CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THE
FOLLOWING EXHIBIT MARKED WITH AN *
EXHIBIT 10.18
AMENDMENT NUMBER TWO
TO LICENSE AGREEMENT
This Amendment Number Two is made and entered into as of December 29,
1995 by and among XXXXXXX XXXXXX COMPANY, a New York corporation ("Licensor"),
IVI PUBLISHING (formerly known as Interactive Ventures, Inc. and Interactive
Television, Inc.), a Minnesota corporation ("Licensee") and MAYO FOUNDATION FOR
MEDICAL EDUCATION AND RESEARCH, a Minnesota nonprofit corporation ("Mayo").
W I T N E S S E T H :
WHEREAS, Licensor, Licensee and Mayo entered into a License Agreement
dated as of April 24, 1991 (Agreement) pertaining to an Optical Disc Program
based on The Mayo Clinic Family Health Book, as amended April 10, 1992
(Amendment) (collectively the "License Agreement"); and,
WHEREAS, the rights granted and obligations under the License Agreement
apply to the literary work, The Mayo Clinic Family Health Book, First Edition,
and all subsequent editions; and,
WHEREAS, Mayo has developed a subsequent edition, The Mayo Family
Health Book, Second Edition, hard copy book version tentatively scheduled to be
published October 1996; and
WHEREAS, IVI has developed an Optical Disc Program of The Mayo Clinic
Family Health Book, Second Edition, released as of September 15, 1995.
WHEREAS, the parties pursuant to the License Agreement desire to amend
the License Agreement to reflect the development by Licensee of digital
interactive optical technology/systems including "CD-ROM," "CD-I" and "On-Line"
for The Mayo Clinic Family Health Book, Second Edition and royalties therefore.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Definitions. All capitalized terms used herein and not
otherwise defined shall have the meaning given them in the
License Agreements.
2. Copyrights. Section 1(a) of the Agreement is amended to read:
(a) "Copyrights" - The term "copyright" means the
literary and statutory and common law rights owned
and held by Mayo relating to the literary work The
Mayo Clinic Family Health Book, Second Edition, as
reflected by the certificates which will be attached
as Exhibit "A" following publication, and all
subsequent editions and modifications of such
literary work within the Rights Period;
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3. Optical Disc Program. Section 1(d) of the Agreement is amended
to read:
(d) "Optical Disc Program" - The term "Optical
Disc Program" means any multi-media software
program physically embodied on digital
optical interactive software utilizing only
the Source Materials (as hereinafter
defined) for simultaneous interactive
presentation of video, audio, graphics,
animation, text and data which is designed
for use with digital optical interactive
hardware.
4. CD-I, CD-ROM, ON-LINE Programs. Section 7 of the Agreement is
amended to read:
7. CD-I, CD-ROM, ON-LINE Programs. It is agreed that the
grant of the license under this Agreement is a grant
for all digital interactive optical
technology/systems as set forth in Section 2 hereof.
It is further agreed that the Licensee currently
intends to produce the Optical Disc Program in forms
that are generally referred to as CD-I, CD-ROM and
ON-LINE Programs. The royalty payments and accounting
periods set forth in Sections 8 and 9 hereof shall be
deemed to apply only to such programs. In the event
Licensee chooses to produce the Optical Disc Program
using digital interactive technology/systems other
than CD-I, CD- ROM or ON-LINE, then the parties
hereto shall, in good faith, negotiate appropriate
royalty payments therefore. Nothing in this section
shall be deemed to limit, in any way, the grant of
the license made under this Agreement.
Notwithstanding anything to the contrary in the
Agreement or any amendment thereto, the ON-LINE
rights granted herein include only the right to
disseminate the Optical Disc Program in its entirety
or substantial entirety via on-line information and
communication systems and nothing herein shall
preclude either Licensor or Mayo from themselves
disseminating or from granting others, the right to
disseminate all or any portion of any edition of The
Mayo Family Health Book via any on-line information
and communication system.
5. Section 8(a) and (b) of the License Agreement and Section 2, 3
and 4 of the Amendment are deleted in their entirety and the
following substituted therefore:
8. Royalties.
(a) Licensee shall pay to Licensor, as compensation for
the rights granted herein, the following royalty and
licensing payments.
(i) Royalties Based on Net Sales. Licensee shall
pay to Licensor royalty payments equal to
* of Net Sales in each
Accounting Period of this Agreement.
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(ii) Advance Royalties. As an advance against the
royalty payments under Subsection 8(a)(i),
Licensee shall pay Licensor *
on the following schedule:
(a) * upon execution of this
Amendment Number Two, receipt of
which is hereby acknowledged;
(b) * on the
next four (4) consecutive annual
anniversaries of the execution of
this Amendment Number Two.
The aforesaid advances shall be payable on
the scheduled dates regardless of whether
Licensee has continued to exploit the rights
granted to it hereunder. At the time of any
normal royalty accounting, if the royalties
owed exceed the advances paid to date, and
if there are any scheduled but unpaid
advance amounts, any such excess royalties
shall be paid at the time of said normal
royalty accounting and will be considered a
prepayment of the next scheduled advance
payment.
(b) "Net Sales" shall mean net revenues (i.e., net of
returns, commissions/percentages to retailers and/or
Remarketers, sales taxes and similar taxes, free
goods, discounts and currency conversion charges)
retained or received by Licensee from the sale or
rental of the CD-I Program, CD- ROM discs or On-Line
sales. It is agreed that Net Sales is calculated on
the actual net dollar amounts received by Licensee
and is not calculated on the wholesale or retail sale
price of the CD-I Program, CD-ROM discs or On- Line
sales. "Accounting Period" shall mean consecutive
three-month quarters commencing October 1, and ending
December 31, March 31, June 30 and September 30 and
which may be referred to collectively as "Accounting
Periods", provided, however, that the first
Accounting Period shall commence September 15, 1995.
6. Rights Period. Section 1(e) of the Agreement and Section 5 of
the Amendment are hereby amended as follows:
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(e) "Rights Period" - The Rights Period for the rights to
the Optical Disc Program of the Mayo Family Health
Book, Second Edition shall begin as of September 15,
1995 and terminate on September 14, 2000.
7. Accounting. The accounting and report requirements set forth
in Section 9 of the License Agreement shall apply to sale made
in each Sales Category with the understanding that separate
accountings and reports shall be kept for each Sales Category.
8. First Edition. Any subsequent sales of The Mayo Clinic Family
Health Book, First Edition shall be accounted for and
royalties paid under the terms of the License Agreement
without reference to this Second Amendment.
9. Miscellaneous. Except as modified hereby, the License
Agreement as amended remains in full force and effect. In the
event of an inconsistency in the terms between this Amendment
Number Two and the License Agreement as amended, the terms of
this Agreement Number Two shall prevail.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
LICENSOR: LICENSEE:
XXXXXXX XXXXXX COMPANY IVI PUBLISHING, INC.
By: By:
Its: Its
MAYO:
MAYO FOUNDATION FOR
MEDICAL EDUCATION AND RESEARCH
By:
Its:
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