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EXHIBIT 10.3
Confidential Materials omitted and filed separately with the
Securites and Exchange Commission. Asterisks denote such omissions.
SECOND AMENDMENT TO PROGRESS SOFTWARE APPLICATION
PARTNER AGREEMENT
SECOND AMENDMENT made as of the 29th day of November, 1995 to the Progress
Software Application Partner Agreement (the "Agreement") by and between Progress
Software Corporation ("PSC") and Security Dynamics Inc. ("AP") dated as of the
5th day of December, 1994 previously amended by the Progress Software
Application Partner Agreement Addendum (the "Addendum") by and between PSC and
AP dated as of the 5th day of December, 1994 and a subsequent amendment to the
agreement dated as of the 19th day of October, 1995 (the "Amendment"). The terms
and conditions of the Addendum and the Amendment shall be entirely superseded by
this Second Amendment. PSC hereby acknowledges payment by AP of the $50,000
development license fee and the initial maintenance fee set forth in Section 7
of Attachment A to this Second Amendment and the $75,000 conversion license fee
set forth in Section 11 of Attachment A. The parties agree that, effective as of
the 5th day of December, 1994, the Agreement shall be amended as follows:
1. Capitalized terms used but not defined in this Second Amendment shall have
the same meaning as in the Agreement.
2. Section 1.1 of the Agreement shall be modified by (a) deleting the words
"in PSC's judgment" located in Section 1.1 between the words "provided
that," and "the products AP supplies" and (b) adding the following sentence
to the end of Section 1.1:
"AP may distribute PSC product licenses to AP customers directly, or
indirectly through a distributor subject to distributor's compliance with
the terms and conditions of this Agreement."
3. Section 4.1 of the Agreement shall be modified by inserting the following:
"(except that AP shall remove the capability to create new databases from
all copies of PSC products installed at an AP customer site by removing
certain utility files mutually designated by the parties from time to
time)"
4. Section 4.3 of the Agreement shall be modified by adding the following
sentence to the end of Section 4.3:
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Confidential Materials omitted and filed separately with the
Securites and Exchange Commission. Asterisks denote such omissions.
"PSC shall use any information obtained from such audit solely for the
purposes of insuring compliance with the terms and conditions of this
Agreement."
5. Section 5.1 of the Agreement shall be modified by (a) inserting the
following at the beginning of Section 5.1:
"For a period of ninety (90) days following receipt of a PSC product by an
AP customer or one hundred and eighty (180) days from receipt of a PSC
product by an AP GSA contract customer, PSC shall warrant to AP that the
PSC product operates substantially in accordance with accompanying PSC
documentation and that the media is free from defect. AP's sole remedy for
a claim brought under this Section 5.1, shall be to return the relevant PSC
product to PSC for repair or replacement at PSC's sole option. AP shall
remove the capability to create new databases from all copies of PSC
products installed by AP by removing certain utility files mutually
designated by the parties from time to time and, except for the foregoing
modification, this limited warranty shall not apply if the PSC product has
been modified or altered by AP and/or AP's customer. This warranty shall
apply only to claims made by AP within the above-mentioned warranty
period.";
(b) modifying the sentence beginning with "OTHER THAN THE LIMITED WARRANTY"
so that the words "SET FORTH ABOVE AND THE LIMITED WARRANTY" are inserted
between "OTHER THAN THE LIMITED WARRANTY" and ", IF ANY," and
(c) deleting the last sentence of Section 5.1.
6. Section 6.1 of the Agreement shall be deleted in its entirety and replaced
with the following:
"The liability of PSC, if any, for damages arising out of this Agreement
shall be limited to an amount equal to the lesser of: (a) the aggregate
amounts paid by AP and received by PSC under this Agreement or (b)
************************ *************** and shall in no event include
incidental or consequential damages of any kind, even if PSC has been
informed of the possibility of such damages. Notwithstanding the foregoing,
the above-described limitation of liabilities shall not apply to (a) claims
covered under the indemnification clause in Section 9.2 below or (b) claims
of personal injury or death or damage to tangible property based solely on
the operation of the PSC product,
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Arterisks denote such omissions.
unaltered or modified only as expressly authorized by PSC under the terms
and conditions of this Agreement or any addenda mutually executed by PSC
and AP.
The liability of AP, if any, for damages arising out of this Agreement
shall be limited to an amount equal to the lesser of: (a) the sum of the
aggregate amounts paid by AP under this Agreement and any outstanding
amounts owed by AP to PSC under this Agreement or (b) *************
************** and shall in no event include incidental or
consequential damages of any kind, even if AP had been informed of the
possibility of such damages. Notwithstanding the foregoing, the
above-described limitation of liabilities shall not apply to (a) claims
covered under the indemnification clause in Section 9.1 below, (b) claims
resulting from AP's breach of its obligations under Section 4.1 above or
(c) any claims resulting from AP's failure to make any payments described
in this Agreement or any addenda mutually executed by PSC and AP. With
regard to any claims PSC may have in connection with AP's failure to make
payments described in this Agreement or any addenda mutually executed
between AP and PSC, the liability of AP shall be limited to the amounts
owing to PSC including all interest accrued pursuant to Section 2.4 of the
Agreement."
7. Section 9.1 of the Agreement shall be deleted in its entirety and replaced
with the following:
"AP AGREES TO INDEMNIFY AND HOLD HARMLESS PSC AND ITS OFFICERS, DIRECTORS,
EMPLOYEES, AND AGENTS, FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, COSTS
AND LIABILITIES (INCLUDING ALL REASONABLE ATTORNEY'S FEES) OF ANY KIND
WHATSOEVER, ARISING OUT OF (A) THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF AP, (B) AP'S FAILURE TO MEET ITS OBLIGATIONS UNDER SECTION 5.3 HEREIN OR
(C) AP'S SALE OR USE OF THE PSC PRODUCT, EXCEPT TO THE EXTENT ANY SUCH
CLAIMS, DEMANDS, COSTS AND LIABILITIES (INCLUDING REASONABLE ATTORNEY'S
FEES) ARISE PRIMARILY OUT OF AN ACT OR OMISSION BY PSC. AP'S OBLIGATIONS
UNDER THIS SECTION 9.1 SHALL BE SUBJECT TO PSC PROVIDING PROMPT NOTICE, IN
WRITING, TO AP OF ANY CLAIM OR PROCEEDING WITH THE SCOPE OF THIS
INDEMNIFICATION AND GIVING AP SOLE CONTROL OF THE DEFENSE OF ANY SUCH CLAIM
OR PROCEEDING AND ALL NEGOTIATIONS FOR ITS COMPROMISE OR SETTLEMENT."
8. Section 9.2 of the Agreement shall be added as follows:
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"PSC agrees to indemnify and hold AP and its officers, directors, employees
and agents harmless from and against any and all claims, demands, costs and
liabilities (including all reasonable attorney's fees) of any kind
whatsoever, arising directly out of any claim that a PSC product infringes
a U.S. patent or copyright of any third party provided AP notifies PSC
promptly in writing of any such claim or proceeding, and further provided
that AP give PSC sole control of the defense of any such claim or
proceeding and all negotiations for its compromise or settlement. Should
any PSC product become, or in PSC's sole opinion be likely to become, the
subject of a claim of infringement, PSC shall have the right, at PSC's
option and expense, (i) to procure for AP the right to continue using it,
(ii) to replace or modify it with a non-infringing version of substantially
equivalent function and performance or (iii) reasonably failing the above,
to refund to AP the depreciated value of the relevant PSC product(s) upon
AP's return of the PSC Product(s) to PSC. The depreciated value shall be
determined by the straight line method, for a five (5) year life, applied
to the amount actually paid by AP for the relevant PSC product license(s).
PSC shall have no liability or obligation to AP hereunder for any
infringement based upon (i) the combination of a PSC product with other
products not produced by PSC, (ii) the use of other than a current version
of the PSC product or (iii) the use of a version of a PSC product including
modifications or alterations not expressly authorized by PSC under the
terms and conditions of this Agreement or any addenda mutually executed by
PSC and AP. The provisions of this Section 9.2 are in lieu of all other
obligations, including without limitation the implied warranty of
noninfringement, and state the sole, exclusive and entire liability of PSC,
and the exclusive and entire remedy of AP, with respect to any claim of
patent or copyright infringement by any PSC product. Further, to the extent
AP is required in specific substantial foreign or worldwide transactions to
provide indemnification concerning foreign patent or copyright rights to
its customers with respect to AP's products, PSC will similarly indemnify
against infringement under such foreign patent or copyright laws with
regard to PSC products on the above stated terms. The determination of the
requirement for such indemnification shall be made solely by AP in the
exercise of its reasonable judgment."
9. Section 11.8 of the Agreement shall be deleted in its entirety and replaced
with the following:
"The parties agree that the provisions of Sections 2, 4, 5, 6 and 9 shall
survive the expiration or earlier termination of this Agreement for any
reason."
10. Section 11.9 of the Agreement shall be added as follows:
"AP shall comply fully with all U.S. export laws including but not limited
to the relevant regulations of the United States Department of Commerce and
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with the United States Export Administration Act to assure that the PSC
products are not exported or re-exported by AP and/or AP's distributors and
resellers in violation of United States law."
11. For a period of time commencing on the effective date of the Agreement and
expiring upon completion of a three (3) year period following the date of
first commercial availability of AP's PROGRESS-based application (the
"Term"), the special terms and conditions concerning pricing, production
and distribution of PSC product licenses set forth in Attachment A hereto
shall be in full force and effect. No later than six (6) months prior to
the expiration of the Term, the parties shall, in good faith, commence
negotiations for a new Attachment A with special terms and conditions
concerning pricing, production and distribution of PSC product licenses
and, no later than four (4) months prior to the expiration of the Term,
shall make a determination as to whether an agreement for a new Attachment
A can be reached between the parties.
In the event the parties are unable to reach an agreement for a new
Attachment A, for a period of six (6) months from the date such
determination is made (such date being no later than four (4) months prior
to the expiration of the Term), AP shall have the right to distribute PSC
products in accordance with the special pricing, production and
distribution provisions contained in the existing Attachment A. Thereafter,
AP shall (a) cease making and distributing copies of PSC products from a
master and (b) either return or certify the destruction of all masters
provided by PSC pursuant to Section 1 of Attachment A or copies thereof;
and, provided AP has not breached any material term or condition of the
Agreement, this Second Amendment or Attachment A and failed to cure such
breach within the time period specified in Section 10.2 of the Agreement,
AP shall have the right to purchase PSC product licenses and services
pursuant to the standard terms and conditions of the Agreement.
In the event that the Agreement terminates or expires, notwithstanding the
foregoing, no PSC product license distributed to a direct or indirect
customer of AP prior to the termination of the Agreement shall be effected
by such termination.
12. Except as modified herein, all provisions of the Agreement are hereby
confirmed and in all respects this Second Amendment and the Agreement shall
be read and construed together as if the provisions of this Second
Amendment had been part of the Agreement. No other modifications or
additions are made to the Agreement. The Agreement as modified by this
Second Amendment (including Attachment A to the Second Amendment) is the
entire agreement between the parties regarding the subject matter thereof
and supersedes and merges all prior proposals, understandings and all other
prior
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agreements, oral and written, between the parties relating to this
Agreement. Except as they may be modified or amended by this Addendum, the
terms and conditions of the Agreement shall remain in effect until the
termination of the Agreement. In the event of conflict or inconsistency
between the terms and conditions of the Agreement and this Second
Amendment, the terms and conditions of this Second Amendment shall govern.
IN WITNESS WHEREOF, this Second Amendment has been executed under seal for and
on behalf of each of the parties hereto by their duly authorized officers as of
the date first specified above.
SECURITY DYNAMICS, INC. PROGRESS SOFTWARE CORPORATION
By: /s/ Arthur W. Coviello, Jr. By: /s/ Michael J. Crismorid
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Name: Arthur W. Coviello, Jr. Name: Michael J. Crismorid
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Title: Exec. V.P. Title: VP - North American Sales
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