For Customers incorporated in Germany, the following provisions shall apply. All other provisions of the Agreement shall remain the same except as provided herein. To the extent of any inconsistency or contradiction between this Addendum and the body of the Agreement, the terms of this Addendum shall prevail.

1. Section 5.1(c) of the Agreement is hereby replaced with the following:

“(c) reverse engineer, decompile except and as only to the minimum extent permitted by sec. 69e para. (1) nos. 1 to 3 German Copyright Act (“UrhG”) and within the limits of sec. 69e para. (2) nos. 1 to 3 UrhG), disassemble or create derivative works of the Software;”

2. Section 11 of the Agreement is hereby replaced with the following:

“11.  Limited Warranties; Disclaimers.

• Limited Warranties. Checkmarx warrants to Customer that: (a) the Software, when properly installed or delivered, and used by Customer, will operate in substantial conformity with the functional specifications set out in the Documentation; and (b) to the extent the Services include any work, Checkmarx will perform this work in a timely, professional and workmanlike manner and in substantial conformity with the applicable Scope of Work. Under this Agreement and to the extent the Services include any work, rights in case of defects in the Services shall be excluded in the case of minor or immaterial deviations from the agreed or assumed characteristics and in the case of just slight impairment of use. If, during the Subscription Term, Customer demands replacement performance because of such a material defect in the Software and/or the Services, Customer shall provide Checkmarx with prompt written notice documenting each such material defect. This shall not affect the statutory obligation of Customer to inspect and notify Checkmarx of defects in the Software and/or the Services. Within a reasonable time after receipt of Customer’s notice, Checkmarx shall, at Checkmarx’s sole discretion choose between the improvement, replacement delivery or replacement of the Software and/or the Services.
• Further Rights. If the defect is not cured within a first time limit and Customer has set Checkmarx a reasonable second time limit without success or if a reasonable number of attempts to remedy, replacement deliveries or replacement services are unsuccessful, then Customer may, subject to the statutory prerequisites, at its option withdraw from this Agreement or reduce the price and claim damages or reimbursement of costs. The remedying of the defect may also take place through the delivery or installation of a new program version of the Software, the Services or a work-around. If the defect does not, or not substantially, impair the functionality, then Checkmarx is entitled, to the exclusion of further rights in case of defects, to remedy the defect by delivering a new version or an update as part of its version, update and upgrade planning.
• Claims for Damages. Any claims for damages are subject to the limitations set forth under Section 13.
• Warranty Limitations. The warranty set forth above in Section 11.1 shall not apply to the extent the Software: (a) is not used in accordance with the Documentation; (b) has been modified without Checkmarx’s express authorization; (c) fails to function due to a malfunction of Customer’s equipment or IT infrastructure; or (d) fails to function due to third party software and/or hardware that is not provided or approved by Checkmarx.”

3. Section 12 of the Agreement is hereby replaced with the following:

“12.   Infringement Indemnification.

12. • Indemnification. Checkmarx will, subject to the exclusions set out in Section 12.3, defend at its own expense any action brought against Customer by a third party to the extent that the action is based on a claim that Customer’s use of the Software infringes any validly registered intellectual property or other third party rights related to the Software, and Checkmarx shall pay those costs and damages finally awarded against Customer in any such action that are specifically attributable to such claim or those costs and damages which have been agreed by Checkmarx in a monetary settlement of such action. Checkmarx’s indemnification obligations are expressly conditioned upon Customer giving Checkmarx prompt written notice of any actual or threatened claim, allowing Checkmarx sole control of the defense and all related settlement negotiations, providing full cooperation for the defense of same to Checkmarx, and not settling or negotiating a settlement of any such claim without Checkmarx’s prior written approval.
    • Remedies. In the event the Software, or any part thereof, is determined to, or is believed by Checkmarx to, become the subject of an infringement claim: (a) Checkmarx may, at its sole discretion: (i) modify the Software so that it is non-infringing; (ii) replace the Software with non-infringing Software that is functionally equivalent or superior in performance; or (iii) obtain a license for Customer to continue to use the Software provided and to the extent that this does not substantially impair the warranted functionality of the Software; and (b) Checkmarx is under an obligation to reimburse Customer for its necessary reasonable costs incurred in the enforcement of the infringement claim. If a release under this Section 12.2 fails within a reasonable time limit set by Customer, then Customer may subject to the statutory prerequisites at its option withdraw from this Agreement or reduce the Fees and claim damages.
    • Exclusions. Checkmarx shall have no obligation or liability for any claim of infringement based on the: (a) use of the Software in combination with other materials (hardware, software or data) not provided by Checkmarx where infringement would not have resulted but for such combination; (b) modification of the Software by anyone other than Checkmarx where infringement would not have resulted but for such modification; or (c) use of the Software after a non-infringing Software has been made available to Customer by Checkmarx.
    • All Other Respects. In all other respects Section 13 applies accordingly.”
13. Section 13 of the Agreement is hereby replaced with the following:

“13.        Limitation of Liability.

13. • Limitations on Damages. CHECKMARX AND ITS AFFILIATES SHALL BE LIABLE UNDER THE TERMS OF THIS AGREEMENT ONLY IN ACCORDANCE WITH THE FOLLOWING PROVISIONS:
      • Checkmarx shall have unrestricted liability for losses caused intentionally or with gross negligence by Checkmarx, its legal representatives or senior executives and for losses caused intentionally by other assistants in performance; in respect of gross negligence of other assistants in performance, Checkmarx’s liability shall be as set forth in the provisions for simple negligence in 13.1.5 below;
      • Checkmarx shall have unrestricted liability for death, personal injury or damage to health caused by the intent or negligence of Checkmarx, its legal representatives or assistants in performance;
      • Checkmarx shall be liable for losses arising from the lack of any warranted characteristics up to the amount which is covered by the purpose of the warranty and which was foreseeable by Checkmarx at the time the warranty was given;
      • Checkmarx shall be liable in accordance with the German Product Liability Act in the event of product liability;
      • Checkmarx shall be liable for losses caused by a breach of its primary obligations by it, its legal representatives or assistants in performance. Primary obligations are such basic duties which form the essence of the Agreement, which were decisive for the conclusion of the Agreement and for the performance of which Customer may rely. If Checkmarx breaches its primary obligations through simple negligence, then its ensuing liability shall be limited to the amount which was foreseeable by Checkmarx at the time the respective service was performed and in any case shall be limited to 150 % of the total Fees payable by Customer to Checkmarx in the respective contract year.
    • Checkmarx shall be liable for loss of data only up to the amount of typical recovery costs which would have arisen had proper and regular data backup measures been taken.
    • Any more extensive liability of Checkmarx is excluded.”
14. Section 16.1 of the Agreement is hereby replaced with the following:

“16.1. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of Germany.

6. Section 16.2.1 of the Agreement is hereby replaced with the following:

“16.2.1   Rules and Place of Arbitration. For Customers incorporated in Germany, binding arbitration shall be conducted in accordance with the Rules of Arbitration of the International Chamber of Commerce (“ICC”) and administered by the ICC. The arbitration shall be conducted in the English language in Hamburg, Germany, unless otherwise agreed by the Parties.”

7. Section 17.18 of the Agreement is hereby replaced with the following:

“17.18 Contracting Entity. For Customers incorporated in Germany, the Checkmarx contracting entity is defined as Checkmarx Germany, GmbH.”