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EXHIBIT 10.2
ADDENDUM #3 TO
LICENSING AND DISTRIBUTION AGREEMENTS
(2004-2005 and 2005-2007)
THIS ADDENDUM #3 TO LICENSING AND
DISTRIBUTION AGREEMENTS (this "Addendum") is
dated as of November , 2004 ("Effective
Date"), by and between ENCORE SOFTWARE,
INC., a Minnesota corporation
("Distributor"), and RIVERDEEP INC., A LIMITED
LIABILITY COMPANY, a Delaware limited
liability company ("Riverdeep"), with
respect to the following Recitals.
A. WHEREAS, Distributor and Riverdeep have
entered into (i) that certain
Licensing and Development Agreement
(Manufacturing Rights)(2004-2005), dated as
of March 29, 2004 ("Agreement One"), and
(ii) that certain Licensing and
Development Agreement (Manufacturing
Rights)(2005-2007), dated as of March 29,
2004 ("Agreement Two", and together with
Agreement One, as amended, the
"Agreements"; each initially-capitalized
term used herein and not otherwise
defined shall have the meaning ascribed to
such term in the Agreements),
pursuant to which, among other things,
Riverdeep has granted Distributor
exclusive rights to replicate, sell, and
distribute the Products into the
Channel and the Territory, as more
particularly described in each of the
Agreements.
B. WHEREAS, the parties now desire to enter
into this Addendum to amend certain
terms and conditions of the Agreements to
address Riverdeep's sale of the assets
associated with the 3DHA (as defined below)
Products to Punch Software LLC
("Punch") and its subsequent removal as a
Product under the terms of the
Agreements.
NOW, THEREFOR in consideration of the
mutual covenants and agreements contained
herein, and for other good and valuable
consideration the receipt and
sufficiency of which are hereby
acknowledged, the parties agree as follows:
1 - Certain Definitions. As used herein,
the following initially-capitalized
terms shall have the meaning ascribed to
them below.
1.1 "3DHA" means the 3D Home Architect(R)
brand of products previously licensed
to Distributor as Products under the
Agreements.
1.2 "3DHA Loss Event" means the sale of
3DHA by Riverdeep to Punch which
resulted in the loss of Distributor's
rights to 3DHA under the Agreements
(except with respect to Riverdeep's right
to earn out payments from Punch
through December 31, 2004 pursuant to
Riverdeep's asset sales agreement with
Punch, which right has no effect on the
rights or obligations of Distributor).
1.3 "Existing Inventory" means
Distributor's existing inventory of 3DHA Products
(other than Existing Consignment Inventory
as defined below) which was to be
distributed by Distributor under the terms
of the Agreements, whether located in
Distributor's warehouse as of the Loss Date
or thereafter returned to
Distributor from the Channel.
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1.4 "Existing Consignment Inventory" means
the Existing inventory that has been
made available for sale by Distributor on a
consignment basis as of the Loss
Date, including any Existing Inventory
which has been shipped to Distributor's
parent company, Navarre Corporation, on a
consignment basis which has not yet
been sold into the Channel.
1.5 "Interim Build" means a moderate
revision to the packaging of the current
version of the 3DHA Products distributed by
Distributor under the Agreements as
requested by Punch in connection with the
subsequent licensing of 3DHA by
Distributor from Punch.
1.6 "Loss Date" means October 12, 2004
which was the closing date of the asset
purchase agreement by and between Riverdeep
and Punch.
1.7 "Riverdeep Version Product" means the
version of the 3DHA Products
distributed by Distributor under the
Agreements prior to the Loss Date.
2. Reduction of the Guaranteed Royalty.
Notwithstanding anything to the contrary
contained in the Agreements, as a result of
the 3DHA Loss Event, each and every
monthly installment of the Guaranteed
Royalty which becomes due and payable
after the Loss Date, in accordance with
Section 4.2.2 of the Agreements, shall
be reduced by nine percent (9%).
3. Credits for Third Party Payments. From
and after the date hereof, Section 4.3
of Agreement Two shall be amended by
deleting the existing language in its
entirety and inserting the following: "Each
quarter during the Term, Distributor
shall
