Exhibit 10.3
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
AMENDMENT NO. 1 TO
PROFESSIONAL SERVICES AGREEMENT
This Amendment (this “Amendment”) is effective as of January 1, 2011 (the
“Amendment Effective Date”), and is entered into by and between International
Business Machines Corporation, a New York corporation with a primary business
address of Armonk, New York 10504 USA (“IBM”), and athenahealth, Inc., a
Delaware corporation with a primary business address of 311 Arsenal Street,
Watertown, Massachusetts 02472 USA (“Athena”), for which IBM provides services
under the Professional Services Agreement effective October 2, 2009, between
such parties (the “PSA”).
WHEREAS, Athena and IBM are parties to the PSA;
WHEREAS, Athena and IBM now wish to amend the PSA as set forth herein;
NOW THEREFORE, the parties hereto agree as follows:

1.   Any capitalized terms used and not defined in this Amendment shall have the
same meaning as defined in the PSA.   2.   The first sentence of Section 4(a) of
the PSA is hereby deleted and replaced in its entirety with the following:      
The initial term of this PSA (the “Initial Term”) shall commence as of the
Effective Date and will continue until December 31, 2015, unless earlier
terminated in accordance with the provisions of this PSA, with two-year
automatic renewals to follow the Initial Term (collectively, the “Term”).   3.  
The fourth paragraph of Section 2 of Schedule C to the PSA is hereby deleted and
replaced in its entirety with the following:       While Athena will strive to
provide the volumes necessary to support the annual Baseline Charges as
reflected by the Baseline Charges amount in Exhibit C-2 (Annual Charges), Athena
will commit to the annual Minimum Charges as reflected by Minimum Charges amount
set forth in Exhibit C-2 (Annual Charges). If Athena fails to provide the
volumes necessary to support such Minimum Charges, IBM will invoice for, and
Athena will pay, an amount equal to the difference between the actual charges
for a year and the Minimum Charges for such year. In recognition of this
commitment from Athena, IBM will offer, for volumes delivered out of India, the
tiered application of the Foreign Exchange (FX) and Economic Cost Adjustment
(ECA) provisions set forth in Sections 7 and 8 of this Schedule C, respectively.
  4.   Sections 7 and 8 of Schedule C to the PSA are hereby deleted and replaced
it their entirety with the following:     7.  Foreign Exchange       Subject to
Section 6(b) of the PSA and as more fully described below, IBM will annually
calculate and apply an adjustment to the billing rates in Exhibit C-1
(Baselines) based upon movements in the underlying currency rates, starting on
January 1, 2011. IBM has established the billing rates as of the Effective Date
based on the foreign exchange rates identified in the table below as Current
Foreign Exchange Rate (CFER).

Athena / IBM Confidential

Page 1 of 5

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PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.

                  CFER Service Location   Currency   1 $U.S. equivalent to:
India   India (Rupee)   47.72 INR           Philippines   Philippines (Peso)  
47.55 Pesos

The actual foreign exchange rate (AFER) for the currency in question, as
published in the New York Times as of October 15th of the previous calendar
year, will be used to calculate the rate adjustment. A foreign exchange rate
change percentage for each currency will be calculated as follows: ((CFER —
AFER) / CFER).*
For example, if the AFER for India published in the New York Times as of
October 15, 2010, equals 50.60 INR to 1 USD, the rate adjustment for 2011 would
be calculated as follows: *
8. Economic Cost Adjustment (ECA)
For purposes of pricing under this Schedule C and to reflect changes in the cost
of living, the economic indices set forth below will be used for calculating
annual economic cost adjustment for each of the Services, based on its location
of delivery, beginning January 1, 2011.

      Service Location   Source
India
  Consumer Price Index for All-India Urban Non-Manual Employees (UNME) as
published by the Government of India, Ministry of Statistics and Programme
Implementation (http://mospi.nic.in/mospi_cpi.htm) (India Price Index)
 
   
Philippines
  Monthly Consumer Price Index for All Income Households in the National Capitol
Region (NCR) by Commodity Group, All Items, as published by Philippines National
Statistics Office
 
  http://www.census.gov.ph/data/sectordata/datacpi.html (Philippines National
Capital Region Price Index)
 
   
United States
  “Employment Cost Index for total compensation, for private industry workers”
for the “Service Occupations” occupational group (not seasonally adjusted)
published by the United States Bureau of Labor Statistics found at the following
web site http://www.bls.gov/news.release/eci.t05.htm

If one of the above sources stops publishing the referenced index or
substantially changes its content and format, the Parties may substitute another
comparable index published by a mutually agreeable source.
Beginning in 2011, IBM will apply the ECA to monthly invoices beginning in
January of each calendar year. No later than October 31 of each year, IBM will
calculate and communicate to Athena the ECA that IBM will apply to invoices
during the following calendar year. IBM will calculate the ECA based on the
percent increase in the applicable index between the previous two Septembers or
over the closest rolling twelve-month period available at the time of
calculation, rounded to the nearest one hundredth of one percent (the “ECA
Factor”). *
The ECA in each calendar year shall be determined as follows:
Adjusted Rate = Prior Rate x (1 + ECA Factor), where “Adjusted Rate” means the
particular rate for a Service for the calendar year for which the cost of living
adjustment is being computed, and “Prior Rate” means the applicable “2009/2010
Rate” for that Service set forth in Exhibit C-1, as such Rate has been adjusted
for ECA and foreign exchange adjustment (if any). *
Athena / IBM Confidential

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PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
For example for services performed out of India, if the applicable US Index for
September 2009 is 180, the applicable US index for September 2010 is 182.6, and
the applicable US index for September 2011 is 185, the ECA Factor for 2011 would
be *
Each month, IBM will invoice Athena using the greater than or equal to
ninety-five percent (>=95%) volume tier for Indian Services as set forth in
Table 2 below. The actual total invoiced amount for a quarter (including Manila
volumes, billed at the full ECA and FX rate) will be compared against the
Quarterly Baseline Spend for such quarter as set forth in Table 1 below.
TABLE 1

                                              Q1 Baseline   Q2 Baseline   Q3
Baseline   Q4 Baseline     Year   Spend   Spend   Spend   Spend   Total
2011
    *       *       *       *       *  
2012
    *       *       *       *       *  
2013
    *       *       *       *       *  
2014
    *       *       *       *       *  
2015
    *       *       *       *       *  

This comparison will be expressed as a percentage and will determine, according
to Table 2 below, the revised pricing IBM will use to calculate and include in
the third monthly invoice of each quarter any charges Athena may have incurred
for delivering less than 95% of the relevant quarter’s baseline spend. IBM will
apply these additional quarterly charges to volumes of work delivered in the
given quarter out of India only, as IBM will always bill Athena 100% FX and ECA
at all volume tiers for work conducted out of the Philippines.
TABLE 2

      Volume Tier   Band
*
  *
*
  *
*
  *
*
  *
*
  *
*
  *

*

5.   Exhibit C-2 to Schedule C to the PSA is hereby deleted and replaced in its
entirety with the following table:

Athena / IBM Confidential

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PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.

                                                          Exhibit C-2: Annual
Charges.                               2009   2010   2011   2012   2013   2014  
2015
Baseline Charges
    *       *       *       *       *       *       *  
Minimum Charges
    *       *       *       *       *       *       *  

6.   The first paragraph of Section 9 of Schedule C to the PSA is hereby deleted
and replaced in its entirety with the following:       In the event of
termination for convenience by Athena in accordance with Section 4(b) of the
PSA, IBM will invoice Athena the applicable termination charges for convenience
on the effective date of the termination as set forth in Exhibit C-3
(Termination Charges for Convenience).   7.   Exhibit C-3 to Schedule C to the
PSA is hereby deleted and replaced in its entirety with the following table:

    Exhibit C3 — Termination Charges for Convenience

                                              Termination Charges          
Termination Charges           Termination Charges Month   for Convenience  
Month   for Convenience   Month   for Convenience
*
            *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *       *     $ —  
*
  $ *       *     $ *                  
*
  $ *       *     $ *                  
*
  $ *       *     $ *                  
*
  $ *       *     $ *                  
*
  $ *       *     $ *                  
*
  $ *       *     $ *                  
*
  $ *       *     $ *                  
*
  $ *       *     $ *                  

8.   Except as set forth above, the PSA shall remain unchanged and in full force
and effect.

Athena / IBM Confidential

Page 4 of 5

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PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
The PSA, as modified by this Amendment, including its attachments and exhibits
(if any), is the entire agreement and expresses the complete understanding of
the Parties with regard to the subject matter herein and may not be modified,
amended, or waived except as provided in the PSA.
In witness whereof, the Parties have executed this Amendment as of the Amendment
Effective Date.
International Business Machines Corporation athenahealth, Inc.

                 
By:
  /s/ Atul Mori
 
Name: Atul Mori   By:   Timothy M. Adams
 
Name: Timothy M. Adams    
 
  Title: Delivery Exec       Title: SVP and CFO    
 
                Date: 3/11/11   Date: 3/11/11    

Athena / IBM Confidential

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