Document:

exv10w25

Exhibit
10.25

MICROSOFT OPERATIONS 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.

AGREEMENT SUMMARY AND SIGNATURE PAGE

This Microsoft Operations Digital Distribution Agreement (“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”)

	 	 	 

	Effective and Expiration Dates:

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

	 	This Agreement establishes the terms and conditions under which Company shall
perform certain E-Commerce Activities for Microsoft, including, distribution,
fulfillment and delivery functions related to digital distribution of Microsoft
Products.

This Agreement consists of the following:

	 	•	 	This Agreement Summary and Signature Page
	 
	 	•	 	The Contact and Notices Information Page
	 
	 	•	 	The General Terms and Conditions
	 
	 	•	 	Inventory Management Terms and Conditions
	 
	 	•	 	Policies and procedures referenced and incorporated into this Agreement
	 
	 	•	 	The Following Exhibits:

	 	•	 	Exhibit A: Vendor Administrative Guidelines (“VAG”)
	 
	 	•	 	Exhibit B: Non-Disclosure Agreement (Dated October 12, 2001)
	 
	 	•	 	Exhibit C: Microsoft Supply Chain Security Policies and Requirements (Version 4)
	 
	 	•	 	Exhibit D: Template — Affiliate Agreement
	 
	 	•	 	Exhibit E: Microsoft Release Services Manager Site License Agreement

Microsoft and Company enter into this Agreement 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.

1

 

MICROSOFT OPERATIONS DIGITAL DISTRIBUTION AGREEMENT

CONTACT AND NOTICES INFORMATION PAGE

Address for Notices. The parties must send legal notices, including notices relating to a
breach or termination of this Agreement or a waiver of any right or obligation in this Agreement,
to the address indicated in the Legal Notice Contact Information table below. Each party must
notify the other in writing of any changes to the Legal Notice Contact Information. The parties
must send any other communication required by this Agreement to the applicable business contact
indicated in the Business Contact Information table below.

Legal Notice Contact Information

	 	 	 	 	 	 	 

	Microsoft	 	Company
	 
	 	 	 	 	 	 
	Street Address, City, State, Country, Zip Code, Facsimile:	 	Street Address, City, State, Country, Zip Code:
	 

	 	Kerry Dean, or successor
	 	 	 	Tom Venable or successor
	 

	 	One Microsoft Way
	 	 	 	 9625 West 76th Street
	 

	 	Redmond, WA, U.S.A. 98052-6399
	 	 	 	Eden Prairie, Minnesota 55344
	 

	 	Fax # 425-936-7329	 	 	 	 
	 
	 	 	 	 	 	 
	Notices Contact(s):	 	Notices Contact(s):
	 
	 	 	 	 	 	 
	With Copy To:	 	With Copy To:
	 
	 	 	 	 	 	 
	 

	 	Legal & Corporate Affairs	 	 	 	 
	 

	 	Microsoft Operations Attorney
	 	 	 	Kevin Crudden
	 

	 	One Microsoft Way
	 	 	 	 9625 West 76th Street
	 

	 	Redmond, WA 98052-6399
	 	 	 	Eden Prairie, Minnesota 55534
	 

	 	Fax # 425-936-7329	 	 	 	 

Notices must be in writing. Notices shall be deemed given on the day deposited in the mail
(postage prepaid, certified or registered, return receipt requested) or sent by recognized national
or international air express courier with charges prepaid.

 

			
	*	 	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.

2

 

GENERAL TERMS AND CONDITIONS

     1. Certain Definitions. As used in this Agreement, the terms below have the following
meanings.

          (a) “Affiliate” means, with respect to an entity, any person or entity that directly or
indirectly controls, is controlled by, or is under common control with that entity. For purposes
of this definition, to “control” means (i) to have the right to control, through the ownership of
or contractual right to vote securities or through other means, the election of directors of a
corporation, or (ii) to own a majority of the voting power or the beneficial interests in income
and capital of an entity other than a corporation.

          (b) “Agreement” means (i) the Agreement Summary and Signature Page, (ii) the Contact and
Notices Information Page, (iii) these General Terms and Conditions, (iv) any additional terms and
conditions, Exhibits and SOWs attached to this Agreement, and (v) any policies or procedures
referenced in this Agreement.

          (c) “Authorized Party” means a third party designated by Microsoft in a SOW or other writing:
(i) from whom Company may acquire services or Inventory; (ii) to whom Company may provide services
or Inventory; or (iii) for whom Company may manage or handle Inventory.

          (d) “Customer” means an End-User or Authorized Party to whom Company is permitted to deliver
Inventory or disburses rebates or refunds, or from whom Company is permitted to receive Inventory
returns, orders for Inventory, requests for Inventory returns or funds, as specified in this
Agreement.

          (e) “Deliverables” means all Intellectual Property or other work product expressly requested
by Microsoft, paid for directly or indirectly by Microsoft and developed by Company for Microsoft
under a SOW.

          (f) “E-Commerce Activities” means any services specified under a SOW, which may include: (i)
Inventory manufacturing, assembly, replication, repair, refurbishment, delivery, returns and
warehousing; (ii) Customer service activities related to handling Inventory orders, processing
payments, rebates, Product identification keys or codes; and/or (iii) the resale of Products and
upgrades and the performance of order transaction and digital download and fulfillment
functionalities.

          (g) “Facility” means the premises that are (i) controlled by Company (or, where approved in
accordance with this Agreement, by Company’s Subcontractor) and (ii) expressly designated in an
applicable SOW as an approved location at which E-Commerce Activities may be performed.

          (h) “Including” means including without limitation.

          (i) “Insolvent” means the condition of a party’s debts exceeding the fair value of its assets;
or, when a party has incurred debts beyond that party’s ability to pay the debts as they mature;
or, when a party is engaged in a business or transaction for which the party has unreasonably small
capital.

          (j) “Intellectual Property” means all intellectual property rights throughout the world,
whether existing under statute or at common law or equity, now or hereafter in force or recognized,
including: (a) copyrights, trade secrets, trademarks and servicemarks, patents, inventions,
designs, logos and trade dress, “moral rights,” mask works, publicity rights, and privacy rights;
and (b) any application or right to apply for any of the rights referred to in clause (a), and all
renewals, extensions and restorations.

          (k) “Inventory” means any tangible or intangible item containing or covered by Microsoft
Intellectual Property that is manufactured, assembled, replicated, delivered, distributed, stored
or handled, whether physically or digitally, by Company under this Agreement, whether complete or a
work-in-progress. For the sake of clarity, Inventory might, in some but not necessarily all cases,
consist of Products or components of Products.

          (l) “Materials” means tangible and intangible items provided by Microsoft, or by an Authorized
Party on behalf of Microsoft, to Company for use in performing the E-Commerce Activities (e.g.,
software, materials associated with a Product, kits, equipment, data from the Microsoft designated
Product support service database, Product application notes, tools, etc.). For the sake of
clarity, “Materials” shall not include any Products obtained by Company outside of this Agreement,
such as Products licensed to Company under a Microsoft volume license agreement or obtained by
Company through the retailer.

 

			
	*	 	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.

3

 

          (m) “Personal Information” means information provided by Microsoft or collected by Company in
connection with this Agreement that identifies or can be used to identify, contact, or locate the
person to whom such information pertains. Personal Information includes: name, address, phone
number, fax number, email address, social security number or other government-issued identifier,
and credit card information. Additionally, to the extent any other information (including a
personal profile, unique identifier, biometric information, and/or IP address) is associated or
combined with Personal Information, then that information is also Personal Information.

          (n) “Product” means any product, service, subscription or other item typically sold or
licensed either directly or indirectly by Microsoft to its end-users, whether tangible or
intangible, with respect to which E-Commerce Activities may be provided under this Agreement (e.g.,
Microsoft-branded or Microsoft proprietary software or hardware).

          (o) “SOW” means a services order referring expressly to this Agreement, signed by authorized
representatives of both parties and describing Services to be performed and any associated
additional terms and conditions.

          (p) “Subcontractor” means a third party to whom Company delegates specified obligations that
Company would otherwise be required to perform under this Agreement. For the sake of clarity,
Microsoft Affiliates or Authorized Parties from whom Company is directed or permitted to acquire
materials or obtain services in connection with its performance of the E-Commerce Activities are
not intended to fall within the definition of a Subcontractor as that term is used in this
Agreement.

          (q) “VAG” means the Microsoft Vendor Administrative Guidelines.

          (r) “Company IP” means Company pre-existing or independently developed proprietary tools,
processes or Intellectual Property.

     2. E-Commerce Activities.

          (a) Performance of E-Commerce Activities; Compliance with Laws. Company shall perform
the E-Commerce Activities in compliance with this Agreement, all Microsoft policies and procedures
referenced in this Agreement, and each applicable SOW. When performing the E-Commerce Activities,
Company shall comply with all applicable local, state and federal laws regulations and ordinances.
Company shall, at its own expense, obtain and maintain any approvals, permits, licenses, filings or
registrations necessary and related to the performance of the E-Commerce Activities.

          (b) No Exclusivity; No Minimum Commitments. This Agreement does not grant the Company
an exclusive right to provide Microsoft any of the E-Commerce Activities or Inventory which
Microsoft may require from Company. Microsoft may contract with third parties for the procurement
of comparable or similar E-Commerce Activities or Inventory. Microsoft makes no representation or
commitment that the scope or level of services or other terms and conditions for any one vendor
will be the same as or similar to any other Microsoft vendor. Company is entering into this
Agreement without any expectations of any such similar treatment. Nothing in this Agreement shall
be construed as creating a minimum commitment for business on the part of Microsoft to Company.

          (c) E-Commerce Activities to Microsoft or Authorized Parties. Microsoft may exercise
its rights under this Agreement directly and/or indirectly through Authorized Parties designated by
Microsoft in the applicable SOW. Microsoft shall have the right to update the list of Authorized
Parties who may engage the Company under this Section 2(c) from time to time. Authorized Parties
are not authorized to act on behalf of Microsoft except as expressly provided in this Agreement, or
otherwise expressly authorized by Microsoft in the SOW or in writing. Company agrees to extend all
rights and privileges under this Agreement to those Authorized Parties, including pricing, when
those Authorized Parties are acting indirectly on behalf of Microsoft, provided, however, that such
Authorized Parties will not be considered third-party beneficiaries of this Agreement and will have
no right to enforce any of the terms hereof.

          (d) Restrictions on the Scope of E-Commerce Activities.

               (i) Company shall perform the E-Commerce Activities only at the Facilities approved in each
applicable SOW, and shall not move or consolidate E-Commerce Activities among or between Facilities
without Microsoft’s written permission.

 

			
	*	 	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.

4

 

               (ii) Company shall only provide the E-Commerce Activities to Microsoft, or to Authorized
Parties located in the geographical territories designated in an applicable SOW. The foregoing
will not be deemed to limit Company’s right to provide products or services (other than the
E-Commerce Activity) to any other party.

               (iii) If the E-Commerce Activities are being provided with respect to particular Products,
Company shall perform the E-Commerce Activities only with respect to those Products as designated
by Microsoft in the applicable SOW.

          (e) Company’s Personnel, Subcontractors and Affiliates.

               (i) Appointment of Account Manager. Company shall appoint one or more individuals to
serve as account manager(s) for the E-Commerce Activities. These individuals are listed in the
Contact and Notices Information Page. Account managers shall ensure timely and accurate
communication between the parties. Company may change account managers on a ten (10) day prior
written notice to the corresponding Microsoft business contacts listed on the Contact and Notices
Information Page.

               (ii) Selection, Training and Removal of Personnel. Company shall be solely
responsible, at its cost, for recruiting, selecting and training its personnel for the performance
of the E-Commerce Activities. If training requirements are identified in the applicable SOW,
Company shall ensure that the necessary personnel are given the training in a timely manner.
Company shall use persons qualified to perform the E-Commerce Activities. Company will not be
entitled to charge Fees (as defined in Section 3) for E-Commerce Activities performed by personnel
who have not completed training requirements specified in an applicable SOW. At Microsoft’s good
faith request and for any business reason, Company shall promptly remove or replace any individual
performing E-Commerce Activities. Company shall be responsible for the acts and omissions of its
employees.

               (iii) Use of Subcontractors. Company may subcontract the performance of any
E-Commerce Activities to any Subcontractor only with the prior written approval of the applicable
Microsoft Business Contact or as expressly designated in an applicable SOW. If Microsoft approves
the use of a Subcontractor, the following requirements shall apply:

                    (A) Company shall guarantee the Subcontractor’s fulfillment of applicable Company obligations
under this Agreement;

                    (B) Company shall require each Subcontractor to consent in writing to any relevant terms,
conditions and policies set forth in this Agreement (including confidentiality obligations,
obligations with respect to Personal Information, security requirements, insurance requirements,
Microsoft’s right to conduct audits, and requirements regarding record-keeping and reporting) and
to acknowledge in writing that Microsoft is an intended third-party beneficiary of those terms and
conditions.

                    (C) Company shall make all payments to Subcontractor.

                    (D) If Company fails to pay a Subcontractor, Microsoft shall have the right (but not the
obligation) to pay such Subcontractor and to offset any amounts due to Company with amounts paid to
the Subcontractor, unless Company provides assurances reasonably acceptable to Microsoft that the
non-payment will not adversely affect or encumber any E-Commerce Activities, Inventory or
Materials.

                    (E) [*]

                    (F) If E-Commerce Activities are being performed in the United States, use commercially
reasonable efforts to ensure that, of the total amount paid by Company to non-Affiliate
Subcontractors operating in the United States to provide E-Commerce Activities under each SOW,
Company spends at least five percent (5%) with Minority Owned and Operated Businesses and at least
five percent (5%) with Women Owned and Operated Businesses. For purposes of this subsection:
“Minority-Owned and Operated Businesses” means businesses which are at least fifty-one percent
(51%) owned by a Minority Person or Persons or, in the case of any publicly owned business, at
least fifty-one percent (51%) of the stock of which is owned by a Minority Person or Persons, and
whose management and daily business operations are controlled by one or more of the same Minority
Person or Persons having ownership interest. “Minority Person or Persons” means one or more
individuals who is/are USA citizens residing in the United States and is/are either
African-American/Black, Hispanic, Asian-American/Pacific Islander (including native Hawaiians),
Asian Indian, and/or Native American/American Indian (enrolled in a federally recognized tribe).
“Women-Owned and Operated Businesses” means businesses which are at

 

			
	*	 	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.

5

 

least fifty-one percent (51%) owned by one or more women residing in the United States, or, in
the case of any publicly owned business, at least fifty-one percent (51%) of the stock of which is
owned by one or more women residing in the United States, and whose management and daily business
operations are controlled by one or more of the same women having ownership interest.

               (iv) Use of Company Affiliates. Company may use its Affiliates to perform certain
E-Commerce Activities under this Agreement only with the prior written approval of the
applicable Microsoft account manager or as expressly designated in an applicable SOW, provided
that:

                    (A) the Company Affiliate agrees to the same obligations, limitations and restrictions imposed
on Company under this Agreement;

                    (B) the Company Affiliate executes an Affiliate Agreement with Microsoft in a form
substantially similar to the one attached hereto as Exhibit D; and

                    (C) Company guarantees its Affiliates’ fulfillment of the applicable obligations imposed on
Company under this Agreement.

          (f) Company’s Technology.

               (i) Selection and Compatibility of Technology. Except for Materials provided to
Company or when otherwise provided in the applicable SOW, Company shall, at its own costs, provide
all equipment, technology, and infrastructure for performing the E-Commerce Activities. Company
shall ensure that these items are compatible with Microsoft equipment, technology and
infrastructure as necessary to perform the E-Commerce Activities.

               (ii) [*]

               (iii) Avoidance of Illicit Code. Company shall not introduce any computer virus
or other illicit code into any Accessible System, Inventory, Materials or Deliverables, or into any
Company IP or other Intellectual Property that is licensed to Microsoft by Company under this
Agreement, if any.

               (iv) Use of Microsoft Technology. When performing the E-Commerce Activities, where a
suitable Microsoft product or technology platform exists, Company shall use commercially reasonable
efforts to utilize such Microsoft product or technology platform, but shall have no obligation to
replace any existing non-Microsoft product or technology platform as a result of this subsection.

               (v) Independent Audit. Company shall have security assessments and audits conducted
by an independent security auditor no less than twice a year and shall make the findings of such
audits and assessments available to Microsoft upon request.

          (g) Company’s Duty of Ongoing Improvement and to Apply Best Practices. Company shall
pursue commercially reasonable opportunities to reduce fees and costs associated with the
performance of the E-Commerce Activities, and to improve performance, without compromising the
quality of the E-Commerce Activities, Deliverables or Inventory.

          (h) Performance Review. At the frequency specified in each applicable SOW, and at
other times that Microsoft requests, Company and Microsoft shall meet to review Company’s
performance and discuss issues related to the E-Commerce Activities, including Company’s compliance
with the performance standards described in the applicable SOW and this Agreement.

          (i) Company’s Duty to Cooperate in Fraud-Prevention Efforts. Company shall have
commercially reasonable processes and procedures in place in order to prevent any occurrence of
fraud with regard to the E-Commerce Activities. If reasonably requested by Microsoft, Company must
work with Microsoft to develop an internal investigation team to detect, investigate and prevent
fraud related to the E-Commerce Activities. Company shall also cooperate with Microsoft in the
investigation of counterfeit, pirated or illegal software and report to Microsoft, as soon as
possible after it comes to Company’s notice, any suspected counterfeiting, piracy or other
infringement of any Microsoft Intellectual Property. In addition, Company shall not:

               (i) engage in or fail to report fraud or infringement relating to Microsoft Intellectual
Property in any form;

 

			
	*	 	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.

6

 

               (ii) knowingly use or manufacture counterfeit, pirated or illegal software;

               (iii) knowingly engage in the warehousing, distribution, supply or transfer of counterfeit,
pirated or illegal software; and

               (iv) knowingly supply any Product or Inventory to any person known to be engaged or have
engaged in the use, manufacturing, distribution or other supply or transfer of counterfeit, pirated
or illegal software.

          (j) Company’s Use of Microsoft Facilities. Company shall not use Microsoft facilities
other than as expressly authorized by a SOW. While on Microsoft’s premises, Company shall comply
with Microsoft’s then-current physical and information security policies. Company shall ensure
that any of its personnel that are issued access cards or Microsoft e-mail accounts execute the
necessary agreements reasonably required by Microsoft and comply with all applicable Microsoft
policies. Company shall remove any of its personnel from Microsoft’s premises upon Microsoft’s
request. If any Company personnel encounter any unsafe conditions while on Microsoft’s premises,
Company shall notify Microsoft promptly in writing indicating the nature and location of the
hazard, and shall require its personnel to take additional safety measures as reasonably necessary
to reduce the risk of injury. If Company becomes aware that a “significant” injury to someone or
damage to property has occurred on Microsoft premises, Company shall notify Microsoft promptly and
provide adequate details to enable Microsoft to investigate the cause. For the purpose of this
subsection, “significant” means injury to a person that results in hospital treatment, or damage to
or loss of property with an estimated value in excess of Ten Thousand United States Dollars
($10,000.00).

          (k) Access to Microsoft Systems and Tools. If necessary to perform the E-Commerce
Activities, Microsoft may give Company access to certain Microsoft systems and tools. If such
access is given, Company shall comply with all Microsoft security and access policies related to
those systems and tools as provided by Microsoft from time-to-time. Specifically, Company shall
comply with the Microsoft Release Services Manager Site License Agreement attached hereto as
Exhibit E.

          (l) Export and Trade Controls.

               (i) Company acknowledges that the Products and Inventory and Products are subject to U.S.
export jurisdiction. Company agrees to comply with all applicable international and national
export control and customs compliance laws and regulations that apply to the Products and the
Inventory, including the U.S. Export Administration Regulations, as well as end-user, end-use and
destination restrictions issued by U.S. and other governments (where applicable). Microsoft shall
make US Export Control Classification Numbers and Schedule B Codes for the Products or Inventory
available to Company on http://www.microsoft.com/exporting/. For additional information, see
http://www.microsoft.com/exporting/.

               (ii) Company shall comply with the trade requirements set forth in the applicable SOW.

               (iii) Company agrees to verify and maintain the non-preferential and preferential country of
origin data for all Products or Inventory delivered under this Agreement. Company is responsible
for the overall content and accuracy of all Company invoices involved in the making of customs
declarations in the country of destination.

     3. Compensation for E-Commerce Activities.

          (a) Microsoft’s Payment of Fees & Pass-Through Costs. If applicable for under an
applicable SOW, Microsoft shall pay Company those fees described in each SOW (“Fees”). [*] Unless
otherwise expressly provided in the SOW or in writing by Microsoft, Company shall invoice Microsoft
for all Microsoft-approved expenses (“Pass-through Costs”). [*]

          (b) MS Invoice Requirements. Company shall invoice Microsoft for all Fees and, if
applicable, Pass-through Costs via the “MS Invoice” online tool in accordance with the then-current
requirements at http://invoice.microsoft.com and in the VAG. Company shall not charge Microsoft
for researching, reporting on or correcting any errors relating to its invoices. Invoices shall
not bear an invoice date earlier than the date on which Company is entitled to be paid under the
applicable SOW, or if not specified in the applicable SOW, invoices may be issued monthly in
arrears.

          (c) Payment by Microsoft. Upon acceptance of the applicable E-Commerce Activities,
Deliverables and/or Inventory (in accordance with any acceptance criteria provided in this
Agreement and in each 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.

7

 

and, if no such criteria are provided, then in accordance with criteria reasonable under the
circumstances) and receipt of a correct and undisputed invoice, Microsoft shall:

               (i) [*]

               (ii) [*]

               (iii) if applicable, pay Pass-through Costs net sixty (60) days with no discount; and

               (iv) pay the amounts in accordance with Microsoft’s then-current payment policies (e.g.,
payment via ACH electronic payment to Company’s financial institution per instructions in
Microsoft’s ACH electronic payment form).

          (d) [*]

     4. Microsoft Policies and Procedures. Company shall adhere to the then-current and
applicable Microsoft policies and procedures described in this Section and this Agreement. These
policies and procedures are expressly referenced and incorporated into this Agreement and they are
either attached as exhibits to this Agreement and/or provided to Company via the web site addresses
listed below (or any successor site or communication designated by Microsoft). While Company must
comply with these policies and procedures, mere compliance does not necessarily waive or diminish
Company’s obligation to comply with any other provision in this Agreement.

          (a) Vendor Administrative Guidelines. Company shall comply with the VAG. A copy of
the current VAG is attached hereto as Exhibit A.

          (b) Trademark Usage Requirements. When permitted to use Microsoft name, trademarks or
servicemarks (“Trademarks”) under this Agreement and any applicable SOW, Company shall only use
those Trademarks as permitted by the applicable SOW as necessary to perform the E-Commerce
Activities, and shall comply with the standard guidelines established by Microsoft and located at
http://www.microsoft.com/trademarks/.

          (c) Microsoft Supply Chain Security Policies and Procedures. Company shall comply
with the Microsoft Supply Chain Security Compliance Policies and Requirements, attached hereto as
Exhibit C.

          (d) Changes to Microsoft Policies and Procedures. Microsoft may update or modify the
policies and procedures from time to time. All updates or modifications shall be effective thirty
(30) days after notifying one of Company’s account managers, unless the parties agree otherwise in
writing. If Company determines, in its reasonable discretion, that changes to a policy or
procedure will cause a material change in the delivery schedule, Fees or other costs applicable to
the E-Commerce Activities, then Company shall promptly notify Microsoft. Upon receipt of a
detailed explanation from Company regarding the material change, the parties shall discuss in good
faith extending the compliance effective date or otherwise implementing a corrective action plan to
enable Company to comply with the updated or modified policy or procedure.

     5. Ownership and Use of the Parties’ Respective Intellectual Property.

          (a) Company’s Use of Materials.

               (i) License to Use Materials. In consideration of the Company’s performance of the
E-Commerce Activities under the terms of this Agreement, Microsoft grants Company, and Company
accepts a non-exclusive, nontransferable, revocable (but only as described below), and limited
license to use the Materials and Trademarks during the term of this Agreement or the applicable SOW
solely to the extent necessary to perform the applicable E-Commerce Activities and subject to the
restrictions and limitations provided for in this Agreement. Microsoft, or if applicable its
suppliers and licensors, reserve all other rights, title, and interest in and to all Materials and
all related Intellectual Property. Company has no right to sublicense the rights granted under
this Agreement, except as necessary to any Subcontractor or Company Affiliate with Microsoft’s
prior written consent, which consent shall not be unreasonably withheld, Company shall not modify,
reverse engineer or decompile any Materials, and shall not remove any proprietary notices or
licenses contained in any Materials. Company is responsible for all actions taken by any
individual authorized or purporting to be authorized by Company in connection with accessing or
using the Materials. If the Materials are accompanied by a separate license (including any license
with respect to the use of software embedded on any equipment provided to Company), the terms of
that license shall also apply, but the provisions of this Agreement shall control in the case of
any conflict between this Agreement and those license terms.

               (ii) Use of Equipment and Tools. If the Materials include any computer hardware or
other equipment or tools (“Equipment”), or if Microsoft requires Company to build or acquire any
Equipment to be used in

 

			
	*	 	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.

8

 

connection with the performance of E-Commerce Activities, the following additional
requirements will apply to Company’s use of the Equipment, except to the extent that the parties
agree otherwise in a written agreement (e.g., a separate Equipment lease or purchase agreement):

                    (A) Company shall use the Equipment only for the performance of the E-Commerce Activities;

                    (B) Company shall assume the risk of, and take all reasonable precautions to protect Equipment
and tools against, loss, damage, theft or disappearance;

                    (C) Company shall take no action which affects Microsoft’s or its authorized third party
lessor’s title or interest in the Equipment;

                    (D) Company shall maintain, use and service the Equipment in accordance with the applicable
manufacturer’s specifications and instructions.

                    (E) Unless otherwise specified in the applicable SOW, Microsoft shall not provide technical or
maintenance support to Company in connection with any Equipment; and

                    (F) Company shall place labels identifying the Equipment and/or tools as Microsoft’s or the
lessor’s property.

               (iii) Termination of License and Return of Materials. The license to use Materials
and/or Trademarks is limited to the term of the applicable SOW and this Agreement. This license
may be revoked by Microsoft with respect to a particular Material or Trademark (A) if Microsoft
receives an allegation that such Trademark or Material infringes a third party’s intellectual
property rights or (B) for a good faith business justification, including, but not limited to, any
action designed to protect Microsoft’s legal interests, so long as, in each case, Microsoft
provides Company with a reasonable notice of revocation. Upon termination of the license in whole
or in part, Company shall promptly return any Materials related thereto to Microsoft upon request.

          (b) Company’s Use of Non-Microsoft Intellectual Property in the Performance of E-Commerce
Activities.

               (i) Use of Third Party Intellectual Property. Company shall provide Microsoft with a
list of any Company IP, and of any material third party Intellectual Property, that it intends to
use in the performance of the E-Commerce Activities prior to such use. Company shall update such
list periodically and as needed (the “Updated List”). Microsoft shall have the right to disapprove
the use of any particular material third-party Intellectual Property in the provision of E-Commerce
Activities by providing written notice to Company within ten (10) days of the receipt of Company’s
Updated List, such notice to describe such problems in reasonable detail.

               (ii) Limitation on Use of Company and Third Party Intellectual Property That Could
Encumber Microsoft Intellectual Property. Company must obtain Microsoft’s express approval
before using any third party Intellectual Property, or any Company IP, in a manner that would cause
it to:

                    (A) be incorporated into any Inventory or Deliverables;

                    (B) alter or affect Microsoft’s ownership interests in any Inventory or Deliverables; or

                    (C) be required for the Inventory or Deliverables to be used or distributed by Microsoft or
any Customer.

               (iii) License to Company IP That Is Incorporated Into or Required For the Use of
Deliverables or Inventory. If Company IP is incorporated into any Inventory or Deliverable, or
is necessary for the unfettered use or distribution of any Inventory or Deliverable by Microsoft or
any Customer, then, unless the parties agree in writing on applicable license terms, Company is
hereby deemed to grant to Microsoft and its Affiliates a worldwide, nonexclusive, perpetual,
irrevocable, royalty-free, fully paid-up right and license, including under all current and future
Intellectual Property, in each case, solely to the extent necessary to use or distribute such
Inventory or Deliverable, as applicable, to:

                    (A) use the applicable Company IP;

 

			
	*	 	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.

9

 

                    (B) publicly perform or display, transmit and distribute, copies of the applicable Company IP;
and

                    (C) sublicense to third parties the foregoing rights, including the right to sublicense to
further third parties.

               (iv) Rights to Third Party Intellectual Property That Is Incorporated Into or Required For
the Use of Deliverables or Inventory. If Company intends to incorporate any third party
Intellectual Property into any Inventory or Deliverable, or uses any third party Intellectual
Property in a manner that makes it necessary for the unfettered use or distribution of any
Inventory or Deliverable by Microsoft or any Customer, then in addition to obtaining Microsoft’s
prior written approval, Company shall obtain all rights in the applicable third party Intellectual
Property needed to grant Microsoft the same rights provided in the preceding Subsections
5(b)(iii)(A)-(C).

          (c) Ownership and Use of Deliverables.

               (i) Ownership of Deliverables. Except as expressly permitted in a SOW, all
Deliverables shall be originally created by Company for Microsoft. Subject to Company’s retention
of its rights in any Company IP, except as otherwise expressly provided in a SOW, all Deliverables
are “work made for hire” for Microsoft under applicable copyright law. To the extent any
Deliverables do not qualify as a work made for hire, Company hereby assigns to Microsoft (and its
successors and assigns) all rights, title and interest in and to the Deliverables, including all
Intellectual Property rights therein. To the maximum extent permitted by law, Company waives all
moral rights that may exist in the Deliverables. Deliverables shall include any data entered into
any Company database in connection with performance of the E-Commerce Activities.

               (ii) Company’s Assistance. Company shall promptly disclose to Microsoft, in writing,
any inventions, works of authorship, improvements, developments or discoveries conceived, authored,
made or reduced to practice by Company or its Affiliates or Subcontractors, either solely or in
collaboration with others, in connection with performing the E-Commerce Activities, excluding,
however, any inventions, works of authorship, improvements, developments or discoveries primarily
relating to Company’s staff or Company’s business models or internal systems or processes. At
Microsoft’s request and expense, Company shall execute documents and take any other action
necessary to evidence, perfect or protect Microsoft’s rights in the Deliverables. Company shall
cooperate with Microsoft in the filing and prosecution of any copyright, trademark or patent
applications that Microsoft may elect to file on the Deliverables. Company hereby irrevocably
appoints Microsoft as Company’s attorney-in-fact (which appointment is coupled with an interest) to
execute those documents on Company’s behalf. Company shall not challenge, oppose or interfere with
any Microsoft applications relating to the Deliverables or file any applications on its own behalf.

               (iii) Inventions. Any inventions, ideas, designs, concepts, techniques, discoveries,
improvements or enhancements including, without limitation, software code, whether or not
patentable (collectively, “Inventions”), which are modifications or improvements of, or based on,
the Intellectual Property of a party developed or created by the other party in the course of
performing obligations or services, including E-Commerce Activities under this Agreement shall be
owned by the party owning the underlying Intellectual Property. Any custom development work
requested by one party to be undertaken by the other party shall only be undertaken pursuant to a
written agreement specifying the terms and conditions under which the development work, including
ownership of any Inventions, shall be undertaken.

               (iv) [*]

               (v) Title and Non-Infringement with Respect to E-Commerce Activities, Deliverables and
Company IP. Company represents and warrants that to its knowledge, the use of the E-Commerce
Activities, Deliverables, and any Company IP or third party Intellectual Property licensed to
Microsoft under this Agreement by Microsoft or its Customers as contemplated by this Agreement will
not infringe or violate any patent, copyright, trademark, trade secret or other proprietary right
of any third party.

               (vi) Company Intellectual Property. Except as otherwise expressly provided in a SOW,
notwithstanding anything to the contrary herein, Company retains all right, title and interest in
and to all copyright, including all renewals and extensions thereof and including the rights to
prepare and distribute derivatives thereof, for all works created, made or conceived by Company (A)
prior to the Effective Date, or (B) in support of Company staff or Company’s business model,
internal systems or processes. Microsoft acknowledges that all rights on Company IP not expressly
granted hereunder are without limitation reserved by Company.

 

			
	*	 	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.

10

 

          (d) Restrictions Related to Use of Publicly Available Software. Except with the
express written consent and approval of Microsoft, Company shall ensure that no Deliverables, and
no Company IP or other Intellectual Property licensed to Microsoft hereunder, are governed, in
whole or in part, by any license requiring, as a condition of use, modification and/or
distribution, that the software or other software combined and/or distributed with it be: (i)
disclosed or distributed in source code form; (ii) licensed for the purpose of making derivative
works; or (iii) redistributed at no charge.

     6. Reports, Audits & Inspections.

          (a) Reporting. Company will comply with the reporting requirements identified in each
applicable SOW, or otherwise reasonably requested by Microsoft (each instance a “Report”). Company
shall use commercially reasonable efforts to ensure that all Reports are accurate, complete,
provided timely and in the format required under the applicable SOW. [*]

          (b) Record-Keeping Requirements. Company shall keep detailed and accurate books and
records related to the E-Commerce Activities, Products, Materials and Inventory for a period equal
to the greater of (i) the time period required by any applicable laws, including the laws of any
local jurisdiction applicable to such records, or (ii) the time period set forth in an applicable
SOW, or (iii) four (4) years. Records shall, where appropriate and unless otherwise indicated in a
SOW, be kept in accordance with generally accepted accounting principles. These records shall
include records regarding any delivery, transfers-out, returns, damage or corruption to, or
recovery, of any Inventory or Materials.

          (c) Financial Information. Microsoft shall have the right to examine Company’s
publicly available financial information and statements to allow Microsoft to determine whether
Company is capable of continuing to perform its obligations under this Agreement. If Company’s
financial statements cease to be public or are not publicly available, at any time upon Microsoft’s
request, Company shall provide to Microsoft a copy of its financial statements (including balance
sheets and related statements of income and retained earnings, and statements of changes in
financial condition) certified by an officer of Company. To the extent these financial statements
are audited, the audit report of the certified public accountant performing the audit shall also be
made available to Microsoft. Whether or not Company’s financial statements are publicly available,
if Microsoft finds the information made available to Microsoft to be insufficient or incomplete in
any material manner, then, at the request of Microsoft, Company shall submit to Microsoft
additional financial information that it reasonably requests. Company financial information shall
be considered Confidential Information as defined in the NDA and subject to Section 7 of this
agreement.

          (d) Audit.

               (i) During the term of this Agreement and for a period of four (4) years thereafter, upon at
least forty-eight (48) hours’ notice, Microsoft may audit Company’s books and records during normal
business hours to verify accuracy and compliance with the terms of this Agreement. Such audit
shall be limited to the books and records from the twenty-four (24) month-period immediately
preceding the date of any such audit. Company will provide Microsoft or its agents with access to
the relevant records and the right to make copies of those records for audit evidence. In
conducting any audit, Microsoft will not unreasonably interfere with Company’s business operations,
and shall cooperate with Company to ensure that Company is able to protect its own and its other
customers’ proprietary information. Company shall promptly correct all discrepancies discovered
during an audit. Microsoft may not exercise its audit rights more than once in any twelve (12)
month period unless an audit reveals the Company’s material noncompliance with this Agreement.
Audits and inspections shall be conducted by Microsoft representatives and/or inspection team, or
any independent certified public accountant or consultant selected by Microsoft.

               (ii) Microsoft shall pay for each audit except that if an audit shows Company overcharged
Microsoft by five percent (5%) or more of the amounts due for any audited period of time, Company
shall, in addition to re-computing and making immediate refund payments to Microsoft of all
overpayments, pay Microsoft for all reasonable costs and expenses actually paid by Microsoft to
third parties in conducting such audit, including any amounts paid to any outside auditor. For the
avoidance of doubt, nothing in this provision is intended to provide Microsoft with access to
Company records relating to other clients of Company, or to Company activities not related to the
E-Commerce Activities provided under this Agreement.

          (e) Facility Inspections. Microsoft may cause an inspection to be made, with at least
three (3) business days’ prior notice, of any Facility (including its security systems,
communications and computing networks) solely as necessary to verify Company’s compliance with this
Agreement (including security requirements). Inspections shall be conducted during regular
business hours and in a manner that does not unreasonably interfere with Company’s business
operations and complies with all of Company’s then-current physical and information security

 

			
	*	 	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.

11

 

policies. Company shall provide Microsoft, or its agents, access to relevant records and
areas of the Facility. Company may designate a representative to accompany Microsoft’s inspectors
and may reasonably restrict access to any section of the Facility containing confidential
information of Company or its customers so long as that restriction does not unreasonably interfere
with the audit. Microsoft’s rights of inspection will extend to any approved Subcontractor or
Affiliate of Company. Company shall inform its Microsoft-approved Subcontractor or Affiliate of
Microsoft’s right to inspect and will use reasonable efforts to secure such rights for Microsoft
and assist Microsoft with any such inspection.

          (f) Sarbanes-Oxley Compliance; SAS-70 Report. Company shall comply with all
applicable Microsoft required documentation related to or required under the United States
Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and that shall not do or omit to do anything in
connection with the E-Commerce Activities to prejudice compliance by Microsoft with its obligations
pursuant to Sarbanes-Oxley. Microsoft agrees that Company’s annual provision of a SAS 70, Type II
Audit will constitute full compliance with Company’s obligations under this Section. Any further
documentation requested shall be provided at Microsoft’s sole cost and expense and shall be
considered Confidential Information as defined in Section 7 of this Agreement and subject to all
the protection and controls provided for in the NDA.

     7. Confidentiality, Privacy, Data Protection and Publicity.

          (a) Confidentiality. The respective confidentiality obligations of the parties
regarding this Agreement are set out in the confidentiality and non-disclosure agreement dated
October 12, 2001 (the “NDA”) attached hereto as Exhibit B and incorporated by reference. In
addition to any information defined as confidential in the NDA, the following information shall be
deemed to be confidential for purposes of the NDA:

               (i) the existence and terms of this Agreement; and

               (ii) information provided by a party under this Agreement or obtained or created by a party in
the course of performing this Agreement, including (A) information contained in any reports
provided to Microsoft, (B) any electronic or written correspondence between the parties, (C)
customer lists, Personal Information regardless of the source, subject to the terms and conditions
set forth in this Agreement regarding Personal Information, and (D) transactional, sales and
activity information related to the E-Commerce Activities.

          (b) Limitations on Company’s Collection and Use of Personal Information.

               (i) Limitations on Collection and Use of Personal Information. Company shall not
access or collect any Personal Information except to the extent strictly necessary to perform the
E-Commerce Activities or to fulfill any legal requirements, and shall not use Personal Information
accessed or collected while performing the E-Commerce Activities for any purpose other than those
expressly permitted by this Agreement. If the E-Commerce Activities involve the collection of
personal information directly from individuals, such as through a webpage, Company shall provide a
clear and conspicuous notice regarding the uses of the personal information. The notice shall
comply with all relevant guidelines contained at http://members.microsoft.com/vendorguide or
otherwise provided by Microsoft.

               (ii) Limitations on Disclosure of Personal Information. [*] If Company is served with
a court order compelling disclosure of any Personal Information or with notice of proceedings for
such an order, Company shall oppose the order, shall notify Microsoft of the order or notice, and
shall provide Microsoft the opportunity to intervene before Company files any response to the order
or notice, all at Microsoft’s expense.

               (iii) Protection of Personal Information. Company shall take reasonable steps to
protect Personal Information in Company’s possession from unauthorized use, access, disclosure,
alteration or destruction. Security measures shall include access controls, encryption and other
means, where appropriate. Company must immediately notify Microsoft of any known security breach
that may result in the unauthorized use, access, disclosure, alteration or destruction of Personal
Information. Company shall conduct an audit on at least an annual basis to evaluate the security
of Personal Information in Company’s possession and to verify that the terms of this Agreement with
respect to Personal Information are being followed. The results of the audit shall be made
available to Microsoft on request.

               (iv) Return or Destruction of Personal Information. Upon request from Microsoft,
Company shall provide Microsoft with Personal Information collected on Microsoft’s behalf and in
Company’s possession. Within ten (10) days following termination or expiration of this Agreement,
Company shall, at Microsoft’s sole discretion, either:

 

			
	*	 	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.

12

 

                    (A) provide Microsoft with all documents and materials (including all copies) containing
Personal Information collected on Microsoft’s behalf and, together with all other materials and
property of Microsoft, which are in its possession or under its control; or

                    (B) destroy all specified documents and materials (including all copies in all formats) and
provide Microsoft with a certificate of destruction signed by an officer of Company. As an
exception to the foregoing, unless Microsoft directs otherwise, Company may retain a copy of
Personal Information solely to the extent necessary to comply with its record-keeping requirements
under the preceding Section 6 (Reports, Audits & Inspections).

          (c) Publicity. Except as otherwise required by applicable laws and regulations,
neither party shall issue press releases, publicity, or other disclosure in any form that relate to
the relationship with the other party or the Agreement without the other party’s prior written
approval. Except as permitted in the applicable SOW, neither party shall use the other party’s
names or trademarks in any marketing materials or web sites. Each party is required to obtain
written permission from the other party before using the party’s name or any of its Affiliates’
names in client presentations or in responses to requests for client lists (e.g., as part of a
Request for Proposal or Request for Information).

     8. Security.

          (a) Company’s Obligation to Protect Materials, Inventory and Confidential Information.
In addition to its compliance with any other terms and conditions set forth in this Agreement,
applicable policies and procedures, and any specific requirements contained in an applicable SOW,
Company shall implement and maintain commercially reasonable security procedures and measures at
its Facilities (including physical lock/key security, computer and communications network security
and data security) designed to prevent disclosure of Confidential Information to any unauthorized
persons or any damage to Materials, Inventory or Confidential Information. Company shall notify
Microsoft immediately in the event of any breach or failure to comply with these or any other
security or data protection requirements set forth in this Agreement or of any breach of its
security affecting any E-Commerce Activities, Materials, Deliverables, Inventory or Microsoft
Intellectual Property.

          (b) [*]

          (c) Subcontractor Audits. Company shall perform security reviews and audits of any
Subcontractors who provide call center, fulfillment, and data center services. Company shall
provide Microsoft, upon Microsoft’s written request, all documentation related to such reviews and
audits together with all necessary corrective action reports.

          (d) Protecting Facilities Restricted Areas. Company shall ensure that all third
parties accessing the restricted areas where Microsoft E-Commerce Activities are being performed
are bound by confidentiality agreements that require those third parties to comply with the
confidentiality requirements of this Agreement (including the NDA) and any such access shall be in
accordance with Company policies and procedures in effect on the date of such access.

     9. Disaster Planning; Obligations in Event of Unavoidable Delay.

          (a) Disaster Planning. Company shall implement and maintain a measurable, documented
disaster recovery plan to ensure continuity and quality of the E-Commerce Activities and Inventory
(“Disaster Plan”). The plan must include, at a minimum, implementation procedures,
weather-related, labor-related, system-related and telecommunications contingencies and a
mitigation plan in the event of these or other foreseeable events that are outside Company’s
reasonable control. [*]

          (b) Obligations in the Event of Unavoidable Delay.

               (i) [*] Where the performance of E-Commerce Activities is delayed by reason of an act of
Force Majeure, Company and Microsoft shall enter into bona fide discussions with a view to
alleviating the effects of such act of Force Majeure or of agreeing upon such alternative
arrangements as may be fair and reasonable.

               (ii) Company shall not be liable for any failure to comply with any obligations hereunder
where such failure is caused by any reason beyond its reasonable control including, but not limited
to, act of God, riot, act of terrorism, accident, fire, and war, (each a “Force Majeure”) AND
Company has otherwise complied with its obligations under this Agreement (including all parts of
Section 9 and of its Disaster Plan). Where a strike, lockout, trade dispute

 

			
	*	 	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.

13

 

or labor disturbance does not directly involve Company, its Affiliates and/or its
Sub-contractors, Company shall use its best efforts to continue to provide and perform the
E-Commerce Activities without interruption or delay in performance, and Company shall not be liable
for any interruption or delay in performance arising from such strike or other labor difficulties
where such interruption or delay in performance arises notwithstanding its utmost efforts in this
regard. Where difficulty in obtaining labor, materials or transport, or the occurrence of any
strike, lock out, trade dispute or other labor disturbance does directly involve the Company, the
occurrence of such act shall not be considered to be outside the Company’s reasonable control and
shall not excuse any delay in Company’s performance, notwithstanding that such strikes or other
labor difficulties are not capable of being terminated on terms acceptable to the party affected.
Where the performance of any E-Commerce Activities shall be delayed by reason of an act of Force
Majeure for more than sixty (60) days either party may, upon written notice to the other, terminate
the affected SOW or SOWs (or, in the event all open SOWs are affected, this Agreement) without
further obligation except to make payment for E-Commerce Activities already rendered and any
obligation with respect to any surviving provision as set forth in Section 15(e), in which event
the provisions of Section 15 shall apply. Without prejudice to the foregoing, Microsoft may
suspend performance to the Company under this Agreement and may itself perform or appoint a third
party to perform the E-Commerce Activities during any period during which Company is affected by an
act of Force Majeure without liability to make or pay any compensation to Company. If within sixty
(60) days, Company is able to return to reasonably normal business operations, regardless of the
existence of a Force Majeure, Microsoft and Company will resume performance under this contract.
Nothing contained herein shall be construed as granting Microsoft any rights in or to Company
Intellectual Property or Company Confidential Information, nor shall anything contained herein
prevent Microsoft from withholding payment or applying performance credits for any non-performance
regardless of the cause.

     10. Insurance Requirements. Company warrants that it shall maintain sufficient
insurance coverage to enable it to meet its obligations created by this Agreement and by law.
Without limiting the foregoing, Company warrants that its insurance shall, at a minimum, include
the following lines of coverage (with minimum limits of $2,000,000 per occurrence) to the extent
the Agreement creates exposures generally covered by these insurance policies: Commercial General
Liability (Occurrence Form) including product liability, Workers’ Compensation (statutory limits),
Crime, Professional Liability and Errors & Omissions Liability, Automobile and Employer’s
Liability. Company shall name Microsoft, its Affiliates, and their respective directors, officers
and employees as additional insureds in the Commercial General Liability policy, to the extent of
contractual liability assumed by Company under this Agreement.

     11. Taxes. This Section governs the treatment of all taxes arising in connection with
this Agreement notwithstanding any other section of this Agreement.

          (a) Tax Obligations Generally. Microsoft is not liable for any taxes that Company is
legally obligated to (collect or) pay and which are incurred or arise in connection with the
manufacture, storage or sale of Inventory or the performance of E-Commerce Activities by Company or
its Subcontractors. Microsoft shall pay Company any sales, use or value added taxes owed by
Microsoft solely as a result of entering into this Agreement or a subsequent SOW and which are
required to be collected from Microsoft by Company under applicable law. Microsoft may provide
Company with a valid exemption certificate, and Company shall not collect taxes covered by the
certificate. If taxes are required to be withheld on any amount to be paid by Microsoft to Company,
Microsoft shall deduct them from the amount owed and pay them to the appropriate taxing authority.
Microsoft shall secure and deliver to Company an official receipt for any taxes withheld.
Microsoft shall use reasonable efforts to minimize such taxes to the extent permissible under
applicable law.

          (b) Tax Obligations Relating to Company’s E-Commerce Activities. If Company is
required to make payments to Microsoft under any SOW (e.g., Inventory royalty payment), then
Company shall pay Microsoft any sales, use or value added taxes owed by Company solely as a result
of entering into this Agreement or a subsequent SOW and which are required to be collected from
Company by Microsoft under applicable law. If taxes are required to be withheld on any amount to
be paid by Company to Microsoft, Company shall deduct them from the amount owed and pay them to the
appropriate taxing authority. Company shall secure and deliver to Microsoft an official receipt
for any taxes withheld. Company shall use reasonable efforts to minimize such taxes to the extent
permissible under applicable law. Company shall remit to the appropriate taxing authority any
duties, taxes, imposts, fees of charges on any Inventory delivery to a Customer where no billing or
collection services are involved (“Transfer Taxes”). Company shall invoice Microsoft for such
Transfer Taxes in accordance with Section 3 of this Agreement.

     12. Disclaimer of Implied Warranties. TO THE MAXIMUM EXTENT PERMISSABLE BY LAW, THE
PARTIES HEREBY DISCLAIM ANY AND ALL IMPLIED WARRANTIES, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY, NON-INFRINGEMENT AND/OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
E-COMMERCE ACTIVITIES, PRODUCTS, INVENTORY OR MATERIALS, WHETHER OR NOT ARISING FROM TRADE USAGE OR
A COURSE OF DEALING. THIS

 

			
	*	 	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.

14

 

DISCLAIMER IS NOT INTENDED TO LIMIT ANY EXPRESS WARRANTIES CONTAINED IN THIS AGREEMENT.

     13. Remedies. Except as provided below, none of the remedies listed in this Section
shall be deemed the exclusive remedies. In addition, the parties agree to the following specific
remedies:

          (a) Indemnification.

               (i) Mutual Indemnity. Each party shall defend the other party and its directors,
officers, employees, agents, subsidiaries and affiliates (each an “Indemnified Party”) against any
third party or governmental claim, lawsuit, investigation, regulatory determination, action, demand
or administrative, judicial or other proceeding (collectively, “Third Party Claims”), and indemnify
and hold harmless each Indemnified Party for and from all damages, taxes, costs, losses and
liabilities arising out of Third Party Claims, to the extent those Third Party Claims arise from:

                    (A) any material breach of this Agreement by the other party or its Affiliates or
Subcontractors;

                    (B) the negligent or willful acts of the other party or its Affiliates or Subcontractors
resulting in any bodily injury or death to any person or loss, disappearance, or damage to tangible
or intangible property; or

                    (C) acts or omissions of the Indemnified Party undertaken or omitted at the direction or on
the instructions of the indemnifying party.

               (ii) Microsoft’s Limited Indemnity for Infringement. Microsoft shall defend Company
and its directors, officers, employees, agents, subsidiaries and affiliates in a lawsuit or other
judicial action, and pay the amount of any adverse final judgment (or settlement to which Microsoft
consents), including any reasonable legal fees, arising from any lawsuit or other judicial action
brought against Company by any third party that claims or alleges that any Product or Materials
infringe any patents, trademarks, trade secrets or copyrights in any territory in which Company is
authorized to perform E-Commerce Activities with respect to the Product or Materials (“IP Claim”).
Microsoft’s obligations shall not apply to the extent the IP Claim arises out of Company’s (1)
modification of Materials or Inventory other than as directed by Microsoft, (2) combination of
Materials or Inventory with any non-Microsoft product, program or data other than as directed by
Microsoft, (3) acquisition of a trade secret through improper means, under circumstances giving
rise to a duty to maintain its secrecy or limit its use, or from a party other than Microsoft or
its Affiliates that owed to the party asserting the claim a duty to maintain the secrecy or limit
the use of the trade secret, or (4) distribution of Inventory or Materials by Company after
Microsoft directs it to stop, or (5) failure to make changes or implement updates with respect to
any Materials after they have been made available to Company.

               (iii) Notice of Claims. The Indemnified Party shall provide the indemnifying party
with reasonably prompt notice of each Third Party Claim or IP Claim to permit the indemnifying
party to answer and defend the Third Party Claim or IP Claim. Upon receipt of such notice, the
Indemnifying party shall respond in writing to the tender of defense within twenty (20) days of
receipt of such notice. The Indemnified Party shall provide the indemnifying party with reasonable
information and assistance, at the indemnifying party’s expense, to help defend any Third Party
Claim or IP Claim. The Indemnified Party shall have the right to employ separate counsel and
participate in the defense of any Third Party Claim, at its own expense. With respect to IP
Claims, Microsoft shall have the exclusive right to undertake the defense against the IP Claim and
to select the counsel to handle the IP Claim. A failure by the Indemnifying Party to respond in
writing to the tender of defense within the time specified in this subsection will be deemed a
waiver of any objection to its obligation to defend the Indemnified Party, but not a waiver of the
indemnifying party’s rights to object to any subsequent obligation to indemnify or to hold harmless
the Indemnified Party. In the event the Indemnifying Party fails to respond to a tender of
defense, the Indemnified Party shall thereafter have the right to control the defense of such Third
Party Claim or IP Claim, including the right to select which law firm defends the claim. In the
event the Indemnifying Party rejects the tender of defense or fails to undertake and continue such
defense or fails (in the Indemnified Party’s reasonable opinion) to adequately pursue or conduct
such defense, the Indemnifying Party will be liable for 100% of any legal fees and expenses
incurred by the Indemnified Party to compel the Indemnifying party to honor its obligations under
this Section, regardless of the comparative negligence or fault of the Indemnified party, and the
Indemnifying Party expressly waives any right it may have under statutory or common law that might
operate to make the recovery of fees under this subsection (iii) a mutual right. For the avoidance
of doubt, if each party tenders the defense of the same Third Party Claim or an IP Claim to the
other, and unless there can be no good faith dispute that the underlying conduct giving rise to the
Loss was solely within the control of Company,

 

			
	*	 	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.

15

 

Microsoft shall defend both parties against the Third Party Claim or IP Claim, subject to any
rights to recoup its defense expenses under this subsection (iii).

               (iv) Settling Claims. Neither party may settle any Third Party Claim or IP Claim on
the other party’s behalf, or publicize the settlement, without the other party’s prior written
permission, unless the settlement is for a monetary amount that is fully covered by that party’s
indemnity and the settlement does not require an admission of fault or impose any other obligation
other than the payment of money. In any event, Company shall not settle any claim that any
Microsoft Intellectual Property infringes any third party’s intellectual property rights without
Microsoft’s consent.

          (b) Company’s Duties In Connection with Infringing Deliverables, E-Commerce Activities and
Company IP. Company shall indemnify Microsoft from any claim that the use of the E-Commerce
Activities, Deliverables and any Company IP or third party Intellectual Property licenses to
Microsoft under this Agreement by Microsoft or any of its Customers as contemplated by this
Agreement, infringe or violate any patent, copyright, trademark, trade secret or other proprietary
right of any third party. Company shall notify Microsoft if a court of competent jurisdiction
holds that any Deliverable, or any Company IP or other Intellectual Property licensed to Microsoft
by Company under this Agreement, infringes a third party proprietary right. Moreover, if the use
of any Deliverable or any Company IP or other Intellectual Property licensed to Microsoft by
Company is enjoined or threatened to be enjoined, then Company shall, at its expense and at its
option, either:

               (i) procure the right for Microsoft to continued use the Deliverables, Company IP or other
Intellectual Property in accordance with this Agreement; or

               (ii) replace or modify the Deliverables, Company IP or other Intellectual Property so that it
is non-infringing and meets the requirements of this Agreement to Microsoft’s reasonable
satisfaction.

          If either of the actions described in the immediately preceding subsections (i) or (ii) is not
fulfilled within thirty (30) days after the injunction or threat of injunction, Microsoft shall
have the right to terminate the Agreement and/or any affected SOW. Upon Microsoft’s written
demand, Company shall refund all amounts paid by Microsoft for infringing Deliverables or
E-Commerce Activities.

          (c) Specific Remedy for Misuse or Loss of Microsoft Property. Upon Company’s misuse
or loss of any Inventory or Materials that was not sold to an End-User or otherwise transferred in
a manner prescribed or permitted by this Agreement or by Microsoft, Company shall reimburse and pay
Microsoft as follows:

               (i) for digital or physical Inventory where activation is required, upon reasonable proof of
activation, Company shall pay Microsoft the full amount that Microsoft would have been entitled to
receive from Company had the Inventory been sold in the normal course of business (the “Estimated
Retail Value”), and where there is no reasonable proof of activation, Company shall pay Microsoft
the replacement value of the Inventory components and related processing costs for such Inventory
(the “Estimated Cost of Replacement”); or

               (ii) for digital or physical Inventory where activation is not required for the use by a
End-User, Company shall pay Microsoft the Estimated Retail Value of the Inventory

               (iii) if Company unlawfully, improperly, or without prior authorization from Microsoft
removes, retains, possesses, misappropriates, loses, damages or fails to return Materials or any
other Microsoft property or Intellectual Property, other than Inventory, Company shall fully
compensate Microsoft at Microsoft’s estimated retail price (or market or replacement value, if
applicable) for that property.

          (d) Certain Remedies in Case of Non-Conforming E-Commerce Activities or Deliverables.
If Microsoft rejects any E-Commerce Activities or Deliverables or they are found by Microsoft to be
non-conforming or defective, then at Microsoft’s request and in accordance with the requirements
set forth in the applicable SOW, Company shall correct the E-Commerce Activities with respect to
those non-conforming items.

          (e) Injunctive Relief. Either party may seek injunctive relief and other equitable
remedies in the event of a breach of this Agreement. The availability of injunctive relief will be
a cumulative and not an exclusive remedy available to the parties.

     14. Exclusion of Consequential Damages.

          (a) EXCLUSIONS. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
CONSEQUENTIAL OR SPECIAL DAMAGES (INCLUDING DAMAGES FOR LOST PROFITS OR LOST OPPORTUNITIES; COSTS
OF COVER OR ANY PUNITIVE OR EXEMPLARY DAMAGES) ARISING

 

			
	*	 	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.

16

 

OUT OF THIS AGREEMENT, REGARDLESS OF WHETHER THE LIABILITY IS BASED ON BREACH OF CONTRACT,
TORT, STRICT LIABILITY, BREACH OF WARRANTIES OR OTHERWISE, EVEN IF IT HAS BEEN ADVISED OF THEIR
POSSIBLE EXISTENCE.

          (b) EXCEPTIONS TO EXCLUSIONS. THE EXCLUSIONS DESCRIBED IN SUBSECTION (a) DO NOT APPLY
TO:

               (i) A PARTY’S DUTY TO INDEMNIFY THE OTHER PARTY;

               (ii) FRAUD;

               (iii) A BREACH OF A PARTY’S CONFIDENTIALITY OBLIGATIONS (INCLUDING THE BREACH OF OBLIGATIONS
RELATED TO PERSONAL INFORMATION AND DATA) UNDER THIS AGREEMENT; OR

               (iv) A PARTY’S MISUSE OR INFRINGEMENT OF THE OTHER PARTY’S INTELLECTUAL PROPERTY.

     15. Termination.

          (a) Termination For Convenience by Microsoft. Microsoft may terminate this Agreement,
or any particular SOW, effective on one hundred and eighty (180) days’ written notice, unless the
SOW provides otherwise, at any time with or without cause.

          (b) Termination For Cause.

               (i) Microsoft may terminate this Agreement, or any particular SOW, in the event of the
Company’s material breach or failure to substantially perform its obligations under this Agreement
(including failure to submit Reports), but only where written notice of the breach or failure to
perform is provided by Microsoft to Company, and the breach or failure to perform is not cured
within thirty (30) calendar days of the Company’s receipt of such notice. Company may terminate or
suspend performance under this Agreement, or any particular SOW, in the event of Microsoft’s
material breach or failure to substantially perform its obligations under this Agreement, but only
where written notice of the breach or failure to perform is provided by Company to Microsoft, and
the breach or failure to perform is not cured within thirty (30) calendar days of Microsoft’s
receipt of such notice.

               (ii) Notwithstanding the foregoing:

                    (A) Either party may terminate this Agreement, or any particular SOW, and Company may
terminate or suspend its performance under this Agreement or any particular SOW, in the event of
material breach of any provision of this Agreement relating to limitations on the use and/or
protection of the Intellectual Property, Confidential Information, or Personal Information of such
party, unless such breach is cured within five (5) business days of receipt of notice of the same
by a party; and

                    (B) Either party may terminate this Agreement, or any particular SOW, and Company may
terminate or suspend its performance under this Agreement or any particular SOW, immediately upon
written notice to the other party in the event of (i) the material violation of the privacy policy
of either party; (ii) the commission of a fraudulent or criminal act by either party having a
material adverse effect on the other party; (iii) if the other party becomes Insolvent; (iv) if the
other party executes any assignment for the benefit of creditors or becomes the subject of any
proceeding under any bankruptcy, insolvency, liquidation, moratorium or other debtor relief laws,
whether voluntary or involuntary, which is not dismissed or terminated within sixty (60) days after
the commencement of such proceeding; (v) if the other party sells or transfers all or a substantial
part of its assets to a third party (including by merger with another entity), or there is
otherwise a change in the control of the other party (for purposes of this subsection, 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); or (vi) if the other party assigns this Agreement in violation of Section18; and

                    (C) In the case of an assertion against Microsoft of claims relating to products liability,
Company’s may suspend or remove the Product from Company’s performance under this Agreement or any
particular SOW, whereupon Company shall immediately provide written notice to Microsoft.

 

			
	*	 	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.

17

 

                    (D) In the case of a third-party assertion against Company of IP Claim relating to Microsoft’s
Products, Company may, upon providing Microsoft with a reasonable written notice remove the
affected Product from Company’s performance under this Agreement if Company presents to Microsoft,
in writing, sufficient proof of the Company’s likelihood of suffering irreparable harm if removal
of the Product does not take place. If the litigating parties resolve the IP Claim, Company shall
immediately resume performance of E-Commerce Activities with respect to the affected Product.

                    (E) Notwithstanding anything to the contrary set forth herein, the right to terminate shall
apply only to the particular SOW or SOWs affected by the breach or condition giving rise to the
right of termination, unless all SOWs are so affected, in which event the terminating party may
elect to terminate this Agreement and all SOWs.

          (c) Effect of Termination or Expiration. Within ten (10) days after the date of
termination or expiration of the Agreement (or any SOW where applicable), except as otherwise
provided in this Agreement, Company shall deliver to Microsoft or to any other location designated
by Microsoft all related Inventory or Deliverables and all data and materials related thereto, in a
format designated by Microsoft. Each party shall return the other party’s Confidential Information
to that party, except to the extent Microsoft permits Company to retain any Confidential
Information in connection with its record-keeping obligations under this Agreement or, in the case
of the termination of a particular SOW, where that Confidential Information relates to other SOWs
not terminated. Each party agrees that its obligations under this subsection and subsection (i)
below are independent of any disputes or claims it may have against the other party, and that it
shall not use its control over Inventory, Deliverables, Confidential Information, data or other
materials related to the E-Commerce Activities to achieve any advantage with respect to any dispute
or claim.

               (i) Effect of Termination for Convenience. If Microsoft terminates this Agreement or
a particular SOW for convenience under Section 15(a) above, Microsoft will have no further
obligation to Company, except for the payment of undisputed Fees and Pass-Through-Costs earned or
approved prior to the termination date (and, in the case of the termination of a particular SOW,
any obligations applicable to any SOWs not yet terminated) and any obligations arising from
surviving sections as provided for in Section 15(e).

          (d) [*]

          (e) Surviving Sections. The provisions of this Agreement which, by their terms,
require performance after the termination or expiration of this Agreement, or have application to
events that may occur after the termination or expiration of this Agreement, shall survive the
termination or expiration of this Agreement.

     16. Governing Law; Consent to Jurisdiction. This Agreement shall be construed under
and enforced in accordance with the laws of the State of New York, U.S.A. without regard to any
rules governing conflicts of laws. Parties agree to exclusive jurisdiction and venue of courts in
the state and federal courts sitting in New York County, New York.

     17. Relationship. This Agreement creates an independent contractor relationship
between the parties. This Agreement does not constitute an offer by Microsoft and shall not be
effective until signed by both parties. Except as required under this Agreement or any SOW,
Company shall not enter into any agreement, contract, or arrangement with any government or
government representative or with any person, firm, corporation, partnership or other enterprise
imposing or purporting to impose legal obligations or liability on Microsoft. Except as otherwise
approved by Microsoft, Company shall not make representations or warranties on behalf of Microsoft
with regard to any Product or Inventory in the course of performing any E-Commerce Activities.
Company’s employees or Subcontractors shall not be construed to be Microsoft employees; Company
shall pay any taxes, insurance or benefits with respect to its personnel and will, upon request,
provide Microsoft with satisfactory proof of independent contractor status. Unless otherwise set
forth elsewhere in this Agreement, there are no third party beneficiaries under this Agreement.

     18. Assignment. Neither party may sell, assign, transfer, pledge or encumber this
Agreement or any right, or delegate any duty or obligation under this Agreement, by assignment or
operation of law without the other party’s prior written consent, which consent shall not be
unreasonably withheld. The Agreement shall inure to the benefit of and bind all permitted
successors, assigns, receivers and trustees of each party.

     19. No Waiver. Failure or delay by a party to exercise any right or remedy shall not
be a waiver and shall not prevent the enforcement of that or any other right.

 

			
	*	 	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.

18

 

     20. Severability. If a court of competent jurisdiction finds any provision of the
Agreement to be unenforceable, then the Agreement shall be deemed amended to exclude the provision
and the remainder of the Agreement shall continue in full force and effect.

     21. Amendments and Addition or Changes to SOWs. Except as otherwise provided in this
Agreement, all amendments to (i) the Agreement Summary and Signature Page, (ii) the Contact and
Notices Information Page, (iii) these General Terms and Conditions, (iv) any additional terms and
conditions, and (v) any addendums created hereunder must be in a non-electronic writing (e.g., not
email) expressly amending this Agreement and signed by authorized representatives of both parties.

          (a) Adding SOWs. The parties may add E-Commerce Activities to this Agreement by
executing SOWs describing the applicable E-Commerce Activities. Company is not authorized to
perform the applicable E-Commerce Activities until the SOW is signed by both parties. Any
Microsoft Affiliate may enter into SOWs with Company under this Agreement. Upon adding a SOW, the
parties shall update and execute a new Agreement Summary and Signature Page to reflect the
additional SOW(s) and any additional Terms and Conditions and/or additional policies to be added to
the Agreement in connection with the additional SOW. However, the failure to execute an updated
Agreement Summary and Signature Page, for whatever reason, shall not render any additional SOW
invalid where it has otherwise been entered into in accordance with this Subsection.

          (b) Change to Scope of E-Commerce Activities. Microsoft may update the description of
E-Commerce Activities to be provided under a SOW in its sole discretion, via written notice to
Company (the “Update Notice”). Except as described below in this subsection, the updated E-Commerce
Activities description shall be effective ten (10) business days after Company’s receipt of the
Update Notice. If Company determines in its reasonable discretion that the updated E-Commerce
Activities scope causes a material change in the delivery schedule, Fees or other costs applicable
to the E-Commerce Activities, it shall notify Microsoft within ten (10) business days of receipt of
the Update Notice. The parties will then follow the procedures described below.

               (i) Within ten (10) business days after receipt of the Update Notice, Company shall provide
Microsoft with a proposal explaining in detail how the request will change the E-Commerce
Activities delivery schedule, Fees or costs for the applicable E-Commerce Activities.

               (ii) Microsoft may accept or reject the proposal, in its sole discretion. If Microsoft
accepts the proposal, the revised E-Commerce Activities scope and any changes to the schedule, Fees
or Pass-through Costs shall be described in a written amendment to the applicable SOW signed by
both parties.

               (iii) If Microsoft rejects the proposal, Microsoft will then be free to have the E-Commerce
Activities performed by a third party.

     22. Entire Agreement; Order of Precedence. This Agreement (including all terms and
conditions, policies and procedures, Exhibits and SOWs referenced on the Agreement Summary and
Signature Page, attached to this Agreement, or signed by the parties and expressly made a part of
this Agreement) supersedes all prior and contemporaneous communications, whether written or oral,
regarding the matters agreed to herein. This Agreement does not replace any separate written
license agreement between Microsoft and the Company. Except as otherwise provided, in the event of
an irreconcilable conflict between any addendum created under this Agreement and this Agreement,
such addendum controls with respect to any SOW expressly referencing the Addendum. Except as
otherwise expressly provided, in the event of an irreconcilable conflict between the provisions of
different parts of this Agreement, the parts shall control in the following order: (a) these
General Terms and Conditions; (b) any additional Terms and Conditions listed on the Agreement
Summary and Signature Page; (c) any policies and documents referenced in this Agreement; (d) any
exhibits to this Agreement (except for the Microsoft Release Services Manager Site License
Agreement which shall control only with respect to Company’s access to the Release Services Manager
tool); and (e) any Statements of Work. In the event of a conflict between this Agreement and
any SOW created hereunder, the provisions of the SOW with respect to such conflicting provisions
shall control over this Agreement, provided, however, that such conflicting provisions expressly
reference the specific Section in the Agreement 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 Agreement, the provisions of this Agreement shall control and the
provisions contained in the SOW shall be voidable at Microsoft’s election.

END OF GENERAL 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.

19

 

INVENTORY MANAGEMENT TERMS AND CONDITIONS

These Inventory Management Terms and Conditions describe the rights and obligations of Company and
Microsoft applicable when the Company is handling Inventory, including replication, manufacturing,
assembly, storage, fulfillment and distribution. The following terms and conditions shall
supplement the General Terms and Conditions.

     IM-1. Microsoft Inventory and Related Materials — Term Defined. For the purposes of
these Inventory Management Terms and Conditions and this Agreement, the terms below shall have the
following meanings:

          (a) “BOM” means the bill of materials provided by Microsoft to Company which identifies all
components and raw materials comprising a given Product or Product Component. Microsoft may, at
its sole discretion, modify the BOMs in writing prospectively.

          (b) “Components” means those parts listed on the BOM or specified by Microsoft in writing,
other than (i) Microsoft-provided parts, or (ii) Materials.

          (c) “Microsoft Inventory and Related Materials” means, collectively, (i) Inventory, (ii)
Materials and (iii) any raw materials or Components in which title has vested in Microsoft.

     IM-2. Performance. Company shall replicate, manufacture, assemble, store, fulfill or
distribute Inventory in accordance with the BOMs and any related specifications provided by
Microsoft in writing in the SOW or otherwise. Company shall also procure all necessary supplies,
Components and raw materials in compliance with the BOMs and any related specifications provided by
Microsoft as necessary to timely perform the E-Commerce Activities under this Agreement and any
applicable SOW.

     IM-3. Title Vested in Microsoft; Company’s Role as Bailee and Trustee.

          (a) Title to Inventory and Raw Materials and Company’s Related Rights. As between
Company and Microsoft, Microsoft shall at all times own all Inventory and Materials.

          (b) Title to Raw Materials and Components. Unless otherwise agreed between the
parties, title in any raw materials or Components acquired in connection with the E-Commerce
Activities shall vest in Microsoft upon the occurrence of one of the following events:

               (i) the raw materials or Components are combined with, incorporate or are incorporated into
Materials or other Microsoft Intellectual Property; or

               (ii) Company has received payment for those raw materials or Components from Microsoft or an
Authorized Party on behalf of Microsoft; or

               (iii) Company has received raw materials or Components ordered based on a binding forecast
provided by Microsoft; or

               (iv) Microsoft has exercised the option to acquire raw materials or Components as described in
this Agreement.

          (c) Effect of Forecasts; Option to Purchase Raw Materials. Forecasts provided by
Microsoft are non-binding unless the applicable SOW expressly provides otherwise. Nevertheless, to
the extent raw materials or Components acquired in connection with the performance of E-Commerce
Activities are unused, Microsoft shall have the option to purchase those raw materials or
Components. Microsoft may assign this option to any of its Affiliates. Microsoft or its
Affiliates may exercise the option at any time by providing fifteen (15) days’ written notice to
Company. The purchase price shall be (a) the price set forth in the applicable SOW; or (b) if no
price is set forth in the SOW, then Company’s actual costs and expenses (without any markup).

          (d) Company’s Role Merely Possessory; Obligations as Bailee.

               (i) Company’s Status and Obligations as Bailee or Consignee. Company holds Microsoft
Inventory and Related Materials solely for Microsoft’s benefit as bailee (or, in the case of
Inventory which Company is authorized to sell on behalf of Microsoft, as consignee). In keeping
with that role, Company shall:

 

			
	*	 	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.

20

 

                    (A) conspicuously label all Microsoft Inventory and Related Materials “Property of Microsoft”
and keep those items separated from any other materials, supplies or inventory belonging to Company
or any third party;

                    (B) keep Microsoft Inventory and Related Materials free and clear of any liens, claims or
encumbrances other than those in favor of Microsoft;

                    (C) immediately notify Microsoft of any threatened foreclosure or other claim adverse to
Microsoft’s interest in Microsoft Inventory and Related Materials; and

                    (D) not assert and shall waive any right of offset, lien or other interest in Microsoft
Inventory and Related Materials.

               (ii) Declaration of Trust. Company agrees that, until delivery of any Microsoft
Inventory and Related Materials to Microsoft or any Authorized Party is completed (e.g., placed
into Microsoft’s control or otherwise disposed of pursuant to Microsoft’s instructions), Company
shall, with respect to each of those items:

                    (A) hold any item in trust for the sole benefit of Microsoft and for the purposes of
performing the E-Commerce Activities under this Agreement;

                    (B) account for the disposition of the item at the times and in the manner requested by
Microsoft; and

                    (C) present the item, including in its balance sheets and in any representations to its
creditors or others, as trust property and not as assets belonging to Company or any of its
Affiliates.

          (e) Company’s Grant of Security Interest.

               (i) Precautionary Grant. For precautionary purposes only and in order to make a
public record of Microsoft’s ownership of Microsoft Inventory and Related Materials, Company grants
to Microsoft a continuing, first priority security interest in all Microsoft Inventory and Related
Materials ever possessed or controlled by Company.

               (ii) Company’s Obligation to Cooperate with Microsoft. Company shall cooperate with
Microsoft, as Microsoft may reasonably request, to give effect to the security interest. Company
authorizes Microsoft to file the necessary documentation that Microsoft deems appropriate to
perfect and maintain the security interest. Company shall execute and deliver all documents and
take any actions reasonably requested by Microsoft to protect its interest in Microsoft Inventory
and Related Materials.

               (iii) Acknowledgement from Company’s Creditors. Company shall provide Microsoft, upon
request, an acknowledgment from any creditor of Company having a security interest in Company’s
tangible or intangible assets, in a form acceptable to Microsoft, that the creditor has no security
interest in, and will not assert a security interest in, any Microsoft Inventory and Related
Materials.

     IM-4. Management of Inventory.

          (a) General. Where applicable, Company shall accurately track and manage all
Microsoft Inventory and Related Materials in strict compliance with this Agreement. Company shall
not modify any Microsoft Inventory and Related Materials except as expressly permitted by the
applicable SOW.

          (b) Company’s Protection of Inventory and Materials.

               (i) Company shall protect all Microsoft Inventory and Related Materials against loss or injury
while the Microsoft Inventory and Related Materials are under its control and/or in its possession.
Company shall not store Microsoft Inventory and Related Materials in any manner or in proximity to
anything that could cause deterioration of or damage to the Microsoft Inventory and Related
Materials.

               (ii) If the Microsoft Inventory and Related Materials pose a material hazard to property or
persons (a “Hazard”), Company shall promptly notify Microsoft as soon as possible. Unless
expressly prohibited by law, the notice will be given to Microsoft prior to notice to any
governmental agency. Company shall promptly

 

			
	*	 	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.

21

 

provide Microsoft with all relevant data and review and discuss the information, tests, and
conclusions relating to the alleged Hazard and the basis for any contemplated recall or other
remedial action, including moving the Inventory to another location within the Facility or to
another Facility. If the Hazard is Company’s fault or is caused by circumstances within Company’s
reasonable control, Company shall pay all costs of any remedial action including any of Microsoft’s
resulting out-of-pocket costs. Company shall, upon request and at its expense, provide Microsoft
and/or Microsoft’s designees all reasonable assistance in determining how best to deal with the
Hazard, and preparing for and making any presentation before any governmental agency which may have
jurisdiction over any aspect of any Hazard. All information regarding a Hazard in any Microsoft
Inventory is Microsoft Confidential Information (as defined in the NDA).

               (iii) Except as permitted in this Section, Company shall not move Microsoft Inventory and
Related Materials from the applicable Microsoft-approved Facility to another facility without
Microsoft’s prior written approval.

          (c) Company’s Storage and Disposition of Damaged or Returned Product. Company shall
separate all damaged or otherwise non-saleable Inventory while awaiting Microsoft’s instructions
about disposition. Company shall dispose of damaged or otherwise non-saleable Inventory (e.g.,
make it saleable, tender it for recycling, etc.) in strict compliance with Microsoft’s instructions
and in accordance with the applicable SOW. Unless instructed by Microsoft, Company shall not
salvage any damaged Inventory and shall take all steps required of it to prevent others from
salvaging the Inventory.

          (d) Detention and Demurrage. Company shall be responsible for all detention and
demurrage charges incurred in connection with storing or handling Inventory. Company shall keep
records concerning detention of vehicles to assist Microsoft and Company in processing any
objection to a carrier’s imposition of detention charges.

          (e) Disposition of Inventory and Work in Progress. In the event of the termination or
expiration of this Agreement, and except as otherwise provided in this Agreement or a SOW, the
following shall apply to the disposition of Inventory:

               (i) Disposition of Inventory and Work in Progress — Binding Forecast or Order: For
any finished Inventory and work-in-progress held or controlled by Company and manufactured, built,
assembled, replicated or procured (or that is being manufactured, built, assembled, replicated or
procured) based on a binding forecast or purchase order, Company shall, at Microsoft’s written
request and at Microsoft’s sole option:

                    (A) deliver the finished Inventory and any work in progress to a location designated by
Microsoft at Microsoft’s expense;

                    (B) complete the work-in-progress and deliver it along with any previously finished Inventory
to a location designated by Microsoft at Microsoft’s expense; or

                    (C) dispose of the finished Inventory and work in progress in the manner designated by
Microsoft in the applicable SOW or in writing. Microsoft shall pay Company the Fees and costs
related to finished Inventory and work in progress disposed pursuant to this Subsection.

               (ii) Disposition of Inventory and Work in Progress — Non-Binding Forecast: For any
finished Inventory or work-in-progress held or controlled by Company and manufactured, built,
assembled, replicated or procured (or that is being manufactured, built, assembled, replicated or
procured) based on a non-binding forecast, Microsoft may, at its sole option:

                    (A) request the delivery of that Inventory and work-in-progress to a location designated by
Microsoft at Microsoft’s expense and subject to Microsoft’s obligation to pay for the Inventory and
work in progress in accordance with this Agreement;

                    (B) request that the Company complete the work-in-progress and deliver the thus-completed
Inventory, along with any previously finished Inventory, to a location designated by Microsoft at
Microsoft’s expense and subject to Microsoft’s obligation to pay the Fees related to that work; or

                    (C) dispose of the Inventory and work-in-progress in the manner designated by Microsoft in the
applicable SOW or in writing, at the Company’s costs and expense.

 

			
	*	 	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.

22

 

     IM-5. [*]

     IM-6. [*]

     IM-7. Manufacturing Standards and Quality Control. If Company is manufacturing any
Inventory, the following additional terms shall apply:

          (a) Manufacturing Standards. Company shall manufacture any Inventory in strict
compliance with any specifications provided in an applicable SOW. In addition, Company agrees that
any Inventory shall be provided free from any defects in design, manufacture, materials or
workmanship and suitable for their intended purposes, and shall comply with applicable health,
safety, environmental and other applicable laws and regulations. Except in accordance with the
terms of this Agreement, the applicable SOW or as otherwise authorized in writing by Microsoft,
Company shall not alter the Inventory or any component thereof without the specific prior written
consent of Microsoft, and shall have no authority to make copies of Microsoft software or
documentation. Company shall not include any other product or informational piece, including
without limitation literature, documentation and advertising, with any Inventory without the prior
written consent of Microsoft.

          (b) [*]

END OF INVENTORY MANAGEMENT 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.

23

 

EXHIBIT A

	 	 	 

	TO:

	 	THE MICROSOFT OPERATIONS DIGITAL DISTRIBUTION AGREEMENT
	 
	BETWEEN:

	 	MICROSOFT CORPORATION AND DIGITAL RIVER, INC.
	 
	DATED:

	 	September 1, 2006
	 
	NAME

	 	Microsoft Vendor Administrative Guidelines

VENDOR GUIDELINES

1. OVERVIEW.

The Vendor Guidelines (“VG”) contain policy and procedural requirements for Vendors providing
services or products (“Work”) to Microsoft.

Microsoft may modify the VG at any time, and modifications will be available to all active
Microsoft vendors on the Microsoft.com intranet website
(http://www.microsoft.com/mscorp/procurement/process/contracting.asp). Microsoft
will use commercially reasonable efforts to notify Vendor within one business week of the posting
of a modified VG at this web site (or any successor site). It is the responsibility of the Vendor
to notify all appropriate parties within Vendor, and any Vendor subcontractors, of the changes made
to the VG.

Questions: E-mail msvpinfo@microsoft.com

2. STATEMENT OF WORK (SOW).

Requirements: Microsoft shall have the sole discretion to select the manner in which Work will be
documented. Microsoft may require that a SOW be signed by both Microsoft and Vendor. However, all
SOW proposals from the Vendor should Include the Information listed below. In many cases the SOW is
comprised of the content of the actual MS Market purchase order that is completed by your Microsoft
customer via the MS Market tool. Each SOW — upon approval — shall be assigned a unique number by
Microsoft (also referred to as a “MS Market order number.”)

It is the responsibility of the Microsoft Business Contact to ensure the finalized documents meet
the current business requirements prior to execution. If there are any legal conditions and/or
clauses in the SOW, the document must be reviewed and approved by Microsoft LCA prior to execution.

Vendor Proposals: To facilitate this process, all Vendor proposals for SOWs or changes to SOWs MUST
include the following information (additional information may be required for category specific
SOWs):

	 	•	 	Vendor’s contact information, including identification of the Vendor Account Manager
	 
	 	•	 	Vendor’s Microsoft vendor number
	 
	 	•	 	Microsoft Business Contact name and division
	 
	 	•	 	The fill name of Vendor’s agreement and its Effective Date (i.e., “Master Work
Agreement, Effective Date                     ”)
	 
	 	•	 	Project objective — a detailed description of the expected results from the project.
This should include specific improvements in key metrics or performance expectations if
applicable.
	 
	 	•	 	Deliverables — complete description of Work provided in association with the
completion of the project objective (include quantities if applicable)
	 
	 	•	 	Deliverable time line with key dates indicated
	 
	 	•	 	Project reporting requirements — detailed description of reporting requirements for
the project that describe progress against milestones, project cost to date and expected
costs, on-going reporting requirements as needed, etc.
	 
	 	•	 	Total Work Fees cost of Work by line-item
	 
	 	•	 	Other charges such as tax, freight, shipping, and handling fees, if applicable, by
line item
	 
	 	•	 	Management fees for any Subcontractors associated with the project. Note that
Microsoft will not pay any mark-up on third party expenditures. Management fees for
coordinating these Subcontractors must be Itemized.
	 
	 	•	 	SAP code (if provided by Microsoft)

3. VENDOR CODE OF CONDUCT.

Microsoft aspires to be more than just a good company — it aspires to be a great company. What
will make Microsoft great is a strong commitment to our mission of enabling people and businesses
throughout the world to realize their full potential. Achieving our mission isn’t just about
building innovative technology. It’s also about who

 

			
	*	 	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.

24

 

we are as a company and as individuals, how we manage our business internally, and how we think
about and work with customers, partners, governments, vendors, and communities.

The global business environment is continuously changing and demanding more from us as a company
and as employees. Not only does the world expect us to deliver the best products and services, it
also expects us to conduct ourselves ethically and responsibly. It is essential that we conduct
ourselves at all times with integrity and in full compliance with the laws and regulations that
govern our global business activities. Microsoft has established a set of company standards of
business practices and regulatory compliance that are set out in the Standards of Business Conduct
which applies to all Microsoft employees, directors, and officers.
(www.microsoft.com/mscorp/legal/buscond). The Microsoft Standards of Business Conduct are
an extension of Microsoft’s values and reflect our commitment to ethical business practices and
regulatory compliance.

Microsoft expects that its vendors (“Vendors”) will share and embrace the letter and spirit of our
commitment to integrity. We understand that Vendors are Independent entities; however, the business
practices and actions of a vendor may impact and/or reflect upon Microsoft. Because of this,
Microsoft expects all Vendors and their employees, agents, and subcontractors (Vendors’ employees,
agents, and subcontractors shall hereinafter be referred to collectively as “Representatives”) to
adhere to the Microsoft Vendor Code of Conduct while they are conducting business with and/or on
behalf of Microsoft. All Microsoft Vendors should educate their Representatives to ensure they
understand and comply with the Microsoft Vendor Code of Conduct.

Legal and Regulatory Compliance Practices

All Microsoft Vendors and their Representatives shall conduct their business activities in full
compliance with the applicable laws and regulations of their respective countries while conducting
business with and/or on behalf of Microsoft. In addition to any specific obligations under Vendor’s
agreement with Microsoft, all Microsoft Vendors shall, without limitation:

	 	•	 	Comply with all applicable trade control and applicable laws as well as all export,
re-export and import requirements.
	 
	 	•	 	Conduct business in full compliance with antitrust and fair competition laws that
govern the jurisdictions in which they conduct business.
	 
	 	•	 	Comply with all applicable environmental laws and regulations regarding hazardous
materials, air emissions, waste and wastewater discharges, including the manufacture,
transportation, storage, disposal, and release to the environment of such materials.
	 
	 	•	 	Be honest, direct, and truthful in discussions with regulatory agency representatives
and government officials.
	 
	 	•	 	Not participate in international boycotts that are not sanctioned by the U.S.
government or applicable laws.
	 
	 	•	 	Comply with the anticorruption laws of the countries in which they do business,
including the United States Foreign Corrupt Practices Act, and not make any direct or
indirect payments or promises of payments to foreign government officials for the purpose
of inducing the individual to misuse his/her position to obtain or retain business.

Business Practices

Microsoft Vendors and their Representatives shall conduct their business interactions and
activities with integrity and in accordance with their obligations under their specific agreements
with Microsoft. In addition to any specific obligations under Vendor’s agreement with Microsoft,
all Microsoft Vendors shall, without limitation:

	 	•	 	Honestly and accurately record and report all business information and comply with
all applicable laws regarding their completion and accuracy.
	 
	 	•	 	Create, retain, and dispose of business records in full compliance with all
applicable legal and regulatory requirements.
	 
	 	•	 	Protect and responsibly use both the physical and intellectual assets of Microsoft
including property, supplies, consumables, and equipment when authorized by Microsoft to
use such assets.
	 
	 	•	 	Use Microsoft provided information technology and systems (including e-mail) only for
authorized Microsoft business-related purposes. Microsoft strictly prohibits Vendors and
their Representatives from using Microsoft provided technology and systems to create,
access, store, print, solicit, or send any material that is intimidating, harassing,
threatening, abusive, sexually explicit or otherwise offensive or inappropriate and/or
send any false, derogatory, or malicious communications using Microsoft provided
information assets and systems.

 

			
	*	 	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.

25

 

	 	•	 	Comply with all Microsoft requirements for maintenance of passwords, confidentiality,
security, and privacy procedures as a condition of receiving access to Microsoft’s
internal corporate network, all systems and buildings. All data stored or transmitted on
Microsoft owned or leased equipment is to be considered private and is the property of
Microsoft. Microsoft may monitor all use of the corporate networks and all systems
(including e-mail) and/or access all data stored or transmitted using the Microsoft
network.
	 
	 	•	 	Comply with the intellectual property ownership rights of Microsoft and others
including but not limited to copyrights, patents, trademarks, and trade secrets. Use
software, hardware and content only in accordance with their associated license or terms
of use.
	 
	 	•	 	Speak to the press on Microsoft’s behalf only if Vendor and/or Representative(s) is
expressly authorized in writing to do so by Microsoft.
	 
	 	•	 	Use good judgment, discretion, and moderation when offering gifts or entertainment to
Microsoft employees. In doing so, the Vendor and/or its Representatives will refrain from
giving Microsoft employees an individual gift or a combination of gifts with a value
greater than $200.00 in a given year (or any lower amount in accordance with applicable
laws) and never offer a bribe, kickback, bartering arrangement for goods or services,
and/or any other incentive to a Microsoft employee in order to obtain or retain Microsoft
business. Gift giving and entertainment practices may vary in different cultures and
waivers to the $200.00 annual limit above may be possible upon petition to the Microsoft
regional controller; however, any gifts and entertainment given or received must be in
compliance with the law, must not violate the giver’s and/or receiver’s policies on the
matter, and be consistent with local custom and practice.
	 
	 	•	 	Avoid the appearance of or actual improprieties and/or conflicts of interests.
Vendors and/or their Representatives shall not deal directly with any Microsoft employee
whose spouse, domestic partner, or other family member or relative holds a significant
financial interest in the Vendor. Dealing directly in the course of negotiating the Vendor
agreement or performing the Vendor’s obligations with a spouse, domestic partner, or other
family member or relative who is employed by Microsoft is also prohibited.
	 
	 	•	 	Avoid insider trading by buying or selling Microsoft’s or another company’s stock
when in possession of information about Microsoft or another company that is not available
to the investing public and that could influence an Investor’s decision to buy or sell
stock.

Employment Practices

Microsoft expects its Vendors to share its commitment to human rights and equal opportunity in the
workplace. Microsoft Vendors shall conduct their employment practices in full compliance with all
applicable laws and regulations. All Microsoft Vendors shall, without limitation:

	 	•	 	Cooperate with Microsoft’s commitment to a workforce free of harassment and unlawful
discrimination. While we recognize and respect cultural differences, we believe that
Vendor companies should not engage in discrimination in hiring, compensation, access to
training, promotion, termination or retirement based on race, caste, national
origin, religion, age, disability, gender, marital status, sexual orientation, union
membership, or political affiliation.
	 
	 	•	 	Provide a safe and healthy work environment and fully comply with all applicable
safety and health laws, regulations and practices. Adequate steps shall be taken to
minimize the causes of hazards inherent in the working environment.
	 
	 	•	 	Prohibit the use, possession, distribution, and/or sale of illegal drugs while on
Microsoft owned or leased property.
	 
	 	•	 	Use only voluntary labor. The use of forced labor whether in the form of Indentured
labor, bonded labor, or prison labor by a Microsoft Vendor and/or its subcontractors is
prohibited.
	 
	 	•	 	Workers should not be required to lodge “deposits” or their identity papers with
their employer and are free to leave their employer after reasonable notice without
penalty.
	 
	 	•	 	Comply with all local minimum working age laws and requirements and not utilize child
labor. Employees shall not be under the legal minimum working age of the respective region
or shall not be less than 16 years of age (whichever is higher). We only support the
development of legitimate workplace apprenticeship programs for the educational benefit of
younger people and will not do business with those who abuse such systems.

 

			
	*	 	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.

26

 

	 	•	 	Not engage in physical discipline or abuse. Physical abuse or discipline, the threat
of physical abuse, sexual or other harassment and verbal abuse or other forms of
intimidation is prohibited.
	 
	 	•	 	Pay living wages under humane conditions. All workers shall be provided with clear,
written information about their employment conditions with respect to wages before they
enter employment and as needed throughout their term of employment. Deductions from wages
as a disciplinary measure shall not be permitted nor shall any deductions from wages not
provided for by national law be permitted without the express permission of the worker
concerned. All disciplinary measures should be recorded. Wages and benefits paid for a
standard working week meet, at a minimum, national legal standards.
	 
	 	•	 	Not require workers to work more than the maximum hours of daily labor set by local
laws; ensure that overtime is voluntary and paid in accordance with local laws and
regulations.
	 
	 	•	 	Keep employee records in accordance to local and/or national regulations.

Compliance with the Microsoft Vendor Code of Conduct

It is the responsibility of the Vendor to ensure that its Representatives understand and comply
with the Microsoft Vendor Code of Conduct and to inform its Microsoft Business Contact (or a member
of Microsoft management) if and when any situation develops that causes the Vendor to operate in
violation of the code set forth in this document. Microsoft Vendors are expected to self-monitor
their compliance with this Vendor Code of Conduct. In addition to any other rights Microsoft may
have under its agreement with Vendor, Microsoft may request the immediate removal of any Vendor (or
employee, agent or subcontractor thereof) who behaves in a manner that is unlawful or inconsistent
with this Code or any Microsoft policy.

Reporting of Questionable Behavior and/or Possible Violations

If you wish to report a questionable behavior or possible violation of the Vendor Code of Conduct,
Microsoft has a variety of resources available to assist you. You are encouraged to work with your
primary Microsoft contact in resolving a business practice or compliance concern. However,
Microsoft recognizes that there may be times when this is not possible or appropriate. In such
instances, please contact any of the following:

	 	1.	 	The Microsoft Business Conduct Line at (877) 320-MSFT (6738).
	 
	 	2.	 	If you are calling from outside the United States, you may make a collect call to the
Business Conduct Line by accessing an International operator and asking to place a collect
call to (704) 540-0139.
	 
	 	3.	 	If you are a Vendor with access to Microsoft’s intranet, you may send an e-mail to
the Director of Compliance by e-mailing the Business Conduct and Compliance alias,
buscond@microsoft.com.
	 
	 	4.	 	Send a letter to the Director of Compliance at Microsoft Corporation, Law and
Corporate Affairs, One Microsoft Way, Redmond, WA 98052-6399 or send a confidential fax to
(425) 705-2985.

Microsoft will not tolerate any retribution or retaliation taken against any Individual who has, in
good faith, sought out advice or has reported questionable behavior and/or a possible violation.

	4.	 	MICROSOFT TRAVEL POLICY FOR VENDORS.

In general, Microsoft does not pay for travel expenses. If Microsoft agrees in a SOW to pay
Vendor’s expenses while traveling on authorized Microsoft business, then Microsoft will reimburse
Vendor for all reasonable and necessary expenses incurred in accordance with the terms of the SOW
and the following policies.

Vendor Responsibility:

	 	•	 	To minimize travel expenses whenever possible by using the least expensive options
that do not result in unreasonably ineffective use of work time or undue inconvenience to
the traveler.
	 
	 	•	 	To obtain Microsoft’s written approval before incurring travel expenses for which
reimbursement will be sought.
	 
	 	•	 	To accurately document all travel expenses.

Airline Tickets: Vendors should purchase non-refundable airline tickets, and purchase them a
minimum of seven (7) days in advance of the travel departure date.

Frequent Flyer/Frequent Guest Programs: Vendors may retain such program awards and benefits.
Participation in these programs must not influence flight or lodging selections in any manner that
would result in increased costs to Microsoft.

Cancellations: Vendor shall not seek reimbursement for travel expenses that are cancelled by
Vendor.

 

			
	*	 	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.

27

 

When a trip is cancelled by Microsoft after the ticket/invoice has been issued, the traveler shall
inquire about using the same ticket for future travel for Microsoft or obtain a refund to be
applied to any request for reimbursement. Vendors are responsible for canceling hotel rooms and
Microsoft will pay no expenses for hotel expenses which could have been avoided by prompt
cancellation.

Excess Baggage: Microsoft will reimburse for excess baggage charges only:

	 	•	 	When Vendor travels with heavy or bulky materials or equipment necessary to perform
Work;
	 
	 	•	 	When the excess baggage consists of Microsoft property; or
	 
	 	•	 	When Vendor travels on Microsoft business for more than fourteen (14) consecutive
days.

VENDORS USING MICROSOFT TRAVEL PROGRAM

Vendors utilizing the Microsoft Travel Program are required to use program vendors whenever
possible to take advantage of negotiated rates for air, hotel and car accommodations. Vendors must
review and implement all procedures outlined in the Microsoft Travel Program — Vendors Procedures”
document, available by emailing a request to tvlgpcal@microsoft.com.

Hotel Reservations: Hotel reservations MUST be made through one of the following methods:

	 	•	 	Travelport (US based travelers only)
	 
	 	•	 	Designated travel agency
	 
	 	•	 	Event Registration (when applicable)

Hotel Selection: Refer to Microsoft’s preferred hotel database http://msmarket (click on
Travel then Hotel Program) or send email to tvIgpcal@microsoft.com. If a Microsoft hotel
rate is not available, use an American Express rate or the least expensive property in a similar
hotel category.

Car Rental Selection: See http://msmarket (click on Travel) or send email to
tvlgpcal@microsoft.com.

Rail Travel: Rail travel should be used when it is less expensive than air travel, adds no more
than one and a half hours to the total travel time, or is more timely than driving.

EXPENSE REIMBURSEMENT

Reimbursable Expenses: Reimbursable items include but are not limited to:

	 	•	 	Airfare and surface transportation (Economy/Coach Class) including parking and tolls
	 
	 	•	 	Car rental (Compact/Midsize; full-size when three or more vendors travel together)
	 
	 	•	 	Gratuities/tips (within reason)
	 
	 	•	 	Hotel/lodging
	 
	 	•	 	Meals incurred during out-of-town trip (not to exceed $75.00 USD per day or as
specified In the SOW)
	 
	 	•	 	Saturday night stay-over (Weekend hotel expenses are reimbursable if airfare savings
result in a lower overall cost for the trip by at least $250.00 USD or equivalent currency
and the expenses do not exceed the airfare savings.)

Non-Reimbursable Expenses: Non-reimbursable items include but are not limited to:

	 	•	 	Barber, hairstylist, manicurist, and other grooming/personal service expenses
	 
	 	•	 	Entertainment (Including entertaining Microsoft employees and any event
entertainment)
	 
	 	•	 	Foreign travel document requirements
	 
	 	•	 	Free or upgrade certificates for flight, hotel, or car rental
	 
	 	•	 	Laundry and dry cleaning
	 
	 	•	 	Membership fees (including frequent flyer/frequent guest programs)
	 
	 	•	 	Any automobile fuel or rental insurance
	 
	 	•	 	Telephone calls (not Microsoft business related)
	 
	 	•	 	Trip or flight Insurance

Questions on Travel Policy Issues? Direct to tvlgpcal@microsoft.com

5. PRE-PLACEMENT POLICY.

Microsoft requires that all temporary personnel agencies, vendors, suppliers and independent
contractors conduct pre-placement background checks on all their staff who will perform services in
the United States that require any access to Microsoft owned or leased facilities or Microsoft
resources such as email, network access, cardkey, or

 

			
	*	 	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.

28

 

other access badges.1

Before Vendor assigns one of its staff to perform any such services under this Agreement, Vendor
will conduct a pre-placement criminal record check based on a social security trace for federal and
state felony convictions and state misdemeanor convictions covering the last seven (7) years
(collectively “background check”). Microsoft further requires that Vendor perform pre-placement
credit checks, when requested by Microsoft, for Vendor staff requiring access to cash handling,
backend access to the corporate network, or Personally Identifiable Information (“PII”). The credit
check must screen for serious unpaid and current delinquent debt, collections or judgments.
Microsoft also reserves the right to request an updated background check or credit check from the
Vendor on Vendor’s staff or Subcontractors on assignment at Microsoft.

Vendor will comply with the Fair Credit Reporting Act and any other applicable state and federal
laws on background checks and credit checks. At a minimum, Vendor should use an established and
reputable commercial background check company.

The Vendor is responsible for making the determination of whether any conviction disclosed in its
staff’s background check or serious delinquency or debt disclosed in the credit check is reasonably
related to the work Vendor staff will do for Microsoft. If the background check discloses a
conviction or the credit check discloses information whose reasonable relationship to the work to
be performed for Microsoft is unclear, Vendor will do the following: 1) Inform Microsoft of the
conviction or serious unpaid and current delinquent debt, collection or judgment; 2) exclude the
identity or any facts that would enable Microsoft to ascertain the identity of the Vendor staff
whose conviction or credit information is in question; 3) discuss with Microsoft whether the Vendor
staff is an unacceptable placement.

If Vendor uses any Subcontractors to perform services in the United States under this Master
Agreement that require any access to Microsoft resources such as email, network access, cardkey, or
other access badges, or that require a Subcontractor to access the credit card or social security
information of Microsoft customer, Vendor will ensure its agreements with Subcontractors include
the requirements set forth in this policy.

If Microsoft or Vendor becomes aware of criminal activity by Vendor’s staff or Subcontractor while
Vendor’s staff or Subcontractor is assigned to work for Microsoft, and Vendor determines this
information makes Vendor’s staff or Subcontractor an unacceptable placement, Vendor will take
complete responsibility for immediately removing said individual from the Microsoft assignment and
from Microsoft property. Vendor shall comply with all applicable laws when removing any Vendor
staff or Subcontractor from Microsoft premises. If the criminal activity would suggest a threat of
physical harm to Microsoft property or employees, the parties must inform their respective business
contact immediately, but in no event later than 24 hours after becoming aware of the information.
Otherwise, Microsoft or Vendor must inform their respective business contact of the criminal
activity within 48 hours of becoming aware of the information.

Vendor agrees to indemnify Microsoft from any liability Microsoft may sustain as a result of
Vendor’s failure to adhere to Microsoft’s background and credit check requirement, including that
requirement’s application to Vendor’s Subcontractors, or Vendor’s failure to comply with all
applicable laws in conducting a background or credit check on Vendor’s staff or Subcontractors who
will perform services In the United States that require any access to Microsoft owned or leased
facilities or Microsoft resources such as email, network access, cardkey, or other access badges.

6. USE OF MICROSOFT FACILITIES AND/OR EQUIPMENT.

Vendor will not use Microsoft facilities or equipment to perform services for any person or entity
other than Microsoft without the prior written consent of Microsoft.

At Vendor’s cost, Vendor shall comply with all Microsoft physical and information security rules
and requirements as modified from time to time. Microsoft may at its option require Vendor and/or
Vendor’s employees or Subcontractors to sign separate agreements regarding access to Microsoft
facilities or equipment.

7. MICROSOFT TRADEMARKS.

Microsoft grants Vendor a non-exclusive, non-transferable, royalty-free, personal license to use
Microsoft

 

			
	1	 	The Vendor and Microsoft acknowledge that
issues regarding pre-placement background checks and credit checks on Company’s
staff who will perform services outside of the United States will be addressed
in the context of the specific Local Agreement under this Master Agreement.

 

			
	*	 	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.

29

 

trademarks and logos specified In a SOW (“Microsoft Marks”) only during the term of the SOW, only
according to the trademark brand use specifications below and all current brand usage guidelines
made available from Microsoft, and solely in relation to Work described in the SOW. All rights not
expressly granted are reserved by Microsoft. Vendor acknowledges Microsoft’s sole ownership of
Microsoft Marks and all associated goodwill, and that Microsoft retains all right, title, and
interest in and to the Microsoft Marks. All goodwill arising from use of Microsoft Marks by Vendor
will inure to the sole benefit of Microsoft. Vendor will not use Microsoft Marks in any manner that
will diminish or otherwise damage Microsoft’s goodwill in the Microsoft Marks.

Vendor will not adopt, use, or register any corporate name, trade name, trademark, domain name,
service mark, certification mark, or other designation that violates Microsoft’s rights in
Microsoft Marks. Microsoft shall have the sole right to, and in its sole discretion may control any
action concerning Microsoft Marks. Vendor agrees to maintain the quality of all deliverables
containing Microsoft Marks at a level that meets or exceeds standards of quality and performance
generally accepted in the industry, and that is at least commensurate with the quality of similar
deliverables approved by Microsoft. Vendor agrees to fully correct and remedy any deficiencies in
its use of Microsoft Marks, or the quality of the deliverables offered in connection with Microsoft
Marks, within a reasonable time upon receipt of notice from Microsoft. Microsoft reserves the right
in its sole discretion to terminate or modify this license for use of Microsoft Marks at any time.
Vendor shall immediately cease all use of Microsoft Marks upon expiration or termination of the
Agreement or the specific SOW.

Trademark Brand Use Specifications:

	1.	 	Microsoft Marks may be used solely on deliverables specifically requested by Microsoft in a
SOW. No Microsoft Marks may be used on, or in relation to, any product or service not
requested by Microsoft in a SOW.
	 
	2.	 	Microsoft Marks may not be used in any manner that expresses or implies Microsoft’s
affiliation, sponsorship, endorsement, certification, or approval of Vendor.
	 
	3.	 	Vendor shall not use Microsoft Marks in association with any third party trademarks in a
manner that suggests co-branding or otherwise creates potential confusion as to ownership of
Microsoft Marks.
	 
	4.	 	Microsoft Marks may not be included in any non-Microsoft trade name, business name, domain
name, product or service name, logo, trade dress, design, slogan, or other trademark.
	 
	5.	 	Microsoft Marks may only be used as provided by Microsoft. Except for size, or as otherwise
specified in the brand guidelines on the extranet, Microsoft Marks may not be altered in any
manner, including proportions, colors, elements, etc., or animated, morphed, or otherwise
distorted in perspective or dimensional appearance.
	 
	6.	 	Microsoft Marks may not be combined with any other object, including, but not limited to,
other logos, words, graphics, photos, slogans, numbers, design features, or symbols.
	 
	7.	 	Microsoft Marks must stand alone. A minimum amount of empty space must surround the Microsoft
Marks separating it from any other object, such as type, photography, borders, edges, and so
on. Unless otherwise specified on the brandtools extranet, the required area of empty space
around the Microsoft Marks must be X, where X equals 1/2 the height of a Microsoft Mark as used
on a deliverable.
	 
	8.	 	Microsoft Marks shall include the appropriate TM and/or ® symbol(s) as provided by Microsoft.

Further brand use specifications are provided at https://brandtools.partners.extranet.microsoft.com/

8. SUBCONTRACTOR REQUIREMENTS

In the event Vendor is unable to comply with the percentage purchase requirements in the Agreement
after using best efforts, Vendor shall have the right to include in the calculation of the amount
paid by Vendor to Subcontractors those amounts paid by Vendor to Minority Owned and Operated
Businesses and to Women Owned and Operated Businesses in the conducting of it’s overall business
(not just those related to Microsoft specific subcontracting). By the tenth (10th) business day
following November 30 and May 31, Vendor shall report their subcontracted spend for the previous
six month period via the template provided by Microsoft. The template can be obtained by emailing
mwdbe@microsoft.com. The provisions of this section shall not apply if Vendor’s annual receipts are
less than Eighteen Million U.S. Dollars (18,000,000 USD) and the Vendor qualifies as a small
business as defined under the Small Business Administration’s Table of Size Standards dated October
1, 2002. However, Vendor must submit an exemption request via the template for each reporting
period. If Microsoft does not approve the exemption request, Microsoft shall notify the vendor via
e-mail that the Vendor must report their subcontracted spend.

 

			
	*	 	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.

30

 

EXHIBIT B

	 	 	 

	TO:

	 	THE MICROSOFT OPERATIONS DIGITAL DISTRIBUTION AGREEMENT
	 
	BETWEEN:

	 	MICROSOFT CORPORATION AND DIGITAL RIVER, INC.
	 
	DATED:

	 	September 1, 2006
	 
	NAME

	 	Non-Disclosure Agreement

MICROSOFT CORPORATION NON-DISCLOSURE AGREEMENT

(STANDARD RECIPROCAL)

This Non-Disclosure Agreement (the “Agreement”) is made and entered into as of the later of the two
signature dates below by and between MICROSOFT CORPORATION, a Washington corporation (“Microsoft”),
and Digital River, Inc., a Delaware corporation (“Company”).

IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS CONTAINED IN THIS AGREEMENT AND THE MUTUAL
DISCLOSURE OF CONFIDENTIAL INFORMATION, THE PARTIES HERETO AGREE AS FOLLOWS:

1. Definition of Confidential Information and Exclusions.

          (a) “Confidential Information” means nonpublic information that a party to this Agreement
(“Disclosing Party”) designates as being confidential to the party that receives such information
(“Receiving Party”) or which, under the circumstances surrounding disclosure ought to be treated as
confidential by the Receiving Party. “Confidential Information” includes, without limitation,
information in tangible or intangible form relating to and/or including released or unreleased
Disclosing Party software or hardware products, the marketing or promotion of any Disclosing Party
product, Disclosing Party’s business policies or practices, and information received from others
that Disclosing Party is obligated to treat as confidential. Except as otherwise indicated in this
Agreement, the term Disclosing Party” also includes all Affiliates of the Disclosing Party and,
except as otherwise indicated, the term “Receiving Party” also includes all Affiliates of the
Receiving Party. And “Affiliate” means any person, partnership, joint venture, corporation or other
form of enterprise, domestic or foreign, including but not limited to subsidiaries, that directly
or indirectly, control, are controlled by, or are under common control with a party.

          (b) Confidential Information shall not include any information, however designated, that: (1)
is or subsequently becomes publicly available without Receiving Party’s breach of any obligation
owed Disclosing Party; (ii) became known to Receiving Party prior to Disclosing Party’s disclosure
of such information to Receiving Party pursuant to the terms of this Agreement; (iii) became known
to Receiving Party from a source other than Disclosing Party other than by the breach of an
obligation of confidentiality owed to Disclosing Party; (iv) is independently developed by
Receiving Party.

2. Obligations Regarding Confidential Information

          (a) Receiving Party shall:

	 	(i)	 	Refrain from disclosing any Confidential Information of the Disclosing
Party to third parties for five (5) years following the date that Disclosing Party
first discloses such Confidential Information to Receiving Party, except as
expressly provided in Sections 2(b) and 2(c) of this Agreement,
	 
	 	(ii)	 	Take reasonable security precautions, at least as great as the
precautions it takes to protect its own confidential information, but no less than
reasonable care, to keep confidential the Confidential Information of the
Disclosing Party;
	 
	 	(iii)	 	Refrain from disclosing, reproducing, summarizing and/or distributing
Confidential Information of the Disclosing Party except in pursuance of Receiving
Party’s business relationship with Disclosing Party, and only as otherwise provided
hereunder; and
	 
	 	(iv)	 	Refrain from reverse engineering, decompiling or disassembling any
software code and/or pre- release hardware devices disclosed by Disclosing Party to
Receiving Party under the terms of this Agreement, except as expressly permitted by
applicable law.

 

			
	*	 	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.

31

 

          (b) Receiving Party may disclose Confidential Information of Disclosing Party in accordance
with a judicial or other governmental order, provided that Receiving Party either (i) gives the
undersigned Disclosing Party reasonable notice prior to such disclosure to allow Disclosing Party a
reasonable opportunity to seek a protective order or equivalent, or (ii) obtains written assurance
from the applicable judicial or governmental entity that it will afford the Confidential
Information the highest level of protection afforded under applicable law or regulation.
Notwithstanding the foregoing, the Receiving Party shall not disclose any computer source code that
contains Confidential Information of the Disclosing Party in accordance with a judicial or other
governmental order unless it complies with the requirement set forth in sub-section (1) of this
Section 2(b).

          (c) The undersigned Receiving Party may disclose Confidential Information only to Receiving
Party’s employees and consultants on a need-to-know basis. The undersigned Receiving Party will
have executed or shall execute appropriate written agreements with third parties sufficient to
enable Receiving Party to enforce all the provisions of this Agreement

          (d) Receiving Party shall notify the undersigned Disclosing Party immediately upon discovery
of any unauthorized use or disclosure of Confidential Information or any other breach of this
Agreement by Receiving Party and its employees and consultants, and will cooperate with Disclosing
Party in every reasonable way to help Disclosing Party regain possession of the Confidential
Information and prevent its further unauthorized use or disclosure.

          (e) Receiving Party shall, at Disclosing Party’s request, return all originals, copies,
reproductions and summaries of Confidential Information and all other tangible materials and
devices provided to the Receiving Party as Confidential Information, or at Disclosing Party’s
option, certify destruction of the same.

3. Remedies

     The parties acknowledge that monetary damages may not be a sufficient remedy for unauthorized
disclosure of Confidential Information and that Disclosing Party shall be entitled, without waiving
any other tights or remedies, to such injunctive or equitable relief as may be deemed proper by a
court of competent jurisdiction.

4. Miscellaneous

     (a) All Confidential Information is and shall remain the property of Disclosing Party. By
disclosing Confidential Information to Receiving Party, Disclosing Party does not grant any express or implied right to
Receiving Party to or under any patents, copyrights, trademarks, or trade secret information except
as otherwise provided herein. Disclosing Party reserves without prejudice the ability to protect
its rights under any such patents, copyrights, trademarks, or trade secrets except as otherwise
provided herein.

     (b) In the event that the Disclosing Party provides any computer software and/or hardware to
the Receiving Party as Confidential Information under the terms of this Agreement, such computer
software and/or hardware may only be used by the Receiving Party for evaluation and providing
Feedback (as defined in Section 5 of this Agreement) to the Disclosing Party. Unless otherwise
agreed by the Disclosing Party and the Receiving Party, all such computer software and/or hardware
is provided “AS IS” without warranty of any kind, and Receiving Party agrees that neither
Disclosing Party nor its suppliers shall be liable for any damages whatsoever arising from or
relating to Receiving Party’s use or inability to use such software and/or hardware.

     (c) The parties agree to comply with all applicable international and national laws that apply
to (i) any Confidential Information, or (ii) any product (or any part thereof), process or service
that is the direct product of the Confidential Information, including the U.S. Export
Administration Regulations, as well as end-user, end-use and destination restrictions issued by
U.S. and other governments. For additional information on exporting Microsoft products, see
http://www.microsoft.com/exporting/.

     (d) The terms of confidentiality under this Agreement shall not be construed to limit either
the Disclosing Party or the Receiving Party’s right to independently develop or acquire products
without use of the other party’s Confidential Information.

     (e) This Agreement constitutes the entire agreement between the parties with respect to the
subject matter hereof. It shall not be modified except by a written agreement dated subsequent to
the date of this Agreement and signed by both parties. None of the provisions of this Agreement
shall be deemed to have been waived by any act or acquiescence on the part of Disclosing Party, the
Receiving Party, their agents, or employees, but only by an instrument

 

			
	*	 	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.

32

 

in writing signed by an authorized employee of Disclosing Party and the Receiving Party. No
waiver of any provision of this Agreement shall constitute a waiver of any other provision(s) or of
the same provision on another occasion.

     (f) If either Disclosing Party or the Receiving Party employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys’ fees and costs. This Agreement shall be construed and controlled by the laws
of the State of Washington, and the parties further consent to exclusive jurisdiction and venue in
the federal courts sitting in King County, Washington, unless no federal subject matter
jurisdiction exists, in which case the parties consent to the exclusive jurisdiction and venue in
the Superior Court of King County, Washington. Company waives all defenses of lack of personal
jurisdiction and forum non conveniens. Process may be served on either party in the manner
authorized by applicable law or court rule.

     (g) This Agreement shall be binding upon and inure to the benefit of each party’s respective
successors and lawful assigns; provided, however, that neither party may assign this Agreement
(whether by operation of law, sale of securities or assets, merger or otherwise), in whole or in
part, without the prior written approval of the other party. Any attempted assignment in violation
of this Section shall be void.

     (h) If any provision of this Agreement shall be held by a court of competent jurisdiction to
be illegal, invalid or unenforceable, the remaining provisions shall remain in full force and
effect.

     (i) Either party may terminate this Agreement with or without cause upon ninety (90) days
prior written notice to the other party. All sections of this Agreement relating to the rights and
obligations of the parties concerning Confidential Information disclosed during the term of the
Agreement shall survive any such termination.

          IN WITENSS WHEREOF, the parties hereto have executed this Agreement.

 

			
	*	 	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.

33

 

EXHIBIT C

	 	 	 

	TO:

	 	THE MICROSOFT OPERATIONS DIGITAL DISTRIBUTION AGREEMENT
	 
	BETWEEN: 

	 	MICROSOFT CORPORATION AND DIGITAL RIVER, INC.
	 
	DATED:

	 	September 1, 2006
	 
	NAME

	 	Microsoft Supply Chain Security Policies and Requirements (Version 4)

[*]

 

			
	*	 	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.

34

 

EXHIBIT D

	 	 	 

	TO:

	 	THE MICROSOFT OPERATIONS DIGITAL DISTRIBUTION AGREEMENT
	 
	BETWEEN:

	 	MICROSOFT CORPORATION AND DIGITAL RIVER, INC.
	 
	DATED:

	 	September 1, 2006

TEMPLATE — AFFILIATE AGREEMENT

For good and valuable consideration, [NAME OF AFFILIATE], a [TYPE OF AFFILIATE] organized under the
laws of [NAME OF COUNTRY] (“Affiliate”) covenants and agrees with Microsoft Corporation
(“Microsoft”), that Affiliate will comply with all obligations of Digital River, Inc., a company
organized under the laws of Delaware (“Company”) pursuant to that certain Microsoft Operations
Digital Distribution Agreement between Microsoft and Company dated September 1, 2006 (the
“Agreement”). Microsoft grants Affiliate all necessary rights, licenses and other contractual
powers granted to Company under the Agreement in order to perform the necessary and delegated
Services under the Agreement and specified below. Affiliated shall only perform the following
Services:

     1.                                         

     2.                                         

     3.                                         

Affiliate acknowledges that its agreement herein is a condition for Affiliate to exercise any of
the rights sub-licensed by Microsoft to Affiliate pursuant to the terms of the Agreement.

Capitalized terms used herein and not otherwise defined shall have the same meaning as in the
Agreement.

IN WITNESS WHEREOF, Affiliate and Company have executed this agreement as of the date set forth
below. All signed copies of this Agreement shall be deemed originals.

	 	 	 	 	 	 	 

	MICROSOFT CORPORATION	 	[AFFILIATE]
	 
	 	 	 	 	 	 
	 
	Signature:

	 	 	 	Signature:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Print Name:

	 	 	 	Print Name:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	DIGITAL RIVER, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Print Name:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	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.

35

 

EXHIBIT E

	 	 	 

	TO:

	 	THE MICROSOFT OPERATIONS DIGITAL DISTRIBUTION AGREEMENT
	 
	BETWEEN: 

	 	MICROSOFT CORPORATION AND DIGITAL RIVER, INC.
	 
	DATED:

	 	September 1, 2006
	 
	NAME

	 	Microsoft Release Services Manager Site License Agreement

MICROSOFT

RELEASE SERVICES MANAGER

SITE LICENSE AGREEMENT

     This Microsoft Release Services Manager Site License Agreement (“Agreement”) is made and
entered into as of the later of the signature dates below (“Effective Date”), by and between
DIGITAL RIVER, INC. (“COMPANY”), a Minnesota corporation, and MICROSOFT CORPORATION (“MICROSOFT”),
a Washington corporation.

In consideration of the covenants and conditions hereinafter set forth, MICROSOFT and COMPANY agree
as follows:

1. License. MICROSOFT hereby grants to COMPANY, and its majority-owned subsidiaries, a limited,
personal, non-exclusive, non-transferable, revocable license to reproduce and use the MICROSOFT
software known as Release Services Manager (the “Licensed Software”), in object code form only,
including any documentation, corrections, enhancements, updates and/or upgrades thereto
(collectively the “Modifications”) provided to COMPANY by MICROSOFT, at MICROSOFT’s sole and
absolute discretion, for internal purposes only at COMPANY’s offices identified on the attached
Exhibit A (the “Location”), subject to the terms and conditions set forth herein. Nothing in this
Agreement shall be construed as obligating MICROSOFT to deliver any Modifications to COMPANY.
MICROSOFT reserves all other rights in the Licensed Software not expressly granted to COMPANY in
this Section 1. For purposes of this Agreement the term “Licensed Software” includes all
Modifications.

2. License Restrictions.

          (a) COMPANY shall only use the Licensed Software to access and download MICROSOFT product
software and any files required to build MICROSOFT products that COMPANY is authorized to
reproduce, manufacture and/or distribute under a separate agreement with MICROSOFT at the Location.
This Agreement does not grant COMPANY any rights in or to any such downloaded MICROSOFT product
software; specifically and without limitation, this Agreement does not grant COMPANY any rights to
use or reproduce such software.

          (b) COMPANY shall not (i) in any way modify the Licensed Software without obtaining, in
advance, the express written permission of MICROSOFT, or (ii) reproduce the Licensed Software
except pursuant to the terms of this Agreement.

          (c) All title and copyrights in and to the Licensed Software as well as the MICROSOFT product
software are owned by MICROSOFT or its suppliers.

          (d) COMPANY shall not transfer, assign, license, rent or lease any copy of the Licensed
Software or any MICROSOFT product software. COMPANY may not export or re-export, directly or
indirectly, the Licensed Software into any country if such a transfer is prohibited by the United
States Export Administration Act and implementing regulations and MICROSOFT has not consented to
such export or re-export in writing.

          (e) COMPANY shall not reverse engineer, decompile, or disassemble the Licensed Software except
and only to the extent that such activity may be expressly permitted by applicable law
notwithstanding this limitation.

          (f) COMPANY shall only distribute the Licensed Software within the COMPANY on a per employee
basis. Each employee must be registered for an individual access account.

 

			
	*	 	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.

36

 

          (g) COMPANY shall ensure that each employee shares neither their individual Licensed Software
account nor password with any other COMPANY employee.

          (h) Should any COMPANY employee who is a registered end user of the Licensed Software either
terminate or be terminated from their employment with COMPANY or no longer holds a COMPANY position
requiring such employee’s access to the Licensed Software, COMPANY shall within forty-eight (48)
hours of such termination notify its MICROSOFT Vendor Account Manager of the relinquishment of
License Software use, copying the same information to MICROSOFT’s PIRSHELP alias.

          (i) COMPANY agrees it has full responsibility for confirming that the MICROSOFT product
software downloaded is a true and complete copy of the MICROSOFT product software COMPANY is
authorized to reproduce, manufacture, and/or distribute under separate agreement with MICROSOFT.

          (j) COMPANY shall not alter, remove, or obscure any copyright notices in the Licensed Software
and shall include in any copies of the Licensed Software the same notices as are contained in the
copies delivered by MICROSOFT hereunder for the Licensed Software or as instructed by MICROSOFT.

3. Warranty Disclaimer. MICROSOFT PROVIDES THE LICENSED SOFTWARE TO COMPANY AS IS, WITHOUT
WARRANTY OF ANY KIND AND HEREBY DISCLAIMS ALL EXPRESSED OR IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

4. Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL MICROSOFT BE LIABLE TO COMPANY FOR
ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING WITHOUT
LIMITATION DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS
INFORMATION, OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF OR IN CONNECTION WITH THE USE OF OR
INABILITY TO USE THE LICENSED SOFTWARE, EVEN IF COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

5. Termination. COMPANY acknowledges that MICROSOFT may terminate its obligation of this
Agreement at any time and therefore agrees that MICROSOFT may, at its option and upon written
notice to COMPANY, terminate this Agreement for any reason at any time without any further
obligation to COMPANY. Sections 3, 6, 7, 8 and 10 shall survive any expiration or termination of
this Agreement.

6. Indemnity.

          (a) COMPANY agrees to indemnify, defend, and hold MICROSOFT and its subsidiaries, successors,
officers, directors and employees harmless from any and all actions, causes, demands, costs,
liabilities, expenses and damages arising out of or in connection with any claim which, if true,
would constitute a breach of its obligations, representations or warranties herein.

          (b) If any action, dispute, claim or demand shall be brought by any third party against
MICROSOFT for which MICROSOFT may seek indemnification from the COMPANY pursuant to this Section,
MICROSOFT shall promptly notify the COMPANY in writing, specifying the nature of the action and the
total monetary amount sought or other such relief as is sought therein. Upon sending such notice to
the COMPANY, MICROSOFT shall defend, contest, negotiate or settle any such claim or demand through
counsel of its own selection, satisfactory to the COMPANY. MICROSOFT shall not settle any action,
dispute, claim or demand without notifying COMPANY and giving the COMPANY the right to comment on
the terms of the settlement.

7. Confidentiality. The COMPANY agrees that at all times during the term of this Agreement,
and for five (5) years thereafter, it will hold in strictest confidence, and will not disclose to
any third party, any confidential information of MICROSOFT, without MICROSOFT’s prior written
consent. However, COMPANY may disclose confidential information in accordance with judicial or
other governmental order, provided COMPANY shall give Microsoft reasonable notice prior to such
disclosure and shall comply with any applicable protective order or equivalent. The term
“confidential information” shall mean all non-public information that MICROSOFT designates as being
confidential, or which, under the circumstances of disclosure ought to be treated as confidential.
Confidential information includes, without limitation, the terms and conditions of this Agreement,

 

			
	*	 	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.

37

 

information relating to released or unreleased software or hardware products, marketing or
promotion of any product, business policies or practices, customers or suppliers, or information
received from others that MICROSOFT is obligated to treat as confidential. If the COMPANY has any
questions as to what comprises confidential information, it agrees to consult with MICROSOFT.
“Confidential information” shall not include information that was known to the public or other
party prior to disclosure, or information that becomes publicly available through no fault of the
COMPANY.

8. Reporting. COMPANY agrees to keep accurate records identifying the number of copies of
the Licensed Software in use at each Location and the hardware upon which the Licensed Software has
been loaded. COMPANY shall maintain such reports for a period of two (2) years from the date the
Licensed Software was delivered or termination of this Agreement which ever is later. At
MICROSOFT’s request and with not less than one (1) hour prior notice to COMPANY, MICROSOFT or its
representatives may inspect the Location to confirm that COMPANY is in compliance with the terms of
this Agreement. All such inspections will be conducted at MICROSOFT’s expense and during the
COMPANY’s regular business hours. COMPANY shall cooperate with MICROSOFT in all respects so that
MICROSOFT may complete its inspection.

9. Notices and Requests. All notices and requests in connection with this Agreement shall
be deemed given as of the day they are received either by messenger, delivery service, or in the
United States of America mails, postage prepaid, certified or registered, return receipt requested,
and addressed as follows:

	 	 	 

	MICROSOFT:

	 	MICROSOFT CORPORATION
	 

	 	One Microsoft Way
	 

	 	Redmond, WA 98052-6399
	 
	 	 
	E-mail Attention:

	 	PlRSHELP@microsoft.com
	 
	 	 
	Telephone:

	 	(425) 882-8080 — Please ask for the PIRS Technical Support Team
	Facsimile:

	 	(425) 936-7329
	 
	 	 
	with a cc to:

	 	MICROSOFT CORPORATION
	 

	 	One Microsoft Way
	 

	 	Redmond, WA 98052-6399
	 
	 	 
	Attention:

	 	Law & Corporate Affairs
	 
	 	 
	COMPANY:

	 	Digital River, Inc.
	 

	 	7625 West 76th Street
	 

	 	Eden Prairie, Minnesota 55344
	 
	 	 
	 

	 	Beechwood House,
	 

	 	10 Windsor Road, Slough, England SL1 2EJ
	 
	 	 
	Attention:

	 	Chief Financial Officer
	 
	 	 
	Telephone:

	 	952-253-1234
	Facsimile:

	 	952-253-8497

     or to such other address as the party to receive the notice or request so designates by
written notice to the other.

10. Miscellaneous

          (a) The parties are each independent contractors, and nothing in this Agreement shall be
construed as creating an employer-employee relationship, a partnership, franchise, or a joint
venture between the parties.

          (b) This Agreement shall be governed by the laws of the State of Washington and COMPANY
consents to jurisdiction and venue in the state and federal courts sitting in the State of
Washington. In any action

 

			
	*	 	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.

38

 

or suit to enforce any right or remedy under this Agreement or to interpret any provision of this
Agreement, the prevailing party shall be entitled to recover its costs, including reasonable
attorneys’ fees.

          (c) This Agreement does not constitute an offer by MICROSOFT and it shall not be effective
until signed by both parties. This Agreement constitutes the entire agreement between the parties
with respect to the Licensed Software and all other subject matter hereof and merges all prior and
contemporaneous communications. It shall not be modified except by a written agreement dated
subsequent to the date of this Agreement and signed on behalf of COMPANY and MICROSOFT by their
respective duly authorized representatives.

          (d) This Agreement may be assigned by MICROSOFT but shall not be assigned by COMPANY without
MICROSOFT’s prior written approval. Except as otherwise provided, this Agreement shall be binding
upon and inure to the benefit of the parties’ successors and lawful assigns.

          Each of the Parties intending to be legally bound hereby agrees to the above terms as of the
Effective Date.

	 	 	 

	MICROSOFT CORPORATION

	 	DIGITAL RIVER, INC.
	 
	 
	 	 
	 

	 	 
	By (Sign)

	 	By (Sign)
	 
	 	 
	 

	 	 
	Name (Print)

	 	Name (Print)
	 
	 	 
	MICROSOFT Vendor Account Manager
	 	 
	 

	 	 
	Title

	 	Title
	 
	 	 
	 

	 	 
	Date

	 	Date

EXHIBIT A

COMPANY may install and use the Licensed Software at the following locations all of which shall be
under COMPANY’s absolute control:

9625 West 76th Street, Eden Prairie, MN 55344 USA.

Beechwood House, 10 Windsor Road, Slough, England SL1 2EJ

 

			
	*	 	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.

39exv10w26

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.

1

 

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
	 
	 	 
	Contact/Title: Kerry Dean

	 	Contact/Title: Tom Venable
	Address: One Microsoft Way

	 	Address: 9625 West 76th Street
	Redmond, WA, U.S.A. 98052-6399

	 	Eden Prairie, Minnesota 55344
	Phone Number: 425-707-4116

	 	Phone Number: 952-253-1234 #8818
	Fax Number: 425-936-7329

	 	Email Address: tvenable@digitalriver.com
	Email Address: Kerryd@microsoft.com
	 	 
	 
	 	 
	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.

2

 

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.

3

 

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.

4

 

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.

5

 

     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.

6

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