EXHIBIT 10(i) TO SYMIX SYSTEMS, INC. 1998 FORM 10-K
SECOND AMENDMENT TO
PROGRESS SOFTWARE APPLICATION PARTNER AGREEMENT
SECOND AMENDMENT to the Progress Software Corporation Application
Partner Agreement is effective as of the 1st day of July, 1998 ("Effective
Date"), by and between Progress Software Corporation, a Massachusetts
corporation with its principal place of business at ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("PSC") and Symix Computer Systems, Inc., an Ohio
corporation with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("AP" or "Symix").
WHEREAS, PSC and AP entered into a Progress Software Application Partner
Agreement effective as of February 8, 1995 (the "Agreement"); and
WHEREAS, PSC and AP previously amended the Agreement by entering into an
Amendment to the Agreement as of July 1, 1997 specifying special pricing for
designated PSC products distributed by AP in conjunction with certain AP
PROGRESS-based applications (the "Amendment");
WHEREAS, AP desires to expand the geographic scope of the special
pricing terms and conditions in the Amendment to apply on a worldwide basis,
to specify additional terms and conditions pursuant to which AP will have the
right to copy and distribute an evaluation version of certain PSC products in
combination with an evaluation version of AP's PROGRESS-based application(s),
and to obtain the right to distribute the WebSpeed transaction server product
in conjunction with AP's SyteWeb application;
WHEREAS, PSC is willing to agree, subject to the terms and conditions
contained herein, to such expansion in the geographic territory of the
special pricing terms and conditions in the Amendment, to grant AP the
above-mentioned rights to copy and distribute the evaluation version of the
designated PSC products, and to allow AP to distribute the WebSpeed
transaction server product in conjunction with AP's SyteWeb application;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
1. Capitalized terms used but not defined in this Second Amendment shall
have the same meaning as in the Agreement or the Amendment.
2. The terms and conditions of the Amendment shall continue in force during
the term of this Second Amendment subject to the following:
a. Section 4(a) of the Amendment limits the territory for the special
pricing terms and conditions specified therein to North America. The
parties agree that, as of the Effective Date of this Second Amendment,
the territory will be expanded to apply on a worldwide basis.
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b. Section 4(b) of the Amendment specifies that: (i) AP has sole
discretion to establish and maintain a price schedule for the Covered
Application, (ii) AP is required to provide PSC with a copy of the
price schedule and written notice of any updates thereto, and (iii)
PSC has the right to modify AP's license and maintenance royalty
formulas in the event AP substantially alters its pricing model,
provided that such adjusted royalty formulas are not significantly
different from the formulas set forth in the Amendment. In addition to
the requirements already established under Section 4(b), in the event
AP has different price schedules for installation locations outside
the United States, AP shall provide PSC with a copy of each price
schedule and written notice of any updates thereto.
c. Section 4(c) of the Amendment states that the use of the Selected PSC
Products by AP's customers shall be subject to the terms and
conditions of PSC's End-User Product License Agreement. Such End-User
Product License Agreement accompanies each Selected PSC Product. A
copy of such End-User Product License Agreement was to be attached to
the Amendment as Exhibit D; however, said Exhibit D was inadvertently
omitted from the list of Exhibits attached to the Amendment. A copy
of PSC's current End-User Product License Agreement for the Selected
PSC Products is attached hereto. Such End-User Product License
Agreement is subject to change by PSC from time to time without notice
to AP. In accordance with the terms and conditions of Section 3.3 of
the Agreement, AP shall deliver each PSC Product to its customers
unopened with the above-mentioned End-User Product License Agreement
in tact.
d. Sections 4(d), 4(e), and 4(f) specify the license royalty, maintenance
royalty, and upgrade royalty arrangements respectively. The terms and
conditions set forth in Sections 4(d), 4(e), and 4(f) shall remain the
same, except that:
(i) The annual revenue goal specified in the last paragraph of
Section 4(d) shall be increased from US$1,920,000 to
US$2,500,000. In the event AP pays royalties to PSC for initial
license, initial maintenance and upgrade fees in excess of
US$2,500,000 in any one year period beginning on July 1st of each
year and ending on June 30th of the following year, the royalty
rate on such license and upgrade fees will drop from 17% to 16%
for orders processed during the remainder of such one year
period. Any royalties paid by AP to PSC or a PSC subsidiary for
initial license, initial maintenance and upgrade fees on Selected
PSC products ordered by AP for installation at an AP customer
location outside of North America shall be applied to the
above-mentioned goal (except for orders placed by AP through a
PSC distributor). AP's performance in relation to the
above-mentioned annual revenue goal will be monitored by PSC's
Bedford, Massachusetts headquarters. AP shall be responsible for
promptly reporting to PSC's Bedford, Massachusetts headquarters
any royalties paid by AP to a PSC subsidiary which, pursuant to
the provisions above, should be counted toward the annual revenue
goal.
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(ii) For each Covered Application license installed at an AP customer
location outside of the United States, the royalty formulas
specified in Sections 4(d), 4(e) and 4(t) shall be applied to the
total local sales price for the Symix portion of the Covered
Application (if different from AP's U.S. sales price).
e. Section 5 of the Amendment states, in the first sentence, that the
terms and conditions of the Amendment shall only apply to AP's
distribution of the Selected PSC Products in conjunction with the
Covered Applications solely in North America. The territory
limitation shall no longer apply. The requirement that the Selected
PSC Products be distributed in conjunction with the Covered
Applications will continue in full force and effect. The remaining
provisions of Section 5 of the Amendment concerning the purchase of
licenses of PSC products not covered under the definition of "Selected
PSC Products" shall remain in effect.
f. Section 7 of the Amendment specifies the ordering, payment and
reporting procedures for the Selected PSC products ordered and
deployed by AP in conjunction with each Covered Application(s)
license. As of the Effective Date of this Second Amendment, the
ordering, payment and reporting procedures specified in Section 7
of the Amendment will be replaced with the following procedures:
INSTALLATIONS IN NORTH AMERICA:
SELECTED PSC PRODUCT ORDERS: For each AP customer location in
North America requiring Selected PSC Products in conjunction with
the Covered Applications(s), AP shall order such Selected PSC
Products from PSC's United States headquarters in Bedford,
Massachusetts ("PSC Headquarters"). With each order, AP shall
provide PSC with the following information: the customer name,
address, number of users, AP's Net License Fee, PSC's Product
Royalty calculated in accordance with Section 4(d) of the
Amendment. PSC shall invoice AP for the Product Royalty owed to
PSC under each order.
ORDERS FOR RENEWAL MAINTENANCE: For each Covered Application(s)
license installation in North America requiring a renewal PSC
maintenance term pursuant to Section 4(e)(ii) of the Amendment
(provided that such maintenance is generally offered by PSC to
its customers), AP shall submit an order to PSC Headquarters
within thirty (30) days prior to the expiration of the current
maintenance term. In each such order, AP shall provide PSC with
the following information: the customer name, location, number
of users, PSC product serial number(s), the original Net License
Fee of the Covered Application(s) licensed to the AP customer,
and PSC's Maintenance Royalty calculated in accordance with
Section 4(e)(ii) of the
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Amendment. PSC shall invoice AP for the Maintenance Royalty
owed to PSC under each order.
ORDERS FOR UPGRADES TO THE SELECTED PSC PRODUCT(S): For each
Covered Application(s) installation in North America requiring an
increase in the user count of the Selected PSC Product(s) or a
generally available update to the Selected PSC Product(s), AP
shall submit an order to PSC Headquarters. Such order shall
include: the customer name, location, PSC product serial
number(s), current number of users, number of users after the
increase (if applicable), the version of the Selected PSC
Products ordered (if ordering an update), PSC Product Royalty and
PSC Maintenance Royalty in accordance with Sections 4(d) and
4(e)(ii) of the Amendment (if additional license and/or
maintenance revenue is generated by AP from the user count
increase or the update). PSC shall invoice AP for the Product
and/or Maintenance Royalties owed to PSC under each order.
REPORTING OF UPGRADES TO THE COVERED APPLICATION(S): In
accordance with Section 4(f) of the Amendment, PSC is entitied to
a Product Royalty payment on any license and maintenance revenue
obtained by AP from upgrades to the Covered Applications, even if
such upgrades do not involve upgrades to the Selected PSC
Products. If AP performs an upgrade to a Covered Application(s)
license which does not require an order for an upgrade to the
Selected PSC Products, and license and/or maintenance revenue is
generated from such upgrade, AP shall immediately report to PSC
the following information regarding the upgrade to the Covered
Application(s) license: customer name, location, PSC serial
number(s), PSC Product Royalty and Maintenance Royalty in
accordance with Sections 4(d) and 4(e)(ii) of the Amendment (if
additional license and/or maintenance revenue is generated by AP
from the upgrade). Upon receipt of the report from AP, PSC shall
invoice AP for the Product and/or Maintenance Royalties owed to
PSC in connection with each reported upgrade.
PAYMENT OF INVOICES: AP shall pay all invoices within thirty
(30) days of the invoice date provided AP meets PSC's credit
requirements. Otherwise, payment shall be made in advance or on
a C.O.D. basis. Interest shall accrue on any delinquent amounts
owed by AP for PSC products at the lesser of eighteen percent
(18%) per annum or the maximum rate permitted by applicable usury
law.
INSTALLATIONS IN PSC SUBSIDIARY COUNTRIES:
The ordering, payment and reporting obligations shall be the same
as those set forth above, except that all orders for Selected PSC
Products to be installed in a local PSC subsidiary country shall
be placed with the local
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PSC subsidiary, all upgrade reports delivered to the local PSC
subsidiary, and all invoices generated by the local PSC
subsidiary. AP shall make all payments to the local PSC
subsidiary in the currency specified in the invoice.
INSTALLATIONS OUTSIDE OF NORTH AMERICA AND OUTSIDE OF A PSC SUBSIDIARY
COUNTRY:
For AP customer installation locations outside of North America
and outside a PSC subsidiary location, AP shall have the option
of: (a) ordering Selected PSC Products from PSC under the
special royalty arrangements set forth in the Amendment and this
Second Amendment by following the ordering, payment and reporting
obligations described above for installations in North America,
or (b) ordering the Selected PSC Products from a local PSC
distributor. If AP elects to order the Selected PSC Products
through a PSC distributor, then such order shall be subject to
the PSC distributor's then-current pricing and shall not be
subject to the special terms and conditions set forth in the
Amendment and this Second Amendment.
g. Section 8 of the Amendment specifies the conversion options available
for AP's existing customers who have purchased PROGRESS-based Symix
applications which incorporate PROGRESS Version 6 or an earlier
PROGRESS version and who desire to upgrade to the Covered Applications
including the Selected PSC Products. The terms and conditions set
forth in Section 8 shall remain the same, except that, for purpose of
clarification, the one hundred and fifty dollars ($150.00) per user
conversion fee referenced in Section 8 of the Amendment shall be
calculated in U.S. dollars regardless of the installation location.
h. Section 11 of the Amendment specifies the term of the Agreement and
the Amendment. The Agreement is scheduled to terminate as of July 1,
1998, and pursuant to the terms and conditions of Section 11 of the
Amendment, the Amendment would automatically terminate upon
termination of the Agreement. The term of the Agreement shall be
extended on an indefinite basis subject to termination pursuant to
Article 10 of the Agreement. Except as otherwise specified in this
paragraph 2(h), the terms and conditions of Section 11 of the
Amendment shall continue in full force and effect.
i. Exhibit A of the Amendment was supposed to list the PSC products
included in the definition of Selected PSC Products; however, at the
time the Amendment was mutually-executed, the list of Selected PSC
Products was included in Exhibit B rather than Exhibit A. Thus, all
references Selected PSC Products in the Amendment and this Second
Amendment shall mean the PSC products listed in Exhibit B to the
Amendment.
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3. AP agrees that all Selected PSC Product licenses delivered by AP to AP
customers shall be in compliance with all applicable laws concerning the
exporting, importing and re-exporting of products as referenced in the
attachment hereto entitied "Restricted Country Groups".
4. PSC shall provide AP with a master copy of generally available evaluation
versions of the Selected PSC products on all available operating platforms,
and shall grant AP a license to copy and distribute such evaluation
versions of the Selected PSC products to AP customers in combination with
an evaluation version of the Covered Applications subject to the following
terms and conditions:
a. AP must display an evaluation agreement in a prominent location in the
packaging and/or the installation routines, said evaluation agreement
including terms and conditions substantially similar to those set
forth in PSC's standard form of evaluation license agreement attached
hereto. Such evaluation agreement between AP and AP's customer shall
in any event contain the following terms and conditions:
(i) warranty and liability limitations, confidentiality obligations
and limitations on copying, modifying, reverse engineering, or
altering the evaluation software, which are no less
restrictive than those set forth in PSC standard evaluation
agreement attached hereto, with all such terms and conditions
applying with the same force and effect for the benefit of
AP's suppliers;
(ii) an express provision notifying the AP customer that the
evaluation software may contain a disabling function triggered
automatically upon expiration of the evaluation license period;
(iii) a provision specifying that the evaluation software should not
be used in connection with AP customer's regular data processing
activities; and
(iv) a provision stating that title to software products of AP's
supplier, including patents, copyrights and property rights
applicable thereto, shall at all times remain solely and
exclusively with such supplier;
b. AP shall maintain sole control over all copies of the master media and
shall not release any such copies to any other party, including, but
not limited to, AP's authorized distributors and replication
companies;
c. AP shall indemnify, defend and hold PSC, and its officers, directors,
employees and agents harmless from and against any costs, damages, and
expenses, including but not limited to reasonable attorney's fees,
resulting from any demand, claim, or cause of action against PSC
arising out of AP's distribution of the evaluation version of the
Selected PSC Products to AP customers; and
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d. Following the termination of this Second Amendment, AP shall
immediately return to PSC all master copies of the evaluation software
for the Selected PSC Products.
5. Exhibit B to the Amendment shall be deemed to be updated to include AP's
SyteWeb module which is an add-on module to AP's SyteLine application (the
SyteLine application is already listed in Exhibit B and included in the
definition of Covered Application). For new Covered Application licenses
including the SiteWeb application or existing Covered Application licenses
where the Site Web application is provided as an add-on module, AP may
include a WebSpeed transaction server license for 5 concurrent agents,
subject to payment of license and maintenance royalties on the total sales
price for SiteWeb application in accordance with the terms and conditions
of the Amendment and this Second Amendment. Any increases to the
concurrent agent count for the WebSpeed transaction server licenses shall
be subject to PSC's then-current standard license and maintenance fees,
less then applicable AP discounts.
6. The term of this Second Amendment shall commence as of the Effective Date
defined above, and shall continue in force until the termination of the
Amendment pursuant to Section 11 of the Amendment (as modified by Section
2(h) above).
7. Except as may be modified or amended by this Second Amendment, the terms
and conditions of the Agreement (as previously amended by the Amendment)
shall remain in effect until the termination of the Agreement. No other
modifications or additions are made to the Agreement. The Agreement,
Amendment, and this Second Amendment constitute the entire agreement
between the parties with respect to the subject matter hereof. In the
event of conflict among the terms and conditions of the Agreement, the
Amendment, or this Second Amendment, the order of precedence shall be:
first, this Second Amendment, second, the Amendment, and third and finally,
the Agreement.
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
representative as of the date first set forth above.
PROGRESS SOFTWARE CORPORATION SYMIX COMPUTER SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President Title: CFO
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