exv10w1






Exhibit 10.1




SECOND OMNIBUS AMENDMENT TO MICROSOFT OPERATIONS DIGITAL

DISTRIBUTION AGREEMENT




AMENDMENT SUMMARY AND SIGNATURE PAGES


This Second Omnibus Amendment (“Amendment”) to the Microsoft Operations Digital Distribution
Agreement is entered into between:




Microsoft Corporation




     A corporation organized under the laws of the State of Washington, U.S.A. (“Microsoft”)



AND




Digital River, Inc.




     A company organized under the laws of the State of Delaware, U.S.A. (“Company”)



	 	 	 

	Amendment Effective Date

	 	This Amendment shall become effective on the
latter of the two signature dates set forth
below.
	 
	 	 
	Purpose and Scope:

	 	Company and Microsoft are parties to a
Microsoft Operations Digital Distribution
Agreement dated September 1, 2006 (as the
same may have been amended, supplemented or
otherwise modified from time to time, the
“Agreement”), pursuant to which Company has
provided E-Commerce Activities to Microsoft in
accordance with the terms of the applicable
SOWs.
	 
	 	 
	 

	 	Company has agreed, as part of the E-Commerce
Activities, to host one or more Microsoft
websites and to make Product available for
purchase by End-Users from Microsoft through
those websites.
	 
	 	 
	 

	 	This Amendment (i) adds a new “Hosted Platform
Addendum” to the Agreement, which will apply
when Company hosts, as part of the E-Commerce
Activities, one or more websites and makes
products available for purchase by Authorized
Parties through those websites on Microsoft’s
behalf, and (ii) effectuates certain other
changes to the Agreement made necessary by the
inclusion of the Hosted Platform Addendum and
Company’s performance of the E-Commerce
Activities contemplated in the Hosted Platform
Addendum and the related SOW(s).






This Amendment consists of the following:





	 	•	 	This Amendment Summary and Signature
Page
	 
	 	•	 	The Amendment Terms and Conditions
	 
	 	•	 	Attachment 1: Hosted Platform Addendum
	 
	 	•	 	Attachment 2: [*]
	 
	 	•	 	Attachment 3: [*]








 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.




 









 











SECOND OMNIBUS AMENDMENT TO MICROSOFT OPERATIONS DIGITAL

DISTRIBUTION AGREEMENT




Microsoft and Company enter into this Amendment by signing below.




	 	 	 	 	 	 	 

	[MICROSOFT CORPORATION]	 	DIGITAL RIVER, INC.
	 
	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Print Name:

	 	 	 	Print Name:	 	 
	 

	 
	 	 	 






	 	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 
	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 
	 

	 
	 	 	 







 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.





 









 





AMENDMENT TERMS AND CONDITIONS




     1. Extension of Term of Agreement. The date defined as the “Expiration Date” in the
Agreement (and any subsequent amendments thereof) is hereby deleted and replaced with a reference
to “October 31, 2013.” Unless the Agreement is terminated earlier, or the Expiration Date is again
extended by mutual written agreement of the parties, the Agreement will expire on the new
Expiration Date set forth in the preceding sentence.



     2. Addition of New Hosted Platform Addendum to the Agreement. A new, Hosted
Platform Addendum in the form of Attachment 1 to this Amendment is hereby added to the
Agreement. The terms and conditions in the Hosted Platform Addendum shall apply only where Company
will, as part of the E-Commerce Activities specified in the applicable SOW, be hosting one or more
Microsoft websites and making products available for purchase by Authorized Parties from Microsoft
through those websites.



     3. [*]



     4. [*]



     5. Press Release. Microsoft acknowledges that Company desires to issue a press
release relating to the execution of the Store SOW and Microsoft’s selection of Company to perform
the E-Commerce Activities specified therein. If Company submits a draft press release relating to
the foregoing matters to Microsoft for review in accordance with Section 7(c) of the Agreement,
Microsoft agrees that it shall review such press release in good faith and that it shall not
unreasonably withhold or condition its approval of such press release or unreasonably delay its
response to Company in respect thereof.



     6. [*]



     7. Amendments to Agreement.



               (a) Amendment to Section 7(c) of Agreement. Two new sentences are hereby added at the
end of Section 7(c) of the Agreement to read as follows:




          “Anything in this Section 7(c) to the contrary notwithstanding, if Company is
obligated to file periodic reports with the Securities and Exchange Commission, then
Company shall have the right to file a copy of any portion of this Agreement with the
applicable commission or governmental agency to the extent necessary, in Company’s
reasonable opinion, to comply with any applicable disclosure laws or regulations
(including any reporting requirement of the Securities Exchange Commission), or any
listing requirement of any stock exchange, including NASDAQ, applicable to Company;
provided, that Company (i) notifies Microsoft in writing reasonably in advance
of any such filing and (ii) makes a good faith effort to seek confidential treatment
from such commission or governmental agency for any provisions in this Agreement which
Company reasonably believes would be (A) viewed as highly confidential by Microsoft or
(B) injurious to Microsoft if known by Microsoft’s competitors or other vendors.
Company shall provide to Microsoft in connection with any notice under subpart (i)
above, a summary of the provisions of this Agreement for which Company will seek
confidential treatment under subpart (ii) above as part of the applicable filing.”



               (b) Amendments to Section 15(b)(ii)(B) of Agreement. Subparts (i) and (v) of Section
15(b)(ii)(B) of the Agreement are hereby deleted in their entirety and the remaining subparts of
that Section are hereby adjusted accordingly.



               (c) Addition of New Section 15(b)(ii)(F) to Agreement. A new subsection (F) is hereby
added to Section 15(b)(ii) of the Agreement to read as follows:




     “(F) Either party (in this context, the “Terminating Party”) may terminate this
Agreement, or any particular SOW, and Company (if it is the Terminating Party) may
terminate or suspend its performance under this Agreement or any particular SOW, with
not less than one hundred eighty (180) days’ prior written notice to the other party
(the “Affected Party”) if:




          (i) the Affected Party enters into one or more definitive agreements (each, a
“Definitive Agreement”) under which the Affected Party will or does:






 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.




 









 






                    (1) sell or transfer all or a substantial part of its assets to a third party,




                    (2) merge with another entity, or




                    (3) undergo a change in control (any of the foregoing, an “Acquisition
Transaction”); 


and




          (ii) in the case of an Acquisition Transaction described in subpart (2) or (3)
above, following consummation of the Acquisition Transaction, the Affected Party (or
its successor) will not be (or is not, as the case may be) controlled, either directly
or indirectly, by a private equity company (as defined below);




provided, that if the Affected Party provides written notice to the
Terminating Party that it has entered into (or intends to enter into) the Definitive
Agreement(s) for an Acquisition Transaction the Terminating Party must deliver its
notice of termination or suspension to the Affected Party (or its successor) under
this subsection (F) within thirty (30) days after receipt of the Affected Party’s
written notice to that effect (or the Affected Party’s actual execution of the
Definitive Agreements, if later) or it shall be deemed to waive such right.




          For purposes of this subsection (F), one entity “controls” another if the entity
directly or indirectly through an Affiliate, holds the majority of the voting rights
in that entity, or has the right to appoint or remove a majority of its board of
directors, or controls alone or under an agreement with others the majority of the
voting rights in it and “private equity company” means a company whose principal
business is acquiring, or investing in, the businesses of others and which is not
controlled by a person or entity whose principal business involves the selling of
products and/or the provision of services.



               (d) Amendments to Section 15(d) of Agreement. In the first sentence of Section 15(d)
of the Agreement, the words “combination or centralization” are hereby deleted. In addition, in
the last sentence of Section 15(d) of the Agreement, the phrase “at Company’s expense” is hereby
deleted and replaced with “at Microsoft’s reasonable expense.”



     8. Definitions. Capitalized terms used in and not otherwise defined in this Amendment
or the attachments shall have the meanings given to them in the Agreement.



     9. No Further Amendment. Except as expressly modified by this Amendment, the
Agreement and shall remain unmodified and in full force and effect.



     10. Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original and as executed shall constitute one agreement, binding on
both parties even though both parties do not sign the same counterpart.



END OF AMENDMENT TERMS AND CONDITIONS







 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.




 









 





ATTACHMENT 1




HOSTED PLATFORM ADDENDUM

TO

MICROSOFT OPERATIONS DIGITAL DISTRIBUTION AGREEMENT



               This Hosted Platform Addendum (this “HPA”) supplements and, to the extent applicable
amends, the Agreement with respect to all SOWs under which Company will host, as part of the
E-Commerce Activities, one or more Microsoft websites and make products available for purchase
by Authorized Parties through those websites on Microsoft’s behalf.




	 	1.	 	Additional Definitions. Capitalized terms used in and not otherwise defined
in this HPA shall have the meanings given to them in the Agreement. The terms below shall
have the following meanings:





                    (a) “Chargeback” means (i) in the case of Transactions subject to the Network Rules of a
Network, any chargeback transaction initiated in accordance with the applicable Network Rules and
(ii) in the case of Transactions processed through a Non-Card Network (as defined in Section 6(b)),
any chargeback or reversal of a purchase Transaction initiated under the Non-Card Network’s
standard rules or guidelines, if any, other than in connection with a return under Microsoft’s
then-current returns policy.



                    (b) “Company-Sourced Third-Party Products” means any and all third-party products and services
available for purchase through a Website which are acquired by Microsoft for resale from Company,
but shall not include Products. If Microsoft elects to purchase Company-Sourced Third-Party
Products from Company, Microsoft and Company acknowledge and agree that the terms governing such
purchases shall be set forth in a separate written agreement between the parties.



                    (c) “Content” means any and all text, pictures, sounds, graphics, video, or other data in any
format whatsoever, integrated into or used on a Website, as such materials may be modified from
time to time.



                    (d) “EULA” means the applicable Microsoft End-User License Agreement for a Microsoft Product.



                    (e) “Hosting Services” means those E-Commerce Activities provided by Company under a SOW which
expressly references this HPA and which involve (i) the creation or assembly of Websites on servers
owned or controlled by Company; (ii) incorporating Content onto Websites; and/or (iii) hosting
and/or maintaining Websites on servers owned or controlled by Company.



                    (f) “Microsoft-Sourced Third-Party Products” means any and all third-party products and
services available for purchase through a Website which are acquired by Microsoft for resale from a
third-party other than Company, but shall not include Products.



                    (g) “Network” means a card association or network (e.g. Visa, Mastercard, Discover or American
Express).



                    (h) “Network Rules” means the bylaws, rules, regulations, and other requirements issued by a
Network from time to time, but solely to the extent that the foregoing are applicable to Microsoft,
the applicable Member Bank, or Company, as the case may be, in relation to the E-Commerce
Activities.



                    (i) “Territory” means the geographic territory(ies) designated in the applicable SOW within
which Products, Upgrades and Third-Party Products will be sold to Customers via the Website(s)
under such SOW. If the United States is designated as a Territory, the Territory shall include
Puerto Rico and United States military bases located outside of the United States.



                    (j) “Third-Party Product” means, collectively, the Company-Sourced Third-Party Products and
the Microsoft-Sourced Third-Party Products.



                    (k) “Transaction” means the sale of one or more Product(s), Upgrades or Third-Party Products
(and any related, ancillary products or services) offered through the Website by Microsoft to a
User through a single order.






 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.




 









 





                    (l) “Upgrade” means the upgraded Products and Third-Party Products that an Authorized Party
obtains through installation of certain encrypted upgrade software code in object code format
provided by Microsoft and/or the purchase and application of license keys and key controls.



                    (m) “User” means a potential Customer, business partner, Microsoft employee or other person
who accesses a Website.



                    (n) “Website” means a website (which may include a store, cart and/or checkout) which is
branded with Microsoft’s trademarks through which certain Users may obtain and/or purchase
Products, Upgrades, and Third-Party Products from Microsoft. Such Websites are created, assembled,
hosted and maintained by Company under this HPA and a SOW. For the avoidance of doubt, the term
“Website” shall not be deemed to include any webpage(s) hosted and maintained by Microsoft or
another vendor of Microsoft, regardless of whether the URL for such website contains one or more of
the same components as the URL for a Website (e.g. “microsoftstore”).



     2. Microsoft as Seller of Record for Transactions. Notwithstanding anything to the
contrary, Microsoft (and not Company) will be the seller of record for all sales of Products,
Upgrades and Third-Party Products to Users through the Websites provided by Company pursuant to
this HPA and any SOW referencing this HPA. Microsoft shall have the sole discretion to set the
price or license fee at which the Products, Upgrades and Third-Party Products are offered for sale
to Users through the Websites. All prices to Users shall be in the currencies mutually agreed
upon in the applicable SOW. As seller of record, title to Products, Upgrades and Third-Party
Products shall pass directly from Microsoft to the Customer or Authorized Party and at no time will
Company be deemed to have or take title to any Product(s), Upgrades or Third-Party Products sold by
Microsoft pursuant to this HPA and any SOW referencing this HPA (other than Company-Sourced
Third-Party Products prior to sale to Microsoft or as otherwise provided in any agreement governing
the terms of the sale of Company-Sourced Third-Party Products to Microsoft). Microsoft agrees and
acknowledges that it shall not enter orders on behalf of Users through the Website except as
expressly agreed upon by the Parties in a SOW referencing this HPA. Company shall have the right to
reject any Product, Upgrade or Third-Party Product for listing through the Website(s) that is not
compliant with applicable laws, rules or regulations.



     3. Development and Maintenance of Websites. Company shall develop and maintain
Websites in accordance with the guidelines and requirements detailed in the applicable SOW.
Company will be responsible for preparing and delivering [*] all disclosures to Users that
it determines to be required or appropriate (it being understood that Microsoft shall have the
right to approve such disclosures (such approval not to be unreasonably withheld or delayed) in
advance of delivery to Users and to reasonably require additional disclosures), [*]
including “who we are” disclosures designed to clearly disclose Company as the e-commerce services
provider with respect to Transactions and the text of pages utilized in connection with the
Website(s) and other disclosures necessary for Company to comply with its agreements with its
payment processors. The format, placement and “look and feel” of all such disclosures and text will
be subject to Microsoft’s prior written approval, which shall not be unreasonably withheld or
delayed. As the seller of record, Microsoft shall control the privacy policy, terms and
conditions of sale, and returns policy (subject to the terms in this HPA) utilized in connection
with the Website(s) [*] Company shall process Transactions with Users residing in the
applicable Territory only. Microsoft shall have the right, at its option, to review and approve
the branding and “look and feel” of the Websites and any Content to be included thereon and to
require Company to make changes thereto (provided such changes comply with applicable laws, rules
and regulations). Company shall incorporate any terms of use, privacy policies and other notices
onto the Websites that are required in good faith by Microsoft from time to time, so long as such
notices are in compliance with applicable laws, rules and regulations. Each party shall comply
with all applicable laws, rules and regulations in connection with the development and maintenance
of the Websites and the parties shall cooperate in good faith to ensure that the Websites remain in
compliance with all applicable laws and regulations. Microsoft shall obtain and will maintain in
full force and effect any and all consents, authorizations, approvals and licenses necessary in
connection with the sale of the Products, Upgrades and Third-Party Products pursuant to this HPA
and the SOWs referencing this HPA.



     4. Hosting Support. In addition to the Hosting Services described in the applicable
SOW, Company shall provide support in connection with the Hosting Services as follows:



                    (a) conduct website and server maintenance [*] on Websites [*];



                    (b) [*];



                    (c) provide technical support to Microsoft’s customer service representatives in respect of
the operation of the Website and User issues relating thereto as described in the applicable SOW;






 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.




 









 





                    (d) provide training and online tools in relation to the use and operation of the Website in
accordance with the terms of the SOW (it being agreed that Company is not responsible for providing
product support to Users unless otherwise provided in the applicable SOW); and



                    (e) provide Microsoft with online access to its globalCommerce Command Console (the
“Administration Interface”), through which Microsoft may administer certain parts of the Website;
add, remove, or change information related to Products, Upgrades and Third-Party Products available
for sale through the Website (including, without limitation, the pricing applicable thereto and
promotions in respect thereof) and obtain standard online reports (it being understood and agreed
that if Microsoft modifies any terms applicable to the Products, Upgrades or Third-Party Products
on the Website(s) through the Administration Interface, that Company shall not be responsible for
any deviation between such information, as modified, and any conflicting requirements in this HPA
or the applicable SOW).



     5. Ownership of Content; Reaffirmation of Ownership of Materials and Company IP.
Company acknowledges that any Content provided to it by or on behalf of Microsoft pursuant to this
HPA or any SOW shall constitute “Materials” under the Agreement and is the property of Microsoft or
its licensors, and that Company has no rights in such Materials except for any applicable license
rights contained in the Agreement. Microsoft acknowledges that any Company-provided Content
utilized on the Website which does not constitute Materials or a Deliverable shall be deemed
“Company IP” under the Agreement and is the property of Company or its licensors, and that
Microsoft has no rights in such Company IP except for any applicable license rights contained in
the Agreement. Microsoft further acknowledges that neither Company-provided Content nor any aspect
of Company’s core infrastructure or functionality in its e-commerce platform used to dynamically
generate Website pages or any implementation thereof utilized in connection with the E-Commerce
Activities contemplated in this HPA or any SOW referencing this HPA shall be deemed a “Deliverable”
under the Agreement and that such items shall be deemed to be Company IP, unless specifically
provided to the contrary in the applicable SOW. Microsoft shall not disassemble, decompile, or
otherwise reverse engineer or otherwise attempt to learn the source code or algorithms underlying
any Company IP.



                    (a) Each party shall be responsible for its respective Content and shall ensure that such
Content does not and will not: (i) contain any material that is unlawful, obscene, or defamatory or
that violates any intellectual property rights or any other rights of any third party; or (ii)
promote or facilitate any violence, discrimination or other illegal activities.



                    (b) Each party shall obtain any and all necessary clearances, releases, approvals and consents
from third parties and make any and all required payments to third parties in connection with the
other party’s use of such party’s Content in connection with the E-Commerce Activities.



     6. Termination of Any Website; Discontinuance of Products or Third-Party Products.
Microsoft shall have the right, with not less than thirty (30) days’ prior written notice, to
require Company to shut down any Website URL if Microsoft reasonably believes that Company or
Microsoft’s use of such URL in connection with the E-Commerce Activities violates the rights of any
third party, provided that Microsoft shall use best efforts to secure an alternative URL for the
purpose of the applicable SOW as soon as reasonably practicable. Microsoft shall further have the
right, at any time and for any reason, with notice to Company, to discontinue the sale of any
Product, Upgrade or Third-Party Product, or the use of Company or a Website to sell such Product,
Upgrade or Third-Party Product. Following receipt of any written notice from Microsoft that it
desires to discontinue the sale of any Product, Upgrade or Third-Party Product, Company shall
remove such Product, Upgrade or Third-Party Product (including any advertising) from the Website(s)
as promptly as reasonably practicable (but will use best efforts to do so within five (5) calendar
days) after receipt of such notice from Microsoft.



                    (a) In the event any claim in connection with any Product, Upgrade and/or Third-Party Product
offered for sale through a Website is asserted against Company, its Affiliates, Microsoft, and/or
the manufacturer or publisher of such Product, Upgrade and/or Third-Party Product (if not
Microsoft), and Company reasonably believes (in the opinion of its legal counsel) that such claim
is non-frivolous and could subject Company to increased legal or business risk should such Product,
Upgrade and/or Third-Party Product remain available for sale through the Website then Company will
have the right to or suspend or terminate the sale of such Product, Upgrade and/or Third-Party
Product in connection with the HPA and any applicable SOWs with not less than fifteen (15) days
prior written notice to Microsoft, and may take such other actions as it deems to be reasonably
necessary to comply with applicable law (including without limitation the “safe harbor” provisions
of the Digital Millennium Copyright Act or similar local legislation).



                    (b) Company shall establish and maintain unique merchant identification numbers under
applicable Network Rules for credit card and debit card payments processed by Company under this
HPA as part of the E-Commerce Activities. In the event that payments through any entity, other
than a Network, are accepted by Company for Transactions as agreed upon in an applicable SOW (e.g.,
PayPal) (each, a “Non-Card Network”), and any such Non-Card Network allows companies






 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.





 









 




performing services similar to the E-Commerce Activities governed by this HPA to establish
unique merchant identification numbers or merchant-specific accounts or contractual relationships
(each, a “MID”), Company shall additionally establish MIDs with such Non-Card Networks. Company
shall use the MIDs solely in connection with Transactions the payment for which is processed by
Company as part of the E-Commerce Activities under this HPA (each such Transaction, a “Processed
Transaction”). Company shall promptly notify Microsoft in writing (each such notice, a “Chargeback
Notice”) in the event that (i) the Chargeback rates for a calendar month under a MID exceed a
Network’s (or Non-Card Network’s, as the case may be) threshold for the ratio of Chargebacks to
Processed Transactions or (ii) Company believes, based on its forecasting of anticipated
Chargebacks in connection with Processed Transactions, that the Chargeback rates for future
calendar months under the MIDs are likely to exceed a Network’s (or Non-Card Network’s, as the case
may be) threshold for the ratio of Chargebacks to Processed Transactions. Each Chargeback Notice
shall include sufficient data to allow Microsoft to verify Company’s calculations. Following
Microsoft’s receipt of a Chargeback Notice, Microsoft and Company shall promptly discuss the
reasons underlying the Chargebacks during the applicable calendar month (or, as applicable, the
bases for Company’s projections for future Chargebacks) and cooperate in good faith with the goal
of reducing the incidence of Chargebacks as stated in the Chargeback Notice and avoiding Network
(or Non-Card Network) fees and fines for Chargebacks.




          [*]




     7. Additional Confidentiality, Privacy and Personal Information Requirements.



                    (a) Confidentiality Requirements. [*] Company shall not disclose Personal Information
to any third party, except in connection with fraud prevention activities, bank authorizations,
charge-backs and Company record retention policies or as required under applicable law or Network
Rules, without Microsoft’s prior written consent. [*] Each party acknowledges that it will
access, use and disclose such Personal Information in compliance with any applicable laws and
applicable Network Rules. Except as expressly amended in this Section 7, Company’s obligations
under the Agreement with respect to Personal Information shall remain unaffected.



                    (b) Collection and Use of Personal Information. Company shall comply with Section 7
of the Agreement with respect to the collection and use of all Personal Information collected by
Company through any Website. [*]



                    (c) Privacy Notices. Each Website must contain clear and conspicuous privacy notices
established and maintained by Microsoft which includes a statement that Microsoft may share with
third parties (such as Company), or authorize third parties to collect and use certain User
information in connection with the processing of a User’s order for the purchase of Products,
Upgrades and/or Third-Party Products as well as for ongoing fraud control and (if applicable)
customer service. The privacy notices must comply with all relevant laws. Nothing in Microsoft’s
privacy notice shall prevent or be deemed to prevent Company from receiving cardholder information
or using it in accordance with the Tri-Party Agreement, this HPA or any SOW which references this
HPA. As between Users and Microsoft, Transactions shall be governed by Microsoft’s privacy notice
applicable to the Website. Any User information used by Company in connection with the processing
of a User’s order for the purchase of Products, Upgrades and/or Third-Party Products shall be
governed by the restrictions on the use of Personal Information contained in this HPA and/or the
Tri-Party Agreement.



                    (d) PCI Security Standards; Network Rules. Company will comply at all times with the
applicable PCI security standards established by the PCI Security Standards Council (including the
PCI DSS requirements for cardholder data (Level 1) and the PCI Payment Application DSS for certain
payment applications) which are required to be implemented under the Network Rules (the “PCI
Standards”). Company will provide to Microsoft upon Microsoft’s request, on an annual basis, a
certification of a duly authorized officer who has knowledge of Company’s compliance with the PCI
Standards, which certification will state that Company is in compliance with the PCI Standards. If
Microsoft receives cardholder data in connection with Company’s performance of E-Commerce
Activities governed by this HPA, Microsoft agrees that it will comply with the PCI Standards in
respect of such cardholder data if (but then only to the extent) it is required to do so by one or
more Networks under applicable Network Rules.



     8. Inventory Management. Without limiting any other term herein, the parties agree
that the Inventory Management Terms and Conditions attached to the Agreement (the “Inventory
Management TC”) shall apply to any Inventory and Third-Party Products in Company’s possession or
under Company’s control under this HPA and a related SOW. All Inventory and Third-Party Products
made available for purchase through a Website in connection with this HPA, and all components
thereof, shall constitute (a) “Inventory” and a part of the “Microsoft Inventory and Related
Materials” for all purposes of the Inventory Management TC and (b) “Inventory” for all purposes of
the Agreement. Company will provide Customers and Authorized Parties with physical media,
documentation and components as provided in the applicable SOW. Notwithstanding the forgoing,





 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.





 









 




nothing in this section shall apply to Company-Sourced Third-Party Products until such time as
they are acquired by Microsoft for resale from Company.




     9. [*]



     10. Returns. Returns of Products, Upgrades and Third-Party Products shall be
processed by the parties in accordance with the terms of the applicable SOW. Notwithstanding the
foregoing, Microsoft may modify its return policy for Customers for any Product, Upgrade or
Third-Party Product by providing not less than [*] calendar days advance written notice to Company.
In the event that any change to Microsoft’s returns policy for a Product, Upgrade or Third-Party
Product would, in Company’s reasonable opinion, materially alter Company’s internal processes
associated with implementing Microsoft’s return policy or materially increase the cost to Company
of implementing such policy, Company may notify Microsoft of that fact in writing, in which event
the parties will discuss in good faith mutually-agreeable solutions to any issues reasonably raised
by Company and any such solutions shall be described in an amendment to the applicable SOW signed
by both parties.



     11. End-User License Agreement. Where Company, its agents or subcontractors is
responsible for digital fulfillment as designated in the applicable SOW, Company shall provide
Customers with the EULAs for Microsoft Products (in the form specified by Microsoft in writing and
updated by Microsoft from time to time at its sole discretion) to be provided with the applicable
Products or Upgrades which govern the Customer or Authorized Party’s use and license of the
Products or Upgrades. Microsoft will be solely responsible for the terms of, and its compliance
with, any and all EULAs relating to Products and Upgrades.



     12. Taxes. Company shall carry out Microsoft’s tax policy as agreed upon in the
applicable SOW. Company will bill and cause to be collected any and all U.S. and foreign sales, use
and value added and comparable taxes, duties, tariffs, and other government-assessed fees and
charges (“Taxes”) in accordance with written instructions as may be provided in writing to Company
by Microsoft from time to time. Microsoft acknowledges that it is responsible for the content in
such written instructions. If Microsoft gives notice to Company of changes in the billing and
collection of Taxes, Company will implement these changes as promptly as reasonably practicable.



                    (a) [*]



                    (b) [*]



     13. Physical and Digital Fulfillment; Customer Service. Unless Company agrees to do so
in an applicable SOW, Microsoft shall provide Customers purchasing Products, Upgrades or
Third-Party Products with the physical media and components (if any) provided for in the applicable
SOW. Unless otherwise agreed to in a SOW referencing this HPA, Company agrees that it shall (or,
to the extent permitted in the Agreement, cause its agents or subcontractors to), as Microsoft’s
fulfillment agent, provide Customers with the electronically digital components (e.g., digital
license keys, control numbers, etc.) associated with the Products, Upgrades and Third-Party
Products in accordance with the requirements set forth in the applicable SOW. Unless otherwise
agreed to in a SOW referencing this HPA, Company shall not be obligated to provide customer service
to Customers and Authorized Parties relating to Products, Upgrades or Third-Party Products. With
the exception of any warranties made by Company in respect of Company-Source Third-Party Products
in any agreement setting forth the terms on which Microsoft will purchase such Company-Sourced
Third-Party Products from Company, Company shall have no obligations to Authorized Parties or
Microsoft with respect to Product, Upgrade or Third-Party Product warranties.



     14. Payment Processing Services.



                    (a) Prior to the Launch Date (as defined in the applicable SOW), (a) Microsoft will enter into
one or more agreements with Company and an acquiring bank mutually acceptable to the parties (the
“Member Bank”), under which agreement such Member Bank shall authorize Microsoft to submit
Transactions (for which Microsoft will be the seller of record) through the merchant agreement
provided by the Company to Microsoft in partnership with the Member Bank (such agreement, the
“Tri-Party Agreement”) for certain Transactions where a Customer uses a credit or debit card
(which, for the avoidance of doubt, does not include gift cards for purposes of this HPA) and (b)
Company and Microsoft (if applicable) will enter into any additional agreements with third parties
required by Section 16 of this HPA to enable Company to accept the forms of payment required to be
accepted in the applicable SOW. Microsoft agrees and acknowledges that Company shall have no
obligation to make the Website(s) available to Users for Transactions under a SOW until following
the full execution of a Tri-Party Agreement. Without limiting Section 2(a) of the Agreement or
Company’s rights under the penultimate sentence of Section 14(b) of this HPA, Company agrees that
it shall obtain and maintain throughout the term of a SOW, all approvals, permits, registrations,
licenses and other authorizations necessary to process Transactions with the Networks and Non-Card
Networks specified in the applicable SOW and otherwise accept the forms of payment specified in
such SOW as contemplated therein and





 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.





 









 




herein. Without limiting Company’s rights under the penultimate sentence of Section 14(b) of
this HPA, Company agrees that if a SOW governed by this HPA requires Company to accept payments
through one or more Networks and/or Non-Card Networks, Company shall ensure, at all times during
the term of such SOW, that it (i) is authorized to process such payments on Microsoft’s behalf in
the manner contemplated in this HPA and the applicable SOW under its agreements with such Networks
and/or Non-Card Networks and the applicable Network Rules and (ii) remains in compliance with such
agreement(s) and Network Rules in connection therewith.




                    (b) Unless otherwise expressly agreed upon by the parties in the applicable SOW, the proceeds
of all Transactions processed by Company under a SOW governed by this HPA [*] shall be settled or
otherwise deposited directly by the Member Bank(s), the applicable Network(s) or Company, as the
case may be, into one or more Microsoft-owned settlement accounts (each, a “Settlement Account”)
maintained with a financial institution reasonably acceptable to the parties (each, a “Settlement
Bank”). [*]



     15. [*]



     16. Maintenance of Third-Party Relationships. Company and Microsoft agree that they
shall establish and maintain all contractual relationships for payment processing services with
third parties Company and Microsoft mutually agree are necessary to perform the E-Commerce
Activities covered by this HPA and the applicable SOWs, including, without limitation, Tri-Party
Agreement(s), provided that such agreements are not in violation of Network Rules or applicable
law. [*]



     17. [*]



     18. Order of Precedence. In the event of an irreconcilable conflict between this HPA
and the Agreement, this HPA controls with respect to any SOW expressly referencing this HPA. In
the event of a conflict between this HPA and any SOW created hereunder, the provisions of the SOW
with respect to such conflicting provision shall control over this HPA, provided, however, that
such conflicting provisions expressly reference the specific Section in the HPA that the parties
intend to amend or supersede. This HPA does not amend or replace the Direct Reseller Addendum to
the Microsoft Operations Digital Distribution Agreement dated September 1, 2006 between the
parties.



     19. No Further Amendment. Except as expressly modified by this HPA, the Agreement
shall remain unmodified and in full force and effect.





 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.





 









 





ATTACHMENT 2




[*]





 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.





 









 





ATTACHMENT 3

[*]






 




			
	*	 	Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality request. Omissions are
designated as *. A complete version of this agreement has been filed separately with the Securities
and Exchange Commission.