Distributor Agreement

CERTAIN CONFIDENTIAL INFORMATION

CONTAINED IN THIS DOCUMENT, MARKED BY

BRACKETS, HAS BEEN OMITTED AND FILED

SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION PURSUANT TO RULE

406 OF THE SECURITIES ACT OF 1933, AS





DISTRIBUTOR AGREEMENT



This Agreement made as of this 23rd day of April, 1997, by and between Corel Corporation (USA) ("COREL") having its principal place of business at 567 East Timpanogos Parkway, Orem, Utah, 84057 (Tel: 801-765-4010; Fax: 801-222-43 79) and Digital River, Inc. ("Distributor"), having its principal place of business at 5198 West 76th Street, Edina, Minnesota (Tel: 612-832-5622; Fax: 612-830-1154).



BACKGROUND:



1. COREL desires to secure distribution of certain of its software; and 2. Distributor desires to obtain certain software from COREL for



NOW THEREFORE, in consideration of the mutual promises, covenants and obligations contained herein the parties agree as follows:





1. INTERPRETATION



1.01 DEFINITIONS. As used herein:



(a) "Agreement" means this Agreement and any Schedule attached

(b) "Customer", means any individual or entity who purchases Software

from Distributor, including an End User.

(c) "Distributor System" or "Electronic Commerce System" means the

system used by Distributor for the receipt and delivery of

on-line orders for the Software and processing of credit card

information for all Software orders by Customers.

(d) "Electronic Software Distribution" means the electronic delivery

of Products, using on line services, the Internet, phone lines,

cable systems, servers, satellite, or other public or private

access network or electronic communication mediums.

(e) "Electronic Distributor Materials" means Distributor-provided

computer readable materials which have received prior written

approval from COREL to be included in a Product.

(f) "End User License Agreement (EULA)" means COREL's end user

license, as modified by COREL from time to time.

(g) "Hard Goods" means any tangible item other than Schedule "B"

Software which is offered for sale or distribution by COREL and

Distributor pursuant to this Agreement.

(h) "Product" means a copy of the Schedule "A" Software,

Documentation, End User License Agreement, and any Electronic

Distributor Materials packaged in computer readable form for

Electronic Software Distribution in accordance with the terms of

this Agreement.

(i) "Software" means collectively, the object code version of the

COREL software Products listed in Schedule "B" ("Schedule "B"

Software") and the object code version in any form or format of

any of the COREL software Products listed in







Schedule "A" ("Schedule "A" Software"). In those instances where

the term "Software" is used, such reference shall include both

schedule "A" and Schedule "B" software. In those instances where

only Schedule "A" or Schedule "B" Software is indicated, such

reference shall refer only to that software so specified.

(j) "Software Prices" means the amount payable by Distributor

pursuant to section 7 of this agreement and according to the

pricing schedule set out in Schedule "A" and Schedule "B" for

each copy of the Software which is distributed by Distributor.

(k) "Territory" means world-wide subject to section 5.04 herein.





2. APPOINTMENT



2.01 LICENSE AND APPOINTMENT. Subject to the terms and conditions hereof,

COREL hereby grants to Distributor and Distributor accepts from COREL:



2.01.1 REPRODUCTION - a non-exclusive license to reproduce Schedule "A"

Software only in computer readable form for the purposes of distribution

only through Electronic Software Distribution as part of a Product;



2.01.2 DISTRIBUTION - the exclusive right to distribute and resell the

Schedule "A" Software, Schedule "B" Software, and Hard Goods to Customers

within the Territory for sales originating from or through COREL's web

site. Distributor agrees not to distribute the Schedule "A" Software

other than in computer readable form as part of a Product.



2.02 INTELLECTUAL PROPERTY. Distributor acknowledges that COREL is the owner

of all intellectual property, including, without limitation, copyright,

relating to the Software and the trade-marks used in association with

the Software. Distributor shall have no rights in respect of such

copyright other than to act as a distributor of the Software to deliver

the Software subject to the End User Licenses.



2.03 END USER LICENSE AGREEMENT. Distributor shall ensure that each copy of

the Software is distributed with a copy of the End User License





3. TRADEMARKS



3.01 COREL MARKS. During the term of this Agreement, COREL grants

Distributor a non-exclusive license to use the COREL Marks for the

distribution and marketing of the Software.



3.02 NON-ALTERATION. Distributor agrees not to alter the trademarks, trade

names, copyright notices and designs of any Software. Distributor

acknowledges and agrees that COREL retains all of is right, title and

interest in the COREL Marks, and all use of the COREL Marks by

Distributor shall inure to the benefit of COREL.







*CONFIDENTIAL TREATMENT REQUESTED





3.03 MARK POLICIES AND STANDARDS. Distributor shall display the COREL Marks

in accordance with COREL's Guidelines for Using Trademarks in effect

from time to time. COREL retains the right to specify and approve the

quality and standards of all materials on which the COREL Marks are

displayed and to inspect from time to time samples of such materials.

Failure of Distributor to adhere to such standards of quality shall be

grounds for COREL to terminate Distributor's rights to use such COREL

Marks and to terminate this Agreement. In order to enable COREL to

protect its rights in the COREL Marks, Distributor will advise COREL

of every country in which it markets or distributes the Software.



3.04 VALIDITY AND ENFORCEABILITY OF MARKS. Distributor shall not at any time

during or after this Agreement assert any claim or interest in or to

any of the COREL Marks or institute any proceeding reasonably

calculated to adversely affect the validity or enforceability of any

of the COREL Marks. Distributor shall not register, seek to register,

or cause to be registered any of COREL's trademarks, logos, or

copyrights, including the COREL Marks, without COREL's prior written

consent. Distributor shall not adopt or use such trademark, trade

names, logos or insignia, or any confusingly similar work or symbol,

as part of Distributor's company or partnership name.



3.05 INFRINGEMENT AND FURTHER ASSURANCE. Distributor agrees to report all

infringement or improper or unauthorized use of COREL's trademarks, trade

names, logos or insignia, including the COREL Marks which come to the

attention of Distributor. Distributor further agrees to execute all

documents and further assurances reasonably required by COREL to

register or protect COREL's rights.





4. TERM OF AGREEMENT



4.01 EFFECTIVE DATE. This Agreement shall be effective as of the date first

written above.



4.02 INITIAL TERM. The initial term of this Agreement shall commence upon

the date first written above and shall continue, subject to section 13,

for a period of twelve (12) months from such date.



4.03 RENEWAL. Subject to section 13, this Agreement shall be renewed for

subsequent periods of [ * ] at the end of the prior [ * ]

term unless either party notifies the other at least [ * ] prior

to the expiration of the term that it does not wish to renew the

Agreement for a further [ * ] term.





5. RESPONSIBILITIES OF DISTRIBUTOR



5.01 ACCEPTANCE OF EULA. Distributor shall display to Customer the

applicable End User License Agreement ("EULA") as provided by COREL for

the Schedule "A" Software







prior to download of the Schedule "A" Software by Customer. Distributor

shall require all Customers to either accept or reject the terms and

conditions of the EULA via a point and click mechanism or other

mechanism acceptable to COREL prior to download and in the event

Customer rejects the EULA, Customer shall not be permitted to download

or purchase the Schedule "A" Software. Distributor agrees that the

mechanism used by Distributor to require Customers to accept or reject

the EULA shall be in a form which will record and store all Customer's

acceptance of the EULA for future reference.



5.02 RESTRICTIONS. Distributor shall distribute the Schedule "A" Software

only in the form provided by COREL as part of a Product, and shall

distribute the Schedule "B" Software only in the form provided by

COREL, and shall not alter the Software, Software packaging thereof or

End User License or any part thereof except as provided in section

5.03. Distributor shall not rent the Software or Products or

knowingly distribute or resell to anyone who rents same or infringes

COREL's rights. Should Distributor become aware of or receive notice

from COREL, Distributor shall immediately discontinue all distribution

of Software to Customers who rent same or infringe COREL's rights.

Distributor shall impose this same restriction on all Customers, other

than end users, who purchase Software from Distributor.



5.03 DISTRIBUTOR MATERIALS. Distributor shall be entitled to add Electronic

Distributor Materials in the electronic package which shall include

only the Schedule "A" Software, Documentation and End User License

Agreement, provided that the additions in no way alter the features or

functionality of the Schedule "A" Software except as permitted and

authorized in writing by COREL, nor create any obligations, warranties

or representations on behalf of COREL. In no event shall Distributor

be permitted to modify the End User License Agreement. Distributor

may append code, data files, serialization, or ancillary software

programs to the Schedule "A" Software, or encapsulate the Schedule "A"

Software in an electronic envelope, for the purpose of performing

Electronic Software Distribution, maintaining or preserving Customer

information, or authenticating the purchase and distribution of

Schedule "A" Software. To the extent the distribution and purchase of

Schedule "A" Software is authorized by COREL, Distributor may modify

the functionality of the Schedule "A" Software to allow limited-time

or limited-functionality trial use or similar "try-before-buy" uses of

the Schedule "A" Software.



5.04 COMPLIANCE WITH LAWS. Distributor shall comply with all laws, rules,

regulations and industry standards existing with respect to the

Software and the performance by Distributor of its obligations

hereunder in the jurisdictions where Distributor carries on activities

under this Agreement and where Software is resold or distributed from

time to time. Distributor shall not export the Software unless such

export complies with any applicable export laws and regulations as

they apply to the Software.



5.05 REPORTS. Distributor shall provide COREL with monthly reports detailing

information on its distribution of all Software and inventory costs of

Schedule "B" Software. Upon COREL's request for credit purposes,

Distributor shall provide a copy of the current financial statement

within (7) days.







*CONFIDENTIAL TREATMENT REQUESTED



5.06 UPGRADES. In the distribution by Distributor of any Software upgrades,

Distributor shall comply with all requirements on the resale of such

upgrades which COREL generally imposes on other distributors of

upgrades. Distributor shall impose this same restriction on all

Customers other than End Users, who purchase upgrades from Distributor.



5.07 CUSTOMER SUPPORT. Distributor shall support connections by Customers

using Internet browsers with Windows(R) 3.1; Windows(R) 95; Windows(R)

NT, Macintosh(R), UNIX, and OS/2 operating systems, or other operating

systems as agreed to by COREL and Distributor. Distributor shall

provide all Electronic Software Distribution and download support for

the Schedule "A" Software to Customers. In addition, Distributor

shall provide all support necessary for online commercial transactions

engaged in by Customers accessing Distributor's Web Site or utilizing

the Distributor System.



5.08 DISTRIBUTOR WEB SITE. Distributor shall maintain Distributor Web Site

sufficient to provide Customers access to Distributor's Web Site 24

hours per day, 7 days per week to enable Electronic Software

Distribution of Schedule "A" Software to Customers or the purchase of

Schedule "B" Software by Customers. Distributor shall provide all

hardware programming logistics for Distributor System and Distributor

Web Site including, but not limited to, integrated shopping basket,

credit card processing, Hard Goods fulfillment and COREL Club



5.09 PRESS RELEASES. Distributor agrees that all information released to the

media or the general public, including press releases and communications

with COREL Club members or Customers, shall require prior written

approval by COREL.



5.10 DEDICATED DATABASE. Distributor shall develop and maintain a COREL

dedicated Oracle 7 database, or other form of database as required by

COREL from time to time, which shall contain all Customer information

collected by Distributor ("Dedicated Database"). Distributor shall

not maintain any third party information on the Dedicated Database.

COREL shall be entitled to immediate onsite access to the Dedicated

Database with twenty-four (24) hour notice to review the contents

thereof, including all current reports and data. Distributor agrees

that: (i) all information collected by Distributor on the Dedicated

Database is the Proprietary Information of COREL and shall be governed

by Section 8 herein; (ii) upon termination or expiration of this

Agreement, Distributor shall immediately provide all information

contained on the Dedicated Database, and any other Customer

information under the possession or control of Distributor, to COREL;

(iii) Distributor is [ * ] information; and (iv) COREL is in no way

restricted in the use of the Dedicated Database or Customer

information. Upon termination or expiration of this Agreement,

Distributor may retain a copy of the Customer information contained in

the Dedicated database for verification purposes regarding this

Agreement, and the limitations contained in Sections 5.10 and 8

regarding the disclosure and use of Customer information do not apply

to data obtained or identified by Distributor which can be

demonstrated as arising from or within a third party or independent







*CONFIDENTIAL TREATMENT REQUESTED



5.11 REPORTS. Distributor shall provide to COREL a quarterly database report

and on-going Distributor System reports as more fully described in

Schedule "D" hereto.



5.12 LOCALIZATION. In the event COREL determines that Distributor's Web Site

should be localized, all localization shall be done by COREL, and all

ownership of the localized works and intellectual property rights in

the localized works, including without limitation copyright relating

to the localized works and trademarks used in association with the

localized works, but excluding any intellectual property rights in or

related to Distributor's electronic commerce or software distribution

system, shall remain the property of COREL.



5.13 ACCOUNT MANAGER. Distributor agrees to assign a dedicated COREL account

manager as the point of contact for COREL.



5.14 COREL EMPLOYEES. Distributor agrees that any COREL employee shall be

permitted to download COREL photoimages from Distributor Web Site

without charge. Distributor shall not be responsible for the

unauthorized downloading, distribution, or use of such photoimages

performed or facilitated by any COREL employee.



5.15 DISTRIBUTOR SYSTEM. Distributor shall utilize its best efforts to

establish a fully functional Distributor System by [ * ].

Distributor shall be responsible for processing all Customer orders

and credit card transactions. Distributor shall use best efforts to

make the Distributor System processing service available 24 hours per

day, 7 days per week. Distributor shall provide processing for VISA,

Mastercard, American Express and Discover credit cards or other credit

cards as are reasonably requested by COREL. COREL will similarly take

such steps are necessary to establish a connection with Distributor

and use commercially reasonable efforts to keep that connection



5.16 CREDIT CARD PROCESSING. Distributor shall submit and process all credit

card transactions as quickly as is reasonably practical for Distributor's

electronic commerce system in light of Customer instructions and

required third-party connections, from the time of receipt by

Distributor, which in most circumstances shall not exceed [ * ] in

addition to any Internet or third-party processor associated delays.



5.17 DISTRIBUTOR SYSTEM MAINTENANCE. Distributor shall provide twenty four

(24) hours notice to COREL of any planned interruption of Distributor

System or Distributor Web Site for maintenance or any other purpose.

In the event Distributor fails to provide such notice, Distributor

shall pay those Downtime Charges as set forth in Schedule "D" hereto.



5.18 DISTRIBUTOR WEB SITE FAILURE. In the event Distributor System or

Distributor's Web Site ceases to be available to Customers by reason

of some failure of equipment or services (whether or not caused by

Distributor or constituting Force majeure as described in section

16.06), Distributor will use its best efforts to restore the

Distributor System and/or Distributor Web Site to normal operating

condition as soon as is reasonably practical and,







*CONFIDENTIAL TREATMENT REQUESTED





in addition, shall immediately advise COREL of any such failure and

provide a Failure Report as more fully described in Schedule "D" hereto.



5.19 SSL NOTICE. Distributor shall provide a notice to Customers prior to

any input of Customer information that those Customers without browsers

containing Secure Socket Layer technology are advised to phone in all

Software orders to promote the security of their Customer information.

Distributor will provide COREL with such notice for their approval.



6. RESPONSIBILITIES OF COREL



6.01 PROMOTIONAL MATERIALS. COREL shall furnish Distributor, at no charge,

with sales aids, product briefs, brochures and similar literature and

materials with respect to the Software which COREL generally makes

available to distributors without charge.



6.02 SUPPORT FOR CUSTOMERS. COREL shall be responsible for providing

maintenance and technical support for the Software to Customers in

accordance with COREL's standard procedures as they may be changed by

COREL from time to time. Such maintenance and technical support shall

in no way apply to Electronic Software Distribution and download

support for the Schedule "A" Software or Customer use of the

Distributor System.



6.03 PREPARATION OF SOFTWARE FOR DISTRIBUTION. COREL agrees to provide

assistance as is commercially reasonable to Distributor to assist

Distributor to prepare Schedule "A" Software for Electronic Software

Distribution, including the provision of an End User License, or other

electronic documentation as provided by COREL, in COREL's sole





7. PAYMENTS



7.01 AMOUNTS PAYABLE. Distrib ...