Amendment To Product Development Agreement

CONFIDENTIAL TREATMENT
REQUESTED BY A.D.A.M.
SOFTWARE, INC. ADDISON WESLEY LONGMAN


One Jacob Way
Reading
Massachusetts 01867-3999
Telephone 617 944 3700


June 11, 1996, 1996


Mr. Curtis Cain Chief Executive Officer A.D.A.M. Software, Inc. 1600 RiverEdge Parkway Atlanta, Georgia 30328


Dear Curt:


This letter is to amend the September 14, 1995 Product Development Agreement between Benjamin/Cummings, a wholly-owned subsidiary of Addison Wesley Longman Inc. (AWL), and A.D.A.M. Software (the "Agreement").


Per our discussions, ADAM and AWL agree to the following changes in the Agreement:


Throughout the Agreement, replace where it says "4-8 Modules" with "4-7 Modules."


Paragraph 11(a) will be replaced in its entirety with the following:


11(a). Royalties. Each party hereto that sells, licenses or otherwise distributes (the "Seller") copies of Modules 1-3 and/or Modules 4-7 (collectively the "Modules") will pay the other party a royalty of XXX of Net Receipts (as defined in Section 11(d) from such products with a minimum annual average per-Module royalty of XXX. For sales by B/C outside of the U.S. to an AWL subsidiary or entity, royalties will be paid as indicated in Paragraph 11(e). For royalties on the first 6,000 units of the Modules (in any combination) sold by AWL, AWL will pay ADAM a royalty of XXX, not XXX. Royalties will be paid quarterly as provided in Paragraph 11(b) below, with adjustments as indicated in Section 11(f) if applicable. These terms will apply to any Modules sold after March 31, 1996.


We also agree to add new paragraphs:


11(e). Royalties (outside US). For sales or transfers outside the U.S. by B/C to an AWL subsidiary or entity, royalties will be paid to ADAM of XXX of B/C's net receipts minus B/C's Cost of Goods Sold (as defined in paragraph 15). The minimum per-Module royalty specified in paragraph 11(a) also applies in this case.


11(f). Royalty Adjustment. If, in any calendar year starting with 1996, more than 15% of copies sold by AWL are sold direct to the end-user (e.g. not through resellers such as campus bookstores), then AWL will pay ADAM a XXX royalty on all such units, not XXX as specified in 11(a). Once a year in January, AWL will review its sales and make the appropriate one-time adjustment to royalties owed ADAM at ...