case of all other versions of Formbuster.
Section VIII, paragraph E, shall be deleted.
Section VIII, paragraph H, shall be amended to read:
Royalty for Windows or Windows-like versions of Formbuster shall be shared
equally by Developer as follows: 5% Jean Ames, 5% Lance Woeltjen, 5% Jim Heintz.
Royalty for all other versions of Formbuster shall be shared by Developer as
follows: 7.5% Jean Ames, 7.5% Lance Woeltjen.
Section VIII shall be amended to add paragraph I as follows:
If any individual Developer or group of Developers produces and licenses a forms
filling program which is deemed in a court of law to be competing with
Formbuster, anywhere in the world, he or they will immediately forfeit all
rights to royalty from the Publisher in addition to any other damages awarded to
the Publisher.
Section XIII, paragraph A, shall be amended to read:
Either the Publisher or the Developer (Lance Woeltjen, Jean Ames, and Jim
Heintz, their successors or assigns, jointly and unanimously, in the case of the
Windows or Windows-like version of Formbuster, or by Lance Woeltjen and Jean
Ames, jointly and unanimously, in the case of all other versions of Formbuster),
shall have the right to terminate this Agreement in the event the other party
commits a material breach of its obligations.
Section XVI, paragraph B, shall be amended to read:
Developer, jointly or severally, may not sell, transfer, or assign any rights or
obligations under this Agreement without prior written consent of the Publisher.
The Publisher may sell, transfer, or assign this Agreement so long as the
Developer receives a royalty payment as outlined in Section VIII, as amended,
upon any cash, stock, or other value received in such a sale, transfer, or
assignment of this Agreement. In the event of the sale of Virtual Reality
Laboratories as a whole, the value of the Agreement upon which the royalty
percentages shall be paid, shall be in direct ratio to the sales of Formbuster
to total sales of the company for the 365 days immediately preceding the sale of
the company. Sales of the Windows or Windows-like version of Formbuster shall be
broken out of total Formbuster sales and royalties shall be distributed
proportionately between the Windows or Windows-like sales and all other sales of
Formbuster for the period 365 days immediately preceding the sale of the
company.
THE PARTIES SET THEIR HANDS AND SEALS TO THIS AGREEMENT AS OF THE DAY AND YEAR
WRITTEN BELOW:
Date Date
- - --------------------------------- --------------------------------
Jean Ames, Developer all versions Lance H. Woeltjen, President
Virtual Reality Laboratories, Inc.
Publisher
Date
- - ---------------------------------
Lance H. Woeltjen, Developer all versions
- - ---------------------------------
Jim Heintz, Developer Windows versions