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Royalties under the EULA are based on revenue for the Product, and the Product is a product that combines the Licensed Technology with other software or content. So it doesn’t exclude a hardware combination.
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We don’t prohibit military simulation. There is a prohibition on military use in connection with live combat, but that’s different than simulation.
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I can’t comment on who a licensee is or isn’t permitted to contract with; that depends on the law of their jurisdiction.