exv10w26






Exhibit 10.26




DIRECT RESELLER ADDENDUM

TO THE MICROSOFT DIGITAL DISTRIBUTION AGREEMENT




Certain confidential information contained in this document, marked by asterisks, has been omitted

and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the

Securities Exchange Act of 1934, as amended.




ADDENDUM SUMMARY AND SIGNATURE PAGE



This Direct Reseller Addendum (“Addendum”) to the Microsoft 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”)



	 	 	 
	Addendum Effective and Expiration Dates:

	 	This Addendum commences on September 1, 2006 (the “Addendum Effective Date”) and,
unless terminated earlier, expires on August 31, 2009 (the “Addendum Expiration
Date”).
	 
	 	 
	Purpose and Scope:

	 	This Addendum supplements and, to the extent applicable amends, the Microsoft
Operations Digital Distribution Agreement between Microsoft and Company,
(“Agreement”) signed as of September 1, 2006 respect to all statements of work
expressly referencing the Agreement and the Addendum. This Addendum supersedes and
replaces the previous Direct Reseller Addendum that was signed concurrently with the
Agreement.
	 
	 	 
	 

	 	The Addendum establishes the terms and conditions under which Microsoft grants
Company a non-exclusive license to resell and distribute certain Microsoft Products
to End-Users. It establishes the legal structure for the parties to create a
business relationship under which Company will resell and distribute, as a seller of
record, certain Microsoft Products to end-users.
	 
	 	 
	 

	 	This Addendum applies only to statements of work expressly referencing the Agreement
and the Addendum. In the event of a conflict between the Agreement and this
Addendum, this Addendum controls with respect to statements of work expressly
referencing this Addendum.






This Addendum consists of the following:





	 	•	 	This Addendum Summary and Signature Page
	 
	 	•	 	The Addendum Contact and Notices Information Page
	 
	 	•	 	The Addendum Terms and Conditions
	 
	 	•	 	Any statements of work (“SOW”) entered into under the Agreement and expressly referencing this Addendum, including the
following statements of work:






	 	•	 	Statement of Work: Office 2007 Digital Distribution (Expiration Date: September 1, 2006)





Microsoft and Company enter into this Addendum 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.




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DIRECT RESELLER ADDENDUM

TO THE MICROSOFT DIGITAL DISTRIBUTION AGREEMENT




ADDENDUM CONTACT AND NOTICES INFORMATION PAGE


Address for Notices. In addition to the notices required under the Agreement, the parties
must send any other communication required by this Addendum to the applicable business contact
indicated in the Business Contact Information table below, in accordance with the Contact and
Notices Information Page of the Agreement.




Business Contact Information




	 	 	 
	Microsoft	 	Company
	 
	 	 
	[*]
	 	[*]
	 
	 	 
	Responsible for: Office 2007
	 	Responsible for: Office 2007








 




			
	*	 	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.




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ADDENDUM TERMS AND CONDITIONS




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



          (a) “End-User” means the user and ultimate consumer of a Product or, in the event of an
Upgrade, the validly licensed user of a Product and the ultimate consumer of an Upgrade.




          (b) “Price List” means the price list provided to Company by Microsoft from time to time
during the term of this Addendum and any applicable SOW for applicable Products and Upgrades. [*]




          (c) “Purchase” or “sale,” as used herein, includes the authorized transfer of a Microsoft
license in the ordinary course of Product distribution. Use of such terminology shall not be
deemed to waive, impair or otherwise affect the Intellectual Property rights of Microsoft.




          (d) “Upgrade” means the upgraded Product set forth on the Price List that an End-User 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.




          (e) “Website” means Company’s digital distribution program website(s) through which End Users
may purchase copies of Products or Upgrades.




     2. License Grant and Restrictions.



          (a) License Grant. For the duration of this Addendum, Microsoft grants to Company a
non-exclusive, limited, non-transferable, non-assignable license to resell copies of those Products
and Upgrades identified in the applicable SOW and to perform order transactions, digital downloads
and fulfillment functionalities in the manner described in the Agreement, this Addendum and the
applicable SOW.




          (b) Restrictions on the License and the Scope of E-Commerce Activities.




               (i) Company shall perform the E-Commerce Activities and apply its license rights under this
Addendum only through websites identified in each applicable SOW (“Approved Websites”), and shall
not move, delete or consolidate Approved Websites in a manner that has any material, adverse impact
on the sales of Microsoft Products or Upgrades without Microsoft’s written permission.



               (ii) Company shall sell and distribute to End-Users physically located in the geographical
territories designated in an applicable SOW.



     3. Development and Maintenance of Approved Websites. Company shall develop and
maintain the Approved Websites in accordance with the website guidelines and requirements detailed
in the applicable SOW. Microsoft must approve the content, branding, functionalities and form of
Approved Websites, such approval not to be unreasonably withheld or delayed. Company shall ensure
that the Approved Websites remain in compliance with all applicable laws and shall provide all
notices to End-Users as required by Microsoft from time to time. For the purposes of ensuring that
the Approved Websites remain in compliance with all applicable laws and regulations, Company may
alter or change the approved site upon notice to Microsoft. The parties may agree on marketing
materials and/or advertising materials related to the Products and Upgrades and other related
programs for inclusion on the Approved Websites. Company shall remove Products and Upgrades
(including any related materials and advertising) from an Approved Website immediately upon the
receipt of a written notice from Microsoft, if for any reason Microsoft decides to discontinue such
Product or Upgrade, or the use of the Company or Approved Website to resell such Products or
Upgrades. If a Product or Upgrade sold through the Approved Website is discontinued because of (i)
a change in applicable law or (ii) order of any court and/or legal action by a third party, Company
shall remove the Product or Upgrade (including any related materials and advertising) as soon as
possible but in any event no later than five (5) calendar days after receipt of notice from
Microsoft.



     4. No Modifications of Products or Materials. For the duration of the Agreement and this
Addendum, Company shall not decompile, disassemble or reverse engineer any Materials, Products or
Upgrades (except and only to the extent






 




			
	*	 	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.




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applicable law expressly permits, despite this limitation). Additionally, Company shall
not modify, alter, tamper with or reduce the content of any Materials, Products, Upgrades or
accompanying documentation in any way.




     5. End-User License Agreement. Company shall provide End-Users Microsoft End-User
License Agreement for the Products or Upgrades (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 End-User’s use and license of the Products or Upgrades.
Company shall not enter into any agreement with an End-User that contains terms that conflict with,
vary or modify the terms and conditions of the End-User License Agreement.



     6. Additional Privacy and Personal Information Requirements.



          (a) 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 the Approved Websites. [*]




          (b) Privacy Notices. All Approved Websites must contain clear and conspicuous privacy
notices relating to the collection and use of Personal Information and must, unless otherwise
specified in an applicable SOW, comply, at a minimum, with all relevant guidelines contained at
http://members.microsoft.com/vendorguide or otherwise provided by Microsoft (as specified in
Section 7 of the Agreement). The privacy notices shall clearly specify that all Personal
Information collected through the Approved Websites and related to the Agreement, this Addendum and
any applicable SOW will be shared with Microsoft except as set forth in the following section.




          (c) Personal Information and Data Ownership Rights and Disclosure. [*]However,
Company, as the seller and merchant of record, shall solely own any payment information provided by
Customers, including credit card information. Company shall provide Microsoft, to the extent
necessary, access by Microsoft agents, Microsoft vendors, or other Microsoft-designated party to
such payment information in order to enable Microsoft or its vendors or agents to provide
additional support and service to Customers. [*] Microsoft acknowledges that it will handle such
Personal Information in compliance with any applicable laws. Except as expressly amended in this
Section, Company’s obligations under the Agreement with respect to Personal Information shall
remain unaffected.




          (d) Solicitation of Personal Information. Company may post language on the checkout
page of the Approved Websites, providing each End-User with an opportunity to elect to receive
solicitations from Microsoft or from Company only if Company’s solicitation is on Microsoft’s
behalf.




     7. Warranties to End-Users. Microsoft warrants the Products and Upgrades to End-Users
pursuant to the written limited warranty document or End-Users License Agreement Terms accompanying
the Products or Upgrades. Microsoft shall provide all End-Users technical support related to the
use of the Products or Upgrades.



     8. Customer Service for End-Users. Company will provide customer service to End-Users
relating to the Products or Upgrades purchase process and delivery transaction as set forth in the
applicable SOW.



     9. End-User Recovery Process. Company will (1) accept recovery requests from
End-Users via the Approved Websites, (2) collect the required recovery information and (3) process
the recovery of the Products or Upgrades or any digital component associated with them as specified
in the applicable SOW.



     10. Electronic Proof of Purchase. Company will provide an End-User with an electronic
proof-of-purchase confirmation for each completed purchase transaction on an Approved Website.



     11. Physical and Digital Fulfillment. When requested to do so in an applicable SOW,
Company shall provide End-Users with the necessary physical media and component provided for in the
applicable SOW. Additionally, Company shall provide End-Users electronically digital components
(e.g., digital license keys, control numbers, etc.) associated with the Products in accordance with
the requirements set forth in the applicable SOW.



     12. Inventory Management. Except as expressly stated in this Section 12, the
management and ownership right of Inventory obtained, created or developed under this Addendum and
an applicable SOW, while in the Company’s possession and under its control, shall be governed by
the Inventory Management and Terms and Conditions set forth in the Agreement. Notwithstanding any
terms to the contrary in the Inventory Management Terms and Conditions, rights, title





 




			
	*	 	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.




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and interest
in each copy of the Products or Upgrades sold to End-Users transfer to Company immediately upon
Company’s processing of the final payment by End-User and before the applicable copy or Upgrade and
any related components and media is delivered to the End-User. As between Company and the
End-User, and with respect to physical media and components shipped to End-Users located outside of
the United States from locations within the United States, title shall transfer from Company to
End-User upon delivery to the End-User. With respect to physical media and components shipped to
End-Users located within the United States, title shall transfer from Company to End-Users upon
delivery to the logistics carrier.




     13. Pricing to End-Users. For copies of the Products and Upgrades sold, licensed and
delivered pursuant to this Addendum and the applicable SOW, Company is the reseller of such copies
or Upgrades and, therefore, Company shall determine the price for selling each copy of the Products
or Upgrades to End Users in its sole discretion. Estimated Retail Prices provided in an applicable
SOW are for guidance only, and are not binding on Company. For each physical component request
from an End-User who has lost or misplaced the original physical component, Company may charge the
End-User the shipping and handling costs related to the physical delivery in amounts to be agreed
upon between Microsoft and Company. All Company’s prices to End-Users shall be in the currencies
specified by Microsoft in the applicable SOW. Company may not otherwise charge any End-User for
the physical delivery, except with Microsoft’s prior written consent.



     14. Collection from End-Users. Company shall be solely responsible for the collection
of any amounts due from End-Users for the resale, licensing and delivery of each copy of the
Product or Upgrade. [*]



     15. Reporting; Invoicing by Microsoft.



          (a) Invoicing by Microsoft. Microsoft, or one of its Affiliates or agents, will
invoice Company for the sale of Products and Upgrades and for the amounts due to Microsoft at the
frequency and in the manner specified in the SOW.




          (b) Sales Reports. Company shall submit to Microsoft on the schedule set forth in the
applicable SOW [*] a report detailing the sales, distributions and deliveries made by Company of
applicable Products and Upgrades during the preceding month (“Sales Report”) in a form and in the
manner described in each applicable SOW.




          (c) Payment Terms by Company and Remittance. Except for Disputed Invoices (as defined
below), Company shall pay all invoices to Microsoft within forty-five (45) calendar days from the
date of the invoice. Company shall remit all amounts due to Microsoft in accordance with the
remittance instructions provided by Microsoft in the applicable SOW or in writing by Microsoft.




          (d) Determining Applicable Price. For the purpose of any sales made under any
applicable SOW created under this Addendum, Company shall purchase the Product at the applicable
amount at the moment the sale is made, pursuant to the applicable SOW for such sale.




          (e) Currency. Payment by Company to Microsoft shall be in the currency(ies) specified
in the applicable SOW or the then-current Price List. Payments by Microsoft to Company shall be in
the currency(ies) specified in the applicable SOW.




          (f) Invoice Disputes. Company may dispute an invoice, in good faith, within thirty
(30) calendar days from the date of the invoice (“Disputed Invoices”). Microsoft and Company will
work together in good faith to resolve any disputes as soon as reasonably possible. Upon
resolution of the dispute, Company shall remit the amount owed within ten (10) calendar days from
date of the resolution of the dispute, if the Company is deemed to owe the disputed amount to
Microsoft.




     16. Payments by Company to Microsoft. Microsoft shall invoice and collect from
Company the amount set forth on the then-current Price List for each copy of a Product or Upgrade
purchased by an End-User via the Approved Website.



     17. [*]





 




			
	*	 	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.




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     18. Records and Audit. In accordance with and subject to Section 6 of the Agreement,
Company shall maintain proper books and records with respect to the sales, distribution and
delivery of copies of Products and Upgrades and Microsoft shall have the right to audit such books
and records.



     19. Taxes. With regard to Company’s obligation to collect transaction taxes from
End-Users, Company is ultimately responsible for the collection and remittance of all taxes from
End-Users and all taxes on those amounts which are its obligation by the operation of law. Company
shall pay all applicable value-added, sales and use taxes and other taxes levied on Company by a
duly constituted and authorized taxing authority on the software and services provided under this
Addendum and any applicable SOW with respect to the resale of Products and Upgrades to End-Users,
or any transaction related thereto in each country in which the services and/or property are being
provided or in which the transactions contemplated hereunder are otherwise subject to tax,
regardless of the method of delivery. Nothing in this Section alters or amends, the tax
obligations and rights of either Microsoft or Company set forth in the Agreement. However, in no
event shall Company be responsible for any transaction tax imposed on any sale made by the Company
where the incidence of the tax is on Microsoft.



     20. Effect of Termination. Upon termination or expiration of the Agreement or this
Addendum, and in addition to the rights and obligations set forth in the Agreement with respect to
termination and expiration, all rights granted to Company under this Addendum shall immediately
cease. Additionally, Company shall immediately cease all activity relating to this Addendum and
any applicable SOW. Company shall either (a) remove the Approved Website and any related links
from the Internet, or (b) post a notice to all Approved Website visitors stating that Company is no
longer authorized to resell the applicable Products. Microsoft may also redirect End-Users to an
alternative website. If Company receives any End-User customer support requests after the date of
termination or expiration, Company shall forward the requests to the Microsoft or a third party
designated by Microsoft. Company must pay any amounts due to Microsoft within sixty (60) calendar
days of termination or expiration.



     21. Entire Agreement. Upon execution by both parties, this Addendum (including
Exhibits and SOWs referenced on the Addendum Summary and Signature Page, attached to this Addendum,
or signed by the parties and expressly made a part of this Addendum) and the Agreement (including
all terms and conditions, policies and procedures, Exhibits and SOWs referenced on the Agreement
Summary and Signature Page, attached to the Agreement, or signed by the parties and expressly made
a part of the Agreement) supersedes all prior and contemporaneous communications, whether written
or oral, regarding the matters agreed to herein. This Addendum does not replace any separate
written license agreement between Microsoft and the Company or the Digital Distribution Services
Agreement dated January 1, 2006 between the parties. Except as otherwise expressly provided, in
the event of an irreconcilable conflict between this Addendum and the Agreement, this Addendum
controls with respect to any SOW expressly referencing this Addendum. In the event of a conflict
between this Addendum and any SOW created hereunder, the provisions of the SOW with respect to such
conflicting provision shall control over this Addendum, provided, however, that such conflicting
provisions expressly reference the specific Section in the Addendum that the parties intend to
amend or supersede AND the SOW is first approved in writing by Microsoft Legal & Corporate
Affairs (“LCA”), such approval to be manifested by the affixation of LCA’s stamp approving the
version of the SOW actually signed by Microsoft. In the event such LCA approval is not secured and
the conflicting provision does not reference this Addendum, the provisions of this Addendum shall
control and the provisions contained in the SOW shall be voidable at Microsoft’s election.



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



END OF ADDENDUM 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.






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