Impact Research Corporation, Joan C. Benz, Tax Matters Person - Page 14




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               The R & D Agreement provides that it would terminate at the            
          later of (1) the passage of 1 year, or (2) when Systems delivered           
          a final report “acceptable to IRC”.14                                       
               2.   Exclusive License Agreement                                       
               Under the exclusive license agreement, IRC transferred to              
          Systems certain rights in exchange for a royalty interest.                  
          The exclusive license agreement obligated Systems to remit to IRC           
          royalty payments equal to 10 percent of the gross revenues                  
          Systems derived from the sale of “Demonstration Discs” and “Core            
          Concepts in Science and Mathematics” for the term of the                    
          exclusive license agreement, discussed below.  Systems was                  
          further obligated to remit to IRC royalties of 10 percent of the            
          gross revenues Systems derived “from the sale of any other                  
          products based upon or embodying the Demonstration Discs”, for a            
          period of 5 years.  At some point, RIC became a party to the                
          exclusive license agreement.                                                
               The term of the exclusive license agreement is set forth in            
          section 2.04 thereof, which provides as follows:                            
                    2.04.  Duration.                                                  
                           (a) The Exclusive License shall continue in                
               effect until such date (the “Date of Termination”) as                  
               it is terminated, in whole or in part, in accordance                   
               with the following provisions.  Royalty Payments (as                   


               14The record herein does not indicate whether the final                
          report was acceptable to IRC (or, for that matter to RIC, supra             
          note 9) or even whether Systems’ delivery was late enough so that           
          the R & D Agreement lasted longer than 1 year.                              





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